Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-00707/USCOURTS-caed-1_05-cv-00707-5/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:7604 Clear Air Act (Emission Standards)

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

ASSOCIATION OF IRRITATED

RESIDENTS, an Unincorporated

Association

Plaintiff,

v.

FRED SCHAKEL DAIRY, a

California Proprietorship,

FRED SCHAKEL, owner and

operator, SCHAKEL FAMILY

PARTNERSHIP, a California

Limited Partnership, owner and

operator, AG RESOURCES III, a

California Limited Liability

Company, owner and, SOUTH

LAKES DAIRY, a California

General Partnership, owner and

operator, 

Defendants.

1:05-CV-00707 OWW SMS

MEMORANDUM DECISION AND ORDER

DENYING DEFENDANTS’ MOTION TO

DISMISS; DENYING DEFENDANTS’

MOTION TO STAY WITHOUT

PREJUDICE

1. INTRODUCTION

Defendants move to dismiss or, in the alternative, to stay

the instant action brought by Plaintiffs Association of Irritated

Residents’ (“AIR”) alleging violations of the federal Clean Air

Act (“CAA”). (Doc. 87, Mot. To Dismiss, Filed August 4, 2004.) 

AIR opposes the motion. (Doc. 102-1, Filed August 18, 2006.) 

2. PROCEDURAL BACKGROUND

AIR filed its initial complaint on June 1, 2005. (Doc. 1,

Complaint.) AIR then filed a Third Amended Complaint (“TAC”) on

May 26, 2006. (Doc. 68, TAC.) On August 4, 2006, Defendants

filed a motion to dismiss or in the alternative motion to stay

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 Unless otherwise indicated, the statement of facts is 1

obtained from the complaint. 

 The eight-hour ozone standard is .08 parts per million 2

measured over the daily maximum eight-hour average. 

2

the action against them. (Doc. 87, Mot. to Dis.) AIR opposed

the motion on August 18, 2006. (Doc. 102, Pl.’s Opp. To Mot. To

Dismiss.) On August 22, 2006 Defendants filed a reply. (Doc.

106, Def.’s Reply to Opp.) 

3. FACTUAL BACKGROUND1

A. The Clean Air Act

The general purpose of the CAA is to enhance the quality of

the nation’s air quality resources for the benefit of public

health. The CAA requires the United States Environmental

Protection Agency (“EPA”) to set National Ambient Air Quality

Standards (“NAAQS”) for certain pollutants including Ozone. The

CAA requires states to designate areas within its boundaries as

“attainment” areas if the air quality meets the NAAQS for a

particular criteria pollutant. Areas where the air quality does

not meet the NAAQS for a particular criteria pollutant are

designated as “non attainment” areas for that pollutant. Ozone

non attainment areas are divided under the CAA as “marginal,”

“moderate,” “serious,” “severe,” and “extreme” based on the

severity of the ozone problem. The San Joaquin Valley Air Basin

has been designated as a serious non attainment area for the

eight-hour ozone NAAQS. 2

Non attainment areas are required to adopt state

implementation plans (“SIP”) to achieve the NAAQS by the

applicable attainment date. The CAA requires that a SIP shall

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“require permits for the construction and operation of new or

modified major stationary sources anywhere in the non attainment

area.” This preconstruction permit is a New Source Review

(“NSR”) permit. 

The San Joaquin Valley Air Pollution Control District (“the

Air District”) adopted Rule 2201 to implement the NSR program. 

Rule 2201 requires a new or modified stationary source of air

pollution or emissions unit to install Best Available Control

Technology (“BACT”) when the potential to emit volatile organic

compounds (“VOC”) exceed 2 pounds per day. The rule also

requires that new or modified stationary sources purchase

“offsets” or “emissions reduction credits” for VOC when the

source’s potential to emit exceeds 10 tons per year. 

On January 1, 2004 California Senate Bill 700 removed a

previously existing agricultural exemption for issuing NSR

permits to agricultural resources. After 2004, agricultural

sources were required to obtain NSR permits prior to construction

of a stationary source facility. 

B. Permitting and Construction of the Schakel Dairy

On December 17, 2003, Defendants obtained approval for a

special use permit from the Tulare County Planning Commission in

order to construct the Fred Schakel Dairy (“the Dairy”). 

On December 18, 2003, Defendants recorded acceptance of the

conditions of approval and agreed to comply with the conditions

within the use permit. On January 6, 2004, Defendants obtained

building permits for the Dairy and obtained a building permit for

a manure separator pit on November 1, 2004. Defendants began

actual construction on the Dairy on or after January 6, 2004. 

