Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit

BOGGS, Circuit Judge,

dissenting.

The State of Michigan, acting under explicit authority from the federal government and under the authority of its own laws, granted a permit for the construction of a one-half billion dollar refuse disposal project. Michigan, by issuing the permit, certified that construction of the project met all applicable state and federal air quality laws.

The plaintiffs here did not participate in this process in any way, and no appeals were taken from the decision, though both administrative and judicial review were available. A federal court has even ruled that these decisions were so final that the United States Environmental Protection Agency (EPA) could not go back and reopen the process, with the court assessing fees and costs against EPA for even claiming that it could. Greater Detroit Resource Recovery Authority v. Adamkus, 677 F.Supp. 521 (E.D.Mich.1987).

Now, four years after the last state proceeding, with the project perhaps complete by the time this opinion is published, we declare it a matter of no federal interest if a state court entertains litigation specifically designed to prevent the completion or operation of the plant under the state-federal permit. This result is compelled neither by the Clean Air Act, principles of comity, nor good sense, and I respectfully dissent.

The court holds that the Michigan Environmental Protection Act (MEPA), Mich. Comp.Laws § 691.1202, gives the Michigan courts the authority to create a common law of environmental quality independent of any decisions made by state or federal agencies. The court also correctly notes that the Clean Air Act allows states to impose their own pollution control standards, as long as those standards are not less strict than the federal standards. Congress’s decision to give states a role in the regulation of air pollution requires that federal courts allow state environmental *345actions against alleged polluters, even if those parties who are accused of polluting are in compliance with federal standards.

I do not dispute that MEPA gives Michigan courts the authority to impose their own environmental standards without regard to the actions of administrative agencies. Nor do I dispute that Congress intended that the states play a large role in the regulation of air pollution. The federal statutory scheme clearly contemplates that Michigan can make its air pollution rules as stringent as it likes, and may enforce those rules. 42 U.S.C. § 7416. The statute contemplates that the state can exercise federal permitting powers through a federally approved implementation plan, specifically to allow the coordination of state and federal interests. But when all of the above has been done, and a permit issued under this federal scheme, it is an excess of “artful pleading” to allow a completely collateral attack on the construction of the plant itself, the very act sanctioned by the federal-state permit, to be carried out in state court.

Thus, my disagreement is as to when, not if, state rulings such as those sanctioned by MEPA should come into play. It is my view that the Clean Air Act’s provision for state actions should not be construed in a manner that essentially eviscerates the permitting system created by the Act. By acquiescing in the plaintiffs’ attempt to sue in state court to forestall the operation of a project that, after a long and costly process, has received a permit certifying that it will be in compliance with state and federal law, the majority has rendered that permit, and with it the scheme set up by the Clean Air Act, worthless.

To understand why this is so, one must understand the nature of the regulatory system established by the Clean Air Act. The Act, as the court recites, “sets out a comprehensive regulatory scheme designed to prevent and control air pollution.” However, rather than mandating one set of federal standards, Congress wished states to devise their own state plans, incorporating both state and federal standards. These state implementation plans (SIPs) allow those parties desiring to build projects requiring approval under the Act to apply for one permit incorporating all the relevant state and federal standards. This permit then becomes federal law. United States v, Congoleum Corp., 635 F.Supp. 174, 177 (E.D.Pa.1986). Such a permit is only issued after study and ample opportunity for public comment. Within thirty days after the issuance of the permit, anyone objecting to the permit can seek review from the EPA. After this review, the EPA’s decision is subject to judicial review.

Thus, the Act establishes a relatively coherent, rational system for dealing with air pollution. The proponents of each proposed project must apply for and receive a permit certifying that the project as permitted is in compliance with both federal and state laws. It is the combined federal and state character of the permit that makes any litigation seeking to challenge these standards, whether under MEPA or the Clean Air Act, a question of federal law, requiring the exercise of federal jurisdiction over claims that would normally be state claims.

This case is, thus, similar to Striff v. Mason, 849 F.2d 240, 244 (6th Cir.1988), where, as the court points out, we held that the well-pleaded complaint rule is not absolute and that an action may be removed to federal court where the real nature of the complaint is federal, not matter how the complaint is characterized. The plaintiff in that case filed a state claim against a police department that was following the dictates of a federal consent decree in its promotions. We held that the plaintiff’s claim was in fact a collateral attack on the consent decree and because, just as here, the subject of the dispute was a creature of federal law, the claims had a sufficiently federal character to be removed. Id. at 245.

The court attempts to distinguish Striff by arguing that the plaintiffs here are not suing to enforce any federal standards; they simply want to enforce a separate state standard. All the permit means, according to the court, is that the project is in *346compliance with federal law. The validity of the permit and the challenge to the operation of the project are separate issues.

In fact, in this regard, this case and Striff are indistinguishable. In Striff, the consent decree did not order the police department to give or not give any promotions. Hence, Striff’s request to block any promotions did not directly contradict any part of the consent decree. The decree merely specified as a matter of law, incorporating both the federal and state law governing this matter, the method by which promotions were to be given. In our case, as well, the court argues that there is no federal requirement that the project be built and that the MEPA suit does not interfere with the operation of the federal process.

