Joint Appendix — Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc.

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Supreme Court. U.S.

JOSE: AR.

IN THE

Supreme Court of the Wuited States

OCTOBER TERM, 1986

GWALTNEY OF SMITHFIELD, LTD

CHESAPEAKE BAY FOUNDATION, IN¢

anc

NATURAL RESOURCES DEFENSE COUNCI

Re spor dents

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

JOINT APPENDIX

E. BARRETT PRETTYMAN, JR." jeTER M. WATSON *

RicHaRD J.M. POULSON \NN POWERS

PaTrick M. RAHER CHESAPEAKE BAY

Davin J. HAYES FOUNDATION, IN¢

CATHERINE JAMES LAUR® Suite 815, Heritage Bidg

loOHN G. ROBERTS, JR 1001 East Main Street

HOGAN & HARTSON Richmond, VA 23219

partnership including 804) 780-1392

professional corporations lawEa THORNTON

$15 Connecticut Aver N.W NANCY MARKS

Washington, D.( AU NATURAL RESOUR

202) 331-4685 DEFENSE CouNs

r Petitioner 122 East 42nd Street

' vy k, N.Y L016

19-0049

;

elof R

PETITION FOR CERTIORARI FILED SEPTEMBER 23, 1986

CERTIORARI GRANTED JANUARY 12, 1987

« - ’ "

In THE

Supreme Court of the Wuited States

OcToBER TERM, 1986

No. 86-473

GWALTNEY OF SMITHFIELD, LTD...

Petitioner.

CHESAPEAKE Bay FOUNDATION, INC..

and

NATURAL RESOURCES DEFENSE COUNCIL.

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

JOINT APPENDIX

TABLE OF CONTENTS

Page

Docket entries from the United States District Court

for the Eastern District of Virginia l

Docket entries from the United States Court of Appeals

for the Fourth Circuit 7

Exhibit 10: Discharge Monitoring Reports for March

and May, 1984 11

Exhibit 25: Letter to Joseph Luter from Richard N

Burton, dated March 12, 1984 13

Exhibit 27: Letter to Terence Switzer from Terry L.

Retting, dated Apri! 6, 1984 16

DATE NR.

1984

June 15 1

Junel5S —

June 22 2

June 29 3

June 29 A

June 29 5

June 29 6

July 2 —

July 5 7

July 23

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 84-0366-R

CHESAPEAKE BAY FOUNDATION, et ai..,

Plaintifis,

GWALTNEY OF SMITHFIELD, LTD.,

Defendant.

DOCKET ENTRIES

PROCEEDINGS

Complaint filed. No jury demand.

Summons issued & mailed to atty. for service.

Pitf’s Decline to jurisdiction of Magistrate,

filed

Pitfs’ Statement of Material Facts Not In Dis-

pute In Support For Their Motion For Summary

Judgment, filed.

Pitfs’ Memorandum of Law, filed.

Affidavit of Jeter M. Watson, filed.

Pitfs Notice of Motion, filed.

Acknowledgement of summons, executed, filed.

Deft’s Answer to Complaint, No Jury, filed,

with Motion.

Pitfs’ Response To Deft’s Answer & Motion To

Dismiss, filed.

DATE NR.

1984

July 25 9

July 25 10

Aug.20 11

Aug. 28

Aug.30 12

Sept.4 13

Sept.10 14

Oct. 5 --

Oct.10 15

Oct.16 16

Oct.16 17

PTO, Non-Jury, ent’d 7-25-84 (RRMjr) filed.

Copies to counsel at PTC.

Motion for Judgment on the Pleadings filed by

the Pitf.

Notice of Hearing on August 28, 1984 at 2:00

p.m., Filed.

IN OPEN COURT: MERHIGE, J. HALASZ,

OCR APPEARANCES: PARTIES BY

COUNSEL. DEFT’S MOTION TO DIS-

MISS HEARD; DENIED. PLTFS’ MOTION

FOR PARTIAL SUMMARY JUDGMENT

HEARD; GRANTED. ORDER TO ENTER.

(21 Mins.)

ORDER, denying deft’s motion to dismiss; de-

nying deft’s motion to abstain: pitf’s motion

for partial summary judgment is GRANTED

ete. Ent. by RRM, JR. on 08/30/84 & filed.

Cps. mailed.

Deft’s Motion for Rehearing, Filed.

Pitfs’ Opposition to Deft’s Motion For Rehear-

ing, filed.

Transcript of Hearing before Hon. RRM, JR.

on 08/28/84 In I Vol., filed.

Pitf’s Motion For Expedited Discovery & Ex-

pedited Proceedings on the Remedy, filed.

ORDER, that discovery is extended through

12/14/84: Parties to file proposed findings of

fact by noon 12/14/84. Deft’s motion for re-

hearing is DENIED. Ent. by RRM, JR. on 10

16/84 & filed. Cps. mailed.

Deft’s Answer, filed. No jury demand.

DATE NR.

1984

Oct.16 18

Oct.17 19

Oct.26 20

Oct.30 21

Nov. 5 22

Nov. 6 23

Nov.16 24

Dec. 16 25

Dec. 16 26

Dec. 6 27

Dec. 14 28

Dec.17 29

Dec.17 30

PROCEEDINGS

Deft’s Memorandum In Support of Motion For

Rehearing, filed.

Pitf’s Motion To Set Trial Date, file”.

Deft’s Motion For Reconsideration, filed.

ORDER, that the portion of this Court’s Order

of 10/16/84 denying deft’s motion for a re-

hearing is VACATED. Argument on said mo-

tion etc. is scheduled for 11/15/84 at 8:00 A.M.

Ent. by RRM,JR. on 10/30/84 & filed. Cps.

mailed.

Pitfs’ Motion to Strike and Brief in Support,

filed.

Pitfs’ Status Hearing Memorandum, Filed.

ORDER, that deft’s Motion For Rehearing is

GRANTED & the Order of 08/30/84 is

Amended to Provide that the deft. violated the

Federal Water Pollution Control Act, ete.

Briefing schedule set. Ent. by RRM,JR. on

11/16/84 & filed. Cps. mailed.

Pitfs’ Notice of Deposition of J. Willis Sneed

on December 11, 1984, Filed.

Pitfs’ Notice of Depositions of Joseph Luter,

III, Henry Morris, Terry Rettig & Kenneth

Brown, Filed.

Pitfs’ Request for Entry Upon Land, Filed.

Pitf’s Proposed Findings of Fact & Conclusions

of Law, filed.

Parties Stipulation, filed.

Deft’s Proposed Findings of Fact & Conclu-

sions of Law, filed. (Exhibits to this are in a

brown expandable next to case file)

DATE NR.

1984

Dec. 18 31

Dec.18 32

Dec. 18 33

Dec.18 34

Dec. 18 35

Dec. 19

1985

Jan. 1] —

Jan.16 36

Jan.29 37

Jan.29 38

Feb.11 39

PROCEEDINGS

Pitfs’ Witness List, filed.

Pitfs’ Exhibit List, filed.

Deft’s Witness List, filed.

Deft’s Exhibits List, filed. (Copies of Exhibits

attached to this List)

Pitf’s Trial Memorandum, filed.

TRIAL PROCEEDINGS: MERHIGE, J.

HALASZ, OCR APPEARANCES: PAR-

TIES BY COUNSEL. MATTER CAME ON

FOR TRIAL ON MERITS. OPENING

WAIVED BY THE PLTFS. OPENING

MADE BY THE DEFT. PLTF ADDUCED

EVIDENCE; RESTED. DEFT ADDUCED

EVIDENCE; RESTED. EVIDENCE CON-

CLUDED. DEFT TO FILE POST-TRIAL

BRIEF BY 1-15-85; PLTFS TO RESPOND

W/N 7 DAYS THEREAFTER IF THEY

DEEM IT NECESSARY. CASE TAKEN

UNDER ADVISEMENT. (5 Hrs. 36 Mins.)

Transcript of Trial Proceedings held on 12/19

84 in I Vol., filed.

Deft’s Post-Trial Memorandum, Filed.

Pitfs’ Motion For Leave To Amend The Com-

plaint Or In The Alternative Join A Party

Deft., filed.

Pitfs’ Response To Defts’ Post-Trial Memo-

randum, filed.

ORDER, giving Ralston Purina Co. through

02/25/85 within which to file a response to

pitfs’ Motion To Amend etc. Ent. by RRM,Jr.

on 02/11/85 & filed. Cps. mailed.

DATE NR.

1985

Feb.25 40

Mar. 8 41

Apr. 2 42

May16 43

May16 44

May 24 45

May 24 46

June 6 47

June 26 48

June 26 49

Non-Party Continental Baking Co.’s Memoran-

dum In Opposition to Pitfs’ Motion To Amend

Their Complaint Or In The Alternative To Join

A Party Detftt., filed.

ORDER, extending through 03/31/85 the time

within which Pltfs’ must respond to Continen-

tal Baking Co’s Memorandum In Opposition to

Pitf’s Motion To Amend, etc. Ent. by RRM,JR.

on 03/08/85 & filed. Cps. mailed.

Pitfs’ Reply To Continental Baking Co’s, Mem-

orandum In Opposition To Pitfs’ Motion To

Amend Their Complaint Or In The Alternative

To Join A Party Deft., filed.

Deft’s Motion To Dismiss For Lack of Juris-

diction, filed.

Deft’s Memorandum In Support of Motion To

Dismiss for Lack of Jurisdiction, filed.

ORDER that Pitfs have ten (10) days from the

date of this Order to file an opposing memo-

randum, entered by RRM, JR. on 5/24/85 &

Filed. Copies Mailed.

Pitf’s Memorandum In Opposition To Deft’s

Motion To Dismiss, filed.

Deft’s Reply Memorandum In Support of Mo-

tion To Dismiss for Lack of Jurisdiction, filed.

Memorandum of the Court ent. by RRM,JR. on

06/24/85 & filed.

JUDGMENT ORDER, that deft’s motion to

dismiss is hereby DENIED: Deft., Gwaltney

of Smithfield, Ltd., is declared to have been in

violation of the Clean Water Act etc.; deft. en-

joined until further Order of the Court to pro-

vide ptifs’ with a copy of all reports said deft.

DATE NR.

1985

June 26

July 24

July 25

July 26

Aug. 9

Aug. 12

Aug. 21

PROCEEDINGS

submits to state or federal government relating

to its NPDES permit etc. Deft. shall pay civil

penalties in accord with the Court’s mermoran-

dum in the sum of $1,285,322 with interest

from this day forward; counsel for the respec-

tive parties shall meet to confer re: atty. fees

etc. if they fail to agree appropriate afiidavits

shall be filed with the

(Cont.) Court no later than 20 days from this

date. Ent. by RRM,JR. on 06/26/85 & filed.

Cps. mailed.

Pitfs’ Application For Atty. Fees & Expenses

(with attachments), filed.

Deft’s, Gwaltney’s, Motion For Extension of

Time, filed.

Findings of Fact & Conclusions of Law As

Stated From The Bench by Hon. RRM.JR.,

filed.

Deft’s Notice of Appeal, filed. ($70.00 fee pd.)

ORDER, granting deft’s motion for extension

of time to respond to the application for atty

fees through 08/02/85 ent. by DDW on 07/26

85 & filed. Cps. mailed.

Deft’s Answer to Pitf’s Application For Costs

& Fees, filed.

ORDER, that the time within which deft. may

respond to pitf'’s application for atty. fees is

extended through 08/09/85 ent. by RRM,JR. on

08/12/85 & filed. Cps. mailed

Clerk’s Certificate

UNITED STATES COURT OF APPEALS

11-12-85

FOR THE FOURTH CIRCUIT

No. 85-1873

CHESAPEAKE Bay FOUNDATION, INC.;:

NATURAL RESOURCES DEFENSE,

Appellees,

versus

GWALTNEY OF SMITHFIELD, LTD..

Appellant.

DOCKET ENTRIES

- FILINGS—PROCEEDINGS

Case docketed. ROA filed. bhr

BRIEFING ORDER, filed. A due 10-07-85. Tenta-

tive Calendar for December, 1985 session. bhr

ORDER requiring a joint brief per side, filed. bhr.

