Court Opinion

ID: 3002339
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:27:52.964537+00
Date Added: 2024-06-11T12:09:48.609034
License: Public Domain

In the

United States Court of Appeals
                 For the Seventh Circuit

No. 06-4045

S IERRA C LUB,
                                                 Plaintiff-Appellee,
                                v.

F RANKLIN C OUNTY P OWER OF ILLINOIS, LLC,
formerly known as E NVIROP OWER OF ILLINOIS, LLC,
E NVIROP OWER, LLC, and K HANJEE H OLDING (US), INC.,

                                          Defendants-Appellants.

            Appeal from the United States District Court
               for the Southern District of Illinois.
              No. 05 C 4095—J. Phil Gilbert, Judge.

    A RGUED O CTOBER 29, 2007—D ECIDED O CTOBER 27, 2008

  Before B AUER, R IPPLE, and W ILLIAMS, Circuit Judges.
   W ILLIAMS, Circuit Judge. Franklin County Power of
Illinois, LLC, wants to build a coal power plant in
southern Illinois. Because the plant will emit a significant
amount of air pollution, the Company must first obtain
a “Prevention of Significant Deterioration” (PSD) permit
from the Illinois Environmental Protection Agency (IEPA),
2                                             No. 06-4045

the agency that the federal EPA has designated as the
issuer of PSD permits in Illinois. Although the IEPA
granted the Company a PSD permit in 2001, the IEPA has
since made a “preliminary determination” that the
permit has expired.
  Sierra Club is a non-profit environmental organization
that sought to enjoin the Company from building the
power plant by bringing this suit against the Company, its
parent company EnviroPower, LLC, and Khanjee
Holding (US), Inc., under a citizen suit provision of the
Clean Air Act. Sierra Club alleged that the Company’s
2001 PSD permit had expired because the Company had
neglected to “commence construction” of the plant within
an 18-month window required under the permit. Sierra
Club also claimed the permit was invalid under EPA
regulations because the Company had discontinued
construction of the plant for over 18 months. The district
court agreed with Sierra Club on both points and granted
summary judgment in its favor. The court also perma-
nently enjoined the Company from building the plant
until it obtained a new PSD permit, and the defendants
appealed to this court.
  We agree with the district court that Sierra Club has
standing to pursue this lawsuit and that its claim is ripe
and permissible under the Clean Air Act. We also agree
that the 2001 PSD permit has expired and that the
district court properly granted permanent injunctive
relief in favor of Sierra Club. Therefore, we affirm the
district court’s grant of summary judgment in favor of
Sierra Club.
No. 06-4045                                                3

                    I. BACKGROUND
  A. Statutory and regulatory framework
  Sierra Club brought this suit under 42 U.S.C. § 7604(a)(3),
a citizen suit provision of the Clean Air Act, which pro-
vides in relevant part:
    [A]ny person may commence a civil action on his
    own behalf . . .
        (3) against any person who proposes to
            construct or constructs any new or
            modified major emitting facility with-
            out a permit required under [42 USCS
            §§ 7470 et seq.] (relating to significant
            deterioration of air quality) . . . or who
            is alleged to have violated (if there is
            evidence that the alleged violation has
            been repeated) or to be in violation of
            any condition of such permit.
The parties agree that the coal power plant that the Com-
pany seeks to build is a “major emitting facility” that
requires a PSD permit. Such a permit contains an
emission limitation that is set by the IEPA and represents
the “best available control technology” for pollution. See
42 U.S.C. § 7475(a).
  Once issued, a PSD permit can expire and become
invalid in three different ways:
    [a] [I]f construction is not commenced within 18
        months after receipt of such approval,
    [b] if construction is discontinued for a period of
        18 months or more, or
4                                                 No. 06-4045

     [c] if construction is not completed within a rea-
         sonable time.
40 C.F.R. § 52.21(r)(2). The IEPA Administrator “may
extend the 18-month period upon a satisfactory showing
that an extension is justified,” id.; otherwise, the PSD
permit terminates by “automatic expiration.” 40
C.F.R. § 124.5(g)(2) (“PSD permits may be terminated
only by recission under § 52.21(w) or by automatic ex-
piration under § 52.21(r)(2).”).

    B. Factual background
  On August 15, 2000, the Company applied to the IEPA
for a PSD permit to build a 600 megawatt 1 coal-fired
power plant in Benton, Illinois, on land for which it had
a 99-year lease. The IEPA concluded the project would
be a major air pollution source subject to PSD review. On
July 3, 2001, the IEPA issued a PSD permit for the plant.
The permit states it will become invalid if:
     construction of CFB [circulating fluidized bed]
     boilers is not commenced within 18 months after
     this permit becomes effective, if construction of
     these boilers is discontinued for a period of 18
     months or more, or if construction of these boilers is
     not completed within a reasonable period of time.

1
  Sierra Club claims the permit only authorized a 500 MW, not
a 600 MW, facility. Because the defendants lost on summary
judgment, we construe all facts in the light most favorable to
them. See Rawoof v. Texor Petroleum Co., 521 F.3d 750, 755 (7th
Cir. 2008).
No. 06-4045                                              5

The permit defines “commence” and “construction” in
terms of 40 C.F.R. § 52.21(b)(9) and § 52.21(b)(8), respec-
tively, which are provisions we will discuss in more
detail later.
  On December 2, 2002, the Company entered into an
agreement with Black & Veatch (B&V), an engineering
and construction company, that required the parties to
“work together on an exclusive basis . . . in order to
draft and negotiate the EPC [Engineering, Procurement
and Construction] Contract.” On about December 18,
2002, the Company contracted with Alberici Constructors,
Inc., for on-site excavation and foundation work. Alberici
was to dig a hole at the site down to the bedrock and pour
concrete to lay part of the foundation for the plant. On
January 3, 2003, four Alberici employees began delivering
equipment to the site, and five days later, they began
excavating.
  On February 14, 2003, Alberici stopped the excavation
after a dispute arose regarding payment. Alberici’s bills
after that date include one day where workers showed
up but did no work. All other days only include a super-
visor’s hours spent maintaining a protective barricade
around the site.
  In July 2004, the Company’s landlord had the hole
refilled, apparently because the Company did not make
a payment on its lease. In September 2004, the Company
signed another contract for excavation and concrete
work, which began anew on September 29, 2004. An
IEPA inspector visited the plant site shortly there-
after and determined that construction had commenced.
6                                               No. 06-4045

