Petition for Writ of Certiorari — Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc.
Supreme Court brief1987
Ask Donna
What actually matters in this document.
Text
——— + ee
SS oe
86 -4 73 . a0 4 7
SEP 23 1986
JOSEPH F. SPANIOL, JR.
No, -————— CLERK
IN THE
Supreme Court of the United States
OCTOBER TERM, 1986
GWALTNEY OF SMITHFIELD, LTD.,
Petitioner,
Vv.
CHESAPEAKE BAY FOUNDATION, INC.,
and
NATURAL RESOURCES DEFENSE COUNCIL,
° Respondents.
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
E. BARRETT PRETTYMAN, JR.*
RICHARD J.M. POULSON
PATRICK M. RAHER
Davip J. HAYES
CATHERINE JAMES LACROIX
JOHN G. ROBERTS, JR.
HoGAN & HARTSON
(a partnership including
professional corporations)
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
(202) 331-4685
Counsel for Petitioner
* Counsel of Record
———— es
WILSON - Eras Printing Co., Inc. - 789-0096 - WASHINGTON, D.c. 20001
a - oe _ > — a te a a
’
‘
a
.
‘
i
'
7 .
pt ‘
‘
.
. ‘ |
.
'
.
.
: ’
*
’
a
. {
‘ '
Ad
- t a 4 y ~ a
of is thd ae [et cali = a o™ :
a wis @ Fy. ee
QUESTION PRESENTED
Did the court below err in holding that citizen suits
may be brought under the Clean Water Act seeking
penalties for purely past violations, contrary to the hold-
ing of the Fifth Cireuit in Hamker v. Diamond Shamrock
Chemical Co., 756 F.2d 392 (1985)?
(i)
ii
PARTIES TO THE PROCEEDINGS
Petitioner and defendant-appellant below Gwaltney of
Smithfield, Ltd., is a wholly-owned subsidiary of Smith-
field Foods, Inc.* Respondents and plaintiffs-appellees
below are Chesapeake Bay Foundation, Inc., and Na-
tural Resources Defense Council.
e-__—
TABLE OF CONTENTS
QUESTION PRESENTED .... ..........-..--.---.--.-. ----s-2e0ee-0000
PARTIES TO THE PROCEEDINGS ......................-------
TABLE OF AUTHORITIES. ............-.-----.--------0--es-eeeee0+
OPINIONS BELOW. ..............-...-2--...20--0---0-eccsecceecsesesenees-
JURISDICTION. ...........--..----..-.0..-2c2ec0e- see -neseocenseccseenceecsees
PERTINENT STATUTORY PROVISION ...................
STATEMENT OF THE CASE ......................--.--------------
REASONS FOR GRANTING THE WRIT ....................
I. The Decision Below Directly Conflicts With the
iI.
Decision of the Fifth Circuit In Hamker ............
A. The Court Below and the Fifth Circuit in
Hamker Adopted Directly Contrary Read-
ings of the Language of the Citizen Suit
ES a
. The Court Below and the Fifth Circuit in
Hamker Adopted Contrary Views of the Role
of the Citizen Suit Provision in the Clean
. The Decision of the Fifth Circuit in Hamker
and of the Fourth Circuit Below Cannot Be
ISSEY CC ee
The Question Over Which the Fourth and Fifth
Circuits Have Split Is Important and Recurring.
II ctccccincerscncnsacnssnreresescescensesesenss ccvessosaesssecorces
10
22
iv
TABLE OF CONTENTS—Continued
APPENDICES
Appendix
Appendix
Appendix
Appendix
Appendix
Appendix
9A wm PS
7
Page
: Opinion of Court of Appeals .......... la
: Opinion of District Court _.......... —— |
: Judgment of Court of Appeals........ 75a
: Order of Court of Appeals Denying
Petition for Rehearing ................. 77a
: Complaint filed June 15, 1984... 79a
Stipulation filed December 17,
ERE T Sy CO PLA SACO 85a
v
TABLE OF AUTHORITIES -°
Cases Page
Atlantic States Legal Foundation v. Al Tech Spe-
cialty Steel Corp., 685 F. Supp. 284 (N.D.N.Y.
a 22
Chrysler Corp. v. Brown, 441 U.S. 281 (1979) ........ 17
City of Evansville v. Kentucky Liquid Recycling,
Inc., 604 F.2d 1008 (7th Cir. 1979), cert. denied,
Pe RF 9-10
Connecticut Fund for the Environment v. Job
Plating Company, Inc., 623 F. Supp. 207 (D.
Ce SID ficcnidedeiinernstilincsaititinaininepepereninanstmnnrevemmecven 22
Consumer Product Safety Comm’n v. GTE Syl
vania, Inc., 447 U.S. 102 (1980)..................--..--. 8,17
Garcia Vv. United States, 469 U.S. 70 (1984) ........... 8
Friends of the Earth v. Archer Daniels Midland
Co., No. 84-CV-413 (N.D.N.Y. 1986).................... 23
Friends of the Earth v. Consolidated Rail Corp.,
768 F.2d 57 (2d Cir. 1985) .................---..------------ 26
Friends of the Earth v. Facet Enterprises, Inc., 618
F. Supp. 582 (W.D.N.Y. 1984) ............-........--.------- 23
Hamker v. Diamond Shamrock Chemical Co., 756
F.2d 392 (5th Cir. 1985) .................-...------eeeeeee- passim
Land V. Dollar, 330 U.S. 731 (1947) ..............----------- 21
Middlesex County Sewerage Authority v. National
Sea Clammers Association, 453 U.S. 1 (1981) ....passim
Milwaukee v. Illinois, 451 U.S. 304 (1981) ............. 9,17
Pawtuzet Cove Marina, Inc. v. Ciba-Geigy Corp.,
22 Env’t Rep. Cas. (BNA) 1999 (D. R.I. 1985) .. 23
Sierra Club v. Aluminum Company of America, 585
F. Supp. 842 (N.D.N.Y. 1984) .............------------------ 23
Sierra Club v. Chevron U.S.A., Inc., No. CV 85-
1851 (C.D. Cal., Jan. 14, 1986), app. pending,
No. 86-6287 (Oth Clr.) .......-20..2.--0.2....cccccceceeeees- 24
Sierra Club v. Copolymer Rubber and Chemical
Corp., 621 F. Supp. 1013 (M.D. La. 1985), app.
pending, No. 85-3763 (5th Cir.) ..............-.-- 19, 21, 22-23
Sierra Club v. Kerr-McGee Corp., 23 Env’t Rep.
Cas. (BNA) 1685 (W.D. La. 1985) -.................-.. 23
Sierra Club v. Monochem, No. 84-147B (M.D. La.
1985), app. pending, No. 85-3762 (5th Cir.) -....... 23
“
vi
TABLE OF AUTHORITIES—Continued
Page
Sierra Club vy. Raytheon Co., 22 Env’t Rep. Cas.
(BNA) 1050 (D. Mass. Pe era 23
Sierra Club v. Shell Oil, No. 84-3583 (E.D. La.
1986), app. pending, No. 85-3753 (5th Cir.) 23
Sierra Club vy. Simkins Industries, Inc., 617 F.
Supp. 1120 (D. Md. 2e eA 23, 24
Sierra Club v. Tosco Corp., 22 Env’t Rep. Cas.
(BNA) 2117 (N.D. . ,. 7 aaa 23
Student Public Interest Research Group v. AT&T
Bell Laboratories, 617 F. Supp. 1190 (D. NJ.
a Sa” eat 13, 23
Student Public Interest Research Group Vv. Anchor
Thread Co., 22 Env’t Rep. Cas. (BNA) 1150
Wty os 9, eR anders 23
Student Public Interest Research Group V. Georgia-
Pacific Corp., 615 F. Supp. 1419 (D. NJ. 1985)... 23, 26
Student Public Interest Research Group v. Mon-
santo Co., 600 F. Supp. 1474 (D. NJ. 1985) ___.. 13, 23
Student Public Interest Research Group v. National
Starch and Chemical Corp., 23 Env’t Rep. Cas.
ya P a cle 4 pL EOI: senate 24
United States v. Detrex Chemical Industries, Inc.,
393 F’. Supp. 735 (N.D. Ohio _ as ea 13
United States vy. Earth Sciences, Inc., 599 F.2d 368
Ee OO aie eS Lo 13
United States vy. Eicher, 56 F. Supp. 972 (D.D.c.
ow eee 27
United States v. Naftalin, 441 U.S. 768 (1979). 16-17
United States v. Turkette, 452 U.S. 576 (1981). x
United States vy. Ward, 448 U.S. 242 (1980) 23
Weinberger v. Rossi, 456 U.S. 25 | 17
Statutes and Regulations
CREE aar eeee 26
.., <<7.Se RR peREI 26
sata sitai inten ee NONE 23
vii
TABLE OF AUTHORITIES—Continued
Page
EE AAC RTE 11,12
ENR ORS Ce 3
ET RC Ih a ED passim
SE a ee er a 9
EA STE 10, 13
TS ee 23
TE See ae ee 4
Legislative Material
S. Rep. No. 50, 99th Cong., Ist Sess. (1985) 22
S. Rep. No. 414, 92d Cong., Ist Sess. (1971) _......... 15
Hearings on Implementation of the Federal Clean
Water Act Before the Subcomm. on Investiga-
tions and Oversight of the House Comm. on Pub-
lic Works and Transportation, 98th Cong., 2d
Ey + eee 23
Water Pollution Control Legislation—1971 (H.R.
11896, H.R. 11895), Hearings Before the House
Comm. on Public Works, 92d Cong., 1st Sess.
ES SOS EE ee 15-16
Water Pollution Control Legislation, Hearings Be-
fore the Subcomm. on Air and Water Pollution
of the Senate Comm. on Public Works (1971) .... 15
116 Cong. Rec. 33104 (1970) 20. 18
118 Cong. Rec. 33700 (1972) 2... eect. 16
Other Authority
EPA Civil Penalty Policy, Env’t Rep. (BNA)
(Fed. Laws) 41:2991 (1984) 000000. 25
Schwartz & Hackett, Citizen Suits Against Private
Industry Under the Clean Water Act, 17 Nat-
ural Resources Lawyer 327 (1984) .....0000... 17, 22, 25
IN THE
Supreme Court of the United States
OCTOBER TERM, 1986
No.
GWALTNEY OF SMITHFIELD, LTD.,
. Petitioner,
CHESAPEAKE BAY FOUNDATION, INC.,
and
NATURAL RESOURCES DEFENSE CM INCIL,
Respondents.
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Petitioner Gwaltney of Smithfield, Ltd., respectfully
prays that a writ of certiorari issue to review the judg-
ment and opinion of the United States Court of Appeals
for the Fourth Circuit, entered in the above-entitled
proceeding on May 22, 1986.
OPINIONS BELOW
The opinion of the Court of Appeals for the Fourth
Circuit is reported at 791 F.2d 304 and is reprinted
in the appendix hereto (““App.”) at la.
The opinion of the District Court for the Eastern Dis-
trict of Virginia (Merhige, J.) is reported at 611 F.
Supp. 1542 and is reprinted at App. 26a.
JURISDICTION
Respondents brought suit in the District Court alleg-
ing jurisdiction under 33 U.S.C. § 1365. Petitioner filed
a motion to dismiss for lack of subject matter jurisdic-
tion, which was denied by the District Court on June 26,
1985. App. 26a.
Petitioner appealed, and the Court of Appeals affirmed
on May 22, 1986. App. 75a. A timely-filed petition for
rehearing was denied on June 26, 1986. App. 77a.
The jurisdiction of this Court to review the judgment
of the Fourth Circuit is invoked under 28 U.S.C. § 1254
(1).
PERTINENT STATUTORY PROVISION
Section 505 of the Clean Water Act, 33 U.S.C. § 1365,
provides in pertinent part:
Citizen Suits
(a) Authorization; jurisdiction
Except as provided in subsection (b) of this sec-
tion, any citizen may commence a civil action on his
own behalf—
(1) against any person (including (i) the
United States, and (ii) any other governmental
instrumentality or agency to the extent permit-
ted by the eleventh amendment to the Consi:tu-
tion) who is alleged to be in violation of (A)
an effluent standard or limitation under this
chapter or (B) an order issued by the Admin-
istrator or a State with respect to such a stand-
ard or limitation, or
(2) against the Administrator where there is
alleged a failure of the Administrator to per-
form any act or duty under this chapter which
is not discretionary with the Administrator.
The district courts shall have jurisdiction, without
regard to the amount in controversy or the citizen-
*
. a
ship of the parties, to enforce such an effluent stand-
ard or limitation, or such an order, or to order the
Administrator to perform such act or duty, as the
case may be, and to apply any appropriate civil pen-
alties under section 1319(d) of this title.
STATEMENT OF THE CASE
Petitioner Gwaltney of Smithfield, Ltd. (“Gwaltney”),
operates a meat vacking plant on the Pagan River near
Smithfield, Virginia. Normal meat packing operations
generate organic wastes that must be treated before dis-
charge. The Virginia State Water Control Board issued
Gwaltney a permit under the Clean Water Act, 33 U.S.C.
§ 1342, authorizing it to discharge treated effluent into
the River.
Gwaltney’s parent corporation, Smithfield Foods, Inc.,
acquired Gwaltney from ITT-Gwaltney on October 27,
1981. At that time Smithfield Foods received assurances .
from ITT-Gwaltney that previous difficulties with the
wastewater treatment system at the plant had been iden-
tified and corrected. In fact, deficiencies in the system
resulted in violations of the limits in Gwaltney’s per-
mit. As Gwaltney itself reported in its discharge moni-
toring reports, it exceeded the limits for fecal coliform /
chlorine (“chlorine”) and total Kjeldahl nitrogen
(“TKN”) on specified occasions between October 27,
1981, and May 15, 1984.
Gwaltney proceeded to correct the inherited flaws in its
wastewater treatment system that had resulted in the
violations of its permit. Within one year the chlorination
system had been corrected, and since October 1982 there
have been no further problems with chlorine. Resolving
1 Chlorine levels were exceeded on isolated occasions during the
winter of 1983-1984 due to the startup of Gwaltney’s new, state-of-
the-art wastewater treatment system. The District Court recog-
nized that such violations were inevitable with the startup of such
a system. App. 69a-70a.
4
the TKN problem proved more difficult, requiring a major
redesign of the treatment facility. Gwaltney undertook
this effort with full notice to and the continuing approval
of the State Water Control Board. After delays beyond
Gwaltney’s control (including a six-month delay caused
by the Board itself), Gwaltney’s new system achieved
designed efficiency levels, and the parties stipulated that
the last violation of the TKN limit occurred on May 15,
1984.* In light of Gwaltney’s efforts, the Board decided
at its March 26, 1984, public meeting to take no action
against Gwaltney for any past violations of the permit
limits. At that proceeding the Board Chairman stated
that “the violations at the moment, as I see the evidence,
it seems to me that they are under control,” and the
staff member presenting the report on Gwaltney re-
sponded “[y]ou are right, they are now under control.”
Ct. App. Ex. Vol. at 425. As the Chairman concluded,
“It just doesn’t seem to me that it accomplishes anything
from my point of view to take enforcement action for
violations of standards that seem to have been not neces-
sary at the outset.” Jd.
On June 15, 1984, however, respondents Chesapeake
Bay Foundation and Natural Resources Defense Council
filed suit against Gwaltney under the citizen suit provi-
sion of the Clean Water Act, 33 U.S.C. § 1365.° The suit
* A discharge monitoring report filed in October 1985—-several
months after judgment in the District Court—indicated an exceed-
ence of the TKN limit at that time, an excusable “upset” caused
by record flooding associated with Hurricane Gloria in September
1985. See 40 C.F.R. 122.41(n) (1985).
* The State Water Control Board was aware, at the time of the
March 26, 1984 meeting, of respondents’ intent to file suit. Indeed,
the Board Chairman asked a representative of respondent Chesa-
peake Bay Foundation who attended the meeting “why ya'll are
thinking about suing when it seems to me, we may incline toward
not taking any action for past violations, from what I’ve heard.”
Ct. App. Ex. Vol. at 423-424. The Chairman stated, “Whatever we
do, obviously ya'll can go ahead with your law suit, but that’s a
5
was based on the permit violations reported by Gwaltney
in its discharge monitoring reports. Although the citizen
_ suit provision authorizes suit against any person “alleged
to be in violation” of limitations in a permit issued under
the Act, respondents stipulated that the last violation by
Gwaltney occurred on May 15, 1984, a full month before
the suit was filed. App. 6a n.7, 7a, 86a, 93a.
On June 26, 1985, the District Court issued an opinion
assessing a penalty of some $1.3 million against Gwalt-
ney. The District Court rejected Gwaltney’s argument
that the citizen suit provision was limited by its express
terms, structure, and legislative history to actions brought
to abate ongoing violations, and did not cover past vi0-
lations. The District Court conceded that the recent de-
cision of the Fifth Circuit in Hamker v. Diamond Sham-
rock Chemical Co., 756 F.2d 392 (5th Cir. 1985), was
“authority for [Gwaltney’s] position,” but the District
Court “respectfully disagree[d)” with Hamker and de-
clined to follow its holding. App. 39a-40a.
Gwaltney appealed, contending that the District Court
erred in not following the ruling of the Fifth Circuit in
Hamker that citizen suits could not be brought on the
basis of past violations. The court below affirmed. It
recognized that the “Hamker court refused to read ‘to
be in violation’ as meaning ‘to have violated,’ stating that
such an interpretation ‘obviously strains the grammar of
the statute and diverges from its ordinary meaning.’”
App. 8a (quoting Hamker, 756 F.2d at 395). Like the
District Court, however, the court below “respectfully dis-
agree(d]” with the Fifth Circuit decision in Hamker and
“decline{d] to follow it to the extent that it holds that
section 505(a) of the Clean Water Act [33 U.S.C. § 1365
much mor[{e} cumbersome way of dealing with the problem.” Id.
at 424. In July 1984, after respondents filed the present suit, the
Board initiated a protective enforcement action in state court that
was voluntarily nonsuited after the decision of the District Court
in this case.
