Petition for Writ of Certiorari — Powell Duffryn Terminals, Inc. v. Public Interest Research Group of New Jersey, Inc.

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IN THE

Supreme Court of the Hitited States

Ocroser Term, 1990

POWELL DUFFRYN TERMINALS, INC.,

Petitioner,

vs.

PUBLIC INTEREST RESEARCH GROUP OF NEW

JERSEY, INC., FRIENDS OF THE EARTH and UNITED

STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

*NATHAN M. EDELSTEIN, Esq.

RIpOLFI, FRIEDMAN, FRANK,

EDELSTEIN & BERNSTEIN, P.C.

Attorneys for Petitioner

Powell Duffryn Terminals, Inc.

3131 Princeton Pike

Building 6A

Lawrenceville, New Jersey 08648

« (609) 896-2900

*Counsel of Record

|

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1

’

QUESTION PRESENTED

Under Article III of the Constitution, a party seeking to in-

voke the jurisdiction of the federal courts must make a three

part showing to establish his standing, including (1) that he per-

sonally has suffered some actual or threatened injury, (2) as a

result of, and fairly traceable to, defendant’s “putatively illegal”

conduct, (3) which is likely to be redressed by a favorable deci-

sion: In the present case, the court of appeals defined different

standards to determine standing for citizen-plaintiffs in Clean

Water Act cases, and in doing so upheld plaintiffs’ standing in

the absence of proof of causation or evidence of redressability.

The question presented is:

Whether the causation and redressability re-

quirements of Article III may be relaxed in citizen suits

under the Federal Water Pollution Control Act, to per-

mit an environmental organization to establish stand-

ing in the absence of evidence that the injuries com-

plained of by its members are a result of and fairly

traceable to the defendant’s conduct.

' Valley Forge Christian College v. Americans United for Separation of Church

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

PARTIES TO THE PROCEEDINGS

The petitioner is Powell Duffryn Terminals, Inc., a New Jersey

corporation. The respondents are Public Interest Research Group

of New Jersey, Inc. and Friends of the Earth. In addition, the

United States Environmental Protection Agency (“EPA”) in-

tervened in the court of appeals regarding the district court's

disposition of the civil penalty and the criteria utilized by the

district court in determining that penalty. The EPA is identified

in this Petition as a respondent.

In the court of appeals, three proceedings under docket

numbers 89-5831, 89-5851 and 89-5861 were consolidated and

a single opinion and judgment was issued.

Powell Duffryn Terminals, Inc. is a wholly owned subsidiary

of Powell Duffryn ple, incorporated in the United Kingdom.

TABLE OF CONTENTS

Question Presented ......----------srrer eres

Parties to the Proceedings ......------+++++++0)

Table of Contents.........-------ssertrtrcee

Table of Authorities .........-------seeerrcr:

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Statement of the Case ........------+ seer ree

Reasons for Granting the Writ .....---.-------:

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TABLE OF AUTHORITIES

5 Cases

Allen v. Wright, 468 U.S. 737 (1984) ...........

Duke Power Co. v. Carolina Environmental

Study Group, Inc., et al., 438 U.S. 59 (1978) ..

FW/PBS, Inc. v. City of Dallas, 493 U.S. _, 110

S.Ct. 596, 107 L.Ed.2d 603 (1990) ...........

Gladstone Realtors v. Village of Bellwood, 441

SEE ASS Sat ape ea

Lujan v. National Wildlife Federation, et al., 497

U.S. _, 110 S.Ct. 3177, 111 L.Ed.2d. 695

Gs ors aaa sc cas

Middlesex County Sewage Authority v. National

Sea Clammers Association, 453 U.S. 1 (1981) ..

O'Shea v. Littleton, 414 U.S. 488 (1974) ........

PIRG, et al. v. Powell Duffryn Terminals, Inc.,

627 F.Supp. 1074 (D.N.J. 1986) .............

Sierra Club v. Morton, 405 U.S. 727 (1973) .....

Simon v. Eastern Kentucky Welfare Rights Org.,

ie 5 eC vnmee ona. <

SPIRG v. AT&T Bell Laboratories, 617 F.Supp.

ee sa ic hcsk bes vb cay enesss

SPIRG v. Hercules Inc., 23 E.R.C. 2081 (D.N.J.

