Amicus Curiae Brief — Friends of Earth v. Laidlaw Environmental Services

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i/) Supreme Court, U.S,

FILE

No. 98-822 7“ =

In The

CLERK

Supreme Court of the United-State ,

FRIENDS OF THE EARTH, et al.,

Petitioners,

Vv.

LAIDLAW ENVIRONMENTAL SERVICES (TOC), INC.,

Respondent.

On Writ Of Certiorari To The

United States Court Of Appeals

For The Fourth Circuit

AMICUS BRIEF OF NATURAL RESOURCES DEFENSE

COUNCIL, INC., CLEAN WATER ACTION, iNC.,

AMERICAN LITTORAL SOCIETY, DELAWARE

RIVERKEEPER NETWORK, CITIZENS FOR A BETTER

ENVIRONMENT, DELTA KEEPER, A PROJECT OF THE

SAN FRANCISCO BAYKEEPER, CALIFORNIA PUBLIC

INTEREST RESEARCH GROUP, FLORIDA PUBLIC

INTEREST RESEARCH GROUP, ILLINOIS PUBLIC

INTEREST RESEARCH GROUP, MASSACHUSETTS

PUBLIC INTEREST RESEARCH GROUP, PUBLIC

INTEREST RESEARCH GROUP IN MICHIGAN, PUBLIC

INTEREST RESEARCH GROUP OF NEW JERSEY, OHIO

PUBLIC INTEREST RESEARCH GROUP, OREGON STATE

PUBLIC INTEREST RESEARCH GROUP, WASHINGTON

PUBLIC INTEREST RESEARCH GROUP, CHESAPEAKE

BAY FOUNDATION, INC., AMERICAN CANOE

ASSOCIATION, INC., NEUSE RIVER FOUNDATION,

PENNSYLVANIA ENERGY PROJECT, SAN DIEGO

BAYKEEPER, FOREST GUARDIANS AND DON’T WASTE

ARIZONA IN SUPPORT OF PETITIONERS

MICHAEL AXLINE CuHarces C. CALDART

(Counsel of Record) Davip A. NICHOLAS

Western Environmental JosHua R. KratTKa

Law Center Howarp J. Hirscu

1216 Lincoln Street National Environmental

Eugene, OR 97401 Law Center

(541) 485-2471 29 Temple Place

Boston, MA 02111

(617) 422-0880

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 .

OR CALL COLLECT (402) 342-2831 ayied

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TABLE OF CONTENTS

Page

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ODEs bo cove edcccneduveconsstcncheeuncs 1

I. THE IMPORTANCE OF COMPLIANCE AND

Il.

DETERRENCE UNDER THE CLEAN WATER

THE ROLE OF CITIZEN SUITS IN ENFORCING

Wee Glee bs eseuscescncessabeunsncesaxnoasauss

SUMMARY OF ARGUMENT ........ccccccccscescess

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II.

THE IMPOSITION OF CIVIL PENALTIES

REDRESSES A CITIZEN PLAINTIFF’S INJURY

BY DETERRING FUTURE VIOLATIONS ......

A. Congress Has Determined That The Impo-

sition Of Civil Penalties On Violators Of

The Clean Water Act Deters Them From

Violating The Act In The Future..........

B. There Is Ample Evidence That Penalties Do

In Fact Deter Future Violations ...........

C. Deterring A Defendant's Propensity To Vio-

late The Act Serves The Citizen Plaintiff's

Interest In Reduced Risk Of Environmental

Or Public Health Harm. ..........ccccceee

A DEFENDANT BEARS A HEAVY BURDEN IN

ATTEMPTING TO PROVE THAT ITS COMPLI-

ANCE WITH THE LAW HAS MOOTED THE

« PPTTITITIT Tere rit rr

Il.

TABLE OF CONTENTS - Continued

Page

REGARDLESS OF WHETHER THE CASE IS

MOOT, PLAINTIFFS ARE ENTITLED TO

ASSERT THEIR CLAIM FOR REASONABLE

ATTORNEYS’ FEES UNDER THE CLEAN

WATER ACT ...cccccccccccccccscccenccccccees

A. When A Case Becomes Moot Through No

Fault Of The Plaintiff, The Federal Courts

Retain Jurisdiction To Adjudicate The Plain-

tiff’s Claim For Statutory Attorneys

B. Under The Clean Water Act, A Plaintiff Is

Entitled To An Award Of Fees When The

Citizen Suit Is A Catalyst In Bringing The

Defendant Into Compliance ...........+.+.

iii

TABLE OF AUTHORITIES

Page

Cases

Albermarle Paper Co. v. Moody, 422 U.S. 405 (1975) .... 15

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

SP neseencawdsccantesccocconsecesseccesececsoce 21

Atlantic States Legal Found., Inc. v. Pan American

Tanning Corp., 993 F.2d 1017 (2d Cir. 1993)........ 11

Atlantic States Legal Found., Inc. v. Tyson Foods, Inc.,

897 F.2d 1128 (llth Cir. 1990).................. 11, 12

Atlantic States Legal Founa., Inc. v. Eastman Kodak

Co., 933 F.2d 124 (2d Cir. 1991)........ 00.00 0004.. 25

Bagby v. Beal, 606 F.2d 411 (3d Cir. 1979)............ 25

Bennett v. Spear, 520 U.S. 154 (1997)...... 14, 16, 17, 18

Budinich v. Becton Dickinson and Co., 486 U.S. 196

PES O6bcecuncencecccnccesencencesecsesececncecs 23

Comfort Lake Ass'n Inc. v. Dressel Contracting, Inc.,

138 F.3d 351 (8th Cir. 1998).................... 24, 25

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1982) .... 23

Doe v. Marshall, 622 F.2d 118 (5th Cir 1980), cert.

denied, 462 U.S. 993 (1980)... 2.0... 0c cece, 25

Duke Power Co. v. Env'tl Study Grp., Inc., 438 U.S.

i peek entail Ab iba iieaddbdcsednes 4

EPA v. State Water Resources Control Board, 426 U.S.

ST aiid ed cet eede da ceadeunesesnunieedesaré 3

Evans v. Jeff D., 475 U.S. 717 (1986) .................. 1

Farrar v. Hobby, 506 U.S. 103 (1992) ................. 27

Friends of the Earth v. Laidlaw Environmental Services

(TOC), 956 F. Supp. 588 (D. S.C. 1997)........ 8, 10, 30

TABLE OF AUTHORITIES - Continued

Page

Friends of the Earth v. Laidlaw Environmental Ser-

vices (TOC), Inc., 149 F.3d 303 (4th Cir. 1998)...10, 15

Friends of the Earth v. Laidlaw Environmental Ser-

vices, 890 F. Supp. 470 (D. S.C. 1995) ......---++++- 4

Grano v. Barry, 783 F.2d 1104 (D.C. Cir. 1986) ....... 25

Gwaltney of Smithfield, Ltd. v. Chesapeake Bay

Found., Inc., 484 U.S. 49 (1987)....... 5, 20, 21, 25, 28

Havens Realty Co. v. Coleman, 455 U.S. 363 (1982) ...12, 13

Hewitt v. Helms, 482 U.S. 755 (1987)............-- 27, 28

Hodel v. Virginia Surface Mining & Recl. Ass'n, 452

UG. 266 TRIGA)... cccccvccccccccscccssccccsccsecees 12

Japan Whaling Assoc. v. American Cetacean Society,

478 US. Z21 (19GB)... 2c cvccccccccccccvccecescees 19

Lewis v. Continental Bank Corp., 494 U.S. 472 (1990) .... 27

Linda R.S. v. Richard D., 410 U.S. 614 (1973).......-. 18

Lujan v. Defenders of Wildlife, 504 U.S. 505 (1992)....13, 18

Maher v. Gagne, 448 U.S. 122 (1980) ...........--55. 24

Public Interest Research Group of New Jersey v. Pow-

ell Duffryn Terminals, Inc., 913 F.2d 64 (3d Cir.

