Nos. 09-3351, 09-3344, 09-3350 

IN THE 

UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT 

UNITED STATES OF AMERICA, 

 Plaintiff-Appellee/Cross-Appellant, 

STATE OF NEW YORK, STATE OF NEW JERSEY, STATE OF CONNECTICUT, 

 Plaintiff-Intervenor Appellees/Cross-Appellants, 

and 

HOOSIER ENVIRONMENTAL COUNCIL, OHIO ENVIRONMENTAL COUNCIL, 

 Plaintiff-Intervenor Appellees,

v. 

CINERGY CORPORATION, PSI ENERGY, INC., 

AND THE CINCINNATI GAS & ELECTRIC COMPANY, 

 Defendant-Appellants. 

Appeal from the United States District Court for the Southern District of Indiana, 

Indianapolis Division, case no. 1:99-cv-1693, 

the Honorable Judge Larry J. McKinney, presiding 

DEFENDANT-APPELLANTS’ OPENING BRIEF 

Marc E. Manly 

Catherine S. Stempien 

Dean M. Moesser 

Julie L. Ezell 

DUKE ENERGY CORP. 

526 South Church Street 

Charlotte, NC 28202 

(704) 382-8000 

Mark D. Hopson 

Counsel of Record 

Peter D. Keisler 

Frank R. Volpe 

Peter C. Pfaffenroth 

Ryan C. Morris 

Lowell J. Schiller 

SIDLEY AUSTIN LLP

1501 K Street, N.W. 

Washington, DC 20005 

(202) 736-8000 tel. 

(202) 736-8711 fax 

Attorneys for Appellants 

December 11, 2009 

 

 

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CIRCUIT RULE 26.1 DISCLOSURE STATEMENT 

(1) The full name of every party that the attorney represents in the case (if the 

party is a corporation, you must provide the corporate disclosure information 

required by Fed. R. App. P 26.1 by completing item #3): 

Cinergy Corp.; PSI Energy, Inc.; The Cincinnati Gas & Electric Company 

(2) The names of all law firms whose partners or associates have appeared for the 

party in the case (including proceedings in the district court or before an 

administrative agency) or are expected to appear for the party in this court: 

Sidley Austin LLP; Taft Stettinius & Hollister LLP; Porter Wright Morris & 

Arthur LLP; Sommer Barnard PC; Hogan & Hartson, LLP; Plews, Shadley, 

Racher & Braun; Barnes & Thornburg LLP 

(3) If the party or amicus is a corporation: 

i) Identify all its parent corporations, if any; and 

Cinergy Corp. is a wholly-owned subsidiary of Duke Energy Corporation. PSI 

Energy, Inc (now known as Duke Energy Indiana, Inc.) and The Cincinnati 

Gas & Electric Company (now known as Duke Energy Ohio) are both whollyowned subsidiaries of Cinergy Corp. 

ii) list any publicly held company that owns 10% or more of the party’s or amicus’ 

stock: 

Duke Energy Corporation owns 10% or more of the stock of Cinergy Corp. 

PSI Energy, Inc (now known as Duke Energy Indiana, Inc.) and The 

Cincinnati Gas & Electric Company (now known as Duke Energy Ohio) are 

both wholly-owned subsidiaries of Cinergy Corp. 

Attorney’s Signature: _________________________________ Date: _________________ 

Attorney’s Printed Name: Mark D. Hopson Counsel of Record: Yes No

Address: Sidley Austin LLP, 1501 K Street N.W., Washington, D.C. 20005 

Phone Number: (202) 736-8188 Fax Number: (202) 736-8711

E-Mail Address: mhopson@sidley.com

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CIRCUIT RULE 26.1 DISCLOSURE STATEMENT 

(1) The full name of every party that the attorney represents in the case (if the 

party is a corporation, you must provide the corporate disclosure information 

required by Fed. R. App. P 26.1 by completing item #3): 

Cinergy Corp.; PSI Energy, Inc.; The Cincinnati Gas & Electric Company 

(2) The names of all law firms whose partners or associates have appeared for the 

party in the case (including proceedings in the district court or before an 

administrative agency) or are expected to appear for the party in this court: 

Sidley Austin LLP; Taft Stettinius & Hollister LLP; Porter Wright Morris & 

Arthur LLP; Sommer Barnard PC; Hogan & Hartson, LLP; Plews, Shadley, 

Racher & Braun; Barnes & Thornburg LLP 

(3) If the party or amicus is a corporation: 

i) Identify all its parent corporations, if any; and 

Cinergy Corp. is a wholly-owned subsidiary of Duke Energy Corporation. PSI 

Energy, Inc (now known as Duke Energy Indiana, Inc.) and The Cincinnati 

Gas & Electric Company (now known as Duke Energy Ohio) are both whollyowned subsidiaries of Cinergy Corp. 

ii) list any publicly held company that owns 10% or more of the party’s or amicus’ 

stock: 

Duke Energy Corporation owns 10% or more of the stock of Cinergy Corp. 

PSI Energy, Inc (now known as Duke Energy Indiana, Inc.) and The 

Cincinnati Gas & Electric Company (now known as Duke Energy Ohio) are 

both wholly-owned subsidiaries of Cinergy Corp. 

Attorney’s Signature: _________________________________ Date: _________________ 

Attorney’s Printed Name: Julie L. Ezell Counsel of Record: Yes No

Address: Duke Energy Shared Services, Inc., 1000 E. Main St., Plainfield, IN 46168 

Phone Number: (317) 838-1100 Fax Number: (317) 838-6001 

E-Mail Address: Julie.Ezell@duke-energy.com

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TABLE OF CONTENTS 

TABLE OF CONTENTS ............................................................................................... iii

TABLE OF AUTHORITIES .......................................................................................... v

JURISDICTIONAL STATEMENT ............................................................................... 1

STATEMENT OF ISSUES PRESENTED .................................................................... 2

STATEMENT OF THE CASE ....................................................................................... 3

INTRODUCTION .......................................................................................................... 3

STATEMENT OF FACTS ............................................................................................. 5

A. Statutory And Regulatory Background. .................................................. 5

B. Factual Background. ................................................................................ 9

1. Cinergy’s Electricity Generating System. .................................... 9

2. Cinergy’s Component Replacement Projects. ............................. 12

C. Procedural Background. ......................................................................... 13

1. The NSR Enforcement Initiative. ............................................... 13

2. The Applicable NNSR Test. ........................................................ 14

3. The Rosen-Koppe Methodology. .................................................. 15

4. The Judgment. ............................................................................. 18

SUMMARY OF ARGUMENT ..................................................................................... 20

ARGUMENT ................................................................................................................ 22

I. The District Court Applied The Wrong Legal Standard. ................................ 22

A. Before 1994, Indiana’s SIP Imposed A “Potential-To-Potential” 

NNSR Standard. ..................................................................................... 23

B. The NNSR Provisions Of The Indiana SIP In Place At The Time 

Of The Projects Govern Plaintiffs’ NNSR Claims. ................................ 29

II. The District Court Erred In Admitting The Rosen And Koppe 

Testimony. ......................................................................................................... 32

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A. Rosen’s And Koppe’s Made-For-Litigation Methodology Is 

Presumptively Unreliable. ..................................................................... 34

B. The Rosen-Koppe Methodology Has Never Been Tested, Has No 

Known Error Rate, And Has Not Been Peer-Reviewed. ....................... 35

C. The Rosen-Koppe Methodology Is Biased And Unreliable. .................. 43

D. The Rosen-Koppe Methodology Is Irrelevant Under The CAA 

And EPA’s Implementing Regulations. ................................................. 52

CONCLUSION ............................................................................................................. 57

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TABLE OF AUTHORITIES 

Page(s) 

CASES 

Braun v. Lorillard Inc., 

84 F.3d 230 (7th Cir. 1996) .................................................................................... 34 

Chapman v. Maytag Corp., 

297 F.3d 682 (7th Cir. 2002) ...................................................................... 33, 36, 43 

Claar v. Burlington N. R.R., 

29 F.3d 499 (9th Cir. 1994) .................................................................................... 36 

Corporate Assets, Inc. v. Paloian, 

368 F.3d 761 (7th Cir. 2004) .................................................................................. 33 

Daubert v. Merrell Dow Pharms., Inc., 

43 F.3d 1311 (9th Cir. 1995) ...................................................................... 34, 35, 38 

Daubert v. Merrell Dow Pharms., Inc., 

509 U.S. 579 (1993) ......................................................................................... passim

Fuesting v. Zimmer, Inc., 

421 F.3d 528 (7th Cir. 2005), vacated in part on other grounds, 448 F.3d 

936 (7th Cir. 2006) .................................................................................................. 35 

Johnson v. Manitowoc Boom Trucks, Inc., 

484 F.3d 426 (6th Cir. 2007) .................................................................................. 35 

Gen. Motors Corp. v. United States, 

496 U.S. 530 (1990) .................................................................................. 5, 6, 22, 30 

Kempner Mobile Elecs., Inc. v. Sw. Bell Mobile Sys., 

428 F.3d 706 (7th Cir. 2005) ............................................................................ 33, 52 

Kumho Tire Co. v. Carmichael, 

526 U.S. 137 (1999) ........................................................................ 32, 35, 36, 39, 40 

Metro. Wash. Coal. for Clean Air v. Dist. of Columbia, 

511 F.2d 809 (D.C. Cir. 1975) ................................................................................ 30 

N. Ind. Pub. Serv. Co. v. Colo. Westmoreland, Inc., 

667 F. Supp. 613 (N.D. Ind. 1987), aff’d, 845 F.2d 1024 

(7th Cir. 1988) ....................................................................................... 10, 11, 43, 47 

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vi 

In re Paoli R.R. Yard PCB Litig., 

35 F.3d 717 (3d Cir. 1994) ...................................................................................... 49 

People Who Care v. Rockford Bd. of Educ., 

111 F.3d 528 (7th Cir. 1997) .................................................................................. 44 

Rosen v. Ciba-Geigy Corp., 

78 F.3d 316 (7th Cir. 1996) .................................................................................... 34 

United States v. Ala. Power Co., 

372 F.Supp.2d 1283 (N.D. Ala. 2005) .................................................................... 13 

United States v. Cinergy Corp., 

458 F.3d 705 (7th Cir. 2006) .................................................................................... 7 

United States v. Disantis, 

565 F.3d 354 (7th Cir. 2009) .................................................................................. 22 

United States v. Ohio Edison Corp., 

276 F.Supp.2d 829 (S.D.Ohio 2003) ................................................................. 13, 29 

Wis. Elec. Power Co. v. Reilly, 

893 F.2d 901 (7th Cir. 1990) .............................................................................. 8, 13

Zenith Elecs. Corp. v. WH-TV Broad., 

395 F.3d 416 (7th Cir. 2005) ...................................................................... 21, 39, 42 

STATUTES AND REGULATIONS 

Pub. L. No. 95-95, §129(a)(1), 91 Stat. 685 (1977) ...................................................... 23 

16 U.S.C. §824d(a) ....................................................................................................... 10 

42 U.S.C. §7407(a) ......................................................................................................... 5 

42 U.S.C. §7408(a) ......................................................................................................... 5 

42 U.S.C. §7409 .............................................................................................................. 5 

42 U.S.C. §7410(a) ................................................................................................... 6, 31 

42 U.S.C. §7411(a)(4) ..................................................................................................... 6 

42 U.S.C. §7413(b) ..................................................................................................... 5, 6 

42 U.S.C. §§7470-7492 ................................................................................................... 5 

42 U.S.C. §7475(a) ................................................................................................... 6, 22 

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42 U.S.C. §7479(2)(C) .................................................................................................... 6 

42 U.S.C. §§7501-7515 ......................................................................................... 5, 6, 30 

42 U.S.C. §7502 ........................................................................................................ 6, 22 

42 U.S.C. §7602(q) ................................................................................................... 5, 22 

Ind. Code §8-1-2-4 ........................................................................................................ 10 

40 C.F.R. §51.24 (1979) ............................................................................................ 7, 24 

40 C.F.R. §51.21 (1979) ............................................................................................ 7, 24 

40 C.F.R. pt. 51, App. S (1979) ................................................................................ 7, 23 

40 C.F.R. §52.21 (1981) ...................................................................................... 7, 45, 47 

40 C.F.R. §52.24 (1981) .......................................................................................... 45, 48 

40 C.F.R. §51.105 (1992) .......................................................................................... 6, 30 

40 C.F.R. §51.165 (1992) .......................................................................................... 6, 31 

40 C.F.R. §51.166 (1992) ................................................................................................ 6 

40 C.F.R. §52.21 (1992) ...................................................................................... 6, 27, 52 

40 C.F.R. §52.770 (1992) .................................................................................. 23, 25, 28 

40 C.F.R. §52.770 (1995) .............................................................................................. 26 

40 C.F.R. §52.793 (2009) .............................................................................................. 27 

44 Fed. Reg. 3,274 (Jan. 16, 1979) .............................................................................. 24 

44 Fed. Reg. 20,372 (Apr. 4, 1979) .................................................................. 23, 24, 29 

44 Fed. Reg. 38,583 (July 2, 1979) .............................................................................. 24 

44 Fed. Reg. 51,924 (Sept. 5, 1979) ............................................................................. 24 

44 Fed. Reg. 67,182 (Nov. 23, 1979) ............................................................................ 24 

45 Fed. Reg. 20,432 (Mar. 27, 1980) ............................................................................ 26 

45 Fed. Reg. 52,676 (Aug. 7, 1980) .................................................................... 7, 24, 27 

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46 Fed. Reg. 54,941 (Nov. 5, 1981) .................................................................... 8, 26, 28 

47 Fed. Reg. 6,621 (Feb. 16, 1982) .............................................................. 8, 23, 26, 27 

47 Fed. Reg. 30,972 (July 16, 1982) ............................................................................ 25 

54 Fed. Reg. 2,214 (Jan. 19, 1989) .......................................................................... 6, 29 

57 Fed. Reg. 32,314 (July 21, 1992) ..................................................................... passim 

59 Fed. Reg. 51,108 (Oct. 7, 1994) ..................................................................... 8, 26, 29 

70 Fed. Reg. 61,081 (Oct. 20, 2005) ............................................................................... 9 

325 Ind. Admin. Code § 2-1.1-1 (1981) ........................................................................ 29 

325 Ind. Admin. Code § 2-3-1 (1981) ........................................................................... 29 

326 Ind. Admin. Code §2-3-1 ....................................................................................... 29 

Ind. Air Pollution Control Regulation APC-1 (recodified as 325 Ind. Admin. 