   In the meantime, co-defendant Khanjee Holding (US),
Inc. had obtained an option to buy the Company and all
its assets. In June 2003, Khanjee affirmed its obligation to
adhere to the Company’s contract with B&V. In January
2004, the Company secured a mandate letter from its
lead financial arranger indicating that financing for the
project was available.
  On November 19, 2004, the IEPA notified the Company
that it had “made a preliminary finding” that its PSD
permit had expired. The Company challenged this pre-
liminary determination and as far as we know, that
matter remains pending before the IEPA.
  On May 20, 2005, Sierra Club filed this suit, alleging that
the 2001 PSD permit had expired and was invalid. The
defendants moved to dismiss, claiming that the citizen
suit provision of the Clean Air Act did not provide a
basis for this suit. They also moved for summary judg-
ment, claiming that Sierra Club lacked standing and that
the permit was valid. Sierra Club countered with its
own motion for summary judgment.
  The district court denied the defendants’ motions and
found the permit to be invalid. It entered summary judg-
ment in Sierra Club’s favor and permanently enjoined the
defendants from building the plant until they obtained
a valid permit. The defendants then filed this appeal.
No. 06-4045                                                  7

                       II. ANALYSIS
  A. Sierra Club had standing.
   An organization has standing to sue if (1) at least one of
its members would otherwise have standing; (2) the
interests at stake in the litigation are germane to the
organization’s purpose; and (3) neither the claim asserted
nor the relief requested requires an individual member’s
participation in the lawsuit. See Friends of the Earth, Inc. v.
Laidlaw Env’l Servs. (TOC), Inc., 528 U.S. 167, 181 (2000)
(citing Hunt v. Washington State Apple Adver. Comm’n, 432
U.S. 333, 343 (1977)). The defendants do not seriously
contest that Sierra Club satisfies prongs (2) and (3). Sierra
Club is a nonprofit organization formed and operated
to “preserve, protect, and enhance the natural environ-
ment,” which is also its stated goal in bringing this law-
suit. The defendants also do not suggest this proceeding
requires an individual Sierra Club member to participate;
rather, they claim that Sierra Club has not presented an
individual member with standing. So the dispute here
turns on prong (1).
  To have standing, an individual must satisfy three
requirements. First, she must have suffered an “injury in
fact” that is both (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical.
Second, the injury must be fairly traceable to the chal-
lenged action. Third, it must be likely, not just speculative,
that a favorable decision will redress the injury. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). Because
these elements “are not mere pleading requirements but
rather an indispensable part of the . . . case, each element
8                                                No. 06-4045

must be supported . . . with the manner and degree of
evidence required at the successive stages of the litiga-
tion.” Id. at 561.
  To survive a defendant’s motion for summary judg-
ment (or to win on a cross-motion for summary judgment),
a plaintiff cannot rely on mere allegations but must
support each element by specific facts via affidavits or
other evidence. See id. We review de novo the district
court’s determination that Sierra Club has standing. See
Disability Rights Wis. Inc. v. Walworth County Bd. of Supervi-
sors, 522 F.3d 796, 800 (7th Cir. 2008).

    1.   Sierra Club member Barbara McKasson will
         suffer injury in fact.
   Sierra Club relies on one of its members, Barbara
McKasson, to establish standing. “[E]nvironmental plain-
tiffs adequately allege injury in fact when they aver that
they use the affected area and are persons for whom the
aesthetic and recreational values of the area will be less-
ened by the challenged activity.” Laidlaw, 528 U.S. at 183
(internal quotation marks omitted). McKasson states in
an affidavit that she will experience diminished aesthetic
and recreational value if the Company constructs and
operates the power plant under the 2001 PSD permit. She
explains that every other year since 1987, McKasson and
her family have taken trips to fish, kayak, camp, and enjoy
the natural beauty and clean environment of Rend Lake,
located three miles from the proposed plant site. She
claims if the Company builds the plant under the 2001
permit, she will cease her biennial recreational trips
No. 06-4045                                                   9

because the pollutants emitted based on the permit will
harm her and diminish her aesthetic enjoyment of Rend
Lake.
  The defendants claim that McKasson’s injury is insub-
stantial, but the “injury-in-fact necessary for standing ‘need
not be large, an identifiable trifle will suffice.’ ” Lafleur v.
Whitman, 300 F.3d 256, 270 (2d Cir. 2002) (quoting Sierra
Club v. Cedar Point Oil Co., Inc., 73 F.3d 546, 557 (5th Cir.
1996)); see also Doe v. County of Montgomery, 41 F.3d 1156,
1159 (7th Cir. 1994) (“[A]n identifiable trifle is enough for
standing to fight out a question of principle . . . .” (quoting
United States v. Students Challenging Regulatory Agency
Procedures (SCRAP), 412 U.S. 669, 689 n.14 (1973))). If the
proposed plant is built, McKasson will be exposed to
emissions from the plant if she continues her long-
standing tradition of visiting Rend Lake with her family.
This “likely exposure” to pollutants is “certainly some-
thing more than an ‘identifiable trifle,’ even if the ambient
level of air quality does not exceed [certain national
limits].” Lafleur, 300 F.3d at 270-71; see also Bensman v.
United States Forest Serv., 408 F.3d 945, 962-63 (7th Cir.
2005) (individual had standing to challenge a proposed
project in a national forest when he had visited the project
area six times over 20 years and planned to return soon).
Moreover, if McKasson foregoes her regular visits to the
lake because of these pollutants, that would also con-
stitute an injury-in-fact. See Laidlaw, 528 U.S. at 183 (indi-
vidual’s affidavit stating that he foregoes using a river
for recreational purposes because of pollution concerns
was sufficient to show injury-in-fact); see also Buono v.
Norton, 371 F.3d 543, 547 (9th Cir. 2004) (“We have repeat-
10                                              No. 06-4045

