Respondents Brief — Friends of Earth v. Laidlaw Environmental Services

In THE

Supreme Court of the United States

FRIENDS OF THE EARTH, et al.,

y Petitioners,

LAIDLAW ENVIRONMENTAL SERVICES (TOC), INC.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF FOR RESPONDENT

STUART H. NEWBERGER DONALD A. COCKRILL *

CLIFTON S. ELGARTEN NANCY W. MONTS

DAVID M. SCHNORRENBERG OGLETREE, DEAKINS,

Scott E. GANT NASH, SMOAK &

CROWELL & MoRING LLP STEWART, P.C.

1001 Pennsylvania Ave.,N.W. 300 North Main Street

Washington, D.C. 20004 P.O. Box 2757

(202) 624-2500 Greenville, SC 29602

HENRY H. TAYLOR (864) 271-1300

Vice President

and General Counsel

BARBARA J. HAMILTON

Vice President and

Assistant General Counsel

SAFETY-KLEEN CORP.

1301 Gervais Street

Columbia, SC 29210

* Counsel of Record Counsel for Respondent

WILSON - Eres PRINTING Co.. Inc. - 789-0096 - WASHINGTON, D.C. 20001

» en

BEST AVAILABLE COPY?”

QUESTIONS PRESENTED

1. Consistent with the requirements of Article III, can

a private citizen maintain an appeal in which the only

aspect of the judgment being appealed concerns the amount

of a civil penalty payable solely to the United States

Treasury?

2. In a case brought under the citizen suit provisions

of Section 505 of the Clean Water Act, can the district

court impose civil penalties payable solely to the United

States Treasury even if it determines that the citizen-

plaintiff is not entitled to any equitable relief, such as an

injunction, in which it has a personal stake?

3. Notwithstanding the Clean Water Act’s jurisdictional

prohibition on a citizen suit if a state agency is diligently

prosecuting compliance with a permit issued under the

NPDES program (33 U.S.C. § 1365(b)(1)(B)), where

the State has been active in seeking compliance, can a

citizen-plaintiff meet the lack of diligent prosecution jur‘s-

dictional requirement by showing that the amount of civil

penalties previously imposed by the State was insufficient?

4. Does a citizen-plaintiff have standing under Section

595 of the Clean Water Act and Article III of the Con-

stitution to seek or obtain any relief in the absence of any

demonstrated harm to the environment when, pursuant to

a prior agreement with a state enforcement agency, the

defendant previously committed to make “every effort” to

achieve compliance, and in fact achieved substantial

compliance within two months of the filing of the citizen

suit?

5. Where a Clean Water Act citizen-plaintiff fails to

obtain either a settlement, injunction, or declaratory relief

that materially alters the legal relationship between itself

and defendant, can it nonetheless be deemed a prevailing

or substantially prevailing party for purposes of an award

of attorneys’ fees?

(i)

ll

6. Can a Clean Water Act citizen-plaintiff recover

attorneys’ fees as a “catalyst” to the defendant’s compli-

ance with the Act where the defendant made commitments

to a state agency to comply with the law prior to the suit

and, as a result of the state agency’s enforcement efforts,

came into substantial compliance with all requirements of

the Act within two months after the citizen-plaintiff filed

its suit?

iii

CORPORATE DISCLOSURE STATEMENT

On June 30, 1998, Respondent Laidlaw Environmental

Services (TOC), Inc. changed its name to Safety-Kleen

(Roebuck), Inc., which is wholly owned by its parent,

Safety-Kleen Services, Inc. (formerly known as LES, Inc.),

which is wholly owned by its parent, Safety-Kleen Corp.

(formerly known as Laidlaw Environmental Services,

Inc.), which is a publicly held corporation traded on the

New York Stock Exchange and the Pacific Stock Exchange.

Laidlaw Finance (Barbados), Ltd. is the only corpora-

tion that owns 10% or more of the stock of Safety-Kleen

Corp. It is wholly owned by its parent, Laidlaw Invest-

ment, Ltd., which is wholly owned by its parent, Laidlaw,

Inc., which is a publicly held corporation traded on the

New York Stock Exchange, the Toronto Stock Exchange,

and the Montreal Stock Exchange.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ono... ...--.ccocccccecsossseesseeeees i

CORPORATE DISCLOSURE STATEMENT ........... iii

TABLE OF AUTHORITIES 9202000000 -.-.-.--ceeceeseeseeseeeeee vii

STATEMENT OF THE CASE 20000000. --ceesecceeeee-ceeeee . 1

SUMMARY OF ARGUMENT .0oo2oo.o.-.ccccccecscsseeeesees -

ARGUMENT... AER SF ARSE een a EN 10

I. THE COURT OF APPEALS PROPERLY DIS-

MISSED THE APPEAL OF A PARTY THAT

HAD NO PERSONAL STAKE IN THE OUT-

EE” ED GUID etttscenccsinceuscnmnetnmnnteiann 10

A. The Court Of Appeals Did Not Have Juris-

diction Over An Appeal In Which Appellants

Only Were Pursuing Relief In Which They

Had No Personal Stake ................ 10

B. Because Petitioners Abandoned The Request

For Relief In Which They Had A Personal

Stake, The Court Of Appeals Was Not Re-

quired To Determine Whether Laidlaw’s

Compliance Independently Rendered The

RL AT EET LO ee EE 14

C. Petitioners Did Not Obtain A Declaratory

Judgment Or Any Other Equitable Relief

Sufficient To Preserve Appellate Jurisdic-

TaD cctisessiecennsenninsnbinntesitniapceinniiansbesiapadeatiihdaiiinatiatiitiiainanins 17

D. The Deterrent Effect Of A Civil Penalty

Does Not Provide A Private Plaintiff With

Standing To Continue Pursuing Such Penal-

a ee ee ae 18

©. Irrespective Of Whether Violations Are Con-

tinuing, A Case Cannot Continue When The

Court Cannot Provide Plaintiff Any Effec-

I 24

vi

TABLE OF CONTENTS—Continued

F. No Distinction Between “Standing” And

“Mootness” Allows Petitioners To Continue

Pursuing This Case _. .

Il. THE DISTRICT COURT LACKED AUTHOR-

ITY UNDER ARTICLE III TO AWARD CIVIL

PENALTIES TO PETITIONERS ................ ae

A. A Private Party May Not Pursue Civil Penal-

ties Payable Solely To The Public Treasury..

B. If A Court May Impose Civil Penalties In A

Citizen Suit, It Only Can Do So As An Ad-

junct To A Proper Injunction .......................

Ill. THE DISTRICT COURT LACKED JURISDIC-

TION TO GRANT ANY REMEDY TO PETI-

ee nxisiasintteitoneneiuninaninorenaseninmasestnaansiemmpnmaannanate

A. Petitioners Had No Standing To Obtain

Equitable Relief Because There Was No

Harm To The Environment ............... eres .

B. South Carolina’s Diligent Enforcement Ef-

forts Barred Petitioners’ Suit .......................

IV. PETITIONERS ARE NOT ENTITLED TO

Oe einen

A. The Attorneys’ Fee Question May Not Be

ee

B. Petitioners Are Not Entitled To Attorneys’

Fees Under Farrar ..........................-..-.00-.000+. “s

ee

Page

&

32

35

vii

TABLE OF AUTHORITIES

CASES Page

Arizonans for Official English v. Arizona, 520 U.S.

Re ate RL le atta etna EI 18, 27

Ashcroft v. Mattis, 431 U.S. 171 (1977) . aie 14

Bender v. Williamsport Area School Dist., ‘AT 5 U. S.

RR RE se RE EOS I ER oh hn 13

Calderon v. Moore, 518 U.S. 149 (1996)... 26

Farrar v. Hobby, 506 U.S. 103 (1992) ....... eniaeedl 41, 42, 43

Foundation on Econ. Trends v. Lyng, 943 F.2d 79

(D.C. Cir. 1991) .. sie 87

Friends of the Earth, Ine. v. Gaston Copper Recy-

cling Corp., 1999 U.S. App. LEXIS 11201 (4th

I ir a 36-37

Gwaltney of Smithfield, Ltd. v. Chesapeake Bay

Found., 484 U.S. 49 (1987) ....0000000. eee. passim

Hensley v. Eckerhart, 461 U.S. 424 (1983) 44

Hewitt v. Helms, 482 U.S. 755 (1987) .. ...17, 18, 41

Honig v. Doe, 484 U.S. 305 (1988) . : 27

Jones v. City of Lakeland, 175 F.3d 410 (6th Cir.

RE Sean eas ae ee ae ee ae aaa 40

Lewis v. Casey, 518 U.S. 343 (1996) 30

Linda R. S. v. Richard D., 410 U.S. 614 (1973) __.. 20

Los Angeles v. Lyons, 461 U.S. 95 (1983)... 25, 30

Lujan v. Defenders of Wildlife, 504 U.S. 555

Ae ina enc lalla 11, 22, 36, 38

Maine v. Taylor, 477 U.S. 131 (1986)... ania 12

Mills v. Green, 159 U.S. 651 (1895) 0. 14, 26

North & South Rivers Watershed Ass'n v. Scituate,

949 F.2d 552 (1st Cir. 1991) 0. 40

Phillips Petroleum Co. v. Shutts, 472 U.S. 797

SS 12

Public Interest Research Grow oa New Jereey © v.

Magnesium Elektron, Inc., 123 F.3d 111 (3d

EE eee a Ne CTT OT Tee 37

S-1 & S-2 v. State Bd. of Educ., 21 F.3d 49 (4th

I TTT ished dannii asia enacts 41

Spencer v. Kemna, 523 U.S. 1, 118 S. Ct. 978

EL ee ee eee eee eee 13, 26

Steel Co. v. Citizens for a Better Environment, 523

U.S. 88, 118 S. Ct. 1008 (1998) ............................. passim

viii

TABLE OF AUTHORITIES—Continued

Page

Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984) ........ 20

Tull v. United States, 481 U.S. 412 (1987) ............. 19

United Mine Workers v. Gibbs, 383 U.S. 715

(| 33

United States Parole Comm'n v. Geraghty, 445

FG ESS 13

Valley Forge Christian College v. Americans

United for Separation of Church and State, Inc.,

FS SE 13

Weinberger v. Romero-Barcelo, 456 U.S. 305

Se saniesitianiacneannibaasibiasisiasaneiaan 23

Young v. United States ex rel. Vuitton et Fils

Le. Ge Gees Ce GED emnesensneennenenn 31

CONSTITUTIONAL AND STATUTORY

PROVISIONS

United States Constitution

a a ea adamlilnll passim

Judicial Improvement Act of 1990

NEESER ESN seenree nee eee 33

Declaratory Judgment Act

CM Se 17

Clean Water Act

SB UL.C. & LBS CO) (1) CB) ..2.2000ccccvccccesceecsess00s. 5, 38, 39

BP ils OF ED ceseecensseencsnceneveussncssvensossesssnseens 41

STATEMENT OF THE CASE

Petitioners are private parties who brought a citizen suit

under Section 505 of the Clean Water Act (“CWA” or

“Act”). They sought an injunction and the imposition of

civil penaities to prevent what they alleged was continuing

harm to themselves as a result of Respondent Laidlaw’s

violations of an NPDES permit at a hazardous waste

incineration facility.