Code §1.1-1) ............................................................................................ 7, 23, 25, 28 

Ind. Air Pollution Control Regulation APC-19 (recodified as 325 Ind. Admin. 

Code §2-1) ............................................................................................... 8, 23, 25, 29 

RULES 

Fed. R. Civ. P. 50(a)(1) ................................................................................................. 23 

Fed. R. Evid. 702, 2000 amend. ............................................................................. 33, 34 

OTHER AUTHORITIES 

Stephen L. Johnson, EPA Policy Statement, Peer Review and Peer 

Involvement at the U.S. Environmental Protection Agency (Jan. 31, 2006), 

http://www.epa.gov/peerreview/pdfs/peer_review_policy_and_memo.pdf ............ 38 

Department of Justice Press Release, U.S. Sues Electric Utilities In 

Unprecedented Action To Enforce The Clean Air Act (Nov. 3, 1999), 

http://www.jus-tice.gov/opa/pr/1999/November/524enr.htm .................................. 3 

EPA, Guidance for Quality Assurance Project Plans for Modeling, EPA QA/G5 (Dec. 2002), http://www.epa.gov/quality1/qs-docs/g5m-final.pdf ................. 37, 38 

EPA, Guidance on Systematic Planning Using the Data Quality Objectives 

Process, EPA QA/G-4 (Feb. 2006), http://www.epa.gov/QUALITY/qsdocs/g4-final.pdf ...................................................................................................... 38 

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JURISDICTIONAL STATEMENT 

In 1999, the United States filed suit in the United States District Court for the 

Southern District of Indiana against Defendant-Appellants, alleging violations of 

Title I of the Clean Air Act. The district court had jurisdiction under 28 U.S.C. 

§§1331, 1345 and 42 U.S.C. §7413. 

On May 22, 2008, a jury found Defendant-Appellants liable on claims relating to 

four component replacement projects at the Wabash River generating station. On 

May 29, 2009, the district court entered partial final judgment under Rule 54(b) as 

to those projects. On June 12, 2009, Defendant-Appellants moved for judgment as a 

matter of law or, in the alternative, a new trial, which the court denied on July 24, 

2009. Separate claims concerning projects at other generating stations remain 

pending before the district court. This appeal reaches only the Wabash River 

projects on which the court entered partial judgment. 

On September 21, 2009, Cinergy timely filed a notice of appeal. This Court has 

jurisdiction under 28 U.S.C. §1291. 

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STATEMENT OF ISSUES PRESENTED 

1. Whether the district court erred as a matter of law by instructing the 

jury to determine whether Cinergy was liable under the Clean Air Act’s nonattainment New Source Review provisions based on an incorrect legal standard that 

was not part of the only regulations enforceable under the Act, the approved 

Indiana State Implementation Plan. 

2. Whether the district court erred in admitting the expert testimony of 

Richard Rosen and Robert Koppe when their predictive methodology was created 

solely for litigation, was never tested or peer-reviewed, has no known error rate, 

and disregards the factors that actually determine the dispatch of electricity from 

power plants and the statutory and regulatory principles that govern this case. 

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STATEMENT OF THE CASE 

In 1999, the United States, on behalf of the Environmental Protection Agency 

(“EPA”), filed suit against Cinergy Corp., PSI Energy, Inc., and the Cincinnati Gas 

& Electric Company (collectively “Cinergy”). At trial, it claimed that Cinergy 

violated the New Source Review (“NSR”) provisions of the Clean Air Act (“CAA”) by 

undertaking fourteen component replacement projects at its electrical generating 

units without first seeking a permit. It contended that these component 

replacement projects constituted “modifications” of the units because the projects 

should have been expected to cause emissions increases of 40 tons or more per year 

of certain pollutants. A jury found Cinergy not liable with respect to most of the 

counts, but found that Cinergy violated the CAA with respect to four projects solely 

at its Wabash River station in Indiana in 1989, 1990, and 1992. As a remedy for 

these violations, the court then ordered Cinergy to retire the units and surrender 

Title IV emissions allowances. 

INTRODUCTION 

This case is one of several “unprecedented” enforcement actions under the NSR 

provisions of the CAA. Dep’t of Justice Press Release, U.S. Sues Electric Utilities In 

Unprecedented Action To Enforce The Clean Air Act (Nov. 3, 1999), http://www. 

justice.gov/opa/pr/1999/November/524enr.htm. It concerns a central question under 

the NSR program: whether and in what circumstances a utility that merely replaces 

a component at one of its generating units, without changing the efficiency, coststructure, capacity, or other fundamental characteristics of the unit, has 

nonetheless “modified” that unit sufficient to subject it to regulation as a new or 

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modified source of emissions. Although EPA had for decades known that utilities 

maintain their plants through such replacements, not until 1999 did it bring any 

enforcement actions involving any of the many such projects across the country 

(some of which had been completed a decade or more before). 

This sudden and massive change of course left the government with 

fundamental gaps in its theories and proof. The government’s improper efforts to 

circumvent those deficiencies led to two overarching errors in this case. 

First, the government relied upon the wrong legal standard for most of the 

claims on which Cinergy was found liable. Cinergy undertook and completed the 

projects at issue between 1989 and 1992, but the jury was instructed to apply a 

standard that the district court acknowledged did not become part of the governing 

State Implementation Plan (“SIP”) until 1994. The SIP, however, is the only 

regulation enforceable under the CAA for those claims. The government offered no 

evidence that Cinergy’s emissions increased under the standard actually contained 

in the SIP. 

Second, even under the standard the jury was instructed to apply, the only 

evidence supporting the claim that Cinergy should have predicted the 40-ton 

increase in emissions necessary to trigger liability was expert testimony that should 

never have been admitted. The experts’ methodology was created in “brainstorming 

sessions” with the government’s counsel exclusively for this litigation and had never 

previously been used by EPA for any purpose. These experts never sought to 

validate their new theory through testing or any other scientific process, asserting it 

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was “simple math,” A00913, that required no testing. Indeed, their methodology 

could not have withstood such scrutiny, because (among other dispositive flaws) it 

was designed consistently to predict generation increases without regard to how a 

utility actually allocates demand among its interdependent generating units, and it 

simply “assumed” away the statutory and regulatory causation requirement. 

STATEMENT OF FACTS 

A. Statutory And Regulatory Background. 

The 1970 Amendments to the CAA “made the States and the Federal 

Government partners” in regulating air quality. Gen. Motors Corp. v. United States, 

496 U.S. 530, 532 (1990). They directed EPA to promulgate national ambient air 

quality standards (“NAAQS”) for certain pollutants. 42 U.S.C. §§7408(a), 7409. They 

then charged each State with developing a SIP that specifies how it will achieve and 

maintain the NAAQS. 42 U.S.C. §7407(a). 

The NSR program directs that State SIPs include provisions requiring preconstruction review and permitting for certain “new” and “modified” sources of air 

pollution. Areas designated as in “attainment” of the NAAQS for a pollutant fall 

under the Prevention of Significant Deterioration (“PSD”) program, 42 U.S.C. 

§§7470-7492, as to that pollutant. Areas designated as in “nonattainment” for a 

pollutant fall under the Nonattainment New Source Review (“NNSR”) program, 42 

U.S.C. §§7501-7515, for that pollutant. 

State SIPs are federally enforceable, but only after approval by EPA. See 42 

U.S.C. §§7413(b), 7602(q). Likewise, revisions to a SIP are federally enforceable 

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only after EPA approves them. 40 C.F.R. §51.105;1 see also Gen. Motors, 496 U.S. at 

540. A utility that violates a State’s PSD SIP provisions faces liability both for the 

SIP violations themselves, 42 U.S.C. §7413(b)(1), and for violations of other CAA 

provisions, id. §7413(b)(2), including §7475(a), which prohibits construction without 

a PSD permit. The NNSR program, in contrast, does not directly impose obligations 

on utilities and subjects a utility to federal liability only for violating the terms of 

the EPA-approved SIP. Compare id. §7475(a), with id. §§7501-15; see also id.

§7413(b)(1). 

Under either program, a pre-construction permit is required for certain 

“modification[s]” of an existing stationary source. 42 U.S.C. §7411(a)(4); see id.

§§7475(a), 7479(2)(C) (PSD); id. §7502(c)(5) (NNSR). Because permitting decisions 

are made by States, the requirements for making the “modification” determination 

are contained within the relevant State’s approved SIP. See id. §7410(a)(2)(C) 

(PSD); id. §7502(c)(5) (NNSR). Nonetheless, EPA promulgates regulations that 

provide guidance to States and has the authority to disapprove proposed SIPs that 

it deems inconsistent with that guidance. See, e.g., 42 U.S.C. §7410(a); 40 C.F.R. 

§§51.165, 51.166, 52.21. 

EPA’s regulatory guidance on the standard for a “modification” has shifted 

repeatedly over time, contributing to what EPA itself has called a “moving target 

syndrome” in the often lengthy SIP approval process. 54 Fed. Reg. 2,214, 2,217 (Jan. 

19, 1989). After the 1977 CAA Amendments, construction projects initially were 

 

1 Unless specifically noted, all C.F.R. references are to the 1992 edition, see ADD-71–212. 

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deemed “modifications” if they caused an increase in “potential” emissions (i.e., 

increases in the unit’s maximum emissions capacity) in excess of 100 tons per year 

for criteria pollutants such as sulfur dioxide (“SO2”) or nitrogen oxides (“NOx”)—a 

standard known as “potential-to-potential” because it required a comparison of the 

unit’s potential emissions before and after the project. See 40 C.F.R. 

§§51.24(b)(2),(3), 52.21(b)(2),(3) (1979) (PSD); id. pt. 51, App. S §II(A)(3), (5) (1979) 

(NNSR). 

In 1980, however, EPA promulgated new guidance providing that a 

“modification” instead occurs when a project would be expected to “result in” an 

increase in “actual” annual emissions above baseline levels. See 45 Fed. Reg. 

52,676, 52,730-32, 52,746-47 (Aug. 7, 1980); United States v. Cinergy Corp., 458 

F.3d 705, 708 (7th Cir. 2006). Relevant here, federal guidance provides that States’ 

PSD and NNSR permitting requirements should be triggered only when the 

projected increase in actual emissions of SO2 or NOx is 40 tons or more per year 

above baseline levels. 45 Fed. Reg. at 52,732. Moreover, this increase in emissions 

must result directly from the project and not some other cause, such as responding 

to increased demand. 40 C.F.R. §52.21(2)(i) (1981). 

Indiana adopted the SIP applicable to this case during this period of shifting 

guidance. This SIP contained the “potential-to-potential” standard contained in 

then-current EPA regulations. Indiana Air Pollution Control Regulation APC-1; 

APC-19. EPA abandoned that test while the Indiana SIP was pending, but EPA 

nonetheless approved the SIP provisions containing this “potential-to-potential” 

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standard for Indiana’s NNSR program. 46 Fed. Reg. 54,941, 54,942 (Nov. 5, 1981); 

47 Fed. Reg. 6,621 (Feb. 16, 1982). Although EPA observed that Indiana had 

committed to update its SIP and EPA would “rulemake on these revised [SIP] 

regulations ... upon their submittal,” 46 Fed. Reg. at 54,942, EPA did not actually 

approve such a revision until 1994, 59 Fed. Reg. 51,108 (Oct. 7, 1994). 