DISCLOSURE STATEMENT A, Y, filed. bhr

DISCLOSURE STATEMENT E, N, filed. bhr

DISCLOSURE STATEMENT E Re-

sources), N, filed. bhr

MOTION (K-44) of Friends of Earth, Sierra Club,

Student Public Interest Research Group of New

Jersey, Connecticut Fund for the Environment

and Atlantic States Lega! Foundation for leave

to file brief amici curiae on behalf of Es, filed

(BHR ;jm)

MOTION (K-67) of Es to supplement the appen-

dix, filed (BHR :ew)

(Natural

‘DATE

11-12-85

11-13-85

11-19-85

11-20-85

11/21/85

11/22/85

12/2/85

01-08-86

FILINGS—PROCEEDINGS

MOTION (K-68) of Es to supplement the record,

filed (BHR :ew)

RESPONSE OF A (Gwaltney) in opposition of

motion for leave to file amicus brief. filed. bhr

RESPONSE of applicant's of the amicus brief in

opposition to A’s response, filed. bhr

MOTION (K-100) of A to extend page limitation

of reply brief, filed. bhr

RESPONSE OF E (Chesapeake) to motion for

filing the amicus brief, filed. bhr

MOTION (K-44) to file amicus brief; A's response

in opposition to motion; applicant's response to

A’s opposition; E’s response to amicus motion

mailed to JHW. bhr

MOTION (K-100) of A for extending page limi-

tation of reply brief mailed to JHW. bhr

APPELLANT'S OPPOSITION (K-68) to Es’ mo-

tion supplement the record, filed (BHR :nac)

Transmitted Es’ motion to supplement the appen-

dix; Es’ motion io supplement the record on ap-

peal; and A’s opposition to Es’ motion to sup-

plement the record to JHW. (BHR :nac)

ORDER granting motion K-44, filed (BHR-:jm)

Copy to Troy; Raher-Hayes-LaCroix; Watson;

Thornton; Powers; Terris-Black; Unterberger-

Ojala ; Habicht-Firestone-Shilton-Lees

ORDER granting motions K-67, K-68 & K-100,

filed (BHR:jm) Copy to Troy; Raher-Hayes-

LaCroix; Watson; Thornton; Powers: Terris-

Black; Unterberger-Ojala; Habicht-Firestone-

Shilton-Lees

MOTION (A-6) of A to supplement the record,

filed. bhr

FILINGS—PROCEEDINGS

01-16-86

01-21-86

1/27/86

01-29-86

1/21/86

06 /05 /86

MOTION (A-8) of USA-AC for permission to par-

ticipate at oral argument, filed (BHR:jm)

Transmitted to HLW, DSR, JMS on 1/13/86

RESPONSE (A-6) of amicus curiae, US, to A’s

motion to supplement the record, filed (DHB:

ew)

RESPONSE of E to A’s motion to supplement the

record, filed (DHB :ew)

RESPCNSE of amici curiae, Friends of the Earth,

etc. to motion to supplement the record, filed

(DHB :ew)

Transmitted A’s motion to supplement the record

(A-6); response of the amicus curiae, US to

motion A-6; E’s response to motion A-6 and

response of amici curiae, Friends of the Earth,

ete. to HLW, DSR and JMS.

RESPONSE to motion (A-8) of Amicus, US, to

participate in argument, filed (Five minutes

ceded by Es), (DHB:ew)

REPLY to CBF’s opposition to Gwaltney’s motion

to supplement the record, filed (BHR:jm) Trans-

mitted to HLW, DSR, JSM on 1/27.

ORDER granting A’s motion to supplement the

record, filed (BHR:ew) Copy of order sent to

Troy; Raher-Hayes-LaCroix; Watson; Thorn-

ton; Powers; Unterberger-Ojala; Terris-Black

and Lees.

Letter to counsel (A-8) advising amicus may ar-

gue if ceded 5 minutes from counsel (BHR:jm)

PETITION FOR REHEARING AND SUGGES.

TION FOR REHEARING IN BANC /(A-151 of

A, filed (SAR:ew) Transmitted to HLW, DSR,

JMS with copies to circuit judges on 06/06/86.

DATE FILINGS—PROCEEDINGS

6/5/86 MOTION (A-152) of Es for attorney fees and

expenses, filed. jd

6/25/86 ORDER denying petition A-151, filed (SAR:jm)

Copy to all counsel of record

06/13/86 LETTER from E’s counsel, Watson, with attach-

ments, filed (SAR :cw)

06/30/86 RESPONSE of A to motion for attorney fees and

expenses, filed (SAR :cw)

07/03/86 Transmitted Es’ motion for attorney fees and ex-

penses, with attachments; letter from E's coun-

se, with attachments; A’s response to motion

for attorney fees and expenses to HLW: DSR

and JMS.

07/03/86 MOTION (A-182) of A for stay of mandate, filed

(SAR:ew) Transmitted to HLW: DSR and

JMS along with the above transmittal.

7/9/86 REPLY of E’s (A-152) to A’s response to motion

for attorney fees and expenses, filed. BMM :ch

7/10/86 TRANSMITTED E's reply to HLW, DSR, JMS,

BMM :cb

8/5 86 ORDER that the motion for attorney's fees and ex-

penses is referred to the d/ct. for decision: this

court granted stay of mandate pending A’s

timely application to U.S.S.Ct. for a writ of

certiorari, filed. SAR:gac (See order further

explanation)

8/5/86 ORDER that the mandate in this case be, and is

hereby, stayed pending timely application of

the A to the 8.Ct. of U.S. for writ of certiorari,

filed. SAR:gac Copies of both orders « i R586

to Counsel of Record.

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EXHIBIT 25

| SEAL]

COMMONWEALTH OF VIRGINIA

STATE WATER CONTROL BOARD

2111 Hamilton Street

|Mar. 12, 1984]

CERTIFIED MAIL

RETURN RECEIPT REQUESTED

P33 0329995

Mr. Joseph Luter

Chairman of the Board

Smithfield Foods, Inc.

P.O. Box 447

Smithfield, Virginia 23430

Dear Mr. Luter:

Gwaltney of Smithfield, Ltd., has violated Total

Kjeldah! Nitrogen (TKN) effluent limits in its NPDES

Permit for some time. Since Smithfield Foods assumed

ownership of the Company, the limit was violated five

months in 1982 and in January through May 1983.

TKN violations recurred in September 1983 and have

continued since that time.

The staff requested plans and a schedule to address

the TKN violations in the spring of 1982.

In August, 1982, the company submitted a preliminary

concept engineering report prepared by your consultant

This was, however, followed by an actual proposal from

the company that differed in several important aspects

from the consultant’s report. After several requests for

additional data from the staff, the Company submitted a

final concept report in January, 1983. This final report

substantially revised the Company’s proposal

EXHIBIT

CONCEPT ENGINEFRING REPORT

MODIFICATIONS TO

WASTE TREATMENT FACILITIES

GWALTNEY OF SMITHFIELD, LTD

SMITHFIE’ D, VIRGINIA

PREPARED BY:

WELLS ENGINEERS, INC.

11237 CHICAGO CIRCLE

OMAHA, NEBRASKA 68154

402 330-0202

COMMISSION NO. 820602

JULY, 1982 [SEAL]

CONCEPT ENGINEERING REPORT

MODIFICATIONS TO

WASTE TREATMENT FACILITIES

INDEX :

Page

Pog 2 PB OI F i

I. INTRODUCTION ........... al ean en ae 1

Il. WASTEWATER SOURCES ..................... ae 1

Ill. EXISTING WASTE TREATMENT FACILI-

ERR ea STE SE Ps SET co ee ee 2

IV. WASTEWATER CHARACTERISTICS ............. 4

V. TREATMENT DESIGN PARAMETERS ........ 7

VI. EFFLUENT LIMITATIONS ................................ ~

VII. DESIGN APPROACH AND METHODS ........... 9

a aeennennd ae 14

APPENDIX

CONCEPT ENGINEERING REPORT

MODIFICATIONS

WASTE TREATMENT FACILITIES

GWALTNEY OF SMITHFIELD, LTD.

SMITHFIELD, VIRGINIA

I. INTRODUCTION

The purpose of this report is to describe modifications

to the existing waste treatment facilities which are re-

quired to meet the requirements of the discharge on an

interim basis and on a permanent basis. The existing

treatment facilities experience difficulties meeting the

TKN limitations during cold weather and suspended

solids limits during warm weather. The scope of the

report includes a description of plant operation, existing

pretreatment and waste treatment facilities, presentation

of sampling and operating data, effluent limitations and

design criteria, discussion of an interim and permanent

solutions, and cost estimates for construction, as well as

additional annual operation and maintenance expenses.

Il. WASTEWATER SOURCES

The Gwaltney plant at Smithfield, in southeast Virginia,

is a hog slaughtering and processing facility. The pres-

ent daily kill is approximately 4500 hogs per day at about

230 lb/hog. The kill and cut are one shift operations five

days/week, while processing is a two shift operation five

or six days/week. All hogs slaughtered at this plant are

boned and fabricated into prepared meat products includ-

ing weiners, sausages, luncheon meat and country hams.

Some beef trimmings are brought in for incorporation

into the processed meat products.

VII. DESIGN APPROACH AND METHODS

Both interim and permanent solutions to the problem of

meeting the requirements of the discharge permit have

been evaluated and will be discussed in this section. In

both cases, after pretreatment, effluent from the packing

plant will be directed to Anaerobic Lagoon No. 1. With

an estimated volume of 6.75 million gallons, this anaero-

bic will have an organic loading of 17.5 lb BOD/1000

ft*/day and a detention time of nearly one week, both

very acceptable values. The design effluent from this

lagoon is furnished in Section V of this report and is

tar mere conservative than actual performance achieved

during the sampling program.

A. Interim Solution

In this case, a new Anaerobic Effluent Control Structure

will be constructed. This structure will include simple

provisions to partially equalize the flow. This will be

accomplished by allowing the water level in the anaerobic

lagoon to rise and fall throughout the week. Flow will

be directed from this structure through a new gravity

line to the northern half of the last lagoon (settling

pond).

The northern half of the final lagoon will be utilized

as an aeration basin. A floating baffle wall will be used

to segregate the new aeration basin portion from the

remainder of the lagoon. This baffle wall will be an-

chored on both sides of the lagoon and consists of a re-

inforced Hypalon or vinyl-type fabric, weighted on the

bottom with a chain and suspended from foam floats.

The nine existing 25-Hp floating surface aerators will be

relocated to this aeration basin and will provide aeration

capacity for BOD reduction and nitrification of ammonia.

These aerators will also serve to maintain mixed liquor

suspended solids (MLSS) in suspension.

With an aeration volume of 2.75 million gallons and an

equalized influent flow of one million gallons per day, the

detention time would be 2.75 days. However, significant

amounts of storm water runoff enters the various lagoons

so flows will occasionally be as high as 2.3 mgd, resulting

in a detention time of 1.2 days. Solids retention times of

15 days or longer (MLSS levels greater than 1400 mg/

1) will resuit in good ammonia nitrification, as long as

the aeration basin mixed liquor temperatures remain

above 10°C. Nitrification may be inhibited by waste-

water temperatures below 10°C which can occur during

severe winter conditions. Also, the variable flow rate

due to storm water runoff will increase the difficulty of

operating this activated sludge system.

Theoretically, 7.2 pounds of alkalinity are required per

pound of ammonia nitrified. This results in a maximum

alkalinity requirement of 9144 lb/day. Approximately

7250 lb/day of alkalinity are available in the anaerobic

effluent, indicating the pH may be depressed by nitrifi-

eation which would inhibit further nitrification. How-

ever, alkalinity in amounts less than the theoretical re-

quirement have often proved sufficient. This is due to

several reasons: 1) some denitrification of the nitrified

flow occurs which returns half of the alkalinity to the

system and 2) some nitrogen is bound up with the waste

activated sludge and is removed from the system. Con-

sequently, no provisions are proposed for the addition of

alkalinity. If pH depression and nitrification inhibition

does occur, lime can be added manually with the rela-

tively small amounts that would be required.

After aeration, the two existing self-priming pumps will

pump the flow to the two existing final clarifiers. Based

on the peak projected flow rate of 2.3 mgd, **e surface

overflow rate of these clarifiers will be 585 gpd/ft* and

the weir overflow rate will be 7,615 gpd/ft, both accept-

able values.

Sludge settling in the final clarifiers will be directed to

the existing sludge pumping station and either be re-

turned to the influent end of the aeration basin through

a new line or wasted to the existing sludge lagoon

through the present line.

Treated effluent will be pumped to the existing chlorina-

tion facilities for disinfection and discharged through the

outfall line to the Pagan River.

B. Permanent Solution

In this case, the two existing self-priming pumps will be

relocated and used to pump effluent from the anaerobic

at a constant rate of approximately 700 gpm. To achieve

this equalized flow rate, the level in the anaerobic lagoon

will be allowed to rise and fall throughout the week.

Anaerobic effluent will be pumped to a new Aeration

Basin Splitter Structure which will equally divide the

flow between two new aeration basins.

The nev aeration basins will be constructed northeast

of the existing final clarifiers. Each concrete basin will

hold 0.75 mgd for a total retention time of 1.5 days at

1.0 mgd. Both basins will be constructed with vertical

and sloped sides and have a depth varying from 3.5 feet

at the sidewall to 15 at the bottom.

A maximum of 450 lb/hr of oxygen will be required for

BOD reduction and ammonia nitrification. Aeration will

be provided by either fine-bubble dome diffusers or pos-

sibly with a jet aeration system.

With a solids retention time of 15 days or greater, nearly

complete nitrification will be achieved at MLSS levels

greater than 2500 mg/l. With a relatively small surface

area and a subsurface aeration system, mixed liquor tem-

peratures will be maintained above 10°C so nitrification

will not be inhibited, even during severe winter weather.

Also, construction of the new aeration basins will elim-

inate wide flow variations due to storm water runoff.

As discussed previously, if alkalinity addition proves

necessary, small amounts of bagged hydrated lime can be

added manually.

After aeration, the flow will enter a new Clarifier Split-

ter Structure which will equally divide the flow between

the two existing final clarifiers.

At an equalized flow rate of 1.0 mgd, the surface over-

flow rate of both clarifiers will be 255 gpd/ft’ and the

weir overflow rate will be 3310 gpd/ft, both low values.

However, with an 8.5 ft side water depth and without

surface skimmers and rapid sludge drawoff mechanisms,

these clarifiers are not of an optimum design for a nitri-

fying activated sludge system.

Settled sludge will either be returned to the splitter struc-

ture ahead of the activated sludge system or wasted to

the existing sludge lagoon.

Clarified effluent will be pumped to the existing chlorine

contact chamber for disinfection prior to discharge to the

Pagan River.

C. Discussion and Recommendations

There are several unknowns involved with the proposed

solutions :

1) Will wastewater temperatures drop below 10°C if

surface aerators are used in half of the settling iagoon?

2) How will storm water runoff impact the operation

of an activated sludge system utilizing half of the exist-

ing lagoon?

3) Is adequate alkalinity available?

