Supreme Court Allows Third Circuits GenOn Opinion to Stand: State Law Actions Not Preempted By the Clean Air Act

Summary

The U.S. Supreme Court has refused to hear¹ the case of Kristie Bell v. GenOn,² where the Third Circuit Court of Appeals ruled that the Clean Air Act did not preempt state common law actions seeking damages for air pollution. The U.S. Supreme Court’s denial of GenOn’s Petition allows the GenOn decision to stand as the law of the Third Circuit.

Background

In the GenOn case, a group of residents filed a class action suit against GenOn seeking damages based on allegations of ash deposits on their property caused by air emissions from GenOn’s Cheswick coal fired power plant. The Cheswick facility was in full compliance with its Clean Air Act Title V permit when the action was filed, and GenOn argued that state common law actions are preempted by the federal law, which is intended to impose uniform, national standards for all major sources of air pollution. The Third Circuit rejected that argument, citing language in the Clean Air Act which saves to states the right to impose their own more stringent standards regarding emissions of air pollutants.³ The Court also cited the Title V permit itself, which contains clauses preserving state law remedies.

The Third Circuit Opinion was a matter of first impression in the Third Circuit on the preemption issue as applied to the Clean Air Act. The Court, however, cited a Clean Water Act ruling by the U.S. Supreme Court in International Paper v. Ouellette,⁴ which held that state common law actions for water pollution were not preempted by the Clean Water Act. Finding "no meaningful difference" in the savings provisions of the two statutes, the Third Circuit ruled that the Ouellette holding controlled the GenOn case, and, therefore, the state common law action was not preempted.

What this Means

Because the Supreme Court refused to hear this case, the Third Circuit’s GenOn Opinion stands within the jurisdiction of the Third Circuit. This means that common law actions for damages (e.g. actions based on nuisance, negligence or trespass) will be heard by the courts even though the emissions are otherwise in full compliance with their Title V permits. The "permit shield" provision of the Clean Air Act (42 USC §7661c.(f)) only applies to shield the permit holder from actions alleging violation of the Title V permit or from actions based on failure to obtain a permit when required to do so. Accordingly, neither the permit shield nor the doctrine of preemption will protect a source from a state common law suit.

Who is Affected?

All Clean Air Act Title V permit holders within the jurisdiction of the Third Circuit (the states of Pennsylvania, Delaware and New Jersey) will be subject to potential common law tort actions despite full compliance with their Title V permits. Similar rulings have been handed down by the Sixth Circuit⁵ (covering Kentucky, Michigan, Ohio and Tennessee) and the Fourth Circuit⁶ (covering Maryland, North Carolina, South Carolina, Virginia and West Virginia).

Stationary sources of air pollutants located in Third Circuit states cannot rely on compliance with their federal permits to protect them from potential liability based on common law actions for damages. Because the Supreme Court refused to hear the case, the remaining Circuits are free to adopt a similar interpretation when presented with an appropriate case involving common law actions for air pollution.

Conclusion

The GenOn case increases the likelihood that all federal courts will accept cases asserting common law liability for damages caused by air pollution, despite the fact that the sources in question have been issued permits under the Title V provisions of the Clean Air Act and are in full compliance with those permits. These suits could result in imposing on sources standards which are more stringent than those established by their Title V permits.

This result reinforces the importance of all air pollution sources paying attention to citizen complaints regarding air pollution, while also adopting a proactive policy of community involvement in order to minimize the likelihood of being subject to common law actions.