Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-01593/USCOURTS-caed-1_05-cv-01593-3/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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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

ASSOCIATION OF IRRITATED )

RESIDENTS, an Unincorporated )

Association, )

 )

Plaintiff, )

)

v. )

)

C&R VANDERHAM DAIRY, a )

California Proprietorship, and RICK )

 and CORRIE VANDERHAM, owners )

and operators, )

)

Defendants. )

)

____________________________________)

CIV F 05-1593 AWI SMS

ORDER ON DEFENDANTS’S

MOTION TO DISMISS

This is a Clean Air Act (“CAA”) case brought by Plaintiff Association of Irritated

Residents (“AIR”) against Defendants C&R Vanderham Dairy, and Rick and Corrie Vanderham

(collectively “Vanderham”). AIR alleges that Vanderham violated California’s State

Implementation Plan by constructing a stationary source that may emit pollutants without

obtaining an Authority to Construct (“ATC”) permit from the San Joaquin Valley Unified Air

Pollution Control District (“the District”) and without the attendant pollution limitations required

by the implementation plan. Vanderham has filed a Rule 12(b)(1) Motion to Dismiss. For the

reasons that follow, the motion will be denied. 

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42 U.S.C. § 7604(a)(1) and (3) in relevant part read: 1

Except as provided in subsection (b), any person may commence a civil action on his own behalf--

(1) against any person (including (I) the United States, and (ii) any other governmental instrumentality or agency to

2

 FACTUAL BACKGROUND

From the complaint, on August 24, 2004, Vanderham obtained a conditional use permit

for a diary from Kern County. The use permit limited the herd to 1,456 milk cows and 1,408

“support stock” (non-lactating or dry cows, heifers, and calves). On July 29, 2005, Vanderham

obtained building permits for a milk barn, two freestall barns, and two hay barns at the dairy site. 

Vanderham began construction on or after July 29, 2005. Vanderham has begun to construct the

Dairy to achieve maximum operational capacity and has constructed or is in the process of

constructing, two freestall barns, two solid separation lagoons, two liquid manure storage

lagoons, all planned corrals with flushed lanes, a milking barn, and feed storage facilities; these

facilities compromise the dairy facility and will occupy 60 acres. 

Dairy cows emit volatile organic compounds (“VOC”) directly from their bodies’s

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

District rules, dairy cows emit many defined VOCs, and decomposing feed also emits VOC. The

enteric emissions from cows in the freestall barns and the milking barn, emissions from

decomposing feed, and emissions from 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 at a rate greater than 2 lbs. per day and 10 tons per year. 

On December 15, 2005, AIR filed its Complaint and alleged a cause of action under

citizen suit provision 42 U.S.C. § 7604(a)(1) of the CAA. AIR alleges that Vanderham has 1

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the extent permitted by the Eleventh Amendment to the Constitution) 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,

. . . . . . .

(3) against any person who proposes to construct or constructs any new or modified major emitting facility without a

permit required under part C of title I (relating to significant deterioration of air quality) or part D of title I (relating

to nonattainment) or who is alleged to have violated (if there is evidence that the alleged violation has been repeated)

or to be in violation of any condition of such permit.

3

violated District Rules 2010 and 2201, which have been approved by the EPA as part of

California’s State Implementation Plan. AIR alleges that Vanderham has failed to obtain an

ATC permit from the District, has not installed Best Available Control Technology, and has not

purchased emission reduction credits. AIR seeks declaratory and injunctive relief, the imposition

of civil fines, and attorney’s fees. On February 14, 2006, Vanderham filed this Rule 12(b)(1)

motion and argues that this Court does not have subject matter jurisdiction because AIR did not

exhaust administrative remedies. 

Vanderham has submitted a series of correspondences between itself/its attorneys and the

District. See Albers Declaration Exhibits C, D, E, F. Additionally, Vanderham has filed a

request for judicial notice, to which there is no objection, of a December 2005 letter it received

from the District, specifically from Samir Shelkh, Permit Service Manager. Vanderham’s

exhibits in pertinent part indicate:

1. On July 15, 2005, Vanderham through its attorney represented to the District that it was

developing a dairy project that will be built for 1320 milk cows, 195 heifers, 486 heifers

over 15 months, 378 heifers aged 7 to 14 months, 162 heifers 4 to 6 months, and 120

calves. Using a downloaded worksheet from the District, the dairy would produce 12.4

tons per year of VOC and would be exempt from permitting requirements. Vanderham

indicates that the dairy is under construction, is concerned over a rule change during the

construction process, and requests a letter from the District that states the dairy is exempt

from permitting requirements. See Albers Declaration Exhibit C.