edly held that inability to unreservedly use public land
suffices as injury-in-fact.”). McKasson’s injuries are also
ones that are “concrete and particularized” because they
affect her in a “personal and individual way.” See Lujan,
504 U.S. at 560 & n.1; Coalition for the Env’t v. Volpe, 504
F.2d 156, 167 (8th Cir. 1974) (holding that a proposed
development that would increase pollution and traffic
and limit plaintiffs’ views was a cognizable injury that
deprived plaintiffs of aesthetic and psychological benefit).
  The defendants also argue that because the plant will
take years to build, McKasson’s injury is not “actual or
imminent” and does not meet the second requirement
for injury in fact. But the defendants forget that
threatened injury can satisfy Article III standing require-
ments. See Babbitt v. United Farm Workers Nat’l Union,
442 U.S. 289, 298 (1979) (“[O]ne does not have to await
the consummation of threatened injury to obtain preven-
tive relief. If the injury is certainly impending that is
enough.”); see also Massachusetts v. EPA, 127 S. Ct. 1438,
1455 (2007) (EPA’s refusal to regulate greenhouse gas
emissions presented an imminent risk of harm); Mainstreet
Org. of Realtors v. Calumet City, 505 F.3d 742, 744 (7th Cir.
2007) (“[S]tanding in the Article III sense does not
require a certainty or even a very high probability that
the plaintiff is complaining about a real injury, suffered or
threatened.”). The Company claims that the PSD permit
that it received is still valid, and it (strenuously) argues
that it has actually begun construction of the plant. As a
practical matter, it makes sense for Sierra Club to chal-
lenge the validity of the Company’s permit now, rather
than waiting until the plant is operational. See Lafleur, 300
No. 06-4045                                                11

F.3d at 270 (likely exposure to emissions from a proposed
but not yet built facility was “certainly an injury-in-fact”).
Moreover, while this suit has been pending, the Company
has again publicly announced its commitment to com-
pleting the plant. So “[t]his is not a case of some abstract
psychic harm or a one-day-I’ll-be-hurt allegation . . . .”
Mainstreet, 505 F.3d at 745. Injury to McKasson has been
freshly threatened and is not merely hypothetical.

    2.   The injury is traceable to the proposed construc-
         tion under the 2001 permit.
  Sierra Club must also demonstrate that McKasson’s
injury is “fairly traceable” to the Company’s construction
of the plant under the 2001 PSD permit. See Texas Indep.
Producers & Royalty Owners Ass’n v. EPA, 410 F.3d 964, 972
(7th Cir. 2005). If the “independent action of some third
party not before the court” causes McKasson’s injury, then
the complaint fails the traceability test. Id. (quoting
Lujan, 504 U.S. at 560) (internal quotation marks omitted).
  The defendants concede that under the 2001 PSD permit
the proposed plant will emit airborne pollutants, including
mercury and particulate matter, three miles from Rend
Lake. McKasson claims these pollutants and the
resulting decrease in visibility will negatively impact her
enjoyment of the lake. We agree that “[w]here a plaintiff
has pointed to a polluting source as the seed of his injury,
and the owner of the polluting source has supplied no
alternative culprit, the ‘fairly traceable’ requirement can
be said to be fairly met.” Friends of the Earth v. Gaston
12                                              No. 06-4045

Copper Recycling Corp., 204 F.3d 149, 162 (4th Cir. 2000).
Here, the defendants point to no other polluting source
that could be the cause of McKasson’s injury.
   Nonetheless, the defendants claim Sierra Club still
cannot show causation because the Company has
designed its plant to produce emissions below permitted
levels, so until the plant is built, there remains a factual
question whether McKasson will actually be injured. This
argument is in essence just a variation on the defendants’
claim (rejected above) that McKasson has not yet suffered
an “actual” or “imminent” injury. We agree that no
one knows the ultimate magnitude of McKasson’s
injury—for example, we don’t know if the particulate
matter from the plant will blot out the sky or merely create
a thin haze that’s not visible to the naked eye, or if the
airborne mercury will actually spread 45 miles to poison
fish that McKasson currently consumes from a pond near
her home (which is another harm she claims she will
suffer). We do know, however, that the plant will re-
lease some pollutants and that McKasson believes these
pollutants will ruin her ability to enjoy Rend Lake and
taint the surrounding area. And her belief is not so ir-
rational that it can simply be discredited. See Laidlaw, 528
U.S. at 182-83 (finding that a local citizens group member
suffered injury in fact because she believed that discharged
pollutants had lowered her home’s value). Because
McKasson’s injury stems from the emissions of the Com-
pany’s proposed plant, we find that her threatened
injury is fairly traceable to the plant.
No. 06-4045                                                 13

    3.   Enjoining the Company from building based on
         its 2001 permit would likely redress McKasson’s
         injury.
  Finally, a plaintiff must show that a favorable decision
will likely, not just speculatively, relieve her injury. Id. at
181. The defendants contend that the IEPA might not set
lower emissions levels for a new PSD permit and that
McKasson’s concerns might remain even if the plant
polluted at lower emission levels.
  The defendants’ argument, of course, presumes that the
Company will actually seek out and receive a new permit.
Despite publicly announcing that it would seek a new
permit after it lost in the district court, the Company
represented at oral argument that it had not yet begun
this process. And even if the Company applied for and
received a new permit, there would be some delay (the
IEPA took almost a year before granting the 2001 permit)
before the Company could begin construction. A decision
in favor of Sierra Club, therefore, would at least redress
McKasson’s injury during that time.
  Moreover, as Sierra Club notes, pollution control technol-
ogy tends to improve over time, so it makes sense that
a new permit would have more stringent emission stan-
dards than the 2001 permit. See 42 U.S.C. § 7475(a)(4)
(major-emitting facilities must use the best available
control technology to receive PSD permits); In re W.
Suburban Recycling and Energy Ctr., L.P., 8 E.A.D. 192
(EPA App. Bd. 1999). Indeed, the record indicates that
the IEPA issued PSD permits in 2003 and 2005 for similar
coal-fired power plants with emission standards that
14                                                  No. 06-4045