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However, Schakel did not obtain an Authority to Construct “ATC”

permit pursuant to CAA 42 U.S.C. 7604(a)(1). Nonetheless,

Defendants constructed the Dairy to achieve the maximum

operational capacity prescribed by the use permit.

Defendants have constructed, or are in the process of

constructing, eight freestall barns, four manure solid separation

lagoons, two liquid manure storage lagoons, corrals with flushed

alleys for support stock, a milking barn, and feed storage

facilities. These components constitute the Dairy facility. The

Dairy also has at least one diesel internal combustion engine

that is greater than 50 horsepower. The Dairy facility will

occupy 256 acres. Fred Schakel and the Schakel Family

Partnership own and operate the Dairy. 

Each of the eight freestall barns is 750 feet long and 102.5

feet wide and is equipped with a system that uses wastewater from

the liquid manure storage lagoons to flush the manure from the

freestall barns. The barns’ flush system captures 80% or more of

the 5,832 milk cows’s urine and feces and flushes the waste to

the liquid manure storage lagoons. The milk cows will be milked

three times per day in a centrally located milking barn, which is

equipped with a flush system similar to the freestall barns

except that fresh water is used to flush the cows’s waste to the

liquid manure storage lagoon. The support stock will be confined

in open, dirt lined corrals that are equipped with a flush system

on concrete lined feed alleys. The corrals’s flush system

captures 60% or more of the 5,058 support stock’s urine and feces

and flushes the waste to the liquid manure storage lagoons.

The dairy has four solid separation lagoons where suspended

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solids in the liquified waste settle out of the waste stream. 

Each solid separation lagoon is 1,200 feet long and approximately

50 feet wide. The dairy has two liquid manure storage lagoons,

one measuring 400 feet wide by 1,000 feet long and the other

measuring 400 feet wide by 650 feet long. The total volume of

liquified waste storage is 10,024,848 cubic feet. Liquified

manure from the freestall barns and flushed alleys will enter the

solid separation lagoons, from which a portion of the manure

solids will be removed and composted, and the two liquid manure

storage lagoons will store the remaining liquified waste. The

liquid manure storage lagoons will also contain manure

contaminated wastewater and stormwater. The dairy will use the

liquified waste from the liquid manure storage lagoons as

fertilizer for crops (alfalfa, wheat, and corn silage) grown on

1,550 acres. Feed will be stored at the southeast corner of the

dairy facility, and solid manure will be shipped off-site for use

as fertilizer at nearby farming operations. 

C. Dairy Cows and VOC’s 

Dairy cows emit VOC’s directly from their digestive system,

which are referred to as enteric emissions. VOC is emitted from

urine and feces (“manure”) from dairy cows immediately after

excretion in the freestall barns, from decomposing manure in the

solid separation lagoons and liquid manure storage lagoons, in

corrals, and in solid manure composting piles. Of the various

compounds defined as VOC under The Air District rules, dairy cows

emit many defined VOC’s, and decomposing feed also emits VOC’s. 

The enteric emissions from cows in the freestall barns and the

milking barn, emission from decomposing feed, and emissions from

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 42 U.S.C. § 7604(a)(3) provides: “Any person may commence 3

a civil action on his own behalf against any person who proposes

to construct or constructs any new or modified major emitting

facility without a permit required under... part D of title I

(relating to non attainment).”

 42 U.S.C. § 7604(a)(1) provides: “Any person may commence 4

a civil action on his own behalf against any person who is

alleged to have violated (if there is evidence that the alleged

violation has been repeated) or to be in violation of (A) an

emission standard or limitation under this Act or (B) an order

issued by the Administrator or a State with respect to such a

standard or limitation...”

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decomposing manure in the manure lagoons and compost piles are

non-fugitive emissions in that they can reasonably pass through a

stack, chimney, vent, or other functionally equivalent opening. 

The freestall barns and milking barn, the liquid manure storage

lagoons, the solid manure storage piles, and the feed storage

unit each have the potential to emit VOC’s at a rate greater than

2 lbs. per day and 10 tons per year. 

The Fred Schakel Dairy is designed to contain a maximum

5,832 Holstein milk cows plus 5,058 support stock, as limited by

the special use permit. A 1,000 pound cow produces the waste of

approximately 20 people. The Fred Schakel Dairy produces the

equivalent waste of a city of approximately 275,000 people. 