6
(a)] does not permit citizen suits seeking civil penalties
for past violations.” App. 8a, 15a. The court below
recognized that the Fifth Circuit in Hamker relied upon
the decision of this Court in Middlesex County Sewerage
Authority v. National Sea Clammers Association, 458
U.S. 1 (1981). The court below dismissed statements in
Middlesex County “that might be read as limiting the
scope of citizen suits” as “mere dicta” that it declined
to follow, adopting instead “an expansive reading of the
jurisdictional grant” that it regarded as more consistent
with “the importance of citizen suits as an enforcement
tool.” App. 16a, 12a.
REASONS FOR GRANTING THE WRIT
I. The Decision Below Directly Conflicts With the De-
cision of the Fifth Circuit in Hamker
The Hamker case, like the present case, involved an
action under the citizen suit provision of the Clean Water
Act, 33 U.S.C. § 1365. Plaintiffs in Hamker, like respond-
ents in this case, sought civil penalties for violations that
occurred entirely in the past and had ceased by the time
suit was filed. The plaintiffs in Hamker sought penalties
for damage caused by a pipeline leak. The pipeline had
been repaired and the leakage problem abated prior to the
filing of the suit. 756 F.2d at 394. Respondents in this
case sought penalties for permit limit violations. It was
Stipulated by the parties that the last such violations
occurred a full month before the suit was filed. App. 6a
n.7, 7a, 86a, 93a.
In holding that citizen suits may be brought under the
Clean Water Act seeking civil penalties for violations
that occurred entirely in the past and are not continuing,
the court below expressly declined to follow the contrary
holding of the Fifth Circuit in Hamker. In Hamker, the
_ Fifth Circuit stated that “(t]he language of section 1365
and the structure of the Act convince us that a complaint
brought under section 1365 must allege a violation occur-
7
ring at the time the complaint is filed.” 756 F.2d at 395.
In contrast, the court below held “that citizen suits like
the one at bar, seeking civil penalties for permit viola-
tions committed entirely in the past, are permitted under
section [1365].” App. 17a. This Court should grant the
writ to resolve this direct and irreconcilable conflict in
the interpretation of the jurisdictional provision of an
important Federal statute.
A. The Court Below and the Fifth Circuit in Hamker
Adopted Directly Contrary Readings of the Lan-
guage of the Citizen Suit Provision
The pertinent section of the Clean Water Act provides
that “any citizen may commence a civil action * * *
against any person * * * who is alleged to be in viola-
tion of” a standard or limitation under the Act. 33
U.S.C. §1365(a) (emphasis supplied). The Fifth Cir-
cuit in Hamker held that this statutory language must be
read as written. “By its ordinary meaning the language
of section 1365 requires an allegation of an ongoing vic-
lation.” 756 F.2d at 395. Quite simply, if the violation
alleged in the complaint ceased prior to suit, the defend-
ant cannot be considered “to be in violation” at that
time. Permitting citizen suits for purely past violations
would require courts to rewrite the Act to provide for
actions against any person alleged “to be or to have been
in violation of” the Act. By its express and plain terms,
the citizen suit provision is limited to ongoing violations
that have not been abated by the time suit is filed.*
4In a brief concurring opinion, Judge Williams noted that the
opinion of the court in Hamker carried his “full concurrence.” He
wrote separately simply to indicate his view that the term “in
violation” should be considered “broad enough to cover the chronic
episodic violator or the violator who intentionally ‘turns off the
Gwaltney did not “turn off the spigot” just prior to the instant
suit, but had undertaken the substantial modifications necessary
8
The court below, however, reached a conclusion directly
contrary to the holding of Hamker. Where the Hamker
court adhered to the ordinary meaning of the words
chosen by Congress, the court below found the language
of the citizen suit provision “ambiguous.” According to
the court below, “in violation” “can be read to compre-
hend unlawful conduct that occurred only prior to the
In relying on the plain language of the statute, the
Hamker court adhered to the most basic canon of statu-
tory interpretation. As this Court explained in Consumer
9
In Middlesex County Sewerage Authority V. National
Sea Clammers Association, supra, this Court recognized
that the citizen suit provision “allows suits under the
Act by private citizens, but authorizes only prospective
relief * * *.” 453 US. at 6.° Civil penalties for viola-
tions that have been abated before suit is filed obviously
do not constitute “prospective relief.” Accordingly, suits
claiming civil penalties for totally abated actions cannot
form the basis of an action under the citizen suit provi-
sion.
In Milwaukee v. Illinois, 451 U.S. 304 (1981), this
Court emphasized the importance of adhering to the plain
language of the very citizen suit provision at issue here.
In that case, the Court rejected arguments that the lan-
guage of a savings clause in the citizen suit provision
should be read expansively to implement the purported
intent of Congress. The Court emphasized that “Twle
* * * are inclined to view the [savings clause] as mean-
ing what it says” and that “[wle prefer to read the
statute as written.” Jd. at 328, 329 n.22. That is pre-
cisely the approach adopted by the Fifth Circuit in
Hamker and rejected by the court below.
The plain language reading of the citizen suit provi-
sion in Middlesex County and Hamker has also been
adopted by the Seventh Circuit in City of Evansville v.
Kentucky Liquid Recycling, Inc., 604 F.2d 1008 (7th Cir.
1979), cert. denied, 444 U.S. 1025 (1980). In that case
the court noted that the citizen suit provision
authorizes a civil action against a party “alleged
to be in violation” of effluent standards or limita-
tions prescribed under the Act or an order of the
Administrator or a state with responsibility under
the Act. It does not provide for suits against parties
6 The Court in Middlesex County held that no private right of
action should be implied under the Clean Water Act, and that no
action could be maintained under 42 U.S.C. § 1983 for violation
of the Act. 453 U.S. at 18, 21.
10
alleged to have violated an effluent standard or limi-
tation in the past or for recovery of damages. [Jd.
at 1014 (emphasis added) .]
The Fifth Circuit in Hamker relied upon the decisions
both of this Court in Middlesex County and of the Sev-
enth Circuit in City of Evansville in concluding that
reading the phrase “to be in violation” to mean “to have
violated” “strains the grammar of the statute and di-
verges from its ordinary meaning.” 756 F.2d at 395.
B. The Court Below and the Fifth Circuit in Hamker
Adopted Contrary Views of the Role of the Citizen
Suit Provision in the Clean Water Act
In support of their respective interpretations of the
language of the citizen suit provision, the court below
and the Fifth Circuit in Hamker also embraced funda-
mentally different views of the role of the citizen suit
provision in the statutory scheme of the Clean Water
Act. The Hamker court correctly recognized that “[p] ri-
mary enforcement responsibility under the Act lies with
the states and the Administrator.” 756 F.2d at 395.
Under the Act, States “desiring to administer their own
permit programs must demonstrate that state officials
possess adequate authority to abate violations through
civil or criminal penalties or other means of enforce-
ment.” Middlesex County, 453 1J.S. at 18. The Common-
wealth of Virginia met these standards in the State Water
Control Law, which authorizes the State Water Control
Board to require regulated companies like Gwaltney to
furnish information and submit to investigation. Va.
Code §§ 62.1-44.15, .16, .20 & .21. The Board may issue
administrative orders and rules, obtain injunctions and
other orders in court, and impose civil penalties for
purely past violations. Id. §§ 62.1-44.15, 23 & 82. As
noted, Gwaltney kept the Board fully informed of the
Company’s plans, participated in all public meetings on
the status of its work, and received Board approval of its
actions.
(Qeteeeeiet eee ene aise
11
The Clean Water Act also grants a broad array of en-
forcement powers to the Federal Government. The Ad-
ministrator of the Environmental Protection Agency
(EPA) is authorized to issue compliance orders to any
person found to be in violation of statutory or permit
conditions, including conditions for which no citizen suits
are authorized. 33 U.S.C. § 1319(a). The Administrator
may also respond to violations by bringing suit, and a
court in such a case may impose appropriate civil penal-
ties. Id. § 1319(b), (d). The Act also authorizes crim-
inal prosecution in suitable cases. Id. $1819(c). See
Middlesex County, 453 U.S. at 13.
Congress “supplemented” this broad array of enforce-
ment authority granted to the States and the Federal
Government by also authorizing citizen suits of a “lim-
ited nature.” Jd. at 14, 17 n.27. The limited supple-
mental nature of citizen suits is clear from the terms of
the Act. Before initiating a citizen suit, prospective
plaintiffs must give notice to the Administrator, the State,
and the alleged violator. When government officials re-
spond by filing suit, the citizen action is barred. 33
U.S.C. § 1865(b). Similarly, as explained by the court in
Hamker, “it is most reasonable to read the requirement
that notice also be given to the alleged violator as an
indication that where the violator responds to the notice
by bringing himself into compliance, the citizen loses the
right to bring suit under 1365(a), just as he loses the
right to commence an action where the Administrator or
the state responds by diligently prosecuting an action
against the alleged violator * * *.” 756 F.2d at 396.
The court below took an approach directly contrary to
that of the Fifth Circuit in Hamker. Rather than view-
ing the citizen suit provision as a limited supplement to
the broad and comprehensive array of enforcement pow-
ers granted to the States and the EPA, the court below
ruled that “an expansive reading” of the citizen suit
provision was necessary to effectuate the policies under-
12
lying the Act. App. 12a. The court noted that the separ-
ate section of the Clean Water Act authorizing suit by
the Administrator of EPA, 33 U.S.C. § 1319(a) (1), con-
tains language similar to that of the citizen suit provi-
sion. Assuming that the Administrator could seek pen-
alties for past violations that have been abated, the
court concluded that citizens must have the same right,
since they must possess the same authority as the Ad-
ministrator. According to the court below, “[i]t can
hardly be questioned that the EPA has authority to bring
suit for civil penalties for purely past violations,” and
“the scope of citizen enforcement powers must, in this
important respect, be viewed as co-extensive with the
enforcement powers of the EPA.” App. 10a.
One of the premises of this syllogism is incorrect, the
other is not necessarily true, and the conclusion, even
assuming the validity of the premises, is a non-sequitur.
First, the language of the provision authorizing suit by
the Administrator is significantly different from the
language of the citizen suit provision. The Administrator
may issue a compliance order or bring suit when he
“finds that any person is in violation” of the Act. 33
U.S.C. § 1819(a) (1) (emphasis supplied). Such findings
at a point prior to suit may support jurisdiction even
if the violation ceases before suit. The citizen suit pro-
vision, on the other hand, authorizes suit against any
person “alleged to be in violation” of the Act, with no
provision for jurisdiction premised on prior “findings.”
33 U.S.C. § 1365(a) (1).* Second, it is by no means es-
tablished that the Administrator may obtain penalties
for purely past violations, as the court below assumed.
*It is significant that the United States agrees that “the juris-
dictional provisions pertaining to citizen suits need not, and indeed
should not, be construed in tandem with the governmental enforce-
ment provisions.” Brief for the United States as Amicus Curiae
Supporting Appellants at 20, Sierra Club v. Shell Oil Co., Nos.
85-3753, 85-3762, 85-3768 (Sth Cir.) (appeal pending).
13
That question is not presented in this case and need not
be decided.’
Finally, even if the statutory language is considered
similar, and even if EPA is considered to have the
power to impose civil penalties for purely past violations,
there simply is no basis for concluding that citizens must
have the identical enforcement power. As the court in
Hamker noted, the citizen suit “section obviously does
not permit the citizen to duplicate the Administrator’s
powers * * *.” 756 F.2d at 395 (emphasis in original).
While the court below ruled that the authority of citi-
zens to sue for penalties for past violations must be the
same as the authority of the Administrator, the Hamker
court properly recognized that such a parallelism was
entirely inconsistent with the supplemental and sub-
ordinate role of citizen suits in the statutory scheme:
Thus, although we do not decide an issue not before
us, the Administrator may have the power to seek
some redress for past violations, but this is no rea-
son to waive the statutory requirement that citizens
must allege that the defendant is “in violation” of an
1 The court below cited four cases for the proposition that the
Administrator could seek penalties for purely past violations.
United States v. Earth Sciences, Inc., 599 F.2d 368 (10th Cir. 1979),
and United States v. Detrex Chemical Industries, Inc., 393 F. Supp.
735 (N.D. Ohio 1975), simply decided that the Administrator could
simultaneously pursue administrative compliance orders and court
actions for penalties. The cases did not specifically address the
question of the Administrator’s authority to seek penalties for past
violations. The other two cases, Student Public Interest Research
Group v. AT&T Bell Laboratories, 617 F. Supp. 1190 (D. N.J. 1985),
and Student Public Interest Research Group Vv. Monsanto Co., 600
F. Supp. 1474 (D. N.J. 1985), did not even involve actions by the
seek penalties for purely past violations. Va. Gode § 62.1-44.15 (8c)
(Supp. 1985) (“the Board may proceed directly under [its civil
penalty powers] for any past violation”).
14
effluent standard, limitation or order. [756 F.2d at
395 (emphasis in original ) . ]
The court below embraced an “expansive reading” of
the citizen suit provision because of its view that “a sig-
nificant deterrent would be lost if citizen suits seeking
civil penalties for past violations were not permitted.”
App. 12a, 10a. It was the view of Congress, however,
that the policies of the Act could best be implemented by
vesting primary enforcement responsibility in the States
and the Administrator, with only a supplementary role
for citizen suits of a “limited nature.” Middlesex County,
453 U.S. at 17 n.27. One of the express limitations on
citizen suits is that they can be brought only against a
person “in violation” of the Act. The court below erred
in overriding the plain language adopted by Congress
because of the court’s view that another approach—read-
Statutes, not policies, and a court is not free to ignore
the former to implement the latter.
The court below sought support for its strained read-
ing of the statute by noting that the citizen suit provi-
sion expressly authorizes a court in an appropriate case
to order that civil penalties be paid to the Government.
App. 12a. This argument is classic bootstrapping. The
App. 12a n.11. Indeed, this Court in Middlesex County
expressly recognized that civil penalties were permitted
under the citizen suit provision, 453 U.S. at 14 n.25, yet
15
nonetheless described that provision as authorizing “only
prospective relief” and authorizing “private persons to
sue for injunctions to enforce” the Act. Jd. at 6, 14.
These statements are easily reconciled when it is recog-
nized that there is no jurisdiction for a citizen suit un-
less the suit concerns an ongoing violation—hence this
Court’s focus on the “prospective relief” authorized by
the provision—but that once such a suit is before a court
it may order civil penalties. As the Hamker court noted,
“t]he section ‘authorizes only prospective relief’ even
though ‘civil penalties * * * may be ordered by the
court.’” 756 F.2d at 396 (quoting Middlesex County,
453 U.S. at 6, 14 n.25).
Although it did not rely on legislative materials, the
court in Hamker noted that “the legislative history sup-
ports our decision * * *.” 756 F.2d at 395 n.l. The
legislative history of the citizen suit provision does in-
deed demonstrate that Congress authorized citizen suits
to be brought only to abate ongoing violations of the
Clean Water Act. The Senate Report, for example, re-
peatedly refers to citizen suits in the context of abating
violations. See S. Rep. No. 414, 92d Cong., Ist Sess. (1971)
at 81 (“citizen suits seeking abatement”), 80 (citizens
may file actions when government authorities do not take
action to abate violations), 81 (attorneys’ fees awardable
to citizen plaintiffs “in actions which result in successful
abatement”). The hearing record also repeatedly re-
flects the understanding that citizen suits were author-
ized only when necessary to abate an ongoing violation
that either the State or EPA has not taken action to
abate.* As this Court itself recognized in Middlesex
8 See, e.g., Water Pollution Control Legislation, Hearings Before
the Subcomm. om Air and Water Pollution of the Senate Comm. on
Public Works, 92d Cong., Ist Sess. (1971) at 114 (“Any person
may sue a polluter to abate a violation”) (staff analysis), 707
(citizen suits “are brought for the purpose of abating pollution”)
(Sen. Eagleton) ; Water Pollution Control Legislation—1971 (AR.
11896, H.R. 11895), Hearings Before the House Comm. on Public
16
County, the citizen suit provision in the Clean
“was expressly modeled on the parallel provision
Clean Air Act,” and “the legislative history of the latter
Act contains explicit indications that private enforcement
suits were intended to be limited to the injunctive relief
expressly provided for.” 453 U.S. at 18 n.27.°
continuous one, or an occasional or sporadic one,” 118
Cong. Rec. 33700 (1972), “[t}he short answer is that
Congress did not write the Statute that way.” United
mony of Stephen Saltzman, Washington Representative, Trout Un-
limited), 439 (“[a] citizen’s suit provision permits the citizen to
on of penalties in the Clean Water Act cannot be read to alta,
saat purpose and permit citizen suits when the violation has already
been abated.
17
States v. Naftalin, 441 U.S. 768, 773 (1979). On the
contrary, the statutory language actually adopted by Con-
gress limited citizen suits to those against a person “who
is alleged to be in violation of” the Act. 33 U.S.C.
§ 1365(a). Senator Muskie’s written insert is the only
item in the voluminous legislative history that departs
from the abatement purpose expressed throughout the
legislative materials. It provides an excellent example of
why, as this Court has repeatedly emphasized, courts
should not rely on such remarks, particularly “one iso-
lated remark by a single Senator,” in seeking to discern
legislative intent. Weinberger v. Rossi, 456 U.S. 25, 35
(1982). This is particularly true when the stray remark
is directly contrary to the plain language of the statute
and every other indicia of intent in the legislative his-
tory.”
The Fifth Circuit in Hamker, again relying on this
Court’s opinion in Middlesex County, recognized that ex-
panding the citizen suit provision to embrace suits for
past violations would directly undermine the intent of
Congress to limit the burden on the Federal courts. In
Middlesex County, this Court recognized that the citizen
suit provision in the Clean Air Act—the model for the
% The court below considered itself justified in ascribing talis-
manic significance to the comments of a single legislator because
the legislator was Senator Muskie, sponsor of the Clean Water Act.
App. 14a n.13. As this Court has often noted, however, “[t)he
contemporaneous remarks of a sponsor of legislation are certainly
not controlling in analyzing legislative history” Weinberger Vv.