2. On October 27, 2005, Vanderham informed the District that the cow population detailed

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in the July 15, 2005, letter is based on the current emission factor of 19.3 pounds, that the

dairy is under construction, and that Defendants will take steps such as installing

stanchions, loops, etc. so as to construct the dairy for the cattle population listed in the

letter rather than for the greater population approved by Kern County. Additionally,

Vanderham states that portions of the freestall barns and corrals will be cordoned off with

fencing and/or locked gates to create physical limitations in housing for the cattle

population. See Albers Declaration Exhibit D.

3. Exhibit E is a letter dated November 3, 2005, from Vander Weerd Construction to the

District. The letter attaches a timeline concerning applications for, and issuances of,

building permits and dates construction commenced. The timeline does not indicate

whether construction has been completed as to any of the dairy’s structures. See Albers

Declaration Exhibit E.

4. On December 8, 2005, Vanderham’s attorney sent a letter to the District regarding the

October 27, 2005, letter. Vanderham’s counsel indicates that he spoke with a District

representative and that this letter is meant as a clarification. Vanderham’s counsel states

that, since locked gates could be unlocked, the Vanderhams have agreed to construct

permanent barriers, meaning fencing will be welded to limit the dairy herd size to the

cattle population specifically listed for the various age groups referenced in the October

27, 2005 [and July 15, 2005], letter. See Albers Declaration Exhibit F.

5. In December 2005, the District sent a letter to Vanderham. The letter indicates that it is

“Re: Permits to Operate.” The letter reads: 

Based on all the information provided to the District regarding your construction

activities, the determination was made that your dairy commenced construction

prior to the date that the District started requiring Authority to Construct (ATC)

permits. Your dairy is therefore considered an existing operation and no ATC is

required.

However, since the emissions from your dairy exceed the new permitting levels, a

Permit to Operate is required for your dairy. Pursuant to District Rule 2010,

Section 4.3, when an application for a Permit to Operate is filed for an existing

operation, the application serves as a temporary Permit to Operate. Therefore,

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The exact date of the letter is unclear. The date reads, “DEC 1% 2005” and the “005” is stamped instead 2

of typed. Given the layout of a typical keyboard, the Court believes that the date is likely December 15, 2005. 

5

since a permit application for your dairy operation was received on October 31,

2005, your application acts as a legal Permit to Operate until you have received

your final Permit to Operate from the District.

Please notify the District Compliance Division at . . . when construction is

completed so that your dairy can be inspected.

Thank you for your cooperation in this matter. . . .

Exhibit 1 Vanderham’s Request for Judicial Notice.2

 DEFENDANT’S MOTION

Defendant’s Argument

Vanderham argues that following administrative remedies gives an agency the

opportunity to correct errors, establish a record, and affords the parties the benefit of expertise

and that the failure to so exhaust is a fatal jurisdictional defect. The CAA requires federal

approval of SIP’s to implement that act’s standards, but “the prevention and control of air

pollution at its source is the primary responsibility of States and local governments.” 42 U.S.C. §

7401(3). Before proceeding under citizen suit provision § 7604(1), a plaintiff “must exhaust its

administrative and judicial remedies before proceeding.” See Action for Rational Transit v.

West Side Highway Project by Bridwell, 699 F.2d 614, 616-17 (2d Cir. 1983) (“Rational

Transit”). In Rational Transit, plaintiffs challenged the state air pollution authority’s

determination that a transit project would not violate the New York SIP. Id. at 616. Plaintiffs

did not challenge this finding through New York state law. Id. The Court of Appeals held

dismissal was appropriate because the decision of the state agency was final and represented the

end product of an administrative process entrusted by Congress to state officials. Id.

Here, the District was established by the California legislature in the California Health &

Safety Code. The Health & Safety Code grants the District powers to adopt orders, regulations,

rules, and permitting authority. Under Health & Safety Code § 42310.16(c), the District may not

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require, for any agricultural source whose actual emissions are less than half the applicable

thresholds unless specific findings in a public hearing are made. The applicable threshold is 25

tons per year of non-fugitive VOC, which means agricultural sources are exempt from permitting

requirement if their actual annual emissions do not exceed 12.5 tons of VOC per year. 