The district court rejected Petitioners’ prayer for prelimi-

nary and permanent injunctive or other equitable relief in

light of the lack of harm to the environment and Laidlaw’s

persistent and successful efforts to comply with its permit.

At Petitioners’ request, however, the district court evalu-

ated the adequacy of civil penalties previously imposed by

the State of South Carolina in an enforcement proceeding

and determined that those state-imposed penalties—in

which Petitioners had no cognizable legal interest or per-

sonal stake—should be increased. The district court's

determination that the penalties previously imposed by

South Carolina were inadequate was the linchpin for its

assertion of jurisdiction. Given the denial of any equitable

relief and the imposition of a civil penalty payable solely

to the United States Treasury, the district court’s judgment

did not provide any relief that benefited Petitioners.

On appeal, Petitioners did not challenge the district

court’s denial of their prayer for equitable relief. Instead,

they focused solely on the amount of civil penalties im-

posed by the district court. With the ostensible appellants

addressing, only the amount of fees payable to the United

States, and not seeking any redress for themselves, the

court of appeals dismissed the appeal and vacated the

judgment. The Fourth Circuit correctly concluded that

this action could not be continued on appeal by parties

possessing no cognizable interest in the outcome. The

court of appeals declined to resolve on the merits the

various issues presented regarding the proper amount of

2

a civil penalty imposed by a state or a federal court in a

Clean Water Act case.

The detailed history of this case is set forth in extensive

findings made in two opinions issued by the district court.

Order of April 7, 1995 (JA 84-137), 890 F. Supp. 470,

and Order of January 22, 1997 (JA 138-97), 956 F.

Supp. 588.

Laidlaw’s 1987 NPDES Permit

Laidlaw’s NPDES permit for effluent discharges into

the North Tyger River became effective in January 1987.

With that permit, the South Carolina Department of Health

and Environmental Control (“DHEC”)- imposed a “dra-

matic reduction” in the mercury discharge limit from 20

parts per billion (“ppb”) to 1.3 ppb. Laidlaw was given

one year to achieve the new limit and directed to deter-

mine whether it was technically possible to do so. The

permit allowed Laidlaw to request a higher mercury limit

upon completion of feasibility studies. JA 86-88.

Accordingly, Laidlaw hired Environmental Technology

Engineering, Inc. (“ETE”) to conduct a feasibility study.

JA 88. ETE concluded that meeting the 1.3 ppb limit

would be “an ‘extremely. difficult and complex problem’

inasmuch as all available manufacturer’s information and

reliable equipment on the market demonstrated that current

technology was capable of reducing mercury only down to

a range of 2 ppb to 5 ppb.” JA 143. ETE recommended

installation of a second carbon adsorption unit. Laidlaw

installed the unit in 1988 and elected not to seek a higher

mercury limit. JA 88. The district court found that

Laidlaw would “have been justified in returning to DHEC

to seek a higher limit. . . . Instead Laidlaw elected a

more difficult and costly path. . . . In sum, all parties

involved knew that it would be a daunting task to go from

20 ppb to 1.3 ppb but Laidlaw elected to try.” JA 177-78.

3

DHEC’s 1988 Enforcement Action

Despite the second carbon adsorption unit, Laidlaw’s

facility failed to achieve consistent compliance with the

1.3 ppb mercury limit. DHEC responded with an investi-

gation, initiation of an administrative enforcement action,

and entry of a consent order on September 7, 1988. The

consent order required, inter alia, that Laidlaw investigate

new treatment technologies, and imposed a $20,000 civil

penalty. JA 88.

To comply with the consent order, Laidlaw retained

another firm, RMT, Inc. Under DHEC supervision, Laid-

law and RMT tested three potential solutions. The results

showed that the Lancy system was most likely to achieve

permit limits for all metals, including mercury. The Lancy

system was constructed and operational by February

1991. JA 89.

The new system brought Laidlaw into compiete com-

pliance with all discharge limits for all metals other than

mercury. JA 89. Laidlaw responded by making opera-

tional adjustments to the Lancy system. The manufacturer

of the system, U.S. Filter, ultimately concluded that it

might be impossible for the Lancy system to achieve con-

sistent discharges below the 1.3 ppb level. Therefore, on

June 26, 1991, Laidlaw filed a request with DHEC for a

higher mercury discharge limit. Nonetheless, through the

remainder of 1991 and into 1992, Laidlaw continued to

seek some method of achieving the 1.3 ppb mercury level.

JA 89-90, 146.

DHEC’s 1992 Enforcement Action

After a series of abnormally high mercury excursions in

December 1991, DHEC began considering an enforcement

action against Laidlaw. On April 10, 1992, Petitioner

Friends of the Earth sent a letter to Laidlaw, EPA and

-DHEC stating an intent to file a citizen suit after sixty

days. On May 21, 1992, DHEC served a formal enforce-

4

ment document on Laidlaw. On June 5 and 8, 1992,

DHEC and Laidlaw negotiated a consent decree. JA

90-91, 146. The consent decree, aproved by the Court

of Common Pleas, Spartanburg County, South Carolina:

(1) required payment of a “civil penalty” in the amount

of $100,000 “[f]Jor all permit violations occurring up to

the date of execution of th[e] Consent Order”; (2) re-

quired Laidlaw to “use every effort . . . to achieve compli-

ance with the limitation for mercury in its permit”; (3)

subjected Laidlaw “to additional enforcement action” for

“[flailure . . . to comply with the terms and conditions of

th[e] Consent Order”; and (4) terminated only if and

when Laidlaw achieved compliance with its current or any

new permit. JA 76-83, 97.

Pursuant to the decree, Laidlaw continued to explore

technologies to remedy its mercury problems, and shut

down its incinerator for substantial periods in July, August,

September, and November 1992 “in an effort not to violate

either its mercury parameter or the judicial consent order

with DHEC.” JA 92. By August 1992, Laidlaw’s own

personnel finally achieved substantial compliance with

Laidlaw’s mercury limit. JA 92, 147, 155, 183. On

August 6, 1993, after an extended period of permit com-

pliance, DHEC notified the state court that Respondent

had complied with the consent decree, which could then

expire. JA 93.

Petitioners’ Federal Court Complaint

On June 12, 1992, Friends of the Earth filed this action

in the district court under Section 505 of the Clean Water

Act. JA 91. Petitioners complained about a variety of

alleged violations of effluent limitations, and of monitor-

ing and reporting requirements. JA 37-38. Petitioners

acknowledged that DHEC had commenced a civil action

concerning the violations alleged in the complaint, but

asserted that action “was not diligently prosecuted” be-

cause, inter alia, the resulting consent decree “provided

5

inadequate remedies for defendant’s violations of its per-

mit.” JA 29-30. The district court denied Petitioners’

motion for a preliminary injunction on December 14,

1992. JA 53-65.

The District Court’s “Diligent Prosecution” Order

Laidlaw sought dismissal of the suit on the jurisdictional

grounds that the State’s prior enforcement action consti-

tuted a “diligent prosecution.”? 33 U.S.C. § 1365(b)

(1)(B). In October and November 1992, the district

court heard seven days of testimony on the “diligence”

question. On April 7, 1995, it denied Laidlaw’s motion

and largely embraced Petitioners’ theory that DHEC’s

lack of diligence in seeking compliance could be discerned

from its failure to exact what the district court considered

a sufficient penalty for past violations. See JA 99-106,

121-35. The court found “most persuasive” Petitioners’

theory that in imposing a $100,000 penalty, DHEC

“failed to recover, or even to calculate, the economic

benefit that Laidlaw received by not complying with its

permit.” JA 121.2 The district court accepted Petitioners’

theory in this respect even though it “agree[d] that no

language in the CWA directly requires a state enforcement

agency to calculate economic benefit when determining

what an appropriate civil penalty should be,” and despite

that neither DHEC regulations nor DHEC’s NPDES En-

1 Laidlaw also sought dismissal based on FOE’s lack of standing

to bring suit, which the district court denied. Tr. of Hr’g on Def.’s

Mot. for Summ. J., June 30, 1993, at 40. Laidlaw later moved to

dismiss plaintiffs CLEAN and Sierra Club because they did not

join FOF’s Section 505 notice letter or send a letter on their own

behalf—a jurisdictional defect which precludes their pursuit of a

citizen suit. 33 U.S.C. § 1365(b). The district court denied that

motion. JA 57.

2 The district court rejected Petitioners’ unfounded assertion that

DHEC’s June 1992 consent decree with Laidlaw was the result of

fraud or collusion. JA 117 n.14.

6

forcement Agreement with the EPA contains such a re-

quirement. JA 127-29. The district court, therefore,

retained jurisdiction and allowed the case to proceed to

the merits.

The District Court’s Decision On The Merits

After another evidentiary hearing, the district court

issued its merits findings on January 21, 1997. The court

found that DHEC played an extensive role in the process

that ultimately solved the discharge problems: “DHEC

was made aware on a continuous basis of the compliance

problems Laidlaw was experiencing. An open line of

communication between Laidlaw and DHEC existed

throughout the time period relevant to this litigation.”

JA 162. Furthermore:

DHEC’s knowledge of these problems, its enforce-

ment efforts with respect thereto, and the agency’s

continued involvement with Laidlaw in achieving a

solution to these problems have resulted in Laidlaw’s

ultimate compliance with its NPDES permit over an

extended period of time.

JA 162-63. The district court also found that the permit

exceedances had caused “no demonstrated adverse affect

on the environment.” JA 164.

The district court denied Petitioners’ prayer for equita-

ble relief, finding that the “lack of demonstrated harm and

the fact that Laidlaw is now and has for an extended

period of time been in compliance with its permit compels

the conclusion that no injunction or other form of equita-

ble relief is appropriate.” JA 183. The court specifically

found that Laidlaw already had been in full compliance

for non-mercury metals discharges since 1991, and in

“substantial compliance” with respect to mercury dis-

charges since “at least” August 1992. JA 89, 183.

7

The district court nonetheless assessed additional civil

penalties beyond those imposed by the State.* JA 160-82.

After acknowledging a number of mitigating factors—

including Laidlaw’s good faith efforts to comply with a

“draconian” mercury level requirement, the expenditure

of over $1,000,000 on consultants and technology, its

coordination with the State’s environmental agency, and

the absence of harm to the environment (JA 146, 162,

173-74)—the court imposed a sanction for each mercury

permit violation since January 1987, for a total of

$405,800. JA 172, 185-95. Based on the per discharge

penalty established by the district court (JA 181), the

fourteen post-complaint exceedances constituted $15,000

of the total penalty. JA 195. The ten reporting and

thirteen post-complaint monitoring violations constituted

an additional $2,300 of the total penalty. JA 159, 181.

The district court also stayed the time for a petition for

attorneys’ fees until after resolution of any appeals.