Rossi, 456 U.S. at 35 n.15. See Consumer Product Safety Comm'n
v. GTE Sylvania, Inc., 447 U.S. at 118; Chrysler Corp. v. Brown,
441 U.S. 281, 311 (1979). This rule applies with no less force
to Senator Muskie’s comments on the Clean Water Act. See
Milwaukee v. Illinois, 451 U.S. at 331 n.23 (“the dissent attaches
great weight to the views of Senator Muskie”) (emphasis sup-
plied). Indeed, as two commentators have noted, Senator Muskie’s
“enthusiasm may explain his expansion of the statutory language.”
Schwartz & Hackett, Citizen Suits Against Private Industry Under
the Clean Water Act, 17 Natural Resources Lawyer 327, 348 (1984).
18
provision at issue in this case—was defended against the
charge that it “‘may burden the courts unduly’” on
the ground that it offered “‘no hope of financial gain
and the very real prospect of financial loss’” for the
citizen plaintiff. 453 U.S. at 18 n.27 (quoting 116 Cong.
Rec. 33104 (1970) (remarks of Sen. Hart)). Expanding
the scope of the citizen suit provision to include suits for
purely past violations would provide a concrete financial
incentive for citizen suits in Federal court. As the Ham-
ker court explained:
If section 1365 were interpreted as permitting citi-
zen suits for civil penalties for past violations, all
state damage claims which could be brought under
pendent jurisdiction could be litigated in a federal
forum, thus undermining congressional intent to
limit the burden on the district courts. Since the
Act provides for awards of attorney’s fees and ex-
penses, there would be a substantial incentive to
bring suit under the Act rather than in state court.
(756 F.2d at 396.}
Again, the court below was not persuaded by the rea-
soning of the Fifth Circuit. The court conceded that the
concern of the Hamker court was “a real one,” but dis-
missed it by noting that District Courts could avoid the
problem by being “wary” in their exercise of pendent
jurisdiction. App. 17a.
C. The Decision of the Fifth Circuit in Hamker and of
the Fourth Circuit Below Cannot Be Reconciled
The court below clearly recognized that its decision
created a conflict with the Fifth Circuit, going so far as
to devote a section of its opinion to “The Hamker Deci-
sion.” App. 15a. The court began that section by sug-
gesting that “it could be argued that Hamker is distin-
guishable” because no permit was involved in Hamker
and because Hamker concerned “only a single long-past
and non-recurring discharge.” App. 15a. The fact that
the present case involves permit violations while Hamker
involved violations of the Act is a distinction without a
19
difference. The citizen suit provision authorizes suits
against persons in violation of “an effluent standard or
limitation under this chapter.” 33 U.S.C. § 1865(a) (1)
(A). “{T]his chapter” refers to the Clean Water Act,
and the effluent standards or limitations may be set in a
permit issued under the Act, as in this case, or in the Act
itself, as in Hamker. See 33 U.S.C. § 1365(f). There is
simply nothing about the source of the limitation allegedly
violated that can in any way reconcile the contrary
jurisdictional holdings of the Fourth and Fifth Circuits."
Nor can Hamker be distinguished as involving only a
“single discharge.” The discharge in Hamker lasted two
weeks. 765 F.2d at 394. Each day of a violation such
as the one involved in Hamker is a separate violation
under the Act, and accordingly Hamker involved some 14
violations of the Act. For that matter, the present case
can also be viewed as involving only a “single discharge”
—the regular discharge of treated effluent-from the
Gwaltney plant into the Pagan River while repair of the
system was underway. Under the Act that discharge
resulted in several discrete violations, but that is equally
true of the discharge at issue in Hamker. The important
point is that in both Hamker and the present case any
violations of the Act were abated prior to commencement
of the citizen suit. In Hamker the past violations were
held insufficient to satisfy the jurisdictional requirements
of the citizen suit provision; in this case the past viola-
tions were held to satisfy those same requirements. The
court in Hamker in no way rested its decision on the
nature or number of incidents of the discharge, but
solely on the fact that it was a past violation.
11 District Courts in the Fifth Circuit have applied Hamker to
cases in which the alleged violation was of a permit limitation.
See, e.g., Sierra Club v. Copolymer Rubber and Chemical Corp., 621
F. Supp. 1013 (M.D. La. 1985), app. pending, No. 85-3763 (5th Cir.).
States has firmed that it “believes that Hember cor
rectly interpreted Section 505 (33 U.S.C. § 1365)” and
that citizen plaintiffs cannot bring “penalty-only actions
against violators who have attained compliance before
suit is filed.” Brief for the United States as Amicus
Curiae Supporting Appellants at 16 n.10, 25 n.17, Sierra
Club v. Shell Oil Co., Nos. 85-3753, 85-3762, 85-3753
(5th Cir.) (appeal pending). The Government, however,
because respondents alleged a continuing violation, even
if the stipulated facts demonstrated that no such viola-
tion existed when the suit was filed.
The court below declined to accept this theory, and
expressly did not decide whether any allegations of con-
tinuing violation by respondents were made in good faith:
Because we hold that the Clean Water Act confers
not decide whether in this case made their
allegations of uing violations in faith.
* * * (S)uch an is not requi or juris-
diction to lie. [App. 7a-8a n.9.]
Nor would the Government’s theory succeed in recon-
ciling the two cases, even if it had been accepted. Re-
spondents’ allegations that Gwaltney constituted “a threat
to continue its violations,” App. 7a n.9, were no different
from plaintiffs’ allegations in Hamker that the defendant
continued to operate its pipeline in a manner that would
result in future violations of the Act. See 756 F.2d at
394, 397-398. In both cases the allegations were to the
can a
‘iil jue
peed ab
allttin bait
Hit HE He
a | i Hoe
HLH erat
Prerameatiet
Ae At ii
iinet lel
TEM
Tie FE ijn
HEB HTH Baye
sa
Ate 25% & Bae
i i é +
Hy i Lis Ha 42 = A
BHT 7 itt ‘teat
Hag a Lil cea
ig ie ia PET at sHbiee
re s Es = SE g,73 gs Ss
ae Edit on
ots] 524) tt Wilig ru
SUEsadaba = “agdniisageiiil
Ht bas
iy
. * +E
al Ni
Mt i
iL Ut.
HPRE
raed "Hk
The decision of the court below will doubtless precipi-
tate an even greater increase in the volume of citizen
suits. As of January 1984, some 65,000 permits had
been issued under the Clean Water Act. Hearings on
Implementation of the Federal Clean Water Act Before
the Subcomm. on Investigations and Oversight of the
House Comm. on Public Works and Transportation, 98th
Cong., 2d Sess. 4-5 (March 7, 1984) (statement of Hugh
J. Wessinger, General Accounting Office). Violations of
effluent limits in those permits must be reported by the
permit holders themselves in discharge monitoring reports,
which are required by law to be made available to the
public. 33 U.S.C. § 1818; 40 C.F.R. § 122.41 (1) (4). The
reports are generally sufficient to establish a violation of
the Act. See United States v. Ward, 448 U.S. 242 (1980).
As the Act is interpreted in the Fourth Circuit, then,
“any citizen” with standing need only look up the dis-
charge monitoring reports of any one of the thousands
ber and Chemical Corp., 621 F. Supp. at 1014-15 (four consoli-
dated cases); Friends of the Earth v. Facet Enterprises, Inc., 618
F. Supp. 532, 535 (W.D.N.Y. 1984) ; Sierra Club v. Simkins Indus-
tries, Inc., 617 F. Supp. 1120, 1126-27 (D. Md. 1985); Student
Public Interest Research Group v. AT&T Bell Laboratories, 617
F. Supp. at 1194-95; Student Public Interest Research Group V.
Georgia-Pacific Corp., 615 F. Supp. 1419, 1425-26 (D.N.J. 1985) ;
Student Public Interest Research Group Vv. Monsanto Coc., 600
F. Supp. at 1476-77; Sierra Club v. Aluminum Company of America,
585 F. Supp. 842, 853-854 (N.D.N.Y. 1984) ; Student Public Interest
Group v. National Starch and Chemical Corp., 23 Env’t Rep. Cas.
(BNA) 1982, 1984 (D.N.J. 1985) ; Sierra Club v. Kerr-McGee Corp.,
23 Env’t Rep. Cas. (BNA) 1685, 1689-90 (W.D. La. 1985) ;
Pawtuxet Cove Marina, Inc. v. Ciba-Geigy Corp., 22 Env’t Rep. Cas.
(BNA) 1999, 2000 (D.R.I. 1985) ; Sierra Club v. Raytheon Co., 22
Env’t Rep. Cas. (BNA) 1050, 1054-55 (D. Mass. 1984) ; Student Pub-
lic Interest Research Group ¥. Anchor Thread Co., 22 Env’t Rep.
Cas. (BNA) 1150, 1154 (D.N.J. 1984) ; Sierra Club v. Tosco Corp.,
22 Env’t Rep. Cas. (BNA) 2117 (N.D. Cal. 1984) ; Sierra Club v.
Monochem, No. 84-147B (M.D. La. 1985), app. pending, No. 85-3762
(5th Cir.) ; Sierra Club v. Shell Oil, No. 84-3583 (E.D. La. 1986),
app. pending, No. 86-3753 (5th Cir.) ; Friends of the Earth v.
Archer Daniels Midland Co., No. 84-CV-413 (N.D.N.Y. 1986).
24
of permit holders, find a violation—no matter how iso-
lated, no matter how old—and file suit, with every con-
fidence of prevailing and recovering all attorneys’ fees
and expenses.’*®
Under the rule announced below, any violation at any
time in any one of ayer 65,000 permits can form the
basis of a suit by any citizen, seeking penalties of up to
$10,000 per day.” The plaintiff’s case is essentially made
by the defendant himself in the discharge monitoring re-
ports. Citizen plaintiffs thus have little to lose and much
to gain simply by flipping through old discharge moni-
toring reports. And, as noted by the Hamker court, there
is a strong incentive for plaintiffs to append state law
damage claims to their citizen suits, thereby covering
their attorneys’ fees and expenses on those claims as
well.'®
% Since the plain language of the statute does not authorize
citizen suits for purely past violations, and since Congress did not
intend to authorize such suits, it is not surprising that the citizen
suit provision contains no statute of limitations. Courts that have
misread the statute to permit citizen suits for purely past violations
have been compelled to struggle with the vexing issue of finding an
appropriate limitations period to “borrow” for such litigation, with
widely divergent results. Some courts have gone so far as to hold
that there is no limitations period for citizen suits. See Student
Public Interest Research Group v. P.D. Oil & Chemical Storage, Inc.,
627 F. Supp. 1074, 1083-85 (D.N.J. 1986). Others have borrowed
the five-year limitations period in Federal law for civil penalty
actions, see Sierra Club v. Simkins Industries, Inc., 617 F. Supp. at
1124-25, while still others have borrowed limitations periods from
state law. See Sierra Club v. Chevron U.S.A., Inc., No. CV&85-1851
(C.D. Cal., Jan. 14, 1986), app. pending, No. 86-6287 (9th Cir.).
7 This result is particularly troubling in view of the holding
below—which we believe to he erroneous but which is not chal-
lenged here—that a violation of a single monthly limit constitutes
thirty violations instead of one, resulting in a maximum penalty
of $300,000 rather than $10,000. See App. 18a-22a.
1% The holding of the court below also increases the danger of
another incentive to suit wholly inconsistent with the objectives of
the Act. Penalties under the Act are payable to the United States
25
The holding of the court below will also disserve the
objectives of the Clean Water Act by permitting citizen
suits to interfere with the primary enforcement respon-
sibilities of States and the EPA under the Act. There is
no doubt that Congress intended citizen suits to supple-
ment government efforts to abate pollution, and indeed
to spur government action when necessary to stop pol-
lution. Congress did not, however, intend to permit citi-
zens to exhume purely past violations, and bring penalty
actions on the basis of such violations. Such suits do
not help abate pollution—by definition, the problem al-
ready has been abated. Instead, they actually interfere
with government efforts to promote prompt compliance
with the Act.
One of the objectives of EPA’s enforcement policy is
the swift resolution of environmental problems. EPA
Civil Penalty Policy, Env’t Rep. (BNA) (Fed. Laws)
41:2991 (February 16, 1984). To serve this objective,
EPA has established a formal policy that it “will con-
sider reducing the gravity component of the penalty for
settlements in which the violator already has instituted
expeditious remedies to the identified violations prior to
the commencement of litigation.” Id. at 2993. If citizens
could exhume past violations years later, however, and sue
for maximum penalties, the incentive underlying this pol-
Treasury, not to citizen plaintiffs. The prospect of large penalties,
however, can be used as leverage to obtain a settlement directly
benefitting the citizen plaintiff. It is common knowledge in the
industry, for example, that many defendants in these suits settle
the claims against them by making contributions to the plaintiff
groups bringing suit or to projects sponsored by those groups. See
Schwartz & Hackett, 17 Natural Resources Lawyer at 359. The
United States recognized that this is a serious problem in the
amicus brief it filed below. See Br. at 26 n.18 (“parties to a private
enforcement action could attempt to circumvent the court’s penalty
assessment and unjustly enrich the plaintiffs at the expense of the
Treasury”). The Governmert goes so far as to argue that “courts
should subject any settlements to some form of public notice and
comment similar in effect to those used by the government.” I/d.
The seriousness of the problem, however, could be mitigated simply
26
i etely evaporate.” The strained reading
ef the statute permitting such suits thus undermines the
sep gp yids yg That goal, after all, was
“to re and maintain the chemical, physical, and bio-
echoed titans of to Nation’s waters,” 33 U.S.C. § 1251
(a), not to restore and maintain the environmental liti-
gation bar.
The citizen suit provision essentially vests prosecutorial
functions in private citizens. Private citizens, however,
unlike state or Federal authorities, are not accountable
to the electorate. Serious constitutional questions would
be presented if the decision below were permitted to
stand.” Congress has on limited occasions expressly au-
thorized private citizens to seek penalties payable to the
United States for purely past violations. Sec, ¢.g., 31
U.S.C. § 3730. Congress knows how to authorize such
actions if it wants to, and, in light of the serious ques-
tions surrounding such suits, they should not be implied
in the absence of express authorization." The citizen
by adhering to the language of the statute and not permitting
citizens to seek penalties for purely past violations.
Only a formal consent order issued in Federal court would bar
subsequent citizen suits. See Student Public Interest Research
Group v. Georgia-Pacific Corp., 615 F. Supp. at 1482. A consent
order issued iu a state administrative proceeding would not have
such an effect. See Friends of the Earth v. Consolidated Rail Corp.,
768 F.2d 57 (2d Cir. 1986).
7 In the case of an ongoing violation, either the State or EPA
can bring suit after notice from the citizen plaintiff, and such
action precludes the citizen suit. In the case of purely past viola-
tions that the governmental authorities have decided do not warrant -
court action, however, there would appear to be no mechanism by
which the State or EPA could sue to prevent penalties being im-
posed. The State or EPA could hardly sue for the purpose of
obtaining no relief.
*1 One reason such actions seeking penalties for purely past vicla-
tions should not be implied is that when Congress has authorized
such suits, it has takem care to enact express safeguards against the
problem of settlements benefitting the private plaintiffs at the
expense of the United States. See id. § 3730(b) (1) (citizen suit
27
suit provision should be interpreted—as it was by the
Fifth Circuit in Hamker—to avoid these serious ques-
tions, particularly since such an interpretation is com-
pelled by the plain language of the statute and supported
by the legislative history.
In the Fourth Circuit, citizen suits may be brought
under the Clean Water Act for purely past violations.
In the Fifth Circuit, they may not. This Court should
grant the writ to resolve this direct and irreconcilable
conflict on an important and recurring question of Fed-
eral law.
CONCLUSION
For the foregoing reasons, this Court should grant the
writ and reverse the decision of the court below.
Respectfully submitted,
E. BARRETT PRETTYMAN, JR.*
RICHARD J.M. POULSON
PATRICK M. RAHER
DAvip J. HAYES
CATHERINE JAMES LACROIX
JOHN G. ROBERTS, JR.
HoGAN & HARTSON
(a partnership including
professional corporations)
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
(202) 331-4685
Counsel for Petitioner
* Counsel of Record
seeking penalties for false claims “may be dismissed only if the
court and the Attorney General give written consent and their rea-
sons for consenting”) ; United States v. Eicher, 56 F. Supp. 972,
973 (D.D.C. 1944) (intent of quoted language was “to discourage
private compromise settlements”). See note 18, supra.
j -
7 7 é
’
‘ a) :
:
‘
al “
*
rs
-—
| .
-
hd
i)
eo
APPENDICES
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 85-1873
CHESAPEAKE BAY FOUNDATION, INC.;
NATURAL RESOURCES DEFENSE,
— Appellees,
GWALTNEY OF SMITHFIELD, LTD.,
Appellant,
UNITED STATES OF AMERICA,
Amicus Curiae,
ATLANTIC STATES LEGAL FOUNDATION, CONNECTICUT
FUND FOR THE ENVIRONMENT, FRIENDS OF THE EARTH,
SIERRA CLUB, and STUDENT PUBLIC INTEREST RESEARCH
GROUP OF NEW JERSEY,
Amici Curiae.
Appeal from the United States District Court
for the Eastern District of Virginia, at Richmond.
Robert R. Merhige, Jr., District Judge. (C/A 84-366-R)
Argued: February 4, 1986 Decided: May 22, 1986
Before WINTER, Chief Judge,, and RUSSELL and
SPROUSE, Circuit Judges.
Patrick M. Raher (David J. Hayes; Catherine J. La-
Croix; Hogan & Hartson; Anthony F. Troy; George A.
Somerville; Mays, Valentine, Davenport & Moore on
brief) for Appellant; James Thornton, Natural Resources
2a
Defense Council, Inc., and Jeter M. Watson, Chesapeake
Bay Foundation, Inc. for Appellees; Joseph E. Lees, De-
partment of Justice (F. Henry Habicht II, Assistant At-
torney General; Nancy B. Fireston and David C. Shilton,
Department of Justice; Glenn Unterberger; Elizabeth
Ojala, Office of Enforcement und Compliance Monitoring,
Environmental Protection Agency; Bruce J. Terris,
Nathalie V. Black on brief) for Amicus Curiae.