Preis 15

Reich v. Occupational Safety and Health Review

Comm'n, 102 F.3d 1200 (11th Cir. 1997)......... 15, 22

Rhodes v. Stewart, 488 U.S. 1 (1988)...............-.. 27

S-1 and S-2 v. State Bd. of Educ. of North Carolina, 21

F.3d 49 (4th Cir.) (en banc) (per curiam), cert.

denied, 513 U.S. 876 (1994)... ........20 eee eeeee 25, 27

TABLE OF AUTHORITIES - Continued

Page

Sierra Club v. Gorsuch, 672 F.2d 33 (D.C. Cir. 1983),

rev'd sub nom. Ruckelshaus v. Sierra Club, 463 US.

BERNER ER ee ey eB ete Oe eee 29, 30

Sierra Club v. Simkins Indus., Inc., 847 F.2d 1109

EE EET ene pen eee 15

Simon v. Eastern Ky. Welfare Rights Organization

426 U.S. 41 (1976)........... ton caressa -.... 18

Sprague v. Ticonic Nat'l Bank, 307 U.S. 161 (1939) .... 24

Steel Company v. Citizens for a Better Environment,

523 U.S. __, 118 S. Ct. 1003 (1998)........... passim

Stoddard v. Western Carolina Regional Sewer Author-

ity, 784 F.2d 1200 (4th Cir. 1986).................. 11

Texas State Teachers Assn. v. Garland Independent

School District, 489 U.S. 782 (1989) ................ 26

Tigner v. State of Texas, 310 U.S. 141 (1940).......... 12

Tull v. United States, 481 U.S. 412 (1987)............. 11

United States Bancorp Mortg. Co. v. Bonner Mall

Partnership, 513 U.S. 18 (1994) ............. 22, 23, 24

United States Dept. of Energy v. State of Ohio, 503

US. 617 (1992) ........ = esseceess id dedddevesccess 14

United States v. Oregon State Medical Society, 343

ed Se EE Send nnendundseweucensubbessssesaces 20

United States v. Phosphate Export Ass'n, Inc., 393

ee BF GP es deavecunvececutcécncesdceucans 19, 20

United States v. Trans-Missouri Freight Ass'n, 166

Se CP hcvnescccnncancdncnssennessoucnsecs 19

United States v. W.T. Grant Co., 345 U.S. 629 (1953). .19, 20

TABLE OF AUTHORITIES - Continued

Page

United States v. Wells, 519 U.S. 482 (1997) ........... 29

Valley Forge Christian College v. Americans United

for Separation of Church and State, Inc., 454 U.S.

OBS CHUTE . cc ccccccscccccccccctccccccescccccccceens 8

Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982) ....10, 14

Williams v. Alioto, 625 F.2d 845 (9th Cir. 1980), cert.

denied, 450 U.S. 1012 (1980)........-.-.- 0c eee eens 25

STATUTES

33 USC. & TBS aMA).... cccscccccccccccsccsccccces 2, 8

33 USC. 6 1ZGMAME).... 2c ccccccccccccccccccecvcccecs 8

5B USGL. © UIBME) occ ccccccccccccccccccccccccccccees 3

5B UGK. | WARE)... ccccccccccccvccccccccccccccess 1

TB UG. 6 BRODER 0c cccccccvccccccccescccces 2, 11, 13

33 USC. | 1SIDg) ... wn ncccccccsccccccccsccces 2, 4, 11

SD UBS. 6 BBR. cc cccccccccccsccccncccccvccscccssess 2

TB UGC. @ BSGBa) .. cc cccccccccccccccccccccscccccecs 3

33 US.C. 6 ISEBQMIMA). ... 2c cccccccccccccccccccces 3

33 U.S.C. § 1365 MINMD) ... 2c ccccccccccccccccccccess 4

SB USC. | UDGBEE) 2. ccccccccccccccces 23, 26, 28, 29, 30

E> ci dackgncihacesimauedniad 26, 28

Vii

TABLE OF AUTHORITIES - Continued

Page

OtHER AUTHORITIES

ee GD CED SUP ccddcscciddecdecuaedducdcave 1

133 Cong. Rec. H175 (daily ed. Jan. 8, 1987) ......... 2

S. Rep. No. 50, 99th Cong., Ist Sess. 28... 4, 12, 15, 29

S. Rep. No. 92-414, 92nd Cong., 2d Sess. (1971) ...4, 28

George J. Stigler, The Optimum Enforcement of Laws,

Fe fp Wwe. Dames. TES (PGE... cc ccccccccvccccccess 13

George Van Cleve, Congressional Power to Confer

Broad Citizen Standing in Environmental Cases, 29

mooves. L. Tan BORE CRGPPD. ... cn ccccccccccccccces 19

Michael J. Metzger, Treble Damages, Deterrence, and

Their Relation to Substantive Law: Ramifications of

the Insider Trading Sanctions Act of 1984, 20 Vat.

fs fT EEE ECE Dee mnyes 7 13, 14

Richard A. Posner, Economic ANALYsIS OF THE LAW

I a 13

Statement of Sen. Bayh (Oct. 4, 1972) reprinted in 1

A Legislative History of the Water Pollution Con-

trol Act Amendments of 1972 (1973)................. 2

Wayne B. Gray & John T. Scholz, Does Regulatory

Enforcement Work? A Panel Analysis of OSHA

Enforcement, 27 Law & Soc’y Rev. 177 (1993)....... 14

INTEREST OF AMICI

Amici are not-for-profit public interest organizations

working to protect the environment and the public

health.! Amici’s work includes influencing environmental

and public health legislation, persuading policy makers

to provide greater environmental and public health pro-

tection, and conducting research into environmental and

public health problems. Amici agree, however, that in the

end “enforcement of the law is what really counts.” Evans

v. Jeff D., 475 U.S. 717, 743 (1986) (Brennan, J., dissenting).

Accordingly, amici regularly employ the citizen suit pro-

visions of environmental laws, such as the Clean Water

Act, to enforce those laws. This interest of amici is threat-

ened by the Fourth Circuit’s decision in this case.

INTRODUCTION

I. THE IMPORTANCE OF COMPLIANCE AND

DETERRENCE UNDER THE CLEAN WATER ACT.

The Water Pollution Control Act Amendments of

1972 (commonly referred to as the “Clean Water Act”)

fundamentally changed the nation’s approach to water

pollution. The Clean Water Act prohibits any point source

discharge to the surface waters of the United States

unless that discharge is “in compliance” with various

requirements of the Act. 33 U.S.C. § 1311(a). These

requirements are applied to individual dischargers

through the National Pollutant Discharge Elimination

1 Counsel for the parties have consented to the filing of this

amicus curiae brief, and the letters of consent are being filed with

this brief. Pursuant to Supreme Court Rule 37.6, amici state that

no counsel for a party has authored this brief in whole or in part,

and that no person or entity other than amici has made a

monetary contribution to the preparation or submission of this

brief.

System (“NPDES”) program, the central feature of which

is the issuance of individual NPDES discharge permits.

See 33 U.S.C. § 1342.2 This “discharge elimination” pro-

gram, in turn, was designed to further the Act’s “national

goal” that “the discharge of pollutants into the navigable

waters be eliminated.” 33 U.S.C. § 1251(a)(1).

Congress believed that strong enforcement measures

would be necessary to change the behavior of dischargers

and make the goals of the Act a reality. See, e.g., Statement

of Sen. Bayh (Oct. 4, 1972) reprinted in 1 A Legislative

History of the Water Pollution Control Act Amendments of

1972 (1973) at 216 (“without strict enforcement and mean-

ingful deterrents, water pollution control laws will have

no real effect.”). Accordingly, Congress authorized the

United States Environmental Protection Agency (“EPA”),

and, in certain circumstances, citizens, to seek civil penal-

ties and injunctive relief against violators of the Act. The

result is an enforcement system designed to bring those

who are out of compliance into compliance, and to deter

future violations.* The availability of civil penalties is

central to this enforcement scheme.

2 NPDES permits are issued by the United States

Environmental Protection Agency or, where the state in which

the discharge occurs is operating a Clean Water Act program

that meets federal criteria and has been approved by EPA, by

the state.