The Court of Appeals’ Decision

Petitioners appealed from the district court’s civil penalty

judgment, “arguing that the district court abused its dis-

cretion by imposing what Plaintiffs assert was an in-

adequate penalty.” 149 F.3d 303, 305. Laidlaw cross

appealed, arguing that Petitioners lacked standing and

that the case should have been barred in light of DHEC’s

diligent efforts to seek compliance prior to Petitioners’

3 The penalty assessment required the district court to detail the

history of Laidlaw’s mercury exceedances and reporting violations,

most of which pre-dated the filing of the federal case. Of 489 total

exceedances, only 11 occurred between June 12 and October 1992

and one each in 1993, 1994 and 1995. JA 158, 178. The last two

occurred when Laidlaw was not even feeding mercury into its

incinerator. Moreover, the last two also did not exceed the new 10

ppb permit limit established by the State, which would have been

in effect but for the state administrative appeal that Petitioners

had taken challenging the new limit. JA 148-49, 178. Only 10 minor

technical reporting requirements violations and 13 monitoring viola-

tions occurred after the filing of Petitioners’ complaint. JA 159.

complaint. Jd. The Fourth Circuit concluded that the

case was moot “[b]ecause plaintiffs ha[d] not appealed the

denial of declaratory and injunctive relief,” and under

Steel Co. v. Citizens for a Better Environment, 523 U.S.

83, 118 S. Ct. 1003 (1998), civil penalties payable solely

to the United States Treasury do not “redress any injury

suffered by a citizen plaintiff.” Jd. at 306. Because Peti-

tioners could not obtain relief on the merits, the Fourth

Circuit also held that they could not recover attorneys’

fees. Id. at 307 n.5.

SUMMARY OF ARGUMENT

Because Petitioners’ appeal addressed only the civil

penalty judgment in which they themselves had no Pper-

sonal stake, their appeal could not proceed. They have no

personal stake in an award of civil penalties that is not

payable to them, but to the United States Treasury. Stee!

Co. v. Citizens for a Better Environment, 118 S. Ct. 1003,

1018 (1998). The possible deterrent effect of a judgment

for civil penalties does not provide a private party, which

can lay no claim to any part of those penalties, with a

sufficient personal stake in the outcome of a case to

sustain a federal court's jurisdiction. In the absence of

parties on both sides of the question having a personal

stake in the outcome of the appeal, it would have been

improper for the court of appeals to resolve the difficult

substantive issues concerning the proper standards to be

used by the State or the district court in imposing a Civil

penalty.

Assuming that it is necessary for this Court to reach

the issue, it is also clear that the district court could not

award civil penalties in the first instance. Once the diStrict

court properly denied Petitioners’ request for any equitable

relief, it should not have imposed civil penalties. It is

doubtful that a federal court ever has jurisdiction to enter-

tain the claim of a private party that seeks the payment of

9

money not to itself but to the public treasury. At a mini-

mum, however, the only way to assure that the court has

some basis for jurisdiction at all stages of a citizen suit is

for civil penalties to be awarded only as an adjunct to a

proper and necessary injunction.

In this case, however, no judgment was proper because

Petitioners lacked standing from the outset. As the court

found, there was no harm to the environment. Moreover,

at the time of suit, Laidlaw had committed in a consent

decree to use every effort to avoid future violations—an

agreement that caused Laidlaw temporarily to shut down

its facility, and under which Laidlaw acted to eliminate

the last, nagging technical difficulty that would allow the

facility to operate in complete compliance. This case,

therefore, did not present the type of ongoing injury or

ongoing violation on which a citizen suit can proceed.

Finally, in light of the jurisdictional prohibition barring a

citizen suit when the State is already diligently seeking

compliance, jurisdiction was lacking here. Where the

State actively has pursued compliance, a jurisdictional

finding of lack of diligence cannot be based, as it was

here, on dissatisfaction with the magnitude of the civil

penalties previously imposed by the State.

Assuming it is proper to reach the question here, at-

torneys’ fees could not properly be awarded in this case

because Petitioners did not obtain a judgment or settlement

that provides any relief to them. Moreover, the district

court found that Laidlaw’s compliance was prompted by

the State agency, not the citizen suit.

10

ARGUMENT

I. THE COURT OF APPEALS PROPERLY DIS-

MISSED THE APPEAL OF A PARTY THAT HAD

NO PERSONAL STAKE IN THE OUTCOME OF

THE CASE

A. The Court Of Appeals Did Not Have Jurisdiction

Over An Appeal In Which Appellants Only Were

Pursuing Relief In Which They Had No Personal

Stake

Petitioners presented an appeal to the Fourth Circuit

starkly inconsistent with Article III's case-or-controversy

requirement. On appeal, Petitioners abandoned their ear-

lier claim for an injunction—a remedy in which they

would, in theory, have a personal stake because it would

bar the defendant from engaging in conduct that would

cause Petitioners harm. Instead, Petitioners’ appeal was

concerned solely with the amount of the civil penalty that

the district court ordered payable to the United States and

to which Petitioners could lay no claim. A citizen-plaintiff

has no cognizable legal interest in, and thus no standing

to prosecute, an action seeking the exaction of a civil

penalty payable solely to the public treasury. See Steel

Co., 118 S. Ct. 1003.4

“Standing” is a fundamental part of the “case-or-con-

troversy” requirement that circumscribes the jurisdiction

of Article III courts. Standing has been divided into three

elements: a plaintiff must have suffered, or in an equity

action be threatened by, some concrete injury; the injury

must be caused by defendant's conduct; the injury must

be redressable by the court. See Steel Co., 118 S. Ct. at

4 Steel Co. was decided during the pendency of the appeal, and

plainly applies to citizen suits brought under the Clean Water Act.

A civil penalty payable to the United States Treasury.can no more

provide a personal benefit to the citizen-plaintiff under the Clean

Water Act than it could under the Emergency Planning and Com-

munity Right-To-Know Act of 1986 (“EPCRA”), 42 U.S.C. §§ 11001

et seq., at issue in Steel Co.

11

1016-17. The basic requirement that a lawsuit in the

federal courts can proceed only when it offers the plain-

tiff an opportunity to obtain concrete relief reflects the

traditional, limited role of the federal courts within our

constitutional structure.

Where a case involves past injury, the issue of redress-

ability ordinarily presents little difficulty. If monetary

relief is available in the form of damages, the award of

such relief to the plaintiff will redress the injury by pro-

viding plaintiff with compensation. When the case involves

only the threat of future harm, the issue of redress tucns

on the availability of some form of equitable relief that

would bar the defendant from engaging in wrongful con-

duct that otherwise would harm the plaintiff.

Civil penalties that are not payable to the citizen-

plaintiff do not redress its injuries or provide it with a

personal stake in the outcome of the case sufficient to

ground a federal court’s jurisdiction. A citizen-plaintiff

does not have a personal stake in a monetary judgment

requiring payment to another party—particularly where

the payee is the public treasury. Such a payment is not

compensation for the plaintiff's past injury, and is not

compensation to the plaintiff if paid to someone else. Nor

can such a payment be equated with an injunctive decree

that bars the defendant from engaging in conduct that will

harm the plaintiff.

That the plaintiff has suffered or is threatened with

injury at the hands of the defendant may therefore be

presumed for purposes of analysis here, as it was in Steel

Co., 118 S. Ct. at 1018. It also may be assumed that the

5 Petitioners lay no claim to any part of those penalties. This

was not the “unusual case in which Congress has created a concrete

private interest in the outcome of a suit against a private party for

the Government’s benefit by providing a cash bounty for the victori-

ous plaintiff.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 573

(1992).

12

plaintiff will derive satisfaction from the fact that some-

one who has caused injury is directed to pay a penalty.

Id. at 1018-19. But neither the fact of injury nor the

hope of such psychic satisfaction provides a “personal

stake” in civil penalties sufficient to satisfy Article III.

The satisfaction derived from directing money to the

Treasury, or punishing a wrongdoer, “is not an acceptable

Article III remedy because it does not redress a cognizable

Article III injury.” /d. at 1019. With a request for civil

penalties, a private plaintiff actually “seeks not remedia-

tion of its own injury . . . but vindication of the rule of

law—the ‘undifferentiated public interest’ in faithful execu-

tion of [the law].” /d. at 1018 (quoting Lujan v. Defend-

ers of Wildlife, 504 U.S. 555, 557 (1992)). Within the

federal system, only governments have a cognizable gen-

eral interest in enforcing the law sufficient to sustain fed-

eral court jurisdiction.®

Through the exercise of equity power, a federal court

may provide relief that benefits many more people than

just the individual plaintiff. But the relief must always

at least directly benefit the plaintiff. A personal stake in

the outcome is what assures the concrete adverseness upon

which the courts depend.? It also confines the federal

6 A sovereign has a cognizable interest in enforcing the law and

imposing punishment; a private party does not. See Maine v.

Taylor, 477 U.S. 131, 137 (1986). The Executive Branch is des-

ignated to enforce the law on behalf of the United States. Serious

Appointments Clause and Separation of Powers issues are raised

by the Legislative Branch’s effort to empower private parties

to invoke the jurisdiction of the federal courts in pursuit of civil

penalties payable solely to the United States. If private parties are

allowed to stand in for Executive Branch officials, those private

parties must at least have a personal interest in the outcome (i.¢.,

financial recovery, on the one hand, or equitable relief on the other)

that is the hallmark of a private suit.

7 See Phillips Petrolewm Co. v. Shutts, 472 U.S. 797, 804 (1985)

(stating that Article III standing requires “ ‘such a personal stake

in the outcome of the controversy as to assure that concrete ad-

13

courts to their traditional role consistent with separation

of powers principles. The personal stake in the outcome

provides the only basis upon which a federal court may

wield judicial power. It must, therefore, exist at all stages

of the case.* Article III is no less important at the stage

at which judicial power is most forcefully exercised (the

remedy stage), than when the case is first presenied.

The requirements of Article III are as important on

appeal as at the inception of a case. If there is no party

with a personal stake in the outcome to pursue the appeal,

the appeal must be dismissed.® It has long been the rule

that

when, pending an appeal from the judgment of a

lower court, and without any fault of the defendant,

an event occurs which renders it impossible for this

court, if it should decide the case in favor of the

plaintiff, to grant him any effectual relief whatever,

—_—_—_—_— er cle rw

verseness which sharpens the presentation of issues’”) (quoting

Baker v. Carr, 369 U.S. 186, 204 (1962)); Valley Forge Christian

College v. Americans United for Separa_ion of Church and State,

Ine., 454 U.S. 464, 472 (1982) (“The requirement of ‘actual injury

redressable by the court’. . . tends to assure that the legal ques-

tions will be resolved . . . in a concrete factual context conducive

to a realistic appreciation of the consequenecs of judicial action.’ )

(internal citation omitted).

8 I'nited States Parole Comm'n v. Geraghty, 445 U.S. 388, 397

(1980) (“The requisite personal interest that must exist at the

commencement of the litigation (standing) must continue through-

out its existence (mootness).”); Spencer v. Kemna, 523 U.S. 1, 118

S. Ct. 978, 982 (1998) (“throughout the litigation, the plaintiff

‘must have suffered, or be threatened with, an actual injury trace-

able to the defendant and likely to be redressed by a favorable

judicial decision’”) (quoting Lewis v. Continental Bank Corp.,

494 U.S. 472, 477 (1990) ).

9 See Arizonans for Official English v. Arizona, 520 U.S. 43, 67

(1997) (“To qualify as a case fit for federal-court adjudication,

‘an actual controversy must be extant at all stages of review, not

merely at the time the complaint is filed.’”) ; Bender v. Williamsport

Area School Dist., 475 U.S. 534, 549 (1986).

14

the court will not proceed to a formal judgment, but

will dismiss the appeal.