4) Are the existing final clarifiers adequate for an ac-

tivated sludge system designed to nitrify?

If the modifications proposed for the interim solution are

implemented and it is then discovered that the permanent

modifications are required, the only interim items which

will not be incorporated into the permanent solution are

the floating baffle wall and small amounts of piping and

electrical.

It is recommended that the interim solution be imple-

mented and operated at least through one winter to re-

solve the previous questions and to determine if the per-

manent modifications are required. If the interim solution

proves capable of meeting the required effluent limitations,

the permanent modifications may not be needed.

VIII. COSTS

This section of the report includes project cost eStimates

for the proposed modifications to the existing waste treat-

ment facilities, as well as annua! operation and mainte-

nance cost estimated. Contingency costs are included to

cover unknowns in construction caused by problems dis-

covered during construction and are not assumed to cover

rising costs. Included are estimated construction costs for

the 1982 construction season; if construction is delayed

beyond this time, costs should be increased to allow for

inflation.

GWALTNEY OF SMITHFIELD

SMITHFIELD, VIRGINIA

INTERIM WASTE TREATMENT MODIFICATIONS

ESTIMATED CONSTRUCTION COSTS

New Anaerobic Effluent Control] Structure $ 6,000

New Pipeline from Existing Anaerobic Lagoon

No. 1 to the New Aerated Cell 10,000

Floating Baffle Wall for Segregating the

Aerated Cell 15,000

. Relocate Nine 25-Hp Floating Surface Aerators

to New Aerated Cell with New Anchor Cables 5,000

Slope Protection 4,000

New Return Activated Sludge Line and Sludge

Wasting Valves 7,000

. Sitework (reseeding areas disturbed by con-

struction) 1,000

Total $48,000

Contingencies _ 5,000

TOTAL ESTIMATED CONSTRUCTION COST

Dye ly ae Fo yt) Se $53,000

ADDITIONAL ANNUAL OPERATION AND

MAINTENANCE COST

. Labor-One Additional Laboratory Person at

a Salary of $14,000/Year $17,500

Maintenance 0

Electrical 0

ESTIMATED TOTAL. ....................... senidbnatpitenentalsitaiinisiaiananaedela $17,000

eo PF BM Fe Ff &

GWALTNEY OF SMITHFIELD

SMITHFIELD, VIRGINIA

PERMANENT WASTE TREATMENT MODIFICATIONS

ESTIMATED CONSTRUCTION COSTS

. Anaerobic Effluent Pumping Station Utilizing

Existing Gorman Rupp Pumps

Aeration Basin Splitter Structure

Aeration Basins (2)

Aeration System and Centrifugal Blowers

Blower Building

New Clarifier Splitter Structure

Piping, Valves and Manholes

Sitework (Sidewalks, Gravel Roads and Seeding)

Electrical and Mechanical

Total

Contingencies

Total Estimated Construction Cost

Engineering, Surveying and Soils Analyses

TOTAL ESTIMATED PROJECT COST .....................

REDUCED ANNUAL OPERATION AND

MAINTENANCE COST

. Labor - One Additional Laboretory Person at

a Salary of $14,000/Year

Maintenance - Probably Less than at Present

Electrical - 75 Hp Less Due to More Efficient

Seration System @ 4¢/kwhr

SEED SU UID. conccnsnssscunenenennantenniihinenianinssinationn

$ 15,000

7,000

165,000

155,000

22,500

_ 7,000

70,000

12,000

30,000

$423,500

42,500

$466,000

40,000

$506,000

$ 17,500

EXHIBIT 56

[LOGO | Telex 82-3648

Smithfield Packing Company, Inc.

P.O. Box 447

Smithfield, Virginia 23430

(804) 357-4321

August 12, 1982

Mr. Kenneth W. Brown

President

Gwaltney of Smithfield, Ltd.

Smithfield, Virginia 23430

Dear Ken:

After reviewing the Concept Engineering Report by

Wells Engineers, Inc., and at.er extensive discussion

with Sharon City, it is my opinion that you should take

the advice of the proposal and put into action an interim

solution proposed by Wells. Gwaltney’s wastewater facility

in its existing state is severely experiencing TKN prob-

lems in the cooler months and intermitten suspended sol-

ids problems. The State Water Control Board Compliance

Division has indicated that steps must be taken to solve

these problems. It is my opinion that unless some action

is taken your system will continue to violate permit limi-

tations and you could experience enforcement action from

the state compliance group.

I have attached the Wells Engineers bill for the engi-

neering services provided in making the recommendations

for you to pay. Also attached is a drawing to supplement

your copy of the Wells report.

Sincerely,

/s/ Henry L. Morris

HENRY L. Morris

Vice President /Engineering

‘eb

ec: JWL

‘rs:

EXHIBIT 57

[LOGO]

GWALTNEY OF SMITHFIELD

Smithfield, Virginia 23430

(804) 357-3131

September 29, 1982

Mr. T. Switzer

State Water Control Board

Pembroke Building #2

Suite 138

Virginia Beach, VA 23462

Dear Mr. Switzer:

As per our discussion on 9/24/82, I am enclosing the

detail for alterations to our current treatment system at

Gwaltney of Smithfield, LTD. Your office is currently

studying the Wells Engineering recommendations for al-

tering the system. However, we wish to make the modi-

fications as outlined in the attached drawings. The

changes we propose will accomplish the same goals as out-

lined by Wells with much less expenditure of time and

money.

Wells’ Modification

Discontinue use of present aerobic lagoon.

—

Divide the current final pond with a floating poly

curtain, thus creating two smaller ponds; one anaer-

obic and one to be aerated.

3. Relocate nine-25 H.P. aerators into new aeration cell.

Gwaltney’s Modification

1. Convert present aerobic lagoon to anaerobic.

2. Relocate aerators into current final pond to create

aerated lagoon.

3. Install chemical pumps and tanks on clarifiers to im-

prove efficiency.

We feel that the additional anaerobic lagoon will increase

denitrification. Also, the reduction in size of the aerated

lagoon should decrease B.O.D.’s and help maintain tem-

perature control. The addition of chemicals to the clari-

fiers will greatly improve reduction of solids content. The

current chlorination system has been upgraded with baffles

in the mixing tank and an automatic feed system.

We feel that these modifications will allow us to_remain

within our permit perimeters.

Sincerely yours,

GWALTNEY OF SMITHFIELD, LTD.

/s/ W. H. Voorhies

WALTER H. VoorRHIEs II

Manager of Quality Control

WHV:Irl

ec: A. Devine

D. Robinson

R. Hogue

EXHIBIT 60

[LOGO]

MEMO:

WELLS ENGINEERS, INC.

To: PBW,JWS

From: WJW

Reference: Gwaltney of Smithfield, Ltd., WE # 820602

Date: August 26, 1982

I received a call from Sharon City stating that they had

not received a reply to the study and report on the ref-

erenced project from the State of Virginia.

She went on to say that the president of Gwaltney of

Smithfield, Ltd. has made the decision to make the waste

treatment operation of Gwaltney of Smithfield totally

independent from Smithfield Packing Company. They have

purchased equipment to set up their own waste treatment

laboratory and have hired a new Class II operator and

they do not wish to have Sharon City involved in the

operation of their plant any longer. Further, they do not

plan to implement the recommendations outlined in our

report and believe that they can handle the problems them-

selves without any help.

Sharon told them that the high TKN values were the big

problem and no amount of chemical addition will solve

that problem. They plan to add alum to control the sus-

pended solids problem and the high cilorine demand

problem.

Ultimately, Mr. Luter may end up deciding not to go

along with their desire to run an independent waste treat-

ment operation if the State of Virginia assesses fines and

penalties for noncompliance due to high TKN values.

Sharon City’s boss, Henry Morris said he told Gwaltney

of Smithfield to look very carefully at our report. His

recommendation is that they implement the temporary

alternative as the most cost effective way of dealing with

the high algae problem and high TKN problem

Ultimately Mr. Luter will have to decide what to do about

the waste treatment system at Gwaltney of Smithfield

based upon the reaction of the State of Virginia concern-

ing our report and concerning fines if there are TKN

violations, which there most assuredly will be in the

winter.

In the meantime, Sharon City is training their new Class

II operator to run tests and then she will no longer be

involved in that plant.

| ee

EXHIBIT 65

[LOGO]

WELLS ENGINEERS, INC.

11237 Chicago Circle

Omaha, Nebraska 68154

(402) 330-0202

February 23, 1983

Re: Gwaltney of Smithfield, Ltd.

WE # 820602 (Contract)

Mr. Henry L. Morris

Smithfield Packing Company

P.O. Box 447

Smithfield, VA 23430

Dear Mr. Morris:

When we conducted the Study and Report on the waste

treatment facilities at your Gwaltney of Smithfield, Ltd.

plant, we had established in our proposal letter of June

11, 1982 a “Not to Exceed” figure of $5,0:'0.00, which

was over and above the initial $650.00 that you agreed

to pay for my trip on June 10, 1982. The Study and

Report actually cost $3,371.95, which along with the $650

for the trip made a total of $4,021.95. We billed you for

this amount and received payment in full.

Following completion of our Study and Report, we were

informed that the personnel at the Gwaltney plant in-

tended to pursue their own course of action on the waste

treatment system, and we did not do any further work

on the project until we were notified by you that the Vir-

ginia Water Pollution Control Board (in their letter of

November 12, 1982) declined to accept the alternatives

suggested by the Gwaltney personnel.

We were then requested by you to develop a schedule and

a Plan of Action for you to submit to the Virginia Water

Pollution Control Board in accordance with their letter

of November 12, 1982. This schedile and Plan of Action

was transmitted to you on November 23, 1982.

On December 1, 1982 we received a call from Sharon City

stating that you had contacted the State of Virginia

Water Pollution Control Board, who told you that they

felt our suggested schedule was a reasonable one, and

that official word would be received following the meeting

of the Virginia Water Pollution Control Board. At that

time we were requested to proceed with the development

of final plans and specifications. We then transmitted

two preliminary copies of those plans and specifications

and requested additional surveying information on De-

cember 23, 1982. We subsequently transmitted three sets

of plans and specifications to the Virginia State Water

Contro! Board on January 5, 1983 and have now re-

ceived a reply letter from them dated February 18, 1983.

We are currently in the process of responding to their

letter. Our Schedule of Compliance anticipated that we

would receive approval of the State Water Control Board

by January 31, 1983. We were approximately 6 days late

in transmitting plans to them, and they are approximately

two weeks late in replying to the plans that were sub-

mitted. The schedule called for opening bids on February

25, 1983. We will not likely be able to open bids before

March 25, 1983, assuming a speedy resolution of the re-

maining problems.

Enclosed is a billing for the work we have completed on

the development of plans and specifications for this proj-

ect through January 31, 1983.

Very truly yours,

WELLS ENGINEERS, INC.

‘s/ W. James Wells, Jr.

W. JAMES WELLS, JR., P.E.

President

WJW :jlk

Encl.

EXHIBIT 77

[LOGO]

SMITHFIELD FOODS, INC.

P.O. Box 447

Smithfield, Virginia 23430

(804) 357-4321

March 15, 1984

Mr. Richard N. Burton

Executive Director

State Water Control Board

P.O. Box 11143

Richmond, Virginia 23230

Dear Mr. Burton:

I received your letter by certified mail expressing your

concern over the TKN violations at the Gwaltney of

Smithfield, Ltd. facility since September of 1983. In

your letter you explained a brief history of the problems

at Gwaltney and I would like to make some corrections

regarding the comments.

I have attached a Chronology of Events that was fur-

nished to me by Henry L. Morris, Vice President /

Engineering, who is responsible for the wastewater sys-

tems at both plants. This chronology of events is backed

up by written correspondence from both Henry Morris

and the SWCB. I am particularly concerned that while

we submitted our plans and specifications on January 5,

1983 to modify the system, it took the SWCB until the

end of May to approve our plans. I might also note that

Mr. R.V. Davis, the Executive Director of the SWCB,

in 1982, was in agreement with Wells Engineers report

proposed in August of 1982, and which was the basis for

the plans and specifications submitted in January 5,

1983. We were prepared at the time to react very

quickly to the TKN problems but it took five months to -

go through the approval procedure even though the

SWCB was aware of our plans in August 1982.

Because of the length of time to obtain approval, the

bids received to modify the system in January 1983 had

to be resubmitted and verified prior to the beginning of

construction. As you can see by the attachment, the con-

tract was awarded on June 17, 1983 and construction be-

gan July 6, 1983. Further, only 214 weeks were lost

during construction due to obstacles that were not de-

tailed on any of the Gwaltney prints. We found our-

selves in a difficult situation throughout November 1983

with the Smithfield Packing Company lagoon system and

the need to remove the sludge from their anaerobic la-

goons. We requested permission from SWCB to pump

the sludge to the abandoned lagoon in the Gwaltney sys-

tem knowing that the overflow would go through the

Gwaltney wastewater system. The SWCB concurred with

our suggestion and we bagan pumping sludge on Novem.

ber 16. We found we had to control pumping levels so

as not to overload the Gwaltney system with runoff from

the abandoned Gwaltney lagoon and we metered the

pumping rate accordingly. After pumping of the sludge

was completed, we found we still had higher than ex-

pected levels in our new anaerobic and aeration lagoons

and we requested Wells Engineers assist us in deter-

mining the reasons. We found that while we were solv-

ing one problem we created another. We found several

restrictions in some non-essential piping in the effluent

piping which created level control problems in our new

lagoon. The restrictions in the non-essential piping were

removed, and as you can see, from mid-December on we

have showed a steady decrease and on February 8 our

last TKN violation occurred.