Vanderham has submitted certain information to the District as to the makeup of the herd. See

Albers Declaration Exhibits C, D, & E. The information indicates that the herd is under the 12.5

ton limit and Vanderham made assurances to keep the herd size below the permitting threshold. 

Id. at Exhibit F. The District reviewed the information and determined that the dairy would be

below the permitting threshold and thus, made the determination that the dairy would emit less

than the percentage of VOC per year than that of a major source within the District. This

determination was made in December 2005, prior to the filing of the instant action. Subsequent

to the district’s determination, AIR has not pursued administrative remedies in an attempt to

correct the administrative action taken.

However, Regulation 5 of the District provides the procedural mechanisms to challenge

the actions of the District. See id. at Exhibit A. Further, AIR has failed to seek redress in state

court, which is required by state law. California Code of Civil Procedure §§ 1094.5, 1094.6

provide for mandamus proceedings to inquire into the validity of administrative actions and is the

exclusive remedy for challenging final decisions by the District. See Cal. Health & Safety Code

§ 40864. AIR has not taken any steps to seek redress administratively: there is no evidence that

AIR followed Regulation 5 nor is there evidence that plaintiffs have sought redress in state court. 

Just as in Rational Transit, this case must be dismissed for lack of subject matter jurisdiction

because AIR has failed to exhaust administrative remedies. 

Vanderham argues in the conclusion section that AIR has attacked the wrong parties since

it was the District who determined that no permit was required. Vanderham argues that AIR

should take the matter up with the permitting authority either administratively or in state court.

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Plaintiff’s Opposition

AIR argues that the CAA’s citizen suit provision does not require that administrative

remedies be exhausted and Vanderham has pointed to no express provision of the CAA that so

requires. The act actually requires the court to exercise jurisdiction as it states that “any person

may commence a civil action on his own behalf” against “any person” alleged to be in violation

of an “emission standard or limitation,” and that District Courts “shall have jurisdiction.” See 42

U.S.C. § 7604(a). The only exception under the CAA for citizen suits is that a citizen must give

a 60-day notice of intent to sue to the defendant, the Administrator, and the relevant state

authority. See 42 U.S.C. § 7604(b). Also, the federally approved SIP in this case does not

require exhaustion of administrative remedies and District Regulation 5 has not been approved as

part of the SIP and is therefore inapplicable. Further, the Ninth Circuit has held that unless

expressly required by a statute, exhaustion is not jurisdictional. Although judicially created

exhaustion may be appropriate in some cases, judicially created exhaustion does not limit

jurisdiction. Also, Congress expressly made available the remedy of a citizen suit in district court

as long as AIR meets the CAA’s requirements; the doctrine of exhaustion cannot trump this

remedy just because a second remedy is available under a different statutory or regulatory

scheme. Because neither the CAA nor the SIP require exhaustion of remedies, exhaustion of

such remedies is not a jurisdictional requirement.

As for Rational Transit, that case is contrary to Ninth Circuit law regarding exhaustion of

legal remedies and the cited aspect of the Rational Transit opinion is dicta as the holding was

that the plaintiffs had failed to allege a violation of a specific commitment in the SIP. Also,

Rational Transit relied on a Ninth Circuit case where subject matter jurisdiction was first

determined and that involved a SIP that required the pursuit of administrative remedies. Finally,

unlike the plaintiffs in Rational Transit, AIR had no way of knowing about the District’s letter to

Vanderham and did not learn of the District’s letter until February 1, 2006. 

Also, the state remedies identified by Vanderham do not apply in this case. Regulation 5

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states that it applies only to “all hearings before the Hearing Board of the District.” Albers

Declaration Exhibit A at Rule 5010 § 2.0. Further, the California Health and Safety Code section

cited concerns only judicial review of a decision of a hearing board.” Cal. Health & Safety Code

§ 40864(a). Here, there was no hearing board determination or public process, rather, there was

an informal letter sent to Vanderham. Moreover, a decision that Vanderham does not need to

obtain a permit falls outside the scope of hearing board review. There is no mechanism to appeal

a District decision that a permit is not required, and participants in actions before the District are

not required to request that the hearing board hold a hearing. 

Finally, AIR argues in response to the Conclusion in Vanderham’s motion that the CAA

vests the Court with subject matter jurisdiction against a pollution source alleged to be in

violation of a CAA permit even when the plaintiff could have sued the agency under a separate

provision. Section 7604(a) authorizes suits by “any person” against “any person . . . alleged to be

violation . . . of an emission standard.”