Such delays were not the only, or even the most important, problems that 

plagued the administration of the program. Even more significant were EPA’s 

highly general and ever-changing substantive standards. For example, EPA began 

directing States to assess whether “like-kind” replacements (replacing worn 

components with newer versions of the same components) were “modifications” by 

comparing pre-project actual emissions with a source’s post-project potential to emit 

(known as the “actual-to-potential” test). Wis. Elec. Power Co. v. Reilly, 893 F.2d 

901, 915-18 (7th Cir. 1990) (“WEPCo”). This would almost always show an 

emissions “increase” because coal-fired power plants are never run at full potential 

output for an entire year. In WEPCo, this Court rejected EPA’s approach, 

confirming that the determination of an increase must rest upon a realistic 

prediction of how the unit’s actual emissions will change as a result of the 

replacement. Id. at 915 n.8, 917-18. 

In 1992, EPA attempted to address the WEPCo decision and to “clarify” other 

aspects of its rules. EPA confirmed that where a utility undertakes a like-kind 

replacement, the States should compare “actual” emissions during a two-year 

“baseline” period pre-project with expected “actual” emissions for the two years 

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after the project. It also extended this “actual-to-future-actual” test to other 

projects. 57 Fed. Reg. 32,314, 32,314-17, 32,323, 32,326 (July 21, 1992). But EPA 

never published any formula illustrating how to apply it. See, e.g., A00680-84. 

Instead, EPA simply emphasized that States implementing this test should 

“[c]onsider all relevant information,” 57 Fed. Reg. at 32,334, including “all available 

information regarding the unit’s likely post-change capacity utilization,” id. at 

32,323. EPA, however, did confirm that its rules required “a causal link between the 

proposed change and any post-change increase in emissions.” Id. at 32,326. And to 

ensure that the pre-project “baseline” is “representative,” EPA emphasized that 

State reviewing authorities should look to years when a “source’s capacity was [not] 

reduced due to physical problems.” Id. at 32,323. 

In 2005, EPA conceded that “[u]ncertainties inherent in the current major NSR 

permitting approach” had adversely affected utilities, because “it can be difficult for 

the owner or operator to know with reasonable certainty whether a particular 

activity would trigger major NSR.” 70 Fed. Reg. 61,081, 61,093 (Oct. 20, 2005). EPA 

accordingly proposed a new emissions test designed to provide greater clarity (and 

which is substantially different from that applied below). Id. at 61,094. 

B. Factual Background. 

1. Cinergy’s Electricity Generating System. 

Cinergy is a public utility that serves Indiana and other Midwestern states. It 

does so through conventional plants and renewable energy resources, including 

wind. A01170-71. To address future electricity needs, Cinergy also promotes 

conservation and is developing smart grids. Id. Cinergy places the highest priority 

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on environmental compliance, and has consistently secured NSR permits when 

constructing new generating capacity. A00998. 

Cinergy is obligated to generate an adequate and reliable supply of electricity to 

meet customer needs. Ind. Code §8-1-2-4. Many of the issues in this case turn upon 

the ways in which utilities meet those obligations. Specifically, because electricity 

cannot be stored, “the load on the system [i.e., customer demand] and the amount of 

power generated must balance.” N. Ind. Pub. Serv. Co. v. Colo. Westmoreland, Inc., 

667 F. Supp. 613, 618 (N.D. Ind. 1987) (Easterbrook, J.) (“NIPSCo”); see also

A00987; A01145-46. Utilities must therefore adjust in real time the amount of 

electricity generated as customer demand fluctuates. A00987; A01136; A01146. 

Electricity generating units are connected to customers through a common grid. 

A00986-87; A01144-45. These units are interdependently responsible for meeting 

customer demand, and not all units are operated continuously. A01140. The 

“availability” of these units—the amount of time they are capable of generating 

electricity—exceeds the actual time they are called upon for generation. To 

determine which combinations of units are dispatched to meet current demand (and 

to what degree), utilities balance well-established economic and engineering 

considerations, as described in detail in NIPSCo, supra. A00815-16; A00992. To 

produce electricity “as cheaply as possible,” NIPSCo, 667 F. Supp. at 616; 16 U.S.C. 

§824d(a); Ind. Code §8-1-2-4, Cinergy endeavors to dispatch its most economical 

units first, A01138-39, but also purchases power from other utilities when doing so 

is cheaper than using its own units, A01048. Numerous factors affect the cost of 

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producing electricity from a unit, including fluctuating fuel prices, fuel contracts, 

and other variable operating and maintenance costs. A01138-39; see also NIPSCo, 

667 F. Supp. at 617. 

Engineering, voltage and other transmission-related considerations also 

influence how Cinergy dispatches its generating units. To ensure reliability of 

dispatch and transmission, Cinergy operates numerous units simultaneously to 

meet demand, rather than running one unit at its maximum before turning to the 

next unit. A01140. A dozen Cinergy units are typically online simultaneously, with 

the output of each rising and falling with demand; some units are being actively 

run, while others are at-the-ready for quick dispatch should demand increase 

suddenly. A00990; A01140. 

Which units are used depends in part on the amount of time necessary to turn 

them on and off, which varies among units, as does the minimum electricity they 

must generate once activated. A01138-39. Relatedly, Cinergy must maintain 

“spinning reserves”—unused, but available, capacity from its presently-online 

units—to respond immediately to emergencies either on Cinergy’s system or 

elsewhere on the grid. A01140; A01151-52; NIPSCo, 667 F. Supp. at 618. 

 Thus, Cinergy’s engineers continuously make dispatch decisions based on 

short-term shifts in demand, cost and other operational considerations. A01132-38; 

A01146; A01154. The mixture of dispatched units also varies with structural 

changes within Cinergy’s operations. A01148. Like other utilities, Cinergy employs 

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skilled professionals who use computer models to balance these considerations. 

A0992-93. 

2. Cinergy’s Component Replacement Projects. 

To maximize the availability of its generating units and satisfy its legal 

obligations to provide reliable service, Cinergy constantly maintains and repairs its 

units. A01012-15; A01037; A01050; A01054; A01070; A01080; A01123; A01153-54. 

Coal-fired generating units are large and complex facilities that experience 

numerous problems that affect their availability. These problems generally affect 

the unit in one of two ways: by forcing it offline and completely unavailable to 

provide service (a “forced outage”), A00801-02, or by causing a reduction in its 

available power output (a “derate”), A00843; A00849a; A01012; A01014. Forced 

outages and derates are random. A00866; A01011-12; A01019; A01037; A01080; 

A00713-14. Cinergy generally predicts a unit’s future availability based on an 

average of the unit’s availability over the previous five years. A00615-16; A00620-

21; A00599-608. As part of its repair and maintenance program, Cinergy regularly 

replaces worn or aged components with new versions of these components, so-called 

“like kind replacements.” A01019; A01028; A01032. Such changes do not alter the 

fundamental characteristics of the unit or change the way in which the units are 

dispatched. A01028; A01033-34; A01092-93; A01141-42; A01144. For instance, 

Cinergy would often replace the tubes that carry steam within a coal-fired plant, 

because they deteriorate under extreme conditions within a plant. A01075a. 

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C. Procedural Background. 

1. The NSR Enforcement Initiative. 

EPA has long known that utilities were maintaining their units through likekind replacement projects, A00205, yet for decades the agency “avoided a 

fundamental issue addressed in the [CAA], that is, at what point plants built before 

1970 must comply with new air pollution standards.” United States v. Ohio Edison 

Co., 276 F. Supp. 2d 829, 832 (S.D. Ohio 2003); see United States v. Ala. Power Co., 

372 F. Supp. 2d 1283, 1306 (N.D. Ala. 2005) (“EPA admits, as it must, that it has 

not spoken with one voice, or a consistent voice, or even a clear voice, on this 

issue.”). Not until 1999, when the present initiative against numerous utilities 

began, did EPA bring any enforcement action under NSR for like-kind 

replacements. A00203-04. Indeed, in more than two decades under the NSR 

program, EPA had only found NSR to apply to one like-kind project, and it was 

“massive” and “unprecedented.” See WEPCo, 893 F.2d at 911. 

In pursuing this initiative, government litigators participated in six months of 

“brainstorming sessions” with their future witnesses in these cases, including 

Richard Rosen and Robert Koppe, to devise a method that would calculate whether 

a replacement project would result in a significant net emissions increase. A00629; 

A00670; A00685-86; A00689; A00942-43. According to Rosen, the purpose of these 

sessions was to develop a “mathematical interpretation” of the NSR regulations, 

and the meetings were “in the spirit of ... think[ing] about what’s the best way to 

make these computations at this point in time.” A00938-39; A00943; A00947; 

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A00670. Rosen conceded he did not even consider how EPA had previously 

determined emissions changes. A00668. 

Based on these new regulatory interpretations, EPA filed suit against Cinergy. 

It alleged that 55 component replacement projects at Cinergy’s units were 

“modifications” for which Cinergy had not obtained permits required by the CAA 

and the SIP. A00130-200 (¶¶106, 127, 145, 163, 172, 203). Those projects included 

four like-kind replacements of steam tubes at Cinergy’s Wabash River station, 

which the government claimed should have been expected to result in significant 

net emissions increases of NOx, SO2, and particulate matter. Id. (¶¶145, 150, 155). 

The projects replaced sections of steam tubes that were deteriorating with new 

tubing, but without otherwise changing the design or operating characteristics of 

the unit. See, e.g., A01066a; A01077-78; A01093-94; A01123. The Wabash River 

station is located in Vigo County, Indiana, which, at the time of the projects at 

issue, was in attainment or unclassifiable for NO2 but in non-attainment for SO2. 

See A00281. Accordingly, whereas the NOx claims were governed by the PSD 

regulations, NNSR applied to the SO2 claims. 

2. The Applicable NNSR Test. 

Prior to trial, Cinergy requested that the court instruct the jury that for projects 

before 1994, Indiana’s SIP for NNSR looked to a unit’s “potential” to emit, not 

“actual” emissions, to determine whether a project was a “modification.” See

A00207-10. Reversing course from its Complaint, see A00147-49 (¶¶48-50), the 

government opposed this instruction and argued that the same “actual” emissions 

test applied to all projects. A00211-17. The district court upheld the government’s 

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changed position, explaining that “[e]ven though it appears that the EPA did not 

formally approve the new regulations until 1994,” it nonetheless would instruct the 

jury that “the same [actual-to-future-actual] test for emissions calculations should 

be applied for all projects.” A00002. The government introduced no evidence to 

establish that the projects at issue satisfied the SIP’s “potential” emissions 

standard. 

3. The Rosen-Koppe Methodology. 

The sole evidence offered to demonstrate that “actual” post-project emissions 

should have been expected to increase past the specific 40-ton threshold was the 

testimony of Dr. Rosen, who in turn relied on the testimony of Mr. Koppe. The 

fundamental theory behind the Rosen-Koppe methodology is that like-kind 

replacement projects increase the availability of the entire unit by reducing the 

number of forced outages and derates, and that an increase in the availability of a 

unit results in a proportionate increase in generation from that unit, thereby 

yielding greater emissions. Rosen’s and Koppe’s calculations attempt to quantify the 

precise increase in emissions that Cinergy should have predicted from the greater 

availability supposedly gained from each like-kind component replacement. 

Koppe first derived the increase in availability Cinergy would supposedly 

realize from the like-kind replacement. To do this, Koppe turned to the Generating 

Availability Data System (“GADS”) database, in which utilities record unit outages 

and derates, their duration, and the affected component. A00405. For each project, 

Koppe reviewed the GADS data for the sixty months preceding a component 

replacement, identifying the outages and derates associated with the replaced 

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component. A00397; A00406. For the projects identified by the government, Koppe 

theorized that by replacing the component, Cinergy would gain back all the lost 

time associated with those outages or derates, and that the availability of the entire 

unit would increase by that recovered amount of time. A00401. 

Rosen then used Koppe’s “increased availability” assumption to derive the 

precise emissions increase expected from the project. Although his calculations 

formally proceeded in five “steps,” one central premise drove Rosen’s analysis—the 

“constant utilization” assumption he used to predict increased generation. Rosen 

multiplied the new annual number of hours of availability provided by Koppe for a 

two-year future period by the unit’s historic “utilization factor”—the percentage of 

time in the past baseline period that Cinergy had used the unit to generate 

electricity relative to the amount of time the unit had been available. A000523; 

A000534-35; A00726. 