Further, our TKN monthly average was below the al-

lowable average during the month of February and to

this date we have experienced no violations of our per-

mit for the month of March.

We feel we have fulfilled our obligations as we first

stated in October 28, 1982 to address the problems and

expediently correct the problem. The SWCB in exam-

ining our proposal delayed the overall construction and

completion by approximately five months. We feel the

action of the staff in threatening legal action before the

Board Members of the SWCB is inappropriate. The fa-

cility is in compliance with its NPDES permit, and ac-

cording to Wells Engineers and our staff people, is func-

tioning as intended and our effluent treatment is improv-

ing daily.

Sincerely yours,

/s/ Joseph W. Luter

JOSEPH W. LUTER, III

Chairman of the Board

/eb

ee: Tidewater Regional Office, SWCB

Bureau of Applied Technology, SWCB

Bureau of Enforcement, SWCB

Attorney General, Gerald L. Baliles

Attorney-at-Law, H. Woodrow Crook, Jr.

CHRONOLOGY OF EVENTS

CONCERNING WASTE WATER PROBLEMS

AT GWALTNEY OF SMITHFIELD, LTD.

October 28, 1982

November 12, 1982

November 30, 1982

January 5, 1983

February 18, 1983

I wrote a letter to R. V. Davis stating

changes in the management structure at

Gwaltney and accepting responsibility

for the wastewater system and the cor-

rective actions that would follow based

on a report submitted by Wells Engi-

neers in the Spring of 1982.

I received a letter from R. V. Davis

asking for a plan of action by November

30th and questions about our approach

to resolve the problems.

I responded with a letter to Mr. Davis

with compliance schedule as follows:

1. submitting plans and specs to SWCB

by 12/30/82

2. expected approval from SWCB by

1/31/83

3. opened bids 2/25/83

4. awarded contract and started con-

struction 3/1/83

5. complete construction and start-up

plant 4/15/83

6 achieve compliance 5/27/83

7. evaluate performance of system for

the year end 6/22/84.

Plans and specifications submitted to

SWCB.

‘Letter from SWCB requesting answers

to four questions concerning the plans

submitted.

<== s—“‘;‘;7TC2S }Pt=<CiC‘;<~ST

March 2, 1983 Submitted a detailed answer to each of

the four questions requested by the

SWCB.

March 10, 1983 We received another letter requesting

further information about our plan.

March 31, 1983 We submitted answers to three questions

complete with calculations showing the

basis of our design.

April 27, 1983 We received a letter from the State in-

dicating forthcoming approval but also

requesting comparative data on nitri-

fication from a similar packing plant

and a new schedule of compliance by

May 31, 1983

May 13, 1983 We submitied data from (3) comparative

packing plants and a new schedule of

compliance as follows:

1. Start construction 10 days after

approval

2. Complete construction 65 days after

starting

8. Achieve compliance 45 days after

completion

May 31, 1983 The State wrote a letter approving the

modifications to the Gwaltney waste

treatment system. This letter was re-

ceived on June 3, 1983 by Sharon City

but due to my absence was not officially

received until June 10, 1983.

Juze 17, 1983 Contract was awarded.

July 6, 1983 Construction began (the reason for the

delay was because we had to firm-up

prices submitted on the previous quota-

tions due to delays in approval of the

system modifications by the SWCB).

October 18, 1983

November 16, 1983

November 18, 1983

December 1, 1983

December 4, 1983

December 7, 1983

December 8, 1983

December 11, 1983

December 15, 1983

December 31, 1983

Construction complete-214 weeks lost

during construction due to obstacles lo-

cated underground as the piping for the

lagoon system was being laid. This was

detailed to Anne Field in a letter dated

September 19, 1983.

Begin pumping sludge from Smithfield

Packing lagoon system to abandoned

anaerobic ‘agoons at Gwaltney.

We reduced pumping levels due to rising

levels in abandoned lagoons forcing ad-

ditional flow to the modified system.

Fabrica'sd and installed slide gate to

contro! flow from the old aeration lagoon.

Slide gate working well, levels begin

dropping.

Experienced extremely heavy rains cre-

ating high levels in the lagoon system

and upsetting the modified anaerobic

and aeration basins.

Wells Engineers evaluated the system

and found restrictions in non-essential

piping in the effluent discharge which

were magnifying problems with level

control in the new anaerobic and aera-

tion basins.

Non-essential piping was removed from

the system.

Level of new aeration basin steadily

dropping, solids building, TKN dropping.

System began functioning as intended

with the design by Wells Engineers.

Solids were building to around 3,000

Mg/l in the aeration lagoon and the

cover on the anaerobic lagoon was be-

ginning to build.

‘enemies

TKN violations since 12/01/83 (permit limit 219 Kg/d)

(109.1 Kg/day average/month) :

12/01/83 385.06

12/06 296.28

12/07 407.78

12/08 380.51

12/13 397.91

12/14 560.18

12/15 441.11

12/19 539.66

12/20 573.03

12/21 580.56

12/27 369.02

12/28 466.75

12/29 469.12

1/04/84 489.97

1/05 461.78

1/06 445.16

1/09 375.36

1/10 310.46

1/11 330.80

1/17 342.38

1/23 248.65

1/24 240.18

2/08 233.7

The last TKN violation was 2/08/84. February monthly

average was 103.8 Kg/day, which is below the allowable

average of 109 Kg/day. This system’s grease bearing

anaerobic lagoon is developing a grease cover and the

system is beginning to function as intended with satis-

factory effluent falling within the limits of our NPDES

permit.

EXHIBIT 101

STATE WATER CONTROL BOARD

STAFF REPORT

IN RE:

GWALTNEY OF SMITHFIELD, INC.

March 25-26, 1984

General Assembly Building

Senate Room B

Richmond, Virginia

MR. ARIAIL Next item, Mr. Burton

MR. BURTON The next item Mr. Chairman, is

Gwaltney of Smithfield, Inc., a staff report by Larry

McBride.

MR. McBRIDE Mr. Chairman, this will be a staff

report for the purpose of briefing the Board on certain

problems which Gwaltney of Smithfield has had in meet-

ing conditions of their NPDES permit. Mr. Terry

Switzer, an Engineer from my staff will be presenting

the staff presentation. I believe the Vice-President of

Engineering with Gwaltney of Smithfield, Mr. Henry

Morris, is also with us today and I think he wishes to

address the Board on the subject following Mr. Switzer.

Terry.

AFTER BEING DULY SWORN

MR. ARIAIL Why are we swearing in on this one?

MR. McEACHERN On advise from Mr. Butcher.

MR. BUTCHER This is essentially a 15 day appear-

ance, Mr. Chairman.

MR. ARIAIL O.K.

MR. SWITZER Mr. Chairman, Members of the Board,

Gwaltney of Smithfield, Ltd. is a swine slaughtering and

processing operation located in Smithfield, Virginia.

Wastewater is treated on-site and discharged at an aver-

age rate of about 1 mgd to the Pagan River under an

NPDES permit which was originally issued in October,

1974. The company, previously named ITT Gwaltney, was

sold to Smithfield Foods in October, 1982. This view-

graph summarizes the sequence of events which this re-

port will discuss. TKN limitations were included in the

company’s permit in August of 1980 due to dissolved

oxygen concerns in the Pagan River. Violations of the

TKN limit occurred yearly during cold weather, and the

company was requested to submit plans for upgrading

to achieve TKN compliance. In August, 1982, the com-

pany’s consultant submitted preliminary plans. How-

ever, the company modified those plans to reduce the

costs, and the staff felt that the modified plans were not

satisfactory. Then in October, 1982 the company was

purchased by Smithfield Foods, and the new management

approved the consultants original preliminary design.

A proposed schedule of compliance was submitted in No-

vember of 1982 which included a May 27, 1983 date for

permit compliance. Final plans were received in Jan-

uary of 1983. After all questions pertaining to the plans

had been satisfactorily addressed, final <-~proval was

granted on May 31, with a request for a re..sed sched-

ule of compliance and monthly progress reports. This

revised schedule called for permit compliance by October

8, 1983. By August, the staff had not received any of the

requested progress reports, and a letter was sent from

the Bureau of Enforcement reminding the company of the

request for the reports and of the need to adhere to the

schedule of compliance. A progress report was submitted

at the end of August, and it was noted that the company

was in violation of the construction completion date of

August 24th contained in the schedule. The company re-

ported that the delay had been due to problems with

awarding a contract and several additional construction

related delays. The new completion date was projected

to October 5. No further progress reports were sub-

mitted, and the modifications were completed on October,

1983. Unfortunately, just as Gwaltney’s newly modified

treatment system was being brought on line, problems

developed in the system as a result of activities in prog-

ress at the Smithfield Packing Co., owned by the same

company as Gwaltney and located across the street.

Smithfield Packing Co. had been experiencing major

problems with its treatment system, and was involved

in a remedial program to correct the problems. This

remedial program involved pumping sludge from the

Smithfield’s Packing Company’s treatment facility to an

abandoned anaerobic lagoon at Gwaltney, and for the

resulting excess liquid to be bled slowly through the

modified treatment system. While this was in progress,

a period of heavy rainfall occurred. No flow control

capability had been initially been installed within the

Gwaltney system to control flows between the abandoned

lagoons and the newly modified system. Gwaltney’s ef-

fluent pumps could not handle the added flows from both

Smithfield Packing Co. and the rainfall. Water levels

rose throughout the Gwaltney system, causing hydraulic

overloading and continued violations since December,

1983 when the new system was brought on-line. Umnfor-

tunately, the sludge pumping operation continued through

this period, adding to the hydraulic load. Therefore,

despite the company’s schedule calling for compliance in

October, 1983, the facility continued to be in violations

of its permit. This chart shows the TKN levels dis-

charged by Gwaltney since the inclusion of these limi-

tations in their permit. The blue areas represent the

average monthly TKN levels, the red areas the maxi-

mum daily TKN levels. The upper dashed line in the

maximum daily limit included in the permit. The lower

dashed line the average monthly limit included in the

permit. It should be noted that the TKN violations at

Gwaltney have generally occurred during the cold tem-

perature months of November through April, when nitri-

fication is generally reduced. During these months dis-

solved oxygen levels in the stream are not critical, and

the impact on the stream would not be major. This is

in contrast to the situation at the Smithfield Packing Co.,

where TKN violations have continued through the sum-

mer months when stream D.O. is critical. A Virginia

Institute of Marine Science model was recently run on

the Pagan River, and the results substantiated that the

winter dissolved oxygen levels should not be adversely

affected by the elevated TKN levels. Moreover, the dis-

charge levels are now returning to within compliance

levels and the staff feels confident that the new treat-

ment system will be able to maintain permit compliance.

As shown in the viewgraph, the average monthly TKN

level in February was within the permitted limit and

the maximum violation resulted from only 1 sample in

excess of the permitted maximum daily limit. The

NPDES permit for Gwaltney is due for reissuance this

October, and the most current information available at

that time will be incorporated into the reissued permit.

Most recently, the Chesapeake Bay Foundation and the

NRDC have notified Gwaltney that they intend to jointly

file suit in accordance with Section 505 of the Clean

Water Act for violations of their NPDES permit as

previously described. Since the staff has been unsuccess-

ful for such a long period of time in our efforts to bring

this facility into compliance, and in view of the legal

action by the environmental groups, the staff wished to

bring this matter to the attention of the Board. That

concludes the presentation, if the Board has any ques-

tions, I’d be happy to answer those.

MR. ARIAIL Let me make sure, most of the preser.-

tation you made didn’t, that had to do with different vio-

lations, didn’t it?

MR. SWITZER No, this was all based on TKN vio

lations only.

MR. ARIAIL Those flows that were coming from th

adjoining plant?

MR. SWITZER Those flows resulted from sludge

being pumped from Smithfield Packing Co., into an aban-

doned lagoon at Gwaltney. As the sludge entered the

lagoon, the liquid level above it rose and was to be bled

slowly through the remaining system.

MR. ARIAIL That’s not happening anymore?

MR. SWITZER That was a temporary occurrance.

Smithfield Packing Co. needed to eliminate the accumu-

lated sludge in one of their lagoons, and .. .

MR. ARIAIL Aren’t we proceeding to get Smithfield,

or isn’t that...

MR. SWITZER Well, right, well that was a different

problem.

MR. ARIAIL Are we treating that as being Smith-

field’s problem?

MLABLE COPY

MR. SWITZER Well, it’s the same company.

MR. ARIAIL I know, but, have we taken any en-

forcement action for that, or is that part of this?

MR. SWITZER Not for the sludge pumping opera-

tion, we haven’t.

MR. ABBITT We do have enforcement action against

Smithfield though, don’t we John?

MR. BUTCHER Mr. Chairman, yes we are in court

with Smithfield at the present time.

MR. ARIAIL But, it is not that particular...

MR. BUTCHER No, the action against Smithfield

is directed toward Smithfield’s own discharges from his

plant and has not been amended to include this incident.

MR. ARIAIL Well I understand that what we are

saying now, is, what I believe you said is that these

TKN standards are likely not to be included in the per-

mit when it is reissued?

MR. SWITZER No, when the permit is reissued in

October, we intend to use whatever the latest informa-

tion we have on the various modeling efforts at that

time to develop the proper type of permit to be reissued.

Whether it includes limits changes or additional monitor-

ing, that has yet to be determined.

MR. STANDING Are you saying, to put things in

the proper perspective, that the TKN limitations in their

permit are not necessary to protect the water quality

and because if it is a violation shown to those TKN’s

in the permit, it’s triggered bells with other organiza-

tions, saying they are in violation of their permit so we

are going to sue Smithfield, when in fact there is no

water quality damage?