WINTER, Chief Judge:
Plaintiffs Chesapeake Bay Foundation (“CBF”) and
National Resources Defense Council (“NRDC”) filed a
“citizen suit” under section 505 of the Clean Water Act,
33 U.S.C. § 1365, against defendant Gwaltney of Smith-
field, Inc. (“Gwaltney”), alleging violations of the pol-
lutant effluent limits contained in Gwaltney’s National
Pollutant Discharge Elimination System (“NPDES”)
permit, issued pursuant to section 402 of the Act, 33
U.S.C. § 1842. The district court granted plaintiffs’ mo-
tion for partial summary judgment on the issue of
liability and held a hearing to determine the amount of
the civil penalty to be assessed against Gwaltney pur-
suant to section 309(d) of the Act, 33 U.S.C. § 1319(d).
Several months later, Gwaltney filed a motion to dismiss
for lack of subject matter jurisdiction, alleging that it
had ceased violating its permit prior to plaintiff's filing
suit. Gwaltney argued that citizen suits for purely past
violations are not permitted under the Act, and that for
jurisdiction to lie, the Act requires a defendant to be
violating the Act at the time suit is filed.’
The district court denied the motion to disr- iss, holding
that citizen suit jurisdiction could lie in the absence of
an ongoing violation. It also ruled that Gwaltney was
* Gwaltney also argued that CBF and NRDC lacked standing to
bring this lawsuit. The district court rejected this contention, and
Gwaltney does not appeai from this aspect of its ruling.
liable for a maximum civil penalty’® of $6,660,000, but,
in view of a variety of factors, adjusted the penalty
downward to $1,285,322.* Gwaltney appeals, and we
affirm.
I.
Plaintiffs are nonprofit corporations dedicated to pro-
tecting natural resources. CBF is a regional environ-
mental group with over 19,000 members residing ‘n the
Chesapeake Bay area, and NRDC a nationwide e viron-
mental group with over 800 of its members residing in
Virginia. Gwaltney is a subsidiary of Smithfield Foods,
Inc., and is engaged in the business of processing and
packing pork products. Smithfield Foods had acquired
the Gwaltney plant, which is situated on, and discharges
wastewater into, the Pagan River near Smithfield, Vir-
ginia, from the ITT-Continental Baking Co. Gwaltney
assumed responsibility for wastewater discharge under
the NPDES permit as of October 27, 1981; although
numerous violations of the permit occurred before that
date, only those violations occurring afterward are the
subject of this lawsuit.
Jurisdiction over this citizen suit was grounded on
Section 505(a) of the Act, 33 U.S.C. § 1365(a), which
permits any citize to commence a civil action against
any person alleged to be in violation of an effluent stand-
ard or limitation under the Act, in order to enforce the
limitation and/or to assess civil penalties for its viola-
2 Civil penalties under the Act are payable to the U.S. Treasury,
and are to be distinguished from private civil damages, awarded
to a plaintiff. Such damages are very clearly not permitted by the
Act. Middlesex County Sewerage Auth. v. National Sea Clammers
Ass'n, 453 U.S. 1 (1981).
8 The district court’s opinion is reported at 611 F. Supp. 1542
(E.D. Va. 1985).
4a
tion.* The suit was filed more than sixty days after
plaintiffs, in compliance with section 505(b) (1) (A) of
the Act, 33 U.S.C. § 1865(b) (1) (A), had given Gwalt-
ney, the Environmental Protection Agency (“EPA”)
and the Virginia State Water Control Board notice of
Gwaltney’s violations and of the plaintiffs’ intent to file
suit.
The violations involved in this case (the responsibility
for which is not at issue on appeal) are repeated dis-
* This section of the Act, in its entirety, provides:
Citizen Suits
(a) Authorization; jurisdiction
Except as provided in subsection (b) of this section, any
citizen may commence a civil action on his own behalf—
:
S
:
:
2
4
by law, see 33 U.S.C. § 1318(a)(3)(A); 40 C.F.R.
§ 122.41(1) (4), in its discharge monitoring reports
(DMR’s).
wie
At
ile fh Hitless
faye {iia ag
i He i
aH Hittite |
ie erat
Ht le H i
TH AH iflass
Ta
II.
A. Subject Matter Jurisdiction
Because it is undisputed that Gwaltney had ceased vio-
lating its permit before June 15, 1984, when suit was
instituted, Gwaltney contends that the district court
lacked jurisdiction over the subject matter of the suit.
It argues that the plain language of the Act requires this
result, because a defendant, under section 505(a), must
be “in violation” of the Act for jurisdiction to attach.’
® Section 505(a) actually confers jurisdiction in cases of a per-
son “alleged to be in violation” of an effluent standard or limita-
tion issued under the Act. Plaintiffs argue in the alternative, and
the United States, as amicus curiae, asserts as its primary con-
tention, that the statute be read as conferring citizen suit jurisdic-
tion when there is a good faith allegation of a continuing violation.
The district court itself offered, as an alternative basis for deciding
this case, an interpretation of section 505(a) as a rule of good faith
pleading, similar to the amount-in-controversy requirement for
diversity jurisdiction. See 611 F. Supp. at 1549 n.8. In the latter
instance, the amount stated in the plaintiff's complaint is deter-
minative of jurisdiction, if made in good faith. The fact that the
plaintiff ultimately recovers less than the jurisdictional amount
does not divest the court of jurisdiction.
In the case before us, plaintiffs, in requesting civil penalties
and injunctive relief, alleged that Gwaltney had continued to violate
the Act after plaintiffs had given Gwaltney notice of their intent to
sue, and that without appropriate judicial relief was a threat to
continue its violations. A very sound argument can be made that
plaintiffs’ allegations of continuing violations were made in good
faith, despite the fact that Gwaltney has not actually violated the
Act since May 15, 1984. Given the facts that excessive TKN dis-
charges are more likely in the winter than in warmer weather, and
that Gwaltney had been responsible for numerous violations during
the winter immediately prior to the filing of this suit, it was not
at all clear at the time of filing in June 1984, that Gwaltney’s new
and unproven water treatment facilities would survive the coming
winter without mishap. .
However, our holding, as developed in the text, assumes the now-
established fact that as of May 15, 1984, Gwaltney had ceased
violating the limits of its NPDES permit. Because we hold that
the Clean Water Act confers on the district court jurisdiction over
8a
Gwaltney interprets this statutory language as requiring
a polluter to be violating the Act at the time suit is filed
against it. Gwaltney further contends that the structure
of the statute and its legislative history limit the role of
citizen suits to seeking abatement of ongoing violations
and obtaining civil penalties for past violations only when
jurisdiction is established by the existence of an ongoing
one. We disagree with each of these contentions and hold
that the Clean Water Act authorizes citizens, as “private
attorneys general,” see Middlesex County Sewerage Auth.
v. National Sea Clammers Ass’n, 453 U.S. 1, 17, 14 n.23
(1981), to seek civil penalties for past violations of the
Act as well as abatement of ongoing violations.
1. Statutory Language
Gwaltney argues that the ordinary meaning of section
505 requires that a defendant be engaged in a violation
at the time the complaint against it is filed for juris-
diction to lie. See Hamker v. Diamond Shamrock Chemi-
cal Co., 756 F.2d 392, 395 (5 Cir. 1985). The Hamker
court refused to read “to be in violation” as meaning “to
have violated,” stating that such an interpretation “ob-
viously strains the grammar of the statute and diverges
from its ordinary meaning.” Jd.
We respectfully disagree. We do not read the language
as encompassing only those situations in which a defend-
ant is currently violating the Act. Rather, we agree with
the district court that the language is ambiguous, in
that it can be read to comprehend unlawful conduct that
occurred only prior to the filing of a lawsuit as well as
citizen suits seeking civil penalties for past violations, we need
not decide whether plaintiffs in this case made their allegations
of continuing violations in good faith. Because being “in violation”
of the Act encompasses more than just perpetration of ongoing
violations, or chronic episodic violations likely to recur in the near
future, such an allegation is not required for jurisdiction to lie.
9a
unlawful conduct that continues into the present.’® See
also Student Public Interest Research Group v. Monsanto
Co., 600 F. Supp. 1474, 1476 (D. N.J. 1985) (“A plaus-
ible construction of the language is that one is ‘in viola-
tion’ and continues to be ‘in violation’ by having ‘vio-
lated.’ In other words, the taint of a past violation is
continuing.”). We therefore cannot, as Gwaltney urges,
rely on the “plain meaning” of this language in deciding
this case. Instead, we look beyond the language itself to
the structure of the statute and its legislative history to
discern congressional intent as to the scope of citizen suit
jurisdiction. |
2. Statutory Structure
In light of the language of numerous other sections of
the Act, Gwaltney’s reliance on the words “in violation”
to curtail the scope of citizen suits undermines its posi-
tion. Virtually all of the enforcement provisions of the
Act, for citizen and government enforcement alike, em-
ploy similar, present-tense phrasing. See, e.g., 33 U.S.C.
§ 1319(a)(1) (EPA Administrator authorized to take
enforcement action, including court action, whenever he
“finds that any person iz in violation of any condition or
limitation ... .”); id. § 1819(a) (3) (Administrator may
issue a compliance order or file a civil suit whenever he
“finds that any person is in violation” of certain provi-
sions of the Act or of permit conditions or limitations) ;
id. § 309(c) (1) (criminal penalties may be imposed on
“fa]ny person who willfully or negligently violates” cer-
tain provisions of the Act or permit conditions or limita-
1 The district court offered a useful analogy to the situation of
a taxpayer who underpays his taxes in one year and pays in full
his taxes for subsequent years. Having once underpaid, he con-
tinues to be “in violation” of the tax laws, the relevant statute of
limitations being the only obstacle to a finding of liability for the
year of delinquency. 611 F. Supp. at 1547; see also Student Public
Interest Research Group v. AT & T Bell Laboratories, 617 F. Supp.
1190, 1195 (D. N.J. 1985).
10a
tions). It can hardly be questioned that the EPA has
authority to bring suit for civil penalties for purely past
violations. Cf. United States v. Earth Sciences, Inc., 599
F.2d 368, 375-76 (10 Cir. 1979) (EPA may, under 33
U.S.C. § 1319(a) (3), either issue a compliance order to
prevent future pollution or seek civil penalties for past
violations, or do both) ; United States v. Detrex Chemical
Industries, Inc., 393 F. Supp. 735, 738 (N.D. Ohio 1975)
(same); Student Public Interest Research Group v.
AT&T Bell Laboratories, 617 F. Supp. 1190, 1197 (D.
N.J. 1985) (“(T]here is no doubt that the EPA may
bring suit based on past violations.” Student Public In-
terest Research Group v. Monsanto Co., 600 F. Supp.
1474, 1476 (D. N.J. 1985) (“It can hardly be argued
that the Government is restricted to abatement actions
[to the exclusion of suits for civil penalties}”). Thus “in
violation,” in the context of government enforcement, has
been construed to encompass past, completed violations as
well as current, on-going transgressions. Any other read-
ing of the Act would eliminate a significant deterrent to
violations of the Act and severely undercut the Act’s
ambitious purpose, “to restore and maintain the chemical,
physical and biological integrity of the nation’s waters,”
33 U.S.C. § 1251 (a).
Similarly, a significant deterrent would be lost if citi-
zen suits seeking civil penalties for past violations were
not permitted. For this reason, the scope of citizen en-
forcement powers must, in this important respect, be
viewed as co-extensive with the enforcement powers of
the EPA. A number of courts have so held, based largely
on the similarity of language between the provisions au-
thorizing government units and the citizen suit provision.
See Connecticut Fund for the Environment v. The Job
Plating Co., 623 F. Supp. 207, 213 (D. Conn. 1985)
(“{Rjemedies obtainable in citizen suits should be co-
extensive with those available in suits initiated by the
federal government.”) ; Student Public Interest Research
lla
Group v. Georgia-Pacific Corp., 615 F. Supp. 1419, 1425
(D. NJ. 1985) (“In suits uader Section 505 of the
Clean Water Act, citizens have the same remedies avail-
able to the EPA”); AT&T Bell, 617 F. Supp. at 1199
(“(T]o hold that citizen suits alone are barred from
seeking civil penalties for past violations would thwart
the goal of uniformity in enforcement.”).
Gwaltney argues further that the Act is structured
so that citizen suits are to play a “distinct and limited”
role in the enforcement of the Act, one “supplementary”
to the roles of state and federal agencies. While it can-
not be denied that citizens’ enforcement authority is nar-
rower than that of government—citizens, for example,
obviously cannot seek criminal penalties or issue com-
pliance orders—the Act does not deprive citizens of the
right to sue for past violations. This conclusion is
supported by the fact that the Act does impose certain
express limitations on the bringing of citizen suits. Sec-
tion 505(b), 33 U.S.C. § 1365(b), provides that no citi-
zen suit may be commenced less than sixty days after
the plaintiff has given notice of an alleged violation to the
Administrator, the state in which the violation occurs,
and the alleged violator. The section also prohibits filing
of a citizen suit if either the Administrator or the state
has commenced and is diligently prosecuting a civil or
criminal action in federal or state court. In such cases,
however, a citizen is permitted to intervene as a matter
of right. These provisions have been narrowly construed
by the courts, e.g., Friends of the Earth v. Consolidated
Rail Corp., 768 F.2d 57, 63 (2 Cir. 1985) (initiation
of administrative enforcement action by state agency did
not preclude filing of citizen suit), and the Act contains
no other express limits on institution of citizen suits.
We read the statute as requiring only those limits on
citizen suit jurisdiction that Congress expressly pro-
vided; we see no reason to impose by implication limits
which Congress could have, but did not, create.
12a
The fact that section 505(a) itself expressly authorizes
the court in a citizen suit to “apply any appropriate civil
penalties under [section 309(d), 33 U.S.C. 1319(d)]”
lends further support to plaintiffs’ position. Courts have
relied on this fact in concluding that the Act authorizes
citizen suits seeking civil penalties for past violations.
See, e.g., Georgia Pacific, 615 F. Supp. at 1425 (language
of sections 505(a) and 309(d) “has been held to sustain
civil penalties for past violations”) (citing United States
v. Earth Sciences, Inc., 599 F.2d 368, 376 (10 Cir. 1979) ;
Monsanto, 600 F. Supp. at 1476 (section 505(a) “quite
specifically refers to the court’s power to impose civil
penalties and contains no limiting time frame”). Stu-
dent Public Interest Research Group v. Anchor Thread
Co., 22 Env’t Rep. Cas. (BNA), 1150, 1154 (D. NJ.
1984) ; Job Plating, 623 F. Supp. at 213."
Moreover, an expansive reading of the jurisdictional
grant contained in section 505(a) is consistent with
S. Rep. No. 414, 92d Cong., Ist Sess. 79 (1971),
prinied in 1 A Legislative History of the Water Pollu-
tion Control Act Amendments of 1972, at 1497 (here-
whatsoever is available unless there is an ongoing violation on
which to ground jurisdiction under section 505 (a).
tes a
ie
i
bes
i
i
Given this recognition of the importance of citizen
general” under the Act, “suggest[s] that Congress in-
suits seeking civi: penalties, and the fact that Congress
tended citizens to step into the shoes of government
cies that failed to act”).
knew how to, and did, in some ways, expressly limit
the application of these suits, there is no reason to sup-
expressly provided for and noc imposed on civil suits by
striction—the requirement of an ongoing violation—not
pose that Congress intended to impose an additional re-
l4a
ever, do not state that abatement of ongoing violations
is the only relief available under section 505(a), and in
fact refer to the availability of civil penalties. Jd. at
1497."
The sections of the legislative history that speak most
directly to the issue before us are the oral and written
one, or an occasional or sporadic one.” 118 Cong. Rec.
33700, (1972), reprinted in 1 Legislative History at 179
(emphasis added). The Senator also noted that “{c]iti-
zen suits can be brought to enforce against both con-
* Gwaltney notes further that the same emphasis on abatement
appears in the history of the Clean Air Act
vision, 42 U.S.C. § 7664, on which Section
Act was modeled. Citations to the Clean
to
interpreting sections 301 and 204 of the Act); American Meat
Institute v. EPA, 526 F.2d 442, 451-52 (7 Cir. 1975) (relying or.
written comments by Muskie, as “the principal author of the Act”).
l5a
tinuous and intermittent violations.” Jd. at 163. Mr.
Muskie’s comments indicate quite strongly that the Act
was intended to permit citizens, as private attorneys gen-
eral, to sue violators even in the absence of a violation
that is ongoing at the time suit is filed.
4. The Hamker Decision
Gwaltney relies heavily on Hamker v. Diamond Sham-
rock Chemical Co., 756 F.2d 392 (5 Cir. 1985). As sug-
gested in Section IIA(1) above, we find the reliance to
be misplaced. Hamker involved a citizen suit seeking
civil penalties, an injunction, and damages by way of
pendent state law claims, as a result of an oil spill, a
one-time occurrence that took place many months before
suit was filed. There was no effluent permit or com-
pliance order involved. The Hamker court relied chiefly
on the “ordinary meaning” of the statute and on Middle-
sex County Sewerage Auth. v. National Sea Clammers
Ass’n, 453 U.S. 1 (1981), in concluding that prospective
relief is the only kind of relief authorized by the Act’s
citizen suit provision, and that civil penalties are avail-
able “only as prospective relief.” 756 F.2d at 398-99.
Because no permit violation was involved in Hamker,
because only a single long-past and non-recurring dis-
charge (for which not even a good faith allegation of a
possible continuing violation could have been made), and
because the Hamkers failed to allege a violation of any
effluent standard or limitation under the Act, it could be
argued that’ Hamker is distinguishable on its facts and
on that basis inapplicable to the case before us. But even
if not distinguishable, we decline to follow it to the extent
that it holds that section 505(a) of the Clean Water
Act does not permit citizen suits seeking civil penalties
for past violations. As we have discussed above, we dis-
agree that the “ordinary meaning” of the statute re-
quires the adoption of the rule espoused in Hamker.
The language “to be in violation of” is at least am-
biguous, and our reading of the statute as a whole and
16a
its legislative history lead us to interpret that language
as permitting citizen suits for violations occurring soiely
in the past.
