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No immunity for Marine Corps from N.C. pollution fine - 4th Circ.

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Marines at Marine Corps. Air Station Cherry Point work in the area of an EA-6B Prowler jet to be deployed to the NATO forces in the Kosovo area. RBD/HB/JDP

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  • Majority says CAA waives federal sovereign immunity for state fine

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(Reuters) - A federal appeals court ruled on Thursday that the U.S. Marine Corps must pay North Carolina a fine for emitting excessive levels of air pollutants at a Craven County facility, reversing a Greenville federal court ruling that let it dodge the penalty on sovereign immunity grounds.

A split panel of the 4th U.S. Circuit Court of Appeals partially reversed the lower court ruling that tossed a lawsuit with which the North Carolina Department of Environmental Quality (NCDEQ) sought to collect an $8,000 fine it slapped on the Corps for releasing unpermitted levels of metallic pollutants at its Air Station Cherry Point.

The Corps did not immediately provide a comment. Department of Justice spokesperson Don Connelly said he had no comment.

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NCDEQ, which appealed the lower court verdict when now-EPA chief Michael Regan was at the state agency's helm, declined to comment.

NCDEQ fined the Corps after conducting tests at Cherry Point that uncovered its coal-fired steam boilers released polluting metals into the air above limits contained in a state permit issued under the Clean Air Act (CAA).

The Corps refused to pay the penalty, telling the NCDEQ that federal sovereign immunity shielded it from state penalties levied under the CAA.

NCDEQ sued the Corps in the Superior Court of Craven County in 2019, and the Corps moved the case from state to federal court.

Last year, Chief U.S. District Judge Terrence Boyle dismissed North Carolina's complaint. The judge disagreed with NCDEQ's argument that the CAA waived the Corps' sovereign immunity through a series of clauses "designed to allow States to effectively enforce air pollution laws against federal facilities."

In the same ruling, Boyle denied NCDEQ's bid to return the case to state court.

In Thursday's ruling, U.S. Circuit Judge Diana Gribbon Motz said NCDEQ had rightly argued that the CAA contains sovereign immunity waivers for civil penalties.

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

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

Motz, however, agreed with the lower court that the case had been properly removed.

She was joined by U.S. Circuit Judge Robert King.

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

The case is State of North Carolina v. U.S., United States Court of Appeals for the 4th Circuit, No. 20-1783.

For State of North Carolina: Sarah Boyce of the North Carolina Department of Justice

For U.S.: Robert Lundman of the U.S. Department of Justice

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Our Standards: The Thomson Reuters Trust Principles.

Sebastien Malo reports on environmental, climate and energy litigation. Reach him at sebastien.malo@thomsonreuters.com

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