Third Circuit Ruling May Change the Contours of CERCLA Release Reporting Requirements for Air Releases

In Clean Air Council, an environmental interest group filed a CERCLA citizen suit targeting releases from a U.S. Steel facility. As part of its operations, U.S. Steel burned coke-oven gas, which can release chemicals subject to CERCLA release reporting. To prevent the release of benzene, hydrogen sulfide, and other substances, U.S. Steel used control rooms to clean the raw gas before it was burned. Fires in 2018 and 2019 shut down that control technology, and U.S. Steel’s operations released certain substances as a result. Pursuant to its state-issued and federally enforceable Clean Air Act (CAA) Title V permit, U.S. Steel reported its releases to the Allegheny County Health Department; however, the company did not report the release to the National Response Center (NRC).

The Clean Air Council’s citizen suit asserted that U.S. Steel violated CERCLA by failing to report the release to the NRC. U.S. Steel moved to dismiss, arguing that the releases were exempt from CERCLA’s reporting requirements because they were “subject to a permit or control regulation under the Clean Air Act” — even though the control technology required by the company’s Title V permit was not working at the time and the releases were thus arguably not in compliance with that permit. The Western District of Pennsylvania agreed with U.S. Steel and dismissed the case.

On appeal, the Third Circuit focused on the words “subject to.” The Council argued that those words must mean “in compliance with” and that U.S. Steel’s releases could not be “subject to” a CAA permit because they did not comply with any CAA permit. U.S. Steel argued that “subject to” means “governed by or affected by” and that its releases were “subject to” its Title V permit because that permit required U.S. Steel to report the releases to the Allegheny County Health Department. The Third Circuit agreed with U.S. Steel. The court first turned to the context of the provision at issue. It explained that other exceptions from CERCLA’s reporting requirement used the phrase “in compliance with.” Because Congress used the phrase “in compliance with” for those provisions but did not use that phrase for the CAA exclusion, the court reasoned that the change in language must be intentional and that “subject to” must mean something other than “in compliance with.” The court also examined other CERCLA and CAA provisions and found those provisions distinguished between “subject to” and “in compliance with,” such that those phrases must have different meanings. Additionally, the court found that U.S. Steel’s interpretation of “subject to” was consistent with the CAA’s structure. The Council argued that EPA guidance from the early 1990s supported its reading and should control the outcome. (That EPA guidance had formed the basis of 1994 Environmental Appeals Board decision in In re Mobil Oil Co., which held that “subject to” meant “in compliance with.”) The Third Circuit disagreed. It found that no deference was due because the traditional tools of statutory construction discussed above resolved any ambiguity about the phrase “subject to.” Accordingly, the Third Circuit affirmed dismissal.

Clean Air Council is notable for several reasons but has a few significant limitations. First, it is notable because it reverses EPA’s longstanding interpretation of the federally permitted release exemption, one that EPA has applied in countless enforcement actions over the last 30 years. Second, it underscores that statutory and regulatory interpretations that environmental practitioners believe are well settled are often less settled than they think unless there is a body of caselaw affirming the prevailing interpretation.

The decision is (currently) of limited value for several reasons. First, it is in just one circuit and remains subject to petitions for rehearing and for a writ of certiorari from the Supreme Court. It is thus not the law of the land, and practitioners should be wary about relying on the precedent outside the Third Circuit states. Indeed, EPA has historically argued that decisions from circuits other than the D.C. Circuit (on issues of national application) and opinions of the Supreme Court are not applicable outside of the circuit issuing the decision. It is likely to take the same view of Clean Air Council. Second, it covers only CERCLA and not other state and federal reporting regimes. For example, for releases of substances that are covered by both CERCLA and the Emergency Planning and Community Right to Know Act (EPCRA), this decision provides only partial clarification. The parallel EPCRA issue remains to be litigated, although the language of EPCRA, including its cross-references to CERCLA, suggest that a court would likely rule on the issue consistent with Clean Air Council. Third, the decision raises significant questions about how certain air releases may be treated. For example, Title V permits are supposed to incorporate at least by reference all “applicable requirements” for the permitted facility. Does this decision mean that any air release subject to any Title V “applicable requirement” is exempt from CERCLA reporting as a federally permitted release? Would that include programs such as the CAA Risk Management Plan Rule? The Third Circuit’s decision strongly suggests “yes,” but these issues may require clarification. Finally, the decision covers only federally permitted air releases. As the Third Circuit noted, CERCLA has clear language with respect to most other types of releases, stating that the exemption applies only to releases that are “in compliance with” the applicable permits or regulatory requirements.