were significantly more stringent than those in the Com-
pany’s 2001 permit. It is therefore reasonable to believe
that any new permit the Company obtains will have
tougher emission standards than the 2001 PSD permit. We
need not determine exactly how much tougher those
standards will be because McKasson need not show that a
favorable decision will relieve her every injury. Massachu-
setts, 127 S. Ct. at 1458 (citing Larson v. Valente, 456 U.S. 228,
244 n.15 (1982)). It is enough that her concerns will be
addressed if more stringent emission standards are im-
posed than those required under the 2001 permit, even
though the plant will still emit some pollutants if the
Company obtains a new PSD permit. See id. at 1458 n.23
(“[E]ven a small probability of injury is sufficient to create
a case or controversy . . . provided of course that the relief
sought would, if granted, reduce the probability.” (quoting
Vill. of Elk Grove Vill. v. Evans, 997 F.2d 328, 329 (7th Cir.
1993))). So it is likely that a favorable decision here
will redress McKasson’s, and hence Sierra Club’s, injury.
   Therefore, we conclude that Sierra Club has organiza-
tional standing to pursue this suit because it has shown
that the Company’s construction under the expired 2001
PSD permit would cause at least one of its members 2 to
suffer injury in fact that is traceable to the Company and
is redressable if Sierra Club prevails here.

2
  Sierra Club has another “standing plaintiff” but like the
district court, we find it unnecessary to address her claims
because McKasson has standing to sue.
No. 06-4045                                                  15

  B. Sierra Club’s claim is ripe and permissible under 42
     U.S.C. § 7604(a)(3).
  The defendants rely on two district court decisions to
argue that Sierra Club’s claim is not ripe. See United States
v. Ill. Power Co., 245 F. Supp. 2d 951, 956-57 (S.D. Ill. 2003);
New York v. Niagara Mohawk Power Corp., 263 F. Supp. 2d
650, 661 (W.D.N.Y. 2003). The defendants contend that
Sierra Club must wait until the Company actually begins
constructing the plant before Sierra Club can allege that
the Company has violated its preconstruction PSD permit.
  The defendants misread these cases, which specify
when the limitations period begins for claims that a
company has violated a preconstruction permitting
requirement. In that context, it makes sense to conclude
that the last possible moment at which a preconstruction
violation occurs is “when the actual construction is com-
menced, and not at some later point in time.” Ill. Power Co.,
245 F. Supp. 2d at 957; see Niagara Mohawk Power Corp.,
263 F. Supp. 2d at 661-62. But it does not logically follow
(nor do these cases suggest) that a preconstruction
permit violation cannot occur until actual construction
begins.
  The defendants also argue that the citizen suit provi-
sion that Sierra Club relies upon, section 7604(a)(3), only
allows suits against entities that are “without a permit,” so
Sierra Club cannot bring this suit because the Company
received a permit (albeit one that may no longer be valid).
The defendants cite no direct support for this position,
instead claiming the matter is not ripe and cannot be
16                                                 No. 06-4045

adjudicated until the IEPA issues a final decision whether
the Company’s 2001 permit has expired.
  The defendants’ argument ignores the explicit language
of section 7604(a)(3). That provision states that “any
person may commence a civil action on his own behalf . . .
against any person . . . who is alleged . . . to be in violation
of any condition of [a PSD] permit.” The Company cer-
tainly is a person alleged to be in violation of a PSD
permit—Sierra Club alleges that the Company violated
the terms of its permit by not commencing construction
of its facility in a timely fashion, which in turn caused the
permit to expire. See 40 C.F.R. § 124.5(g)(2). And the IEPA
made the same allegation when it preliminarily found
that the Company’s permit had expired. Moreover, even
if having an expired permit were akin to having no
permit at all, Sierra Club would still be able to sue under
section 7604(a)(3), which enables citizens to sue entities
like the Company that “propose[] to construct . . . new or
modified major emitting facilit[ies] without a [PSD]
permit.” 42 U.S.C. § 7604(a)(3) (emphasis added).
  It is irrelevant that the IEPA has yet to finish deciding
whether the Company’s permit is invalid because that’s
not what section 7604(a)(3) requires. In a circuit
case referenced by both parties, Grand Canyon Trust v.
Tucson Elec. Power Co., 391 F.3d 979, 986 (9th Cir. 2004), the
Ninth Circuit held that a district court had jurisdiction
over a citizen suit that challenged the validity of a permit
even though the EPA had not yet acted to revoke the
permit. The defendants claim Grand Canyon analyzed a
different citizen suit provision than the one at issue here.
No. 06-4045                                               17

That seems doubtful. See id. at 985 (“Unauthorized con-
struction of a power plant violates the Clean Air Act
and provides grounds for a citizen suit under the Act’s
citizen suit provision. See 42 U.S.C. § 7604(a)(3) . . . ”).
Regardless, Grand Canyon does not suggest there is a
categorical rule requiring a plaintiff to wait until the
relevant agency finishes deciding whether a permit is
valid (at least when, as here, a suit is not asking us to
review an agency action). So in accordance with the
plain language of section 7604(a)(3), we find that Sierra
Club has properly brought this suit under that provision.

  C. The Company did not “commence construction” of
     the plant.
  As noted above, a PSD permit can expire and become
invalid in one of three ways: (1) if construction is not
“commenced” within 18 months after receipt of the
permit, (2) if construction is discontinued for a period of
18 months or more after construction has begun, or
(3) if construction is not completed within a reasonable
time. See 40 C.F.R. § 52.21(r)(2). Similarly, the Company’s
PSD permit stated it would become invalid if:
    construction of CFB [circulating fluidized bed]
    boilers is not commenced within 18 months after
    this permit becomes effective, if construction of
    these boilers is discontinued for a period of 18
    months or more, or if construction of these boilers
    is not completed within a reasonable period of
    time.
18                                                 No. 06-4045