 LEGAL STANDARDS

1. F.R.C.P. 12(b)(1)

Rule 12(b)(1) of the Federal Rules of Civil Procedure allows for a motion to dismiss

based on lack of subject matter jurisdiction. See Fed. R. Civ. Pro. 12(b)(1). It is a fundamental

precept that federal courts are courts of limited jurisdiction. Limits upon federal jurisdiction

must not be disregarded or evaded. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365,

374 (1978). A Rule 12(b)(1) motion may be either facial, where the inquiry is confined to the

allegations in the complaint, or factual, where the court is permitted to look beyond the complaint

to extrinsic evidence. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004); Savage v.

Glendale Union High School Dist. No. 205, 343 F.3d 1036, 1040 n.2 (9th Cir. 2003). The

plaintiff has the burden to establish that subject matter jurisdiction is proper. Kokkonen v.

Guardian Life Ins. Co., 511 U.S. 375, 377 (1994); In re Ford Motor Co., 264 F.3d 952, 957 (9th

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Cir. 2001). This burden, at the pleading stage, must be met by pleading sufficient allegations to

show a proper basis for the court to assert subject matter jurisdiction over the action. McNutt v.

General Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Fed. R. Civ. P. 8(a)(1). The

pleading must show “affirmatively and distinctly the existence of whatever is essential to federal

jurisdiction, and if [it] does not do so, the court, on having the defect called to its attention or on

discovering the same, must dismiss the case, unless the defect be corrected by amendment.”

Tosco Corp. v. Communities For A Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001). 

When a defendant challenges jurisdiction “facially,” all material allegations in the

complaint are assumed true, and the question for the court is whether the lack of federal

jurisdiction appears from the face of the pleading itself. See Wolf, 392 F.3d at 362; Miranda v.

Reno, 238 F.3d 1156, 1157 n.1 (9th Cir. 2000); Thornhill Publishing Co. v. General Telephone

Electronics, 594 F.2d 730, 733 (9th Cir. 1979); Mortensen v. First Fed. Sav. & Loan Ass’n, 549

F. 2d 884, 891 (3d Cir.1977). When a defendant makes a factual challenge “by presenting

affidavits or other evidence properly brought before the court, the party opposing the motion

must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject

matter jurisdiction.” Safe Air For Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004);

Savage, 343 F.3d at 1039 n.2. The court need not presume the truthfulness of the plaintiff’s

allegations under a factual attack. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). 

2. REGULATORY FRAMEWORK

The Clean Air Act In General

Congress passed the CAA to protect and to enhance the quality of air resources and to

promote the health, welfare, and productive capacity of the nation. 42 U.S.C. § 7401; California

v. United States, 215 F.3d 1005, 1007 (9th Cir. 2000). The CAA creates a framework for the

“development of cooperative Federal, State, regional, and local programs to prevent and control

air pollution.” 42 U.S.C. § 7401(a)(4); Hall v. United States Environmental Protection Agency,

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273 F.3d 1146, 1153 (9th Cir. 2001). The CAA requires that the EPA publish a list of air

pollutants and promulgate health based standards, known as the National Ambient Air Quality

Standards (“NAAQS”), that set the maximum permissible concentrations in the ambient air for

each listed air pollutant. 42 U.S.C. §§ 7408(a), 7409(a); Vigil v. Leavitt, 366 F.3d 1025, 1029

(9th Cir. 2004); Bayview Hunters Point Cmty. Advocates v. Metro. Transp. Comm’n, 366 F.3d

692, 695 (9th Cir. 2004). Each state has primary responsibility for assuring air quality, and the

CAA requires each state to adopt a State Implementation Plan (“SIP”) in order to meet NAAQS

requirements. 42 U.S.C. §§ 7407(a), 7410(a); Vigil, 366 F.3d at 1029; Bayview Hunters Point,

366 F.3d at 695; Hall, 273 F.3d at 1153. Specifically, each state is required “to adopt a ‘plan

which provides for implementation, maintenance, and enforcement’ of the ambient air quality

standards and to submit its SIP to the EPA for approval. Each SIP must include enforceable

emission limitations and other control measures necessary to attain the NAAQS, as well as

timetables for compliance.” 42 U.S.C. § 7410(a)(2)(A); Bayview Hunters Point, 366 F.3d at

695; see also Vigil, 366 F.3d at 1029. In order to provide for federal oversight of state efforts to

meet NAAQS requirements, “SIPs are subject to EPA review and, if inadequate, disapproval.” 