Because the utilization factor is a measure of the percentage of time a unit 

generates electricity relative to its availability, any increase in availability 

multiplied by the historic utilization factor will always “predict” an increase in 

generation (the “capacity factor”) proportionate to the increase in availability. See, 

e.g., A00708 (“[I]f the utilization factor is assumed to be constant, then an increase 

in availability will yield an increase in capacity factor”). For example, if the unit 

historically had a utilization factor of 60% (because it previously was used 60% of 

the time it had been available), and Koppe predicted an increase in availability of 

100 hours, then Rosen’s calculation would predict 60 more hours of generation in 

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the future. Rosen would then use the remaining steps in his formula to determine 

the additional emissions that would result from the additional generation. A000534-

35. 

Cinergy moved to exclude Rosen’s and Koppe’s opinions under Fed.R.Evid. 702. 

Cinergy emphasized that their methodology bore none of the indicia of reliability 

identified in Daubert; it had been developed solely for litigation, and had never been 

tested, published, peer-reviewed, or in any other way “supported by appropriate 

validation.” Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 590 (1993). 

Cinergy further argued that the methodology could not withstand such scrutiny. 

Cinergy challenged the methodology for simply assuming that when the availability 

of a unit is presumed to increase, its actual utilization will increase proportionately. 

Cinergy contended that Rosen’s assumption completely ignored the economic and 

engineering factors that actually drive utilization decisions. Rosen acknowledged 

that a more accurate estimate of increased generation would be based upon a 

system-wide model that calculated changes in utilization factor based on all 

relevant factors. A00673; A00706. He further acknowledged that a dispatch model 

(such as those commonly used by utilities to determine how to allocate generation 

among its units) could perform this more accurate prediction, including projecting 

generation from each unit, A00673; A00706; A00735; A00738, and that it would be 

“preferable” to use such models to forecast emissions increases, A00563. 

Nonetheless, Rosen stated that he was not given sufficient time or resources to 

perform this preferred analysis. A00676-77. 

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Cinergy further argued that Rosen’s analysis was inconsistent with the very 

EPA regulations that Rosen claimed he was “mathematically interpreting.” Cinergy 

noted Rosen’s failure to consider whether the repairs at issue “caused” an emissions 

increase. Cinergy demonstrated that, for each of the Wabash River units at issue, 

the repairs did not change how Cinergy would dispatch the unit relative to normal, 

pre-repair operations, see, e.g., A00385-86; A00294, and that each unit already had 

substantial excess availability, see, e.g., A00319-24; A00346; A00393. 

Cinergy also contended that the court need not even reach the flaws in Rosen’s 

analysis because the “recovered availability” data provided by Koppe was untested 

and unreliable. Specifically, Cinergy argued that Koppe’s approach was contrary to 

systems engineering theory and industrial practice, which recognize that for mature 

and complex systems like the generating units at issue here, repairing a particular 

component will not increase the overall availability of the unit because of the 

thousands of other components that could fail, including potentially the new 

component itself. See, e.g., A000575-76; A00299. 

The district court denied Cinergy’s motion in a two-sentence order. 

4. The Judgment. 

After a nine-day trial, the jury returned a non-liability finding on ten of the 

fourteen projects the government pursued,2 finding Cinergy liable for only Wabash 

River Units 2, 3, and 5. See A00115-17. All these projects involved the like-kind 

replacement of steam tubes. The district court assigned PSD (NOx) and NNSR (SO2) 

 

2 Although the government challenged 55 projects in its various complaints, it ultimately 

proceeded to trial on fourteen projects. 

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liability for the projects at Units 3 and 5, but only NNSR liability for the two 

projects at Unit 2. See id. The district court required Cinergy to shut down those 

units by September 30, 2009, reduce their operations prior to shutdown, and 

surrender certain CAA Title IV SO2 emission allowances. See A00067. 

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SUMMARY OF ARGUMENT 

As the government acknowledged, this case sought an “unprecedented” 

application of NSR. But the government’s dramatic new policy objectives exceeded 

what the law could support. The government’s improper efforts to fill those 

fundamental gaps in its theories and proof gave rise to at least two errors below. 

First, the government successfully advocated a legal standard that did not apply 

in Indiana at the time the Wabash River projects were undertaken. The applicable 

SIP provision for NNSR at the time of these projects required a comparison between 

each unit’s “potential” to emit—i.e., its maximum capacity—before and after the 

project, as the government initially admitted. The jury, however, was erroneously 

instructed to apply a different test, focusing on “actual” rather than “potential” 

emissions, that did not become part of the SIP for NNSR until long after these 

projects had been completed. Judgment should have been granted to Cinergy as to 

all NNSR claims because the government did not even attempt to show that 

Cinergy’s projects increased “potential” emissions. 

Second, to satisfy the “actual emissions” test, the government sponsored a new, 

made-for-litigation methodology of projected emissions increases that had never 

before been used by EPA and was instead created exclusively for these cases: it 

ensures that virtually every replacement of a component that was once associated 

with outages or derates will automatically be projected to cause an emissions 

increase, even though no such relationship exists in the real world. Although 

Daubert and this Court’s decisions applying it have emphasized the importance of 

validating expert theories through testing, and although the government’s experts 

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could have tested their newly-minted methodology, they never did so. Instead, 

remarkably, the experts claimed that their theory was so simple it did not require 

testing and that it could be “assumed” to have been tested because it had been 

subjected to rebuttal in other litigation from the same NSR enforcement initiative. 

But “there are important differences between the quest for truth in the courtroom 

and the quest for truth in the laboratory,” Daubert, 509 U.S. at 596-97, and it is 

elementary that experts must “follow scientific approaches normal to their 

disciplines,” Zenith Elecs. Corp. v. WH-TV Broad. Corp., 395 F.3d 416, 419 (7th Cir. 

2005). That did not remotely occur here. 

Indeed, this methodology could not have withstood any independent testing or 

other scientific scrutiny. It ignored the economic and operational factors that 

actually drive dispatch decisions among interdependent units—factors the 

government’s expert conceded would have been “preferable” to take into account. It 

further ignored the causation requirement in the EPA’s regulations, which provides 

that the emissions increase must be the result of the project at issue, and, again, 

simply “assumed” that causation was present. The testimony should have been 

excluded under Rule 702 as both unreliable and irrelevant. And because that 

testimony was the only evidence that claimed to quantify the expected emissions 

increase as exceeding the numerical threshold for liability, judgment should have 

been entered for Cinergy. 

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ARGUMENT 

I. The District Court Applied The Wrong Legal Standard. 

The jury’s liability finding suffers from a threshold error: the jury was 

instructed to apply the wrong legal standard.3 Whether the projects in question—

which occurred between 1989 and 1992—were “modifications” subject to permitting 

requirements must be determined according to the EPA-approved Indiana SIP. See

42 U.S.C. §§7475(a), 7502(c)(5), 7602(q); Gen. Motors, 496 U.S. at 540. Because the 

Wabash River station was in an area then designated as non-attainment for SO2, 

the NNSR rules applied to all of the Wabash River SO2 claims. See supra p. 14. On 

the NNSR claims at issue, however, the jury was instructed to apply a standard 

that EPA had not then approved for Indiana’s SIP, and did not approve until 1994. 

The district court acknowledged that “EPA did not formally approve the new 

regulations until 1994,” A00002, but nonetheless applied the post-1994 standard to 

projects that had been completed several years earlier. 

Specifically, the jury was instructed to find Cinergy liable on each PSD and 

NNSR claim if it found that Cinergy should have predicted a project to result in an 

increase in “actual” emissions of 40 or more tons per year of the specific pollutant. 

See A00094; A00002. Yet at the time of the Wabash River projects, the Indiana SIP 

provisions governing NNSR “modifications” used a different standard. They 

required a “potential-to-potential” analysis that looked to whether the project 

caused an increase in the unit’s “potential” to emit, i.e., its maximum capacity, of 25 

 

3 This Court “review[s] de novo a district court’s decision to give or refuse a jury instruction 

‘when the underlying assignment of error implicates a question of law.’” United States v. 

DiSantis, 565 F.3d 354, 359 (7th Cir. 2009). 

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tons or more per year. 325 Ind. Admin. Code (“IAC”) 1.1-1; 325 IAC 2-1; 47 Fed. Reg. 

6,621; 40 C.F.R. §52.770(c)(24). The government, however, presented no evidence 

that any of those projects caused an increase in a unit’s potential to emit SO2. To 

the contrary, the government only sought to demonstrate that the projects caused 

an increase in actual emissions. See, e.g., A01162-63. Had the court applied the 

correct standard, Cinergy would have been entitled to a directed verdict in its favor. 

See Fed.R.Civ.P. 50(a)(1). Accordingly, judgment on these claims should be reversed 

and the remedy order should be vacated.4

A. Before 1994, Indiana’s SIP Imposed A “Potential-To-Potential” NNSR 

Standard. 

At the time of the Wabash River projects (1989-92), the Indiana SIP that EPA 

had approved provided that “modifications” under the NNSR program required a 

“potential-to-potential” analysis. See supra pp. 7-8. Although Indiana today requires 

an analysis of “actual” emissions, the regulatory landscape was far different when 

the projects occurred. When Congress amended the CAA in 1977, it provided that 

an EPA interpretive ruling, 40 C.F.R. Pt. 51 App. S, would initially apply as a 

placeholder NNSR regulation and would be replaced by States’ revised SIPs as EPA 

approved them. See Pub. L. No. 95-95, §129(a)(1), 91 Stat. 685, 745 (1977) (codified 

as note under 42 U.S.C. §7502); 44 Fed. Reg. 20,372, 20,379 & n.36 (Apr. 4, 1979). 

 

4 The district court’s remedy rests predominantly on the NNSR violations. First, the SO2 

emission allowances surrender was intended to remedy only the NNSR violations. See

A00060. Second, the jury found only NNSR liability at Unit 2. See supra pp. 18-19. Finally, 

even at Units 3 and 5, where the jury found both NNSR and PSD violations, the district 

court attributed substantially more harm to the NNSR violations than the PSD ones. 

A00050-51.

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If, however, a State’s plan failed to meet the requirements of 42 U.S.C. §§7501-15 

after June 30, 1979, the State would face draconian consequences—a prohibition on 

all new construction. See 44 Fed. Reg. at 20,379-80. To help States avoid this 

prohibition, EPA announced that instead of disapproving a deficient NNSR SIP, it 

could conditionally approve it, subject to the State’s commitment to correct the 

identified deficiencies in the future. See 44 Fed. Reg. 38,583 (July 2, 1979); 44 Fed. 

Reg. 67,182 (Nov. 23, 1979). 

At that time, the federal placeholder regulation for NNSR used a “potential-topotential” standard. EPA defined a “major modification” as “any physical change in, 

change in the method of operation of, or addition to a stationary source which 

increases the potential emission rate” of certain pollutants by 100 tons per year or 

more. 44 Fed. Reg. 3,274, 3,282 (Jan. 16, 1979) (emphasis added) (codifying App. S 

to 40 C.F.R. Pt. 51). A source’s “potential’ to emit” was defined as the capability at 

“maximum capacity to emit.” See id. Thus, an NNSR permit would not be required 

unless a project caused an increase in a source’s maximum capacity to emit a 

pollutant. (The same standard applied under the PSD program, see 40 C.F.R. 

§§51.24(b)(3), 52.21(b)(3) (1979)). This “potential-to-potential” standard remained in 

EPA’s rules until 1980, when EPA revised the federal NSR framework to make an 

increase in actual emissions the touchstone for permitting. See 44 Fed. Reg. 51,924, 

51,934 (Sept. 5, 1979) (proposed rulemaking); 45 Fed. Reg. at 52,698-99 (final rules). 

That revised federal framework, however, did not become part of Indiana’s 

governing SIP for another 13 years. Instead, until 1994, the “potential-to-potential” 

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standard governed. In June 1979—before EPA had proposed changing the federal 

“potential-to-potential” framework—Indiana submitted to EPA a revised SIP, APC19 (later recodified as 325 IAC 2-1), along with revisions to the SIP’s general 

definitions section, APC-1 (later recodified as 325 IAC 1.1-1). See 40 C.F.R. 

§52.770(c)(24), (26); 47 Fed. Reg. 30,972, 30,978 (July 16, 1982). Consistent with the 

then-existing federal guidance, the revised Indiana SIP applied a “potential-topotential” test, requiring a pre-construction permit only for a “modification” that 

“will result in a potential increase in emissions of 25 tons per year or more.” 325 

IAC 2-1 (APC-19), §§1(b) and 4. Nowhere did Indiana’s rules suggest that a utility 

must calculate an increase in “actual” emissions. 