In addition, we find the reliance by the Hamker court,
and by the defendant in the case bejore us, on the Su-
preme Court’s opinion in Middlesex to be misplaced. The
issue in Middlesex was whether the Clean Water Act,
with its “elaborate enforcement provisions,” 453
at 13, authorized an implied private cause of action for
damages as well. The Court held that it did not.
Court, in fact, acknowledged the availability of civil
penalties under the Act. Jd. at 14 n.25.
™ Gwaltney’s reliance on City of Evansville v. Kentucky Liquid
Recycling, 604 F.2d 1008 (7 Cir. 1979), cert. demed, 444 ;
(1980), is similarly flawed, as the issue in that case also was
also Illinois v. Outboard Marine Corp., 619 F.2d 623, 631 (7 Cir.
1980), vacated and remanded, 453 U.S. 917 (1981), on remand,
Corp., 21 Env't Rep. Cas. (BNA) 1390, 1398 (D.R.I. 1984) (citing
City of Evansville).
17a
If section 1365 were interpreted as permitting citi-
suits for civil penalties for past violations, all
be
zen
state damage claims which could brought under
could
power
Gibbs, 383 U.S. 715, 726 (1966) (“It has consistently
been recognized that pendent jurisdiction is a doctrine
of discretion, not of plaintiff's right.”) In the case of
the Clean Water Act, under which it was the intent
of ;
|
|
:
the lure of obtaining damages in federal
avoid the “floodgates” problem envisioned by the Hamker
court.
In sum, we hold that citizen suits like the one at bar,
seeking civil penalties for permit violations committed
entirely in the past, are permitted under section 505(a).
Gwaltney has not asserted, and indeed could not assert,
given section 505(a)’s express provision for “appropriate
civil penalties under section [309(a), 33 U.S.C. § 1319
18a
(d)),” that civil penalties may never be assessed in a
citizen suit. However, the narrow reading of
505(a) that it urges, creating jurisdiction to
such penalties only in suits involving violations that con-
tinue up to the time suit is filed, places
limitation on the use of citizen suits and
as a toul of enforcement and deterrence.
B. Gwaltney’s Violations of Monthly Average
Limitations
28
3
33
U.S.C. § 1319(d) for exceeding a monthly average limita-
File HARM Heise Hi
i ie i ih Hash iti a ie I
pies Hata it it
iy MERU ppiiig tte by
, iH: RADY bun au ae
ure un
HITE HUB ; HAE bE a2 |*2085
HH Hie aT.
Dae
ce ae iUtiagtt i |
2la
maximum penalty), even though it never once exceeded
its daily maximum.”
The seeming unfairness of the situation in Gwaltney’s
hypothetical dissipates when one recalls that § 1319(d)
serves only to set a maximum penalty. Within this limit,
the district court in its discretion may set an “appropri-
ate” penalty. A district court, applying the approach to
penalty assessment that we adopt, could (and indeed
should, all else being equal) impose a substantially -
17 This hypothetical was advanced by Gwaltney in the district
court. The district court attacked Gwaltney’s use of this hypo-
thetical as an attempt to suggest that environmental damage is
caused, and penalties therefore appropriate, only for violations of
daily limitations. As the district court noted, 611 F. Supp. at 1553,
this suggestion ignores the concept that both large, isolated dis-
charges and moderate, long-term discharges are potentially harmful.
This is presumably why NPDES permits like Gwaltney’s contain
monthly average limitations that are substantially lower than the
daily limitations.
In its brief on appeal, Gwaltney presents a slightly different
hypothetical, tied somewhat more closely to the realities of this
case: A polluter calculates its monthly average on the basis of six
monthly samples. On five of the six sample days, little or no
effluent is discharged, and on the sixth, the discharge is so great
that the monthly average limitation is exceeded for the month.
There is thus on!y one identifiable day of excessive discharge; yet,
the polluter is subject to a maximum penalty corresponding to
thirty days of violation.
Because it involves damage caused by a single event, rether
than by continuous discharges, this hypothetical is not as vulnerable
as the first to the district court’s criticism. On the other hand,
EPA regulations provide for monthly average permit limits only
for pollutants that are discharged continuously, 40 C.F.R. § 122.45
(d) (2), so that a polluter who discharges in a pattern like that
posited in Gwaltney’s second hypothetical might not be subject
to a monthly average limit in the first place. In any event, scenarios
like Gwaltney’s second hypothetical do not require us to reject the
district court’s approach to setting the maximum penalty. As dis-
cussed in the text, while the court may set a large maximum
penaity in such a case, it retains discretion to assess a penalty
much smaller than the maximum, as the situation requires.
22a
smaller penalty on Gwaltney’s hypothetical polluter than
on either of the polluters in the first two hypotheticals
discussed.
Again, what is important is to adopt an approach that
will give district courts the continuity of possibilities
necessary for them to assess appropriate sanctions in
every case. The district court’s approach achieves this
end.
C. Amount of Penalty
Gwaltney contends that, in a number of ways, the dis-
trict court abused its discretion and exceeded its statu-
tory authority in establishing the amount of the penalty
in this case.
First, Gwaltney argues that, in assessing a part of the
penalty, the court impermissibly shifted the burden of
proof to Gwaltney. The district court found that Gwalt-
ney was responsible for thirteen violations of daily lim-
itations occurring during months in which the monthly
average limitation was not violated. Gwaltney’s DMR’s
did not show on precisely which days the violations oc-
curref=they could conceivably have occurred on as few
as seven days. See 611 F. Supp. at 1556 & n.15. The
court presumed that they occurred on thirteen separate
days, leaving it to Gwaltney to demonstrate through
records solely within its control, that there was some
“overlap” “ of violations, thus reducing the total number
of days of violation. Because Gwaltney failed to come
forward with evidence showing overlapping violations,
the district court relied on the presumption that thirteen
separate daily violations had occurred.
* The question of “overlap” is only pertinent in light of the
district court’s holding that $10,000 is the maximum penalty per
day regardless of how many different violations occurred on that
day. The parties have not raised this issue on appeal. See supra
note 8.
23a
We find no infirmity in the district court’s approach.
Plaintiffs, by showing that thirteen violations of daily
maximums had occurred, had in essence established a
prima facie case of thirteen daily violations. Requiring
Gwaltney to come forward with some evidence to rebut
this is not impermissible, particularly where, as here,
such information would appear to be peculiarly within
the knowledge of Gwaltney. See Campbell v. United
States, 365 U.S. 85, 96 (1961) (“The ordinary rule,
based on notions of fairness, does not place the burden
upon a litigant of establishing facts peculiarly within
the knowledge of his adversary.”) (quoting United States
v. New York, N.H. & H.R.R., 355 U.S. 253, 256 n.5
(1957)). Moreover, by requiring permit holders to
monitor their discharges and report them through DMR’s,
33 U.S.C. § 1318(a) (3) (A); 40 C.F.R. § 122.41(1) (4),
the Act itself places on the permit-holder a burden of
showing compliance with the permit’s limitations. In
addition, as we have stressed repeatedly, deciding the
number of days of violation is relevant only in determin-
ing the maximum allowable penalty, and the district
court is not obliged to assess the entire maximum amount.
For these reasons, the court’s requiring Gwaltney to show
that the actual number of days of vivlation was less than
the thirteen violations that appeared on the face of its
DMR’s, does not require a reassessment of the penalty
imposed.
Gwaltney’s remaining contentions regarding the penalty
assessed require little discussion.
As noted above, the district court and the parties
agreed that in assessing penalties the court would use
the EPA’s Civil Penalty Policy, 41 Env’t Rep. (BNA)
2991 (Feb. 16, 1984), as a guideline. Gwaltney now com-
plains that in adjusting the penalty to reflect the “grav-
ity” of Gwaltney’s violations, the court exceeded the
percentage increase recommended by the EPA policy.
The EPA policy, however, is an internal document for
24a
agency guidance, and is not binding on the district court.
The court agreed only to use the policy as a guideline,
see 611 F. Supp. at 1556, and is not limited strictly by
its terms in imposing an “appropriate” civil penalty. 33
U.S.C. § 1365 (a).
Next, Gwaltney contends that the district court abused
its discretion by assessing a penalty that failed to further
the goal, espoused in the EPA Civil Penalty Policy, of
“fair and equitable treatment of the regulated com-
munity.” Specifically, Gwaltney complains that the pen-
alty assessed is much greater than those assessed in a
handful of “similar” cases decided five or more years
prior to this one. We do not undertake a detailed com-
parison of this and prior cases in order to determine the
propriety of the penalty assessed below. Each case must
“stand on its own merits, and here the district court ap-
plied the agreed upon guidelines in a thorough, thought-
ful, and rational manner. We do not view the outcome
thus reached as arbitrary or an abuse of discretion.
Gwaltney also complains that the district court abused
its discretion when, in adjusting the penalty to account
for delays in compliance, it assessed a penalty for each
day of unjustified delay, regardless of whether a viola-
tion actually occurred on each of those days. Because 33
U.S.C. § 1819(d) speaks in terms of penalties per day of
violation, Gwaltney contends that the court erred in im-
posing penalties for days on which no violation occurred,
and that its penalty should be reduced accordingly. We
disagree. The Act speaks in terms of days of violation
only for the purpose of establishing the maximum penalty
assessable. Jd. The district court properly considered
Gwaltney’s days of violation in setting a maximum pen-
alty of $6.66 million for 666 days of violation. Within
that framework the court was permitted, in its discre-
tion, to craft an “appropriate” penalty. Jd. § 1365(a).
This the court also did when, pursuant to the EPA Civil
Penalty Policy, it penalized Gwaltney for unexcused de-
lays in improving its effluent treatment systems. We see
no abuse of discretion in the district court
|
such a suit.
We hold also that for the purpose of fixing an “ap-
propriate” civil penalty which, pursuant to 33 U.S.C.
§ 1319(d), may be fixed at a maximum of $10,000 per
proach in setting Gwaltney’s maximum penalty, and did
not abuse its diseretion in calculating the penalty actu-
ally assessed against Gwaltney.
AFFIRMED.
26a
APPENDIX B
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
RICHMOND DIVISION
Civil Action No. 84-0366-R
GWALTNEY OF SMITHFIELD, LTp.,
Defendant.
[Filed June 26, 1985]
MEMORANDUM
Water Act, 33 U.S.C. §§ 1251 et seg. (the “Act”). The
Court has already determined, in granting plaintiffs’
motion for partial summary judgment on the issue of
liability, that defendant has violated the Act; the parties —
do not now contest liability. They do, however, differ
over (i) defendant’s maximum liability for its violations
and (ii) the appropriate penalty for those violations.
Plaintiffs contend that defendant is subject to a maxi-
mum of $8,300,000 in civil penalties, and that the full
measure of liability should be imposed. Defendant, on
the other hand, contends that it is subject to a maximum
Plaintiffs filed a short response, also had filed a trial
memorandum on the day prior to trial. Several months
later, defendant filed a motion to dismiss based on its
BACKGROUND
This suit is a citizen enforcement action—a “citizen
suit”—authorized by Section 505 of the Clean Water
Act, 33 U.S.C. § 1365. Plaintiffs are two non-profit cor-
porations dedicated to protecting natural resources: the
From October 27, 1981 until May 15, 1984, Gwaltney’s
plant exceeded its discharge limitation for a variety of
pollutants* on a number of occasions._ Gwaltney itself
toring
ports (DMRs), as required by law.’ Prior to October 27,
1981, Gwaltney was not responsible for the pollution dis-
that it was aware of ITT-Gwaltney’s record of non-
compliance. Only the violations subsequent to Gwaltney’s
assumption of responsibility on October 27, 1981, are at
issue here, however.
* NPDES Permit No. VA 0002844.
* Those pollutants are: (i) feeal coliform: (4) chlorine (Ci,) ;
(ili) total suspende! solids (TSS); (iv) total Kjeldah! nitrogen
(TKN) ; and (v) ofl and grease.
* Section 1318(a)(3)(A) of Title 33 mandates, among other
things, that the Administrator of the Environmental Protection
Agency “require the owner or operator of any point source” to
and
:
7
|
.
gust 2239983929829 £54573
ie PTE Agu
3 = ¢ - ef —
HAP a5) lt aa 2
cadagd $2,828) ,98533! sf
patsy Hee Pins
Heaeeeeelae
ed UNG Tabata
1: iy i: fay Hit a2ierh! ge!
id | fi jiaaerill
30a
It is clear that, at least under the Clean Water Act,‘
a citizen enforcer can only establish standing if it meets
the requirements of “injury in fact” set forth in Sierra
Club v. Morton, 405 U.S. 727, 734-35 (1972). See, e.g.
Sierra Club v. SCM Corp., 747 F.2d 99, 107 (2d Cir.
1984). An organizational plaintiff, such as CBF or
NRDC, can establish “injury in fact” through injury to
their members as weil as through injury to the organiza-
tion itself. See, e.g., Sierra Club v. Morton, 405 U.S. at
739. The parties do not dispute these basic principles of
standing.
The Court need not consider the dispute over whether
plaintiffs have established standing to sue in their own
right, because it concludes that they have established
standing to sue on behalf of their members. They estab-
lished such standing when the Court granted their motion
for summary judgment on the issue of liability. In sup-
port of that motion, plaintiffs included an affidavit of
one of their counsel stating:
Members of CBF. reside in Virginia, in the vicinity
of the Pagan River, and recreate in, on, or near,
and otherwise use or enjoy the Pagan River and the
water system of which it is a part... . The interests
of CBF and of CBF’s members have been, are being,
and will be adversely affected by [Gwaltney’s} fail-
ure to comply with its NPDES permit requirements.
The affidavit included an identical paragraph about mem-
bers of NRDC. Defendant failed to dispute this in any
* Standing requirements may be more lenient for citizen enforcers
suing under the citizen suit provisions of other environmental
statutes, where-—unlike the Clean Water Act § 505(g¢), 33 U.S.C
§ 1365(g)—there is no limitation of “citizen” to a person “having
an interest which is or may be adversely affected.” See, ¢.g., Clean
Air Act § 304(a), 42 U.S.C. § 7604(a) (1982) (“any person” can
sue); Metropolitan Washington Coalition for Clean Air v. Wash-
ington, D.C., 611 F.2d 809, 814 (D.C. Cir. 19756) (discussing stand-
ing requirements under the Clean Air Act).
aaayngy Teepgy WEEN y
ft ER BALI AED i
Hii a rithe at geeshF. 228s
Ht ci HET vi asnttl He
PUR bunt BRUEG he
iil i shai = ee isis3 TEES be +
EF z & “yd E: gt tee 2s $= = ik
Higied feet ipeeda a ih
sian itt ja astald a
Lee TT
RR
ai 43 S23 5°8535 +4 aj :
7 attttat He ital ih ih
i alee uit Mi
Be id it
. Ht i fle} tiles is! a iF
aL a a
lin iit berdaal Hill fifa HHI
tT
HH ti ;
| 1 i ie Ht
re
chip init
ae at
Lh
of the Pagan River.
ment clearly supports Gwaltney’s position. Other courts
besides one have perceived ambiguity in the statutory
language a issue. See Student Public Incerest Research
Group of New Jersey, Ine .v. Monsanto Co., 600 F. Supp.
1474, 1476, (D.N.J. 1985); Sierra Club ». Raytheon, 22
Env. Rep. Cases 1050, 1064 (D. Mass. 1984). The words
“to be in violation” may reasonably be read as compre
hending unlawful conduct that occurred solely prior to
to the filing of the lawsuit as well as unlawful conduct
that continues into the present. For example, a person
who under-pays taxes one year remains “in violation”
of the relevant tax laws, even though that person pays ~
the proper amount of taxes for the following year. Simi-
larly, a polluter that exceeds various discharge limita-
tions in its NPDES permit, such as Gwaltney, arguably
remains “in violation” with respect to those excesses,
even though in subsequent years it brings itself into com-
pliance. Indeed, its discharge violations remain on the
records, and the effects of the excess discharges may
The district courts shall have jurisdiction .. . to
apply any appropriate civil penalties under (33
US.C. § 1319/4) }.
33 U.S.C. §1365/a). Section 1319/d) authorizes civil
penalties “not to exceed $10,000 per day of . . . viola-
tion.” 33 U.S.C. § 1319/d). Neither Section 1319/d) nor
the citizen-suit provision itself expressly limits the im-
position of such civil penalties to polluters that persist
their unlawful conduct up to the time the
filed. On the contrary, the absence of any
tion implies that Congress intended to
In view of the ambiguity the statutory language,
however, the Court has also reviewed relevant portions
do not discuss any requirement that such suits must be
based on unlawful conduct occurring at the time the suit
See H.Rep. No. 911, 92d Cong., 2d Sess. 133
(1972), reprinted in 1 A Legislative History of the
context of acknowledging the general availability of civil
penalties—implies that such a requirement was never
contemplated.
The legislative history provides direct support, as well
as support by implication, for the view that the Clean
Water Act authorizes citizen suits based on unlawful
conduct that occurred in the past regardless of whether
the conduct continues through the time the complaint is
filed. Senator Muskie, the manager in the Senate of the
bill that added the citizen suit provision to the Act,
stated:
_. . a citizen has a right under Section 505 to bring
an action for an appropriate remedy in the case of
any person who is alleged to be, or to have been, im
violation, whether the violation be a continuous one,
or an occasional or sporadic one.
See 118 Cong. Rec. 33,700, reprinted in 1 Legislative
History at 179 (emphasis added). Gwaltney acknowl-
edges that Senator Muskie’s remark supports plaintiff's
position and undermines its own. But it attempts to
ellminate the force of his explication by noting that it
is the remark of only an individual legislator. To be
sure, a court cannot allow colloquies among legislators
to materially alter clear statutory language. See, ¢.g.,
Regan v. Wald, —— US. , , 52 U.S.L.W. 4966,
4970 (1984). But such is not the case here. Rather,
Senator Muskie’s remark lends further support to a
plausible reading—and one which is uncontradicted by
the statute itself and other legislative materials '"—of
ambiguous statutory language.
7 Gwaltney also quotes # remark of Senater Bayh in support of
its position. Senator Bayh’s remark is s follows:
These sorts of citizen suits—in which a citizen can obtain an
injunction but cannot obtain money damages for himself—are
a very useful additional tool in enforcing environmental pro-
tection laws.
