United States v. Duke Energy Corp.

The Clean Air Act was a federal statutory scheme regulating emission standards of pollutants. Modifications to pollutant sources required certain emissions standards to be met. In a 1970 version of the act, Congress defined “modification” to mean physical changes of a pollutant source that increased the amount of any air pollutant or resulted in the new emission of a pollutant. The Environmental Protection Agency (EPA) (plaintiff) was tasked with implementing this version of the statute. In regulations, the EPA defined “modification” to include increases in the hourly rate of emissions from a source. In a later version of the act, Congress cross-referenced the earlier definition of “modification” to define the term “construction.” The later version imposed certain permitting requirements on new facilities that went through the EPA. The Duke Energy Corporation (Duke) (defendant) was a power company that operated coal-fired plants. Duke modernized its plants by redesigning the boilers in the plants. The changes did not increase the amount of pollution emitted per hour; they did, however, increase the total emissions from the plants because the emissions could run for more hours each day. Duke made the changes without applying for or receiving EPA permits under the later version of the act. The EPA sued Duke, claiming that the modernization project required a permit under the act. The EPA argued that because the total emissions levels increased, a permit was required. Duke argued that because there was only a total increase, not an hourly increase, the permits were not required under the law. Interpreting the EPA regulations implementing the act, the district court sided with Duke. The EPA appealed.