3 The 1972 Act authorized court-imposed civil penalties of

$10,000 per day per violation. In 1987, Congress increased the

maximum civil penalty to $25,000 per day per violation, see 33

U.S.C. § 1319(d), and authorized EPA to impose administrative

penalties. Id. § 1319(g). See 133 Cong. Rec. H175 (daily ed. Jan. 8,

1987) (statement of Rep. Nowak) (increased penalty focus was

designed to “reduce violations of the Act and discourage those

parties who would choose to violate the Act with little fear of

punishment.”)

Il. THE ROLE OF CITIZEN SUITS IN ENFORCING

THE ACT.

In the “citizen suit” provision of the Clean Water Act,

Congress gave persons affected by violations of the Act a

private right of action “to enforce” the Act against viola-

tors. 33 U.S.C. § 1365(a). As the language and legislative

history of the Act make clear, Congress intended citizen

suits to be an essential component of the Act’s enforce-

ment scheme. See 33 U.S.C. § 1251(e) (“Public participa-

tion in the development, revision, and enforcement of any

regulation, standard [or] effluent limitation . . . shall be

provided for, encouraged, and assisted by the Adminis-

trator [of EPA] and the States.”) (emphasis added). Con-

gress provided for citizen suits because it recognized that

EPA and the states would not always have the resources,

or the political will, to enforce the Act as Congress

intended. Thus, while the federal and state governments

have primary enforcement authority, citizen suits are an

essential component of an enforcement scheme that

emphasizes compliance and deterrence.

Congress included certain “gatekeeper” provisions in

the Clean Water Act to minimize conflicts between citizen

enforcement and agency enforcement. The Act requires

that, prior to filing suit, citizens give sixty days’ notice of

the alleged violation to the violator, EPA, and the state.

See 33 U.S.C. § 1365(b)(1)(A). If EPA or the state wishes to

wholly preclude a citizen suit, it may file and “diligently”

4 As between the two, the overriding authority rests with

the federal government. The Clean Water Act created a federal

program designed to serve a set of clearly articulated federal

interests. See, e.g., EPA v. State Water Resources Control Board, 426

U.S. 200, 206-208 (1976) (explaining federal primacy in Clean

Water Act implementation).

prosecute its own judicial enforcement action®

after receiving the citizen’s notice of suit. See id.

§ 1365(b)(1)(B).© Unless EPA or the state does so,

however, or unless the violator takes all corrective action

5 In discussing the degree of “diligence” required, the

Senate Report noted that “if the court viewed the agency action

as inadequate, it would have jurisdiction to consider the citizen

action notwithstanding any pending agency action.” S. Rep. No.

92-414, 92nd Congress, 2d Session, p. 80 (1971), reprinted in 1972

U.S. Code Cong. and Admin. News 3668, 3746. After a lengthy

factual hearing, at which several witnesses testified, the district

court in this case concluded that a state court consent decree

negotiated between Laidlaw and the State of South Carolina did

not constitute “diligent” prosecution. See Friends of the Earth v.

Laidlaw Environmental Services, 890 F. Supp. 470, 478-480, 484,

489, 493 (D. S.C. 1995) (identifying at least twelve separate

factors indicating lack of diligence in the state’s enforcement

proceeding).

6 Agency administrative action also precludes a citizen

penalty action, but only when the agency’s action was begun

prior to service of the citizen’s sixty day notice and diligently

seeks (or has imposed) an administrative penalty for the same

violations under 33 U.S.C. § 1319(g), or under a comparable

state law. Id. at § 1319(g)(6)(A) & (B). An administrative penalty

action does not, however, bar a citizen action for injunctive

relief where the discharger remains in violation. See id.

§ 1319(g)(a) (only “a civil penalty action” brought by the United

States or a citizen is barred). It is evident that Congress was

aware of the interplay it was creating between agency actions

and citizen suits. E.g., S. Rep. No. 99-50 at 28 (1985) (“This

amendment . . . strikes a balance between two competing

concerns: The need to avoid placing obstacles in the path of

such citizen suits and the desire to avoid subjecting violators of

the law to dual enforcement actions or penalties for the same

violation”). After explaining that the “balance” chosen was the

middle ground of Section 1319(g)(6)(A), the Senate Report then

notes that an agency “can prevent duplicate proceedings

by .. . bringing its own judicial action before a citizen suit is

filed.” Id.

necessary to ensure sustained compliance with the Act,

see Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found.,

Inc., 484 U.S. 49 (1987) (citizens may not bring suit if

violations are not “ongoing” at the time of the filing of

the complaint), the citizen may file suit after the expira-

tion of the notice period.

Congress thus drew a bright line between the time

prior to the filing of the citizen suit and the time follow-

ing the filing of suit. Where the regulatory agencies and

the violator fail to address violations adequately prior to

the filing of the citizen suit, citizens are authorized to

bring suit to enforce the Act, and to seek both injunctive

relief and civil penalties.”

SUMMARY OF ARGUMENT

The Fourth Circuit in this case erred in two respects.

First, the Fourth Circuit erred in holding that there is no

longer an Article III case or controversy here. The Fourth

Circuit was incorrect in concluding that the plaintiffs’

injuries could not be redressed by the deterrent effect of

imposing civil penalties on Laidlaw, and in relying on

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

__, 118 S. Ct. 1003 (1998), to arrive at that conclusion.

? This answers the concern, expressed by South Carolina

business amici in their opposition to certiorari, that citizen suits

“might ultimately discourage out of court settlements between

agencies and regulated entities.” Brief of Amici Curiae South

Carolina Chamber of Commerce, et al., on Petition for Writ of

Certiorari, p. 13. The congressional goal in crafting the Act’s

enforcement provisions clearly was compliance and deterrence,

and not settlement per se. So long as agencies and violators enter

into enforcement agreements that meet these goals, violators

will be free of subsequent citizen enforcement for the same

violations.

In Steel Company, the plaintiffs did not allege ongoing

harm, and there thus was nothing for civil penalties to

deter. In the case at bar, however, the plaintiffs alleged

and proved ongoing violations of the Clean Water Act.

This Court specifically noted in Steel Company that, where

there are allegations of future violations, judicial relief

aimed at deterring those violations satisfies the

redressability requirement of Article III. 118 S. Ct. at 1019.

Congress recognized in the Clean Water Act that when

ongoing violations are proven, civil penalties specifically

deter future violations, and such deterrence benefits citi-

zen plaintiffs. That Congressional finding is consistent

with common sense, an extensive body of empirical liter-

ature, and this Court’s prior opinions. That finding is also

entitled to deference.

Even if Congress had not determined that penalties

must be imposed on Clean Water Act defendants to deter

their future misconduct, violators who come into compli-

ance with the Act after being sued would bear a heavy

burden in attempting to establish that they will not vio-

late in the future (and thus that there is no need for

deterrence). Laidlaw did not meet that heavy burden

here.

Second, even if the case is moot, the Fourth Circuit

erred by refusing to consider whether, for purposes of an

application for fees and costs, this citizen suit was a

“catalyst” in bringing this defendant into compliance

with -the Clean Water Act. This Court has consistently

held that claims for fees and costs survive the conclusion

of the merits phase of litigation, whether the merits are

resolved through a final judgment, a settlement, or a

mooting of the case through the actions of a defendant.

The Fourth Circuit reached its conclusion with regard

to fees by drawing an incorrect inference from the 1987

amendments to the Clean Water Act citizen suit provi-

sion. Congress in 1987 clarified that Clean Water Act

plaintiffs who lose their cases cannot receive fees, but

Congress at the same time reaffirmed that plaintiffs who

achieve even partial success are entitled to fees. Congress

was aware of this Court’s “catalyst” jurisprudence when

it amended the citizen suit provision, and Congress chose

language in amending that provision that logically incor-

porates the catalyst test.

If the Fourth Circuit’s opinion were allowed to stand,

defendants would be encouraged to defend against mer-

itorious citizen suits, and comply with the Clean Water

Act only when it appears that a final judgment is immi-

nent. Under the Fourth Circuit’s reasoning, such defen-

dants would thus avoid paying a penalty for their

violations. Citizens would be far less likely to bring

actions to enforce the Clean Water Act, or to enforce any

other legislation where Congress has authorized citizens

to seek civil penalties and recover fees when successful.