Mills v. Green, 159 U.S. 651, 653 (1895). The same

rule necessarily applies where, as here, the plaintiff aban-

dons on appeal its only claim for “effectual relief.” Cf.

Ashcroft v. Mattis, 431 U.S. 171 (1977) (per curiam).

This case illustrates the danger of allowing a party to

prosecute an appeal in which it has no direct stake in the

outcome. The heart of Petitioners’ appeal concerned the

important issues related to the proper measure for a state

agency or a federal court to employ in assessing a civil

penalty for violation of the Clean Water Act. Yet the

State of South Carolina, whose penalty assessment policies

and enforcement practices were assailed, was not party to

the trial or the appeal. Cf. Gwaltney of Smithfield, Ltd. v.

Chesapeake Bay Found., 484 U.S. 49, 61 (1987) (noting

the potential that citizen suits will undermine state en-

forcement efforts). Moreover, the United States—the only

entity with a direct interest in the assessment of the civil

penalties awarded by the district court—also was not a

party to the appeal, or at any other stage of the case.

In the absence of parties on both sides possessing a

personal stake in the outcome, the court of appeals prop-

erly dismissed the appeal and vacated the judgment.

B. Because Petitioners Abandoned The Request For

Relief In Which They Had A Personal Stake, The

Court of Appeals Was Not Required To Determine

Whether Laidlaw’s Compliance Independently Ren-

dered The Case Moot

Petitioners and Amicus United States argue that the

appeal could not be dismissed as moot unless Laidlaw

showed that its permit discharge problems “could not rea-

sonably be expected to recur.” obviating any threat of

future harm. Pet. Br. 23: Br. for the United States as

Amicus Curiae (“Gov't Br.”) 26. They argue that it was

15

necessary for the district court or the court of appeals to

first render a specific finding to that effect before dismiss-

ing the case as moot.

But a specific finding that “voluntary cessation” of con-

duct has eliminated the threat of future harm is not the

only basis to find a case moot. As noted above, a plain-

tiff’s own actions can moot a case, and that is precisely

what happened here. On appeal plaintiffs abandoned their

request for an injunction or other equitable remedies,

thereby giving up every claim for relief that could pro-

vide them with personal benefits. Consequently, the case

could not proceed—and there was no need for the court

of appeals to determine whether Laidlaw met the “heavy

burden” !° of showing that there was no threat of future

harm.

In denying the injunction, the district court concluded

that Laidlaw “is now and has for an extended period of

time been in compliance.” JA 183. It did not believe that

Laidlaw was required to “show that there is no chance of

a future permit violation.”"' JA 183. Such a strong show-

ing may be appropriate where the defendant seeks to put a

premature halt to proceedings by having the case declared

moot. But denial of injunctive relief on the merits did not

ultimately require that degree of certainty. In light of the

fact that there had been no harm to the environment, and

10 The “heavy burden” of showing mootness has been applied only

in cases where mootness is raised by a defendant's self-serving

assertion that it has ceased the offending conduct. No similar

heavy burden has been imposed where mootness is the product of

plaintiff’s own actions or litigation decisions.

11 Although the district court did not make a finding that there

was absolutely no possibility of future harm, it is obvious from the

record that it perceived no such threat, and denied an iniunction

on that basis. Moreover, in light of the fact that the facility has

been closed, there can be no serious argument about a threat of

future harm sufficient to ground federal court jurisdiction in pur-

suit of an injunction. See Respondent’s Suggestion of Mootness,

filed June 9, 1999.

16

that Laidlaw had worked cooperatively with DHEC to

comply with an unnecessarily stringent standard, the many

years of compliance were sufficient to demonstrate that no

equitable remedy was required to protect Petitioners from

future harm. Petitioners did not challenge these findings.

Having been denied the on/y form of relief in which they

had an interest—a form of relief that is designed specifi-

cally to prevent future harm—and not challenging that

denial on appeal, there was no basis to continue the case.

Ignoring this principle, Amicus United States argues

that the “court of appeals erred in ruling that a Clean

Water Act citizen suit . . . must be dismissed as moot if

the district court concludes that injunctive relief is un-

warranted.” Gov't Br. 8. Petitioners and the United

States insist that the question the Court should address is

whether a citizen suit becomes moot after the citizen’s

request for injunctive relief is denied.

As shown above, that is not the question presented.

Indeed, the answer to that question as posed is plainly

“no,” although not for the reasons suggested by Petitioners

and the United States. Denial of an injunction is a dis-

position on the merits, not a disposition of the case as

moot. If, after injunctive relief was denied, Petitioners

appealed that decision, the appellate court would have

jurisdiction to consider Petitioners’ challenge to that

denial. But where, as here, Petitioners are no longer even

seeking relief for themselves, that fact is dispositive.

This does not mean that it would be proper for the

district court to impose civil penalties after denying an

injunction, even if the plaintiff had not abandoned its

claim for injunction. To the contrary. as shown below. a

federal court’s authority to impose civil penalties in a suit

by a private varty is doubtful under anv circumstances.

The notion that a partv can obtain relief for someone

other than itself is inconsistent with Article TTT’s case-

or-controversy requirement. See Part ITB, infra.

17

In Laidlaw’s view, however, Petitioners’ decision to

abandon the injunction claim on appeal is dispositive and

obviates the need to answer the questions posed by Peti-

tioners and the United States regarding the precise circum-

stances under which a district court lacks a jurisdictional

basis to exact penalties in a CWA citizen suit.

C. Petitioners Did Not Obtain A Declaratory Judg-

ment Or Any Other Equitable Relief Sufficient To

Preserve Appellate Jurisdiction

Petitioners argue that their failure to pursue an injunc-

tion on appeal is not fatal because they obtained a differ-

ent form of equitable relief from the district court, a

“declaratory judgment as to liability.” Pet. Br. 40, 42.

Petitioners’ assertion is without basis in the record and

without support in the law.

No “declaratory judgment as to liability” was ever

issued pursuant to 28 U.S.C. $$ 2201, 2202. Petitioners

sought “both a declaratory judgment and injunctive relief”

(JA 182), but the district court declined to grant either,

explaining “the fact that Laidlaw is now and has for an

extended period of time been in compliance with its permit

compels the conclusion that no injunction or other form

of equitable relief is appropriate. Accordingly, plaintiffs’

request for equitable relief is denied.” JA 183 (emphasis

added).

What Petitioners call a “declaration of liability” is the

district court's finding of liability in imposing a civil pen-

alty. This Court has held, however, that the incidental

pronouncement of a court on a matter of law or fact is

not equivalent to a declaratory judgment. To “suggest

such an equivalency is to lose sight of the nature of the

judicial process.” Hewitt v. Helms, 482 U.S. 755, 761

(1987); see also id. at 762 (“[{T]here is a very practical

objection to equating statements of law (even legal hold-

ings en route to final judgment for the defendant) with

declaratory judgments.” ).

18

Moreover, there is a fundamental difference between a

“declaration of [past] liability” and the type of declaratory

judgment, prospective in nature, that actually will fore-

stall a threatened injury and thus provide some benefit to

the plaintiff. For example, a declaration that a law is

unconstitutional or a regulation invalid is presumed to

provide redress as effective as an injunction because of its

prospective effect. The government is expected to refrain

from enforcing a law that a court has declared unlawful.

Similarly, private parties whe seek a declaration about the

meaning of a contract or title to property may have stand-

ing to seek that declaration because it will control their

future behavior. The effect of a judicially enforceable

declaratory judgment on the parties’ ongoing relationship

provides concrete relief to the plaintiff by materially alter-

ing the legal relationship of the parties. Jd. at 761.

In contrast, a “judicial statement that does not affect

the relationship between the plaintiff and the defendant is

not . . . equivalent [to a declaratory judgment].” /d.

(emphasis in original). A “declaration of liability,” with-

out more, is inherently retrospective. Likewise, an award

of civil penalties for past wrongs will not preclude future

wrongs. Petitioners fail to grasp the distinction between a

civil penalty ruling concerning only past liability, which

benefits them not at all, and the grant of some form of

equitable relief that will protect them from future harm,

which the district court found unnecessary.

D. The Deterrent Effect Of A Civil Penalty Does Not

Provide A Private Plaintiff With Standing To Con-

tinue Pursuing Such Penalties

Amicus United States argues that upon an initial show-

ing of a continuing violation, unless and until the court

makes a finding that there is no longer any threat of

future injury, a private plaintiff should independently have

standing to pursue civil penalties to deter possible future

19

violations. Gov't Br. 24. Under this theory, the possible

deterrent effect of the penalty independently provides the

plaintiff with the required personal stake in the outcome

to continue a case, whether or not plaintiff even seeks an

injunction to stop a violation.

This theory is advanced by Petitioners and the United

States without support from this Court’s cases, or any

historical analogue involving the jurisdiction of the federal

courts. Indeed, it appears contrary to conventional un-

derstandings concerning the differing roles of civil penal-

ties and equitable remedies. Injunctions and declaratory

orders are designed to provide prospective relief by pro-

hibiting (or requiring) action to prevent future harm. In

contrast, civil penalties are retrospective in design. They

punish past behavior.’* Private plaintiffs have heretofore

had no legally recognized interest in the exaction of penal-

ties for the benefit of the public. “[I]n American juris-

prudence at least, a private citizen lacks a judicially cog-

12 Under that theory, citizens would have standing to compel the

government to prosecute law violators on the grounds that such

prosecutions will deter future violations. But, in contrast with

those state courts which allow citizens to prosecute criminal cases

in some circumstances, the federal courts have never been offered

as a forum for private party criminal prosecutions. The restrictions

of Article III itself, and the clear constitutional assignment of

responsibility for enforcing the law to the Executive Branch, pre-

clude such private enforcement actions. The Legislative Branch

cannot permissibly encroach on the power of the Executive Branch

by assigning Article II power to private parties, at least absent some

traditional private-party controversy that independently grounds

the jurisdiction of the federal court.

13 The Clean Water Act reflects Congress’ view that civil penalties

are retrospective in focus—meant to punish for past violations.

While the imposition of penalties may, of course, deter noncom-

pliance, this Court has recognized the essential punitive nature of

civil penalties under the Act. Tull v. United States, 481 U.S. 412,

422 (1987) (penalties authorized under § 1319(d) are “of thfe]

—— of “(rjemedies intended to punish culpable individ-

P).

20

nizable interest in the prosecution or nonprosecution of

another.” Linda R. S. v. Richard D., 410 U.S. 614, 619

(1973); see also Sure-Tan, Inc. v. NLRB, 467 U.S. 883,

897 (1984).

Petitioners stretch for precedential support for their

theory from the statement in Gwaltney that “citizens .. .

may seek civil penalties only in a suit brought to enjoin

or otherwise abate an ongoing violation.” 484 U.S. at 59.

Petitioners read this sentence as holding that penalties

“abate” violations. See Pet. Br. 17. But the Court's

opinion did not go that far. The Court simply postulated,

consistent with the statute, that civil penalties may be

proper as an adjunct to a case brought to enjoin or abate

violations. The Court did not say or imply that civil

penalties themselves abate an ongoing violation, let alone

that such a theory would comport with the requirements

of Article IIT.