The permit issued on July 3, 2001, so its drop-dead date
was January 3, 2003.3 The question is whether the Com-
pany “commenced” construction of its plant by that
deadline.
  42 U.S.C. § 7479(2)(A) states there are two ways in which
construction can “commence”:
     (i) [the owner or operator has] begun, or caused to
         begin, a continuous program of physical
         on-site construction of the facility or
     (ii) [the owner or operator has] entered into bind-
          ing agreements or contractual obligations,
          which cannot be canceled or modified without
          substantial loss to the owner or operator, to
          undertake a program of construction of the
          facility to be completed within a reasonable
          time.
See also 40 C.F.R. § 52.21(b)(9) (defining “[c]ommence as
applied to construction” similarly). The district court
concluded the Company had neither commenced a pro-
gram of actual construction nor entered into a binding
agreement to undertake such a program. The district court
also found that even if the Company had begun con-

3
  The defendants argued before the district court that the
Company was entitled to various extensions and grace periods,
thereby delaying the deadline to February 10, 2003. While the
district court did not decide whether this was correct, it noted
that the defendants lost even under the February 10 date. The
defendants do not re-argue these extensions on appeal, so the
January 3, 2003, deadline is the operative one.
No. 06-4045                                                 19

structing the plant, it had lapsed in its construction
activity for more than 18 months, thereby invalidating
the PSD permit.
  On appeal, the defendants assert there are genuine
factual disputes that should have prevented the district
court from granting summary judgment to Sierra Club.
We review the district court’s grant of summary judg-
ment de novo and construe all facts in the light most
favorable to the defendants. See Rawoof v. Texor Petroleum
Co., 521 F.3d 750, 755 (7th Cir. 2008).

   1.   No reasonable factfinder could find that the
        Company had started a timely program of actual
        construction or engaged in construction activities
        without an impermissible lapse.
  The defendants claim that the Company prevented its
2001 PSD permit from expiring by beginning “a continuous
program of actual construction” that included “conducting
engineering studies [and] excavation work.” We disagree.
 The EPA defines “begin actual construction” as:
   [I]n general, initiation of physical on-site construc-
   tion activities on an emissions unit which are of a
   permanent nature. Such activities include, but are
   not limited to, installation of building supports and
   foundations, laying underground pipework and
   construction of permanent storage structures. With
   respect to a change in method of operations, this
   term refers to those on-site activities other than
20                                              No. 06-4045

     preparatory activities which mark the initiation of
     the change.
40 C.F.R. § 52.21(b)(11) (emphases added); see also 40 C.F.R.
§ 52.21(b)(8) (defining “construction” as “any physical
change or change in the method of operation (including
fabrication, erection, installation, demolition, or modifica-
tion of an emissions unit) that would result in a change
in emissions”). We acknowledge (as the defendants
strenuously argue) that beginning actual construction
might be something slightly different than beginning
a continuous program of physical on-site construction,
as required under 42 U.S.C. § 7479(2)(A)(i). But the Com-
pany did not engage in any kind of permanent construc-
tion activity at all. As of the PSD permit’s expiration date
of January 3, 2003, the Company had laid no foundation
and constructed no building supports, underground
pipework, or permanent storage structures. Importantly,
the Company had not begun constructing the CFB boilers,
which was something that the PSD permit had explicitly
required that the Company do before January 3. Indeed,
the only construction activity performed by the
Company was that it had directed Alberici Constructors
to dig a hole, which Alberici began to do on January 8.
Alberici’s minimal work hardly heralded the start of a
“continuous program” of actual construction, as Alberici
stopped digging the hole on February 14, 2003, after a
payment dispute. And digging the hole was not construc-
tion activity “of a permanent nature,” as the Company’s
landlord later had the hole refilled.
  Our conclusion here is further buttressed by a July 1,
1978, memorandum sent by Edward E. Reich, Director of
No. 06-4045                                                       21

Stationary Source Enforcement at the EPA, and entitled
“ ‘Commence Construction’ Under PSD” (the “Reich
Memorandum”).4 In addressing what constitutes physical
on-site construction, the Reich Memorandum specifically
notes that “[a]ctivities such as site clearing and excava-
tion work will generally not satisfy the commence con-
struction requirements.” Reich Memorandum (“As stated
in the preamble to the draft regulations, ‘it will not suffice
merely to have begun erection of auxiliary buildings or
construction sheds unless there is clear evidence (through
contracts or otherwise) that construction of the entire
facility will definitely go forward in a continuous man-
ner’.”). The defendants have provided no reason why we
should ignore the EPA’s guidance on this issue or why this
case is a special one that merits ignoring this general rule.
 Finally, we note that even if the Company had “com-
menced construction” of the plant, it lapsed in construc-

4
   While the EPA did not promulgate the Reich Memorandum as
part of its rulemaking authority, an “agency’s interpretation [of
its own regulations] must be given controlling weight unless
it is plainly erroneous or inconsistent with the regulation.”
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994) (internal
quotation marks omitted). Indeed, “it can still be apparent
from the agency’s generally conferred authority and other
statutory circumstances that Congress would expect the
agency to be able to speak with the force of law when it ad-
dresses ambiguity in the statute or fills a space in the enacted
law, even one about which ‘Congress did not actually have
an intent’ as to a particular result.” United States v. Mead Corp.,
533 U.S. 218, 229 (2001) (quoting Chevron, USA, Inc. v. NRDC,
Inc., 467 U.S. 837, 845 (1984)).
22                                               No. 06-4045

tion for over 18 months, thereby invalidating its PSD
permit. After Alberici stopped digging on February 14,
2003, it performed no more excavation work at the site.
Indeed, the site appears to have lain dormant for over
19 months until September 29, 2004, when another com-
pany began digging a second hole for the Company. This
19-month lapse in construction activity killed the Com-
pany’s PSD permit. See 40 C.F.R. §§ 52.21(r)(2), 124.5(g)(2).