Because citizen enforcement is central to the goals of the

Clean Water Act, such an outcome would frustrate not

only Congress’s specific authorization of citizen enforce-

ment, but also its overriding goal of improving the qual-

ity of the nation’s waters.

ARGUMENT

I. THE IMPOSITION OF CIVIL PENALTIES

REDRESSES A CITIZEN PLAINTIFF’S INJURY BY

DETERRING FUTURE VIOLATIONS.

In Clean Water Act citizen suits, the plaintiff typically

satisfies the case or controversy requirement of Article III

by demonstrating that he or she is being injured by

violations of the Act, and that this injury will be lessened

by relief designed to deter such violations in the future.*

In the case at bar, the plaintiffs are injured because,

although they would like to catch and eat fish from the

North Tyger River, they refrain from doing so due to the

risks associated with being exposed to mercury dis-

charged by Laidlaw into the river. Further, the evidence

in the case shows that fish from the river contain mer-

cury, and that the plaintiffs’ concern is reasonable. Friends

of the Earth v. Laidlaw Environmental Services (TOC), 956

F. Supp. 588, 601 (D. S.C. 1997). It is commonly known

that the ingestion of mercury can be hazardous; as the

district court found in this case, “[mJercury is an

extremely toxic pollutant.” Id. at 601.°

* A party has Article III standing to bring suit in federal

court when: (1) that party “personally suffered some actual or

threatened injury as a result of the putatively illegal conduct of

the defendant” (often referred to as “injury-in-fact”); (2) the

injury “fairly can be traced to the challenged action;” and (3) the

injury “is likely to be redressed by a favorable decision.” Valley

Forge Christian College v. Americans United for Separation of

Church and State, Inc., 454 U.S. 464, 472 (1982) (citations

omitted).

* As this case demonstrates, persons using a waterway can

be adversely affected by violations of the Act, and thus

“injured” for Article IIl purposes, before pollution levels

increase so much that plants or animals start dying or public

health warnings are posted. Abatement of pollution for the

purpose of preventing the despoliation of a waterway is an

express goal of the Clean Water Act, and one in which citizens

have a concrete interest. As discussed supra, Part I, Congress

determined in the Clean Water Act that it is the “national

policy” that there should be zero (as opposed to environmentally

benign) discharges of pollutants into the nation’s waters. 33

U.S.C. §§ 1251(a)(1) and (6). Moreover, it is the effect of the

illegal mercury discharges on the plaintiffs, not the effect on the

river, that is the focus of the Article III inquiry. Reasonable

The plaintiffs’ injury can be traced to Laidlaw’s viola-

tions of the Act. To the extent that Laidlaw complies with

its NPDES permit limit for mercury, less mercury is pre-

sent in the river, less mercury gets into the fish that swim

in the river, and the plaintiffs’ concerns about mercury

exposure are reduced. The relief sought by the plaintiffs

will redress their injuries, because the imposition of a

civil penalty on Laidlaw will deter future violations, and

reduce the likelihood that mercury will be illegally dis-

charged to the river.

The Fourth Circuit, however, read this Court's opin-

ion in Steel Company v. Citizens for a Better Environment,

523 U.S. __, 118 S. Ct. 1003 (1998), as prohibiting federal

courts from considering the deterrent effect of penalties

when determining whether there is an Article III case or

controversy in citizen suits to enforce the Clean Water

Act:

people could decide that they want to ingest or be exposed to as

little mercury as possible - even below levels determined by

regulatory agencies to pose no known health risk to humans.

Indeed, people make this kind of decision all the time: people

use water filters in homes where city tap water has been

declared safe, and people buy organically grown fruits and

vegetables to avoid pesticides even though the government has

set health standards governing the amount of pesticides

permitted on conventionally grown fruits and vegetables. See

Duke Power Co. v. Env'tl Study Grp., Inc, 438 U.S. 59, 74 (1977)

(concern about exposure to radiation from licensed nuclear

power plant sufficient injury-in-fact “given our generalized

concern about exposure to radiation and the apprehension

flowing from the uncertainty about the health and genetic

consequences of even small emissions like those conc “edly

emitted by nuclear power plants.”)

Prior to Steel Co. . . . this court had held that

because ‘penalties can be an important deter-

ren(t] against future violations,’ they could

redress a private plaintiff's injury from the vio-

lations even though the penalties are not paid to

the plaintiff . . . Because Steel Co. represents ‘a

superseding contrary opinion of the Supreme

Court,’ we are required to follow it.

Friends of the Earth v. Laidlaw Environmental Services

(TOC), Inc., 149 F.3d 303, 306 (4th Cir. 1998) (citations

omitted). This misreads Steel Company, and puts the

Fourth Circuit's opinion squarely at odds with this

Court's jurisprudence on the deterrent effect of penalties.

In Steel Company, there was no allegation of future

violations, and thus nothing to deter. Id. at 1019. As this

Court noted in that case, however, where a citizen plain-

tiff alleges harm from “a continuing violation or the

imminence of a future violation,” judicial relief designed

to deter future violations will “remedy that alleged

harm.” Id. at 1019. That is precisely the situation here,

and precisely the role that Congress envisioned for civil

penalties under the Clean Water Act. As this Court has

noted, civil penalties serve as “a means of ensuring com-

pliance” with the Clean Water Act. Weinberger v. Romero-

Barcelo, 456 U.S. 305, 314 (1982) (“An injunction is not the

only means of ensuring compliance. The [Clean Water

Act] . . . provides for fines and criminal penalties.”).

The plaintiffs in this case alleged and proved con-

tinuing harm, and sought both a civil penalty and injunc-

tive relief in an effort to ensure that Laidlaw would not

violate in the future. After trial, the district court deter-

mined that an injunction was not necessary, and that the

imposition of a civil penalty would “provide adequate

deterrence under the circumstances of this case.” Friends

of the Earth v. Laidlaw Environmental Services (TOC), 956

F. Supp. at 611. It is this specific deterrence of Laidlaw’s

propensity to violate in the future that redresses the

plaintiffs’ injury in this case.

A. Congress Has Determined That The Imposition

Of Civil Penalties On Violators Of The Clean

Water Act Deters Them From Violating The Act

In The Future.

The Clean Water Act specifies that, when a violation

of the Act is established in a court proceeding, the viola-

tor “shall be subject to a civil penalty not to exceed

$25,000 per day for each violation.” 33 U.S.C. § 1319(d)

(emphasis added). As the Fourth Circuit itself has recog-

nized, see Stoddard v. Western Carolina Regional Sewer

Authority, 784 F.2d 1200, 1208 (4th Cir. 1986), this is a

mandate to the district courts to impose a penalty on

violators of the Act. Accord, Atlantic States Legal Found.,

Inc. v. Pan American Tanning Corp., 993 F.2d 1017, 1021 (2d

Cir. 1993); Atlantic States Legal Found., Inc. v. Tyson Foods,

Inc., 897 F.2d 1128, 1140-42 (11th Cir. 1990).

Among the factors that Congress directed the district

courts to consider in calculating the amount of the pen-

alty are “the economic benefit (if any) resulting from the

violation,” and “the economic impact of the penalty on

the violator.” 33 U.S.C. § 1319(d). This indicates that

Congress intended the penalty to create an economic

incentive for the violator to refrain from violating the Act

in the future. See Tull v. United States, 481 U.S. 412, 422-23

(1987) (Clean Water Act's legislative history “reveals that

Congress wanted the district court to consider the need

administrative penalties under section 1319(g) of the Act is left to

the discretion of EPA. See 33 U.S.C. § 1319(g) (“ . . . the

Administrator . . . may, after consultation with the State in which

the violation occurs, assess a . . . civil penalty . . . under this

subsection”) (emphasis added).

for retribution and deterrence, in addition to restitution,

when it imposed civil penalties,” and the district court

may “seek to deter future violations by basing the pen-

alty on its economic impact.”)'! By directing that courts

consider the economic impact on the specific violator

being prosecuted, Congress indicated that it expected

penalties to deter that violator specifically.