The general definitions submitted on the same day as APC-19 confirm that the 

regulations were written to require an analysis of potential emissions. A 

“modification” was defined as “any physical change, or change in the method of 

operation of any facility which increases the potential or legally allowed emissions 

(whichever is more stringent) of any pollutant.” 325 IAC 1.1-1 (APC-1), §43 

(emphasis added). “Potential emissions” were in turn defined as emissions “based on 

maximum annual rated capacity unless hours of operation are limited by 

enforceable permit conditions.” Id. §58. Similarly, “legally allowed emissions” meant 

“[t]he emission rate calculated using the maximum rated capacity of the facility,” 

subject to such legally enforceable limitations as enforceable permit conditions. Id.

§2 (defining “allowable emissions”) (emphasis added). 

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In March 1980, EPA proposed to approve or approve conditionally the various 

definitions in APC-1 and to approve conditionally APC-19, all subject to Indiana 

revising portions not relevant here. See 45 Fed. Reg. 20,432, 20,433-35 (Mar. 27, 

1980). Although EPA noted that revisions to the federal PSD regulations were 

underway and could affect the contents of Indiana’s PSD SIP provisions, it made no 

such reference to any similar NNSR revisions. See id. at 20,434-36, 20,447-48. 

Indeed, even as to PSD, EPA proposed to review the plan “based upon its existing 

regulations,” then “advise Indiana of any changes required in its plan” after 

promulgation of the new rules. Id. at 20,448. 

As requested, Indiana corrected the unrelated deficiencies and, although the 

federal regulations had changed in the interim, EPA approved APC-1 and APC-19 

in 1981 and 1982, respectively. See 46 Fed. Reg. at 54,943; 47 Fed. Reg. 6,621 (Feb. 

16, 1982). These provisions remained in effect as Indiana’s NNSR SIP until 1994, 

when EPA finally approved a revision to Indiana’s SIP that employed an actual 

emissions standard. See 59 Fed. Reg. at 51,108; see also 40 C.F.R. §52.770(c)(94) 

(1995).5 

In its Complaint, the government acknowledged that the pre-1994 Indiana SIP 

applied an NNSR test that looked to potential emissions, and that this test was 

different from the actual emissions standard that applied to the other claims 

pursued in this action. See A00147-49 (¶¶48-50). Moreover, in explaining the 

standard in place at the time of the projects, the government quoted at length from 

 

5 The new rules appear now at 326 IAC 2-3-1. 

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both the regulations and definitions submitted in 1979, including the definition of 

potential emissions. Id. (¶48). 

Faced with an absence of evidence to meet the legal standard it had admitted 

applied to the Wabash River projects, however, the government changed tack before 

trial. Then, for the first time, the government argued that the actual emissions 

standard for post-1994 projects should be applied to all projects in its complaint. 

A00211-17. But this assertion is belied by EPA’s actions in approving Indiana’s SIP. 

Although EPA in 1980 revised both the federal PSD and NNSR regulation, it 

handled Indiana’s pending changes to each of these programs very differently. For 

Indiana’s PSD program, EPA expressly disapproved the SIP, then incorporated 

federal PSD regulations into the Indiana SIP by reference. See 45 Fed. Reg. at 

52,740-41 (incorporating 40 C.F.R. §52.21(b) through (w) into the Indiana SIP).6

These federal regulations are still incorporated today. See 40 C.F.R. §52.793 (2009). 

EPA did not do the same for Indiana’s NNSR rules. Instead, in February 1982, 

EPA approved APC-19 (325 IAC 2-1) to be implemented under the Indiana SIP. 47 

Fed. Reg. 6,621 (Feb. 16, 1982). The only part of APC-19 not approved in this action 

was section 7, which dealt with the PSD program. Thus, sections 1(b) and 4, which 

provided that a pre-construction NNSR permit was only required for a 

“modification” that “will result in a potential increase in emissions of 25 tons per 

year or more,” became part of the applicable Indiana SIP. The government has 

 

6 The federal provisions incorporated were drafted by EPA to apply “to any State 

implementation plan which has been disapproved with respect to prevention of significant 

deterioration of air quality [PSD].” 40 C.F.R. §52.21(a). 

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never disputed the effectiveness of this approval, which rendered the SIP governing 

law under the CAA NNSR provisions. 

EPA also expressly approved Indiana’s general definitions, APC-1 (325 IAC 1.1-

1), several months earlier. See 46 Fed. Reg. at 54,943; see also 40 C.F.R. 

§52.770(c)(26). In that approval, EPA acknowledged that “[c]ertain of the definitions 

contained in 325 IAC 1.1-1 are inconsistent with EPA’s most recent definitions,” but 

it nonetheless approved the proposed definitions, observing that “Indiana is 

currently revising its NSR regulations ... to be consistent with EPA’s most recent 

requirements.” 46 Fed. Reg. at 54,942. EPA noted that Indiana’s definitions met the 

requirements of the CAA “for purposes other than new source review,” explained 

that it would review Indiana’s new rules and new definitions in a subsequent 

proceeding, and then expressly and unqualifiedly approved the definitions at 325 

IAC 1.1-1 for the interim. Id.7 Indeed, in quoting these definitions in its complaint, 

the government itself has admitted that they became part of the relevant NNSR 

SIP. See A00147-48 (¶48). Accordingly, the district court was simply incorrect when 

it held that “EPA explicitly rejected Indiana’s proposed definitions to the extent that 

they were contrary to federal law.” A00002. 

There is nothing unusual about how EPA handled the Indiana SIP. By its 

nature, the federal-state dynamic of the CAA creates the potential that a State may 

propose a SIP that conforms to the federal framework at the time it is proposed, but 

becomes outdated during EPA’s reviewing process or thereafter. Indeed, EPA’s SIP 

 

7 EPA listed only a single exception: EPA disapproved of Indiana’s definition of the term 

“state implementation plan,” noting that a definition for that term was not necessary. 

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approval process suffered from this problem to such a degree that the agency coined 

a term for it: “moving target syndrome.” See 54 Fed. Reg. at 2,217 (noting frequency 

with which a SIP “conform[s] to the policy in place when it was submitted” but then 

a policy changes while the SIP is “under review” at EPA and the SIP thus “doesn’t 

conform to a newly evolved policy”). Here, rather than force a halt to all new plant 

construction in Indiana by rejecting portions of the SIP, see 44 Fed. Reg. at 20,379-

80, EPA reasonably chose to allow Indiana’s plan to go into effect pending the 

approval of revised regulations. Indiana promptly executed a revision, see 325 IAC 

§§2-1.1-1, 2-3-1(l), and 2-3-1(o) (1981), but EPA did not approve that revision until 

after the projects at issue here, see 59 Fed. Reg. at 51,108. That the government 

may now wish EPA had acted sooner cannot be the basis for imposing liability on 

Cinergy. Cf. Ohio Edison, 276 F. Supp. 2d at 832 (criticizing EPA’s “abysmal 

breakdown in the administrative process”).

B. The NNSR Provisions Of The Indiana SIP In Place At The Time Of 

The Projects Govern Plaintiffs’ NNSR Claims. 

The district court not only misinterpreted the requirements of the SIP but also 

made a more fundamental mistake: it erroneously held that even though the 

applicable SIP did not require Cinergy to analyze actual emissions until after 1994, 

Cinergy nonetheless could be held liable under such a standard because the 

standard could be found in other state and federal regulations. A00002. This 

decision is irreconcilable with the basic framework of the NSR program, under 

which a utility’s obligation to meet certain preconstruction requirements is defined 

by the applicable SIP. 

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Because the CAA “made the States and the Federal Government partners” in 

regulating air quality, Gen. Motors, 496 U.S. at 532, the NSR program does not 

consist of a set of top-down federal regulations that impose direct requirements on 

utilities. Instead, such requirements by and large are imposed through SIPs, and a 

SIP is only applicable—and thus federally enforceable under §7413(b)(1)—to the 

extent it has been approved by EPA in accordance with §7410. Thus, “[r]evisions of 

a plan, or any portion thereof, will not be considered part of an applicable plan until 

such revisions have been approved by the Administrator ... .” 40 C.F.R. §51.105. See 

also Gen. Motors, 496 U.S. at 540 (“There can be little or no doubt that the existing 

SIP remains the ‘applicable implementation plan’ even after the State has 

submitted a proposed revision.”); Metro. Wash. Coal. for Clean Air v. Dist. of 

Columbia, 511 F.2d 809, 812 (D.C. Cir. 1975) (“revisions are not to be considered 

part of a plan until approved by the Administrator”) (citation omitted). 

Accordingly, it is irrelevant to an assessment of federal CAA liability whether 

Cinergy complied with the provisions of an unapproved revision to Indiana’s SIP. As 

EPA itself has recognized, “there will always be a period during which a Stateproposed revision and a federally-approved SIP will differ.” Br. of United States at 

36, General Motors v. United States, 496 U.S. 530 (1990). 

It is likewise irrelevant whether Cinergy complied with provisions of the federal 

NNSR regulations that differ from those of the approved version of the Indiana SIP. 

As noted supra pp. 5-6, the statutory NNSR program merely sets forth the 

requirements that a State’s SIP must contain. See 42 U.S.C. §§7501-15 (setting 

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31 

forth requirements for States); id. §7410(a)(2)(I) (a SIP must meet the statutory 

NNSR requirements). Moreover, there are no federal NNSR regulations that 

directly apply to Cinergy. Although Appendix S to 40 C.F.R. Part 51 would have 

applied directly to Cinergy at one time, it did so as a placeholder pending SIP 

approval; it ceased to apply in Indiana after EPA approved the 1979 revisions to 

Indiana’s NNSR SIP. See supra pp. 23-24. And the regulations at 40 C.F.R. §51.165 

by their own terms provide conditions that each SIP must meet, not requirements 

directly applicable to utilities. See, e.g., id. §51.165(a) (“State Implementation Plan 

... provisions satisfying sections 172(b)(6) and 173 of the Act shall meet the 

following conditions ....”). 

The district court therefore erred when it judged Cinergy’s NNSR compliance 

based on state and federal regulations that were not incorporated into the 

applicable SIP until well after the relevant pre-construction permits would have 

needed to be obtained. Cinergy could not have been liable under §7413(b)(2) because 

no NNSR regulations outside the SIP applied to it. And as to any assessment of 

liability under §7413(b)(1), any regulations never approved into the SIP are simply 

irrelevant. 

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II. The District Court Erred In Admitting The Rosen And Koppe Testimony. 

Even if the “actual emissions” instruction had been correct as to the NNSR 

claims, the government failed to offer admissible evidence to establish a violation 

under that standard. That failure likewise invalidated the PSD claims (to which the 

error described in Section I, supra, does not apply). 

Under Fed.R.Evid. 702, the district court’s “gatekeeper” function requires it to 

ensure that any expert “testimony or evidence admitted is not only relevant, but 

reliable,” including “whether the reasoning or methodology underlying the 

testimony is scientifically valid.” Daubert, 509 U.S. at 589, 592-93. This gatekeeping 

role is particularly important in jury trials because for juries “[e]xpert evidence can 

be both powerful and quite misleading because of the difficulty in evaluating it.” Id.

at 595 (citations omitted). 

In Daubert, the Supreme Court provided a non-exclusive set of factors to assist 

courts in deciding whether particular expert testimony is scientifically reliable: (1) 

whether the “‘theory or technique ... can be (and has been) tested’”; (2) whether “it 

‘has been subjected to peer review and publication’”; (3) whether, “in respect to a 

particular technique, there is a high ‘known or potential rate of error’ and whether 

there are ‘standards controlling the techniques’ operation’”; and (4) whether “the 

theory or technique enjoys ‘general acceptance’ within a ‘relevant scientific 

community.’” Kumho Tire Co. v. Carmichael, 526 U.S. 137, 149-50 (1999) (quoting 

Daubert, 509 U.S. at 592-94). Additional factors were identified in the Advisory 

Committee Commentary that accompanied the 2000 revision to Rule 702 in light of 

Daubert, including (1) whether the expert developed the opinions outside of 

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litigation or “‘whether [the expert] developed [the] opinions expressly for purposes of 

testifying,’” and (2) whether “the expert has adequately accounted for obvious 

alternative explanations.” Fed. R. Evid. 702, 2000 amend.; see also Fuesting v. 

Zimmer, Inc., 421 F.3d 528, 534 (7th Cir. 2005), vacated in part on other grounds, 

448 F.3d 936 (7th Cir. 2006). 

“It is incumbent upon the trial court to carefully consider [the reliability] factors 

before admitting any expert scientific evidence.” Chapman v. Maytag Corp., 297 

F.3d 682, 687 (7th Cir. 2002). Indeed, “[t]o satisfy its essential role, the gatekeeper 

must do more than just make conclusory statements. A more searching Daubert

analysis is required.” Fuesting, 421 F.3d at 535. Here, the District Court’s ruling in 

its entirety was as follows: 

the Court finds that the parties’ experts are qualified in their 

respective fields by reason of knowledge, education, or experience and 

that the assumptions and methodologies underlying their opinions 

have been subjected to some type of testing or verification or are 

premised on assumptions generally accepted within the relevant 

community. Further, the Court concludes that the arguments in 

opposition to the experts go to the credibility and the weight to be 

given to the testimony. 

