On January 6, 2015, in Group Against Smog and Pollution, Inc. v. Shenango Inc., the US Court of Appeals for the Third Circuit held that the diligent prosecution bar to private actions under the Clean Air Act is a claim-processing rule, rather than a jurisdictional limitation. Motions to dismiss pursuant to the diligent prosecution bar should therefore be analyzed under Federal Rule of Civil Procedure (FRCP) 12(b)(6) for failure to state a claim, and not 12(b)(1) for lack of subject matter jurisdiction. ( (3rd Cir. Jan. 6, 2016).)

Group Against Smog and Pollution (GASP) sued Shenango in federal district court for alleged violations of the Clean Air Act. Various state and federal government agencies charged with enforcing the Clean Air Act had already sued Shenango in state and federal court for the same violations. Those suits ended in consent decrees which included provisions preserving jurisdiction for the district court and authority for the government agencies to seek further enforcement if Shenango failed to comply with the agreements. Shenango moved to dismiss GASP’s suit under FRCP 12(b)(1) and 12(b)(6), arguing that the government was already diligently prosecuting the action, meaning that private citizen suits over the same issues were barred under the Clean Air Act. The district court granted the motion under 12(b)(1), and GASP appealed.

The Third Circuit affirmed the dismissal, but found that the complaint should be dismissed for failing to state a claim rather than for lack of subject matter jurisdiction. The court analyzed whether the Clean Air Act’s diligent prosecution bar was jurisdictional or merely a "claim-processing rule" designed to promote the orderly progress of litigation. Because of the statute's text and the placement of the relevant provision in the statute, the court held that the diligent prosecution bar was nonjurisdictional, and therefore, the motion to dismiss should not be decided under FRCP 12(b)(1). Instead, district courts should consider the Clean Water Act's diligent prosecution bar as a claim-processing rule, and determine whether the plaintiff had stated a claim under FRCP 12(b)(6).

The distinction between a motion to dismiss for failing to state a claim and one based on a lack of subject matter jurisdiction is an important one because:

The court found that GASP failed to state a claim upon which relief could be granted because the diligent prosecution bar prohibited GASP from bringing its claims. In an issue of first impression, the court held that when a state or federal agency diligently prosecutes an underlying action in court, the Clean Air Act’s diligent prosecution bar prohibits citizen suits during the litigation and after the litigation has been terminated by a final judgment, consent decree, or consent order and agreement. Not only was there a consent decree in the suit against Shenango, but the decree granted the right to continued enforcement by the government agencies, further bolstering Shenango’s argument that the case was being diligently prosecuted. Therefore, while the Third Circuit affirmed the district court's dismissal of GASP's complaint, it found that dismissal was appropriate. GASP failed to state a claim because of the Clean Water Act's vigilant prosecution bar as opposed to the district court's holding that it lacked subject matter jurisdiction.