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State of New Jersey v. Rri Energy Mid-Atlantic Power

March 28, 2013

STATE OF NEW JERSEY, PLAINTIFF
v.
RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC, RRI ENERGY POWER GENERATION, INC., SITHE ENERGIES, INC., NOW KNOWN AS DYNEGY, INC., AND METROPOLITAN EDISON CO., DEFENDANTS AND STATE OF CONNECTICUT, INTERVENOR-PLAINTIFF
v.
RRI ENERGY MID-ATLANTIC POWER HOLDINGS, LLC, RRI ENERGY POWER GENERATION, INC., SITHE ENERGIES, INC., NOW KNOWN AS DYNEGY, INC., AND METROPOLITAN EDISON CO., INTERVENOR-DEFENDANTS



The opinion of the court was delivered by: James Knoll Gardner, United States District Judge

OPINION

This matter is before the court on Defendant Metropolitan Edison Company's Motion for Summary Judgment filed July 27, 2012.

SUMMARY OF DECISION

For the reasons expressed below, I grant Defendant Metropolitan Edison Company's Motion for Summary Judgment and dismiss plaintiffs claims asserted against defendant Metropolitan Edison Co. ("MetEd").

Specifically, I conclude that the applicable statute of limitations bars all of plaintiffs claims asserted against MetEd. More specifically, I conclude that based on the recent decision of the United States Supreme Court in Gabelli v. Securities and Exchange Commission, 568 U.S. , 133 S.Ct. 1216, L.Ed.2d (2013), the discovery rule does not apply to the applicable statute of limitations set forth in 28 U.S.C. § 2462 for actions seeking civil penalties.

Moreover, I conclude that plaintiffs have failed to provide sufficient evidence to toll the statute of limitations based on the doctrine of equitable tolling because plaintiffs have not produced any evidence that MetEd concealed its allegedly unlawful conduct from plaintiffs.

Finally, I conclude that the continuing violations doctrine, even if generally applicable to violations of the Clean Air Act, does not provide a basis to permit plaintiffs to recover for MetEd's alleged unlawful conduct because all of MetEd's conduct occurred outside the applicable statute of limitations period.

Accordingly, because none of plaintiffs' claims against MetEd were filed within the applicable five-year statute of limitations, and because plaintiffs have not established a basis for tolling the limitations period, I grant MetEd's motion for summary judgment and dismiss plaintiffs' claims against MetEd.

JURISDICTION

Jurisdiction in this case is based upon federal question jurisdiction pursuant to 28 U.S.C. § 1331.

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391(b) because the events giving rise to plaintiff's claims allegedly occurred in Northampton County, Pennsylvania, which is located within this judicial district.

PROCEDURAL HISTORY

Plaintiff, the State of New Jersey, initiated this action on December 18, 2007 by filing an eight-count civil Complaint against Reliant Energy Mid-Atlantic Power Holdings, LLC, Reliant Energy Power Generation, Inc., Reliant Energy, Inc., Centerpoint Energy, Sithe Energies, Inc., Metropolitan Edison Co., and GPU, Inc. The claims arose from defendants' alleged construction or operation of the Portland Generating Station ("Portland Plant" or "the Plant"), a coal-fired power plant located in Upper Mount Bethel Township, Northampton County, Pennsylvania, across the Delaware River from Warren County, New Jersey.

Specifically, New Jersey's claims arose from the construction or operation of the Portland Plant without permits required by the Clean Air Act ("the Act"), 42 U.S.C. §§ 7470-7503, and the Pennsylvania State Implementation Plan, which incorporates the federal program at 40 C.F.R. Part 52, Subpart NN, §§ 52.2020 to 52.2063.

On December 4, 2008, New Jersey filed its First Amended Complaint which asserted eleven-counts against defendants Reliant Energy Mid-Atlantic Power Holdings, LLC., Reliant Energy Power Generation, Inc., Sithe Energies, now known as Dynegy, Inc. (collectively the "GenOn defendants") *fn1 , and Metropolitan Edison Co. ("MetEd").