D. Citizen Enforcement Action 

On June 1, 2006, AIR filed its complaint under citizen suit

provisions 42 U.S.C. § 7604(a)(3) and 42 U.S.C. § 7604(a)(1). 3 4

Also on June 1, 2006, AIR sent a 60-day notice letter for

violations of emission standards or limitations in the federally

approved SIP (District Rules 2010 and 2201). AIR alleges that

Defendants have violated Air District Rule 2010 and Rule 2201,

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which have been approved by the EPA as part of California’s SIP. 

AIR alleges that Defendants have failed to obtain an ATC permit

from the Air District pursuant to Rule 2010, have not installed

BACT pursuant to Rule 2201 § 4.1, and have not purchased emission

reduction credits pursuant to Rule 2201 § 4.5. AIR seeks

declaratory and injunctive relief, the imposition of civil fines,

and attorney’s fees. 

4. REQUEST FOR JUDICIAL NOTICE

AIR requests judicial notice of the August 17, 2006 letter

from David Warner and Samir Sheikh, San Joaquin Unified Air

Pollution Control District to Ryan Schakel of South Lakes Dairy. 

(Doc. 108-1, Pl.’s Request for Judicial Notice, Filed September

8, 2006.) The letter provides Defendants with notice that the

permit application is incomplete. The letter is an official

public record and its contents are not reasonably in dispute. 

It is therefore appropriately the subject of judicial notice. 

See Fed. R. Evid. 201(b)(2). 

AIR’s request for judicial notice is GRANTED. 

5. MOTION TO DISMISS

The Ninth Circuit describes the doctrine of mootness as “the

requirement that the controversy remain live even after the

plaintiff demonstrates initial standing.” Skysign Intern., Inc.

v. City and County of Honolulu, 276 F.3d 1109, 1114 (9th Cir.

2002). To establish mootness, a defendant must show that the

court cannot order any effective relief. San Francisco

Baykeeper, Inc. V. Tosco Corporation, Diablo Services, Inc., 309

F.3d 1153, 1159 (9th Cir. 2002). Defendants claiming mootness

must satisfy a “heavy burden of persuasion.” Id. Voluntary

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 The NOV is a one page document that includes the following 5

violations: “Dairy constructed without authority to construct,

constructed prior to determination of BACT, constructed without

Public Notice, and operated without permit to operate.” (Doc.

96., Decl. of Rick McVaigh, Ex. A, Filed August 7, 2006.) 

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cessation of challenged conduct moots a case only if it is

“absolutely clear that the allegedly wrongful behavior could not

reasonably be expected to recur.” Aderand Constructors, Inc. v.

Slater, 528 U.S. 216, 221 (2000). 

A. Defendants Have Failed to Meet Their Burden of Showing

That The Court Cannot Order Any Effective Relief.

In their complaint, AIR alleges that Defendants have failed

to obtain an ATC permit from the Air District pursuant to Rule

2010, have not installed BACT pursuant to Rule 2201 § 4.1, and

have not purchased emission reduction credits pursuant to Rule

2201 § 4.5. AIR seeks declaratory and injunctive relief, the

imposition of civil fines, and attorney’s fees. 

Defendants argue that AIR’s action, which seeks injunctive

relief, is moot because Defendants have applied and are currently

in the process of getting approved for an ATC permit. Thus, the

relief sought to be enjoined by AIR is no longer necessary

because the Air District has taken administrative action, which

will ensure that the NOV is remedied, will issue fines against

defendants, and will bring litigation if Defendants fail to

comply with the permit. Defendants argue that the action is moot

because the Notice of Violations (“NOV”) issued by the Air

District contains the same violations as AIR’s complaint and

seeks the same remedies. The NOV, however, does not include 5

AIR’s first cause of action as it does not provide notice of

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Defendants’ failure to obtain a NSR permit as a major stationary

source. It also does not include Defendants’ failure to obtain

offsets as alleged in AIR’s first and second causes of action. 

Nor does the NOV, provide a remedy for civil penalties under the

CAA or attorneys’ fees. 

Civil penalties serve as an alternative to an injunction to

deter future violations and thereby redress the injuries that

prompted a citizen suitor to commence litigation. San Francisco

Baykeeper v. Tosco Corp., 309 F.3d 1153, 1159 (9th Cir.

2002)(citing, Friends of the Earth v. Laidlaw, 528 U.S. 167, 174

(2000). As is ordinarily the case with monetary relief, liability

for civil penalties under the [CAA] attaches at the time the

violations occur not at the time of the judgment. Id. That a

defendant ceases illegal conduct following the commencement of suit

ordinarily does not suffice to moot a case because civil penalties

still serve as a deterrent to future violations. Id. at 1159-1160.

