The Third Circuit Court of Appeals issued a ruling June 21 that certain releases of air pollutants “subject to” Clean Air Act (CAA) requirements, even if not in compliance or specifically named in a permit, are exempt from release reporting requirements under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). Clean Air Council v. United States Steel Corporation, No. 20-221 (3rd Cir. filed June 21, 2021). This ruling undercuts a longstanding EPA interpretation of the CERCLA reporting requirement that limited the exemption to only those releases actually in compliance with a federal CAA permit.

The Third Circuit’s opinion centers around releases of benzene, hydrogen sulfide, and other pollutants following two fires that shut down the control room at U.S. Steel’s Mon Valley Works steel facility near Pittsburgh, PA in 2018 and 2019. U.S. Steel reported the releases to the local air pollution control agency as violations of its federal Title V operating permit. U.S. Steel was then sued by the Clean Air Council, which claimed that the releases were also required to be reported under CERCLA. Under CERCLA, an operator must immediately notify the National Response Center when a certain amount of pollutants are released from its facility. CERCLA exempts “federally permitted releases” from this reporting requirement, however, and names 11 different types of federally permitted releases, including “any emission into the air subject to a permit or control regulation” under the CAA or any state plans implementing the CAA.

In determining that U.S. Steel was not obligated to report under CERCLA, the court focused on the words “subject to.” While the Clean Air Council argued that U.S. Steel’s releases were not “subject to” its Title V permit because they were in violation of it, the Third Circuit agreed with the lower court that the emissions were “subject to” the permit because they were governed by it. The court keyed in on a discrepancy in the words Congress used in the CERCLA statute — in defining the 11 types of releases that qualify as an exempted “federally permitted release,” the statute lists releases “in compliance with” the Clean Water Act, RCRA, and other federal environmental acts, but exempts air emissions “subject to” a CAA permit. According to the court, if Congress had meant that emissions had to be “in compliance with” a CAA permit or regulation to qualify as a federally permitted release, it knew how to include that language in the statute.

The court rejected the Clean Air Council’s argument that interpreting CERCLA to treat CAA releases differently than releases under the other environmental statues was “absurd.” In fact, the court found that this interpretation was consistent with the CAA’s scheme of “cooperative federalism,” which leaves much of the implementation of the CAA to the states. In the case of the U.S. Steel releases, the facility had already reported the emissions to the local regulator as required by its Title V permit, and the court found that no additional benefit would be gained from also reporting to the National Response Center. Finally, while acknowledging that not every emission from a facility with a Title V operating permit is automatically “federally permitted,” the court determined that the specific pollutants released from the U.S. Steel facility in the wake of the two fires were in fact subject to the permit or CAA regulations, even though the emissions violated applicable requirements.

The Third Circuit’s ruling may spur EPA to release new guidance to facilities regarding what constitutes a “federally permitted release” under the CAA in the context of CERCLA since the court’s holding departs from EPA’s prior interpretation. In the meantime, the U.S. Steel decision provides some clarity regarding reporting obligations for facilities subject to multiple underlying reporting requirements under the CAA and CERCLA.