Louisiana Environmental Action Network et al v. McCarthy

Filing 48

RULING: Yuhuang Chemical, Inc.'s 18 Motion to Intervene is DENIED and Plaintiffs' 37 Motion to Strike is GRANTED. The Clerk's Office shall STRIKE Yuhuang Chemical, Inc.'s 36 Notice of Supplemental Filing from the record. Signed by Magistrate Judge Richard L. Bourgeois, Jr. on 08/16/2016. (NLT)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
LOUISIANA ENVIRONMENTAL
ACTION NETWORK, ET AL.

CIVIL ACTION
NO. 15-858-JJB-RLB

VERSUS
GINA MCCARTHY, IN HER OFFICIAL
CAPACITY AS ADMINISTRATOR OF
THE U.S. ENVIRONMENTAL PROTECTION
AGENCY
RULING
Before the Court is non-party Yuhuang Chemical, Inc.’s (“YCI”) Motion to Intervene.
(R. Doc. 18). The motion is opposed. (R. Docs. 24, 25).
Also before the Court is Plaintiffs’ Motion to Strike YCI’s Notice of Supplemental
Filing. (R. Doc. 37). YCI has filed a response. (R. Doc. 39).
I.

Background and Procedural History
Title V of the Clean Air Act (“CAA”), 42 U.S.C. §§ 7661-61f, and the applicable

regulations, require state permitting authorities to submit any proposed Title V permits to the
U.S. Environmental Protection Agency (“EPA”) for review. 42 U.S.C. § 7661d(a)(1); 40 C.F.R.
§ 70.8(a)(1). On February 4, 2015, the Louisiana Department of Environmental Quality
(“LDEQ”) submitted to EPA a proposed Title V permit for YCI’s operation of a new methanol
manufacturing plant in St. James, Louisiana (“the Methanol Plant”). (R. Doc. 18-1 at 4). EPA
had 45 days from receipt of the proposed permit to object to the permit if EPA determined it
“contains provisions that are . . . not in compliance” with the “applicable requirements” of the
CAA. 42 U.S.C. § 7661d(b)(1). EPA did not object to the issuance of the proposed permit
within the 45-day period.

On May 5, 2015, in the absence of any objection from EPA, the Louisiana Department of
Environmental Quality (“LDEQ”) issued Permit No. 2560-00295-V0 (“the Permit”) to YCI for
the operation of the Methanol Plant. (R. Doc. 18-1).
Within 60 days after the expiration of the 45-day period for EPA to object, “any person
may petition” EPA to object to a proposed permit and EPA “shall either grant or deny such
petition within 60 days after the petition is filed.” 42 U.S.C. § 7661d(b)(2). Plaintiffs Louisiana
Environmental Action Network (“LEAN”) and Sierra Club, non-profit environmental groups,
filed such a petition on May 19, 2015 (“the Petition”) requesting EPA to object to the Permit. (R.
Doc. 2 at 1).
On December 23, 2015, Plaintiffs initiated this citizen suit pursuant to 42 U.S.C §
7604(a)(2), which provides that “any person may commence a civil action on his own behalf . . .
against the Administrator . . . to perform any act or duty under this Act which is not discretionary
with the Administrator.” Plaintiffs allege that EPA failed to perform a nondiscretionary duty
under the CAA, namely that EPA failed to grant or deny the Plaintiff’s timely petition for
objecting to a major source operating permit within 60 days as required by 42 U.S.C. §
7661d(b)(2). (R. Doc. 29 at 1).
On March 18, 2016, YCI moved to intervene pursuant to Rule 24 of the Federal Rules of
Civil Procedure, or, in the alternative, to participate as amicus curiae. (R. Doc. 18). YCI has
submitted a proposed Answer in Intervention and Affirmative Defenses in which it prays that the
Court reject all claims raised by Plaintiffs. (R. Doc. 18-2 at 8). Plaintiffs oppose intervention by
YCI, whether as a matter of right or through permissive intervention. (R. Doc. 25). EPA opposes
intervention by YCI as a matter of right, taking no position on whether permissive intervention
should be allowed. (R. Doc. 24).