Petitioners’ reliance on deterrence as providing the basis

for Article III] standing for private parties to seek the

imposition of civil penalties fundamentally misapprehends

the mechanism through which “deterrence” works. The

heart of the deterrence rationale is the threat that penal-

ties will be imposed in the future, not the actual exaction

of penalties for what has taken place in the past. Thus,

Petitioners might plausibly have an interest in the issu-

ance of a court order that declared any future violations

of the CWA by Laidlaw would result in the mandatory

imposition of a $25,000 penalty. Such an order would be

addressed directly to future behavior, creating a deterrent

to future wrongdoing.’* In contrast, an order actually

imposing a penalty for prior wrongdoing is addressed

primarily to the past.

14 Consent order provisions setting penalties for future violations

are a common way for government enforcement agencies to pursue

enhanced deterrence against such violations.

21

This is not to belittle the utility of deterrence. The

availability of civil penalties under a statute adds to the

Statute’s deterrent force. Moreover, seeing the law ac-

tually enforced against someone has some additional,

general deterrent force. That general deterrence does not,

however, provide the plaintiff with specific relief to re-

dress his own injury in any particularized sense. See Steel

Co., 118 S. Ct. at 1018-19 (interest in deterrence does

not satisfy Article IIT).

The United States and Petitioners focus on the mar-

ginal additional deterrent force on a particular company

associated with imposing civil penalties on that company.

Of course, in the context of this case, they are talking

about the marginal chastening force of imposing additional

civil penalties on a party that not only had been making

every effort to comply with the law, but already had been

subjected to civil penalties by the State, which has the

primary responsibility for balancing penalties against

other interests in prompting compliance.’®

The theory “that the punishment will deter the risk of

future harm” was the subject of a concurring opinion in

Steel Co., but was found by the Court to reach too far.

“Obviously, such a principle would make the redressabil-

ity requirement vanish.” Steel Co., 118 S. Ct. at 1018.

There is a fundamental difference between a judicial de-

cree that directs future compliance with a statute, regu-

lation or judicial rule, thus by its terms barring actions

which may cause harm to the plaintiff, and the exaction

of penalties for past harm, which may deter future mis-

conduct but does not prohibit it. The former provides

direct redress of the plaintiff's injury; the latter does not.

15 Of course, the threat of civil penalties is always present under

the CWA, whether or not citizens can pursue them. The State and

the EPA can, and do, pursue civil penalties in cases across the

country.

22

Thus, a plaintiff has standing to seek an injunetion that

would prohibit some conduct by the defendant that nares

the plaintiff. The injunction is deemed to be S >

subject of a private suit because the rule of law rests —

the assumption that laws and court orders will be obeys -

and therefore control a party’s conduct. But {he cases

have not suggested that individuals have standin& ‘© at

sue civil penalties for past wrongs on the theory that suc

punishment may affect a defendant’s future beha@vicr.

Whether the meting out of penalties for past WFOngs

will have a deterrent effect in any particular sipasee bo

uncertain—depending on a multitude of factors, such 7

the financial status of the company and the personality

its managers. It is impossible to say that any give ten '

of civil penalties will prevent any specific future ¥!° —

of the law. It must be “ ‘likely,’ as opposed t? merely

‘speculative,’ that the injury” of which plaintiff complains

“will be ‘redressed by a favorable decision.’” Lian, 504

U.S. at 561 (quoting Simon v. Eastern Kentucky Welfare

Rights Org., 426 U.S. 26, 38, 43 (1976)).

As advanced in this case, the deterrence argum®"t IS, at

most, tenuous. The findings of the district covft made

clear, based on at least five years of Laidlaw’s cemtnuous

compliance, that the threat of future harm was alr!st non-

existent. Thus, the deterrence suggested by the United

States was directed to a nonexistent (or barely ¢Xistent)

threat. Moreover, it is difficult to see the incremental de-

terrent impact on a company that had been actiY¢lY pur-

suing compliance, had made (notwithstanding potential

objections to the standards) costly efforts at compliance.

and was already obligated in an agreement with the State

to put an end to mercury violations. Moreover. the State

had, in the exercise of its discretion. already exacted pen-

alties for those same violations. The district cov'Tt found

here that it was mandated under the Act to impose civil

penalties for past violations. JA 160. This undermines

23

the notion that civil penalties were imposed here in order

to deter Laidlaw from future violations. If the threat of

future harm were real, the court's first recourse would nec-

essarily be to a traditional means of barring future harm

by injunction, not to the speculative influence of penalties

for past violations.

Petitioners and Amicus United States place heavy re-

liance on the statement in Weinberger v. Romero-Barcelo,

456 U.S. 305, 314 (1982), that “an injunction is not the

only means of ensuring compliance.” The Court stated

there that “the FWCPA itself, for example provides for

fines and criminal penalties.” /d. (emphasis added). In

so doing, the Court was addressing the contention that an

injunction must issue in connection with every violation of

the Act or else the regulated community would be free to

ignore the requirements of the Act with impunity. The

Court simply pointed out that the statute of its own force

deters violations by establishing fines and criminal penal-

ties for noncompliance."®

The deterrence argument of the United States turns the

traditional role of civil penalties upside down. In a gov-

ernment action, the availability of penalties for past viola-

tions would ordinarily obviate the necessity of examining

continuing injury in a mootness inquiry; the availability

of the retrospective remedy would keep the case alive.

Here the United States suggests the opposite result—that

such civil penalties can only be imposed if there is a threat

of future harm. In fact, the district court's jurisdiction

to exact civil penalties is, under this theory, specifically

connected to the deterrent effect of the penalties on the

particular party—and presumably the amount of the pen-

16 Courts, however, compel compliance in particular cases by

issuing orders that require obedience. They do not do so by impos-

ing penalties for past violations. Indeed, the Court explained in

Romero-Barcelo that the district court in that case had acted to

assure compliance not, as Petitioners would have it, by imposing

penalties, but by “ordering the Navy to apply for a permit.” 456

U.S. at 315.

24

alty must be specifically calibrated only to deter, for the

court may not use the penalty to exact retribution.

Petitioners’ arguments highlight the overbreadth of their

deterrence rationale as a basis for standing. Laidlaw filed

a Rule 21 Suggestion of Mootness in this Court based on

the fact that it ceased all operations at the facility that was

the subject of this lawsuit. Although that cessation pre-

cludes the possibility of any further harm at the only fa-

cility owned and operated by Respondent, Petitioners argue

that imposing civil penalties on Respondent will deter fu-

ture violations at “16 other NPDES permitted facilities,”

owned and operated by corporate affiliates of Respondent

near where some of Petitioners’ members live. See Pet.

Resp. to Suggestion of Mootness 8. Under that theory,

anyone who lives within shouting distance of any facility

owned and operated by a corporate affiliate of Respondent

anywhere in North America would have standing to main-

tain a suit for civil penalties in connection with this facility

because the deterrent effect of the award of civil penalties

here might be said to deter Laidlaw from violating the law

elsewhere.

E. Irrespective Of Whether Violations Are Continuing.

A Case Cannot Continue When The Court Cannot

Provide Plaintiff Anv Effectual Relief

Petitioners and Amicus United States also argue that

the existence of a continuing violation has independent

jurisdictional significance. Under this theory. a continuing

violation at the outset of a case provides the court with

jurisdiction: once the court has jurisdiction, it can issue

any remedy it desires so long as it chooses to retain that

jurisdiction. In support of this theory, Petitioners note the

“heavy burden” on a defendant that seeks to have a case

dismissed as moot based on its contention that it has

stopped violating the law. But in emphasizing this point,

Petitioners reveal a fundamental confusion about the rea-

25

sons why the existence of a continuing violation is impor-

tant." A continuing violation is indicative of a realistic

threat of future injury, which is, in turn, the predicate for

a court to grant an injunction. It is the answer to the

question whether some effectual remedy continues to be

available to plaintiffs, not simply whether harm is con-

tinuing, that determines whether an Article III case or

controversy still exists.

In connection with a Clean Water Act citizen suit, an

ongoing violation is important for two related reasons.

First, the ongoing violation fulfills the statutory require-

ment that a citizen-plaintiff must allege “a state of either

continuous or intermittent violation—that is, a reasonable

likelihood that a past polluter will continue to pollute in

the future.” Gwaltney, 484 U.S. at 57. This sounds ex-

actly like the precondition for an injunction; Congress

clearly made it a precondition to suit.

Second, the issue of an ongoing violation is frequently

addressed in connection with “mootness.” The focus there

is whether defendant's “voluntary cessation” obviates the

threat of future harm and thus divests the court of its

authority to grant any relief. The threat of future harm is

important because it is the precondition for granting equi-

table relief to the plaintiff. Cf. Los Angeles v. Lyons. 461

U.S. 95, 109 (1983) (referring to the “equitable doctrine

that cessation of the challenged conduct does not bar an

injunction”). The ability to potentially grant some relief

to the plaintiff is the predicate for the court's continued

exercise of its jurisdiction. The significance of the con-

tinuing violation for purposes of the mootness inquiry is

17 The traditional resistance to a defendant’s self-interested

assertion that it has voluntarily stopped engaging in wrongful

conduct is not due to some unstated rule that having overcome its

initial reluctance to take the case, a court becomes even more

reluctant to give it up. The resistance simply reflects skepticism

about a defendant's self-interested assertion that it has suddenly

mended its ways. See Steel Co., 118 S. Ct

US. at 67. - at 1020; Gwaltney, 484

26

thus tied to whether the court continues to be in a position

to provide redress for the plaintiff's injury.* See generally

Steel Co., 118 S. Ct. at 1020.

The ultimate question, therefore, is whether the court

will be able to provide “effectual relief.” Mills, 159 U.S.

at 653. This reflects the broader link between “moot-

ness” and redressability.% If the court cannot provide the

plaintiff any effectual relief, the case cannot continue and

must be dismissed, regardless of whether there is a “con-

tinuing violation.”

F. No Distinction Between “Standing” And “Moot-

ness” Allows Petitioners To Continue Pursuing This

Case

Petitioners argue that Stee! Co. was a standing decision,

while this case involves only mootness. They suggest, in

essence, that standing is a rigid doctrine designed to keep

interlopers out of court, but once they have passed the

portals, “mootness” is flexibly applied to allow them to

stay. Pet. Br. 23-24. Petitioners thus assert that having

successfully invoked the district court's jurisdiction by

alleging and proving a continuing violation at the begin-

ning of the case. they may continue the case on appeal

in pursuit of additional civil penalties even if the viola-

tions have ceased.”

18 Obviously, if the plaintiff may recover damages, the court’s

jurisdiction is unaffected by whether the violation is continuing.

Conversely, if in an equity action the court suddenly was stripped

of all power to grant an equitable remedy, the case would be dis-

missed on the merits. Plaintiff could not maintain the case, or the

court its jurisdiction, with no relief available.

19 See, e.g., Spencer v. Kemna, 118 S. Ct. at 988 (mootness arises

when there is “nothing .. . to remedy”). Cf. Calderon vr. Moore,

518 U.S. 149, 150 (1996) (availability of possible remedy keeps a

case from being moot).