In fact, though, the plaintiffs in this case, as in Striff are challenging the validity of the federal process. The federal and state governments have decided that this permit process will govern the construction of projects and, as in Striff any collateral challenge to the results of this process cannot be allowed. The true nature of the plaintiffs’ complaint is evident from the Audubon plaintiffs’ request that the court issue a permanent injunction restraining the city or anyone acting in concert with it “from constructing or causing the construction of the incinerator,” as well as from the Ontario plaintiffs’ request that the trial court determine the “validity, applicability, and reasonableness of the standards used for granting the permit.” Clearly, the plaintiffs, like Striff, are unhappy with the results of the federal process and wish them overturned.

Therefore, our court, by considering the validity of the permit and the MEPA claims are separate issues, misapprehends the point of the comprehensive permitting process. A permit, issued under the Michigan SIP, means that the project has complied with both state and federal regulations and may be built. The court’s argument would be more persuasive if the permit incorporated only federal standards, and a separate action attacking the standards used in granting the permit were pursued in state court. This would be the case, for example, if the state did not present an implementation plan and the EPA, pursuant to 42 U.S.C. § 7410(c)(1), submitted its own plan for the state. Here, however, state law was considered and implemented in the granting of the permit. Thus, the Michigan SIP allows the state to implement its own pollution standards, but it does so in a way that preserves the essentials of the regulatory scheme.

This emphasis on the permit, however, does not mean that MEPA has no role to play in the regulation of pollution. It only means that it cannot be used as a vehicle for subverting the system of combined state and federal permitting established by the Clean Air Act. If the plant does not perform as advertised, its operation can be challenged either through a MEPA suit or in a federal action. If the operation of the plant as advertised proves to be unacceptable, that operation then can be complained of in state courts under MEPA. For example, if, after the plant is operating, the plaintiffs contend that the plant’s emissions degrade the environment, they can file a suit under MEPA seeking to remedy the production of pollution. There is, though, neither precedent nor logic to support our requiring the defense of the permit itself in this completely untimely proceeding. The Michigan courts can exercise their independent power of review without emasculating the regulatory scheme set up by the Act.

The court cites two cases to show that state suits are generally not preempted by regulatory schemes similar to that of the Clean Air Act. In fact, these cases illustrate how such suits can be fit into a comprehensive state-federal system of regulation. In International Paper Co. v. Ouellette, 479 U.S. 481, 107 S.Ct. 805, 93 L.Ed.2d 883 (1987), the Supreme Court held that the Clean Water Act, which contains exactly the same savings clause as the Clean Air Act, did not preempt a state court nuisance suit by individual landowners against a company whose mill was allegedly polluting the water, even where the alleged polluters had a permit under the Clean Water *347Act. A MEPA suit seeking to halt destructive emissions from the operating incinerator would be equivalent to the nuisance suit in Ouellette and would be allowed under my proposed disposition of this case. One must also note, when looking at Ouellette, the care taken by the Court in ensuring that the application of the state law did not “disrupt the regulatory partnership established by the permit system.” Id. 107 S.Ct. at 815. The Court recognized that the allowance of a nuisance suit did not disrupt that partnership; the kind of suit the plaintiffs filed in this case does.

The second case the majority cites m support of its position makes the same point as Ouellette. The Seventh Circuit in People of State of Ill. v. Kerr-McGee Chem. Corp., 677 F.2d 571 (7th Cir.), cert. denied, 459 U.S. 1049, 103 S.Ct. 469, 74 L.Ed.2d 618 (1982), held that the plaintiffs could maintain a state court action against a company engaged in the handling of hazardous radioactive wastes even though the industry was subject to pervasive regulation by the Nuclear Regulatory Commission. The action in Kerr-McGee, like the one in Ouellette, was one to abate the nuisance from the allegedly ill-handled waste. This type of suit, again, is permissible under the approach I am suggesting. The state has every right under the Clean Air Act, as under these other regulatory schemes, to assess and correct the actual production of pollution.

Indeed, the Michigan Supreme Court has held that MEPA calls for precisely this type of adjudication. In Ray v. Mason County Drain Comm’r., 393 Mich. 294, 306-07, 224 N.W.2d 883, 888 (1975), in a passage quoted in the court’s opinion, the Michigan Supreme Court stated: “The Act allows the courts to fashion standards in the context of actual problems as they arise in individual contexts.” (emphasis added) This kind of action is very different from an untimely attack on the standards used by the responsible regulatory agencies in performing their complex and important tasks.

It is my conclusion, then, that the inconvenience and confusion that will result from the court’s decision are unnecessary. By understanding MEPA as part of a system of regulation that we judges, within the limits of our power, have a responsibility to help make work, we can honor the intentions of the Michigan legislature in passing MEPA, as well as Congress’s enactment of the savings clause in the Clean Air Act, and still preserve the viability of the regulatory scheme worked out by the federal and state legislatures. Disrupting that scheme does not serve the asserted ends of comity and federalism. Therefore, I dissent.