The congressional determination that penalties are

needed to deter future violations is entitled to consider-

able weight. As a general matter, the factual (and policy)

determinations of Congress are given substantial defer-

ence by this Court. See, e.g., Hodel v. Virginia Surface

Mining & Recl. Ass'n, 452 U.S. 264, 276 (1981). Moreover,

as this Court has specifically recognized, the factors influ-

encing the choice of which remedy or remedies will most

effectively solve “the . . . problem of deterrence” are

“matters within legislative competence.” Tigner v. State of

Texas, 310 U.S. 141, 149 (1940).

Congress's determination as to the deterrent value of

penalties under the Clean Water Act also has important

Article III implications. As noted in Havens Realty Co. v.

'! The enumerated factors to be considered in setting the

amount of the penalty were added as part of the 1987

amendments. As noted in the Senate Report on the 1987

amendments, Congress believed that disgorging the economic

benefit earned as a result of noncompliance is an important

tactor in reducing the economic incentive to violate in the

tuture. See S. Rep. No. 99-50, at 25 (1985) (“Violators should not

be able to obtain an economic advantage vis-a-vis their

competitors due to their noncompliance with environmental

laws.”). See also Tyson Foods, 897 F.2d at 1141 (“Insuring that

violators do not reap economic benefit by failing to comply with

the statutory mandate is of key importance if the penalties are

successfully to deter violators.”).

Coleman, 455 U.S. 363, 373 (1982), “congressional inten-

tion cannot be overlooked” in determining whether the

pursuit of a judicial remedy afforded by statute consti-

tutes a case or controversy under Article III. See also Lujan

v. Defenders of Wildlife, 504 U.S. 505, 580 (1992) (“Congress

has the power to define injuries and articulate chains of

causation that will give rise to a case or controversy

where none existed before.”) (Kennedy, J. and Souter, J.,

concurring).

Here, Congress has expressed its intent that violators

of the Clean Water Act “shall be subject to a civil pen-

alty,” 33 U.S.C. § 1319(d), because Congress believed that

this remedy would create an economic deterrent to future

v’ lations. Since the deterrence of future violations will

redress the injury of citizen plaintiffs who seek to avoid

the adverse effects of such violations, Article III is satis-

fied.

B. There Is Ample Evidence That Penalties Do In

Fact Deter Future Violations.

The deterrent effect of monetary sanctions has long

been recognized, e.g., Richard A. Posner, Antitrust Law,

An Economic Perspective, at 221 (1976) (statutory treble

damages in antitrust litigation perform a deterrence func-

tion against violators of the law), and the economic the-

ory of deterrence is well-developed. See, e.g., Richard A.

Posner, Economic ANALysIs OF THE Law, at 265 (4th Ed.

1992) (“[T]he primary function of law, in an economic

perspective, is to alter incentives.”); George J. Stigler, The

Optimum Enforcement of Laws, 78 J. Pot. Econ. 526 (1970).

In general, “[djeterrence is a function of the expected

punishment, which is a product of both the perceived

probability and severity of punishment.” Michael J.

Metzger, Treble Damages, Deterrence, and Their Relation to

Substantive Law: Ramifications of the Insider Trading Sanc-

tions Act of 1984, 20 Var. U. L. Rev. 575, 595 (1986).

As an empirical matter, and as a matter of common

sense, penalties do deter future misconduct. A recent

study of enforcement actions taken by the Occupational

Safety and Health Administration (“OSHA”), for exam-

ple, found

a significant negative relationship between

OSHA inspections that impose a penalty and the

change in injuries at the penalized plant over

subsequent years. In our analysis, an inspection

imposing a penalty reduces injuries by 22% over

a three-year period,.and reduces lost workdays

by 20%. This relationship holds even after test-

ing and controlling for potential biases.

Wayne B. Gray & John T. Scholz, Does Regulatory Enforce-

ment Work? A Panel Analysis of OSHA Enforcement, 27 Law

& Soc’y Rev. 177, 199 (1993).!2

Not surprisingly, this Court has acknowledged the

specific deterrent effect of penalties on those who are

penalized. See, e.g., Bennett v. Spear, 520 U.S. 154, 170

(1997) (finding redressability in Endangered Species Act

case because of likelihood that threat of “substantial civil

and criminal penalties” will motivate behavior related to

the plaintiffs’ injuries); United States Dept. of Energy v.

State of Ohio, 503 U.S. 617, 625 (1992) (noting that where a

Clean Water Act defendant is exempt from penalties, it

“may break the law where it might have complied volun-

tarily if it had faced the prospect of punitive fines for past

violations.”); Weinberger v. Romero-Barcelo, 456 U.S. at 314

(identifying civil penalties as a “means of ensuring com-

pliance” with the Clean Water Act).

‘2 The authors of the study found that it was the penalty,

and not merely the inspection, that made the difference. See id.

at 192.

Lower courts have consistently found that civil pen-

alties have a deterrent effect on the Clean Water Act

violators on whom they are imposed. Indeed, as dis-

cussed supra, the Fourth Circuit itself acknowledged in

this case that “ ‘penalties can be an important deterren|t]

against future violations.’ ” Laidlaw, 149 F.3d at 306 n.4,

quoting Sierra Club v. Simkins Indus., Inc., 847 F.2d 1109,

1113 (4th Cir. 1988). See also Public Interest Research Group

of New Jersey v. Powell Duffryn Terminals, Inc., 913 F.2d 64,

73 (3d Cir. 1990) (finding Article III redressability because

“[pjenalties will deter . . . [the defendant] specifically.”).

Courts often decline to issue an injunction precisely

because they believe that penalties alone will provide

sufficient deterrence. Moreover, the punitive nature of

penalties is more clearly focused on providing deterrence

than is a simple order to comply. See, e.g., Albermarle Paper

Co. v. Moody, 422 U.S. 405, 417-18 (1975) (“If employers

faced only the prospect of an injunctive order, they would

have little incentive to shun practices of dubious legal-

ity;” it is the “reasonably certain prospect” of a monetary

penalty that “provides the spur or catalyst” for compli-

ance); Reich v. Occupational Safety and Health Review

Comm'n, 102 F.3d 1200, 1203 (11th Cir. 1997) (“As long as

a business operates, it should feel itself to be effectively

under the applicable laws and regulations — even on the

last day. And the continuing potential of penalties — more

so than injunctive relief - makes these feelings real.”). See

also S. Rep. No. 99-50, at 29 (1985) (Congress added

administrative penalties to the Clean Water Act because

“issuance of an administrative [compliance] order, with-

out penalties, has not proven powerful enough to moti-

vate violators ... ”).

C. Deterring A Defendant's Propensity To Violate

The Act Serves The Citizen Plaintiff’s Interest

In Reduced Risk Of Environmental Or Public

- Health Harm.

Because the imposition of a civil penalty specifically

deters the Clean Water Act defendant from committing

future violations, civil penalties - no less than injunctions

~ redress the citizen plaintiff's injury by reducing the

level of pollution discharged into a waterway in which he

or she has a concrete aesthetic, recreational, or economic

interest. As this Court stated in Steel Company, “deterring

[a defendant] from violating [a regulatory statute] in the

future . . . can of course be ‘remedial’ for Article III

purposes, when threatened injury is one of the grava-

mens” of the citizen plaintiff's action. 118 S. Ct. at 1019.

In a Clean Water Act citizen suit, there is every

reason to believe that the defendant who is made to pay a

monetary penalty for violating the Act will be less

inclined to violate the Act in the future, especially where

the defendant is a profit-maximizing company with an

economic interest in avoiding future penalty liability.

Indeed, in Bennett v. Spear, this Court held that the “pow-

erful coercive effect” of monetary penalties on the future

behavior of another was sufficient to confer Article III

standing on plaintiffs who had invoked the citizen suit

provision of the Endangered Species Act. See 520 U.S. at

170.

The plaintiffs in Bennett challenged the adequacy of a

biological opinion issued by the United States Fish and

Wildlife Service under the Act. 520 U.S. at 157. The plain-

tiffs claimed prospective injury because restrictions on

lake levels recommended in the biological opinion for the

protection of endangered species would, if followed by

the Bureau of Reclamation, reduce the amount of water

available to the plaintiffs for irrigation. Id. at 160 and 167.