A00007. Had the court conducted the required analysis, the evidence could not have 

been admitted, and the district court abused its discretion in concluding otherwise. 

Fuesting, 421 F.3d at 534-37.8 

 

8 A “court abuses its discretion when it commits ‘a serious error of judgment, such as 

reliance on a forbidden factor or failure to consider an essential factor,’” Kempner Mobile 

Elecs., Inc. v. Sw. Bell Mobile Sys., 428 F.3d 706, 712 (7th Cir. 2005), or when it relies “on 

an incorrect legal principle or a clearly erroneous factual finding,” Corporate Assets, Inc. v. 

Paloian, 368 F.3d 761, 767 (7th Cir. 2004). Further, where, as here, the district court has 

failed to undertake the “searching ... analysis” required by Daubert, this Court has 

independently applied the Daubert reliability factors. See Fuesting, 421 F.3d at 536-37. 

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A. Rosen’s And Koppe’s Made-For-Litigation Methodology Is 

Presumptively Unreliable. 

An important factor in assessing the reliability of expert testimony is “‘whether 

[the expert] developed [the] opinions expressly for purposes of testifying.’” 

Fed.R.Evid. 702, 2000 amend. (quoting Daubert v. Merrell Dow Pharms., Inc., 43 

F.3d 1311, 1317 (9th Cir. 1995) (“Daubert II”)); see Fuesting, 421 F.3d at 537 

(expert “developed his opinion expressly for this litigation”); Rosen v. Ciba-Geigy 

Corp., 78 F.3d 316, 318 (7th Cir. 1996) (Daubert requires judges to “distinguish 

between real and courtroom science”). The inquiry under Rule 702 and Daubert is 

designed specifically to stop the abuse of “hiring ... reputable scientists, 

impressively credentialed, to testify for a fee to propositions that they have not 

arrived at through the methods that they use when they are doing their regular 

professional work rather than being paid to give an opinion helpful to one side in a 

lawsuit.” Braun v. Lorillard Inc., 84 F.3d 230, 235 (7th Cir. 1996); see also Daubert 

II, 43 F.3d at 1317 (expert’s “normal workplace is the lab or the field, not the 

courtroom or the lawyer’s office”). 

Because expert methodologies or theorems developed specifically for litigation 

lack key indicia of reliability, such as independent verification or objectivity, they 

are presumptively unreliable. Daubert II, 43 F.3d at 1316-17; id. at 1317-18 

(requiring other objective evidence that the methodology is reliable when made for 

litigation). Methodologies and theories developed for litigation also suffer from the 

“‘potential for abuse in light of the incredible benefits of hindsight,’” that is, that the 

methodology serves no other purpose than to resolve after the fact the specific issue 

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35 

before the court. Johnson v. Manitowoc Boom Trucks, Inc., 484 F.3d 426, 435 (6th 

Cir. 2007). 

Here, it is indisputable that Rosen and Koppe developed their emissionsincrease methodology specifically for this litigation. Both admitted that the formula 

was developed during “brainstorming” sessions with the litigators over a six-month 

period in the early stages of the enforcement initiative. A00629; A00670; A00685-

86; A00689; A00942-43. The meetings were “in the spirit of ... think[ing] about 

what’s the best way to make these computations at this point in time.” A00670 

(emphasis added); A00682 (methodology developed “[i]n the litigation”); A00943. 

The methodology has never appeared in any government regulation or guidance, or 

any academic article or peer-reviewed document. A00680-84. Because it was created 

for litigation, it should have been treated as presumptively unreliable. See Kumho, 

526 U.S. at 152 (an expert must “employ[ ] in the courtroom the same level of 

intellectual rigor that characterizes the practice of an expert in the relevant field”). 

B. The Rosen-Koppe Methodology Has Never Been Tested, Has No 

Known Error Rate, And Has Not Been Peer-Reviewed. 

When expert theories or methods are created specifically for litigation, an 

especially strong showing of objective reliability under other factors is necessary, 

but no such showing can be made here. See Daubert II, 43 F.3d at 1317-18; 

Johnson, 484 F.3d at 435. The Rosen-Koppe methodology fails to satisfy the other 

Daubert factors: it has not been tested, has no known error rate, and has not been 

peer reviewed. 

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A “key question” in assessing the reliability of expert testimony is whether “a 

theory or technique ... can be (and has been) tested.” Daubert, 509 U.S. at 593 

(emphasis added). As this Court explained, the “‘first and most significant Daubert

factor is whether the scientific theory has been subjected to the scientific method.’” 

Fuesting, 421 F.3d at 536 (citation omitted). The “absence of any testing indicates 

that [the expert’s] proffered opinions cannot fairly be characterized as scientific 

knowledge.” Chapman, 297 F.3d at 688. “Such insulation of [the] theory from the 

dispassionate crucible deeply, if not fatally, compromises [the] testimony’s 

reliability.” Fuesting, 421 F.3d at 536; accord Claar v. Burlington N. R.R., 29 F.3d 

499, 503 (9th Cir. 1994) (observing “scientists whose conviction about the ultimate 

conclusion of their research is so firm that they are willing to aver under oath that 

it is correct prior to performing the necessary validating tests could properly be 

viewed by the district court as lacking the objectivity that is the hallmark of the 

scientific method”). 

Closely related is whether the method has a “known or potential rate of error.” 

Daubert, 509 U.S. at 594 (citing United States v. Smith, 869 F.2d 348, 353-54 (7th 

Cir. 1989)). That is, in assessing the reliability of expert testimony, a court should 

understand how often the methodology has “produced erroneous results.” Kumho, 

526 U.S. at 151. 

As noted, the key features of the Rosen-Koppe methodology are the increased 

unit availability assumption (i.e., that all past availability lost to an identified 

mechanical issue will be regained in the future) and the constant utilization 

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assumption (i.e., that this increased availability will be utilized at the same rate as 

the lower availability was in the past). Both propositions can be tested, but neither 

were. A00702-03; see also A00695 (“Q. And did you compare those actual numbers 

to your projections to gauge reliability of your calculations? A. Not that I can 

remember, no.”); A00711-12; A00716-17; A00703-04 (“I can’t think of any statistical 

tests that I have run certainly not on this case”); A00637 (Koppe conceding he did 

not have “any data” that verified his theory); see also A00632; A00640-42; A00651-

58. Similarly, neither Rosen nor Koppe even attempted to derive any error rate for 

their theorem. A00696-98; see also A00561 (“my equations do not require ‘error 

rates’ [because] they are generally just simple ratios or fractions”). 

Their failure to undertake any meaningful testing is particularly stark in light 

of the government’s assertion below that “test[ing]” rather than “theorem” should be 

relied upon when “actual data” are available. A00271. Indeed, although Rosen 

opined that nothing in EPA’s NSR regulations required that he and Koppe test the 

accuracy of their methodology, A00716-17, EPA, in fact, requires the testing of 

predictive models, places limits on “decision error,” and mandates the highest 

degree of rigor when models “involve potentially large consequences,” such as use in 

litigation. EPA, Guidance for Quality Assurance Project Plans for Modeling, EPA 

QA/G-5M, EPA/240/R-02/007 at 1, 4-5, 14, 34-35 (Dec. 2002), http://www.epa.gov/ 

quality1/qs-docs/g5m-final.pdf; EPA, Guidance on Systematic Planning Using the 

Data Quality Objectives Process, EPA QA/G-4 at i (Feb. 2006), http://www.epa.gov/ 

QUALITY/qs-docs/g4-final.pdf (“quality objectives” include “potential decision 

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errors” when “establishing the quality and quantity of data needed to support 

decisions”); id. at 45 (establishing process for setting “performance or acceptance 

criteria that the collected data will need to achieve in order to minimize the 

possibility of either making erroneous conclusions or failing to keep uncertainty in 

estimates to within acceptable levels”). 

Nor was the Rosen-Koppe methodology subject to any peer review. 

“[S]ubmission to the scrutiny of the scientific community is a component of ‘good 

science,’ in part because it increases the likelihood that substantive flaws in 

methodology will be detected.” Daubert, 509 U.S. at 593-94. Publication in a peerreviewed journal is a particularly significant factor when a methodology is 

developed for litigation because subjecting that theory to “the usual rigors of peer 

review” “is a significant indication that it is taken seriously by other scientists, i.e., 

that it meets at least the minimal criteria of good science.” Daubert II, 43 F.3d at 

1318. These principles apply with particular force here given the clear direction of 

EPA that peer review is “encouraged and expected” for “all scientific and technical 

information that is intended to inform or support Agency decisions.” Stephen L. 

Johnson, EPA Policy Statement, Peer Review and Peer Involvement at the U.S. 

Environmental Protection Agency (Jan. 31, 2006), http://www.epa.gov/peerreview/ 

pdfs/peer_review_policy_and_memo.pdf; see also EPA, Guidance for Quality 

Assurance Project Plans for Modeling at 1, 2, 14 (models that “create a prediction” 

should be “peer reviewed” at every step of the process). Remarkably, Rosen 

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dismissed the relevance of peer review by asserting that his methodology “is such a 

simple application of mathematics that it does not require peer review.” A00559. 

When Rosen or Koppe attempted to defend their failure to test their theories, 

they confirmed how unscientific and unreliable their work is. Rosen “assume[d]” 

that his methodology had been tested because it was “tested by the rebuttal 

experts” in separate NSR enforcement litigation. A00692. But “there are important 

differences between the quest for truth in the courtroom and the quest for truth in 

the laboratory,” Daubert, 509 U.S. at 596-97, and experts must “follow scientific 

approaches normal to their disciplines,” Zenith, 395 F.3d at 419; see also Fuesting, 

421 F.3d at 536. A “critique” in litigation is hardly the same as statistical testing to 

establish a theory’s real-world reliability or error rate. Kumho, 526 U.S. at 152. 

Koppe claimed to have assessed the validity of his assumptions of increased unit 

availability from the replacement of a component, but he conceded that he did so 

only during the course of litigation and only to the extent that time and resources 

permitted. A00651-58. Moreover, Koppe produced no evidence of any such testing, 

and could not even describe the tests he used or the results of his comparisons. 

A00637; A00651-58. Koppe further conceded that his method did not analyze the 

impact on availability of the numerous other outages that were occurring at the 

same time he was claiming an increase in availability. A00905-07. To the extent any 

such after-the-fact and undocumented “testing” occurred, it hardly rises to “the 

same level of intellectual rigor that characterizes the practice of an expert in the 

relevant field.” Kumho, 526 U.S. at 152. 

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Rosen also claimed validation for his methodology from Cinergy itself, A00526; 

A00530, but the relevant Cinergy practices only underscore the flaws in Rosen’s 

approach. Cinergy uses computer dispatch models to project future generation and 

to assist it in conducting operational studies and making fundamental decisions 

about, for example, future plans for the purchase of fuel and power, and whether 

and where to build a new plant or retire an old one. A00389; A00291 (¶¶16-17); see 

also A00924-31; A00951-52; A01155-56; A00260-67. These tools account for the realworld economic and engineering factors that determine how much an individual 

unit in an interdependent system will generate to satisfy demand. A00389; A00924-

31; A00735; A00738-39; A00260-67. They employ forecasts of future availability and 

make projections of future utilization—but unlike the Rosen-Koppe methodology, 

Cinergy engineers using the models, and the models themselves, do not assume 

either (a) that like-kind replacement projects recover all lost availability from 

outages, as Koppe assumed, or (b) that utilization is a constant percentage of 

availability, as Rosen assumed. A00289 (¶13); A00291 (¶¶16-17); A00390; A00309-

311; see also A00954-55; A00703; A00706; A00735; A00738. These models do not 

make those assumptions because they are counterfactual and inconsistent with 

Cinergy’s real-world experience and practices. 

That is why Rosen was forced to acknowledge that, in comparison to his 

methodology, it would have been “preferable to use a computerized dispatch model 

... for the purpose of forecasting the generation levels from a generating unit that 

has undergone a repair or replacement.” A00563; see also A00706; A00924-29 

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(describing the types of analyses that can be done by dispatch models). Indeed, 

Rosen repeatedly cited such models as the best way of reflecting the 

interdependence of generating units and estimating accurately how utilization 

might change with an increase in availability. A00723; A00729; A00738-40. 