Defendants in this case have not ceased operations and are

continuing to operate the Dairy without a permit.

In Baykeeper, the Supreme Court reasoned that a new owner

taking over the a facility does not make the “deterrent effect of

civil penalties any less potent,” because an imposition of civil

penalties against a current owner for its pollution at the

facility will demonstrate to any future owner that violations at

this same facility will be costly. Baykeeper, 309 F.3d at 1160. 

It follows that, as in this case where the Dairy is still under

Schekel’s ownership and still in operation without a permit, a

finding of mootness could allow repeated violations that would

evade review, and would substantially weaken the ability of

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citizen suits and civil penalties to police and deter the conduct

forbidden by the CAA. Id. Defendants have not met their burden

under the mootness doctrine. 

Monetary penalties continue to fulfill their purpose after

the issuance of a permit. Ecological Rights Foundation v.

Pacific Lumber Company, 230 F.3d 1141, 1153 (9th Cir. 2000). 

Here, a permit has not been issued. The application is still

pending. As of August 17, 2006, the application was not fully

submitted as it was returned to Defendants as incomplete. It

cannot be said that the court cannot order effective relief to

AIR to redress Defendants’ continuing violations. 

B. Even if Defendants Were to Be Issued a Permit,

Defendants Still Have Failed To Show That Any Future

Violations Could Not Reasonably Be Expected to Occur.

Defendants also argue that they voluntarily filed a permit

application almost immediately after receiving the complaint and

three or four weeks before the Air District sent the NOV. 

Defendants argue that they were not aware they required a permit

and, since becoming aware, have paid the permit fees and fully

cooperated with the Air District to obtain a permit. For these

reasons, Defendants argue the case is moot. 

It is well settled that “a defendant’s voluntary cessation

of a challenged practice does not deprive a federal court of its

power to determine the legality of the practice.” Friends of the

Earth, Inc. V. Laidlaw, 528 U.S. 167, 189 (2000). A case becomes

moot if subsequent events made it absolutely clear that the

allegedly wrongful behavior could not reasonably be expected to

recur. Id. A defendant claiming that its voluntary compliance

moots a case bears the formidable burden of showing that it is

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absolutely clear the allegedly wrongful behavior could not

reasonably be expected to occur. Id. at 190. There is no basis

for believing that issuance of a new stricter permit makes future

permit violations any less likely, deterrence any less necessary,

or the deterrent effect of civil penalties any less potent. 

Pacific Lumber Co., 230 F.3d at 1153. 

Laidlaw involved a citizen suit against a hazardous waste

incinerator facility. Shortly after receiving its permit the

facility’s discharge of pollutants began to exceed the limits set

by the permit. Laidlaw, 528 U.S. at 176. As a result,

Plaintiffs brought a citizen suit under the Clean Water Act

(“CWA”) against the facility alleging non compliance with the

permit and seeking declaratory and injunctive relief as well as

an award of civil penalties. Id. at 177. The Supreme Court

granted certiorari to hear the case. After the Court of Appeal

issued its decision but before the Court granted certiorari, the

entire incinerator facility was permanently closed, dismantled

and put up for sale, and all discharges from the facility

permanently ceased. Id. at 179. The issue before the court was

whether a defendant’s compliance with its permit after the

commencement of litigation does not moot claims for civil

penalties under the act. Id. at 180. 

The court reasoned that the only conceivable basis to find

mootness in the case was Laidlaw’s voluntary conduct – either its

achievement of substantial compliance with the permit or its more

recent shutdown of the facility. Id. at 189. In response to

the Defendants’ argument that the case was moot because the

facility closed down, the Court stated that the closure of the

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facility might moot the case only if one or the other of these

events made it absolutely clear that the Defendants’ permit

violations could not reasonably be expected to recur. Id. at

193. The effect of both Defendants’ compliance and the facility

closure was a disputed factual matter. Id. at 193-194. 

In this case, the Dairy has not ceased operation pending the

issuance of the ATC permit. Further, the Defendants in Laidlaw

had a permit to operate, yet Defendants in this case are

currently operating the Dairy facility without the required

permits. Defendants cannot guarantee that the required operating

permits will in fact be issued or when they will be issued. The

initial permit application was found to be incomplete by the Air

District and returned to Defendants for correction. There are no

facts to show whether the corrections to the permit application

have been made. There is no indication as to whether BACT has

been installed or when BACT will be installed on the facility. 