Se res ent gee Cek ec REMERORY 5.4% >

United States v. Richardson, 418 U.S. 166 (1974) ..

Cases

U.S. v. Students Challenging Regulatory Agency

Procedures, 412 U.S. 669 (1973) .............

Valley F — + Christian College v. Americans

Unitea . »r Separation of Church and State,

sa US Oe cs.

Warth v. Seldin, 422 U.S. 490 (1975) ...........

Constitution, Statutes and Rules

U.S. Const.:

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Statutes:

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Section 505 of the Federal Water Pollution

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Rules:

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Other Authorities Cited:

Schwartz & Hackett, “Citizen Suits Against

Private Industry Under The Clean Water Act,”

17 National Resources Lawyer 327 (1984) ..... 19

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————E

No.

IN THE

Supreme Court of the United States

Ocroser Tem, 1990

POWELL DUFFRYN TERMINALS, INC.,

Petitioner,

vs.

PUBLIC INTEREST RESEARCH GROUP OF NEW

JERSEY, INC., FRIENDS OF THE EARTH and UNITED

STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Petitioner, Powell Duffryn Terminals, Inc., respectfully peti-

tions for a writ of certiorari to review the judgment of the United

States Court of Appeals for the Third Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals is approved for publica-

tion but has not yet been reported. It is appended as Exhibit

“A” to Petitioner’s Appendix, at pages la to 54a.? The opinion

of the district court on the question of standing is reported at

2“ a” to “__n” refers to the appendix to this Petition for a Writ of Certiorari.

“A-__” refers to the joint appendix the parties filed in the United States Court

of Appeals for the Third Circuit.

627 F.Supp. 1074 (D.N.J. 1986). 1f to 32f. The opinion of the

district court on the issues of civil penalties and injunctive relief

is reported at 720 F.Supp. 1158 (D.N.J. 1989). 1b to 21b. A prior

unpublished written opinion of the district court, regarding cer-

tification under 28 U.S.C. §1292(b), is appended as Appendix

“E” (le to lle), and a separate oral opinion of the district court

granting plaintiffs’ third motion for summary judgment is ap-

pended as Appendix “C” (Ic to 4c).

JURISDICTION

Respondents brought suit in the district court alleging jurisdic-

tion under 33 U.S.C. §1365. Petitioner filed a motion to dismiss

for lack of subject matter jurisdiction under Article III, which

was denied by the district court on January 13, 1986. lf to 32f.

Petitioner appealed, and the court of appeals affirmed in rele-

vant part on August 20, 1990. (la-54a). Jurisdiction in the court

of appeals was established under 28 U.S.C. §1291. A timely-filed

petition for re-hearing by respondents was denied by the court

of appeals on October 11, 1990. 1g-2g.

The jurisdiction of this Court to review the judgment of the

court of appeals is invoked under 28 U.S.C. §1254(1).

CONSTITUTIONAL AND STATUTORY PROVISIONS

Constitution:

Article III, §2, clause 1 of the Constitution, provides that,

“The judicial Power shall extend to all Cases, in Law

and Equity, arising under this Constitution, the Laws

of the United States, and Treaties made, or which shall

be made, under their Authority; — to all Cases af-

fecting Ambassadors, other public Ministers and Con-

suls; — to all Cases of Admiralty and Maritime

Jurisdiction; — to Controversies to which the United

States shall be a Party; — to Controversies between

two or more States; — between a State and Citizens

of another State; — between Citizens of different

States; — between Citizens of the same State claim-

ing Lands under Grants of different States, and be-

tween a State, or Citizens thereof, and foreign States,

Citizens or Subjects.”

Statute:

§505 of the Federal Water Pollution Control Act, 33 U.S.C.

§1365 (hereafter referred to as the “Clean Water Act” or the

“FWPCA”) provides in pertinent part:

“Citizen Suits

(a) Authorization; jurisdiction

Except as provided in subsection (b) of this section and sec-

tion 1319(g)(6) of this Title, any citizen may commence a civil

action on his own behalf —

(1) against any person (including (i) the United States,

and (ii) any other governmental instrumentality or

agency to the extent permitted by the eleventh amend-

ment to the Constitution) who is alleged to be in viola-

tion of (A) an effluent standard or limitation under

this chapter or (B) an order issued by the Ad-

ministrator or a State with respect to such a standard

or limitation, or

(2) against the Administrator where there is alleged

a failure of the Administrator to perform any act or

duty under this chapter which is not discretionary

| with the Administrator.”