Despite these admissions, Rosen seized upon a different, inconsistent and far 

more rudimentary process that Cinergy used for the more limited purpose of 

comparing potential capital expenditure projects. Specifically, in choosing among 

possible maintenance projects at different plants, only some of which Cinergy could 

undertake within its capital budget, Cinergy would assign a monetary value to each 

based on potential costs and benefits for purposes of prioritizing among multiple 

possible projects. A00781; A00784; A00791-95; A00579; A00977-78; A00982-83; 

A01105-06. Unlike Cinergy’s more sophisticated predictive models, the simplified 

capital budgeting process, consistent with the Rosen-Koppe methodology, assigned 

“benefits” to projects that included, inter alia, cost savings that would be achieved if 

availability previously lost due to the replaced component was recovered and if prerepair utilization rates applied. 

Rosen’s reliance on this simplified cost-benefit analysis confirms the unscientific 

nature of his method. It was undisputed that these simplified calculations were 

never relied upon by Cinergy outside of the capital budgeting context and thus not 

used by Cinergy to forecast future generation or make other critical decisions such 

as fuel purchases and unit construction. See supra pp. 10-12, 41. Nor did Cinergy 

use the economic “benefit” associated with each capital expense to project future 

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revenue. See, e.g., A00794-95. The cost-benefit analysis was nonetheless useful to 

Cinergy because it enabled the utility to compare different options for maintenance 

expenditures in a way that focused on the degree to which a component had caused 

outages in the past and the extent to which the particular unit had previously been 

utilized. 

Rosen, by contrast, used these simplified assumptions not to make comparative 

judgments, but instead to calculate precise increases in future generation at 

individual units taken in isolation. But any reliance on Cinergy’s cost-benefit 

analyses in this different context would be improper for the reasons given above. 

Further, as noted, the “most significant” inquiry under Daubert “is whether the 

scientific theory has been subjected to the scientific method.” Fuesting, 421 F.2d at 

536 (emphasis added, internal quotation marks omitted). Cinergy’s capital 

budgeting process was not subject to testing or validation as a method of predicting 

future generation, and the government cannot demonstrate the scientific reliability 

of its methodology by pointing to a process that likewise has never been 

scientifically validated for that purpose. Cf. Zenith Elecs., 395 F.3d at 419 (experts 

must “follow scientific approaches normal to their disciplines”). 

Indeed, applying Rosen’s assumptions in order to predict actual generation 

increases produces impossible results. If Cinergy had actually authorized each of 

the hundreds of repair projects it considered during the period at issue in the 

Complaint, and the assumptions in its comparative analysis were applied to predict 

future generation, the result would be to predict enormous generation increases at 

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every generating unit in the system even if demand were flat or falling—an utterly 

implausible outcome. See NIPSCo, 667 F. Supp. at 618 (“the load on the system and 

the amount of power generated must balance”). 

Rosen ultimately conceded that the use of these cost-benefit calculations for 

ranking capital projects “does not mean this methodology is correct for use under 

the NSR regulations.” A000526. Rather, he asserted that the capital ranking 

analysis was “correct” because it employed assumptions that were consistent with 

those he was using. Id. His untested methodology, however, was neither a reliable 

means for projecting future generation nor a “correct” application of the NSR 

regulations. 

C. The Rosen-Koppe Methodology Is Biased And Unreliable. 

Any independent scientific review would have exposed the Rosen-Koppe 

methodology as fatally flawed and unreliable. It ignores virtually all of the 

engineering and economic factors that actually determine how much electricity a 

unit will generate. Indeed, that methodology was a deus ex machina introduced to 

fill a critical gap in the government’s proof. It will always predict a generation 

increase whenever a component associated with prior outages is replaced—even 

though no such causal relationship exists in the real world. Such a biased 

methodology cannot be applied “reliably to the facts of the case” and should have 

been excluded under Fed. R. Evid. 702. See Chapman, 297 F.3d at 686-87. 

Rosen. Rosen conceded that his methodology would necessarily yield an increase 

in generation when applied to the repair projects at issue. See A00708; A00917-19. 

Rosen predetermined this result as a matter of mathematics by applying a unit’s 

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pre-repair utilization factor to his (hypothesized) increased post-repair availability. 

See supra pp. 16-17. Rosen thus assumed that if a unit’s availability increases as a 

result of a repair project, some portion of that “recovered availability” will then be 

used to generate electricity. 

This analysis ignores the bases on which the “dispatch” decisions allocate 

demand among the multiple generating units in a utility system. See supra pp. 10-

12; see also People Who Care v. Rockford Bd. of Educ., 111 F.3d 528, 537-38 (7th

Cir. 1997) (“[A] statistical study that fails to correct for salient explanatory 

variables ... has no value as causal explanation and is therefore inadmissible in 

federal court.”). An increase in availability, standing alone, does not mean that a 

unit will be dispatched more than it was historically. To the contrary, the fact that 

prior demand was satisfied by running a unit at a certain level in the past suggests 

strongly that increased generation from the unit is not necessary to satisfy the same 

level of demand in the future. This is especially true where, as here, the repairs at 

issue did not make any fundamental changes to generating units that would allow 

them to generate electricity at a lower cost or otherwise change their place in the 

dispatch order, A00294-95 (¶¶23-24); A00384-86; A01019-20; A01028; A01032-33; 

A01086; A01092; A01111-12; A01114-15, and where units had substantial excess 

availability prior to the projects—i.e., they were frequently not run even when 

available, A00321-22 & A00346; A01024-26; A01096-97; A00959-67 (Rosen 

conceding that Cinergy’s units had substantial excess capacity). Nor can it be 

assumed that the unit will need to be run more in order to satisfy increased 

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demand, because, as Rosen acknowledged, EPA’s rules expressly exclude 

consideration of demand growth in the prediction of emissions increases. A000527 

(citing 40 C.F.R. §52.21(b)(33)(ii)); see also 57 Fed. Reg. at 32,327; 40 C.F.R. 

§§52.21(b)(2)(iii)(f), 52.24(f)(5)(iii)(f) (1981). 

A reliable assessment whether a unit will be run more as a result of a presumed 

increase in availability requires an analysis of the engineering and economic factors 

that guide how electrical generating units will be dispatched to determine whether, 

for that unit, there is reason to believe that increasing the unit’s availability will 

cause it to be dispatched more than it was in the past. But it is precisely those 

factors—such as the relative costs of the units and other sources of electricity 

available to Cinergy, the operating characteristics of Cinergy’s individual units, and 

the need to maintain “spinning reserves”—that were ignored in Rosen’s analysis. 

See supra pp. 10-12, 17, 44. 

Rosen conceded these real-world factors dictate how generating units are in fact 

dispatched. A00703-04; A00738-40; compare A00563 (“I agree that all of the 

complexities that Mr. Harris lists in Table 1 can affect how a generating unit 

operates”), with A00310. He also acknowledged that he never examined the 

dispatch order of Cinergy’s units. A00720; A00775; A00970. And he admitted that 

he could have performed a more accurate prediction that took these factors into 

account (using a model like those regularly used by utilities) and that it would be 

“preferable” to use such models to forecast emissions increases, A00563; see also

A00706; A00723; A00729; A00735; A00738-40. He testified simply that he lacked 

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sufficient resources or time to do so. A00673; A00676-77; see also A00761-63 

(stating he did not even ask the government about calculating emissions using a 

dispatch model because he “just sort of assumed” that it was too expensive). 

These concessions confirm that Rosen’s analysis should have been excluded 

under Fed.R.Evid. 702. Without analyzing the factors that influence the decision to 

dispatch electricity from a unit, Rosen had no reliable basis from which to conclude 

that each project should have been predicted to increase generation and emissions. 

Cf. A00308-10; A00317-20; A00384-86; A00291 (¶¶16-17); A01015; A01019-21; 

A01027-28; A01037-38; A01057; A01086; A01092-93; A01112; A01114-15. Indeed, 

many of the relevant factors ignored by Rosen would have suggested that 

generation at the repaired units might decrease after a repair. A00702-03 

(conceding that parameters ignored by his constant utilization factor could cause 

decrease in generation). For example, Rosen ignored binding constraints on how 

Cinergy units may be dispatched, such as thermal discharge permits limiting 

Cinergy’s use of the Wabash River units when temperatures are high. A01066; 

A01068; A01083-84. He also ignored that natural gas prices can decrease relative to 

coal prices and make coal plants more costly, and thus less likely to be dispatched. 

A01112; A01122; A01140; A01142. He ignored that during the time period at issue 

in the Complaint Cinergy constructed new generating units and increased the 

capability of Wabash River Unit 1, thereby potentially decreasing the amount of 

energy that existing units need to provide. A00738 (acknowledging new capacity 

impacts utilization of existing units); see also A00998; A01087. And he failed to 

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consider the fact that Cinergy was moving from relying predominantly on its own 

units for electricity in the 1980s to purchasing electricity from neighboring utilities 

in the 1990s, thereby potentially reducing its own generation. A00738; A00766 

(acknowledging off-system sales impacts utilization of generating units); see also 

A01148. 

Rosen’s decision to ignore the factors that actually drive electricity generation 

decisions led to an additional and especially basic error—he ignored the 

interdependence of generating units that comprise a single system. Cf. A00308-11; 

A00291 (¶¶16-17); A01140-41; A1143; A01145-49. In assessing a possible change in 

interdependent systems, one cannot look at one unit and hold everything else 

constant as Rosen did. In particular, an individual generating unit is not like a 

manufacturing plant where, for example, if a broken assembly line conveyor is 

repaired, the plant might then be expected to produce more of its product. To the 

contrary, if one unit in an interdependent utility system is to generate more, 

another must generate less. That is particularly clear here because (a) the demand 

for electricity and the electricity generated “must balance,” see NIPSCo, 667 F. 

Supp. at 618, and (b) the demand must be assumed to be flat or falling because 

EPA’s regulations require that any potential growth in demand be excluded from 

the calculations, 57 Fed. Reg. at 32,327; 40 C.F.R. §§52.21(b)(2)(iii)(f), 

52.24(f)(5)(iii)(f) (1981). One cannot, therefore, predict how much a single unit will 

generate without considering what other units will generate. 

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Rosen ignored that reality. He analyzed a series of projects at different 

generating units and looked at each unit as if it were a stand-alone utility, without 

regard to what might be occurring at other generating units. See A000525-26; 

A000533-35. He did so even though he was predicting increases at multiple units 

during the same general period of time. A000539-40. It is, of course, physically 

possible for dispatch engineers to make substantial shifts of generation 

disproportionately toward units that have recently undertaken like-kind component 

replacements. But Rosen never attempted to show—and could not have shown—

that any utility actually behaves in that way (or rationally would), rather than 

make decisions (as they do) on the basis of cost considerations, operating 

characteristics, reserve needs, and similar factors. Indeed, in a hypothetical system 

in which each unit recently undertook a replacement of a component previously 

associated with outages, Rosen’s methodology would predict an outcome that could 

never occur: each unit, as well as the system as a whole, would increase generation 

even if demand were constant. 

Rosen’s failure to consider the relevant dispatch factors and unit 

interdependence is particularly stark given the government’s position that, “[f]or all

of the Cinergy units” at issue, availability “increased substantially” during the 

applicable period because of systemic improvements in maintenance, management 

and operating practices. A00414 (emphasis added); see also, e.g., A00404; A00408-

09; A00411; A00388. Even assuming arguendo that a particular repair increased a 

given unit’s availability, as Rosen does, it was nonetheless the case that Cinergy’s 

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other generating units likewise contemporaneously experienced substantial 

availability increases for independent reasons. But under Rosen’s theory, all these 

other units would also be predicted—nonsensically—to generate more electricity 

while demand remains flat. Testimony relying on such a manifestly illogical theory 

should not have been presented to the jury. 

Koppe. Although Rosen’s “constant utilization” assumption by itself renders 

the methodology unreliable, it is not the methodology’s only such failing. The 

“recovered availability” theory propounded by Koppe is likewise fundamentally 

flawed, and independently renders the analysis biased and unreliable. See In re 

Paoli R.R. Yard PCB Litig., 35 F.3d 717, 745 (3d Cir. 1994) (“any step that renders 

the analysis unreliable ... renders the expert’s testimony inadmissible” (emphasis 

added)). 

This theory assumed that the entire generating unit recovers, for a two-year 

period, the precise number of hours previously lost to outages and derates 

associated with the replaced component in a pre-project two-year “baseline” period. 

A00397; A00523. This assumption was demonstrably wrong. Koppe’s own data show 

that, in many cases, numerous and substantial outages and derates associated with 

the repaired component itself continued to occur after the repair. See, e.g., A00430; 

A00434; A00437; A00439-40; A00443; A00445-46; A00449; A00452; A00461-62; 

A00465; A000575-76. If the repairs did not even stop the outages at issue—let alone 

address the thousands of other randomly-failing components in the units—one 

cannot reliably predict that these projects will “recover” all previously “lost” 

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availability. Indeed, in an independent 1982 report, Koppe acknowledged that a 

replacement may “not provide the full gain or perhaps creates a worse situation” 

and that “the risk of not achieving higher levels of productivity as a result of the 

improvement must be considered and treated accordingly.” A00235; see A00826-27 

(Koppe conceding that a repair itself may fail or not be completely effective); 

A00846-47 (Koppe “at a loss” for why outages continued seven months post-repair); 

see also A00861-63; A00882-83; A01016-18. 