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The current parties to this action—LEAN, Sierra Club, and EPA—filed a Joint Status
Report on April 7, 2016. (R. Doc. 23). The parties indicated that they provided YCI with a draft
of the Joint Status Report as a courtesy. (R. Doc. 23 at 1). YCI moved to participate as a
“proposed intervenor” for the purpose of participating in the scheduling conference set for April
21, 2016. (R. Doc. 22). The Court denied the motion, stating that resolution of the pending
motion to intervene would determine YCI’s participation in this action, and rescheduled the
scheduling conference. (R. Doc. 30).
On April 15, 2016, EPA lodged a proposed consent decree containing the terms of a
proposed settlement between the parties. (R. Doc. 31). EPA indicated that “[p]ursuant to 42
U.S.C. § 7413(g) and Paragraph 18 of the proposed consent decree, after the proposed consent
decree is lodged with the Court, EPA will submit a notice of the proposed consent decree for
publication in the Federal Register, and will then accept public comment on the proposed
consent decree for 30 days.” (R. Doc. 31 at 1). EPA further indicated that “[a]fter the close of
the public comment period, EPA will review the comments and will move the Court for entry of
the proposed consent decree if appropriate in light of the comments received.” (R. Doc. 31 at 1).
On April 18, 2016, the parties filed a joint motion for stay of proceedings until June 30,
2016, to allow for completion of the comment process. (R. Doc. 32). The Court granted the
motion. (R. Doc. 33). The stay was continued until July 15, 2016. (R. Doc. 43).
On June 1, 2016, despite its non-party status and the stay of the litigation, YCI filed a
“Notice of Supplemental Filing” in the record (R. Doc. 36), attached to which are YCI’s
comments on the proposed consent decree dated May 27, 2016. (R. Doc. 36-1).

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On June 6, 2016, Plaintiffs moved to strike the “Notice of Supplemental Filing” on the
basis that YCI is not a party in this action and has had the opportunity to comment on the
proposed consent decree through the process allowed by 42 U.S.C. § 7413(g). (R. Doc. 37).
On July 15, 2016, EPA filed a Consent Motion for Entry of Consent Decree. (R. Doc.
44). The proposed consent decree, if entered by the Court, will require EPA to “sign a response
granting or denying the Petition” on or before September 1, 2016. (R. Doc. 44-2 at 2). That
motion remains pending before the district judge.
A telephone status conference is set for August 23, 2016. (R. Doc. 47).
II.

Law and Analysis
A.

Intervention of Right

Rule 24(a) provides for intervention of right, on timely motion, where the movant:
claims an interest relating to the property or transaction that is the subject of the action,
and is so situated that disposing of the action may as a practical matter impair or impede
the movant's ability to protect its interest, unless existing parties adequately represent that
interest.
Fed. R. Civ. P. 24(a)(2).1 Accordingly, the four elements for intervention of right include (1)
timeliness, (2) an interest in the subject matter of the litigation. (3) impairment of the applicant’s
interest if it is not allowed to intervene, and (4) inadequate representation of that interest by the
existing parties. House v. S/V Canada Goose I, 641 F.2d 317, 320 (5th Cir. 1981). Because the
Court concludes that YCI does not have “an interest in the subject matter of the litigation,” the
Court need not address the remaining issues.
The “interest” requirement of Rule 24(a) requires a direct, substantial, legally protectable
interest in the action, meaning ‘that the interest be one which the substantive law recognizes as

Intervention of right is also appropriate where the intervenor “is given an unconditional right to
intervene by federal statute.” Fed. R. Civ. P. 24(a)(1). YCI does not allege that it has been granted
such a right.
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belonging to or being owned by the applicant.’” Cajun Elec. Power Co-op., Inc. v. Gulf States
Utilities, Inc., 940 F.2d 117, 119 (5th Cir. 1991) (quoting New Orleans Public Service, Inc. v.
United Gas Pipe Line Co. (NOPSI III), 732 F.2d 452, 464 (5th Cir. 1984) (en banc)). “Nonproperty interests are sufficient to support intervention when, like property interests, they are
concrete, personalized, and legally protectable.” Texas v. United States, 805 F.3d 653, 658 (5th
Cir. 2015). “[A]n interest is sufficient if it is of the type that the law deems worthy of protection,
even if the intervenor does not have an enforceable legal entitlement or would not have standing
to pursue her own claim.” Id. at 659.
YCI argues that it “has a momentous interest in the Permit, in the development of its real
property in St. James Parish as intended and permitted, as well a substantial interest in preserving
the value of YCI’s real property considering its sizable investment in the property due to its
specific attributes for YCI’s intended development.” (R. Doc. 18 at 10-11). More specifically,
YCI argues that it has “a concrete, personal, and legally protectable interest in the continued
viability of its key contracts, including design, engineering, construction, and natural gas supply
contracts for the Methanol Plant”; “a personal, direct and substantial interest in the avoidance of
incredible economic loss which would result from the impairment of the foregoing property
interests, including but not limited to loss of investment, lost revenues, and/or costly equipment
changes”; and an “interest in the timeframe or deadline for EPA’s response to the Petition, a
timeframe which could impact the current progression of the project due to the cloud on the
Permit and uncertainties surrounding the investment, or which could impair YCI’s ability to
address Plaintiffs’ concerns with the Permit should YCI determine it appropriate to do so.” (R.
Doc. 18 at 11). YCI notes that pursuant to 42 U.S.C. § 7661d(b)(2) the Permit remains effective,

