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July 13, 2020

Reporting Non-Compliant Air Emissions under CERCLA: District Court Upends Longstanding EPA Interpretation


A recent federal district court decision in the Western District of Pennsylvania, Clean Air Council vs. United States Steel Corporation, No. 2:19-CV-1072, 2020 WL 2490023, at *1 (W.D. Pa. May 14, 2020), held that emissions from a Clean Air Act (CAA) Title V-permitted facility that were not compliant with the facility's permit were nonetheless "federally permitted releases" that were exempt from reporting provisions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This decision ran contrary to longstanding EPA guidance and administrative law decisions, which held that only compliant emissions could take advantage of the "federally permitted release" exemption. If adopted more broadly, this ruling could have significant impacts, exempting a group of previously-regulated emissions from CERCLA reporting and even liability requirements. We recommend, however, that companies should follow developments but exercise caution before making any change in their reporting policies based on this one court decision.

Legal Background

CERCLA requires reporting of any release of a hazardous substance in excess of the "reportable quantity" (RQ) of the substance, unless the release is a "federally permitted release." 42 U.S.C. § 9603. Federally permitted releases under CERCLA are defined in reference to requirements of the other major federal environmental statutes. See 42 U.S.C. 9601(10). As relevant here, a federally permitted release is defined to include "any emission into the air subject to a permit or control regulation" under certain provisions of the CAA. Id. Such releases are exempt from CERCLA reporting requirements and liability for releases of hazardous substances. See 42 U.S.C. § 9603(a) (describing reporting obligations for releases of hazardous substances "other than a federally permitted release"); 42 U.S.C. 9607(j) ("Recovery by any person . . . for response costs or damages resulting from a federally permitted release shall be pursuant to existing law in lieu of this section.").

For decades, EPA has interpreted federally permitted releases that are "subject to" a CAA requirement to include only those that are in compliance with that requirement. EPA first expressed this policy in 1988, where it stated in a proposed rule that, "for the [federally permitted release] exemption to apply, the emission must be in compliance with the applicable permit or control regulation." 53 Fed. Reg. 27,268, 27,273 (July 19, 1988); see also id. at 27,280 (proposing to revise 40 CFR § 302.3(8) to read that a federally permitted release is "[a]ny emission of a substance into the air which is named specifically or is included in a specifically named group of substances subject to and in compliance with a permit or control regulation"). EPA expressly rejected a broader interpretation that would not require compliance because that interpretation would mean that "virtually all air emissions including dangerous episodic releases would be exempt from CERCLA reporting requirements." 53 FR at 27,273.

A subsequent decision by an administrative law judge affirmed EPA's interpretation, stating that "interpreting the exclusion for federally permitted releases . . . so that accidental air releases would not have to be reported locally would . . . frustrate the purpose of Section 103 of CERCLA, [which] requir[es] that accidental air releases be reported to a federal response entity." in In re Mobil Oil Corp. (Mobil Oil I), 1992 WL 293133, at *16 (E.P.A. 1992). That decision, and the interpretation contained therein, was subsequently affirmed by the Environmental Appeals Board. See In re Mobil Oil Corp. (Mobil Oil II), 5 E.A.D. 490, 1994 WL 544260, at *10 (E.A.B. 1994).

EPA thereafter continued to maintain this interpretation, including through a 2002 guidance document published in the Federal Register. 67 FR 18,999 (April 17, 2002); see also 64 FR 71,614 (Dec. 21, 1999) (Interim Guidance). In that guidance document, EPA expressly adopted the ruling and reasoning from the Mobil Oil cases, and further advised that "[i]n most circumstances, releases resulting from accidents and malfunctions" would not be considered federally-permitted releases. 67 FR at 18,903.

