EPA v. SHAKOPEE MDEWAKANTON CASINO HOTEL

Case summary

Region 5 conducted an inspection of SMSC Tribal facilities in July 2011 and confirmed that three new generators – each somewhat larger than a semi-truck trailer – had been installed on poured concrete pads in the location where the Tribe intends them to be permanently located. The Tribe had also erected permanent steel scaffolding. The scaffolding supports long, metal tubing through which electrical cables will run to transmit power from the generators to the hotel/casino complex. The Tribe had already installed the long runs of metal tubing that are permanent elements of the emissions source. On the basis of these facts, Region 5 has concluded that Shakopee has begun actual construction of a major modification to an existing major air emissions source without a PSD preconstruction permit in violation of 40 C.F.R. § 52.21(a)(2)(iii). Negotiations with the Tribe EPA began discussions with the Tribe in an effort to resolve these violations in 2009. By September 2009, EPA thought it had reached agreement with the Tribe which would have required the Tribe to apply for PSD preconstruction permits for the approximately thirty existing generators. EPA then planned to set emissions limits and issue after-the-fact PSD construction permits. EPA would then incorporate the emissions limits established during the PSD permitting process into the Tribe’s Part 71 operating permit. Shortly thereafter, the Tribe changed course. Rather than agreeing to apply for a PSD permit, the Tribe asserted: (1) it was exempt from permitting requirements because of EPA’s “Potential to Emit (PTE) Transition Policy for Part 71 Implementation in Indian Country” (“Transition Policy”); and (2) EPA would soon issue the Minor Source Rule for Indian country and should allow the Tribe to wait until the new rule became effective to submit an application for a synthetic minor rather than a PSD permit. The Tribe persisted with these arguments until November 2011 when it agreed to seek all necessary permits under the terms of an Administrative Consent Order (ACO) and to execute a CAFO that required the payment of a civil penalty. The Tribal Enforcement Guidance requires OECA concurrence on settlements with tribes that include penalties. Thus, while your concurrence on the ACO is not required, we attach it for informational purposes. It subsequently agreed to pay the $76,260 penalty proposed by Region 5. Our understanding is that the Tribe was motivated to resolve this matter by its desire to continue with construction of the three new generators that support the Tribe’s primary casino and hotel complex. Coordination with Headquarters Region 5 has consulted with Headquarters. It has worked directly with the Associate Director of the Air Enforcement Division, the OECA Tribal Program Coordinator, Tribal Air Coordinator, Senior Advisor to OECA’s Air Enforcement Division, and Tribal Enforcement Specialist. All are supportive of the Region’s proposed approach. Compliance with Tribal Consultation Policy By a letter dated January 26, 2011, the Tribe requested “Consultation and Coordination Under Our Government-to-Government Relationship.” On March 24, 2011, Region 5 met in Chicago with representatives of the Tribe. In the months that followed, Region 5, including both staff and senior management, engaged in extensive discussion with the Tribe and its legal counsel. This consultation between Region 5 and the Tribe has resulted in this agreement. Recommendation to OECA On February 28, 2012, Region 5 requested that OECA concur with the Region’s proposal to execute a CAFO that includes a $76,260 civil penalty. This concurrence is required by OECA’s “Guidance on the Enforcement Principles Outlined in the 1984 Indian Policy” (Tribal Enforcement Guidance).

Defendants (1)

• SHAKOPEE MDEWAKANTON CASINO HOTELNamed in complaintNamed in settlement

Facilities (4)

• SHAKOPEE MDEWAKANTON CASINO HOTEL

  2330 SIOUX TRAIL NW, PRIOR LAKE, MN, 55372

  Registry ID: 110023151747

• SHAKOPEE MDEWAKANTON CASINO HOTEL

  2330 SIOUX TRAIL NW, PRIOR LAKE, MN, 55372

  Registry ID: 110023151747

• SHAKOPEE MDEWAKANTON CASINO HOTEL

  2330 SIOUX TRAIL NW, PRIOR LAKE, MN, 55372

  Registry ID: 110023151747

• SHAKOPEE MDEWAKANTON CASINO HOTEL

  2330 SIOUX TRAIL NW, PRIOR LAKE, MN, 55372

  Registry ID: 110023151747

Statutes cited

• CAA 165 — Prevention of Significant Deterioration (PSD)

Enforcement conclusions (2)

• SHAKOPEE MDEWAKANTON CASINO HOTELentered 2012-03-13

  Primary law: CAA

• SHAKOPEE MDEWAKANTON CASINO HOTELentered 2012-02-27

  Primary law: CAA

Timeline (2 milestones)

• 2012-02-28Enforcement Action Data Entered
• 2012-03-13Final Order Issued