By: Richard G. Douglass

When the EPA finds that your local county is not achieving national Clean Air Act standards, where can an affected generator file to appeal that decision?  Under the Seventh Circuit’s 1993 Madison Gas decision, the answer depended, at least in part, on what you were challenging.  If you were challenging a national standard set by the EPA, then the Clean Air Act mandates the case be filed in the U.S. Court of Appeals for the D.C. Circuit.  But, if you were challenging only the determination of whether your locality is meeting those standards, the appeal could be filed in a federal trial court within the local U.S. Circuit Court of Appeals.
On July 12, 2017, the Seventh Circuit overturned the almost 25-year old rule, finding that it “stands in direct conflict with the actual text of the venue provision.” S. Illinois Power Coop. v. EPA, 863 F.3d 666, 672 (7th Cir. 2017).  The case involved the EPA’s findings about Williamson County, Illinois.  Southern Illinois Power Cooperative (SIPC) operates the Marion Generating Station in Williamson County, Illinois.  SIPC claimed the Illinois Environmental Protection Agency (IEPA) recommended an attainment designation for the area but on July 12, 2016, the federal EPA rejected that recommendation and issued a final action designating the area surrounding the Marion Generating Station as in “nonattainment” under the EPA’s 2010 National Ambient Air Quality Standards for SO2.  SIPC filed an action in the Seventh Circuit Court of Appeals to challenge that decision, arguing the EPA action was “locally or regionally applicable” and, therefore, under 42 U.S.C. §7607(b)(1) and the Madison Gas rule, properly reviewed locally.  The EPA moved to dismiss or transfer the appeal claiming the rule was of national character and, therefore, could only be appealed to the D.C. Circuit.
On May 30, 2017, the Seventh Circuit heard oral argument in the case.  The panel, comprised of Judges Bauer, Sykes and Ripple, directed the parties to focus on whether the SO2 case was distinguishable from Madison Gas and, if not, whether Madison Gas and its local venue rule should be reversed.  Judge Sykes, in questioning the EPA’s counsel, signaled that the court was seriously considering overturning that decision, saying the court’s goal was to “get the rule right.”
On July 12, 2017, the Court sided with the EPA, finding that the “intermediate approach” of Madison Gas was unsustainable in light of the statutory language.  S. Illinois Power Coop., 863 F.3d at 672.  The Court held that the focus of the venue test must be on the “nature of the agency’s action, not the scope of the petition” challenging the action.  Id. at 674.  Accordingly, the court held that SIPC’s challenge “belongs in the D.C. Circuit.”  Id.
 The Seventh Circuit thus joins most other Federal Circuits that have rejected the intermediate approach to venue.  E.g., ATK Launch Sys., Inc. v. U.S. EPA, 651 F.3d 1194 (10th Cir. 2011) (rejecting the reasoning of Madison Gas).  But, just a year ago the Eighth Circuit expressly relied on Madison Gas and the intermediate approach to venue when considering a challenge to another EPA program.  Nat’l Parks Conservation Ass’n v. EPA, 816 F.3d 989 (8th Cir. 2016).  We expect the EPA to use its victory in the Seventh Circuit to again challenge the intermediate approach in those Circuits that apply it.

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