There is nothing in the record to show whether Defendants have

given public notice of the Dairy’s construction. Defendants

violations are continuous and ongoing. The dispute between the

parties is a real and active dispute. Under Laidlaw and its

progeny, Defendants have not shown that future violations are not

reasonably likely to occur. 

Defendants motion to dismiss on mootness grounds is DENIED.

C. Defendants’ Ripeness Argument is Untimely

Defendants also argue that this case is not ripe for review

because disagreement over whether Defendants meet the terms of

the permit is premature since no permit has been issued. This

argument is flawed for two reasons. First, Defendants raise this

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argument for the first time in their reply brief without giving

the Plaintiffs an opportunity to respond. Second, the issue in

this dispute is not whether the terms of a permit have been met

but whether Defendants have violated provisions of the CAA and

Air District rules 2201 and 2010. This question is purely one of

CAA interpretation. See Envtl. Def. Ctr., Inc. v. EPA, 344 F.3d

832, 852 (9th Cir. 2003). A defendant is not required to “be in

violation” of the Act at commencement of suit; rather the statute

requires that a defendant be “alleged to be in violation.” 

Gwaltney v. Smithfield v. Chesapeak Bay Found., 484 U.S. 49, 64

(1987)(overruled on other grounds.) In this case, Defendants

admitted at oral argument heard on October 2, 2006 that they are

operating the dairy without a permit in violation of the CAA. 

Even if Defendants have raised a ripeness argument in a timely

fashion, the issues in this case are ripe for review. See,

Envtl. Def. Ctr., Inc., 344 F.3d at 852. 

6. MOTION TO STAY

Although a motion to stay is “not within the ambit” of the

Federal Rules of Civil Procedure, “federal courts often consider

these motions in an effort to maximize the effective utilization

of judicial resources and to minimize the possibility of

conflicts between different courts.” 5A Charles A. Wright &

Arthur R. Miller, Federal Practice and Procedure, § 1360, at 438-

39 (2d ed. 1990). A stay is appropriate when a similar action is

pending in another court (whether state or federal) or when

arbitration may be appropriate. Hungerford, 53 F.3d at 1016 (9th

Cir. 1995)(upholding federal abstention where several state court

claims were pending); Privitera v. California Bd. of Med. Quality

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Assurance, 926 F.2d 890, 895-96 (9 Cir. 1990) (holding that a th

stay was not appropriate because there was no indication that

duplicative state court litigation would be avoided or that an

order compelling arbitration would avoid a decision on federal

constitutional issues); See also Wright & Miller at 439-40. 

A judge has wide discretion to use the inherent power of the

federal court to promote judicial efficiency and prevent

prejudice to the parties in granting or denying a motion to stay. 

See Wright & Miller at 441. In a declaratory judgment action a

district court is authorized in the sound exercise of its

discretion, to stay or dismiss an action seeking a declaratory

judgment before trial or after all arguments have drawn to a

close. Wilton v. Seven Falls, 515 U.S. 277, 288 (1995). In the

declaratory judgment context, the normal principle that federal

courts should adjudicate claims within their jurisdiction yields

to considerations of practicality and wise judicial

administration. Id. Where the basis for declining to proceed is

the pendency of a state proceeding, a stay will often be the

preferable course because it assures that the federal action can

proceed without risk of a time bar if the state case, for any

reason, fails to resolve the matter in controversy. Id. at n.2. 

Defendants assert the same arguments in their motion to stay

as in their motion to dismiss. Defendants argue that they were

not aware a permit was necessary for construction and operation

of the dairy, that they are using their resources to get into

compliance, and that the Air District intends to continue to

prosecute the case and levy fines. 

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However, Defendants do not show how the pending

administrative enforcement action at the Air District is

duplicative to the proceedings in federal court. Defendants do

not argue that the federal court proceedings in any way depend on

issues or facts to be determined in the administrative action. 

Defendants also do not argue that there is a potential for

prejudice or conflict with the administrative proceedings in

continuing the federal action. Absent evidence that the federal

action is duplicative or that it prejudices the parties’ interest

in the administrative enforcement action, the federal action must

proceed. 

Defendants’ motion to stay is DENIED WITHOUT PREJUDICE.

7. CONCLUSION

Defendants’ motion to dismiss is DENIED.

Defendants motion to stay is DENIED WITHOUT PREJUDICE.

IT IS SO ORDERED.

Dated: October 25, 2006 /s/ Oliver W. Wanger 

dd0l0 UNITED STATES DISTRICT JUDGE

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