MR. SWITZER No, what we are saying is that dur-

ing the winter months, we don’t believe that the viola-

tions that Gwaltney has been experiencing have ad-

versely effected the water quality because during the

winter dissolved oxygen in the river isnt critical, and

the dissolved oxygen concerns are the reason the TKN

limits were put into the permit. Now, had the violations

occurred during the summer, that would be a critical

D.O. period and would probably have adversely effected

the water quality.

MR. STANDING So, the plan is to revise those TKN

limits in the new permit that will be issued in October?

MR. SWITZER Those limits will be looked at closely,

and some type of revision will probably be necessary.

MR. ARIAIL O.K., anymore questions of Mr. Switzer?

We want to hear from, is there a representative of the

Company here?

MR. SWITZER Yes sir.

MR. MORRIS Mr. Chairman, Members of the Board,

by name is Henry Morris, I am Vice-President of En-

gineering for Smithfield Foods. Smithfield Foods is the

parent company for Smithfield Packing Company, the

packing company located on the left side of the screen

and Gwaltney of Smithfield, the packing company located

on the right side of the stream. Both of these plants

are located in Smithfield, Virginia. I would like to clar-

ify some of the things that Mr. Terry Switzer said, be-

cause I think that there are some errors in his presenta-

tion. 1) We acquired Gwaltney from the ITT organiza-

tion in October of 1981. We elected to maintain the ITT

management staff for approximately a year, and there

were many changes that we made at that, in the man-

agement staff during the first year. At the time that

we acquired Gwaltney we found that we were in viola-

tion of the TKN limits with the Gwaltney wastewater

system. In the spring we acquired Wells Engineering

out of Omaha, Nebraska to study the Gwaltney system

and make a presentation, which they did, in fact as

Terry Switzer said, in August of 1982. I assumed re-

sponsibility for the engineering aspects of the Gwaltney

operation in October of 1982 and found that prior man-

agement had elected to present a plan different from

Wells Engineering to the State Water Control Board.

As you can see on the chronology of events that occurred

from that point on. I contacted Mr. Davis, who was then

the Executive Director of the State Water Control Board,

assured him that the management structure at the

Gwaltney organization would respond promptly to the

problem of TKN, which in fact we did. We submitted

a schedule per his request by the first of the year, which

was almost verbatim the plan that Wells’ Engineering

staff had proposed. We proceeded at the time to obtain

bids and begin our plans for construction. By looking at

the chronology of events, you can see that from January

the 5th, over on the second page, until May the 31st

we received numerous questions from the State Water

Control Board concerning the, our plan for implement-

ing a modification to the Gwaltney system and also some

of the calculations that were behind the proposal prior

to the time the award, the approval was given. We in

fact received the approval on May 31st. I was out of

the country at the time we received the approval and I

reacted when I returned, on June 10th. This is a pic-

ture of the Gwaltney wastewater system as construction

was beginning. The Gwaltney system consisted of an

anaerobic lagoon in the center of the picture, the lagoon

with the cover. A large aeriation basin, the basin di-

rectly behind the white warehouse building with the di-

vision in the middle of the lagoon was a stabilization

pond within the system, and then in the very bottom

right hand corner you can see one of the two twin clari-

fiers. The Wells Engineering report in essence called

for a re-structuring of this lagoon system, that we would

totally eliminate the large aeriation basin that is directly

in the center of the picture where you can see the aeria-

tion activity. Modify the stabilization pond on the right

hand side of the picture, so that we had increased ana-

erobic capacity and a very small aeriation basin. We in

essence installed an activated sludge system very similar

to the one we have next door in Smithfield Packing Co.

This picture is, was taken sometime in the summer and

construction had begun. One of the problems we had

early on was all of the bids that we received back in

January and February months had to be updated because

of the length of time it took for the State Water Control

Board to approve the plan. Once the bids were received

and renewed, the contract was awarded and we actually

began construction on July 6, 1983. During the con-

struction period we lost approximately 214, weeks, which

I thought was remarkable for a project of this size.

Most of the lost time was due to pipelines that we were

running to and from the plant and obstacles that we hit

underground that weren’t marked on any print. This

is a facility that has been added onto, I guess many

times, in the last several years and most of the drawings

of the internal part of the plant and the plumbing are

not on paper. We hit obstacle one after the other and

it did create some delays for us, but we moved right

along and completed the construction of the lagoon sys-

tem and actually effective startup on October 18, 1983.

Mr. Switzer has said that we had a problem with

Smithfield Packing anaerobic lagoons and pumped our

sludge from those lagoons to this system. As the system,

I’m going to move over to the slide to show you a couple

of things. We had an abandoned anaerobic lagoon on

the back side of the aeriation basin that would overflow

to another abandoned lagoon which would ultimately

overflow to this aeriation basin. We took the piping

from across the road, across this roadway, down to this

anaerobic lagoon to pump the sludge out of the two

anaerobics at Smithfield Packing that were virtually of

a dialated sludge. We began pumping the sludge on No-

vember 16, we reduced the flows from the Smithfield

Packing Co. on November 18, when we found that the

water level in the old aeriation basin was rising rapidly

and we were completed with the pumping of the sludge

from the 2 anaerobic lagoons by November 24, 1983.

The short period of time that we were pumping really

didn’t impact the system that much. What we had really

done was that we had solved one problem and created

another. We found many, in the piping arrangement

from the pumping station in the new aeriation basin to

the chlorine contact tank and ultimately to the Pagan

River, we found an awful lot of restrictions in that

piping and a lot of the piping was non essential. You

couple that with the flow from the plant, some very heavy

rainfall in the period, the latter part of November and

the first part of December and we were hydraulically

overloaded. We modified the piping on the discharge side

of the lagoon system to the river. We were immediately

successful, as far as our pumping and our levels in our

lagoons reduced, and as you can see on the last page of

this chronology of events, I’ve listed our TKN violations

from December 1—present. If you will look down about

December 19th, you will see that we had a 539 kg/d vio-

lation, but if you will look at the pattern following that

19th of December you will see a drastic drop through

the winter months, when our violations have occurred in

the past years, of the TKN violations down to a point

of February 8th, which was 233 kg/d, our permit limit

being 219. Since that time, we have had no violations of

TKN and the system is developing a grease cover over

the anaerobic lagoon. The aeriation system is working

as it was designed. I believe we have eliminated the

TKN as a problem with the Gwaltney system. I don’t

think any of these other slides are really particularly

pertinent to the issue. I included one slide that would

show you the proximity of the Pagan River from the

lagoon system. As Terry Switzer indicated, the mathe-

matics] model that was performed on the Pagan River in

the mid-seventies has been restudied. We had a meeting

this past Thursday with the State Water Control Board.

We are in hopes that some relaxing of the TKN stand-

ards through the winter months would be possible, since

the state has indicated that the impact to the Pagan

River is virtually non-existant during the winter months.

I'll be happy to answer any questions, if the Board has

any.

MR. ARIAIL Are you saying that you think when it

starts running though you would be able to meet the

TKN standards that we’ve got now?

MR. MORRIS The design by Wells Engineering was

to meet a TKN limit, maximum of 219 kg/d, 109 kg/d

monthly average.

MR. ARIAIL What would the, if the permit ended

up being modified to give you higher limits during the

winter months, would that just give you extra capacity

or would it reduce what your treatment had to be at some

point?

MR. MORRIS Let me try to answer that question in

a little different fashion. The hardest time for a treat-

ment system of this type to control TKN is through the

winter months of the cold temperature. As the water

temperature reduces down to a point of about 50°F, the

TKN limit can jump immediately as the water may fluc-

tuate in 2-3°. With the large surface areas we had on

the aeriation basin before, it was very easy for that

aeriation basin to drop in temperature as the outside

temperature did. With the new smaller aeriation basin,

we hope that we can maintain the temperature in that the

average water temperature of a meat packing plant, the

effluent is rather high because of, just because of the na-

ture of the operation. We don’t have much control over

the weather, we don’t have any control over a duration of

a real hard cold spell and I can see, there could be some

violations if we got into some very severe temperature

problems. It’s our hope and certainly the best expertise

we have says that we should be within limits, that we

should meet the limitations. I just project our concerns

as far as our inability to control the weather with this

particular type of system.

MR. ARIAIL Any other, any questions?

MR. MILLER Just one question Mr. Chairman. Have

you completed all the transfer of the sludge from the

other plant?

————— rt (_i‘—SCS

MR. MORRIS Oh yes sir. We completed the pumping

of the sludge from the two anaerobic lagoons on Novem-

ber 24th, Thanksgiving Day, this past year. We then

moved over and pumped the sludge out of an old sludge

holding pond that had been eliminated from the system.

Our new plan at Smithfield Packing, calls for us to utilize

that small holding pond as an aeriation basin and we had

to eliminate all of the sludge from the pond before we

began work on the system. But, we completed the pump-

ing of that sludge, and we pumped it at a very slow rate

and we were able to hold the water levels down, pri-

marily because of the modifications we made to the piping

between the pumps and the Pagan River. We were able

to hold that pumping down and get it pumped sometime

I think around the Ist of January.

MR. ARIAIL Any other questions, comments? Thank

you very much.

MR. MORRIS Yessir.

MR. McBRIDE Mr. Chairman, the staff would simply

recommend in this case that you accept this status report

and direct the staff to consider the updated results of the

mathematical modeling in the reissuance of the NPDES

Permit for this facility.

MR. ARIAIL I see Mr. Watson’s here from the Chesa-

peake Bay Foundation, I don’t want to put you on the

spot, I’d be interested in knowing why ya’ll are thinking

about suing when | seems to me, we may incline toward

not taking any action for past violations, from what I’ve

heard. Let’s see if I’m missing something.

MR. WATSON I didn’t come prepared to make a

statement, but I’ll be glad to answer your question.

MR. ARIAIL I understand, was this just a routine

filing, are ya’ll going through routinely filing these no-

tices, or was there some particular reason that ya'll filed

a notice in this particular situation?

MR. WATSON No, we routinely follow the enforce-

ment of NPDES permits, but this is by no means a rou-

tine action on our part. In examination of the industrial

major dischargers in the State of Virginia for the past

5 years or so, this is one of the worse enforcement records

we have seen. Smithfield Packing, the other company, also

has a very bad record and I think that possibly at look-

ing at the two in comparison you are not giving quite as

much consideration to this case as would be warranted

under the circumstances. As you knew, enforcement of

NPDES permits is a problem nationwide and I think it’s

a problem in Virginia too, if this type of record goes by

with no more enforcement than has occurred on it to this

date.

MR. ARIAIL Ordinarily I’m inclined to agree that

there is a problem, but it seems to me we’ve got action

against Smithfield, I’m not trying to argue, I just really

trying to understand because I’m inclined personally not

to take any action in this case, and before we do things

like that I like to hear the other side a little bit. What-

ever we do, obviously ya’ll can go ahead with your law

suit, but that’s a much more cumbersome way of dealing

with the problem. We’rewgoing ahead with Smithfield, we

have some violations with Smithfield, but they were in

court, is that correct?

MR. BUTCHER We're in court with Smithfield, Mr.

Chairman, they’re under a temporary injunction and the

penalty case is going forward into discovery right now.

MR. ARIAIL So, we really are just dealing with this

issue alone, we’ve got separate action against Smithfield,

SO we recognize that they may have had other corporate

problems. O.K., any other, I don’t really mean to, I’m

not trying to argue with you, I just wanted to hear from

ya'll. Anybody have any questions from Mr. Watson?

Thank you. Do we need to go into Executive Session on

this or do I hear a motion for the staff recommendation.

MR. STANDING I move we adopt the*staff recom-

mendations.

MR. CRAGWALL Second.

MR. MILLER Will the staff come back in June with

the response .. .

MR. ARIAIL What does that mean if we adopt the

staff recommendations?

MR. McBRIDE Mr. Chairman, the reissuance of the

company’s NPDES permit is scheduled for October, so we

could give you a status report in June, possibly by then

we will have resolved the question of the application of

the TKN limits during winter vs. summer months. But,

it would not be until October that we reissue that permit.

MR. ARIAIL But, the violations at the moment, as I

see the evidence, it seems to me that they are under

control.

MR. McBRIDE I believe that’s true, and another

thing that you should recognize. A major difference be-

tween the way we are handling this action vs. the Smith-

field Packing Co., although the Smithfield Packing Co.

violated TKN and Gwaltney is also violating TKN. The

big difference is when. Smithfield Packing’s violations

occurred during the summer and we had evidence that

there were dissolved oxygen problems in the river, which

we felt were related to those. In this case the violations

have largely been during the winter months and we have

no evidence of water quality problems. You are right,

they are now under control.

MR. ARIAIL 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 necessary at the outset. Now, that may

be hindsight, but that’s . . . anybody else have any com-

ments, any further discussion on the motion? All those

in favor of the motion, signify by saying “Aye’’, opposed.

UNANIMOUS

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 84-0366-R

CHESAPEAKE BAY FOUNDATION, INC., and

NATURAL RESOURCES DEFENSE,

- Plaintiffs,

GWALTNEY OF SMITHFIELD, LTD.,

Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

AS STATED FROM THE BENCH

BEFORE: Honorable Robert R. Merhige, Jr.

United States District Judge

Richmond, Virginia

August 28, 1984

THE COURT: This is a motion by plaintiffs for par-

tial summary judgment, on the issue of liability, in a

“citizens’ suit” to enforce certain requirements of the

Clean Water Act, 33 U.S.C. §§ 1311 et seg. (the Act),

against a food-processing facility. No effort was made

to set up a factual issue that was not present; there are

no factual issues here. The matter is ripe for summary

judgment.