20 This case illustrates the likely consequences of such an ap-

proach. Based on its commitments to the State that preceded this

27

The distinction Petitioners (and, to a lesser extent,

Amicus United States) posit between standing and moot-

ness is not to be found in the Constitution. Both doc-

trines derive from the application of the same case-or-

controversy requirement.” The ultimate question on moot-

ness, as it is on initial standing, is whether there continues

to be a controversy before the court in which the parties

have a personal stake and for which the court can pro-

vide redress.** Petitioners’ theory that having alleged

jurisdiction at the outset, a plaintiff may then go on to

pursue civil penalties irrespective of some independent

basis of standing to do so is, of course, inconsistent with

lawsuit, Laidlaw came into compliance with the non-mercury ex-

ceedance limits by March 1991 and into substantial compliance with

mercury limits no later than August 1992, shortly after the suit

began. JA 183. The district court nonetheless proceeded to examine

hundreds of pre-complaint violations. JA 158-59, 178. Although

the focus of the citizen suit is primarily to afford affected citizens

a means of protecting themselves from harm when the government

cannot, or will not, command compliance (see Gwaltney, 484 U.S.

at 62), by the time the district court turned to the substantive

issues in its 1995 and 1997 opinions, the straightforward matter of

bringing Laidlaw into compliance was long since resolved. Instead,

the trial court focused on the difficult issues associated with meting

out appropriate penalties for violations that took place long ago

and had been redressed by Laidlaw’s and the State of South Caro-

lina’s efforts to find a workable method of limiting Laidlaw’s

mercury discharges.

21 Indeed it has been said that moootness is simply “the doctrine

of standing set in a time frame.” Arizonans, 520 U.S. at 68 n.22

(quoting Geraghty, 445 U.S. at 397).

22 The redressability principle is at the core of Article III. It

informs conceptions of both standing and mootness. Even if one

regards mootness as a prudential doctrine allowing the courts to

consider moot cases “where there are strong reasons to override”

the doctrine, Honig v. Doe, 484 US. 305, 331 (1988) (Rehnquist,

C.J., concurring), the fact remains that those “strong reasons” are

rarely found. The federal courts’ institutional interests that require

the mootness doctrine to be “overridden” in rare cases have never

been found to exist in a whole class of cases, e.g., CWA citizen

suits, such as those at issue here.

28

the settled understanding that a proper case or contro-

versy must exist at all stages of a suit.

Petitioners’ reliance on Gwaltney is especially suspect.

Gwaltney addressed whether citizen-plaintiffs could none-

theless “press their suit to conclusion” where “allegations

of ongoing noncompliance [sufficient to invoke the court's

jurisdiction] become false at some later point in the litiga-

tion because the defendant begins to comply with the

Act.” 484 U.S. at 66 (emphasis added). This Court

found they could not. Once “defendant begins to comply

with the Act”—at least in the sense of obviating any like-

lihood of future harm—the case is moot and the action

must be dismissed. The Court emphasized the “heavy

burden” on the defendant in seeking to obtain dismissal

by virtue of voluntary cessation of its alleged wrongful

conduct. But the Court expressed no doubt that if viola-

tions convincingly ceased—obviating the threat of future

harm—the action could not proceed simply to obtain

penalties for past violations. Jd. at 66-67. Indeed, the

Court explained that “plaintiffs are also protected from

the suddenly repentant defendant by the authority of

the district courts to award litigation costs ‘whenever the

court determines such award is appropriate.” Id. at 67

n.6. The Court's discussion of these “protections” from

the “repentant defendant” would have been wholly un-

necessary if, as Petitioners suggest, a plaintiff may con-

tinue to prosecute a claim for civil penalties even after

the defendant has ceased violating the Act.

Petitioners also argue that a close view of Gwaltney

would show that violations in that case ceased before the

action was filed, that the district court denied an injunc-

tion, and that the denial of the injunction was not ap-

pealed, yet the Court did not dismiss the case as moot.

Pet. Br. 15. Petitioners reason that since the Court “im-

plicitly, but clearly, held that the case was not moot, it

29

necessarily concluded in Gwaltney that injunctive relief

is not essential for Article III jurisdiction in a citizen suit

where ongoing violations are alleged and proved.” Pet.

Br. 17. In Steel Co., the Court commented on another

effort to read jurisdictional rulings into Gwaltney, caution-

ing against reliance on “drive-by” jurisdictional holdings

of the kind that Petitioners construct. 118 S. Ct. at 1011.

Even on its own terms, however, Petitioners’ effort to

derive a constitutional holding out of Gwaltney’s failure

to find the case moot is ill-conceived. The Court vacated

the civil penalties awarded in the lower court, focusing

on the possible absence of statutory jurisdiction. Where

the Court identifies a lack of jurisdiction on one ground,

this cannot be taken to mean that the Court held that

the plaintiff surmounted every other jurisdictional hurdle

not addressed in the Court's opinion.

II. THE DISTRICT COURT LACKED AUTHORITY

UNDER ARTICLE III TO AWARD CIVIL PENAL-

TIES TO PETITIONERS

A. A Private Party May Not Pursue Civil Penalties

Payable Solely To The Public Treasury

Under this Court’s decisions, it is doubtful that a private

party can ever be awarded a judgment requiring payment

of a civil penalty solely to the United States Treasury.

This limitation on the remedies a private party may obtain

exists whether or not the federal court has jurisdiction

over some other claim presented by that private party.

Article III is not simply a statement of jurisdiction.

Rather, it is a description of the federal judicial power.

It is inconsistent with the proper, historic limitations on

judicial power to allow it to be exercised—i.e., to dis-

pense punishment—on behalf of someone who has no

legally cognizable interest in the remedy.

30

The federal court’s remedial power may only be exer-

cised on behalf of a party who has standing to seek the

remedy in question. Thus, in Lyons, this Court held that

there was no jurisdiction over a party’s request for a

broad injunction that, while possibly benefiting others, was

unlikely to prevent any future harm to the plaintiff him-

self. 461 U.S. 95. The fact that the plaintiff was pre-

viously the victim of such harm did not provide standing

to pursue equitable relief.

This Court addressed a similar issue in Lewis v. Casey,

518 U.S. 343 (1996). The Court found jurisdiction

over certain claims of the prisoner plaintiffs. But this

did not provide the district court with the authority to

grant equitable relief throughout the prison system or to

remedy harms quite unlike those suffered by the prisoner-

plaintiffs. As the Court pointed out, “standing is not

dispensed in gross. If the right to complain of one ad-

ministrative deficiency automatically conferred the right to

complain of all administrative deficiencies, any citizen

aggrieved in one respect could bring the whole structure

of state administration before the courts for review.” 518

U.S. at 358-59 n.6. Whether or not a federal court has

jurisdiction over some claim (as in Lyons, for an award

of damages), plaintiffs may only obtain relief that benefits

themselves.

This Court’s historic concern that issues can properly

be presented only by a party with a direct stake in the

resolution of those issues is just as important in the con-

text of a specific claim for relief as it is in connection

with the initial filing of a suit. Indeed, the danger of

allowing a party to seek relief that does not benefit that

party is well illustrated by this case. Petitioners are not

suitable advocates to advance the claim of the United

States or South Carolina for the imposition of civil penal-

ties. As this Court noted in Gwaltney, allowing a private

3L

party to assert claims for civil penalties can interfere with

the remedial objectives of those charged with primary

responsibility for enforcement of the Act: state and fed-

eral officials. These representatives clearly do have a

cognizable interest in the award and amount of civil

penalties. They may, as they choose, compromise civil

penalties in aid of other objectives, weighing the public

interest in one form of relief against the other.“ In con-

trast, precisely because the private party has no direct

Stake in the penalty, allowing a private party to seek civil

penalties puts the private party in the position of compro-

mising those penalties in favor of its own private interests.

Neither Petitioner nor Amicus United States has thus

far suggested any federal precedent for allowing a private

party to obtain a remedy—whether for civil penalties or

otherwise—that provides no benefit to that party.”

23 The specific illustration of such a compromise in the public

interest, theorized by the Court in Gwaltney, is apt to the facts of

this case. The Court asked the reader to suppose that

the Administrator agreed not to assess or otherwise seek civil

penalties on the condition that the violator take some extreme

corrective action, such as to install particularly effective but

expensive machinery, that it otherwise would not be obliged

to take. If citizens could file suit, months or years later, in

order to seek the civil penalties that the Administrator chose

to forgo, then the Administrator’s discretion to enforce the

Act in the public interest would be curtailed considerably. The

same might be said of the discretion of state enforcement

authorities.

484 U.S. at 60-61.

24 There are rare situations where that might be permitted, and

none of them is without controversy. For example, where a party

has successfully obtained an injunction, an unrelated private attor-

ney may be appointed by the court to enforce the injunction

through a criminal contempt action, even though the penalty on

the contemnor would be paid to the court rather than as damages

to the party itself. See Young v. United States ex rel. Vuitton

et Fils S.A., 481 U.S. 787, 809 (1987). But this example appears

32

Thus, allowing a party to pursue relief in which it has

no personal stake puts the federal court in the position

of resolving an issue about which there is no case or

controversy. To the extent that the Court must reach

the issue in this case, it should hold that a private plain-

tiff has no cognizable legal interest in pursuing any claim

for civil penalties under Section 505 of the Clean Water

Act.

B. If A Court May Impose Civil Penalties In A Citizen

Suit, It Only Can Do So As An Adjunct To A

Proper Injunction

In Gwaltney, the Court assumed that a civil penalty

might properly be exacted in a citizen suit, presumably

as a form of relief ancillary to the main action to enjoin

the violation. 484 U.S. at 58-59.

That view may be based on the idea that once the

court has jurisdiction over one “case” or “controversy”

the court may make findings involving the same basic

facts and issue a judgment assessing penalties payable to

the public treasury. In other words, assuming a live con-

troversy before the court, and a substantial overlap be-

tween the plaintiff's injunction suit and the showing neces-

sary to justify the imposition of penalties, one might enter-

tain extending the court's jurisdiction to “tax” penalties

on behalf of the United States at the same time that it

issues an injunction. This might occur, for example, where

the alleged violation continued unabated up until trial.

This approach is difficult to justify. It would involve

broadening jurisdiction in a manner quite different than

with other forms of “supplemental jurisdiction.” For ex-

closely tied to the need for the court to enforce its own orders.

There may be other examples, but they are scarce, and almost

certainly do not address a grant of authority of the type conferred

by the Clean Water Act.

33

ample, prior to codification of the supplemental jurisdic-

tion concept in 28 U.S.C. § 1367, under theories of

pendent or ancillary jurisdiction, the federal courts’ au-

thority was extended to the entirety of a case, notwith-

standing that the court would not independently have

jurisdiction over each claim in that case. See United Mine

Workers v. Gibbs, 383 U.S. 715, 725 (1966). However,

the situation hypothesized here would involve assuming

jurisdiction over claims that are beyond the constitutional

jurisdiction of the federal courts.

If, however, this Court concludes that it is permissible

for a citizen-plaintiff to obtain a civil penalty judgment in

some circumstances, the minimum requirement must be

that no civil penalty be awarded absent the issuance of

an injunction. Once it is clear that an injunction will

not issue, the plaintiffs no longer have an interest in the

controversy sufficient to sustain the jurisdiction of the

federal court. Similarly, it would be improper (where the

penalty rests on a deterrence rationale) to award penal-

ties at a point in time when the court can plainly deter-

mine that violations have ceased.