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and that it is currently continuing to pursue construction of the Methanol Plant, despite the filing
of the Petition. (R. Doc. 18 at 11 n. 33).
In opposition, EPA and the Plaintiffs argue that YCI does not have an interest in the
deadline by which EPA will act on the Petition and, therefore, intervention of right is not
warranted. (R. Doc. 24 at 5-9; R. Doc. 25 at 4-8). In support of this position, EPA acknowledge
that neither the Fifth Circuit nor this Court has addressed intervention in the context of a citizen
suit seeking to compel EPA to respond to a Petition submitted pursuant to 42 U.S.C. §
7661d(b)(2). (R. Doc. 24 at 6).
EPA and the Plaintiffs ask the Court to adopt the reasoning in Sierra Club v. McCarthy,
308 F.R.D. 9 (D.D.C. 2015) and decisions issued by the D.C. Circuit. (R. Doc. 24 at 6-7; R. Doc.
25 at 4-7). The facts of Sierra Club are similar to those in the instant action. In Sierra Club, the
Public Service Company of New Hampshire (“PSNH”) operated a power plant called Schiller
Station for which it sought a Title V operating permit from the New Hampshire Department of
Environmental Services. Id. at 10-11. As in this case, the state agency submitted a proposed
permit to EPA, which raised no objections in the 45-day review period. Id. at 11. The Sierra
Club subsequently filed a timely petition with EPA and EPA did not grant or deny the petition
within 60 days. Id. Sierra Club filed the lawsuit seeking to compel EPA to respond to the
petition and PSNH moved to intervene. Id.
In providing the legal standards for intervention, the district court stated that in addition
to demonstrating a “legally protectable interest,” an entity seeking to intervene as a matter of
right in an action pending within the D.C. Circuit must also “establish Article III standing.” Id.
(citing Defenders of Wildlife v. Perciasepe, 714 F.3d 1317, 1323 (D.C. Cir. 2013). In light of
that standard, the Court held that “PSNH’s alleged injuries—the loss or alteration of its permit

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for Schiller Station—are entirely contingent on EPA deciding to grant the Sierra Club’s petition,
since a decision to deny it would maintain the status quo. As a result, PSNH lacks standing
because ‘standing requires more than the possibility of potentially adverse regulation.” Sierra
Club, 308 F.R.D. at 12 (quoting Defenders of Wildlife, 714 F.3d at 1324-25 (emphasis by Sierra
Club)). The district court further stated that the reasons for its finding that PSNH lacked
standing equally establishes that PSNH lacks a legally protected interest meriting intervention of
right. Id. at 12-13 (citations omitted). The district court also denied permissive intervention
because the “litigation pertains to the timeline and not to the substance of the EPA’s decision on
the Sierra Club’s petition” and the Court would not stall ongoing settlement negotiations
between the Sierra Club and EPA. Id. at 13.
Unlike the D.C. Circuit, the Fifth Circuit does not necessarily require a proposed
intervenor seeking intervention as a matter of right to establish Article III standing. Instead, the
Fifth Circuit has held that “Article III does not require intervenors to independently possess
standing where the intervention is into a subsisting and continuing Article III case or controversy
and the ultimate relief sought by the intervenors is also being sought by at least one subsisting
party with standing to do so.” Ruiz v. Estelle, 161 F.3d 814, 830 (5th Cir. 1998). Later decisions
by the Fifth Circuit suggest that proposed intervenors need not establish Article III standing at all
so long as the original parties have standing. See, e.g., Newby v. Enron Corp., 443 F.3d 416, 422
(5th Cir. 2006) (“[T]here is no Article III requirement that intervenors have standing in a pending
case.”).
The Court need not address whether YCI has Article III standing in this action because
YCI has not established a legally protectable interest in the subject matter of the litigation. The
subject matter of this litigation does not pertain to whether EPA will ultimately grant Plaintiff’s