Hall, 273 F.3d at 1153; see Bayview Hunters Point, 366 F.3d at 695. Once a SIP is

“adopted by a state and approved by the EPA, [it] becomes controlling and must be carried out

by the state.” Bayview Hunters Point, 366 F.3d at 695; Beentjes v. Placer County Air Pollution

Control Dist., 254 F.Supp.2d 1159, 1162 (E.D. Cal. 2003) (“[a SIP’s] requirements and

commitments become binding upon the state as a matter of federal law.”). “Approved SIPs are

enforceable by either the State, the EPA, or via citizen suits brought under [42 U.S.C. §

7604(a)].” Bayview Hunters Point, 366 F.3d at 695. Regions within a state are “designated as

either ‘attainment’ or ‘non-attainment’ areas, depending upon whether they meet the NAAQS for

a particular pollutant.” Council of Sacramento v. Slater, 184 F.Supp.2d 1016, 1019 (E.D. Cal.

2000). The CAA requires that each SIP include a permit program for non-attainment areas to

regulate the construction and operation of proposed new or modified major stationary sources of

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An “emission standard or limitation” under 42 U.S.C. § 7604 is:

3

(1) a schedule or timetable of compliance, emission limitation, standard of performance or emission standard,

(2) a control or prohibition respecting a motor vehicle fuel or fuel additive, [or]

(3) any condition or requirement of a permit under part C of title I [42 USCS §§ 7470 et seq.] (relating to significant

deterioration of air quality) or part D of title I [42 USCS §§ 7501 et seq.] (relating to nonattainment),[,] section 119

[42 USCS § 7419] (relating to primary nonferrous smelter orders), any condition or requirement under an applicable

implementation plan relating to transportation control measures, air quality maintenance plans, vehicle inspection

and maintenance programs or vapor recovery requirements, section 211(e) and (f) [42 USCS § 7545(e), (f)] (relating

to fuels and fuel additives), section 169A [42 USCS § 7491] (relating to visibility protection), any condition or

requirement under Title VI [42 USCS §§ 7671 et seq.] (relating to ozone protection), or any requirement under

section 111 or 112 [42 USCS §§ 7411, 7412] (without regard to whether such requirement is expressed as an

emission standard or otherwise);[,] or

(4) any other standard, limitation, or schedule established under any permit issued pursuant to title V [42 USCS §§

7661 et seq.] or under any applicable State implementation plan approved by the Administrator, any permit term or

condition, and any requirement to obtain a permit as a condition of operations.[,] which is in effect under this Act

(including a requirement applicable by reason of section 118 [42 USCS § 7418]) or under an applicable

implementation plan.

42 U.S.C. § 7604(f).

11

pollutants. 42 U.S.C. § 7502(c)(5); Greenbaum v. EPA, 370 F.3d 527, 531 (6th Cir. 2004). This

permitting program is known as New Source Review (“NSR”). Greenbaum, 370 F.3d at 531. 

Citizen Suits Under The CAA

Private individuals may bring a “citizen suit” to enforce provisions of the CAA and

approved SIP’s. See 42 U.S.C. § 7604; Bayview Hunters Point, 366 F.3d at 695; Communities

for a Better Environment v. Cenco Ref. Co., 180 F.Supp.2d 1062 (C.D. Cal. 2001). The CAA

expressly authorizes citizens’ suits in federal court. See Oregon Environmental Council v.

Oregon Dept. of Environmental Quality, 775 F.Supp. 353, 364 (D. Or. 1991). The CAA in

pertinent part reads:

(a) Authority to bring civil action; jurisdiction. Except as provided in subsection

(b), any person may commence a civil action on his own behalf--

(1) against any person (including (I) the United States, and (ii) any other

governmental instrumentality or agency to the extent permitted by the

Eleventh Amendment to the Constitution) 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 3

(B) an order issued by the Administrator or a State with respect to such a

standard or limitation,

(2) against the Administrator where there is alleged a failure of the Administrator

to perform any act or duty under this Act which is not discretionary with the

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Administrator, or

(3) against any person who proposes to construct or constructs any new or

modified major emitting facility without a permit required under part C of

title I [42 USCS §§ 7470 et seq.] (relating to significant deterioration of air

quality) or part D of title I [42 USCS §§ 7501 et seq.] (relating to

nonattainment) or who is alleged to have violated (if there is evidence that

the alleged violation has been repeated) or to be in violation of any

condition of such permit.