1 Legislative History at 221. Gwaltney argues that the fact that
Senator Bayh did not mention civil penalties—and did mention
injunctive relief—somehow indicates that Senator Muskie’s expli-
cation was an inadvertent misstatement. The Court disagrees.
Senator Bayh’s statement hardly contradicts Senator Muskie’s
expheation. It is, rather, an accurate statement of a citizen-
enforcer’s remedies under the Clean Water Act with respect to
injunctions and money damages—and simply does not address the
circumstances when a citizen suit for civil penalties may be
maintained.
Gwaltney also calls attention to occasional references in the
legislative history to “abatement” actions. See S.Rep. No. 414,
92d Cong., ist Sess. 79-82, reprinted in 2 Legislative History at
1497-1500. Such references, however, do not persuade the Court
that abatement of continuing unlawful conduct was the only avenue
of relief Congress contemplated when it authorized citizen suits
under the Act. See Student Public Interest Research Group of New
Jersey v. Monsanto Co., 600 F. Supp. 1474, 1476 (D.NJ. 1985).
87a
A reading of the citizen-suit provision that would au-
thorize suits for civil penalties against polluters for past
unlawful conduct regardless of their compliance status
when the suit is filed is also consistent with one of the
primary policy objectives inherent in the concept of citi-
zen suits: deterrence of violations. Indeed, unless citi-
zens may sue for civil penalties in such circumstances,
citizen suits would provide little, if any, additional- in-
centive for polluters to comply with their discharge limi-
tations until a citizen suit is actually commenced. See
also Monsanto, supra, 600 F. Supp. at 1476-77; Sierra
Club v. Aluminwm Company of America, 585 F. Supp.
842, 854 (N.D.N.Y. 1984).
If citizen suits under the Act were limited to situa-
tions where the polluter is engaged in unlawful conduct
when the suit is filed, the deterrence effect of citizen
suits would also be undermined by the evidentiary dif-
ficulties citizen enforcers would fact in establishing that
a polluter is currently discharging unlawfully. As the
Senate Report recognized, one of the keys to the success-
ful functions of the Act’s citizen suit provision is dis-
closure of a polluter’s discharge information. See S.Rep.
No. 414, 92d Cong., 1st Sess. 81 (1971) reprinted in 2
Legislative History at 1499 (“The information and other
disclosure provisions required throughout the bill are
important to the operation of this provision.”). And, in-
deed, Gwaltney’s DMRs form the basis of this lawsuit.
But, as plaintiffs have pointed out, such reports are not
available until at least a month—and sometimes more—
after the discharge occurs. Gwaltney’s proffered con-
struction of the Act would engage the litigants in dis-
covery battles over whether a polluter is no longer dis-
charging unlawfully; and it would engage the courts in
a search for standards to apply in determining whether
a polluter’s conduct can fairly be viewed as continuing
in violation. See Hamker v. Diamond Shamrock Chemi-
cal Co., 756 F.2d 392, 399 (5th Cir. 1985) (Williams,
38a
J., concurring) (attempting to define what constitutes
“in violation”); Friends of the Earth v. Facet Enter-
prises, Inc., 22 Env. Rep. Cases 1143, 1145 n. 1 (W.D.N.Y.
1984) (“... it is difficult for a plaintiff to verify that
a violation is occurring at the very time that. plaintiff
is filing a notice of intent to sue... . I am not prepared
to draw a line that Congress has not drawn, defining the
point at which violations are sufficiently “recent” to
form the basis for a citizen suit. To my mind, that line
has been drawn already [by the relevant statute of
limitations].”) Such a situation would also be contrary
to Congress’s understanding that citizen suits involve
“manageable and precise benchmarks for enforcement.”
S.Rep. No. 92-414, Ist Sess. 81 (1971), reprinted in 2
Legislative History at 1499.*
®The problem of determining whether a violation is a “con-
tinuing” one is highlighted well in this case. Plaintiffs filed this
suit in mid-June of 1984. With a history of violations of its
TKN limitations in the wintertime, Gwaltney had just experienced
another winter of repeated violations of its TKN limitations,
despite the changes it had implemented in its wastewater treatment
system to address the problem. At the time of trial in December
of 1984, one of Gwaltney’s own witnesses—Mr. Sneed—expressed
doubt as to whether Gwaltney would meet its TKN limitations.
It was not until Gwaltney had experienced a full winter without
problems that it could make its motion to dismiss based on its
present compliance, with a secure belief that it was indeed in
compliance. Thus, plaintiffs’ allegation in the complaint, that
Gwaltney was continuing to violate its NPDES permit when plain-
tiffs filed suit appears to have been made fully in good faith. On
these facts, the Court believes that even if Gwaltney were correct
that a district court has no jurisdiction over citizen suits based
entirely on unlawful conduct that occurred entirely in the past, the
Court would still have jurisdiction here. A useful analogy is the
manner in which the federal courts treat the jurisdictional amount
requirement in diversity cases. Gwaltney has raised this analogy
in support of its position that the Court is without jurisdiction
here. The Court disagrees, and concludes that the analogy supports
the position that it does have jurisdiction here.
In diversity cases, the question whether the jurisdictional amount
is satisfied—and whether the court, ultimately, has jurisdiction—is
Gwaltney is not, however, without authority for its
position. It relies heavily on Hamker v. Diamond Sham-
rock Chemical Co., 756 F.2d 392 (5th Cir. 1985). In
that case, the Court of Appeals for the Fifth Circuit held
that a person cannot maintian a citizen suit under the
Clean Water Act unless the polluter’s conduct is unlaw-
ful at the time the suit is filed, and cannot be brought
First, the Court notes that the panel concluded the
statutory language is not sufficiently ambiguous to
any question about its proper meaning. See id. at
statutory scheme centers primary enforcement respon-
sibility with the states and the Administrator of EPA,
citizens are not authorized to
citizens must first notify the
and the alleged polluter and
public enforcement authorities the opportunity to
before proceeding. See 38 U.S.C. § 1365(b) (1) (A).
H
|
Z
z
7
¢
E
4
z
74
i
z
|
3
ment authorities—of its intent to sue, the statu
templates that a citizen loses the right to
lator brings itself into compliance before
elapses, just as the citizen loses the right
governmental authorities commence prosecu
before sixty days elapses. /d. at 396. This reasoni
is unpersuasive. The statute expressly provides that pu
citizen suit, see 33 U.S.C. § 1865(b) (1) (B), but does not
anywhere state that the violator’s compliance within the
sixty-day period deprives a citizen of the right to sue.
It thus appears inappropriate to infer that compliance
soks
ries
egies
7 ®
Hh HHT 1 Hen
1 fat sie iit a lp + aL
eee brit bel Pr t ut +
iH dytlisa ti Hit wit Hi
th atalintiplit ii ue Heese |
ya
42a
Gwaltney also relies on City of Evansville, Indiana v.
Kentucky Liquid Recycling, 604 F.2d 1008 (7th Cir.
1979), cert. denied sub nom Louisviie and Jefferson
County Metropolitan Sewer District v. City of Evans-
ville, Indiana, 444 U.S. 1025 (1980). In that case, the
Court of Appeals for the Seventh Circuit remarked that
the Clean Water Act “does not provide for suits against
parties alleged to have violated an effluent standard or
limitation in the past or for recovery of damages.” /d.
at 1014. That remark, however, insofar as it can be said
to address citizens for civil penalties for past violations,
is only dicta. The issue in the case was whether citizen
suits may be brought for damages. The panel did not
at all analyze whether the statute authorizes citizen suits
for civil penalties for past violations."° The case of Paw-
tuxet Cove Marina v. Ciba-Geigy Corp., 21 Env. Rep.
Cases 1393 (D.R.I. 1984), which Gwaltney also cites,
relics primarily on City of Evansville to reach its con-
clusion. See id. at 1394 (referring to cases cited in
magistrate’s decision, 21 Env. Rep. Cases 1390, 1391).
Accordingly, the Court does not find the case to be per-
suasive.
Finally, Gwaltney relies on Middlesex County Sewer-
age Authority v. National Sea Clammers Association,
453 U.S. 1 (1981). Gwaltney focuses on Justice Powell’s
1© Plaintiffs argue that a case decided by the Court of Appeals
for the Seventh Circuit subsequent to City of Evansville implicitly
rejects the position with respect to citizen suits based on past vio-
lations that City of Evansville took. That case, People of the State
of Illinois v. Outboard Marine Corporation, Inc., 680 F.2d 473
(7th Cir. 1982), is not as on point as plaintiffs argue. The case
does reflect the understanding that the United States can sue under
the Clean Water Act for injunctive and other relief based on past
discharges, regardless of a polluter’s present compliance. See id.
at 480-81. It also reflects the understandiz¢ that citizens may
intervene in such cases. Jd. at 480. It simply does not address the
question whether citizens themselves can sue for civil penalties
based on a polluter’s unlawful conduct, that occurred entirely in the
past, however.
43a
observation that “this provision allows suits under the
Act by private citizens, but authorizes only prospective
relief... .” Id. at 6. This observation, however, like the
semark of the Seventh Circuit in City of Evansville,
arose in the context of whether a citizen enforcer may
sue for damages. The Supreme Court, like the Seventh
Circuit, concluded that one may not. Later in the opinion
it did recognize that civil penalties are authorized in
citizens suits. See id. at 14 n. 25. It had no occasion to
consider or remark about whether a citizen enforcer may
sue a polluter for civil penalties based on past violations.
III. Maximum Luwbility.
The number of days during which a polluter violates a
limitation in its permit sets the polluter’s maximum lia-
bility in civil penalties for violating that limitation. The
subsection of the Clean Water Act authorizing civil pen-
alties states that a polluter in violation of, among other
things, permit limitations such as those forming the basis
of this suit “shall be subject to a civil penalty not to
exceed $10,000 per day of such violation.” 33 U.S.C.
§$ 1319(d). Determining the number of days involved in
a given violation is thus an important aspect of assessing
civil penalties. Determining whether, and in what cir-
cumstances, a polluter can be subjected to a penalty of
greater than $10,000 per day for permit violations is also
important. The parties dispute the law on both points.
A. Number of days involved for violating a monthly
average. Gwa'tuey has violated its “monthly average”
permit limitations for several substances on a number
of occasions. The “monthly average” of a substance re-
flects the averege amount (or concentration, where the
-ubstance is measured by concentration instead of by
amount) of the substance discharged per day, based on
an average of measurements taken for that substance
over the course of a month. The monthly average for
the pollutants at issue in this case is roughly half of the
eens
44a
maximum daily amount allowed.’ Gwaltney argues that
a violation of a monthly average constitutes a single day
of violation. Plaintiffs, on the other hand, maintain that
a violation of a monthly average constitutes thirty days
of violation.
As discussed above, the relevant section of the Clean
Water Act authorizing eivil penalties reads that: “any
person who violates . . . any permit condition or limita-
vn... Shall be subject to a civil penalty not to exceed
$10,000 per day of such violation.” 33 U.S.C. § 1319(d).
Thus, to determine the maximum authorized penalty for
the violation of a monthly limitation, the Court must
consider how many days are involved in such a violation.
It is difficult for this Court to imagine how the violation
of a monthly limitation involves any number of days
other than the number of days in that month. Vio.ating
a monthly limitation, then, subjects a polluter to a maxi-
mum penalty of $300,000. Similarly, a violation of a
weekly limitation would, it seems, necessarily involve
seven days. At least one other district court has reached
the same conclusion. See United States v. Amoco, 580
F.Supp. 1042, 1045 (W.D. Mo. 1984).
Although it cites neither cases nor legislative history in
support of its position, Gwaltney contends that this con-
clusion is nevertheless wrong primarily because it be-
11 The average and maximum permit limitations for four of the
pollutants at issue in this case read as fol'ows on Gwaltney’s
DMR for May, 1984: (i) for TSS: 228.000 KG/D (daily average
over a month), 455.000 KG/D (daily maximum); (ii) for fecal
coliform: 200.0000 N/CML (daily average over a month), 400.000
N/CML (daily maximum); (iii) for TKN: 109.0000 KG/D (daily
average over a month), 219.0000 KG/D (daily maximum); (iv)
for oil and grease: 78.0000 KG/D (daily average over a month),
156.0000 KG/D (daily maximum). For chlorine, (Cl,), there was
no average limitation: rather, a daily minimum (1.5000 MG/L)
and maximum (2.5000 MG/L) were set.
45a
lieves it can be unjust.” To illustrate its point, Gwaltney
suggests a hypothetical: a polluter discharges, for twenty-
nine days of a month, 98% of the amount that it must
average each day in order to meet its monthly average;
on the last day, however, the polluter discharges 180%
of that amount. Because of the last day’s discharge, the
polluter would violate its monthly average; yet, if its
permit allowed a daily maximum twice as great as the
monthly average (as Gwaltney’s does), the polluter would
not have violated its daily maximum for the substance
at all during the entire month. In Gwaltney’s view, sub-
jecting the polluter to thirty days’ liability because of the
monthly violation is unjust, especially in light of the fact
that the polluter never exceeded its daily maximum.
12 Gwaltney raises two other arguments against treating the vio-
lation of a monthly limitation as a thirty-day violation.
First, Gwaltney contends that to characterize a violation of a
monthly limitation as thirty days of violation is contrary to the
principle that penal statutes are to be construed strictly. See,
é.g., Commissioner of Internal Revenue v. Archer, 361 U.S. 87, 91
(1959). Adhering to this proposition does not affect the Court’s
conclusion. The words of the statute authorize a penalty of up to
$10,000 “per day of such violation.” Because a violation of a
monthly limitation necessarily involves a violation over an entire
month, a maximum penalty of $10,000 per day of the month is
plainly within the words of the statute and therefore does not
violate any principal of strict construction.
Second, Gwaltney argues that one of the stipulations, in con-
junction with the plaintiffs’ response to an interrogatory, precludes
plaintiffs from arguing that Gwaltney’s violation of a monthly
limitation subjects Gwaltney to a penalty for every day of the
month. The parties stipulated that 160 violations had occurred,
and plaintiffs had indicated in response to an interrogatory that
“the total dollar amount of civil penalties” they would seek would
be “$10,000 per violation.” Some of the violations that were stipu-
lated were, of course, violations of monthly limitations. Gwaltney
is correct that plaintiffs now take a position on penalties that is
technically inconsistent with their interrogatory response because
they said “$10,000 per violation” instead of “$10,000 per day of each
violation.” But such an event, parties’ responses to interrogatories
do not preclude this Court from imposing appropriate penalties.
46a
The Court disagrees. Part of Gwaltney’s argument is
based on the suggestion that no real harm is being done
where maximum daily limitations are not violated. But
the mere fact that a daily maximum is not violated does
not mean that the polluter’s discharges are harmless.
Daily maximums for the pollutants at issue are no doubt
more lenient than the monthly average because the en-
vironment may be able to absorb a relatively high dis-
charge in a single day without incident—while a sub-
stantially lower discharge over the course of a month
may present an environmental problem. In any event,
the water pollution authorities have established the al-
lowable discharge levels for various time intervals in
order to ensure that water quality standards are met.
It is not for the district court to decide, in a citizen suit
proceeding, that a permit limitation an agency has fixed
is unnecessary.
Another part of Gwaltney’s argument is based on the
fact that only on one day did its hypothetical polluter
exceed the amount that it needed to maintain each day
in order to meet the month’s average. But this too is
unpersuasive. The average is based on discharges over
the entire month. When a polluter violates a monthly
average, every day of its discharges contributes to the
violation, even if most of the discharges are within the
average that the polluter needs to maintain in order to
stay within the monthly limitation."
13 Gwaltney also suggests that its violations of a monthly average
cannot be presumed to be a violation during every day of the
month, because the average may be computed based on measure-
ments taken less frequently than every day. The Court recognizes
that Gwaltney’s permit requires it to monitor many of its dis-
charges only three days per week, rather than every day. But
even though those periodic tests do not establish with absolute
certainty that Gwaltney’s actual monthly average exceeded the
permitted amount, it is nevertheless reasonable to presume that
they do establish such a monthly violation—especially in light
of Gwaltney’s failure to introduce more accurate evidence to the
contrary.
47a
The problem with Gwaltney’s position is further il-
lustrated when one considers a counter-hypothetical: the
polluter nearly exceeds—but does not pass—its daily
maximum every day of a month. Such a polluter would
far exceed the monthly average, and would be liable for
violating that limitation. But Gwaltney’s position, if
adopted, would constrain a court to treat such conduct as
one single day of violation, thereby preventing a court
from imposing over $10,000 in penalties for a full month
of substantial discharges. Such a limitation does not
strike this Court as a sensible one, much less as con-
sistent with the statute.
Ultimately, the district court has discretion to deter-
mine the appropriate penalty under Section 1319(d) for
a day of violation. As the district court noted in Amoco,
merely because a polluter is subject to $300,000 in penal-
ties for violating a monthly standard does not necessarily
mean that those penalties will be imposed. See Amoco,
supra, 580 F. Supp. at 1045. The $300,000 is a maxi-
mum penalty under the statute, not a mandatory one.
See 33 U.S.C. § 1319(d). Thus, the district court can
consider any appropriate factors in arriving at a penalty.
But it ought not to have its hands tied, when crafting
a penalty for a violation of a monthly limitation, by a
$10,000 limit.
B. Maximum penalty per day where multiple viola-
tions occur within a day. In some instances, Gwaltney
violated discharge limitations for several substances on
the same day. Gwaltney argues that the Clean Water Act
limits its liability to $10,000 per day, regardless of the
number of its violations on a given day. Plaintiffs, on
the other hand, argue that the Act only limits a per-
mittee’s liability to $10,000 per day per violation of the
discharge limitations on a given substance.
The relevant statutory provision states that:
Any person who violates . . . any permit condition
or limitation [implementing any of several enumer-
48a
ated section of the Clean Water Act, in a permit
such as Gwaltney’s NPDES permit] . . . shall be
subject to a civil penalty not to exceed $10,000 per
day of such violation.