The Clean Air Council Decision Summary

In Clean Air Council, the plaintiff brought suit again the owner of steel plants that had for months produced air emissions with elevated levels of certain hazardous substances, primarily benzene. These elevated emissions were caused by accidents that shut down the processes that would normally process coke (fuel) to remove benzene and other hazardous substances generated during combustion of the coke. Clean Air Council, 2020 WL 2490023, at *1. Plaintiff Clean Air Council brought a citizen's suit alleging that such emissions violated CERCLA because U.S. Steel had failed to report the emissions as releases under CERCLA's mandate that all releases of hazardous substances above the RQ be reported. See 42 U.S.C. § 9603(a). In its Motion to Dismiss, U.S. Steel raised the argument that such emissions were exempt "federally permitted releases," despite the fact that the emissions were allegedly not in compliance with the applicable CAA permits for the facilities. Clean Air Council, 2020 WL 2490023, at *1. Thus, the Clean Air Council court was faced squarely with the question of "whether emissions from a facility that holds Clean Air Act permits are exempt from CERCLA's reporting requirements, regardless of whether the emissions comply with those permits." Id. at *2.

The court concluded that federally permitted releases included even non-compliant air emissions, relying on the plain text of CERCLA and analogous CAA reporting requirements, which the court found duplicative of CERCLA's. Specifically, under CERCLA's definition of a "federally permitted release," the clause relating to the CAA uses the phrase "subject to," while other CERCLA provisions state that releases must be "in compliance with" or "authorized under" other environmental statutes. See 42 U.S.C 9601(10). Thus, the court reasoned that Congress would have used language such as "in compliance with" if it had intended to make only CAA-compliant emissions "federally permitted releases," whereas "subject to" simply meant the pollutant is regulated under the permit even if the emissions exceed the applicable limit. The court also reasoned that, unlike the other environmental statutes referenced in the CERCLA definition of federally permitted releases, the CAA includes its own independent reporting and emergency response requirements. See 42 U.S.C. 7412(r); 40 CFR Part 68. Such duplicative reporting requirements, the court reasoned, explained why non-compliant CAA emissions may have been included in the definition of federally permitted releases when non-compliant releases under other statutes clearly were not. See Clean Air Council, 2020 WL 2490023 at *4.

Immediate Implications of the Clean Air Council Decision

One important question to consider is the effect of the decision on parties other than the two parties directly bound (subject to any appeals). Generally, EPA does not recognize the nationwide effect of decisions interpreting the CAA unless they are "decisions of the U.S. Supreme Court and decisions of the U.S. Court of Appeals for the D.C. Circuit Court that arise from challenges to nationally applicable regulations . . . or final action." 40 CFR § 56.3. Therefore, EPA by its own regulations appears unlikely to change its interpretation of which air emissions constitute "federally permitted releases" based solely on the effect of the Clean Air Council decision. Further, under the basic principles of the federal court system, the decision by a single district court would not be binding on other courts, and would only constitute authority to the extent persuasive. Accordingly, the concrete legal effects of the decision are largely limited to the actual case being adjudicated, although given the dearth of court decisions addressing this issue, this lone decision could be given considerable precedential weight in other courts.

Additionally, regulated companies may question their own approach the reporting of air emissions in light of the Clean Air Council. Under the holding of the decision, parties may now have grounds to believe they are no longer required to report non-compliant emissions under CERCLA. However, for several reasons industry should approach reliance on Clean Air Council with caution.

As discussed above, there is very little binding legal effect from the decision itself, so regulators and courts may simply disagree with the district court and seek to impose liability notwithstanding the Clean Air Council decision. Additionally, and as discussed below, the Clean Air Council raises legal issues that will need to be determined in future decisions. Finally, and perhaps most importantly, there may be little practical benefit in omitting to report non-compliant emissions under CERCLA if a party is aware of them. As the Clean Air Council decision recognized, releases of hazardous substances would still need to be reported under the CAA reporting regulations under most circumstances, so the additional administrative burden of also reporting a release pursuant to CERCLA seems outweighed by the risk of CERCLA non-compliance for failing to report.1 In summary, regulated entities should continue to track the development of the legal theory embraced in Clean Air Council, but it is likely premature to make any concrete changes to reporting practices without new guidance from EPA or more-established case law.

Future Questions

In addition to the important holding of Clean Air Council—that non-compliant CAA emissions are nonetheless federally permitted releases under CERCLA—the decision also raises a few key questions that will need to be determined by future court decisions, beyond the court's analysis of the CERCLA plain language meaning of emissions that are "subject to" CAA permits.