The entirety of §505 of the Clean Water Act is set forth in

Appendix “H” (lh to 3h).

STATEMENT OF THE CASE

1. a. The Federal Water Pollution Control Act establishes a

comprehensive regulatory program to “restore and maintain the

chemical, physical, and biological integrity of the Nation's

waters.” 33 U.S.C. §125l(a). In relevant part, the FWPCA

establishes a permitting program for point source discharges into

“navigable waters,” and this program is designated as the “Na-

tional Pollutant Discharge Elimination System” (“NPDES”) pro-

gram. 33 U.S.C. §134] et seq. A permit to discharge is known

as an “NPDES” permit, or in New Jersey as a New Jersey Pollu-

tant Discharge Elimination System (“NJPDES”) permit.

The FWPCA permits enforcement of the NPDES program

by the United States Environmental Protection Agency, or where

authority has been delegated to a state, by the state's en-

vironmental agency. 33 U.S.C. §1342(b). In New Jersey this

authority was delegated in 1982 by the EPA to the New Jersey

Department of Environmental Protection (“DEP”).

The FWPCA also permits enforcement of the NPDES pro-

gram, in certain circumstances, through “citizen suits.” 33 U.S.C.

§1365 (also known as §505 of the Act). In the present case and

on january 27, 1984, two environmental organizations, Public

Interest Research Group of New Jersey, Inc. (“PIRG”) and

Friends of the Earth (“FOE”), initiated a citizen suit under §505

of the Act alleging that defendant had violated its NJPDES per-

mit and seeking statutory penalties and injunctive relief. li to

7i. This is the basis on which jurisdiction was invoked in the

district court.

b. The defendant, Powell Duffryn Terminals, Inc., a New

Jersey corporation (“PDT”), is an NJPDES permit-holder

operating a bulk storage facility (tank farm) in Bayonne, New

Jersey. PDT is located on land adjacent to the Kill Van Kull,

which is one of the most industrialized waterways in the United

States. 47a. Powell Duffryn neither manufactures nor refines

products, and serves as a storage facility of others’ liquid pro-

ducts. By 1987 a state-of-the-art wastewater treatment facility,

known as the “Zimpro” system, was completed by Powell Duffryn

to treat all of its effluent, consisting primarily of rainwater,

before discharge of the effluent into the Kill Van Kull. A-1854

to 1855.

c. From the outset and throughout all proceedings, Powell

Duffryn has challenged plaintiffs’ allegations of standing under

Article III of the Constitution. PDT has produced affidavits,

which are unrebutted, that it is not the cause of, nor does it

contribute to, the environmental injuries complained of by plain-

tiffs. 1k to 2m. LeRoy Sullivan, an expert in civil and en-

vironmental engineering (A-1669), attested that “(t]he condi-

tions complained of by the plaintiffs ... are caused by sources

other than Powell Duffryn ... They do not derive from the con-

stituents of P.D’s discharge. P.D. is not the source.” 1k-4k. The

affidavits state further that none of the conditions complained

of by plaintiffs, such as water discoloration, sheen and/or smell,

exist or are present in the Kill Van Kull at or around PDT.

1(1)-2(1), 2m. The affidavits certify that the sources of the pollu-

tion complained of by plaintiffs are “downstream” from PDT.

and that there is no causal relationship between Powell Duf-

fryn’s discharge and plaintiffs’ alleged injuries. 1(1)-2(1) (par.

#22), 1k-4k. The evidence identifies two sewage treatment plants

which discharge up to sixty million (60,000,000) gallons of

treated sewage per day into the Kill Van Kull, and which are

located within 200-300 yards of a park where plaintiffs state

that they walk and birdwatch, as sources of plaintiffs’ alleged

injuries. A-1621 to 1622 and 1(1)-2(1) (par. #22), 3k.?

