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United States v. Global Partners LP

United States District Court, D. Maine

December 19, 2019

UNITED STATES OF AMERICA, Plaintiff
v.
GLOBAL PARTNERS LP, et al., Defendant

          MEMORANDUM DECISION GRANTING MOTION TO ENTER CONSENT DECREE

          D. Brock Hornby United States District Judge.

         This is a case about emissions of smog-causing compounds from a petroleum storage site in South Portland. The federal government and the site owners have agreed to settle their dispute and have proposed a consent decree for which they seek court approval. South Portland's local government and residents widely criticized the proposed decree during an extended public comment period, but no one has moved to intervene in this lawsuit, and the criticisms generally relate to matters outside the scope of the complaint that the government filed in court against the defendants. As the executive branch, the government has full control over what legal proceedings to bring, and as a judge, I must measure the settlement and proposed decree against the scope of the complaint the government actually filed, not against what it could have or perhaps should have done. See SEC v. Citigroup Glob. Mkts., Inc., 752 F.3d 285, 297 (2d Cir. 2014) (“To the extent the district court withheld approval of the consent decree on the ground that it believed the S.E.C. failed to bring the proper charges against Citigroup, that constituted an abuse of discretion. . . . The exclusive right to choose which charges to levy against a defendant rests with the S.E.C.”); United States v. Davis, 261 F.3d 1, 22 (1st Cir. 2001) (“[A] consent decree must . . . come within the general scope of the case based on the pleadings.”); see generally Brandon L. Garrett, The Public Interest in Corporate Settlements, 58 B.C. L. Rev. 1483, 1514-16 (2017). I conclude that I must Grant the motion to enter the consent decree.

         Background

         On March 25, 2019, the United States, on behalf of the Environmental Protection Agency (I will call the government or plaintiff the EPA), filed in this court a complaint against the defendants (I will call them collectively Global). Compl. (ECF No. 1). Global owns and operates a petroleum storage facility in South Portland. The EPA's complaint says that Global failed to comply with several licensing and emission requirements for volatile organic compounds (VOCs) that come out of its storage tanks or its transfer of petroleum products. VOCs react with nitrogen oxides in sunlight to produce ground-level ozone, a pollutant that contributes to smog. EPA, Ground-level Ozone Basics, https://www.epa.gov/ground-level-ozone-pollution/ground-level-ozone-basics (last visited Dec. 19, 2019). Because VOCs have unhealthy effects, the EPA and state authorities try to control them using the Clean Air Act, 42 U.S.C. § 7401 et seq.

         Here is the legal framework. Under the Clean Air Act, Maine has created a state implementation plan (the jargon is “SIP, ” but there are enough other acronyms in this lawsuit, so I will call it the “Plan”) that limits VOC emissions, and the EPA approved it.[1] See EPA Approved Regulations in the Maine SIP, https://www.epa.gov/sips-me/epa-approved-regulations-maine-sip (last visited Dec. 19, 2019)[2]; 42 U.S.C. § 7410 (provision of the Clean Air Act concerning state implementation plans). Maine's Plan prohibits any VOC emission without a license. Me. Plan Ch. 115 § II. To obtain a license, an entity must demonstrate that its air emissions are receiving the “best practical treatment, ” id. § V(A)(2)(a), which means that the entity is reducing its emissions to the lowest level possible given existing technology, the effectiveness of alternative methods, and economic feasibility, id. Ch. 100(19). Any facility that has the potential to emit at least 40 tons of VOCs per year must comply with additional “reasonably available control technology” requirements to limit its VOC emissions. Id. Ch. 134. Finally, an entity that is a “major source” of air pollution-meaning it is subject to certain federal regulations and has the potential to emit at least 50 tons of VOCs per year, id. Ch. 100(78)-must obtain what is known as a Part 70 license (also called a Title V operating permit). Id. Ch. 140 (laying out details of Part 70 licensing program); 40 C.F.R § 70.5 (requiring major sources to apply for the license).

         In 2014, the EPA informed Global that its South Portland facility was a “major source” of air pollution and it therefore had to obtain a Title V operating permit.[3] June 6, 2014, Notice of Violation, Kudarauskas Decl. Ex. D at 63 ¶ 15 (ECF No. 19-3). The EPA said Global was also exceeding the VOC emissions limit contained in its existing Maine license and failing to apply “best practical treatment” to its emissions. Id. at 63 ¶¶ 16-17. The following year, the EPA issued a second notice finding that the South Portland facility was subject to and failing to follow the “reasonably available control technology” requirements. April 7, 2015, Notice of Violation, Kudarauskas Decl. Ex. D at 66 (ECF No. 19-3).

         On March 25, 2019, the EPA filed in this court a four-count complaint alleging that Global violated: (1) Chapter 115 of the Maine Plan by failing to obtain a license for its VOC emissions and failing to control VOC emissions by applying “best practical treatment”; (2) Chapter 115 of the Plan by exceeding the VOC emissions limit of its existing license; (3) Chapter 134 of the Plan by failing to comply with the “reasonably available control technology” requirements; and (4) Sections 502(a) and 503(c) of the Clean Air Act, 42 U.S.C. §§ 7661a(a) and 7661b(c), by failing to obtain a Title V operating permit even though the facility was a “major source” of VOCs.

