Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 2:10-cv-13101—Bernard A. Friedman, District Judge.
Argued: December 10, 2015
Decided and Filed: January 10, 2017
Before:BATCHELDER, DAUGHTREY, and ROGERS, Circuit Judges.
MARTHA CRAIG DAUGHTREY, Circuit Judge. This case is before us for a second
time, following an order of remand in United States v. DTE Energy Co. (DTE I), 711 F.3d 643
(6th Cir. 2013). As we noted there, regulations under the Clean Air Act require a utility seeking
to modify a source of air pollutants to “make a preconstruction projection of whether and to what
extent emissions from the source will increase following construction.” Id. at 644. This
projection then “determines whether the project constitutes a ‘major modification’ and thus
requires a permit” prior to construction, as part of the Act’s New Source Review (NSR) program.
Id.; see also 42 U.S.C. §§ 7475, 7503; 40 C.F.R. § 52.21. The NSR regulations require an
operator to “consider all relevant information” when estimating its post-project actual emissions
but allow for the exclusion of any emissions “that an existing unit could have accommodated
during the [baseline period] . . . and that are also unrelated to the particular project, including any
increased utilization due to product demand growth.” 40 C.F.R. § 52.21(b)(41)(ii)(a) and (c).
An operator must document and explain its decision to exclude emissions from its projection as
resulting from future “demand growth” and provide such information to the EPA or to the
designated state regulatory agency. 40 C.F.R. § 52.21(r)(6)(i)–(ii).
. . .
In short, DTE was not required by the regulations to secure the EPA’s approval of the
projections, or the project, before beginning construction, but in going forward without a permit,
DTE proceeded at its own risk. The EPA is not prevented by law or by our prior opinion in
DTE I from challenging DTE’s preconstruction projections, such as they are. Viewing the facts
in the light most favorable to the EPA, we conclude that there are genuine disputes of material
fact that preclude summary judgment for DTE regarding DTE’s compliance with NSR’s
statutory preconstruction requirements and with agency regulations implementing those
provisions. Therefore, we REVERSE the district court’s grant of summary judgment to DTE
and REMAND this case for further proceedings consistent with this opinion.
In terms of the remand, it is important to note that the panel unanimously agrees—now
that DTE I is the law of this case and of the circuit—that actual post-construction emissions have
no bearing on the question of whether DTE’s preconstruction projections complied with the
regulations. (Batchelder Concurrence at 6, 7; Rogers Opinion at 20) DTE I foreclosed that
question in holding that an operator who begins construction without making a projection in
accordance with the regulations is subject to enforcement, no matter what post-construction data
later shows. 711 F.3d at 649. The district court erred initially and again on remand when it ruled
that post-construction data could be used to show that a construction project was not a “major
modification.” Apparently, it is necessary to reiterate that the applicability of NSR must be
determined before construction commences and that liability can attach if an operator proceeds to
construction without complying with the preconstruction requirements in the regulations. Postconstruction
emissions data cannot prevent the EPA from challenging DTE’s failure to comply
with NSR’s preconstruction requirements.