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Petition or some aspect of it. This action simply involves whether and when the EPA must act.
See Sierra Club, 308 F.R.D. at 10 (“Timing is everything. And in this case, it is the only
thing.”).
Accordingly, the Court finds that YCI has no interest in the subject matter of the instant
litigation—the timeframe or deadline for EPA to respond to the Petition—for the purpose of
Rule 24. YCI’s own articulation of its interest in this timeframe or deadline is that it “could”
impact its economic interests and/or impair its ability to address Plaintiffs’ concerns with the
Permit. (R. Doc. 18 at 11). The Fifth Circuit has held that an “economic interest alone is
insufficient” to satisfy the standard for intervention of right. NOPSI III, 732 F.2d at 466.
Furthermore, nothing in the proposed consent decree suggests that Plaintiffs and EPA have
reached a settlement on the merits of the Petition. (See R. Doc. 44-2). YCI has failed to
articulate how the timing of EPA’s decision future decision on Plaintiff’s Petition (which the
applicable statute set to occur over one year ago) will impair its ability to address Plaintiffs’
concerns with the Permit.2
Based on the foregoing, the Court concludes that YCI has not established that it must be
allowed to intervene as a matter of right.
B.

Permissive Intervention

Rule 24(b) permits intervention, on timely motion by anyone who, in appropriate part,
“has a claim or defense that shares with the main action a common question of law or fact.” Fed.
R. Civ. P. 24(b)(1). In exercising its discretion, “the court must consider whether the

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Furthermore, this Court does not have jurisdiction to review any actions by EPA on the Petition other
than the timing of its action. Review of EPA’s ultimate action on the merits of the Petition is in the
exclusive jurisdiction of the appropriate U.S. Court of Appeals. See 42 U.S.C. § 7661d(b)(2); 42 U.S.C. §
7607(b).
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intervention will unduly delay or prejudice the adjudication of the original parties’ rights.” Fed.
R. Civ. P. 24(c).
Here, the original parties have moved for entry of a proposed consent decree to resolve
the issue in this action—whether and when EPA will act on Plaintiff’s Petition. (R. Doc. 44).
The proposed consent decree, if entered by the Court, will require EPA to respond to Plaintiff’s
Petition by September 1, 2016. (R. Doc. 44-2). YCI clearly is attempting to disrupt the
settlement negotiated by the parties, as it is seeking a delay of EPA’s response to Plaintiff’s
Petition until December 31, 2016 in light of an amended permit modification it submitted to the
LDEQ in mid-June 2016 which, according to YCI, “will moot all issues raised by the Plaintiffs
regarding the current permit.” (R. Doc. 36 at 2).
Again, this litigation pertains solely to the “timeline and not the substance of EPA’s
decision” on Plaintiff’s Petition. See Sierra Club, 308 F.R.D. at 13. EPA has had an opportunity
to consider YCI’s comments on the proposed consent decree, which notified EPA of the
amended permit modification submitted to the LDEQ. (R. Doc. 36-1). As allowing YCI to
intervene in this action “will unduly delay or prejudice the adjudication of the original parties’
rights” to settle their dispute, the Court will deny YCI’s request to intervene permissively under
Rule 24(b). For similar reasons, the Court will deny YCI’s request to participate in this action as
amicus curiae.
III.

Conclusion
For the foregoing reasons, the Court concludes that the YCI may not intervene in this

matter under Rule 24(a) or Rule 24(b) of the Federal Rules of Civil Procedure. Furthermore, in
light of the denial of YCI’s motion to intervene and request to participate in this action as amicus

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curiae, the Court will strike from the record YCI’s “Notice of Supplemental Filing” (R. Doc.
36), which was filed by a non-party while this action was stayed.
IT IS ORDERED that Yuhuang Chemical, Inc.’s Motion to Intervene (R. Doc. 18) is
DENIED.
IT IS FURTHER ORDERED that Plaintiffs’ Plaintiffs’ Motion to Strike (R. Doc. 37) is
GRANTED, and the Clerk’s Office shall STRIKE Yuhuang Chemical, Inc.’s Notice of
Supplemental Filing (R. Doc. 36) from the record.
Signed in Baton Rouge, Louisiana, on August 16, 2016.

S

RICHARD L. BOURGEOIS, JR.
UNITED STATES MAGISTRATE JUDGE

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