         On the same day it filed its complaint, the EPA also filed a proposed consent decree. The decree, to which Global consented, would require Global to pay a $40, 000 penalty, follow a variety of new requirements aimed at reducing VOC emissions, apply for an amended VOC license from the Maine Department of Environmental Protection, and spend at least $150, 000 on “a supplemental environmental project” to improve local air quality by replacing residential wood-burning stoves or boilers in Cumberland County. Consent Decree ¶¶ 8, 11, 14 (ECF No. 4-1). The proposed decree also includes penalties in case Global fails to meet any of the requirements in the future. Id. ¶¶ 30-42. The EPA estimates that the terms of the consent decree will result in Global emitting 20 fewer tons of VOCs each year and will cost Global a total of about $440, 000. Gov't's Consent Mot. to Enter Consent Decree (Mot.) at 9 (ECF No. 19); Kudarauskas Decl. ¶¶ 7, 11 (ECF No. 19-3). The EPA says the supplemental wood-burning stove project has a sufficient “nexus” to Global's VOC emissions because newer or retrofitted wood stoves emit fewer VOCs than older stoves do, so the replacement program will reduce VOCs in the same county where Global emitted excessive VOCs (albeit the county is a geographic area much larger than South Portland). Mot. at 13 (ECF No. 19).

         The EPA held a 30-day public comment period that it later extended to 90 days-60 days longer than required by federal regulation. See 28 C.F.R. § 50.7(b). It received about 90 comments. Mot. at 1 (ECF No. 19). The comments overwhelmingly opposed the consent decree. See Comments (ECF No. 19-1). They said the $40, 000 penalty was inadequate to punish Global for polluting the community over many years, or to dissuade Global or other companies from violating environmental laws in the future. They raised concerns about odors and hazardous air pollutants emanating from Global's tanks but not addressed by the decree. They criticized the EPA for failing to inform the City of South Portland or its residents about the excessive emissions over the nearly five years between when the EPA learned about the emissions and when it filed the complaint in this case. Finally, many commenters criticized the proposed decree's lack of an ongoing air monitoring requirement and what they saw as an inadequate connection between the wood stove project and the harm caused by Global. The EPA responded to the public comments but did not seek to alter the proposed decree or withhold its consent. See Responsiveness Summ. (ECF No. 19-2). After the close of the public comment period, the EPA filed the consent motion to enter the decree.

         On October 31, I entered a procedural order with three questions for the parties: (1) whether the record-which was limited to the complaint, proposed decree, motion to enter the decree, and documents attached to the motion- should contain more information about the parties' legal and factual contentions and their bargaining efforts; (2) whether voluntary actions undertaken by local and state authorities are relevant to my consideration of the proposed decree; and (3) asking for additional information concerning a section in the proposed decree on the procedures and burden of proof required to enforce the decree. Proc. Order at 3-5 (ECF No. 20). The parties provided responses that sufficiently satisfied my concerns. See Defs.' Resp. to Proc. Order (ECF No. 21); Gov't's Resp. to Proc. Order (ECF No. 22). The content of their responses is interspersed in the relevant places below. Whether to enter the proposed consent decree is now ripe for decision.

         Analysis

         In deciding whether to grant the parties' request to enter their consent decree, I must review the decree to ensure that it is fair, reasonable, and “faithful to the statute's objectives.” City of Bangor v. Citizens Commc'ns Co., 532 F.3d 70, 93 (1st Cir. 2008) (quoting United States v. Charles George Trucking, Inc., 34 F.3d 1081, 1084 (1st Cir. 1994)).[4] The First Circuit Court of Appeals, whose law I follow, recognizes “the strong public policy in favor of settlements, particularly in very complex and technical regulatory contexts”-especially where, as here, “the settlement has been advanced for entry as a decree by a government actor committed to the protection of the public interest and specially trained and oriented in the field.” United States v. Comunidades Unidas Contra La Contaminacion, 204 F.3d 275, 280 (1st Cir. 2000); see also Charles George Trucking, 34 F.3d 1081, 1085 (1st Cir. 1994) (“[A] trial court, without abdicating its responsibility to exercise independent judgment, must defer heavily to the parties' agreement and the EPA's expertise.”). With that deference in mind, I review the proposed decree's fairness, reasonableness, and consistency with the Clean Air Act. I also consider the many public responses opposing the decree.

         Fairness

         The fairness requirement contains two elements. The decree must be procedurally fair-requiring, among other things, that the parties engaged in “arm's length, good faith bargaining”-and substantively fair, a standard that considers “concepts of corrective justice and accountability.” Comunidades Unidas, 204 F.3d at 281.

         Procedural Fairness

         “To measure procedural fairness, a court should ordinarily look to the negotiation process and attempt to gauge its candor, openness, and bargaining balance.” United States v. ...


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