On Thursday, July 29, 2021, in a split decision, the 4th U.S. Circuit Court of Appeals ruled that the U.S. Marine Corps must pay the North Carolina Department of Environmental Quality’s (NCDEQ) fine for excess air pollution emissions at its Craven County Air Station Cherry Point facility.  

The decision reversed a federal district court ruling in Greenville that sided with the Corps in its argument that it was entitled to dodge the penalty based on the legal position of sovereign immunity, which states that the government cannot be sued without its consent.

The original case

The Corps was issued a fine of $8,000 after the NCDEQ conducted tests at Cherry Point that revealed that coal-fired steam boilers at the location were releasing metal pollutants in excess of permit limits, according to Reuters.

“NCDEQ sued the Corps in the Superior Court of Craven County in 2019, and the Corps moved the case from state to federal court,” Reuters says. “Last year, Chief U.S. District Judge Terrence Boyle dismissed North Carolina's complaint. The judge disagreed with NCDEQ's argument that the CAA waived the Corps' sovereign immunity through a series of clauses ‘designed to allow States to effectively enforce air pollution laws against federal facilities.’”

Boyle’s ruling also denied the NCDEQ’s motion to return the case to state court.  The case was appealed to the 4th U.S. Circuit Court of Appeals.

The appellate decision

Writing for the majority, Circuit Judge Diana Gribbon Motz first took up the issue of the United States’s right to remove cases to federal court, which is an absolute right for the federal government. North Carolina argues that the Clean Air Act (CAA) carves out an exception to that rule. The court disagreed with this opinion.

The Supreme Court has long “held that that the right of removal is absolute for conduct performed under color of federal office,” according to the opinion.   However, North Carolina argued that the CAA’s state suit provision implicitly “carves out a narrow exception” to removal that precludes federal court adjudication of this federal immunity defense. The court decided not to send the case back to state court.

For the sovereign immunity arguments presented in the case, North Carolina argued that the CAA waived the United States’s immunity “as to punitive civil penalties assessed pursuant to state air pollution law.” The federal government’s counter argument asserted that “while the [CAA] does waive its immunity, it does so only as to ‘coercive civil penalties — that is, penalties that induce a noncompliant federal agency to comply with state emissions limitations’ — not punitive penalties like that at issue here,” Motz wrote in her opinion.

The court based its sovereign immunity decision upon the following statutes:

• 42 U.S.C. 7418(a), which says that “a federal agency may be compelled ‘to pay a [punitive] civil penalty imposed’ by a local air pollution control board,” according to the opinion.
• 42 U.S.C.7604(e), which provides that “nothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any emission standard or limitation or to seek any other relief (including relief against the Administrator or a State agency). Nothing in this section or in any other law of the United States shall be construed to prohibit, exclude, or restrict any State, local, or interstate authority from (1) bringing any enforcement action or obtaining any judicial remedy or sanction in any State or local court, or (2) bringing any administrative enforcement action or obtaining any administrative remedy or sanction in any State or local administrative agency, department or instrumentality, against the United States, any department, agency, or instrumentality thereof, or any officer, agent, or employee thereof under State or local law respecting control and abatement of air pollution. For provisions requiring compliance by the United States, departments, agencies, instrumentalities, officers, agents, and employees in the same manner as nongovernmental entities, see section 7418 of this title.”

“In waiving the United States’ sovereign immunity as to ‘any . . . remedy or sanction,’ Congress granted a waiver as to every type of civil penalty, including those levied for punitive purposes,” Motz wrote. The opinion further states that in the legislative history of 42 U.S.C.7604(e), Congress explained “that Federal facilities… may be subject to injunctive relief (and criminal or civil contempt citations to enforce such injunction), to civil or criminal penalties, and to delayed compliance penalties.”

Motz “rejected the Corps' argument that the statute only waives its immunity against penalties imposed on noncompliant federal agencies in order to bring them into compliance, but does not waive its immunity for penalties that punish violations agencies have already rectified,” according to Reuters. “Cherry Point has replaced the boilers that caused its violation,” the Corps says.

“Rather, Motz noted that the CAA's language speaks of no ‘other law’ restricting a state's authority to obtain ‘any judicial remedy.’ The wording amounts to ‘an unambiguous waiver of sovereign immunity that encompasses this case,’ she said,” Reuters adds.

Motz was joined in her opinion by U.S. Circuit Judge Robert King.

“In a partial dissent, U.S. Circuit Judge Steven Agee said he disagreed with the majority's conclusion that the text of the CAA contains an ‘unequivocal waiver of sovereign immunity’ for punitive fines,” Reuters notes.