33 U.S.C. §1319(d). There is no question here that
Gwaltney’s NPDES permit is a type of permit encom-
passed under this subsection. Nor is there any question
that all of the limitations at issue in Gwaltney’s permit
are limitations implementing sections of the Clean Water
Act enumerated in Section 1319(d). The parties merely
dispute the proper construction of the phrase “$10,000
per day of such violation.”
Gwaltney relies on United States v. Detrex Chemical
Industries, Inc., 393 F. Supp. 735 (N.D. Ohio 1975).
In that case, the district court rejected the view that 33
U.S.C. § 1319(d) can be read to authorize “$10,000 per
violation per day.” Jd. at 738. The district court first
concluded that the statutory language is ambiguous. See
id. at 736. It next reviewed the legislative history and
found references to the Act’s authorizing penalties up to
“$10,000 per day” and “$10,000 per day of violation,”
without any use of the words “of such violation.” See id.
at 737. It also concluded that $10,000 per day as an
absolute maximu!: provides an adequate deterrent, and
is consistent with other provisions of the Clean Water
Act. See id. at 736-37.
Plaintiffs suggest that the appropriate reading of Sec-
tion 1319(d)—and what the Detrex court intended— was
that Section 1319(d) establishes a maximum daily pen-
alty of $10,000 for violating the limitations on any given
substance, not an absolute daily maximum. For example,
if a polluter violates its limitations for fecal coliform as
well as for TKN on the same day, it is subject to a
maximum civil penalty of $20,000, not $10,000. On the
other hand, if the polluter violates two different limita-
tions—such as the monthly average and the daily maxi-
mum—for TKN only, on a given day, it is subject to no
49a
more than $10,000 in civil penalties for that day of viola-
tion. They rely on dicta in a recent district court case,
United States v. Amoco Oil Co., 580 F. Supp. 1042, 1046-47
n.1 (W.D. Mo. 1984) to support their belief that the Detrex
holding can be harmonized with this construction of Sec-
tion 1319(d), and that this construction is indeed the
correct one. In Amoco, the district judge remarked that
“a good argument can be made for the idea that viola-
tions of the daily limit for two or more different effluents
should be subjected to separate penalties.” Jd. at 1047
n.1 (emphasis original).
The Court does not believe that Detrex can be har-
monized with the plaintiffs’ and the Amoco court’s con-
struction of Section 1319(d). Indeed, the district judge
in Amoco acknowledged that “there are indications” that
Detrex cannot be harmonized with his own (and plain-
tiffs’) proffered construction. Amoco, supra, 580 F. Supp.
at 1047 n.1. In order to harmonize the two, plaintiffs
correctly point out that the reported opinion in Detrex
does not indicate whether the multiple violations per day
that were at issue involved the same substance or differ-
ent ones. They suggest that the “multiple per day viola-
tions” that the case addressed may have involved re-
peated violations on the same day of an hourly limitation
for a single substance. This may be true, of course.
But whether or not the facts were as limited as plaintiffs
suggest, the Detrex court clearly contemplated the issue
in terms of an absolute maximum penalty per day, re-
gardless of whether the limitations violated were for the
same or different substances:
. . . a $10,000 per day civil penalty, regardless of
the number of violations of § 1311, 1312, 1316, 1317,
or 1318 of Title 33 or of any permit condition or
limitation or of any order of the E.P.A. more than
adequately effectuates the Congressional purpose of
a “real” threat of sanction.
Detrex, supra, 393 F. Supp. at 738.
50a
The Court concludes that the Detrex court’s construc-
tion is the appropriate one. Section 1319(d) authorizes
a maximum of $10,000 per day in civil penalties for
violations that are enumerated therein, even where the
defendant has violated discharge limitations for several
substances during the same day.
In view of the contrary suggestion in Amoco, it may be
helpful to explain the Court’s reasoning further. As the
Detrex court remarked, the statute itself is ambiguous.
To elaborate on this, the words “$10,000 per day of such
violation” may be read, as plaintiffs would suggest, to
mean “$10,000 per day per each violation.” On the
other hand, the words may also be read as indicating how
the number of days for a maximum civil penalty of
$10,000 can be imposed should be computed: that is, to
clarify that the maximum civil penalty may be imposed
for each day of an enumerated violation—rather than,
for example, being limited to the day on which a violation
is reported, or to the day on which the Administrator
gives an order that the defendant violates, or to the days
on which the defendant violates some provision of the
Clean Water Act beside the enumerated ones. All of
these alternate readings may have been at least arguable
if the statute had ended with the words “$10,000 per
day,” omitting the words “of such violation.”
In view of the ambiguity in the statute itself, the
Detrex court examined the legislative history and found
several indications that Congress intended to authorize
an absolute daily maximum. See Detrex, supra, 393 F.
Supp. at 737. The Court need not elaborate further on
this point, nor on the other reasons for this construction
that Detrex discusses. Plaintiffs do not raise any per-
suasive reasons for choosing their construction over the
one that Gwaltney has offered and that the Detrex court
and this Court find to be correct. Their primary srgu-
ment is based on the language of Section 1319(d) itself
and the fact that the Amoco court, in dicta, surgested the
5la
same reading based on that language. As the Court has
already demonstrated, however, that language is amen-
able to various other readings as well. Plaintiffs provide
no legislative history in support of their position. And
their primary policy argument is that deterrence is better
effectuated by their position. This, however, is unclear.
A maximum penalty of $10,000 per day may amount to
a substantial deterrent against violations by even the
largest corporations where more than a few days of
violation are involved, as will be come clear infra. The
Court is satisfied that its construction of Section 1319(d)
accurately reflects the intent of Congress.
C. Maximum civil penalty applicable to Gwaltney. In
light of the foregoing principles for calculating days of
violation, the Court is now able to determine the number
of days for which Gwaltney is, in its view, subject to a
$10,000 maximum penalty. The parties have stipulated
to the number of violations, based on Gwaltney’s DMRs
from November, 1981 to August, 1984. Copies of the
DMRs themselves are also in evidence. The DMRs reflect
which of the stipulated violations involve monthly limita-
tions, and which ones involve daily limitations. The
Court has summarized Gwaltney’s violations in Appen-
dix A.
During twenty-two of the thirty-three months for
which are in evidence, Gwaltney violated the monthly
average for at least one substance. During these same
months, Gwaltney almost always violated more than one
daily maximum or monthly average limitation. But
under the principles discussed above, Gwaltney is subject
to no more than $10,000 per day of violation, regardless
of how many violations occurred on that day. There were
653 days in those tweny-two months; ** thus, there were
14 Actually, a total of 669 days are in the twenty-two months
involved. The parties have stipulated, however, that during the
last of those 22 months—May, 1984—no violations occurred after
May 15. Accordingly, the Court has treated Gwaltney’s violation
52a
653 days of violation. For those days of violation, Gwalt-
ney is subject to a maximum penalty of $6,530,000.
In addition, Gwaltney violated daily limitations during
five months when it reported no violation of monthly
averages. In July 1982 it violated two limitations; it also
violated two limitations during each of the three months
following. Finally, Gwaltney violated five daily maxi-
mum limitations in February, 1984, making a total of
13 violations of daily standards during months when no
violations of monthly averages occurred.
The DMRs do not indicate on which day of the month
a given violation occurred, however. Therefore, it is im-
possible for the Court to discern whether any of these
daily violations occurred on the same lays. Conceivably,
there were as few as seven different days of violation.’
Plaintiffs have not demonstrated that each of these
thirteen violations of daily standards occurred on differ-
ent days.
The Court nevertheless believes that it is reasonable to
presume that each of these did occur on a different day.
Gwaltney has contended throughout this litigation that it
is subject to a maximum penalty of $10,000 for a given
day of violation, regardless of how many violations oc-
of its May, 1984 monthly average for TKN as involving only 15
days of violation.
*'In July 1982, for example, there was one fecal coliform viola-
tion and one chlorine violation. Those violations could have occurred
on the same day, because tests for fecal coliform were performed
three tinies per week, and tests for chlorine were performed
hourly, according to the DMRs. Each of the two reported chlorine
violations in August, September, and October, 1984, could have
occurred on the same day because chlorine was tested on an
hourly basis. 7
In February 1984, the single TKN violation and the two fecal
coliform violations could have occurred on the same days as the
three oil and grease violations. Tests for all three substances were
performed three days per week, according to the DMRs.
53a
curred on that day. Gwaltney also has complete access to
any relevant records, so that it could have presented
evidence to show that any of the violations occurred on
the same day, if such evidence indeed existed. In the
absence of such evidence, the Court concludes that Gwalt-
ney’s violations during those five months occurred on
thirteen different days. These violations increase Gwalt-
ney’s maximum liability in civil penalties by $130,000.
Adding this to the maximum penalty for the months
when Gwaltney violated monthly standards, $6,660,000 is
the maximum civil penalty to which Gwaltney is subject.
Iv. Gwaltney’s Penalty.
As the Court has already discussed, the penalty of
$10,000 per day of violation authorized by Section 1319
(d) is a maximum penalty, not a mandatory one. The
Court now faces the task of determining the actual pen-
alty, within the statutory limits, that Gwaltney shall be
assessed. The parties differ markedly on this point.
Plaintiffs urge the Court to impose the statutory maxi-
mum: here, as the Court has discussed, over $6,000,000.
Gwaltney argues that a far smaller amount ought to be
assessed: somewhere between $12,000 and $20,000.
Despite their widely varying estimates of the appropri-
ate penalty, the parties agree that the United States
EPA’s civil penalty policy, see Environmental Protection
Agency Civil Penalty Policy, [Federal Laws] Env’t Rep.
(BNA) 41:2991 (June 1, 1984) (hereinafter cited as
“EPA Penalty Policy”), is an appropriate guideline for
determining the amount of Gwaltney’s penalty. Neither
of the parties argue that the policy binds the Court. Nor
indeed does it. Nevertheless, both parties suggest—and
the Court agrees—that EPA’s penalty policy provides a
helpful analytical framework for arriving at a civil pen-
alty. It would have nothing to lose by non-compliance
because a penalty for their violations would make them
no worse off than if they had complied in a timely way.
54a
See id. The policy suggests that the gravity component
reflect both the seriousness of the violation and—where
extensive non-compliance with a regulatory program
exists in an area—an additional amount to promote
general deterrence purposes. See id.
Once an appropriate penalty for deterrence purposes
has been estimated, the policy recommends that this
“preliminary deterrence amount” be adjusted to ensure
that the “regulated community” is fairly treated. See
EPA Penalty Policy at 41:2992. The policy identifies a
variety of factors that ought to be accounted for in arriv-
ing at a final civil penalty. Such factors include the
degree of willfulness or negligence involved, the degree
of cooperation involved, the violator’s history of non-
compliance, and whether the penalty would force the
violator out of business. See EPA Penalty Policy at
41:3000-02.
B. Gwaltney’s violations. Although the parties have
stipulated to over 160 different violations involving, five
different substances, the Court shall consider two distinct
compliance problems in arriving at Gwaltney’s penalty.
Each problem related to a specific pollution control
method at the plant. Inadequacies in one method or the
other account for virtually all of the violations at issue
here.
1. Chlorination problems. From November, 1981 to
October, 1982, Gwaltney experienced problems with its
chlorination process. These problems caused Gwaltney’s
violations of its fecal coliform and chlorine limitations
during that time. Fecal coliform, a type of microbe
associated with human and animal feces, is a good indi-
eator of the safety of water for drinking, swimming,
and shellfish harvesting. Gwaltney’s permit includes
both monthly average and daily maximum limitations on
its discharges of fecal coliform. Chlorine is a toxic
chemical that the state requires Gwaltney to use—in
appropriate concentrations—to ki!l fecal coliform. Chlo-
55a
rine also kills other life forms where its concentration is
high enough, however. Thus, Gwaltney’s NPDES permit
imposes daily maximum as well as minimum limitations
on the concentration of its chlorine discharges. From
July, 1981 (before Gwaltney bought the plant) until
October, 1982, the plant chronically violated its permit
limits for fecal coliform and chlorine. These violations
were due to both insufficient and excessive exposure of
Gwaltney’s waste-water to chlorine.
Gwaltney knew that its plant had a chlorine problem
prior to purchasing the plant from ITT-Gwaltney in
October, 1981. ITT-Gwaltney had taken the initial step
of purchasing a new chlorinator, which Gwaltney believed
would correct the chlorine and fecal violations. After a
period of nearly one year from the takeover date, Gwalt-
ney finally resolved the chlorination problems at its plant.
At no time did Gwaltney seek outside assistance from in-
dependent consultants in analyzing the causes or the
extent of its chlorination problems.
a. Economic benefits. The Court first considers the
economic benefits that accrued to Gwaltney as a result
of the delay in the plant’s having a chlorination system
that would meet the chlorine and fecal coliform limita-
tions. The Court feels compelled to ensure that Gwaltney
receives no economic benefit whatever from its delay in
having a properly operating chlorination system.
Determining with precision a firm’s economic benefit
from noncompliance is not a simple matter. As EPA’s
penalty policy points out, there are at least three distinct
types of economic benefits that a violator may enjoy as a
result of its violation. See EPA Penalty Policy at
41:2996-97. First, by delaying the expenditure of funds
on compliance, a violator obtains the use of the money for
other purposes in the meantime. Second, a violator may
also avoid some costs altogether—for example, the costs
of maintaining and operating the pollution control sys-
56a
tem until it is implemented. Third, a violator may, in
addition, obtain a competitive advantage as a result of its
violation—for example, it may be able to offer goods at a
lower price, thereby possibly increasing its sales and
profits. While these different types of benefit ure not
difficult to understand in the abstract, determining their
amounts is more complicated. Indeed, proving the extent
of some of these types of economic benefits will often be
impossible; thus, any objective formulation of economic
benefit is likely to underestimate that benefit. The Court
need not painstakingly determine such an amount, how-
ever. The purposes behind including an economic benefit
component in a penalty assessment are to ensure that
the violator disgorges at least its economic benefit, while
also providing some objective basis for at least part of
the penalty asessment. In light of these purposes and
the difficulty of demonstrating al! elements of economic
benefit, the Court shall incorporate any objective evidence
to arrive at what it hopes is a rational estimate of Gwalt-
ney’s economic benefit, resolving uncertainties in favor of
a higher estimate.
Gwaltney offered evidence addressing primarily the
first type of economic benefit: the benefit accruing from
delaying its expenditures. Gwaltney indicated that its
net cost for the changes in the chlorination system was
$11,560. This amount is undisputed. In order to deter-
mine Gwaltney’s economic benefit from delaying its ex-
penditure, one must also know the length of the delay and
the value of not incurring that expenditure.
Gwaltney attempted to demonstrate at trial that it
could not have implemented the necessary improvements
in the chlorination system any more than four months
earlier than it actually“did. Gwaltney argues that its
economic benefit from delay should therefore be computed
based on this four-month period. The Court, however,
believes that the period of benefit for computing the eco-
nomic benefit of delayed compliance should run for the
57a
entire time during which the violator is out of com-
pliance because of its chlorination problems: here, twelve
months. The Court recognizes, of course, that Gwaltney
could not have accomplished the necessary changes in-
stanteously upon discovering the chlorination problems.
Indeed, Gwaltney’s suggestion that six months was an
appropriate, reasonable period for implementing a fully
complying chlorination system may be correct. But this
does not change the fact that if the expenditures had
been made in time to prevent any violations at all, then
Gwaltney would have incurred all the expenditures prior
to the noncompliance period.** The Court also notes that
its approach for computing the benefit period comports
with that of the EPA’s penalty policy. See EPA Penalty
Policy at 41:2996.
Gwaltney argues that its actual rate of interest on
borrowed funds during this period should be used to
calculate its economic benefit from delayed compliance.
It »dduced evidence that during the relevant period this
rate was 13%. Plaintiffs, on the other hand, computed
Gwaltney’s economic benefit from delay using a rate of
18.17%, which is the ten-year rate of return on equity
earned by Smithfield Foods, Inc.—Gwaltney’s parent cor-
poration. At least in these circumstances, the Court be-
lieves that 13%—the actual interest rate Gwaltney itself
paid on borrowed funds—is a more accurate basis for
determining Gwaltney’s economic benefit from delay.”
16 The fact that in the circumstances of this case another firm
--ITT-Gwaltney, rather than defendant—owned the plant at the
time such expenditures would have been incurred does not alter
this conclusion. Presumably the cost of such improvements would
have been reflected in the sale price that defendant would have
paid for the plant.
17 Plaintiffs cite Ohio ex rel. Brown v. Dayton Malleable, Inc.,
13 E.R.C. 2189, 2194 (Ohio Ct. C.P. 1979), aff'd, 488 N.E. 2d 120
(Ohio 1982), for the proposition that the historic return on
equity is the appropriate rate. But in that case, which involved
penalty assessments under an Ohio water pollution statute, appar-
58a
Given Gwaltney’s rate of interest, its period of delay
compliance because of chlorination problems, and the
amount of investment involved, the Court can determine
at least the portion of economic benefit accruing to
Gwaltney because of the delay in expending funds on the
chlorination system. That amount is approximately
$1,500."* While this amount is probably less than Gwalt-
ney’s total economic benefit, the Court has no basis for
rationally arriving at a figure any larger. In view of
the rest of the penalty that Gwaltney shall be assessed,
however, the Court has-no doubt that Gwaltney shall
disgorge any economic benefit of its non-compliance.
b. Gravity component. Gwaltney argues that there is
no reason to impose a penalty with an adjusted gravity
component of more than $4,900. Gwaltney’s suggested
ently no one contended that the defendant’s own rate of interest
ought to be used. Rather, the choice before the Court was between
the polluter’s actual rate of return and “some outside standard.”
Dayton Malleable, 13 E.R.C. at 194. The Court rejected the latter.
Here, plaintiffs’ proposed rate—not the rate proposed by Gwaltney
—is more accurately described as the “outside standard”: it is
based on the parent’s rate of return; not Gwaltney’s; and it runs
over a ten-year period, not the years in question.
18 Gwaltney’s annual rate of return (13%) multiplied by the
amount of investment involved ($11,560) multiplied by the number
of years of non-compliance (1.0).