The district courts shall have jurisdiction, without regard to the amount in

controversy or the citizenship of the parties, to enforce such an emission standard

or limitation, or such an order, or to order the Administrator to perform such act

or duty, as the case may be, and to apply any appropriate civil penalties. . . .

(b) Notice. No action may be commenced--

(1) under subsection (a)(1)--

(A) prior to 60 days after the plaintiff has given notice of the violation (I)

to the Administrator, (ii) to the State in which the violation occurs, and

(iii) to any alleged violator of the standard, limitation, or order . . . .

42 USCS § 7604(a), (b)(1).

The CAA’s provision for citizen suits “is meant to supplement rather than to supplant

government action.” Sierra Club v. Georgia Power Co., 443 F.3d 1346, 1349 (11th Cir. 2006). 

For citizen suits brought under § 7604(a)(1), citizen plaintiffs must give sixty (60) days notice as

a mandatory condition precedent or else face dismissal of their claim. See Hallstrom v.

Tillamook County, 493 U.S. 20, 31 (1989) (interpreting analogous notice requirements under

RCRA); Save Our Health Org. v. Recomp of Minn., Inc., 37 F.3d 1334, 1337-38 (8th Cir. 1994);

Village of Oconomowoc Lake v. Dayton Hudson Corp., 24 F.3d 962, 963 (7th Cir. 1994);

Anderson v. Farmland Indus., 45 F.Supp.2d 863, 865 (D. Kan. 1999). “The purposes of the

notice requirement are to: (a) allow the alleged violator to come into compliance with the law;

(b) provide an opportunity to negotiate a settlement of the dispute short of a lawsuit; and (c) give

state and federal environmental agencies an opportunity to step in and enforce their laws and

regulations.” Cenco Ref. Co., 180 F.Supp.2d at 1086 (citing Hallstrom v. Tillamook County, 493

U.S. 20 (1989)). 

3. EXHAUSTION OF REMEDIES

Under the doctrine of exhaustion, “no one is entitled to judicial relief for a supposed or

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threatened injury until the prescribed . . . remedy has been exhausted.” McKart v. United States,

395 U.S. 185, 193 (1969); Laing v. Ashcroft, 370 F.3d 994, 997 (9th Cir. 2004). “Where

Congress specifically mandates, exhaustion is required. But where Congress has not clearly

required exhaustion, sound judicial discretion governs.” McCarthy v. Madigan, 503 U.S. 140,

144 (1992); Pension Benefit Guar. Corp. v. Carter & Tillery Enters., 133 F.3d 1183, 1187 (9th

Cir. 1998). Thus, exhaustion “can be either statutorily or judicially required,” and, if statutorily

required, “may be mandatory and jurisdictional.” Laing, 370 F.3d at 998. Where exhaustion of

administrative remedies is not required by a statute, a district court may exercise it discretion to

require exhaustion. Porter v. Board of Trs. of Manahattan Beach Unified Sch. Dist., 307 F.3d

1064, 1070 (9th Cir. 2002); Tomas v. Rubin, 926 F.2d 906, 911 (9th Cir. 1991); MorrisonKnudsen Co. v. CHG Int'l, Inc., 811 F.2d 1209, 1223 (9th Cir. 1987). “In exercising its

discretion, the court must balance the agency’s interest in applying its expertise, correcting its

own errors, making a proper record, and maintaining an efficient, independent administrative

system, against the interests of private parties in finding adequate redress.” Tomas, 926 F.2d at

911-12; Morrison-Knudsen, 811 F.2d at 1223. A court’s discretionarily imposed exhaustion

requirement, however, “does not limit jurisdiction.” Morrison-Knudsen, 811 F.2d at 1223. 

Rather, where a district court exercises its discretion to require exhaustion, the court “may allow

the action to proceed immediately, it may dismiss the action pending exhaustion of

administrative remedies, or it may stay its own proceedings pending administrative review. In

most cases, particularly where a statute of limitations problem might develop, the third

alternative may represent the best accommodation of the competing interests.” Pension Benefit,

133 F.3d at 1187; Morrison-Knudsen, 811 F.2d at 1223. “Resort to administrative remedies is

not required where the administrative remedy is inadequate, or where proceeding within the

administrative process would be futile or serve no purpose.” American Federation of

Government Employees, Local 1168 v. Dunn, 561 F.3d 1310, 1314-15 (9th Cir. 1977).