Koppe’s testimony at trial only further underscored that his analysis was 

unreliable and contrary to EPA’s NSR rules. At trial, Koppe asserted that these 

“clusters” of problems that can occur soon after a replacement could be ignored 

because in “the long term after the project” and “many years in the future” these 

problems will be eliminated. A00826-27; see also A00861-63; A00882-83. But that is 

irrelevant. EPA’s test requires a determination of how much emissions are projected 

to change in the two years following the project, 57 Fed. Reg. at 32,323; see also

A00910, not “many years in the future,” and Rosen improperly used Koppe’s “longterm” calculations of recovered availability to predict emissions increases for those 

two-year periods. 

Moreover, even if one could assume that utility component repairs are always 

effective, it is undisputed that forced outages at coal-fired units are random events 

and can occur at any time from hundreds of different factors. A00302-07; A00287 

(¶8); A00589-94; A00713-15; A00808-09; A00866; A01007-08; A01019; A01037; 

A01042; A01080; A01126. It is also undisputed that such outages are extremely 

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frequent. See, e.g., A00865; A01069; A01008; A01011; A01107-08. Thus, as Koppe 

acknowledged, one of the thousands of other components that make up complex 

generating systems and that was not replaced could fail and cause an outage, 

A00479; A00830; A00852-53; A00868; see also A00287-89 (¶¶8-11); A00299-302; 

A01011-12. In aggregate, the outages caused by these other component failures are 

significant and can exceed the outages caused by the steam tube replacements 

challenged by the government. See, e.g., A00868-75; A00877-99; A01011-12. This is 

particularly true because as a coal-fired generating plant ages, it is to be expected 

that many of its older parts will wear out. A00884; see also A00479 (hundreds of 

components can be replaced during a shutdown); A01001; A01039 (tens of 

thousands of component repair projects occurred during this period). As such, there 

was no basis to presume that the handful of repair projects analyzed by Koppe 

would somehow boost unit availability well in excess of historical levels.

This is why, rather than assume as Koppe did that a repair will restore the 

amount of unit availability previously lost as a result of the component being fixed, 

Cinergy—like other utilities, A00523-25—used a several-year average of the unit’s 

historic availability as the best proxy for future availability in generation 

forecasting models, A00615-16; A00620-21; A00599-604; A00607-08; A01037. Such a 

long-term average reflects any sustained and verifiable improvement in overall unit 

availability while accounting for the fact that generating units are complex 

machines consisting of hundreds of subsystems subject to frequent and random 

failures—the reality that Koppe’s assumptions improperly ignored. 

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D. The Rosen-Koppe Methodology Is Irrelevant Under The CAA And 

EPA’s Implementing Regulations. 

The Rosen-Koppe methodology should also have been excluded under Rule 702 

for an additional reason: the methodology does not show that the predicted 

emissions increases are caused by the repair projects. Its predictions of emissions 

increases were therefore irrelevant to whether the projects at issue were 

“modifications” that triggered NSR. See Daubert, 509 at 591-92 (“Rule 702’s 

‘helpfulness’ standard requires a valid scientific connection to the pertinent inquiry

as a precondition to admissibility”) (emphasis added); Kempner Mobile Elecs., Inc. 

v. Sw. Bell Mobile Sys., 428 F.3d 706, 713 (7th Cir. 2005) (affirming exclusion of 

plaintiff’s expert testimony “as irrelevant and inapplicable to [plaintiff’s] theory of 

liability”). 

The CAA and implementing regulations require a showing that each like-kind 

change would be expected to “result in” significant emissions increases. See, e.g., 40 

C.F.R. §52.21(2)(i). As EPA has concluded, this means that “NSR will not apply 

unless EPA finds that there is a causal link between the proposed change and any 

post-change increase in emissions.” 57 Fed. Reg. at 32,326. 

Thus, for example, where an increase in emissions will be a result of 

“independent factors” other than the physical change in the plant (such as a growth 

in demand) and the unit would “have been able to accommodate” that projected 

increase “even absent the particular change,” the increase must be “excluded from 

the projection of future actual emissions.” Id. By contrast, for example, if a physical 

change “significantly alters the efficiency of the plant” and is “the predominant 

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cause of the change in emissions”—because it will make the plant less costly to run 

and the plant will therefore be dispatched more often—the resulting increase can 

trigger NSR. Id. at 32,326-27. But even where a project will improve a unit’s 

efficiency, EPA emphasized, causation “must be resolved on a case-by-case basis 

and is dependent on the individual facts and circumstances of the change at issue.” 

Id. at 32,327. 

Rosen never conducted any causation analysis, much less a factual and casespecific one, to demonstrate that increasing the availability of a unit will cause an 

increase in generation. He provided no basis for concluding that like-kind 

component replacements, which are not intended or expected to alter the unit’s 

efficiency or otherwise change its place in the dispatch order, would nonetheless 

lead the unit to be dispatched more often. 

The government did not deny below that Rosen was required to show causation 

for his predictions. Instead, the government asserted that his analysis satisfied that 

requirement because it: 

by design, isolates the emissions expected to result from the project 

itself. Dr. Rosen assumes that post-project Cinergy will operate the 

unit for the same percentage of available hours as it did before the 

project. This excludes the impact of increases in operation attributable 

to increases in demand and isolates the effect of the project. By 

definition then, an increase calculated by Dr. Rosen cannot be 

“unrelated” to the project. Thus, even if one assumes that the unit 

could have generated emissions equal to the post-project emissions, the 

calculated increase attributable to the project is an increase that can 

trigger New Source Review. 

A00277 (citations omitted). This is no defense at all. To the contrary, it confirms 

that Rosen merely “assume[d]” that generation increases would follow from 

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availability increases, and that those increases would therefore satisfy the 

causation requirement only “by definition.” That explanation begs the question, 

because it acknowledges that this assumption was critical without providing any 

basis for thinking it valid. Rosen’s entire formula was driven by his assumption that 

a utilization rate that had applied to a unit in the past, at one level of availability, 

would also apply to that unit in the future, at a different presumed level of 

availability—even though the availability of the other, interdependent units in the 

system was increasing at the same time. But Rosen never sought or was able to 

justify that essential assumption. 

The absence of a causation analysis was particularly glaring here for at least 

two reasons. First, none of the units at issue had ever been called upon to generate 

at anything near the full extent of their availability. As Rosen conceded, all the 

units had extensive “headroom”—excess availability that was never actually 

utilized—and could have accommodated substantial increases in generation even if 

the projects in question had never been done. A00959-67; see also A01024-26; 

A01096-98. For example, Rosen’s calculations predicted a 1.54% increase in 

generation from the 1989 project at Wabash River Unit 2; however, Unit 2 already 

could have accommodated a 27.9% increase in generation without the project. The 

other Wabash River units could have similarly accommodated Rosen’s projected 

generation increase without making the replacement. A01096-97; A000580 & 

A000582-84; A00319-24; A00346; see also A00959. There was no basis to assume 

that a modest addition of availability would suddenly be used when the ample 

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extant availability had not been. This is particularly true under EPA’s requirement 

that growth in demand be excluded given that any assumed generation increase by 

one unit must therefore be accompanied by corresponding generation decreases in 

Cinergy’s other interconnected units. 

Second, even accepting arguendo that a unit becomes more available as a result 

of a single like-kind replacement, but see supra pp. 49-51, other aspects of EPA’s 

rules establish that such an alleged availability increase does not cause an 

emissions increase within the meaning of NSR. In addressing the selection of the 

“baseline emissions period”—i.e. the two-year pre-project period from which a 

projected emissions “increase” is measured—EPA has explained that periods in 

which “the source’s capacity was reduced due to physical problems” should not be 

used as baselines because such periods do not represent “normal operations.” 57 

Fed. Reg. at 32,323.9 The entire Rosen-Koppe theory, by contrast, is that “normal 

operations” include the periods in which the particular component at issue is 

causing forced outages, and that repairing that component causes an emissions 

increase within the meaning of NSR. As Rosen conceded, use of a baseline that did 

not reflect “reduct[ions] due to physical problems” would produce results “less 

favorable to the government.” A00727. Because their theory is inconsistent in this 

and other respects with the legal framework it purports to apply in a manner that 

 

9 EPA thus concluded on remand from WEPCo that it would be inappropriate to evaluate 

WEPCo’s life extension project by using the period immediately prior to the project because 

an earlier period “prior to the source curtailments due to [WEPCo’s] discovery of cracks in 

the rear steam drums” was “more representative of normal source operations.” A00254. 

EPA later reaffirmed that “normal source operations” means operations when the replaced 

components were not yet causing problems. A00240-41. 

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produces inflated emissions results, it should have been excluded as irrelevant to 

the issues the jury was charged with deciding. 

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CONCLUSION 

For the foregoing reasons, this Court should reverse the district court’s 

judgment and remand with instructions to enter judgment in Cinergy’s favor. 

 Respectfully submitted, 

Marc E. Manly 

Catherine S. Stempien 

Dean M. Moesser 

Julie L. Ezell 

DUKE ENERGY CORP. 

526 South Church Street 

Charlotte, NC 28202 

(704) 382-8000 

Mark D. Hopson 

Counsel of Record 

Peter D. Keisler 

Peter C. Pfaffenroth 

Ryan C. Morris 

Lowell J. Schiller 

SIDLEY AUSTIN LLP

1501 K Street, N.W. 

Washington, DC 20005 

(202) 736-8000 tel. 

(202) 736-8711 fax 

Attorneys for Appellants 

December 11, 2009 

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CERTIFICATE OF COMPLIANCE 

1. This brief complies with the type-volume limitation of Fed. R. App. P. 

32(a)(7)(B) because it contains 13,855 words, excluding the parts of the brief 

exempted by Fed. R. App. P. 32(a)(7)(B)(iii). 

2. This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) 

and Circuit Rule 32, and the type style requirements of Fed. R. App. P. 32(a)(6), 

because it has been prepared in a proportionally spaced typeface using Microsoft 

Word in twelve point Century Schoolbook font. 

____________________________ 

December 11, 2009 Mark D. Hopson 

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59 

CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 30(d) 

Pursuant to Circuit Rule 30(d), the undersigned counsel hereby certifies that all 

materials required by Circuit Rules 30(a) and 30(b) are included in the Required 

Short Appendix. 

____________________________ 

December 11, 2009 Mark D. Hopson 

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60 

CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 31(e)(1) 

 Pursuant to Circuit Rule 31(e)(1), the undersigned counsel hereby certifies 

that appendix materials required by Circuit Rules 30(a) and 30(b) are not available 

in searchable digital format. 

____________________________ 

December 11, 2009 Mark D. Hopson 

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61 

CERTIFICATE OF SERVICE 

Pursuant to Federal Rules of Appellate Procedure 25 and 27, I, Peter C. 

Pfaffenroth, hereby certify that on December 11, 2008, I served two copies of this 

brief by first class mail, postage pre-paid, to the following counsel at the following 

addresses: 

PHILLIP A. BROOKS 

JUSTIN A. SAVAGE 

JAMES A. LOFTON 

JASON A. DUNN 

THOMAS A. BENSON 

LOREN A. REMSBERG 

Environmental Enforcement Section 

Environment & Natural Resources Div. 

U.S. Department of Justice 

P.O. Box 7611

Washington, D.C. 20530 

(202) 514-5293 

MICHAEL MYERS 

Assistant Attorney General, 

Environmental Protection Bureau 

The Capitol 

Albany, NY 12224 

(518) 402-2594 

Attorney for State of New York 

 

JON MARTIN 

Deputy Attorney General 

Richard J. Hughes Justice Complex 

25 Market Street, P.O. Box 093 

Trenton, NJ 08625-4503 

(609) 984-2845 

Attorney for State of New Jersey 

TIMOTHY M. MORRISON 

United States Attorney 

Southern District of Indiana 

THOMAS E. KIEPER 

Assistant United States Attorney 

Southern District of Indiana 

10 West Market Street, Suite 2100 

Indianapolis, IN 46204-3048 

 

Attorneys for the United States of 

America 

SCOTT N. KOSCHWITZ 

Assistant Attorney General 

55 Elm Street 

P.O. Box 120 

Hartford, CT 06141-0120 

(860) 808-5101 

Attorney for State of Connecticut 

 

KEITH GUTHRIE 

13242 South 600 East 

Elizabethtown IN 47232 

(812)579-5926 

Attorney for the Hoosier 

Environmental Council and the Ohio 

Environmental Council 

 

 

 Peter C. Pfaffenroth 

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