First, the court's decision does not consider the impact that its interpretation may have on CERCLA liability provisions, from which federally permitted releases are also exempt. See 42 U.S.C. 9607(j). Parties may be liable under CERCLA if they were the owner or operator of a facility that engaged in the "disposal" of hazardous substances. 42 U.S.C. § 9607(a)(2). CERCLA's definition of "disposal" simply references the definition from the Resource Conservation and Recovery Act (RCRA), which defines disposal as the "discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters." 42 U.S.C. § 9601(29); 42 U.S.C. § 6903(3). Whether disposal can include air emissions is an unsettled question, but several courts in both the CERCLA and RCRA contexts have interpreted certain air emissions to constitute disposal that could lead to liability under the statutes.2 Under the holding of Clean Air Council, pursuing CERCLA liability against air-emitters becomes very difficult, because even non-compliant air emissions could not lead to CERCLA liability; only completely unregulated air emissions could be the potential source of CERCLA liability. Additionally, unlike reporting requirements, the CAA has no provisions that are analogous to CERCLA's strict liability, retroactive, liability regime for releases of hazardous substances. Therefore, the court's rationale in Clean Air Council based on overlap between the CAA and CERCLA would not be applicable in the liability context.

Second, the effect of the Clean Air Council decision on EPA's position on the interpretation of federally permitted releases is yet to be determined. While the court's decision was a clear departure from the EPA's position and prior administrative law decisions, the court did not provide an explanation for its disagreement with EPA, or even acknowledge EPA's conflicting position. While EPA likely will not view itself as bound by the Clean Air Council decision, it remains to be seen whether EPA will reiterate its position or issue further guidance in light of the decision. Additionally, future courts facing this same or a similar question may need to address the reasoning behind EPA's interpretation, as well issues of deference to the administering agency's views.

Third, the decision does not address the timing of the enactment of the respective CERCLA and CAA reporting provisions. More specifically, though the court reasoned that it was "understandable that Congress would not require a facility to comply with duplicative reporting requirements under both the Clean Air Act and CERCLA," implying that Congress drafted the definition of federally permitted release under CERCLA with the understanding that the CAA had similar, potentially-duplicative reporting requirements. However, the definition of a federally permitted release was drafted before Congress added the Section 112(r) reporting requirements in the 1990 Amendments to the CAA See PL 96–510, 94 Stat 2767 (December 11, 1980) (enacting CERCLA, including the definition of "federally permitted release"); PL 101–549, 104 Stat 2399 (November 15, 1990) (adding CAA reporting requirements at 42 U.S.C. § 112(r)). Thus, it would have been impossible for Congress to consider both the CAA's reporting requirements when drafting the CERCLA definition of federally permitted releases. While Congress clearly did differentiate the CAA by stating that its federally permitted releases need be "subject to" the Act instead of "in compliance with" it, the reason for that difference could not have been potentially-duplicative CAA reporting requirements. Of course, it is conceivable that Congress crafted the Section 112(r) reporting requirements based on its understanding of the scope of CERCLA reporting of air emissions releases.

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In sum, Clean Air Council represents a significant departure from EPA's longstanding interpretation that federally-permitted air emissions exempt from CERCLA reporting must be in compliance with air permitting requirements. But it remains to be seen how other courts and EPA will respond to the decision. In the meantime, industry is well-advised to stay tuned and continue reporting under CERCLA especially where similar reporting is required under CAA Section 112(r) anyway.

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

  1. Additionally, regulations implementing 42 U.S.C. § 7412(r) state that "procedures for informing the public and the appropriate Federal, state, and local emergency response agencies about accidental releases" should "compl{y} with other Federal contingency plan regulations." 40 CFR § 68.95.

  2. Cyprus Amax Minerals Co. v. TCI Pac. Commc'ns, Inc., No. 11-CV-0252-CVE-PJC, 2017 WL 2662195, at *8 (N.D. Okla. June 20, 2017) (CERCLA); The Little Hocking Water Association, Inc. v. E.I. du Pont de Nemours & Co., 2:09-cv-1081, 2015 WL 1038082 (S.D. Ohio Mar. 10, 2015) (RCRA); Citizens Against Pollution v. Ohio Power Co., No. C2-04-cv-371, 2006 WL 6870564, at *4-5 (S.D. Ohio. 2006)) (RCRA); but see Pakootas v. Teck Cominco Metals, LTD., 830 F.3d 975, 978 (9th Cir. 2016) (Finding that air emissions did not constitute "disposal" under CERCLA).