The first of two plaintiffs here, Chesapeake Bay Foun-

dation, is a non-profit organization organized under the

laws of Maryland. Its principal place of business is in

Annapolis, and it has an office in Richmond. It is a

regional conservation organization with thousands of

members in the Chesapeake Bay area. Some of its mem-

bers reside in Virginia in the vicinity of the Pagan

River, and they use and enjoy the river and the water

«system. (All this is set forth in plaintiffs’ uncontested

affidavits. )

The Court finds that the q.ulity of the nation’s waters

and waters of the Commonwealth directly affects the

health, recreation and esthetic environmental interests

of that organization and its members.

The Court finds that the interests of that organization

and its members have been, are being, and will be adversely

affected by the failure of defendant, Gwaltney of Smith-

field Limited (Gwaltney), to comply with its National

Pollution Discharge Elimination System (NPDES) per-

mit.

The second plaintiff, Natural Resources Defense Coun-

cil, is a non-profit membership organization organized

under the laws of the State of New York with offices

in New York, Washington and San Francisco. It has

over seven hundred individual members within the Com-

monwealth of Virginia. They, like the members of the

Chesapeake Bay Foundation, utilize the river and are

affected by Gwaltney’s failure to comply with its NPDES

permit. (This too is by uncontested affidavit).

Jurisdiction in the case is pursuant to 33 U.S.C.

§ 1865(a) (1); the Court finds from the uncontradicted

evidence that on October 23, 1974 the Virginia State

Water Control Board issued, to the defendant, NPDES

Permit Number VA 0002844, pursuant to VA. Code Sec-

tion 62.1-44.15, Section 402 B. of the ACT, and an ap-

proval of Virginia’s program by the Administrator of

the United States Environmental Protection Agency un-

der Section 402 of the Act, 33 U.S.C. § 1343, dated

March 31, 1975.

The permit was reissued on October 23, 1979, modi-

fied by the addition of a TKN limitation on August 1,

1980, and it has remained in effect to this date.

The defendant’s monthly reports under its permit,

which are required to be filed, reflect that between Jan-

uary 1979 and June 15, 1984 it has on at least 237

occasions discharged substances into the Pagan River,

which is a tributary of the James River and Chesapeake

Bay, in excess of the amounts allowed by its permits.

Defendants’ monthly reports may be used to establish

civil liability under the Act. See, e.g., United States v.

Ward, 448 U.S. 242 (1980).

Under 33 U.S.C. 1311(a), any discharge is unlawful

unless it is authorized by one of several specified sections

of the Act, including Section 402(b) of the Act, 33

U.S.C. 1342(b). Section 402(b) provides that compli-

ance with the permit issued pursuant to this section

shall be deemed compliance with Section 301 of the Act,

83 U.S.C. $1311, for purposes of enforcement under

Section 309 of the Act. 33 U.S.C. § 1319, or under Sec-

tion 505 of the Act, 33 U.S.C. § 1365.

Without more, then, to violate an NPDES permit con-

dition is to violate the Act. E.P.A. v. State Water Re-

source Control Board, 426 U.S. 200, 205 (1976), Nat-

ural Resources Defense Council v. Costle, 568 F.2d,

1369, 1374-77 (D.C. Cireuit 1977).

There being no genuine issue as to any material facts,

the plaintiffs are entitled to summary judgment in the

form of a declaration that the defendant has violated

the Act, for which it must be held liable. It is so OR-

DERED.

Gentlemen, we might just as well set it down for what-

ever else you want to do with it. I will see you in cham-

bers. Thank you for your help.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 84-0366-R

CHESAPEAKE Bay FOUNDATION, INC.

and

NATURAL RESOURCES DEFENSE COUNCIL. INC.,

Plaintiffs,

Vv.

GWALTNEY OF SMITHFIELD, LTD.,

Defendant.

[Filed Aug. 30, 1984]

ORDER

For the reasons stated from the bench and deeming it

proper so to do, it is ADJUDGED and ORDERED as

follows:

Defendant’s motion to dismiss be and the same is

hereby DENIED.

Defendant’s motion to abstain be and the same is

hereby DENIED.

Plaintiffs’ motion for partial summary judgment be

and the same is hereby GRANTED, and the Court de-

clares defendant Gwaltney of Smithfield, Ltd. to have

violated and to be in violation of the Federal Water

Pollution Control Act, 33 U.S.C. §§ 1311 and 1342.

rhe matter of appropriate re iy and injunctive re

ier is upon motion of parties, contin unt . er

order of the Court

Let the Clerk send a copy ol this order t =

of record

>. =. ‘ . | ‘

United States District Judge

Date Aug. 30. 1984

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 84-0366-R

CHESAPEAKE BAY FOUNDATION, INC., et e/.,

Plaintiffs,

GWALTNEY OF SMITHFIELD, LTD..,

Defendant.

[Filed Nov. 16, 1984]

ORDER

After hearing counsel for the parties at a status con-

ference held on the 7th day of November, 1984, it is

hereby ADJUDGED and ORDERED as follows:

1. Defendant's Motion for Rehearing is GRANTED,

and this Court’s Order of August 30, 1984, is AMENDED

to provide that the Court declares defendant Gwaltney

of Smithfield, Ltd. to have violated the Federal Water

Pollution Control Act, 33 U.S.C. §§ 1311 and 1342, on

those occasions subsequent to October 27, 1981, that are

documented by Discharge Monitoring Reports that it has

submitted to the Virginia State Water Control Board.

2. Counsel for the plaintiffs shall serve proposed find-

ings of fact and conclusions of law on counsel for the

defendants no later than November 27, 1984, and coun-

sel for the defendant shall serve proposed findings of

fact and conclusions of law on counsel for the plaintiffs

no later than December 4, 1984. Counsel for the parties

shall thereafter meet and confer in an effort to enter

into a comprehensive written stipulation of the facts and

the law relevant to the imposition and amount of a civil

penalty for the defendant's violations of the Federal

Water Pollution Control Act. All stipulations shall be

filed with this Court no later than 12:00 noon on De-

cember 14, 1984, together with the parties’ proposed find-

ings of fact and conclusions of law regarding those is-

sues that cannot be resolved by stipulation

s/ |Illegible|

United States District Judge

Date Nov. 16, 1984

Seen and Agreed to:

s’ Jeter M. Watson

JETER M. WATSON

Chesapeake Bay Foundation, Inc

11 South 12th Street

Richmond, Virginia 23219

Counsel for Plaintiffs

s Anthony F. Troy

ANTHONY F. Troy

Mays, Valentine, Davenport & Moore

23rd Floor, Sovran Center

1111 East Main Street

Post Office Box 1122

Richmond, Virginia 23208

Counsel for Defendant

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

P .

CA-84-0366-R

CHESAPEAKE BAY FOUNDATION, INC..,

Plaintiff,

GWALTNEY OF SMITHFIELD, LTD..

Defendant.

[TRANSCRIPT OF PROCEEDINGS)

Richmond, Virginia

Before: HoNnoras_e Ropert R. Mernice, Jr.,

United States District Judge

Appearances:

Jerer W. WATSON, Esq.

JAMES THORNTON, Esq.

ANN P. Galtuis, Esq.

Scott Burns, Esq.

For the plaintiff

ANTHONY F. Troy, Eso.

James E. RYAN, Jr., Esa.

H. Wooprow Crook, Jr., Ese.

For the defendant

GILBERT FRANK HALASZ, RPR

Official Court Reporter

(87) Q. Mr. Sneed, would the proposed interim solu-

tion and the permanent solution, so called, did you tell

the company that both would meet permit compliance?

A. We felt they were both acceptable alternatives

that stood a good chance of meeting the limitations, other-

wise we would not have proposed them.

Q. Would you describe very quickly for the court the

change in the aerators design which has been introduced

and how that would improve waste water treatment at

the plant?

A. Yes. The original aerators which were in the

aerated lagoon originally from I. T. T. Gwaltney which

were then moved to the new aerated lagoon do result in

fairly large amount of temperature loss, particularly dur-

ing the winter [88] time. So as those have needed repair

or needed replacement they have been replaced with a

submerged type of aerator.

Q. Does that minimize heat loss, and does it make it

more likely that the plant would comply with its T. K. N.

limitations?

A. That is correct.

Q. You have reviewed the waste water characteristic,

I take it, that come out of the packing plant. Are you

aware—just characterize the waste water for me, if you

would, please. Tell me what it is like.

A. Yes, sir, it is a highly biodegradable waste as you

would expect from food, that is, coming from pork. it is

very readily treatable by the bacteria in the treatment

plant by virtue of being a food waste. It is not a toxic

type of waste. In fact, we had a number of toxics anal-

yzed and none of them showed any concentrations that

would be of concern.

Q. So to your knowledge there is nothing in the waste

water that would be toxic, that is of any concern?

A. No, sir.

Other than chlorine, which is required by the State

Water Control Board to meet the fecal limitations.

Q. All right. I don’t believe I have further questions.

THE COURT: All right.

MR. BURNS: I will try to make it brief. I only

have a few questions, a couple areas I want to touch on.

(89) CROSS-EX AMINATION

BY MR. BURNS:

Q. Isn't it in fact, through, that your company advised

defendant, | believe you have testified, prior to the pur-

chase of the Gwaitney facility that there were inadequate

technology there with regard to meeting T. K. N. limits?

A. Sharron City called our firm when Smithfield

Foods was considering buying the plant and briefly de-

scribed the facility that was there briefly and asked our

opinion of it. We did indicate that we felt the lack of

sludge return was of concern and noted potentially about

our other problems that perhaps should be addressed.

Q. Mr. Sneed, when was the Concept Engineering re-

port designed to address these problems prepared?

A. In June and i believe in July of 1982.

Q. That is some eight or nine months after defendant

acquired the Gwaltney plant?

A. I believe that is correct.

Q. With regard to the interim solution prepared in

the Concept Engineering report, were there not some

reservation with regards to its ability to meet T. K. N.

limits in the winter?

A. Yes, sir. We did have some reservations, particu-

larly in light of the surface aerators and temperature loss.

However, we had designed a very similar type system, a

lagoon [90] system with sheet pile baffle walls at Smith-

field Packing Company, and that did give us comfort in

that regard.

I might also note, of course, that subsequent use of the

submerged aerators to replace the surface aeraters.

Q. You referred a number of times in your testimony

to Smithfield plant. You designed that plant?

A. Yes, sir.

Q. Have there been compliance problems there?

A. In the past year or so, yes, there have been.

Q Wasn't that facility in closed by the State Water

Control Board as a result of that non compliance?

A. Yes, sir.

Q. Do you think that given that it was unreasonable

for the State to request more information from Gwaltney

than was provided by Smithfield?

A. Yes, I do. That system performed very adequately

for a number of years after it was designed. Only after

the design loads were significantly increased did it go

out of compliance.

Q Mr. Sneed, is adequate grease cover important to

proper winter T. K. N. treatment of the plant?

A. On the anaerobic lagoon, yes.

Q You were with us last week when we toured the

facility, were you not?

A. Yes.

[91] Q Isn't it im fact true at that point in time, in

December, the lower anaerobic lagoon did not have ade-

quate grease cover?

A. Yes. Earlier in the summer time that lagoon was

covered with grease. And that was what we expected

would happen.

Quite frankly we were very surprised that that grease

cover has deteriorated to this point, and we have since

taken steps to accelerate the formation of that grease

cover.

Q. Given the importance, as you mentioned before, of

maintaining adequate grease cover, isn't there some doubt

in your mind as to whether the Gwaltney facility would

be in compliance with T. K. N. limits this winter?

A. Yes, we have.

Q. Isn't there some doubt? That is all I am asking.

A. Yes, sir.

I think there is some doubt every year that you would

expect the plant to go out of compliance at some time.

Q. I believe you mentioned earlier that the B.O.D.

data biochemical oxygen demand data upon which you

relied in developing the Concept Engineering report were

within expected limits?

A. Yes, sir.

Q. Isn’t that because you chose to disregard the higher

B.0.D. numbers reported on two to three days tested?

[92] A. We did disregard the higher B.O.D. and sus-

pended solids numbers on those days because the com-

parison of those parameters with the T. K. N. and the

grease indicated there was probably a grease spill which

skewed those numbers. The one remaining sample which

we did choose to believe is within norm of what we would

expect from this type of plant.

Q. You stated earlier, did you net, there were at

least some reservation in your mind with regard to the

inability of the interim solution to meet T. K. N. limits

in the winter.

A. Yes, sir.

Q. Defendant didn’t at first even chose to implement

the interim solution, did they?

A. There was another proposal which was submitted

by the personnel of I. T. T. Gwaltney after our Concept

Engineering report was prepared.

Q. That report or proposal was submitted in the late

summer of 1982, was it not?

A. I believe that is correct.

Q. Did your company express an opinion with regard

to the proposed modifications of your interim solution?

A. Regarding our proposed modification?

Q. No. Did your company express an opinion with

regard to the modification proposed by Gwaltney when

they decided not to follow your interim solution?

A. Yes, sir, I believe we expressed doubt that the

[93] proposed—the I. T. T. Gwaltney proposal would

meet the limitations.

Q. Do you have an exhibit book?

A. Idon’t have one in frent of me.

Q. Exhibit 60, please.

Can you identify that document for the record, please?

A. This is a memo which was written by Jim Wells,

president of our company, to Paula Wells and myself re-

garding the Gwaltney packing plant.

Q. Could you please read the last paragraph of that

memo to the court?

A. “In the meantime, Sharron City is training a new

class of operators to run tests.”