On February 19, 2009, the GenOn defendants filed a motion to dismiss Counts 1-5 and 7-11 of the First Amended Complaint. That same day, MetEd filed a motion to dismiss New Jersey's entire First Amended Complaint.

On October 31, 2008, the State of Connecticut filed a motion to intervene. By Order dated March 24, 2009, I granted the motion and directed Connecticut to conform its complaint-in-intervention to New Jersey's First Amended Complaint and gave Connecticut until April 3, 2009 to file its complaint-in-intervention.

On April 3, 2009, Connecticut filed its complaint-in-intervention, styled "Amended Complaint", against the GenOn defendants and MetEd. *fn2 New Jersey's First Amended Complaint and Connecticut's First Amended Complaint-in-Intervention sought the same relief based on the same allegations.

On April 23, 2009, MetEd filed a motion to dismiss Connecticut's First Amended Complaint-in-Intervention. On April 27, 2009, the GenOn defendants filed a motion to dismiss Counts 1-5 and 7-11 of the complaint-in-intervention.

MetEd's motions to dismiss sought dismissal of Counts 5, 6 and 11 because the alleged modifications were made after MetEd was no longer the owner of the Portland Plant. MetEd sought dismissal of Counts 1-4 and 7-9 as barred by the applicable statute of limitations.

The GenOn defendants sought dismissal of Counts 1-5 and 7-11 of the complaints. Specifically, the GenOn defendants contended that plaintiffs failed to state a claim in those counts because the GenOn defendants did not own or operate the Portland Plant at the time the modifications to the Plant were made. Additionally, the GenOn defendants contended that those claims were barred by the statute of limitations.

By Order and accompanying Opinion dated September 30, 2009 I granted in part and denied in part MetEd's and the GenOn defendants' motions to dismiss. Specifically, I granted each motion to dismiss to the extent it sought dismissal of Count 11. *fn3

I granted MetEd's motion to dismiss to the extent it sought dismissal of plaintiffs claims for injunctive relief against it. *fn4 I also dismissed as moot MetEd's motion to dismiss Counts 5-6 and 10 of each complaint because plaintiffs indicated that they were not pursuing those claims against MetEd, but rather were only seeking relief in Counts 5, 6 and 10 from the GenOn defendants. *fn5

I denied MetEd's motion to dismiss in all other respects. In doing so, I specifically held that the discovery rule could be applied to toll the statute of limitations applicable to plaintiffs' claims. I concluded that based on the face of plaintiffs' complaints, it was not clear when plaintiffs learned, or should have learned, of the alleged Clean Air Act violations. I also held that dismissal based on the statute of limitations was not appropriate because plaintiffs could present evidence to establish that the statute of limitations was tolled based on the doctrine of equitable tolling.

I granted the GenOn defendants' motions to dismiss to the extent each sought to strike certain paragraphs from New Jersey's First Amended Complaint and Connecticut's First Amended Complaint-in-Intervention. *fn6

However, I denied the GenOn defendants' motions to dismiss in all other respects. In doing so, I concluded, like I had in denying MetEd's motions to dismiss, that the discovery rule could serve to toll the applicable statute of limitations period for plaintiffs' claims against the GenOn defendants. I also held that an owner or operator of a plant could be held liable under the Clean Air Act because the preceding owner of the plant failed to secure the appropriate permit and that the prevention of significant deterioration ("PSD") provisions imposed ongoing obligations on owners and operators. *fn7

On October 28, 2009 defendants answered New Jersey's First Amended Complaint and Connecticut's First Amended Complaint-in-Intervention. After conducting substantial discovery, on June 28, 2011 plaintiffs filed a motion for leave to file a second amended complaint.

