On January 6, 2016, the Third Circuit held that the Clean Air Act’s diligent prosecution bar cannot be the basis for a motion to dismiss for lack of subject matter jurisdiction.  Instead, the bar requires citizen suits under the Act to be dismissed for failure to state a claim. Group Against Smog & Pollution v. Shenango, Inc., Case No. 15-2041 (Jan. 6, 2016). Several federal environmental laws bar citizen suits where regulators are “diligently prosecuting” a civil action against the alleged violator. With this case, the Third Circuit became the third appellate court to break with past precedent and hold that a diligent prosecution bar is not jurisdictional. This change will require defendants filing motions to dismiss based on the diligent prosecution bar to do so before they answer a complaint. Additionally, it will require courts to accept all well-pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff. Industry defendants should be aware of these procedural changes as they prepare to respond to citizen suits.

In Group Against Smog & Pollution v. Shenango, Inc., the Third Circuit affirmed the lower court’s dismissal of a citizen suit under the Clean Air Act because regulators had already entered into consent decrees with the defendant. The suit arose from three alleged violations of emissions standards at Shenango’s Neville Island Coke Plant. The Western District of Pennsylvania dismissed the case in March 2015, because the facility had previously entered into a consent decree with state and local regulators that covered all three categories of alleged violations. The Third Circuit affirmed, holding that citizen suits are barred both while an enforcement action is pending and after it has concluded with a final judgment or consent decree.

The Third Circuit focused much of its analysis on whether the diligent prosecution bar is jurisdictional, citing recent Supreme Court cases cautioning courts to be more meticulous in distinguishing between jurisdictional and nonjurisdictional rules. The Third Circuit concluded that the suit should be dismissed for failure to state a claim, rather than for lack of subject matter jurisdiction, because the Clean Air Act’s diligent prosecution bar does not speak in explicitly jurisdictional terms. The Seventh Circuit has ruled similarly in the context of the Resource Conservation and Recovery Act and the Fifth Circuit has done so in the context of the Clean Water Act. Adkins v. Vim Recycling, 644 F.3d 483 (7th Cir. 2011); Louisiana Environmental Action Network v. Baton Rouge 677 F.3d 737 (5th Cir. 2012).

Characterizing the diligent prosecution bar as nonjurisdictional may have important impacts on defendants in citizen suits. While lack of subject matter jurisdiction can be raised at any time, including for the first time on appeal, motions to dismiss for failure to state a claim must be made before responding to the complaint. Additionally, motions to dismiss for failure to state a claim require federal courts to accept all well-pleaded facts in the complaint as true and to view them in the light most favorable to the plaintiff. A court is not required to do the same when considering subject matter jurisdiction. Corporations subject to citizen suit under the Clean Air Act should be aware of this recent ruling, as it may affect both when they can move for dismissal based on the diligent prosecution bar and how courts will review that motion.