     2.   No reasonable factfinder could find that the
          Company had timely entered a binding contract
          to undertake a program of actual construction.
  The defendants alternatively claim that the Company
had “commenced construction” within 18 months of the
permit’s issuance by signing a “construction memoran-
dum” with B&V in late 2002, thereby requiring those
parties to “work together on an exclusive basis . . . in order
to draft and negotiate the EPC [Engineering, Procurement
and Construction] Contract.” To count as a contract that
commenced construction, the construction memorandum
would have to be one “which [could not] be canceled or
modified without substantial loss to the owner or operator,
to undertake a program of construction of the facility
to be completed within a reasonable time.” 42 U.S.C.
§ 7479(2)(A)(ii).
  Even if entering the construction memorandum
counted as “commencing construction” of the power
plant, the Company’s permit expired because of the 19-
month lapse between February 2003 and September 2004
in which the Company did no construction work on the
No. 06-4045                                                 23

facility. See supra II(C)(1). The Company would have
to argue (which it doesn’t) that the construction memoran-
dum somehow prevented this 19-month lapse from
killing the permit. But such an interpretation would in
effect allow a PSD permittee to trump the 18-month lapse
provision and indefinitely delay the construction of a
facility so long as the permittee has entered a contract
that “commences construction.” We see no basis for
reading the EPA regulations in this manner. See 40 C.F.R.
§ 52.21(r)(2) (noting that a PSD permit expires “if construc-
tion is discontinued for a period of 18 months or more” or
“if construction is not completed within a reasonable
time”); see also 40 C.F.R. § 52.21(b)(8); Reich Memorandum
(“In order to assure that construction proceeds in a con-
tinuous manner and is completed within a reasonable
time, the regulations require that a break in construction
of greater than 18 months or failure to commence con-
struction within 18 months of PSD permit issuance will
generally invalidate a source’s PSD permit.”).
  At any rate (as we discuss below), the Company’s
signing of the construction memorandum did not “com-
mence construction” of the power plant. Before we inter-
pret the memorandum, however, we note that the
parties disagree on which jurisdiction’s law we should
apply. Sierra Club claims we should follow a choice of
law provision in the construction memorandum, which
specifies that the agreement is to be interpreted “in accor-
dance with the substantive law of the State of New York,
except for its choice of laws provisions.” See Am. Fuel
Corp. v. Utah Energy Dev. Co., Inc., 122 F.3d 130, 134 (2d Cir.
1997) (“[W]here the parties have agreed to the applica-
24                                                     No. 06-4045

tion of the forum law, their consent concludes the choice
of law inquiry.”). The defendants counter that an Illinois
statute renders the memorandum’s choice of law
provision void and points us to Illinois law: See 815 Ill.
Comp. Stat. Ann. 665/10 (2008) (“A provision contained
in or executed in connection with a building and con-
struction contract to be performed in Illinois that makes the
contract subject to the laws of another state . . . is against
public policy. Such a provision is void and unenforce-
able.”).
  We need not decide who is right because both New York
and Illinois law 5 would characterize the construction
memorandum as a preliminary agreement that required

5
   The defendants suggest that a “third alternative” would be to
apply federal common law in interpreting the contract, but they
don’t explain why that alternative should apply here. The
two primary cases they cite involved contracts in which the
federal government was a party. See United States v. Seckinger,
397 U.S. 203, 209-10 (1970) (“[F]ederal law controls the interpre-
tation of [a] contract . . . entered into pursuant to authority
conferred by federal statute and, ultimately, by the Constitu-
tion.”); Funeral Fin. Sys. v. United States, 234 F.3d 1015, 1018 (7th
Cir. 2000) (“Interpreting the meaning of a provision in a federal
government contract is a matter of federal common law . . . .”).
That’s a materially different situation from what we have
here. The defendants also note that federal common law can
be applied when “necessary to protect uniquely federal inter-
ests,” but they don’t explain why such federal interests are
present here, or why we should disregard both the con-
tracting parties’ choice of law (New York law) and the prefer-
ence indicated by the Illinois statute (Illinois law), particularly
when both point to the same outcome.
No. 06-4045                                                   25

the parties to conduct further negotiations, not a construc-
tion contract to build a power plant. New York law recog-
nizes that parties can enter into precisely this kind of
preliminary agreement:
    The parties agree on certain major terms, but leave
    other terms open for further negotiation. . . . [This
    type of agreement] ‘does not commit the parties to
    their ultimate contractual objective but rather to
    the obligation to negotiate the open issues in good
    faith in an attempt to reach the . . . objective within
    the agreed framework.’ A party to such a binding
    preliminary commitment has no right to demand
    performance of the transaction.
Adjustrite Sys. v. GAB Bus. Servs., 145 F.3d 543, 548 (2d Cir.
1998) (quoting Teachers Ins. & Annuity Assoc. of Am. v.
Tribune Co., 670 F. Supp. 491, 498 (S.D.N.Y. 1987)). Simi-
larly, “Illinois law recognizes the prerogative to agree to
further negotiations, even after most essential contract
terms have been settled, while remaining free to back out
of a pending deal until the occurrence of some later event.”
Venture Assoc. Corp. v. Zenith Data Systems Corp., 987 F.2d
429, 432 (7th Cir. 1993).
  Here, the construction memorandum was merely a
preliminary step toward the parties’ ultimate goal—
agreeing on an EPC contract for building the power plant.
Contrary to the defendants’ claim that the memorandum
required the parties to “undertake a program of construc-
tion of the facility,” the memorandum only required the
parties to work together toward reaching an actual con-
struction agreement. The memorandum specified that
26                                             No. 06-4045

the parties would “agree to work with each other in good
faith . . . to complete the drafting and negotiation of the
EPC CONTRACT, with the goal of agreeing and signing
such EPC CONTRACT by September 1, 2005.” The memo-
randum was clear that it did not enable the Company to
demand that B&V perform construction work: “The
PARTIES agree that upon Termination of the CONSTRUC-
TION MEMORANDUM, CONTRACTOR shall have no
liability to perform the EPC Work Scope for the FCP
[Franklin County Power] PROJECT for the OWNER.”
Moreover, the memorandum was hardly a final agree-
ment for building the plant as it noted that B&V was
“continuing to develop a firm price and Draft EPC Con-
tract” for the project.
  The construction memorandum also listed various
events that could terminate the agreement, but none of
these events was anything like “completing construction
of the plant” or “finishing the construction project,”
which would have suggested that the construction memo-
randum was the contract for building the plant. Rather,
the terminating events included “[t]he date of signature
of the EPC CONTRACT for the FCP PROJECT” and the
“[f]ailure of the PARTIES to reach agreement on an EPC
Contract by September 1, 2005 or such later date as may
be agreed in writing by the PARTIES,” which again
indicate that the construction memorandum was just a
preliminary agreement en route to an EPC contract.
  Even if the language of the construction memorandum
was unclear, extrinsic evidence (which the defendants
encourage us to utilize) would support the same conclu-
No. 06-4045                                             27

