Where Is Compliance With Your Air Permit Considered Tortious Conduct? In The Third Circuit.

Comply with your air permit and be sued anyway. That is what the Third Circuit has just held in Kristie Bell et al. v. Cheswick Generating Station et al., No.12-4216(3d Cir. Aug. 20, 2013). In brief, the Court held that the federal Clean Air Act does not preempt state common law property damage tort claims—even where the facility is in compliance with its air permit! The Third Circuit is the federal appeals court which covers Pennsylvania, New Jersey, Delaware, and the U.S. Virgin Islands.

The importance of this breathtaking decision to permitted entities cannot be overstated. A clear message has been delivered: the federal Clean Air Act and state Clean Air Acts are no longer in complete control of determining compliance with air emissions.

In short, even if a source is complying with the terms of its permit and meeting emission standards, it can be subject to being sued by environmental groups or those that live near the plant or facility for tort claims that were never anticipated. The protection that was envisioned by compliance with state operating permits by those operating compressor stations or refineries, for example, has been removed for common law tort claims.

This decision affects all air permit holders. A particular target will be companies in the midstream and downstream sectors of the oil and gas industry, refineries, and electric generating units. In the current atmosphere of aggressive litigation tactics by those who seek to oppose continued natural gas development or any use or development of fossil fuels in the Marcellus and Utica shale plays (as well as other shale plays in the United States), this case will be used as a club. This will fuel efforts by environmental advocacy groups and residents living near oil and gas operations to engage in private party and citizens' group litigation. In other words, those groups can now pursue property damage claims against oil and gas companies even if those entities are complying with their Clean Air Act permits.

The decision revives a class action lawsuit previously dismissed by the U.S. District Court for the Western District of Pennsylvania. That class action commenced in April 2012 when two plaintiffs, Kristie Bell and Joan Luppe, filed nuisance and trespass claims against GenOn, the owner of the Cheswick Generating Station, a 570 megawatt coal-fired-electrical generation plant located in Springdale, Pennsylvania. See Bell vs. Cheswick Generating Station, 903 F. Supp. 2d 314...