In its proposed calculations, Gwaltney, like the Court, calculates
its benefit from delay on the entire amount of investment involved:
$11,560. Gwaltney claims that this is a generous concession on its
part, because the money was actually expended over the course of
the improvements, which while the calculation is based on the fiction
that the money was spent in a lump sum at the end of the improve-
ments—facilitating the computation but distorting the reality. The
Court agrees that a fiction is involved, but disagrees that it distorts
Gwaltney’s economic benefits from delay. If the expenditures had
been incurred in time to improve the system before the violations
occurred, it is reasonable to presume that each of the expenditures
would have been incurred about a year before it was actually in-
curred. Thus, it is appropriate to calculate Gwaltney’s benefit on
the entire amount expended based on one year’s time.
59a
gravity component covers all the violations at issue in
this case, including its violations resulting from its
chlorination problems.
The actual and potential environmental harm asso-
ciated with a violation is an important factor, under the
EPA’s penalty policy, in arriving at the gravity com-
ponent. See EPA Penalty Policy at 41:2999. The Court
agrees. In connection with the environmental harm of
its fecal coliform violation, Gwaltney recognizes that the
presence of fecal coliform has led the state to generally
prohibit the taking of shellfish for human consumption
from much of the Pagan River. Gwaltney attempts to
minimize the seriousness of its fecal coliform violations,
however, by pointing out that the state—in certain cir-
cumstances—nevertheless allows oysters and clams from
those same parts of the Pagan River to be sold for hu-
man consumption in their uncooked state. Further,
Gwaltney argues that the Pagan River’s condition with
respect to fecal coliform could not be improved for shell-
fish harvesting even if Gwaltney constantly complied with
the fecal coliform limitations in its permit. Gwaltney
also attempts to minimize the seriousness of its fecal
coliform violations by noting that the State has not abso-
lutely forbidden the discharge of fecal coliform; rather,
the State has only limited such discharge.
In the Court’s view, Gwaltney trivializes the serious-
ness of its fecal coliform violations. To begin with, an
EPA summary of the effects of the fecal coliform indi-
cates that increased levels of fecal coliform in waters
used for recreational swimming and shellfish harvesting
pose health hazards to human beings, and act as a
medium of disease transmission for a variety of dis-
eases." In light of this, the Court finds Gwaltney’s char-
acterization of its violations as posing “no threat what-
1%”This EPA summary is a joint exhibit to which the parties
stipulated.
60a
ever to the public health” to be nothing less than offen-
sive.
Further, the Court notes that Gwaltney’s fecal coliform
violations were not de minimus. Gwaltney violated its
daily maximum—by four to seven times the permitted
amount—on at least six occasions, according to the
DMRs; and during five out of the seven months when
Gwaltney exceeded its monthly average for fecal coliform,
it exceeded the monthly average by 58% to 150%. Fi-
nally, the Court notes that Gwaltney experienced fecal
coliform problems almost continuously from November,
1981 to July, 1982. It is true, of course, that the Pagan
River was not a virgin stream before Gwaltney exceeded
its permit limitations for fecal coliform; Gwaltney’s
fecal coliform violations were not responsible for spoil-
ing the river. But the fact that a river already suffers
from poor water quality hardly excuses a polluter’s vio
lation. Indeed, in view of the fact that the Clean Water
Act aims to restore the waters of the United States as
well as to prevent the degradation of unpolluted waters,
see 33 U.S.C. § 1251, violations that impede the restora-
tion of water quality ought not to be treated lightly.
Considering all these factors, the Court believes that the
“gravity component” of Gwaltney’s penalty should in-
clude $4,000 per day of fecal coliform violations arising
out of Gwaltney’s chlorination problems. A total of 213
days are involved.”
Gwaltney’s problems with its chlorination system re-
sulted in violations of its chlorine standards as well as
of its fecal coliform standards. The parties have stipu-
lated that at least half of Gwaltney’s 34 chlorine viola-
tions involved minimum standards, however, not maxi-
*° Gwaltney violated its monthly average for fecal coliform in
November and December, 1981, and from February to June, 1982;
it also violated daily maximums on one occasion in Janvary, 1982
and on one occasion in July, 1982. This amounts to 218 days of
violation.
ee
6la
mum ones. The only possible harmful environmental ef-
fect from violating a minimum chlorine standard, ac-
cording to the evidence, is that fecal coliform limitations
may be exceeded. The Court has already considered the
environmental harm from Gwaltney’s fecal coliform vio-
lations. It sees no reason increase the gravity com-
ponent because of Guakagrt violations of its minimum
chlorine standards.
Gwaltney’s violations of its maximum chlorine stand-
ards are a different matter, though. Chlorine is a toxic
pollutant, and in certain concentrations kills a variety
of marine life. Gwaltney correctly points out that it is
required to use chlorine in its waste-water treatment and
has even been required to maintain a minimum level of
chlorine in its effluent. Gwaltney also points out that ap-
parently no fish kills on the Pagan River occurred during
the entire period of its noncompliance. The Court never-
theless believes that a non-trivial amount should be added
to the gravity component of Gwaltney’s penalty to ac-
count for its chlorine violations. The gravity component
should account for risk of environmental harm as well as
for any actual environmental harm. During ten of the
twelve months when Gwaltney experienced problems with
its chlorination system, it exceeded its maximum chlorine
limitations on some seventeen occasions. Although most
of these violations were not grossly excessive,”' two in-
volved discharges that were double the permitted concen-
tration. Considering these factors, the Court deems it
appropriate to include in the gravity component of
Gwaltney’s penalty an amount of $1,000 for each of the
seventeen days of violation of its maximum chlorine
limitation.
21 Gwaltney’s permit allowed discharges with a maximum chlorine
concentration of 2.5 mg./1. and a minimum of 1.5 mg./1. It appears
that 11 of Gwaltney’s 17 violations of its maximum chlorine limi-
tations involved discharges with a chlorine concentration under
3.2 mg./1.
62a
c. Adjustments. Gwaltney argues that its penalty
ought to be adjusted downward to account for a variety
of factors. Under EPA’s civil penalty policy, a violator’s
willfulness or negligence—or lack thereof—is one factor
to consider in arriving at a final penalty amount. See
EPA Penalty Policy at 41:3000. Of course, liability un-
der Section 1319(d) is strict. See, e.g. United States v.
Amoco, supra, 580 F. Supp. at 1050. But willfulness is
nevertheless relevant to the amount of penalty. See id.
Gwaltney argues that its conduct should not be char-
acterized as willful merely because it did not shut down
its facility in the face of admitted knowledge that chlori-
nation problems at its plant were causing permit viola-
tions even before Gwaltney took over the plant. In sup-
port of that proposition, Gwaltney suggests that it had
no “absolute statutory obligation” to close its plant or
slow its production, absent “imminent and substantial
endangerment to health or welfare.” Gwaltney’s premise
does not support its conclusion, however. Even if it had
no “absolute statutory obligation” to close its plant or
slow its production, Gwaltney’s failure to take any such
measures, in the face of undisputed knowledge that con-
tinued operation would result in continued violations, re
flects a certain degree of willfulness. The Court need not
decide whether it is the sort of willfulness that ought to
result in an increased penalty, though, because the evi-
dence reflects that Gwaltney dealt with its chlorination
problems in an exceedingly unconcerned manner. While
Gwaltney may not have had any control whatever in the
chlorination problem’s first arising, it did exercise con-
siderable control over the time involved in correcting that
problem, and its attitude borders on benign neglect.
The first shipment of parts for the new chlorinator
that Gwaltney believed would solve its problems did not
arrive until December, 1981; vet, the problem had arisen
in August, and ITT-Gwaltney had ordered the parts in
63a
September. The record does not reflect any effort by
Gwaltney to speed up the arrival. A ervcial component
for maintaining the proper chlorine flow—an automatic
valve—was missing from the December shipment and
had to be back-ordered; this part did not arrive until
March 16, 1982. The record does not reflect any efforts
by Gwaltney to speed up this arrival, either. Every wit-
ness who was asked indicated that the chlorination prob-
lems arising from the lack of an automatic valve could
have been handled manually. It would not have been
easy—but it was possible. The record does not reflect
any speciai effort by Gwaltney w control the problem
manually. Further, Gwaltney’s engineers suspected—cor-
rectly, as it turned out—other problems with the chlori-
nation system besides the chlorinator itself. A supplier
first sent the wrong dyes for testing those suspicions.
Gwaltney did not obtain the proper dyes until ten days
later, despite virtually uncontradicted testimony that the
necessary dye is commonly available. Through all this,
Gwaltney did not seek any outside advice to assist it in
determining the precise nature and extent of its chlori-
nation problems.
Contrary to Gwaltney’s contentions, the Court believes
that Gwaltney’s penalty ought to be increased, not re-
duced, because of willfulness. Gwaltney’s lackadaisical
approach in correcting a problem that posed risks—albeit
not “imminent” ones—to both human health and aquatic
life should not be countenanced. One may speculate how
long Gwaltney would have taken to repair a machine the
faulty operation of which would have halted production.
It is reasonable, in the Court’s view, in conclude that at
the very least Gwaltney would have exerted more effort
to repair such a machine than it did to bring its dis-
charges into compliance with pollution standards. Gwalt-
ney acknowledges thai the evidence supports the conclusion
that it could have reduced the compliance time by 125
days. The Court agrees, and shall increase the penalty
64a
by $1,000 per day that Gwaltney could have eliminated
in correcting the problem.
Gwaltney argues that its penalty should also be reduced
because of its cooperation in controlling its chlorination
problem.” It is apparently true that Gwaltney corrected
its chlorination problems without the threat of a lawsuit
from anybody to prod it along. In that sense, Gwaltney
was not uncooperative. But the Court finds it inappro-
priate to give Gwaltney credit for correcting violations
for which Gwaltney plainly knew it was responsible.
Gwaltney’s final argument for reducing any penalty it
will be assessed is its purported inability to pay a sub-
stantial penaity. EPA’s penalty policy is, generally, not
to request a penalty that is “cl:arly beyond the means of
the violator.” See EPA Penalty Policy at 41:3002.
Gwaltney characterizes its own “profit margin” as “ex-
tremely thin.” It suggests that its penalty should be
fashioned in light of this fact. The Court disagrees, be-
ing unpersuaded that any penalty warranted by Gwalt-
ney’s violations would jeopardize Gwaltney’s continued
operation.**
22 Gwaltney also suggests that its cooperation is reflected by
its self-reporting of violations, and intimates that under EPA’s
penalty policy this should result in a mitigation of its penalty.
Gwaltney is legally required to report its violations, however see
supra note 3. Thus, the Court shall not mitigate Gwaltney’s penalty
on account of its self-reporting. This approach accords with EPA’s
policy. See EPA Penalty Policy at 41:3000 (“assuming such self-
reporting is not required by law, such behavior should result in the
mitigation of any penalty.”) (emphasis added).
*8 Although Gwaltney’s income statement for the year ending
April 29, 1984, reflects an after-tax loss of $247,000, this loss must
be considered in light of Gwaltney’s extraordinary loss during the
same year of 1.8 million dollars on the disposition of a plant.
Gwaltney is clearly earning a substantial dollar amount on its
operations, regardless of whether its profit margin is “thin.”
65a
In light of Gwaltney’s economic benefit, the gravity
component, and appropriate adjustments, Gwaltney’s total
penalty for the violations arising out of its chlorination
problems is $995,500.**
2. Biological treatment system. Gwaltney’s second
source of compliance problems was its biological treatment
system. Inadequacies in that system led to repeated viola-
tions of Gwaltney’s TKN limitations during the winter
months early in 1982 and the winter months of 1982-83.
Gwaltney also experienced violations of its permit limita-
tions for TKN and other substances during the winter
and spring of 1983-84, in connection with the start-up of
its new biological treatment system.
TKN is a nitrogen compound that can degrade a river
by depleting its oxygen supply. Natural chemical and
biological processes, involving TKN and bacteria in the
river, transpire after TKN is added to a river. Those
processes consume the dissolved oxygen in a river, to the
detriment of many forms of river life. Gwaltney knew
before it purchased the plant that its biological treat-
ment system had resulted in TKN violations the previous
winter. It did not take any steps of its own to address
the problem until later May, 1982—well after it experi-
enced TKN violations during the first winter that it was
operating the plant. Over the following two years, in
conjunction with the advice and approval of a consulting
24 This amount is computed as follows:
—economic benefit: $ 1,500
—gravity-fecal coliform
($4,000 x 213 days of violation) : 852,000
—gravity-chlorine
($1,000 x 17 days of violation
of maximum limit) : 17,000
—adjustment for delay
($1,000 x 125 days of delay): 125,000
$995,500
66a
firm and the State Water Control Board (SWCB),
Gwaltney devised and implemented a variety of changes
in its biological treatment system. It submitted a pro-
posed plan to the SWCB on January 5, 1983, which the
SWCB approved on May 31 of the same year. By mid-
October, construction was completed. Although Gwaltney
experienced a number of violations during the system’s
start-up period, it experienced no violations after May 15,
1984, up to the time of trial in mid-December, 1984.
Some experts did testify, though, that they were uncer-
tain whether the new system would meet the permit limi-
tations for TKN during the remainder of the winter.
a. Economic benefit. As with its chlorination system,
the only evidence about Gwaltney’s economic benefit from
non-compliance concerns the value of delaying the neces-
sary expenditures. Gwaltney’s evidence is that its ex-
penditure amounted to $159,745. The Court’s computa-
tion of Gwaltney’s economic benefit shall be based on this
amount.*°
The period over which a violator’s economic benefit
should be computed runs from the date of non-compliance
*5 Plaintiffs argue that Gwaltney’s benefit from delayed expendi-
tures should be based on a much larger amount. They point out
that Gwaltney’s consultants outlined a “permanent solution” to
Gwaltney’s biological treatment problems, at an estimated cost of
$506,000, and that Gwaltney chose instead to implement a modified
version of the “interim solution,” which was considerably less
expensive. Plaintiffs argue that Gwaltney’s economic benefit consti-
tutes the difference between the “permanent solution” and the
amount Gwaltney actually expended.
This approach is incorrect. Gwaltney’s benefit from delaying
expenditures is the benefit from delaying those expenditures that
are necessary to achieve compliance. Gwaltney appears to have
achieved compliance on the expenditures it has already incurred
on its biological treatment system.
Although some of the testimony suggests that the modifications
Gwaltney made in its treatment may not result in compliance with
its TKN limitations, the Court believes it would be too speculative
to reach that conclusion on the present record.
67a
until the date of compliance, or the date on which com-
pliance may reasonably be expected, as discussed above.
The compliance problems arising out of the plant’s bio-
logical treatment system commenced, for Gwaltney, in
January 1982. They were not rectified until May 15,
1984.2 This is a period of two years and over four
months, or 2.37 years.
The rate at which Gwaltney benefited from the delay,
as discussed supra, is 13%. Given such a rate, as well
as the amount of expenditures involved and the period
of benefit, Gwaltney’s benefit from delaying expenditure
is $54,022.*"
b. Gravity component. As mentioned supra, in connec-
tion with the chlorination problems, Gwaltney argues that
the gravity component of its penalty for all its violations,
including those caused by its biological treatment system,
should not exceed $4,900, when adjusted. With respect to
the numerous TKN violations resulting from the problems
with its biological treatment system, Gwaltney argues
that the great majority were utterly innocuous from an
environmental standpoint because TKN is not toxic, be-
26 The Court is aware that the evidence raises some question
whether Gwaltney had permanently corrected its TKN problems
by May 15, 1984, even though it experienced no further violations
after that date; or whether instead Gwaltney would again experi-
ence TKN violations during the coldest winter months. As indi-
cated supra note 21, the Court believes that such a conclusion
would be too speculative, given the present record.
27 This amount is based on yearly compounding, computed as
follows:
1982: $159,745 x .13/yrx lyr = $20,767
1983: ($159,745+ $20,767) x .13/yr x lyr = 23,467
1984: ($159,745 +$20,767 + $23,467) x .13/yrx 37 yr= 9,811
TOTAL: $54,045
68a
cause the Pagan River is improving, and because most of
the discharges occurred in the wintertime.
Some of its points are relevant to penalty considera-
tions, although Gwaltney overstates its case. Gwaltney
correctly points out that the presence of TKN in a river
does not affect human health, according to the evidence.
But it does have undeniable implications for the river’s
dissolved oxygen content, which is related to the environ-
mental quality of the river. While none of the evidence
reflects specific environmental damage resulting from
Gwaltney’s TKN violations, the Court does not believe
that it should blind itself to those violations as a result.
Nor does the Court believe that Gwaltney’s penalty
should be mitigated because the Pagan River’s condition
is generally improving. Gwaltney’s violations may have
contributed to delaying that improvement. Compliance
incentives would be undermined if polluters believed that
their violations would not be treated seriously where
environmental regulations have generated some improve-
ment in the environment.
The Court does recognize, however, that Gwaltney’s
TKN violations during the winter months posed less
environmental risk than summer violations. The process
by which TKN depletes the river’s oxygen slows down
substantially with the colder winter temperatures. Plain-
tiffs point out that the Pagan River’s tidal nature may
inhibit the flushing of TKN from the river—raising the
possibility that even winter TKN discharges may lead to
oxygen depletion during warmer months. Nevertheless,
the risk is certainly diminished. In the Court’s view,
fairness dictates that Gwaltney’s winter TKN violations
should be treated less harshly than its summer TKN vio-
lations. An appropriate penalty is $250 per day of viola-
tion for TKN violations during the months of November
through April. For violations during the remaining
69a
months of the year, a penalty of $1,000 per day of TKN
violation is appropriate.
c. Adjustments. An important factor is the willfulness
involved in a compliance problem. Gwaltney concedes that
it could have begun addressing the problems in its biologi-
cal treatment system substantially earlier. One major
delay was that Gwaltney did not contact a consu!tant
immediately upon experiencing unexpected TKN compli-
ance problems in the winter of 1981-82; rather, it waited
until late May, 1982, to do so. Gwaltney has submitted
evidence that this—and other unnecessary delays it could
have prevented—totaled 283 days. The Court concludes
that this number is a reasonable approximation.
Gwaltney’s penalties should be adjusted upward for
each day of these controllable delays, just as its penalt
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.