By Order dated October 6, 2011 and filed October 11, 2011 I granted plaintiffs' motion. On October 14, 2011 New Jersey filed its Second Amended Complaint and Connecticut filed its Second Amended Complaint-in-Intervention. *fn8

On November 14, 2011 defendants filed their respective answers to the complaints. *fn9 After conducting additional discovery, on July 27, 2012 MetEd filed the within motion for summary judgment asserting that it is entitled to judgment on all of the remaining claims against it.

On August 17, 2012 New Jersey and Connecticut each filed responses in opposition to MetEd's summary judgment motion. On September 17, 2012 MetEd filed a reply brief in support of its motion for summary judgment and on October 2, 2012 New Jersey filed a surreply.

On November 1, 2012 plaintiffs each filed a motion for partial summary judgment, in which they asserted that they were entitled to judgment on Claims 4 and 7. Also on November 1, 2012 the GenOn defendants filed a motion for partial summary judgment, in which they sought judgment on Claims 6, 10, 11 and 12. *fn10

On February 22, 2013 I heard oral argument on all of the summary judgment motions in this case and took each motion under advisement. During oral argument, the GenOn defendants sought to join MetEd's motion for summary judgment. *fn11

On February 27, 2013 the United States Supreme Court issued a decision in Gabelli v. Securities and Exchange Commission, 568 U.S. , 133, S.Ct. 1216, L.Ed.2d (2013). That same day, MetEd sought leave to file a brief in support of its summary judgment motion based on the Gabelli decision.

On March 11, 2013 plaintiffs filed a brief in opposition to MetEd's supplemental brief. On March 14, 2013 MetEd sought leave to file a reply to plaintiffs' brief in opposition to MetEd's brief based on the Gabelli decision.

By Order dated and filed March 22, 2013 I granted MetEd's motions for leave to file the supplemental brief and reply brief and indicated that I would consider MetEd's supplemental brief, and plaintiffs' brief in opposition, and MetEd's reply brief on the Gabelli decision.

STANDARD OF REVIEW

Rule 56(a) of the Federal Rules of Civil Procedure permits a party to seek summary judgment with respect to a claim or defense, or part of a claim or defense. Rule 56(a) provides, in pertinent part, that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); National Association for the Advancement of Colored People "NAACP" v. North Hudson Regional Fire & Rescue, 665 F.3d 464, 475 (3d Cir. 2012).

For a fact to be considered material, it "must have the potential to alter the outcome of the case." Id. (citing Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006)). Disputes concerning facts which are irrelevant or unnecessary do not preclude the district court from granting summary judgment. Id.

Where a party asserts that a particular fact is, or cannot be, genuinely disputed, the party must provide support for its assertion. Fed.R.Civ.P. 56(c)(1). Rule 56(c)(1) provides that party may support its factual assertions by

(A) citing particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or

(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

When considering a motion for summary judgment, the district court must view the facts and record evidence presented "in the light most favorable to the non[-]moving party." North Hudson, 665 F.3d at 475 (quoting Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007)).

If the moving party shows that there is no genuine issue of fact for trial, "the non-moving party then bears the burden of identifying evidence that creates a genuine dispute regarding material facts." Id. (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

Where a defendant seeks summary judgment, the plaintiff cannot avert summary judgment with speculation, or by resting on the allegations in his pleadings, but rather he must present competent evidence from which a jury could reasonably find in his favor. Ridgewood Board of Education v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir 1999); Woods v. Bentsen, 889 F.Supp. 179, 184 (E.D.Pa. 1995)(Reed, J.).

"Ultimately, [w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Id. (quoting Matsushita Electric Industries Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)) (internal quotations omitted and alteration in original).

REGULATORY FRAMEWORK OF THE CLEAN AIR ACT Congress passed the Clean Air Act ("the Act") to "preserve, protect, and enhance" the nation's air quality and to protect public health from adverse effects associated with air pollution. See 42 U.S.C. § 7470.

The Act requires the United States Environmental Protection Agency ("EPA") to establish national ambient air quality standards ("NAAQS") for designated pollutants that the EPA has determined may cause or contribute to air pollution anticipated to ...


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