Q. Next to the last paragraph, pardon me a minute.

A. “Ultimately Mr. Luter will have to decide what to

do with waste treatment at Gwaltney Smithfield based

upon the reaction of the State of Virginia concerning

our report and concerning fines if there are T. K. N. vio-

lations, which there most assuredly will be in the winter.”

Q. That was with regard to the proposed modifica-

tions of Gwaltney to interim solution, was it not?

A. Yes, sir.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 84-0366-R

CHESAPEAKE BAY FOUNDATION, INC.

and

NATURAL RESOURCES DEFENSE COUNCIL, INC.,

Plaintiffs,

Vv.

GWALTNEY OF SMITHFIELD, LTD.,

Defendant.

[Filed May 16, 1985)

MOTION TO DISMISS

FOR LACK OF JURISDICTION

Defendant Gwaltney of Smithfield, Ltd. respectfully

moves the Court to dismiss this action for lack of juris-

diction over the subject matter, for the reasons stated in

the accompanying Memorandum.

GWALTNEY OF SMITHFIELD, LTp.

By /s/ Anthony F. Troy

Of Counsel

H. Woodrow Crook, Jr.

107 Institute Street

Post Office Box 406

Smithfield, Virginia 23430

(804) 357-3050

Anthony F. Troy

James E. Ryan, Jr.

George A. Somerville

Edward E. Scher

Mays, Valentine, Davenport & Moore

23rd Floor, Sovran Center

1111 East Main Street

Post Office Box 1122

Richmond, Virginia 23208

(804) 644-6011

Counsel for Defendant.

{Certificate of Service Omitted in Printing]

[Corrected Copy |

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

Civil Action No. 84-0366-R

CHESAPEAKE BAY FOUNDATION, et al.,

Plaintiffs,

Vv.

GWALTNEY OF SMITHFIELD, LTD.,

Defendant.

[Filed June 26, 1985]

MEMORANDUM

Before the Court is the question of the amount that

ought to be assessed, in civil penalties, against defendant

for polluting Virginia’s water in violation of the Clean

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

of about $980,000 in civil penalties, and that the Court

should assess somewhere between $12,000 and $20,000.

Defendant also vigorously contests the Court’s subject-

matter jurisdiction over this lawsuit. First, it argues

that plaintiffs do not have standing to prosecute this

action. Second, it argues that the statute does not au-

thorize citizen suits against defendants who are not dis-

charging unlawfully when the suit is filed.

Following trial, defendant sought and received the

Court’s leave to file a post-trial memorandum; about a

month thereafter, defendant filed that memorandum.

Plaintiffs filed a short response, and also had filed a trial

memorandum on the day prior to trial. Several months

later, defendant filed a motion to dismiss based on its

argument that a continuing violation is required, which

has been fully briefed. All the foregoing matters are now

ripe for disposition.

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

Chesapeake Bay Foundation (CBF), a regional environ-

mental group with over 19,000 members residing in the

Chesapeake Bay area, including Virginia; and the Natu-

ral Resources Defense Council] (NRDC), an environ-

mental group ~~ 1 members throughout the nation, in-

cluding over 800 members in Virginia. Defendant,

Gwaltney of Smithfield, Ltd. (Gwaltney), is in the busi-

ness of processing and packing pork products. It is a

subsidiary of Smithfield Foods, Inc. (Smithfield Foods).

Gwaltney’s plant, the operation of which is the subject

of this lawsuit, is situated on the Pagan River near

Smithfield, Virginia. In the course of its production, the

plant discharges wastewater into that river.

At all times material hereto, Gwaltney was allowed to

discharge various pollutants from that plant into the

river—within certain limits, as set out in a “National

Pollution Discharge Elimination System” (NPDES) per-

mit." Such permits are issued pursuant to procedures

and regulations under the Clean Water Act. See 33

U.S.C. § 1342.

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

reported these violations in its discharge monitoring re-

ports (DMRs), as required by law.* Prior to October 27,

1981, Gwaltney was not responsible for the pollution dis-

charges from the plant at issue here. Instead, ITT-

Gwaltney, Inc. (ITT-Gwaltney) owned the plant and was

responsible. Under ITT-Gwaltney as well as under Gwalt-

ney, the plant repeatedly exceeded a number of its

NPDES discharge limitations. Gwaltney acknowledges

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.

The violations reported in Gwaltney’s DMRs form the

basis of this action. Where a permittee is in violation of

an NPDES discharge limitation, it is also “in violation

of . . . an effluent standard or limitation under [the

Act],” 33 U.S.C. § 1365(a)(1), which makes the per-

mittee subject to citizen suits. Jd. For citizen suits under

* NPDES Permit No. VA 0002844.

? Those pollutants are: (i) fecal coliform; (ii) chlorine (Cl,);

(iii) total suspended solids (TSS); (iv) total Kjeldahl nitrogen

(TKN) ; and (v) oil and grease.

* Section 1318(a)(3)(A) of Title 33 mandates, among other

things, that the Administrator of the Environmental Protectien

Agency “require the owner or operator of any point source” to

establish and maintain such records of effluent discharges and to

make such reports as the Administrator may “reasonably require.”

Currently, permittees under the Clean Water Act must submit

DMRs. See 40 C.F.R. § 122.41(1)(4) (1984). Such reports are

public information, by statute. See 33 U.S.C. § 1318(b) (2).

the Clean Water Act, Congress has authorized the district

courts to assess appropriate civil penalties. 33 U.S.C.

£ 1365(a). Such penalties may be as high as “$10,000

per cay of such violation.” 33 U.S.C. § 1319(d).

DISCUSSION

I. Standing.

At the outset, the Court must dispose of defendant's

contention that plaintiffs have no standing under either

the Act or Article III of the Constitution. Standing is

an element of jurisdiction over the subject matter. See,

e.q., Warth v. Seldin, 422 U.S. 490, 494-95 (1975). Thus,

if plaintiffs have no standing, then the Court may not

proceed further. See id.

Gwaltney contends that plaintiffs’ allegations are in-

sufficient to establish standing for CBF and NRDC to

sue in their own right. It then acknowledges that the

allegations of standing in the complaint, taken alone,

might be sufficient for CBF and NRDC to sue on behalf

of some of their members. But Gwaltney argues that no

such standing has been established because plaintiffs did

not present evidence of standing at trial, even though

Gwaltney denied plaintiffs’ standing allegations in its

answer and Gwaltney’s counsel demanded prior to trial

that plaintiff's counsel establish at trial that plaintiffs

meet the Clean Water Act's standing requirements as

articulated in Sierra Club v. SCM Corp., 747 F.2d 99

(2d Cir. 1984). Plaintiffs, on the other hand, argue

that they have established standing to sue bo.h in their

own right and on behalf of their members. As for stand-

ing to sue for their members, they refer to the Court's

findings in granting them summary judgment on the

issue of liability, as well as to a number of affidavits

they have filed at different stages of the litigation.

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, €.9.,

Sierra Club v. SCM Corp., 747 F.2d 99, 107 (24 Cir.

1984). An organizational plaintiff, such as CBF or

NRDC, can establish “injury in fact” through injury to

their members as well as through injury to the orgar®za-

tion itself. See, ¢.g., Sierra Club v. Morton, 405 US. 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, eg., 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., 511 F.2d 809, 814 (D.C. Cir. 1975) (discussing stand-

ing requirements under the Clean Air Act).

way at the summary judgment hearing, although it had

raised the standing issue at the pleading stage.’ Indeed,

Gwaltney failed to file any response whatsoever to plain-

tiffs’ motion for summary judgment, despite the fact that

two months had elapsed between the filing of plaintiffs’

motion and the hearing on it. In granting plaintiffs’

motion the Court specifically stated, in its findings of fact

from the bench, that plaintiffs have standing to prosecute

this action.

Apparently, Gwaltney believes that any showing of

standing that plaintiffs may have made previously is

insufficient in light of a recent decision by the Court of

Appeals for the Second Circuit, Sierra Club v. SCM,

supra, 747 F.2d 99, construing standing requirements

under the Clean Water Act. Gwaltney suggests that the

case establishes a requirement that plaintiffs identify

affected members in order to establish standing under

the Act. The Court does not agree, however.

In Sierra Club v. SCM, the issue pertaining to stand-

ing before the Court of Appeals was whether the Sierra

Club, solely on the basis of its “institutional interest in

the preservation of the enviromnent,” could sustain “in-

jury in fact” for standing purposes in a citizen suit

under the Clean Water Act. See Sierra Club v. SCM,

supra, 747 F.2d at 103. Writing for a unanimous panel,

Judge Kearse rejected Sierra Club’s contention. After

carefully reviewing the legislative history of the Act, she

concluded that the Sierra Club could only establish stand-

ing by showing actual injury within the meaning of

Sierra Club v. Morton, 405 U.S. 727 (1972), and that

the Sierra Club’s “institutional interest” was insufficient

in that regard. /d. at 107. She furthe held that an

* Gwaltney filed a document titled “Answer and Motion to Dis-

miss,” in which it denied plaintiffs’ standing allegations in its

“Third Defense.” The answer and motion were unaccompanied by

any documents that might create a genuine issue of material fact as

to plaintiffs’ standing, however.

organizational plaintiff can satisfy the actual injury re-

quirement by “providing a concrete indication” that the

organization or “one or more of its members” use the

waterway into which the defendant discharges its wastes

or would be adversely affected by the pollution of that

waterway. Id.

Despite defendant's suggestion to the contrary, Judge

Kearse did not hold that a plaintiff organization must

identify its injured members in order to provide the

requisite “concrete indication.” It is true, of course, that

the district judge had dismissed the complaint—at least

in part—because the Sierra Club refused to identify any

injured member. See Sierra Club v. SCM Corp., 580 F.

Supp. 862, 865 (W.D.N.Y. 1981). Despite the contro-

versy in the district court over Sierra Club's refusal to

identify members, though—of which the Court of Ap-

peals was well aware, see Sierra Club v. SCM, supra, 747

F.2d at 102—the Court of Appeals carefully avoided

holding that an organization suing under the Clean

Water Act must identify injured members in order to

establish standing through them. Instead, Judge Kearse

—noting that the Sierra Club had submitted an affidavit

indicating merely that some of its members lived within

a seventy-mile radius of the polluting plant—chose more

general langvage to describe the requisite showing for

standing: a concrete indication” that one or more mem-

bers “used the | waterway involved) or would be affected

by its pollution.” Plaintiffs here have satisfied this

standard. The unopposed affidavit of plaintiffs’ counsel

quoted supra, which indicates that members of plaintiffs’

organization use the river into which defendant dis-

charges its wastes, is sufficient to establish plaintiffs’

standing under the Clean Water Act.*

*In any event, plaintiffs did ultimately name members. In their

response to defendant's post-trial memorandum, plaintiffs attached

the affidavits of three affected members who indicated specifically

how they used the Pagan River (or the Chesapeake Bay into

which it flows), and how they are adversely affected by the pollution

of the Pagan River.

Il. Continuing Violation.

Gwaltney also argues that the Court has no jurisdic-

tion over this suit because Gwaltney was not in violation

of its NPDES permit when the complaint was filed, or

subsequently. Gwaltney contends that the Clean Water

Act’s citizen suit provision only confers jurisdiction

where the polluter is engaged in an ongoing violation ;

where the violation occurred entirely in the past, Gwalt-

ney urges that there is no jurisdiction. Plaintiffs cuon-

tend. on the contrary, that citizens can sue regardless of

whether the polluter’s unlawful conduct was continuing

at the time the suit was filed.

The dispute is one of statutory construction. Gwalt-

ney’s argument centers around the portion of the Clean

Water Act's citizen suit provision that reads, in pertinent

part:

_.. any citizen may commence a civil action on his

own behalf —

(1) against any person .. . who is alleged to be in

violation of (A) an effluent standard or limitation

under this chapter ....

$8 U.S.C. $1265(a)‘1) ‘emphasis added). Gwaltney

points out that the statute does not include the words

“to have violated.” and argues that the statute therefore

only authorizes citizen suits against polluters whose un-

lawful conduct is occurring at the time the suit is filed.

In analyzing whether Gwaltney’s position is correct,

the Court begins with the familiar principal that it need

not consider a statute’s legislative history where the

statutory language itself is clear. See, ¢g., Ex Parte

Collett, 337 U.S. 55, 61 (1949). Despite Gwaltney’s pro-

testations to the contrary, the Court does not believe that

the statutory language on which Gwaltney rests its argu-

meat clearly supports Gwaltney’s position. Other courts

besides this one have perceived ambiguity in the statutory

tanguage at issue. See Student Public Interest Research

Group of New Jersey, Inc. v. Monsanto Co., 600 F. Supp.

1474, 1476, (D.N.J. 1985); Sierra Club v. Raytheon, 22

Env. Rep. Cases 1050, 1054 (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

linger well after they occur.

In addition to the ambiguity in the words “to be in

violation” standing alone, other portions of Section 1365

suggest that Gwaltney’s proffered construction is not the

only.—or the most—plausible one. Section 1365 states

that:

The district courts shall have jurisdiction . . . to

apply any appropriate civil penalties under [33

U.S.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 in

their unlawful conduct up to the time the complaint is

filed. On the contrary, the absence of any such limita-

tion implies that Congress intended to authorize citizen

suits to recover civil penalties based on a polluter’s un-

lawful conduct in the past, regardless of whether the

polluter has ceased its unlawful conduct by the time the

citizen suit is brought. In the Court's view, the statutory

language, fairly read, suggests that the Act authorizes

citizen suits for civil penalties based on unlawful con-

duct that occurred in the past, regardless of whether a

polluter is in compliance when the suit is brought.

In view of the ambiguity of the statutory language,

however, the Court has also reviewed relevant portions

of the legislative history in order to better understand

Congress's intent. The committee reports do not ex-

pressly address the issue at hand one way or another.