To be sure, plaintiffs’ mere pursuit of an injunction

would indeed provide the court with continuing jurisdic-

tion over the claim for the injunction. But to allow a

court to issue civil penalties to any party that simply

pursues an injunction would engender frivolous or un-

necessary appeals (or arguments in the district court) in

pursuit of an equitable remedy to which the plaintiffs are

not entitled. Petitioners in this case acted quite properly

by abandoning on appeal an effort to obtain an injunc-

tion that they presumably felt they could not win. If the

court’s authority to grant a penalty depends upon it hav-

ing continuing jurisdiction over an injunction claim, an

award of penalties can only be made as an adjunct to a

proper and fully sustainable injunction granted to the

34

plaintiff. Accordingly, when the district court here found

the injunction unwarranted, it likewise should have denied

the request for an enhanced penalty. To find otherwise

would allow the provisions of the Clean Water Act to

trump Article III principles.

Disregarding the priority of Article III requirements,

Petitioners and their Amici maintain that the deterrent

force of the Clean Water Act is best served by making

civil penalties available readily in citizen suits. They con-

tend that it would undermine the Act to allow a de-

fendant to avoid both an injunction and civil penalties

simply by bringing itself into compliance with the Act.

In so aguing, Petitioners confuse the general purposes of

the Act with the more limited purpose of the citizen suit.

Certainly, the main purpose of the Act is to ensure com-

pliance with our nation’s environmental laws. Primary en-

forcement of the Act, including pursuit of penalties, is the

responsibility of federal, state and local agencies. See

Gwaltney, 484 U.S. at 60. The role of the citizen suit

is, at best, “supplementary” and “interstitial.” Jd. at 60-

61. The citizen suit’s primary purpose is to provide a

mechanism by which the citizen can seek a halt to con-

tinuing violations of the Act that cause the citizen harm.

The “harm sought to be addressed by the citizen suit lies

in the present or the future, not in the past.” Jd. at 59.

That is the purpose of the notice provision, which gives

the alleged violator the opportunity to bring itself into

compliance and thereby obviate the citizen suit entirely.

See id. at 60. If the violations are abated, there was, in

Congress’ view, no reason to allow the action.” An in-

junction is a powerful remedy. Pursuant to Federal Rule

of Civil Procedure 65, for example, district courts may

25 Moreover, civil penalties still can be imposed in an action

brought by the state, federal and local officials primarily responsible

for enforcement of the Act.

35

issue a preliminary injunction at the very outset of the

case to prevent harm to the plaintiffs.”®

Of course, were we to assume that civil penalties might

still be awarded at the end of the case as an adjunct to a

proper injunction, even less can be made of Petitioners’

public policy argument. If, by abating violations, a firm

can avoid not only an injunction but also civil penalties,

this would provide a powerful incentive to bring itself

into compliance with the Act. Such a result is consistent

with the Act’s primary purpose.

Ill. THE DISTRICT COURT LACKED JURISDICTION

TO GRANT ANY REMEDY TO PETITIONERS

As noted above, the court of appeals properly held that

the case could not continue consistent with the require-

ments of Article III. As shown below, the district court

lacked jurisdiction over Petitioners’ case from the outset.

A. Petitioners Had No Standing To Obtain Equitable

Relief Because There Was No Harm To The Envi-

ronment

The district court found “no demonstrated proof of

harm to the environment” arising from the mercury dis-

charge violations. JA 162. The absence of harm to the

environment precludes a finding of either Article ITI stand-

ing or a finding of an ongoing violation that is a statutory

prerequisite to seeking equitable relief.27 The elements of

standing

26 In fact, the district court denied a preliminary injunction and

Petitioners did not appeal that denial.

27 The state consent decree entered before the suit began, man-

dated compliance with the mercury restrictions and required

Laidlaw to continue to seek a technical solution. The district court

ultimately found that Laidlaw had been forced to suspend its

operations in 1992 in order to avoid violating the decree. JA

92-93.

36

are not mere pleading requirements but rather an

indispensable part of the plaintiff's case, each element

must be supported in the same way as any other

matter on which the plaintiff bears the burden of

proof, i.e., with the manner and degree of evidence

required at the successive stages of the litigation. . . .

And at the final stage, those facts (if controverted)

must be “supported adequately by the evidence ad-

duced at trial.”

Lujan, 504 U.S. at 561 (internal citations omitted) (quot-

ing Gladstone, Realtors v. Village of Bellwood, 441 US.

91, 115 n.31 (1979)).

Petitioners failed to prove standing at trial. They al-

leged adverse environmental effects from Laidlaw’s dis-

charges in violation of its NPDES permit. But after hear-

ing testimony from various experts and DHEC officials and

reviewing nine years of objective biological data from

the North Tyger River, the district court found “that prior

mercury discharge limits as high as 20 ppb had no adverse

effect on the indigenous biological community in the North

Tyger River downstream from Laidlaw’s facility.” JA 157

(emphasis added). The district court specifically found

that “the water quality standard for mercury is currently

being attained in the North Tyger River and . . . the over-

all quality of the river exceeds levels necessary to support

propagation of fish, shellfish, and wildlife, and recreation

in and on the water.” JA 156 (emphasis added) .*

28 Indeed, the court found that using Petitioners’ choice of an

EPA value range for environmental harm demonstrated only that

the “water quality-based effluent standard was exceeded and not

that any health or environmental harm resulted from that ex-

ceedance. .. . The plaintiffs’ use of the 1-10 value range con-

stitutes an acknowledgment that the NPDES permit violations at

issue in this citizen suit did not result in any health risk or environ-

mental harm.” JA 161 (emphasis added).

29 This finding undermined Petitioners’ standing allegation based

on lessened recreational activities. See Friends of the Earth, Inc.

37

Nor do the reporting and monitoring violations provide

standing to seek equitable relief. Without more, an as-

serted “need” for information cannot satisfy Article III

requirements. See, e.g., Foundation on Econ. Trends v.

Lyng, 943 F.2d 79, 84-85 (D.C. Cir. 1991) (if “informa-

tional injury” alone were sufficient “a prospective plaintiff

could bestow standing upon itself in every case”). Rather,

there must be some material nondisclosure or environ-

mental consequences traceable to the failure to report.

There was none here. The district court found that:

The monitoring and reporting violations proven to

have occurred were a combination of anomalies inter-

fering with properly installed detection equipment,

instances where the detection equipment malfunc-

tioned, and technical errors on reporting forms that

even DHEC recognizes were a result of confusion as

to how to properly complete the forms. These defi-

ciencies were not the result of a failure either to

install proper monitoring equipment or to submit

timely DMRs.

>” * * *

In this case, Laidlaw's monitoring and reporting de-

ficiencies, all of which have long since been resolved,

produced no direct environmental impact. There has

been no demonstrated proof of harm to the envi-

ronment.

JA 162 (emphasis added). Thus, correct monitoring and

reporting would have provided plaintiffs with no addi-

v. Gaston Conper Recucling Corp., 1999 U.S. Apn. LEXIS 11201

(4th Cir. 1999) (plaintiffs were not injured, and therefore lacked

standing, because evidence failed to establish adverse environmental

impact); Public Interest Research Group of New Jersey v. Mag-

nesium Elektron, Inc., 123 F.3d 111, 121 (3d Cir. 1997) (“reduction

in a person’s recreational activity cannot support the iniury prong

of standing when a court also concludes that a polluter’s violation

of an effluent standard has not harmed the affected waterway and

that it, in fact, poses no threat to that waterway”).

38

tional information. In any event, a research interest in

Laidlaw’s report, without some interest in the effects of

Laidlaw’s discharges in the North Tyger River, cannot

confer standing sufficient to provide Petitioners any equi-

table relief. See Lujan, 504 U.S. at 566.

B. South Carolina’s Diligent Enforcement Efforts

Barred Petitioners’ Suit

As noted, the focus of the citizen suit provision is on the

future, not the past. Gwaltney, 484 U.S. at 59. Moreover,

the citizen suit provision was designed to supplement, not

supplant, government action. /d. at 60. Thus, a court

may not entertain a citizen suit where the State is diligently

prosecuting an action against the defendant to “require

compliance with” the relevant Clean Water Act provisions.

The statute is explicit:

No action may be commenced .. . if the . . . State

has commenced and is diligently prosecuting a civil

or criminal action in a court of . . . a State to require

compliance with the standard, limitation, or order.

33 US.C. § 1365(b)(1)(B). See also Gwaltney, 484

US. at 60 (“citizen suits are proper only ‘if the Federal,

State, and local agencies fail to exercise their enforcement

responsibility’ ”) (citing legislative history of Clean Water

Act). An ill-conceived citizen suit could interfere with the

enforcement efforts of state officials charged with primary

enforcement responsibility. See id. at 61.

The pre-lawsuit compliance efforts of the State, through

DHEC, are documented in the district court’s findings.

From 1986 to 1992, Laidlaw worked closely with DHEC

to achieve compliance with a range of requirements includ-

ing a stringent new 1.3 ppb mercury limit.” In Septem-

30 By way of comparison, 2 ppb of mercury in drinking water is

considered acceptable.

39

ber 1988, Laidlaw and DHEC executed the first consent

order which required the facility to submit plans for a

long range solution to address the very exceedances at

issue in Petitioners’ complaint. By March 1991, Laidlaw

had achieved compliance with all limitations except for

mercury. Thereafter, in December 1991, Laidlaw experi-

enced a number of unexplained, abnormally high mercury

discharges. JA 90. These high mercury discharges led

DHEC enforcement officials to consider additional enforce-

ment action in early 1992—before FOE mailed its 60-day

notice letter to DHEC and Laidlaw on April 10, 1992.

JA 90-91. The second consent decree, entered before

FOE filed suit, required Laidlaw to “use every effort” to

resolve the mercury problem, subjected violations to addi-

tional enforcement action, and provided continuing juris-

diction in the State court to ensure compliance. JA 82-83.

As the district court found, that consent order caused Laid-

law to shut down its facility for extended periods in 1992

and to solve its mercury discharge problem. JA 92-93.

The record shows that Laidlaw cooperated with DHEC

to achieve compliance with the Act (JA 180), and those

undisputed, long-term efforts should have precluded fed-

eral jurisdiction over this case—for equitable relief or civil

penalties. Petitioners focused their and the district court's

attention away from DHEC’s obvious oversight and en-

forcement efforts and onto the amount of the penalty im-

posed by the consent decree. The district court made the

“amount of penalty” that DHEC had imposed the focus

of its jurisdictional analysis. At that point the trial court

ane the proper § 1365(b)(1)(B) jurisdictional ap-

pr .

The district court’s analysis and ultimate findings were

clearly misdirected at the method the State used in assess-

ing penalties. Because, as noted above, Petitioners had no

direct interest in the award of civil penalties or their

40

amount," their only potential interest was in assuring com-

pliance with the law to prevent future harm to themselves.

However, to be allowed even to commence a suit they must

demonstrate that the State itself is not pursuing compliance

by the permit holder. Thus, the showing of lack of dili-

gence could only have properly been based on the State’s

efforts in assuring Laidlaw’s compliance with the Clean

Water Act, not on second-guessing the State’s assess-

ment of penalties.

