Union Electric Co. v. EPA

Under the Clean Air Act, the Environmental Protection Agency (EPA) (defendant) was required to establish national ambient-air-quality standards (NAAQS), which were measurements of the acceptable concentrations of pollutants in the ambient air. The Clean Air Act also required each state to develop a state implementation plan (SIP) containing emission limitations necessary to attain the NAAQS. A state was permitted to grant a variance that relieved an entity from complying with an emission limitation in the SIP so long as the variance did not prevent attainment of the NAAQS. Additionally, the EPA was required under the Clean Air Act to bring an enforcement action against an entity that failed to comply with a state emission limitation. In bringing an enforcement action, the EPA was allowed to seek either injunctive relief or daily monetary penalties. Monetary penalties were assessed in an amount of up to $25,000 for each day of noncompliance. The EPA informed the Union Electric Company (Union Electric) (plaintiff) that its coal plants failed to comply with the sulfur-dioxide emission limitation contained in Missouri’s SIP. Union Electric had previously submitted a petition to the Missouri Air Conservation Commission (the state commission) requesting a variance from this emission limitation. At a meeting with Union Electric, the EPA stated that it would bring an enforcement action against Union Electric without waiting for the decision of the state commission on Union Electric’s variance request. However, the EPA did not indicate whether it would seek injunctive relief or daily monetary penalties. Subsequently, Union Electric filed suit, contending that the EPA was precluded from bringing an enforcement action against it because it was seeking a variance. The district court ruled in favor of Union Electric. The EPA appealed.