The United States argued that the claim did not present a

case or controversy under Article III because the Bureau

of Reclamation itself was not before the court, and was

not, in any event, legally obligated to follow the recom-

mendations set forth in the biological opinion. Id. at

168-9. Thus, the United States argued, an order setting

aside the biological opinion would not redress the alleged

injury. See id. This Court disagreed.

The [Bureau] is technically free to disregard the

Biological Opinion . . . but it does so at its own

peril (and that of its employees), for ‘any per-

son’ who knowingly ‘takes’ an endangered or

threatened species is subject to . . . civil fines of

up to $25,000 per violation and criminal penal-

ties of up to $50,000 and imprisonment of up to

one year...

Id. at 170.

In the case at bar, as in Bennett v. Spear, the

redressability element of Article III is met because penal-

ties have a predictable effect on future behavior. To be

sure, the two cases present different situations, but

the underlying principle is the same. In Bennett,

redressability was met because of the likely effect of the

threat of penalties on a public agency that had not yet

violated the law. Here, it is met by the likely effect of

imposing a penalty on a profit-maximizing company that

has thus far violated the law with impunity. In either

case, redressability is met because penalties deter viola-

tions of the law, just as Congress envisioned.

In fact, redressability is more obviously satisfied in

this case, where a violator is being prosecuted directly by

citizens, than in cases such as Bennett, where the plaintiff

sues the government seeking to influence the behavior of

a party who is not before the court. In those cases, this

Court has employed a stricter standard for determining

whether an Article III case or controversy exists. See Lujan

v. Defenders of Wildlife, 504 U.S. at 562 (“When ... a

plaintiff's asserted injury arises from the government's

allegedly unlawful regulation (or lack of regulation) ot

someone else, much more is needed|,]” because in such

situations “[t]he existence of one or more of the essential

elements of standing depends on the unfettered choices

made by independent actors not before the courts .. . ”)

(emphasis in original) (citation and internal quotes omit-

ted); Simon v. Eastern Ky. Welfare Rights Organization, 426

U.S. 41, 46 (1976) (federal courts “act only to redress

injury that fairly can be traced to the challenged action of

the defendant, and not injury that results from the inde-

pendent action of some third party not before the court.”)

(construing Linda R.S. v. Richard D., 410 U.S. 614, 617

(1973)). In such cases, unless the causal chain leading to

redressability is clearly demonstrated, the plaintiff has

shown no more than an “undifferentiated public interest”

in “vindication of the rule of law” by the government.

Steel Company, 118 S. Ct. at 1018 (citation and internal

quotes omitted).

In the case at bar, on the other hand, the heightened

standard of redressability is not applicable, because the

party whose conduct the plaintiffs seek to affect - Laidlaw

~ is before the court. The plaintiffs do not seek to compel

government prosecution, but rather are themselves pros-

ecuting the very defendant that is causing them injury. If

the “coercive effect” of penalties was sufficient to meet the

heightened standard of redressability applied in Bennett,

520 U.S. at 170, it should be sufficient here as well. It was

not sufficient in Steel Company, however, because there was

no allegation in that case that the defendant would violate

in the future. Accordingly, the plaintiffs there had shown

no more than the “undifferentiated public interest” in

general deterrence of the regulated community.'*

Il. A DEFENDANT BEARS A HEAVY BURDEN IN

ATTEMPTING TO PROVE THAT ITS COMPLI-

ANCE WITH THE LAW HAS MOOTED THE

CASE.

Even if Congress had not determined that penalties

must be imposed on Clean Water Act defendants to deter

their future misconduct, violators who come into compli-

ance with the Act after being sued would bear a heavy

burden in attempting to establish that they will not vio-

late in the future (and thus that there is no need for

deterrence). As this Court held in United States v. Phos-

phate Export Assn., Inc., 393 U.S. 199, 203 (1968):

Mere voluntary cessation of allegedly illegal

conduct does not moot a case; if it did, the

courts would be compelled to leave “[t]he

defendant . . . free to return to his old ways.”

United States v. W.T. Grant Co., 345 U.S. 629, 632

(1953); see, e.g., United States v. Trans-Missouri

Freight Assn., 166 U.S. 290 (1897).

This Court has made it difficult for a defendant to

establish that its post-complaint return to lawful behavior

13 This is not to say that the public interest is not relevant to

a determination of redressability. When citizens have been

authorized by Congress to enforce a public law, redressability

should account for public, as well as private, benefits. Adoption

of this view of redressability would be consistent with the

common law tradition of encouraging citizens to enforce public

laws through qui tam and quo warranto actions. See generally,

George Van Cleve, Congressional Power to Confer Broad Citizen

Standing in Environmental Cases, 29 Envt’t L. Rer. 10028 (1999).

See also Japan Whaling Assoc. v. American Cetacean Society, 478

U.S. 221, 220 n.4 (1986).

has made a case moot. As stated in Gwaltney, “[i]n seek-

ing to have a case dismissed as moot. . . the defendant's

burden ‘is a heavy one.’ ” 484 U.S. at 66 (quoting United

States v. W.T. Grant Co., 345 U.S. 629, 633 (1953)).

The defendant must demonstrate that it is ‘abso-

lutely clear that the allegedly wrongful behavior

could not reasonably be expected to recur.’

United States v. Phosphate Export Assn., Inc., 393

U.S. 199, 203 (1968).

Gwaltney, 484 U.S. at 66 (emphasis added). This heavy

burden “protects plaintiffs from defendants who seek to

evade sanction by predictable ‘protestations of repen-

tance and reform.’ United States v. Oregon State Medical

Society, 343 U.S. 326, 333 (1952).” Id. at 67.

As noted in Steel Company, 118 S. Ct. at 1020, a

presumption of future injury “applie[s] to refute the

assertion of mootness by a defendant who, when sued in

a complaint that alleges present or threatened injury,

ceases the complained-of activity.”'* This presumption

fully supports the congressional determination that Clean

Water Act defendants need to be penalized to deter their

propensity to commit future violations.

As this Court has stressed, arguments that post-com-

plaint changes have eliminated the underlying case or

'4 In Steel Company, this Court contrasted the situation

where a defendant complies after the complaint is filed - a

situation, like the one in the case at bar, in which the

presumption of future injury does apply - with the situation

where a defendant takes the steps necessary to attain lasting

compliance before the complaint is filed, a situation in which

the presumption does not apply. 118 S. Ct. at 1020. This Court

has been unwilling to apply the presumption for the purpose of

attaining initial Article III jurisdiction (standing), but does

employ it for the purpose of retaining such jurisdiction

(mootness). See id.

oe erence nanan cet

——

controversy are to be evaluated under principles of moot-

ness, not standing.!®

And while mootness and standing are related, they

are not the same. This Court has described mootness as

“‘the doctrine of standing set in a time frame,’ ” Arizo-

nans for Official English v. Arizona, 520 U.S. 43, 68 n.22

produces differences in the Article III analysis. When a

defendant claims that its post-complaint change in conduct

has deprived the court of an Article III case or contro-

versy, the burden of proof shifts from the plaintiff to the

defendant, a presumption of ongoing harm applies, and

the nature of the inquiry shifts from the plaintiff’s quali-

fications to the defendant’s conduct.

1S Steel Company acknowledges this distinction in rejecting

an argument by the United States that the presumption of

ongoing harm applied when analyzing a defendant’s claim of

mootness should be invoked to assist a plaintiff in establishing

standing. See 118 S. Ct. at 1020 (“The ‘presumption’ the

Government refers to has been applied to refute the assertion of

mootness by a defendant who, when sued in a complaint that

alleges present or threatened injury, ceases the complained-of

activity. ... It is an immense and unacceptable stretch to call the

presumption into service as a substitute for the allegation of

present or threatened injury upon which initial standing must be

based.”) (emphasis added). See also Gwaltney, 484 U.S. at 69

(Scalia, J., concurring) (“It does not suffice to defeat subject

matter jurisdiction that the success of the attempted remedies

becomes clear months or even weeks after the complaint is filed.