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The complaint alleges that “On September 20, 2005, AIR sent a 60-day notice of intent to sue Vanderham 4

to enforce the [SIP] pursuant to § 304(a)(1) of the [CAA], 42 U.S.C. § 7604(a)(1).”

14

 DISCUSSION

Vanderham’s Rule 12(b)(1) motion to dismiss is based on an alleged failure by AIR to

exhaust administrative remedies. However, the Court finds AIR’s arguments on the issue of

subject matter jurisdiction persuasive. 

An exhaustion requirement is either mandated by statute or judicially imposed. Laing,

370 F.3d at 998. With respect to a statutory mandate, the text of § 7604 does not contain an

express exhaustion of state remedies requirement. Cf. Citizens for a Better Env't v. Union Oil

Co., 83 F.3d 1111, 1119 (9th Cir. 1996) (“Furthermore, 33 U.S.C. § 1365 makes no mention of

exhaustion of state remedies as a prerequisite for bringing a citizen suit.”). In fact, § 7604(a)

states that “district courts shall have jurisdiction, without regard to the amount in controversy or

the citizenship of the parties, to enforce such an emission standard or limitation.” 42 U.S.C. §

7604(a). Thus, there is an express grant of jurisdiction to this Court to enforce an “emission

standard or limitation.” The CAA does require 60-days notice before a plaintiff can file a suit

seeking to enforce an emission standard. However, Vanderham does not challenge the 60-day

notice requirement, and there is no indication that AIR has failed to fulfill the 60-day notice

requirement for filing a § 7604(a)(1) suit. Vanderham focuses on state statutory provisions for 4

challenging decisions of a hearing board. However, this lawsuit is based on a provision of

federal law, the CAA. Under the federal provision under which AIR brings suit, 42 U.S.C. §

7604, there is no evidence that AIR has failed to fulfill the requirements imposed by that statute. 

Vanderham has not shown that any mandatory provisions of the CAA have been violated such

that dismissal would be appropriate or that exhaustion is mandated by § 7604, other than perhaps

the 60-day notice requirement. 

In the absence of an express requirement for exhaustion of state remedies in § 7604, the

Court may exercise its discretion and require exhaustion. However, in its reply, Vanderham

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maintains that the Court lacks jurisdiction and states that the “issues in this case focus on

statutory exhaustion, not the doctrine of judicial exhaustion.” Vanderham’s Reply at 8:23-24. 

Thus, it appears that Vanderham is not requesting the Court to impose a judicially created

exhaustion requirement. Moreover, Vanderham has not addressed arguments made by AIR

against a judicially imposed exhaustion requirement. Specifically, Vanderham has not addressed

arguments that: (1) the 60-day notice requirement in § 7604 serves similar functions as an

exhaustion requirement, see Cenco Ref.,180 F.Supp.2d at 1086; (2) other courts within this

circuit have refused to require exhaustion of state judicial or administrative remedies prior to

filing a citizen suit, see Cenco Ref. Co., 180 F.Supp.2d at 1087 n.10; Oregon Environmental

Council, 775 F. Supp. at 364; and (3) it is unclear how or whether Regulation 5 and/or the

Health & Safety Code could apply in the circumstances of this case, i.e. a decision that no permit

is required and the decision is not made by the District Hearing Board after a hearing. 

Accordingly, because it does not appear that Vandheram is requesting a judicial exhaustion

requirement, and because Vanderham has not adequately explained the basis for imposing a

discretionary exhaustion requirement, the Court will not impose a discretionary, judicial

exhaustion requirement. 

With respect to Rational Transit, the Court finds this case to be distinguishable from the

case at bar. Rational Transit relied primarily on League to Save Lake Tahoe, Inc. v. Trounday,

598 F.2d 1164 (9th Cir. 1979) for the proposition that state judicial and administrative remedies

must be exhausted prior to bringing a § 7604(a)(1) suit. However, in Trounday, the Ninth Circuit

was dealing with a federally approved SIP that had incorporated state administrative

remedies/procedures. Id. at 1168, 1174 & n.12; Cenco Ref., 180 F.Supp.2d at 1086. The

Trounday plaintiffs’s failure to pursue the administrative remedies as provided by the federally

approved SIP did not entitle them to a remedy in federal court. Trounday, 598 F.2d at 1174;

Cenco Ref., 180 F.Supp.2d at 1086-87. Here, Vanderham has failed to point to an exhaustion

requirement or administrative remedies/procedures similar to Trounday within the federally

approved SIP. 

