On October 1, 2018, the 5th Circuit Court of Appeals upheld the dismissal of claims for civil penalties for violations of the Clean Air Act’s (“CAA”) major source Preconstruction permit requirement (CAA § 165(a); 42 U.S.C. § 7475(a)) because the claims were filed more than five years after the claim accrued, but held that the government’s claim for injunctive relief for the same violation is not subject to the applicable 5-year statute of limitation. The case involved two power plants that underwent multiple capital projects and operational changes, which resulted in significant amounts of SO2 and NOx emissions, without obtaining a preconstruction permit in accordance with CAA § 165. The capital projects and operational changes were implemented at various times between October 15, 2005 and April 1, 2009. The government filed suit on August 16, 2013 alleging that the defendant-power companies violated and continue to violate the preconstruction requirements under CAA § 165, and sought civil penalties and injunctive relief. The defendants moved to dismiss five of the six CAA § 165 violations as time barred – i.e. the alleged unpermitted construction occurred outside the 5-year statute of limitations.

Section 165(a) of the CAA requires any proposed major source of emissions (or a major modification to a major source) to obtain a permit before beginning construction. 28 U.S.C. § 2462 bars CAA claims for the enforcement of any civil fine, penalty, or forfeiture that accrued more than five years before suit was filed.

The 5th Circuit Court followed other Circuits holding that an action for civil penalties for violations of the major source preconstruction permit requirement under CAA § 165(a) must be brought within five years of the first day of the alleged construction period. Notably, the Court held that the language of CAA § 165(a) “can only be read one way: the Preconstruction requirements are terms and conditions with which the facility must comply in order for the facility to begin construction. They are not requirements that arise at a point in time after the facility has begun construction or resumed operation.” The court further clarified that “any claim asserted under § 7475(a) accrues at the moment unpermitted construction commences” and the violation does not extend into operation. The Court also noted that compliance with BACT requirements is a precondition for granting a preconstruction permit, not an obligation imposed on the continuing operation of the facility.

With respect to the claim for injunctive relief, however, the court held that the government, in its sovereign capacity, is not subject to any limitations period, unless Congress expresses its clear consent thereto. The Court explained that the applicable statute of limitations in this case (28 U.S.C. § 2462) makes no reference to injunctive relief. Accordingly, the court remanded the injunctive relief claims to the District Court for further consideration. The District Court must now decide what, if any, equitable relief is appropriate.