sion. As of January 2006, after the construction memoran-
dum had expired, the parties still had not agreed on a
price term—while the term sheet contemplates a price
of $615 million for the EPC contract, B&V advised the
Company on January 10, 2006, that the project would be
in the “$710m plus range.” B&V also told the Company
that the project would require 45 months or more to
completion, not the Company’s target of 32 months, and
advised the latter, “If you can find someone competent
who will do the project for $615m and 32 months you
must go ahead and work with them.” These facts indicate
that the construction memorandum was not a contract
to build the actual plant.
  The defendants also claim that the construction memo-
randum’s $72 million termination fee (which they repre-
sented at oral argument that they would have to pay if
they lost this suit) indicates that this was a contract to
construct the power plant. This fee appears to be less
than 10% of the total project cost, which was estimated
by the defendants at oral argument to be between
$750 million and $1 billion. See Reich Memorandum (“A
Contractual obligation for purposes of commencing
construction must also be one which cannot be cancelled or
modified without substantial loss. . . . Whether a loss of
less than or equal to 10% of the total project cost will
be considered substantial will be determined on a case
by case basis.”).
  At any rate, the existence of this fee doesn’t affect our
conclusion that the memorandum is just a preliminary
agreement requiring the parties to conduct further nego-
28                                                No. 06-4045

tiations. Cf. id. (“[C]ontracts for non site specific equip-
ment, such as boilers, will typically not suffice, regardless
of any penalty clauses contained in the contracts.”). Indeed,
we have previously noted that parties often include these
kinds of termination fees in preliminary agreements:
     The process of negotiating multimillion dollar
     transactions . . . often is costly and time-consum-
     ing. The parties may want assurance that their
     investments in time and money and effort will not
     be wiped out by the other party’s footdragging or
     change of heart or taking advantage of a vulnerable
     position created by the negotiation. . . . [T]hey
     might prefer to create [a contractual remedy] in the
     form of a deposit or drop fee (what in publishing is
     called a “kill fee”), rather than rely on a vague duty
     to bargain in good faith. . . .
     Damages for breach of an agreement to negotiate
     may be, although they are unlikely to be, the same
     as the damages for breach of the final contract that
     the parties would have signed. . . .
Venture Assocs. Corp. v. Zenith Data Systems Corp., 96 F.3d
275, 278 (7th Cir. 1996) (internal citations omitted). So the
presence of this fee does not imply that the construction
memorandum was a contract to build the power plant.
  Finally, the defendants contend that the use of the
word “program” in “program of construction” suggests
that we should interpret more broadly which construction
contracts count as “commencing construction” and not
limit ourselves to contracts for actual construction of a
No. 06-4045                                                29

facility. We are not so sure. Cf. Sierra Pac. Power Co. v.
EPA, 647 F.2d 60, 67 (9th Cir. 1981) (citing United States v.
City of Painesville, 431 F.Supp. 496, 500 n.5 (N.D. Ohio
1977), aff’d, 644 F.2d 1186 (6th Cir. 1981)) (approving the
EPA’s decision not to read the word “program” broadly to
include planning and design of a unit). But at any rate,
the construction memorandum was not a contract for
a “program” of construction activity. As the Reich Memo-
randum notes, “In order to satisfy the commence con-
struction requirements, a contractual obligation must be
for a site specific commitment. The types of activities
which will be considered site specific for purposes of a
contract are identified in question #1 [’placement, assem-
bly, or installation of materials, equipment, or facilities
which will make up part of the ultimate structure of the
source’].” Here, the construction memorandum did not
require B&V to do any site-specific construction (or even
any nonsite-specific construction). It was, to reiterate, just
a contract that required the parties to work toward an
EPC agreement. And the Reich Memorandum indicates
that entering this kind of contract is simply not enough
to “commence construction.”
  This conclusion makes sense. Time limits prevent
companies from sitting on PSD permits for an unreason-
ably long period of time. Presumably these requirements
help ensure that major emitting facilities comply with up-
to-date emissions regulations and do not construct
today’s facilities with yesterday’s technology. Reading the
phrase “program of construction” so broadly as to en-
compass the construction memorandum would greatly
extend the time that companies could delay the actual
30                                               No. 06-4045

construction process. We decline to adopt that interpreta-
tion here.

  D. The district court did not err in granting injunctive
     relief in favor of Sierra Club.
  The defendants also challenge on two grounds the
district court’s decision to grant injunctive relief in favor
of Sierra Club. First, the defendants claim the district court
lacked jurisdiction to grant an injunction because, accord-
ing to them, a civil penalty is the sole remedy for the
citizen suit here. The defendants rely on language at the
end of 42 U.S.C. § 7604(a) (emphases added):
     The district courts shall have jurisdiction, without
     regard to the amount in controversy or the citizen-
     ship of the parties, to enforce such an emission
     standard or limitation, or such an order, or to order
     the Administrator to perform such act or duty, as
     the case may be, and to apply any appropriate civil
     penalties (except for actions under paragraph (2)).
The defendants claim the first two remedies emphasized
above correlate with sections 42 U.S.C. §§ 7604(a)(1) and
(a)(2), respectively, and the third remedy (i.e., “civil
penalties”) applies to 42 U.S.C. § 7604(a)(3), the provision
at issue in this citizen suit. Specifically, the defendants
contend that the district court could only award civil
penalties and not an injunction as a remedy for Sierra
Club’s section 7604(a)(3) suit here.
  The defendants’ argument lacks merit. The statute does
not state that the three remedies listed above are exclu-
No. 06-4045                                                 31