The need to focus clearly on the State’s efforts to induce

compliance is of special importance because of the poten-

tial that the citizen suit will interfere with state enforce-

ment efforts. See Gwaltney, 484 U.S. at 60-61. In assess-

ing state efforts under this provision, the district court may

perhaps consider the civil penalties that were imposed by

the State. But the focus must necessarily be upon whether

the State acy is moving forward “to require compli-

ance” with .atever standard, limitation, or order the de-

fendant is asserted to be violating. That focus was clearly

missing in the district court's first opinion. The district

court not only focused on the wrong issues, but effectively

supplanted the State’s judgment with the view of an appro-

priate penalty espoused by Petitioners. The district court

31 Petitioners could have intervened in the state court case to

challenge the $100,000 penalty or the terms of the consent decree,

but elected to pursue their separate federal case.

32 See Jones v. City of Lakeland, 175 F.3d 410, 415 (6th Cir.

1999) (“the restrictions on citizen suits found in §§ 1365(b) and

1319(g)(6) are intended to prevent the filing of citizen actions that

would be duplicative of ongoing state or federal agency action”) ;

North & South Rivers Watershed Ass’n v. Scituate, 949 F.2d 552,

557 (1st Cir. 1991) (when a state agency “has specifically addressed

the concerns of an analogous citizen suit, deference to the agency's

plan of attack should be particularly favored”).

33 The State’s enforcement judgment regarding the weight af-

forded to “economic benefits” and its rationale for entering into a

consent decree with Laidlaw was explicitly analyzed and understood

41

ultimately found that the State's efforts actually produced

Laidlaw’s complete compliance with all requirements of

the Act within months of the consent decree. JA 162-63.

Accordingly, the State was sufficiently diligent to preclude

federal jurisdiction over Petitioners’ suit.

IV. PETITIONERS ARE NOT ENTITLED TTOR-

NEYS’ FEES =e ‘

A. The At Fee

torneys’ Question May Not Be Ripe For

Petitioners claim the right to pursue attorneys’ fees on

the theory that they prevailed in this litigation by prompt-

ing Laidlaw to comply with the Act. However, the

attorneys’ fee question comes to this Court in an odd

posture. The district court has not yet ruled on Petition-

ers’ fee request, deferring consideration of such a petition.

In light of its conclusion that Petitioners had not

obtained a judgment in their favor, the court of appeals

held in a footnote that Petitioners could not be considered

“prevailing or substantially prevailing” parties under 33

U.S.C. § 1365(d).™ 149 F.3d at 307 n.5.

by the district court, which was presented with testimony explain-

ing that “DHEC considers economic benefit in conjunction with

good-faith attempts at compliance” in assessing penalties, and that

in the case of Laidlaw, DHEC did not consider it to have “obtained

any significant economic benefit.” JA 97.

% Petitioners do not appear to lay claim to attorneys fees o

theory that they prevailed by persuading the district ty

impose an enhanced civil penalty. This Court has held repeatedly

that to qualify as a prevailing party, the party must at least obtain

some benefit to itself. See Farrar v. Hobby, 506 U.S. 103, 111-12

(1992) ; see aleo Hewitt v. Helms, 482 U.S. 755, 760 (1987). Peti-

tioners have no direct stake in the imposition of a civil penalty

and those penalties could not provide any basis for a fee award.

35 The court of appeals relied on its opinion in S-1 & S.

- -2 v. Stat

Bd. of Educe., 21 F.3d 49, 51 (4th Cir. 1994) (en banc) (per eat mar

42

The footnote addressing fees may have been intended

as a disposition but is better viewed as dicta. On appeal,

Laidlaw continued to question the district court’s initial

jurisdiction, both in terms of Petitioners’ constitutional

and statutory standing. /f the district court did not have

jurisdiction over this suit at the outset, then the award of

attorneys’ fees would be improper.

But in addressing mootness, the court of appeals

assumed that the district court had jurisdiction at the out-

set. This was proper—both mootness and standing are

jurisdictional and, in dismissing, the ¢gourt could choose

between them. But the question whether plaintiffs were

entitled to attorneys’ fees was undoubtedly a _ merits

question. While the court of appeals may have viewed

this as an easy question in light of its own precedents,

Steel Co. teaches that jurisdictional issues must be re-

solved before proceeding to the merits. 118 S. Ct. at

1016. Concededly, this case presented the matter to the

court of appeals in a somewhat unique posture. At a

minimum, however, Steel Co. counsels that a court not

decide an issue on the merits before addressing all juris-

dictional prerequisites.

In this Court, the same considerations control. If the

Court agrees that the district court had no jurisdiction,

that is dispositive of the fee claim. If the Court were to

decide that the district court had jurisdiction at the out-

set, it can proceed to review the court of appeals’ foot-

note on attorneys’ fees. If the Court elects to allow the

court of appeals to address the jurisdictional questions in

the first instance, Steel Co. suggests that this Court not

proceed to address the fee petition on the merits.

B. Petitioners Are Not Entitled To Attorneys’ Fees

Under Farrar.

If a plaintiff must obtain a judgment or settlement in

its favor in order to be deemed a “prevailing party” under

Farrar v. Hobby, 506 U.S. 103 (1992), then Petitioners’

_—_—_

43

claim to fees must be rejected. Petitioners do not argue

any contrary view. Rather, they argue that the court of

appeals was wrong in rejecting the “catalyst” theory. Even

if the catalyst theory is viable, however, it would not

warrant a fee award in this case.

In Farrar the Court clearly established that a “material

alteration of the legal relationship of the parties” is the

prerequisite for the fee award to a “prevailing” party. /d.

at 111 (quoting Texas State Teachers Ass'n v. Garland

Indep. School Dist., 489 U.S. 782, 792-93 (1989)).

The Court held that “{[no] material alteration of the legal

relationship between the parties occurs until the plaintiff

becomes entitled to enforce a judgment, consent decree,

or settlement against the defendant.” 506 U.S. at 113.

The Court explained that

to qualify as a prevailing party, a civil rights plaintiff

must obtain at least some relief on the merits of his

claim. The plaintiff must obtain an enforceable

judgment against the defendant from whom fees are

sought, or comparable relief through a consent decree

or settlement. Whatever relief the plaintiff secures

must directly benefit him at the time of the judgment

or settlement. Otherwise, the judgment or settlement

cannot be said to “affec[t] the behavior of the de-

fendant toward the plaintiff.”

506 U.S. at 111 (emphasis added) (internal citations

omitted). Farrar directs the result reached by the court

below. Farrar necessarily supersedes any earlier sugges-

tion that the informal effect of a lawsuit on defendant's

behavior may render a plaintiff a prevailing party.

Only a party that has achieved some measure of en-

forceable relief “prevails” in the lawsuit. Petitioners’ own

discomfort with a defendant’s proclamation that it has

voluntarily ceased violating the law highlights the very

significant difference between voluntarily ceasing conduct

44

on the one hand, and an enforceable judgment or settle-

ment agreement on the other.

With Farrar as the guiding standard, this case illustrates

inherent difficulties in trying to apply a “catalyst theory.’

Before this lawsuit was filed, Laidlaw committed itself to

make “every effort” to eliminate any violations. JA 82.

To the extent that any outside pressure was necessary,

the State was applying that pressure, playing an active

role in forcing compliance. Yet, under Petitioners’ theory,

one can easily imagine a trial devoted to determining

whether Petitioners or the State or Laidlaw’s consultants,

or Laidlaw itself (which ultimately found the technical

solution), was responsible for resolving | the mercury

problem that earlier challenged the facility. Congress

could not have wanted to encourage satellite litigation

over fees where the basic issue of liability for fees would

be so difficult to determine. See Hensley v. Eckerhart,

461 U.S. 424, 437 (1983) (“A request for attorney's

fees should not result in a second major litigation.”).

Moreover, even assuming arguendo that the catalyst

theory of prevailing party status has vitality, this case

would take that theory farther than it could properly go,

even by its own terms. To prevail under this theory, the

June 12, 1992 citizen suit would have to have been re-

sponsible for bringing Laidlaw into compliance with its

NPDES permit. But the two opinions of the district court

make clear that the citizen suit had nothing to do with

Laidlaw’s compliance.

This case does not involve an NPDES permit holder

and state environmental agency galvanized into action by

the filing of a citizen suit. The district court’s two deci-

sions chronicle the nearly six years of continuous,’ pre-

citizen suit activity by Laidlaw and DHEC to solve the

mercury discharge problem. This included, among wre

things, the commencement of an enforcement action Zs

subsequent entry of a consent order in 1988 that led to

45

the installation of the Lancy system, the complete’ elim-

ination of non-mercury exceedances, and a process of

continual experimentation with new technology that ulti-

mately eliminated mercury exceedances.

As noted above, DHEC and Laidlaw were engaged

in enforcement/compliance activities before Petitioner

mailed its 60-day notice letter on April 10, 1992. During

this 60-day notice period, a formal enforcement confer-

ence was held on May 21, 1992 which led directly

to a June 8, 1992 consent agreement that was then ap-

proved by a state court judge on June 10, 1992. JA 90-91,

146-47. The need to satisfy the consent decree compelled

compliance. JA 92, 147 (“As the mercury problems con-

tinued to be investigated, the defendant [Laidlaw] had

to simply shut down the incinerator altogether for sub-

stantial periods of time in July, August, September and

November 1992, in an effort not to violate either its mer-

cury parameter or the judicial consent order with

DHEC.”).

After entry of the June 8, 1992 consent decree, Laidlaw

added new carbon adsorption equipment in J uly 1992 and

installed prefilters to protect (and enhance the perform-

ance) of this equipment in January 1993. Id. Once Laid-

law learned how to maximize the efficiency of the new

carbon adsorption equipment, the mercury problem was

solved.

The record thus establishes unequivocally that the “cata-

lyst” to compliance was a combination of DHEC’s and

Laidlaw’s enforcement/compliance efforts. The district

court so found:

36 Petitioners inaccurately contend that Laidlaw’s mercury prob-

lems were caused by its failure to properly control its mercury

feed rate. Pet. Br. 5. The suggestion that Laidlaw readily pos-

sessed the ability to avoid its permit violations by lowering the

feed rate was rejected by the district court. JA 174-75.

46

An open line of communication between Laidlaw

and DHEC existed throughout the time period rele-

vant to this litigation. Further, DHEC’s knowledge

of these problems, its enforcement efforts with respect

thereto, and the agency’s continued involvement with

Laidlaw in achieving a solution to these problems

have resulted in Laidlaw’s ultimate compliance with

its NPDES permit over an extended period of time.

JA 162-63. Simply stated, compliance was the product of

Laidlaw’s and DHEC’s intervention. Petitioners are not,

under any theory, entitled to recover fees and costs.

CONCLUSION

The judgment of the court of appeals should be af-

firmed.

Respectfully submitted,

STUART H. NEWBERGER DONALD A. COCKRILL *

CLIFTON S. ELGARTEN NANCY W. MONTS

DAVID M. SCHNORRENBERG OGLETREE, DEAKINS,

Scott E. GANT NASH, SMOAK &

CROWELL & MORING LLP STEWART, P.C.

1001 Pennsylvania Ave.,N.W. 300 North Main Street

Washington, D.C. 20004 P.O. Box 2757

(202) 624-2500 Greenville, SC 29602

HENRY H. TAYLOR (864) 271-1300

Vice President

and General Counsel

BARBARA J. HAMILTON

Vice President and

Assistant General Counsel

SAFETY-KLEEN CORP.

1301 Gervais Street

Columbia, SC 29210

* Counsel of Record Counsel for Respondent

July 19, 1999