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The Court does not suggest that there was anything improper or nefarious about the correspondences

5

between Vanderham and the District or the District’s determination that no ATC permit was required. 

16

Also, in Rational Transit, the plaintiffs “knew that their interests were at stake in the

indirect source proceedings,” but failed to participate in or pursue the administrative process

regarding issuance of a permit. Rational Transit, 699 F.2d at 616-17. Rational Transit does not

explain what kind of proceedings occurred in the determination that no permit was necessary, but

the plaintiffs in that case knew that proceedings were occurring and that their interests were

involved. See id. at 617. In the case at bar, the determination that no permit was required for

Vanderham does not appear to have involved any open proceedings, but instead was done

through private correspondences. It is unknown how AIR could be expected to know that its

5

interests were at stake. 

Vanderham’s Argument Made In Reply

In its reply brief, Vanderham mostly expands on the argument that AIR is attacking the

wrong party. As explained above, in the Conclusion section of its motion, Vanderham stated in

summary that AIR is attacking the wrong party because it was the District that determined that

Vanderham needs no ATC permit. The reply brief significantly expands on this argument and

argues, in part, that AIR prays for an injunction from this Court to require Vanderham to obtain a

permit. Vanderham argues that since the District has already determined that no permit is

required, and since the District is not a party to this lawsuit, the Court cannot grant this relief. In

its prior opposition, AIR states in one paragraph that it is challenging Vanderham’s violation of

law, is not challenging the District’s decision, and that § 7604(a)(1) does not require it to sue the

state agency. 

The issue of attacking the wrong party was inadequately developed in the initial motion

as the issue simply purported to be a summary in the conclusion section of Vanderham’s Rule

12(b)(1) motion. Vanderham’s reply brief expands on this argument, but raises issues that were

not briefed in its 12(b)(1) motion or addressed by AIR in the prior opposition. It is inappropriate

to consider arguments raised for the first time in a reply brief. See Eiden v. Thrifty Payless, Inc.,

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407 F.Supp.2d 1165, 1171 n.7 (E.D. Cal. 2005). Additionally, the arguments raised by

Vanderham in its reply appear to be better suited for a motion other than a Rule 12(b)(1) motion

since any problems with relief available or parties may require dismissal, but do not deprive the

Court of subject matter jurisdiction at this point. See Fed. Rs. Civ. Pro. 12, 19. Accordingly, the

Court will not address these issues at this time. See Edien, 407 F.Supp.2d at 1171 n.7.

CONCLUSION

Vanderham has moved the Court to dismiss this case under Rule 12(b)(1) and argues that

this Court lacks subject matter jurisdiction because AIR did not exhaust state administrative and

judicial remedies. An exhaustion of remedies claim is either mandated by a statute or judicially

imposed as an exercise of discretion. Judicially imposed exhaustion requirements do not limit a

court’s jurisdiction. Here, Vanderham has not shown, and apparently does not argue, that a

discretionary exhaustion requirement should apply, but instead maintains that this Court lacks

subject matter jurisdiction. The citizen suit provision of the CAA does not contain an exhaustion

of state remedies requirement. Moreover, the CAA specifically grants district courts jurisdiction

to hear suits that seek to enforce an emission standard or limitation. The only pre-requisite

apparent under the CAA’s citizen suit provision is a 60-day notice requirement. Courts do

dismiss CAA citizen suits where a plaintiff fails to serve the mandatory 60-day notice. However,

there has been no issue raised with respect to the 60-day notice in this case. Given the language

of the citizen suit provision of the CAA, specifically the absence of an exhaustion requirement

and the express grant of jurisdiction to district courts, the Court concludes that it has subject

matter jurisdiction in this case.

Accordingly, IT IS HEREBY ORDERED that:

1. Defendants’s Rule 12(b)(1) Motion To Dismiss is DENIED; and

2. Defendants shall file an answer or other appropriate responsive pleading within

twenty-one (21) days of service of this order.

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IT IS SO ORDERED.

Dated: June 15, 2006 /s/ Anthony W. Ishii 

0m8i78 UNITED STATES DISTRICT JUDGE

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