ELR Citation: ELR 20265
No(s). CV 89-0548 WJR (Sx) (C.D. Cal. Oct 16, 1990)

The court rules that §118 of the Clean Air Act clearly and unambiguously waives sovereign immunity, thereby obligating federal facilities to pay locally imposed air pollution permit and operating fees. The South Coast Air Quality Management District (the District) is one of 41 air pollution control districts in California vested with primary control of stationary source air pollution. The District established a permit processing fee, an annual operating permit fee, and an emissions fee for facilities operating within its jurisdiction, which includes a four-county area with the worst air quality problem in the nation. Federal military installations sued the District, arguing that the permit and operating fees constitute illegal taxes and are discriminatorily imposed on the United States while exempting state and local governments from the same fees. The court first holds that §118 of the Clean Air Act contains an unambiguous expression of Congress' intent to waive sovereign immunity with respect to all aspects of the District's air pollution control program, including the challenged regulatory fees. The plain language of §118 is broad and expansive, using the words "all," "any," "any requirements whatsoever," and "notwithstanding any immunity" to mandate compliance. This inclusive language demonstrates Congress' intent to waive all immunity, even if §118 does not specifically list fees and taxes as requirements with which federal facilities must comply. Additionally, the court observes in a footnote that Congress amended §118 specifically to subject federal facilities to all federal, state, and local requirements—procedural, substantive, or otherwise. The court holds that §110 does not limit the amount of fees that the District may assess federal facilities. Section 110(a)(2)(K) is a minimum fee requirement, and the Environmental Protection Agency has concluded that stricter fees are permissible. The court also holds that §118 does not allow state or local governments to abuse their power to tax the United States without legal recourse. If the government can show that a tax would be illegal as applied to a private party, that tax or fee would be illegal as applied to the United States. Furthermore, §118(b) provides that the president can exempt federal facilities from compliance with any requirement of the Act when appropriate.

The court next holds that the regulatory fees are not a tax unconstitutionally imposed on the federal government while exempting state and local governments. The District's exemption for state and local governments has been eliminated, and §118's requirement that the federal government comply with the Clean Air Act to the same extent as any "nongovernmental" entity means to the same extent as any private entity; not any nonfederal governmental entity as the United States argues. Moreover, Congress has consented to the imposition of state-assessed fees to implement the Clean Air Act. Congress has defined the scope of the waiver of sovereign immunity in §118, and case precedent does not limit the extent to which Congress may waive sovereign immunity.

Counsel for Plaintiff/Counterdefendants
Ian Fan, Ass't U.S. Attorney , Civil Division
300 N. Los Angeles St., Los Angeles CA 90012
(213) 894-2434

Richard B. Stewart, Ass't Attorney General
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants/Counterclaimants
Mark I. Weinberger, Alletta d'A. Belin
Shute, Mihaly & Weinberger
396 Hayes St., San Francisco CA 94102
(415) 552-7272

Peter Greenwald, District Counsel; Barbara Baird, S.O. Deputy District Counsel; Robert N. Kwong, Deputy District Counsel
South Coast Air Quality Management District
9300 Flair St., El Monte CA 91731
(818) 572-6200