They do, however, note that the statute authorizes the

recovery of civil penalties in citizen suits. The reports

do not discuss any requirement that such suits must be

based on unlawful conduct occurring at the time the suit

is filed. See H. Rep. No. 911, 92d Cong. 2d Sess. 133

(1972). reprinted in 1 A Legislative History of the

Water Pollution Control Act Amendments of 1972 at

820 (1973) ‘hereinafter “Legislative History”); S.Rep.

No. 414, 92d Cong.. Ist Sess. 79, reprinted in 2 Legisia-

tive History at 1497. As already referred to, the ab-

sence of any discussion of such a requirement—in the

context of acknowledging ihe 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:

... @ 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, in

violation, whether the violation be @ continuous one,

or an occastonal 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

eliminate 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, e.g.,

Regan v. Wald, —— U.S. . , 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.

A reading of the citizen-suit provision that would au-

thorize suits for civil penalties against polluters for past

7 Gwaltney also quotes a remark of Senator Bayh in support of

its position. Senator Bayh’s remark is as 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 Legisiative 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 wgs an inadvertent misstatement. The Court disagrees.

Senator Bayh’s statement hardly contradicts Senator Muskie’s

explication. 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 Leg’slative 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.N.J. 1985).

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. Aluminum 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 sucecss-

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,

J., eoneurring) (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 of 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

not answered by whether the plaintiff ultimately recovers in excess

of $10,000. See, e.g., 14A C. Wright, A. Miller, E. Cooper, Federal

Practice & Procedure § 3702 at 31-33, and cases cited (1985).

Rather, the issue is whether the amount plaintiff stated in the

In light of the language of the Clean Water Act’s

citizen suit provision, its legislative history, and its

underlying policy goals, the court concludes that the

Clean Water Act authorizes citizen suits for civil penal-

ties for violations of the Act, regardless of whether the

polluter is engaged in unlawful conduct at the time the

suit is filed or afterward. A number of other courts

have recently reached the same conclusion. See, e9.,

Monsanto, supra, 600 F. Supp. at 1476-77; Aluminum

Company of America, supra, 585 F. Supp. at 853-54;

Sierra Club v. Raytheon, supra, 22 Env. Rep. Cases at

1054; Student Public Interest Research Group of New

Jersey v. Anchor Thread Co., 22 Env. Rep. Cases 1150,

1154 (D.N.J. 1984); see also Student Public Interest

Research Group of New Jersey v. Tenneco Polymers, 602

F. Supp. 1394, 1398-99 (D.N.J. 1985); Facet Enter-

prises, supra, 22 Env. Rep. Cases at 1145 n.1.

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 maintain 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

for civil penalties for past violations. Jd. at 396. This

Court, respectfully, disagrees.

First, the Court notes that the panel concluded the

statutory language is not sufficiently ambiguous to raise

any question about its proper meaning. See id. at 395.

original claim satisfies the amount, and is made in good faith.

See, e.g., Wiggins v. North Carolina Equit. Life Assur. Co., 644

F.2d 1014, 1016-17 (4th Cir. 1981). As Gwaltney recognizes, the

test of good faith is whether it appears to be a “legal certainty”

that the jurisdictional fact is not satisfied. See St. Paul Mercury

Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938); Wig-

gins, supra, 644 F.2d at 1016-17. But there was no certainty here—

legal, factual, or otherwise—that Gwaltney’s system would correct

one of the two major violation problems for which this suit was

brought—until nearly one year after the suit was filed.

As discussed supra, however, this Court—and several

others—have examined the language without being able

to resolve its plain meaning with the same degree of

certainty.

Second, the Hamker panel reasoned that because the

statutory scheme centers primary enforcement respon-

sibility with the states and the Administrator of EPA,

citizens are not authorized to sue polluters unless the

polluter is engaged in ongoing unlawful conduct. Id. at

395-96. But this Court does not comprehend how the

conclusion necessarily follows from the premise. For,

even if the statute is construed to allow citizens to sue

for past violations, primary enforcement responsibility

remains with the states and the administrator: generally,

citizens must first notify the states, the administrator,

and the alleged polluter and wait sixty days te give

public enforcement authorities the opportunity to act

before proceeding. See 33 U.S.C. § 1365(b) (1) (A). The

panel also reasoned that because the statute requires the

citizen-enforcer to notify the violator—as well as enforce-

ment authorities—of its intent to sue, the statute con-

templates that a citizen loses the right to sue if the vio

lator brings itself into compliance before the sixty days

elapses, just as the citizen loses the right to sue if the

governmental authorities commence prosecution in a court

before sixty days elapses. Jd. at 396. This reasoning

is unpersuasive. The statute expressly provides that pub-

lie enforcement within the sixty-day period precludes a

citizen suit, see 33 U.S.C. § 13865(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

by the violator carries the same consequences for citizen

enforcement as initiation of a government enforcement

action °.

*The Court also notes that the committee reports, as well as

the statute itself, do not indicate that one of the purposes of the

Finally, the Hamker panel reasoned that construing

the provision to preclude citizen suits for civil penalties

based on past violations would promote the goal of limit-

ing the burden on the federal courts. But this Court is

not persuaded that such a construction would ultimately

reduce the federal judiciary burden. If such a construc-

tion were adopted, citizen suit provisions would pro

vide an incentive for compliance only in those specific

cases where the citizen-enforcer actually files a notice

of intent to sue and then a complaint. The threat of

citizen suits would have little general deterrent effect.

It is not unreasonable to presume that under such a sys-

tem, noncompliance would be more widespread than un-

der a system where it is clear that citizens can sue for

civil penalties for past violations. If the number of citi-

zen suits is related to the level of noncompliance—a rea-

sonable assumption—then it may well be that the num-

ber of suits actually filed per period of time would be

greater under a system in which citizens cannot sue for

civil penalties for past violations.

In considering the persuasiveness of Hamker, this

Court also notes that the Hamker panel did not address

the legislative history militating against its construction

of the statute. As discussed supra, the legislative his-

tory corroborates the view that citizens can sue for civil

penalties for past violations.

Gwaltney also relies on City of Evansville, Indiana v.

Kentucky Liquid Recycling, 604 F.2d 1008 (7th Cir.

1979), cert. denied sub nom Louisville and Jefferson

County Metropolitan Sewer District v. City of Evans-

sixty-day notice requirement is to give a violator the opportunity to

come into compliance and avoid liability. See H. Rep. No. 911, 92d

Cong., 2d Sess. 133 (1972), reported in 1 Legislative Histo. y, at

820; S. Rep. No. 414, 92d Cong., Ist Sess. 79-80 (1971), reprinted

in 2 Legislative History at 1497-98. Rather, the sole purpose ap-

pears to be to “encourage and provide for agency enforcement.”

S. Rep. No. 414, 92d Cong., Ist Sess. 79 (1971), reprinted in 2

Legislative History at 1497.

ville, Indiana, 444 U.S. 1025 (1980). In that case, the

Cou:t 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.” Id.

at 1014. That remark, however, insofar as it can be said

to address citizen suits for civil penalties for past viola-

tions, 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

Pawtuxet Cove Marina v. Ciba-Geigy Corp., 21 Env. Rep.

Cases 1393 (D.R.I. 1984), which Gwaltney also cites,

relies 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

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

remark of the Seventh Circuit in City of Evansville,

* 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 poin’ s plaintiffs argue. The case

does reflect the understanding that tue 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 understanding 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.

arose in the context of whether a citizen enforcer may

sue for damages. The Supreme Court, like the Seventh

Cireuit, 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.

Il. Maximum Liability.

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. Gwaltney has violated its “monthly average”

permit limitations for several substances on a number

of occasions. The “monthly average” of a substance re-

flects the average amount (‘or concentration, where the

substance 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

maximum daily amount allowed."' Gwaltney argues that

"! The average and maximum permit limitations for four of the

pollutants at iseve in this case read as follows on Gwaltney's

DMR for May. 1984: (i) for TSS: 228.000 KG_D (‘daily average

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 civil penalties reads that: “any

person who violates . . . any permit condition or limita-

tion . . . 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. Violating

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. 19°4).

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-

lieves it can be unjust.” To illustrate its point, Gwaltney

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); (ili) for TKN: 109.0000 KG/D (daily

average over a month), 219.0000 KG/D (daily maximum); (iv)

for oll 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.

“4 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 «

monthly limitation as thirty days of violation is contrary to the

principle that penal statutes are to be construed strictly. See,

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 discha:ge, 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.

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.

¢.@., Commissioner of Internal Revenue o. Archer, 461 US. 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 £19,000 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 th

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 ty interrogatories

do not preclude this Court from imposing appropriate penaties

able

charge in a single day without incident—while a sub-

stantial

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.

average, every day of its discharges contributes to the

, even of the discharges are within the

average that the polluter needs to maintain in order to

stay within the monthly limitation.”

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

“ Gwaltney also suggests ‘hat 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 por 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 im light

of Gwaltney’s failure to introduce more accurate evidence to the

contrary.

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-

ated sections 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 USC. £1319/d). There

Gwaltney'’s NPDES permit is

passed under this subsection. Nor is

that all of the limitations at issue in Gwaltney’s permit

;

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. Detrer 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.” Id. 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 maximum 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 Detrer court intended—was

that Section 1319/d) establishes a marimum daily pen-

alty of $10,000 for violating the limitations on any given

substance, not an absolute daily maximum. For ;

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

more than $10,000 in civil penalties for that day of viola-

tion. They rely on dicta in a recent district court case.

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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 argu-

ment is based on the language of Section 1319(d) itself

and the fact that the Amoco court, in dicta, suggested the

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 f6regoing 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 thirtyhree 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 twenty-two months; * thus, there were

653 days of violation. For those days of violation, Gwalt-

ney is subject to a maximum penalty of $6,530,000.

4 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

of its May, 1984 monthly average for TKN as involving only 15

days of violation.

In addition, Gwaltney violated daily limitations during

five months when it reported no violation of monthly

averages. In July 1982 it violaced 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 days. 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-

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

15In 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 times 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.

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.

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 is especially useful in light of the substantial

maximum penalty that the statute authorizes, on the one

hand, and the total absence of guidance Congress has

provided in assessing penalties pursuant to Section 1319

(d), on the other hand. Cf. Clean Water Act § 311(b)

(6), 33 U.S.C. § 1321(b) (6) (in determining the amount

of the penalty for types of violations of the Clean Water

Act not at issue in this case, the following factors shall

be considered: the size of the business involved; the

effect of the penalty on the business’ ability to continue;

and the gravity of the violation). Finally, there are

few cases that explain in any detail how they arrive at a

penalty amount under Section 1319/(d).

A. The EPA Penalty Policy. The policy aims at two

general goals: (i) deterrence; and (ii) “fair and equi-

table treatment of the regulated community.” See EPA

Penalty Policy, 41:2992-93. As for deterrence, the policy

recognizes that both deterrence of future violations by

the violator (specific deterrence) and by other regulated

firms (general deterrence) is important. See id. at

41:2992. For deterrence purposes, the policy recommends

a penalty that includes two components. First, it should

include the “economic benefit of non-compliance”; other-

wise, the violator and potential violators would perceive

that it pays to violate the law, creating an obvious dis-

incentive for compliance. See id. Second, the penalty

should inc#ide an additional amount, which the policy

characterizes as @ “gravity component.” If the penalty

were limited to the economic benefit of non-compliance,

regulated firms would find that they 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. See id. The policy sug-

gests that the gravity component reflect both the serious-

ness of the violation and—where extensive non-compli-

ance with a regulatory program exists in an area—an

additional amount to promote general deterrence pur-

poses. 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.

100

B. Gwaltney’s violations. Although the parties have

stipulated to over 160 different violations invoiving 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 monthiy 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 kill fecal coliform. Chlo

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

independent consultants in analyzing the causes or the

extent of its chlorination problems.

101

a. Economic benefits. The Court first considers the

economic benefits that accrued te 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-

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 are 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

benefits 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 assessment. In light of these purposes and

the difficulty of demonstrating all elements of economic

benefit, the Uourt 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 «ffered 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

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 al! 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

The fact that in the circumstances of this case another frm

—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.

caleulate its economic benefit from delayed compliance.

It adduced 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 interes’ rate Gwaltney itself

paid on borrowed funds—is a more accurate basis for

determining Gwaltney’s economic benefit. from delay.”

Given Gwaltney’'s rate of interest, its period of delay

compliance because of chlorination problems, and the

Gwaltney because of the delay in expending funds on

the chlorination system. That amount is approximately

Plaintiffs cite Ohio ex rel. Brown « Dayton Malleable, Ine.,

13 ERC. 2189, 2194 (Ohi Ct. CP. 1979), of'd, 498 NE. 24 120

penalty assessments under an Ohio water pollution statute, appar-

ently no one contended that the defendant's own rate of interest

ought to be used. Rather, the choice before the Court was between

™ Gwaltney's annual rete of return (13%) multiplied by the

amount of investment involved ($11,560) multiplied by the number

of years of non-compliance (10).

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 « generous concession on ite

part, because the money was actually exp nded over the course of

the improvements, which while the calculation is based on the fiction

that the money was «pent in a lump sum at the end of the improve.

m nts— facilitating the computation but distorting the reality. The

104

ney’s ‘otal 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

gravity component covers all the violations at issue in

this case, including its violations resulting from its chio-

rination 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 feca! 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-

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 ycar before it was actually in-

curred. Thus, it ls appropriete to calculate Gwaltney’s benefit on

the entire amount expended based on ome years (ime.

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 is violations as posing “no threat what-

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

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