Subject matter jurisdiction ‘depends on the state of things at the

time of the action brought’; if it existed when the suit was

brought, ‘subsequent events’ cannot ‘oust[]’ the court of

jurisdiction.”) (citations omitted).

16 Unlike the case at bar, Arizonans involved post-complaint

changes in the plaintiff's status, 520 U.S. at 72, as opposed to

post-complaint changes in the defendant's conduct.

In the case at bar, the district court found after a trial

that Laidlaw needed to be deterred from violating the Act

in the future, and accordingly imposed a $405,800 pen-

alty. Laidlaw did not meet the heavy burden of establish-

ing that such deterrence is not necessary.!7

'7 Laidlaw may now argue that this case became moot after

the Fourth Circuit issued its decision, by virtue of the reported

closing of Laidlaw’s plant. There are no facts in the record to

indicate that Laidlaw has met its heavy burden of proving the

case is moot due to the reported plant closing. Furthermore, the

plaintiffs are entitled to discovery as to the nature of the plant

closure, and should be given an opportunity to submit their

own evidence on that issue. See, e.g., Reich, 102 F.3d at 1203

(expressing concern that defendants would attempt “to avoid a

penalty by going out of business and, perhaps, then

reincorporating under a different name.”). Moreover, if this

Court does conclude that Laidlaw has met its heavy burden of

proving that this case is moot due to the plant closure, the

decision of the Fourth Circuit, but not the decision of the district

court, should be vacated. In assessing how to dispose of an

otherwise moot case, this Court has made it clear that the

inquiry should consist of an equitable analysis focusing on the

cause of the mootness. United States Bancorp Mortg. Co. v. Bonner

Mall Partnership, 513 U.S. 18, 24 (1994). As this Court explained

in Bancorp: “A party who seeks review of the merits of an

adverse ruling, but is frustrated by the vagaries of circumstance,

ought not in fairness be forced to acquiesce in the judgment. The

same is true when mootness results from unilateral action of the party

who prevailed below.” Id. at 25 (emphasis added). If this Court

concludes that Laidlaw’s closing of the plant mooted the case,

the plaintiffs will have been prevented from obtaining review of

the Fourth Circuit’s decision solely by Laidlaw’s unilateral

action in closing the plant, and that decision should be vacated.

Ill. REGARDLESS OF WHETHER THE CASE IS

MOOT, PLAINTIFFS ARE ENTITLED TO

ASSERT THEIR CLAIM FOR REASONABLE

ATTORNEYS’ FEES UNDER THE CLEAN WATER

ACT.

A. When A Case Becomes Moot Through No

Fault Of The Plaintiff, The Federal Courts

Retain Jurisdiction To Adjudicate The Plain-

tiff’s Claim For Statutory Attorneys’ Fees.

Regardless of whether the underlying merits of a

citizen plaintiff's claims are moot, the federal courts

retain jurisdiction to determine whether the plaintiff is

entitled to an award of statutory costs, including attor-

neys’ fees,'"* under the Clean Water Act. See 33 U.S.C.

§ 1365(d). It is well-settled that a dispute over litigation

costs and attorneys’ fees is separable from the merits of

the underlying case, see, e.g., Budinich v. Becton Dickinson

and Co., 486 U.S. 196, 202-3 (1988), and that federal courts

retain jurisdiction to adjudicate disputes over costs and

fees even after the underlying litigation has been

resolved. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384,

395-6 (1982) (“It is well established that a federal court

may consider collateral issues after an action is no longer

pending. .. . Thus, even years after the entry of a judg-

ment on the merits a federal court could consider an

award of counsel fees.”) (quotations and citations omit-

ted).

In the mootness context, this Court has explicitly

recognized the ancillary power of federal appellate courts

to award costs and fees when a case is mooted pending

appeal. Bancorp, 513 U.S. at 21. This principle applies

18 The Clean Water Act's citizen suit provision specifies

that attorneys’ fees and expert witness fees are to be taxed and

collected as “costs.” 33 U.S.C. § 1365(d).

throughout the course of federal litigation: whenever a

district court, court of appeals or this Court determines

that a controversy is moot, that court retains jurisdiction

to dispose of the case “as justice may require,” id. at 21-22

(citations and quotations omitted), including, in appro-

priate circumstances,'* an award of fees and costs.

The same residual power allows courts to resolve

conflicts over statutory fees after settlement of the under-

lying dispute. See Maher v. Gagne, 448 U.S. 122, 129 (1980)

(recognizing power of federal courts to award post-settle-

ment attorneys’ fees to prevailing plaintiff under Civil

Rights Attorney’s Fees Awards Act). Since settlement of

the underlying merits moots a case except as to fees, see,

e.g., Bancorp, 513 U.S. at 20, this Court’s approval of post-

settlement fee litigation confirms that, like appellate

courts, federal district courts retain jurisdiction over

ancillary matters like fee disputes even after the underly-

ing merits have become moot.?°

'% These circumstances would include where fees and costs

are available by common law, see, e¢.g., Sprague v. Ticonic Nat'l

Bank, 307 U.S. 161 (1939) (awarding fees several years after

entry of judgment to plaintiff who produced benefit commonly

available to others similarly situated), or, as here, by statute. See

Bancorp, 513 U.S. at 22 (“Congress may authorize us to enter

orders necessary and appropriate to the final disposition of a

suit that is before us for review.”) As discussed infra, Part III.B.,

Congress intended the district court’s authority to award

litigation costs under section 505(d) of the Clean Water Act to a

“prevailing or substantially prevailing party” to extend to cases

where the plaintiff's suit is a catalyst for the defendant's post-

complaint compliance with the Act.

20 Every circuit to address the issue, including the Fourth

Circuit, has ruled that federal district courts retain jurisdiction

after a case is mooted to assess whether the plaintiff was a

“prevailing party” for purposes of statutory fees. See, e.g.,

Comfort Lake Ass'n, Inc. v. Dressel Contracting, Inc., 138 F.3d 351,

This Court has implicitly recognized in the specific

context of a Clean Water Act citizen suit that a plaintiff's

claim for costs and attorneys’ fees survives the mooting

of the underlying merits where the mooting event is

caused by the unilateral conduct of the defendant. See

Gwaltney, 484 U.S. at 67 n.6. This case presents precisely

the situation the Court envisioned in Gwaltney: a defen-

dant that comes into compliance during the pendency of

a citizen suit. If a defendant’s post-complaint achieve-

ment of compliance is sufficient to evade an obligation to

pay the litigation costs of a prevailing citizen plaintiff,

citizen suit plaintiffs would be deprived of the very pro-

tection identified by the Court in Gwaltney. A citizen

plaintiff could devote substantial time and resources to

enforcing the Clean Water Act against a persistent viola-

tor, only to have the plaintiff's entitlement to statutory

fees eliminated by the defendant's decision to do that

which the plaintiff seeks.?!

357 (8th Cir. 1998) (Clean Water Act); Atlantic States Legal Found.,

Inc. v. Eastman Kodak Co., 933 F.2d 124, 128 (2d Cir. 1991) (same);

Grano v. Barry, 783 F.2d 1104, 1108 (D.C. Cir. 1986) (Civil Rights

Attorney's Fees Awards Act); Doe v. Marshall, 622 F.2d 118, 120

(Sth Cir. 1980), cert. denied, 462 U.S. 993 (1980) (same); Williams v.

Alioto, 625 F.2d 845, 848 (9th Cir. 1980), cert. denied, 450 U.S. 1012

(1980) (same); Bagby v. Beal, 606 F.2d 411, 413 (3d Cir. 1979)

(same); S-1 and S-2 v. State Bd. of Educ. of North Carolina, 21 F.3d

49, 51 (4th Cir.) (en banc) (per curiam), cert. denied, 513 U.S. 876

(1994) (same).

21 Enforcement of the Act would be seriously undermined,

since citizen plaintiffs without resources to pay an attorney

would be unlikely to find one who is willing to accept the risk

that the case will be mooted - and the right to attorneys’ fees

eradicated - by the defendant's unilateral conduct, even years

into the litigation.