sively available for suits that are brought under their
“corresponding” statutory subsections. In fact, the statute
suggests just the opposite when it states that the third
remedy (“any appropriate civil penalties”) is not available
for “actions under paragraph (2) [section 7604(a)(2)],”
which implies that this remedy is available for actions
under sections 7604(a)(1) and 7604(a)(3).
  Moreover, the defendants have not cited (and we have
not found) any case law that has interpreted the provision
in the manner that they propose. Sierra Club, on the
other hand, can point to at least one case that directly
contradicts the defendants’ position. See United States v.
Am. Elec. Power Serv. Corp., 137 F. Supp. 2d 1060, 1067 (S.D.
Ohio 2001). Although this district court case is not binding
on us, we agree that “a plain reading of the statute” implies
“that the [injunctive remedies provision] applies to
actions under [section 7604](a)(3).” Id.
   The defendants also claim the district court erred by not
performing the standard four-part analysis that precedes
an award of injunctive relief. That analysis generally
requires a court to consider (1) whether the plaintiff has
suffered or will suffer irreparable injury, (2) whether
there are inadequate remedies available at law to compen-
sate for the injury, (3) the balance of hardships, and (4) the
public interest. eBay Inc. v. MercExchange, L.L.C., 126
S. Ct. 1837, 1839 (2006); e360 Insight v. The Spamhaus Project,
500 F.3d 594, 604 (7th Cir. 2007). We review the district
court’s entry of such an injunction for an abuse of dis-
cretion. e360, 500 F.3d at 603.
  Circuit courts have upheld orders granting injunctive
relief where a district court did not perform a complete
32                                                 No. 06-4045

four-part analysis when a plaintiff prevailed on the
merits of his claim, see Fogie v. THORN Americas, Inc., 95
F.3d 645, 654 (8th Cir. 1996), or when, in an action for a
statutory injunction, a violation was demonstrated and
there was a reasonable likelihood of future violations, see
United States v. Kaun, 827 F.2d 1144, 1148 (7th Cir. 1987).
Moreover, “[i]t is an accepted equitable principle that a
court does not have to balance the equities in a case
where the defendant’s conduct has been willful.” EPA v.
Envtl. Waste Control, 917 F.2d 327, 332 (7th Cir. 1990).
  Sierra Club latches on to this last exception, claiming that
the Company has engaged in willful misconduct by
persisting in its “proposal to construct this Project without
a valid permit.” But Sierra Club cites no authority to
explain how the Company’s persistence constitutes
willful misconduct. The Company need not roll over and
concede that its permit is invalid—indeed, that’s what
this litigation is all about. Unlike cases in which
defendants flaunted environmental laws by, for ex-
ample, not implementing control systems for hazardous
wastes, see United States v. Bethlehem Steel Corp., 38 F.3d 862,
865, 867-68 (7th Cir. 1994), the Company here is simply
defending the validity of its permit in court. And the
Company’s arguments are not so frivolous as to make us
believe that its defense is akin to some kind of malicious
intransigence.
  Still, we need not remand this case for the district court
to explicitly analyze the injunctive relief factors. The court
found that the Company did not have a valid PSD permit
when it granted Sierra Club’s motion for summary judg-
No. 06-4045                                                 33

ment. Because EPA regulations require the Company
to obtain such a permit before it can build the facility,
42 U.S.C. § 7475(a)(1), the court’s decision leaves the
Company no option but to obtain this permit before it can
commence construction. So the court’s injunction, which
prohibits the Company from “actual construction of the
Plant until [it has] obtained a valid PSD permit,” is essen-
tially the same as the court’s finding on the merits. See
Fogie, 95 F.3d at 654 (holding that by prevailing on the
merits of its claim, “the plaintiff class has demonstrated
that the four factors of this test overwhelmingly militate
in favor of an injunction”).
   Moreover, this is not a case where a plaintiff sued an
already-operational facility and claimed it was polluting
in excess of permissible limits. In such a situation, a
district court would likely need to balance equities before
it granted injunctive relief and shut down the facility. See
Harrison v. Indiana Auto Shredders Co., 528 F.2d 1107, 1123
(7th Cir. 1975). Here, the only cost to the Company of the
injunction is that it must now obtain a new permit before
it can build, which was already implicit in the court’s
decision granting summary judgment.
  Additionally, the record here demonstrates that the
four injunctive relief factors favor Sierra Club. First, Sierra
Club will likely suffer irreparable injury if the Company
builds under its expired PSD permit rather than a new
permit because the former likely includes more relaxed
emission standards. See supra section II(A)(3); Amoco Prod.
Co. v. Vill. of Gambell, 480 U.S. 531, 545 (1987) (environmen-
tal injuries are “often permanent or at least of long dura-
34                                              No. 06-4045

tion, i.e., irreparable”). Second, legal remedies will not
adequately address Sierra Club’s injury. The record shows
that at least one Sierra Club member will likely suffer a
decrease in recreational and aesthetic enjoyment of Rend
Lake if the plant is built according to the 2001 permit. An
economic award would not sufficiently compensate for
this injury. See Amoco, 480 U.S. at 545 (“Environmental
injury, by its nature, can seldom be adequately remedied
by money damages . . . .”); Envtl. Waste Control, 917 F.2d
at 332.
  Third, the balance of harms favors issuing an injunction.
An injunction protects Sierra Club from irreparable
injury while simply requiring the Company to defer
construction until it obtains a permit that complies with
the Clean Air Act. Finally, the record contains no
evidence that the injunction harms the public interest. In
fact, based on the record before us, we agree with Sierra
Club that requiring the Company to obtain a valid PSD
permit would likely result in decreased emissions and
improved public health, which would further a stated goal
of the Clean Air Act. See 42 U.S.C. § 7401(b)(1) (“to protect
and enhance the quality of the Nation’s air resources so
as to promote the public health and welfare and the
productive capacity of its population”).
  Although in most instances we would remand a case
when a district court did not clearly explain why it
granted injunctive relief, see e360, 500 F.3d at 604, we
need not remand here because the court’s decision on the
merits essentially embraced the remedy and the injunc-
tive relief factors favor Sierra Club. A remand on this
issue would merely prolong the case, result in additional
No. 06-4045                                           35

costs, and not change the outcome. Cf. Books v. Chater,
91 F.3d 972, 978 (7th Cir. 1996); DiLeo v. Ernst & Young,
901 F.2d 624, 626 (7th Cir. 1990).

                  III. CONCLUSION
 The judgment of the district court is A FFIRMED.

                         10-27-08