This Blog Post was authored by Brielle Brown, a summer associate.  Originally published on July 7, 2021, it has been updated to reflect that after a rehearing, the decision was affirmed on July 20, 2021.

A three-judge panel of the Third Circuit held on June 21, 2021, that air emission exceedances governed by a state air permit and duly reported to state or local authorities pursuant to the permit need not be reported again to the United States Environmental Protection Agency (“EPA”) pursuant to the Section 103 reporting requirements of the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). Clean Air Council v. U.S. Steel Corp., 2 F.4^th 112 (3d Cir. 2021); 42 U.S.C. § 9603. The decision was reheard and affirmed on July 20, 2021. Clean Air Council v. U.S. Steel Corp., No. 20-2215, -- F.4^th --, 2021 WL 3045927 (3d Cir., July 20, 2021). The court’s reasoning came down to an interpretation of CERCLA that the phrase “subject to” was intended to mean “governed or affected by” rather than “obedient to.” Id. at *3–4. Thus, air emissions that violate relevant Clean Air Act permits are nevertheless “subject to” that permit and therefore exempt from CERCLA’s reporting requirement. Id.

The United States Steel Corporation (“U.S. Steel”) ran a steel facility that used coke-oven gas as fuel. Id. at *1. The burning of raw coke emits benzene, hydrogen sulfide and other pollutants, which require Clean Air Act Permits. Id. Thus, U.S. Steel obtained Clean Air Act permits for the emissions from the facility. Id. However, in December of 2018 and again in June 2019, fires shut down two control rooms responsible for treating the gas before its emission. Id. U.S. Steel reported the fires and resultant emissions to the Allegheny County Health Department (the “County”) in compliance with its Clean Air Act permits and regulations. Id. The Clean Air Council (the “Council”) sued alleging that U.S. Steel released reportable amounts of coke-oven emissions that were not “federally permitted releases” under CERCLA. Id. at *2. Thus, the Council argued that U.S. Steel was required to report the emissions to the Department and the Coast Guard’s National Response Center as outlined under CERCLA. Id.

The district court disagreed and held that the emissions were “federally permitted releases” because they were governed by and “subject to” the Clean Air Act permits. Id. at *3. Therefore, U.S. Steel needed to report the emissions only to the County as provided under the Clean Air Act. Id. The district court dismissed the complaint, and the Council’s appeal asked the same legal question of the Third Circuit, what “subject to” means in CERCLA’s definition of federally permitted releases, which exempts “any emission into the air subject to a permit or control regulations under” the Clean Air Act from CERCLA reporting. Id.; 42 U.S.C. §9601(10)(H).

The Third Circuit relied on the canons of statutory construction in holding that “subject to” in CERCLA’s definition of “federally permitted releases” means “governed or affected by.” Id. at *3–4. The court started with the plain meaning of the phrase and determined that dueling dictionary definitions support either side. Id. at *3. In isolation, “subject to” could mean “governed or affected by” as U.S. Steel argued or “obedient to” as the Council argued. Id. However, the Court held that any ambiguity was resolved by the context surrounding CERCLA’s enactment. Id. More specifically, the Court reasoned that reading “subject to” as “governed or affected by” fit within CERCLA’s scheme of cooperative federalism, as exempting violations of the Clean Air Act from CERCLA’s federal reporting requirement allows local regulators to handle violations. Id. at *4. The court reasoned that U.S. Steel did just that by reporting the fires and keeping the County informed about the facility’s remedial steps after the emissions. Id. Thus, reporting under both CERCLA and the Clean Air Act would have been duplicative. Id. The court pointed out that U.S. Steel could be liable under the Clean Air Act for not reporting the benzene and the amounts of hydrogen-sulfide and coke-over emissions to the County. Id.; Art. XXI, § 2108.01(c)(1), (2)(D)-(E).

The Council next argued that the Court should defer to the executive branch’s reading of “subject to,” which—decades earlier—found the phrase ambiguous and interpreted it to exclude emissions that violate Clean Air Act Permits. Id. at *4 (citing In re Mobil Oil Corp., 1992 WL 293133 at *8, *17 (EPA Adm’r Sept. 30, 1992), aff’d, 1994 WL 544260, at *12, (EPA Env’tl Appeals Bd. Sept. 29, 1994)). The executive branch’s decision held that CERCLA reporting and reporting under permit programs were not duplicative because of significant differences served by each notification. In re Mobil Oil Corp., 1992 WL 293133 at *11 (EPA Adm’r Sept. 30, 1992). The decision reasoned that if permit notification requirements could suffice for CERCLA notification, the information available to EPA under CERCLA would be inconsistent or incomplete. Id. For example, CERCLA requires immediate notification while other permit notification systems needed to be reported only at monthly intervals. Id. The 1992 administrative decision noted that CERCLA’s notification is immediate to allow timely response if the release presents substantial danger to public health or the environment. Id. However, the Third Circuit rejected this reasoning, emphasizing that deference was not due to the agency because the court found no ambiguity in the statute. Clean Air Council, 2021 WL 3045927, at *4.

Lastly, the court addressed the Council’s argument that the district court was wrong to grant U.S. Steel’s motion to dismiss because it was premised on an affirmative defense that did not appear on the face of the complaint. Id. at *5–6. The court found no error and cited examples of instances where doing so is proper. Id. at *5 (“True, courts rarely consider affirmative defenses on motions to dismiss. … But sometimes we do.”). The court reviewed additional factual nuances raised by the Council on rehearing, but the outcome did not change. Id. at *6.

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