B. Under The Clean Water Act, A Plaintiff Is Enti-

tled To An Award Of Fees When The Citizen

Suit Is A Catalyst In Bringing The Defendant

Into Compliance.

A citizen plaintiff whose suit is a catalyst in bringing

a defendant into compliance is a “prevailing or substan-

tially prevailing party” for purposes of a fee award under

the Clean Water Act. The Act’s citizen suit provision

provides in pertinent part:

The court, in issuing any final order in any

action brought pursuant to this section, may

award costs of litigation (including reasonable

attorney and expert witness fees) to any prevail-

ing or substantially prevailing party, whenever

the court determines such award is appropriate.

33 U.S.C. § 1365(d). A citizen plaintiff who “has suc-

ceeded on ‘any significant issue in litigation which

achieve[d] some of the benefit the parties sought in bring-

ing suit’... has crossed the threshold to a fee award of

some kind” as a prevailing party. Texas State Teachers

Assn. v. Garland Independent School District, 489 U.S. 782,

791-92 (1989) (construing 42 U.S.C. § 1988, and citing

Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir. 1978)).

The critical question in determining whether a party is

“prevailing” is whether, at a minimum, the plaintiff can

“point to a resolution of the dispute which changes the

legal relationship between itself and the defendant.” Id. at

792.

Thus, a plaintiff need not obtain a judgment, nor

even enter into a formal settlement, to be considered a

prevailing party:

A lawsuit sometimes produces voluntary action

by the defendant that affords the plaintiff all or

some of the relief he sought through a judgment

- €g., @ monetary settlement or a change in

conduct that redresses the plaintiff's grievances.

When that occurs, the plaintiff is deemed to

have prevailed despite the absence of a formal

judgment in his favor.

Hewitt v. Helms, 482 U.S. 755, 760-61 (1987) (citation omit-

ted). Conversely, even a nominally favorable judgment

will not afford a plaintiff “prevailing” party status if the

judgment fails to “affect{ | the behavior of the defendant

toward the plaintiff.” Rhodes v. Stewart, 488 U.S. 1, 4

(1988). In short, it is the result that matters.

Here, after the complaint was filed, Laidlaw brought

its mercury discharges into compliance with the Act and

the plaintiffs thus have “crossed the threshold” to pre-

vailing party status.?

In holding that the plaintiffs are not entitled to

recover attorneys’ fees, the Fourth Circuit misreads both

this Court’s decision in Farrar v. Hobby, 506 U.S. 103

(1992), and the language and legislative history of section

1365(d). Amici adopt the arguments presented in the

briefs of plaintiffs and of amici curiae Public Citizen and

the American Civil Liberties Union demonstrating that

S-1 & S-2, 21 F.3d at 51, wrongly held that Farrar v. Hobby

overruled the “catalyst” doctrine in attorneys’ fee

awards.

Moreover, Congress specifically intended that a citi-

zen plaintiff whose Clean Water Act suit is a catalyst in

22 This is in contrast to cases where an order vacating a

judgment on grounds of mootness deprives a plaintiff of relief, in

which the plaintiff cannot be said to be a prevailing party. See,

e.g., Lewis v. Continental Bank Corp., 494 U.S. 472 (1990) (change

in legal framework governing the case during pendency of

appeal deprived plaintiff of its claim for relief). Here, it is

plaintiffs’ success in changing the defendant's behavior prior to

judgment that arguably renders the case moot.

bringing a defendant into compliance be considered a

“prevailing or substantially prevailing party.” Before the

1987 amendments to the Clean Water Act, section 1365(d)

provided that fees may be awarded to “any party, when-

ever the court determines such an award is appropriate.”

See Gwaltney, 484 U.S. at 67 n.6 (quoting previous version

of statute). In enacting that provision, Congress stated

that an award of costs:

should extend to plaintiffs in actions which

result in successful abatement but do not reach a

verdict. For instance, if as a result of a citizen

proceeding and before a verdict is issued, a

defendant abated a violation, the court may

award litigation expenses borne by the plaintiffs

in prosecuting such actions.

Id. (quoting S. Rep. No. 92-414, at 81 (1971)).

Congress amended section 1365(d) in 1987 to add the

words “prevailing or substantially prevailing” before

“party.” On its face, the plain language of this amend-

ment does not alter the conclusion reached in Gwaltney.

Indeed, the amendment merely brings the Clean Water

Act's attorneys’ fees provision into closer alignment with

the language of the civil rights statutes.2> And by 1987, it

was already “settled law .. . that relief need not be

judicially decreed in order to justify a fee award” under

the civil rights statutes. Hewitt v. Helms, 482 U.S. at 760.

Since it is presumed that Congress expects its statutes to

be read in conformity with Supreme Court precedent,

3 If anything, by using the phrase “prevailing or

substantially prevailing,” Congress made the universe of

plaintiffs entitled to fees under the Clean Water Act even larger

than that under the Civil Rights Attorneys’ Fee Awards Act, 42

U.S.C. § 1988, which only provides for fees to “prevailing”

parties.

ee ene ee

United States v. Wells, 519 U.S. 482, 495 (1997), Congress’s

deliberate use of the “prevailing party” language in sec-

tion 1365(d) must be understood to encompass plaintiffs

who succeed by virtue of the defendant's post-complaint

compliance.

The legislative history of the 1987 amendments also

makes clear that Congress did not intend to reverse itself

and preclude an award of fees to a citizen plaintiff whose

suit serves as the Satalyst spuiying a defendant to abate

its violations of the Act before a verdict is issued. Instead,

this amendment had a single, and very different, pur-

pose: to ensure that plaintiffs who affirmatively lose on all

litigated issues do not receive fee awards.

The Senate Report on the 1987 amendments states

that Congress was reacting to the decision in Sierra Club

v. Gorsuch, 672 F.2d 33 (D.C. Cir. 1983), rev'd sub nom.

Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983), in which

the court of appeals held that it was ‘appropri-

ate’ to award fees under the Clean Air Act to the

petitioner even though the government had pre-

vailed on all issues. . . . Accordingly, these

amendments [to 1365(d) and adding a new sec-

tion 1369(b)(4)] would limit the awarding of

costs under the Clean Water Act to prevailing or

substantially prevailing parties.

S. Rep. No. 99-50, at 33 (1985). Emphasizing that it is not

appropriate to assess costs “when the opposing party has

not prevailed on the issues,” the Senate Report makes

clear that in other respects the fee-shifting provision of

the Act was not being altered, by listing several examples.

Fees may still be awarded, as before, to “a partially

prevailing party with respect to the issues on which that

party has prevailed” and to a party who has achieved “a

successful settlement,” and fees may be denied, as before,

to a party “technically on the prevailing side [who] fails

to make a substantial contribution to the successful out-

come of the case.” Id.

No negative inference should be drawn from Con-

gress’s failure to specifically list the situation presented

here — that of a defendant who abates its violations before

a judgment or settlement is reached — since that situation

is omitted both from the enumerated situations in which

a party is entitled to costs and from the enumerated

situations in which a party is not entitled to costs. If any

inference is to be drawn, it is that if Congress had meant

to preclude an award of costs under circumstances where

it previously had allowed such awards, Congress would

have said so.

Accordingly, even if this Court were to conclude that

the underlying dispute here is now moot, the case should

be remanded for the district court to assess whether the

plaintiffs qualify as “prevailing or substantially prevail-

ing partlies]” under section 1365(d).74

Respectfully submitted,

MicHaAeL AXLINE CHartes C. CALDART

(Counsel of Record) Davip A. NiIcHOLAs

Western Environmental JosHua R. KratKa

Law Center Howarp J. Hirscu

1216 Lincoln Street National Environmental

Eugene, OR 97401 Law Center

(541) 485-2471 29 Temple Place

Boston, MA 02111

(617) 422-0880

24 Since the district court implicitly found that plaintiffs are

entitled to an award of statutory fees, Laidlaw, 956 F. Supp. at

610-11, the sole remaining issue may be the determination of a

“reasonable” amount under the statute. See 33 U.S.C. § 1365(d).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.