” Testimony at trial on the issue of civil penalties also shows that Powell Duf-

fryn’s discharge is not a cause of plaintiffs’ alleged injuries. Powell Duffryn

produced the expert testimony of Dr. Richard Hires, Ph.D, an expert in physical

oceanography (A-2012). Dr. Hires testified that he conducted a rhodamine

dye tracer study to assess the impacts, if any, of PDT’s discharge. This is a

comprehensive study using a specialized dye to track the distribution of an

effluent in receiving waters. A-1954 to 1956. It is the state-of-the-art means

utilized in the study of the effects, if any, of a discharge on water quality and

marine communities. He testified that, to a reasonable scientific certainty,

PDT did not cause or contribute to the conditions complained of by plain-

tiffs. A-2018 to 2020. This evidence was unrebutted by plaintiffs. The district

court asked plaintiffs, “Are you going to present testimony that it [Powell Duf-

fryn’s discharge] has an impact?” (A-1969). Plaintiffs answered, “[I] don’t think

we're going to.” A-1969. They did not.

d. Plaintiffs produced no affidavits, testimony or other

evidence to demonstrate that the environmental conditions

which they claimed aggrieved them were in fact a result of, and

fairly traceable to, PDT’s alleged conduct. Nor was evidence

presented to rebut Powell Duffryn’s proof that there was no

causation between its discharge and plaintiffs’ alleged injuries.

e. On December 19, 1984, PDT moved under Fed. R. Civ.

P. 56 for summary judgment dismissing the complaint because

plaintiffs failed to satisfy the second and third requirements for

Article III standing — causation and redressability. A-81 to A-88.

Presented with plaintiffs’ lack of proof of causation and Powell

Duffryn’s affidavits, the district court stated —

“ . it is not the court’s role to determine whether

defendant is polluting the Kill Van Kull and rather

the court’s role [in adjudging standing] [is] to deter-

mine whether the FWPCA ... has been violated.”

PIRG, et al. v. Powell Duffryn Terminals, Inc., 627

F.Supp. 1074, 1083 (D.N.J. 1986) emphasis added.

(19f).

The district court then held,

“Plaintiffs show causation merely by showing viola-

tions of the discharge permit ... plaintiffs meet the sec-

ond part of the Valley Forge test if they show these

violations.” 627 F.Supp. at 1083, emphasis added. (19f).

2. a. The question of standing thereby decided by the district

court arose out of plaintiffs’ general allegations of causation in

their complaint. At paragraphs #7 and 9 they alleged broadly

that their members “reside in the vicinity of;” or own property

or recreate “in, on or near portions of the Kill Van Kull and

Upper and Lower New York Bay that are affected by defendant's

discharge” and that defendant’s discharge “directly affects the

health, economic, recreational, aesthetic and environmental in-

terests and well-be’ng” of PIRG’s and FOE’s members. 3i-4i.

The complaint further alleged that the interests of PIRG’s and

FOE’s “members have been are being and will be adversely

. “==

Rs BRAC OR RA ROE OO A eS

affected by the defendant's violation of the terms and condi-

tions” of defendant’s NJPDES permit. See Complaint par(s) #7

and 9 (3i-4i).*

b. PDT immediately challenged these general allegations, on

which standing was predicated, as unsupportable and untrue.

A-59 and A-81 to A-87. Because of this question by PDT, the

district court bifurcated the case, with discovery to proceed on

standing. After its completion, cross-motions for summary judg-

ment were to be filed by plaintiffs on liability and by PDT, if

warranted, for dismissal for lack of standing. A-63 to A-68. If

plaintiffs were granted summary judgment on liability, which

eventually they were (If to 32f), the case would proceed on the

issues of civil penalties and injunctive relief. A-63 to A-66.

c. At the outset of this discovery on the question of standing,

PDT propounded interrogatories on plaintiffs asking PIRG and

FOE to identify the members referred to in the complaint, on

whom standing was based, and who, prior to commencement

of suit, actually “were consulted by you [plaintiffs] regarding

adverse impacts if any on their interests resulting from defen-

dant’s discharges ....” 2j-3j. Both PIRG and FOE replied in

answers to these interrogatories that they could not identify such

members(s) —

“No members of NJPIRG [and/or of FOE] were con-

sulted regarding adverse impacts of defendant's

discharges prior to the institution of this suit.” 2j to

3j, (interrogatories #17 and 18).

When suit was started the identity of the members generally

referred to in the complaint, as residing, owning property or

recreating on portions of the Kill Van Kull or New York Bay “af-

fected by defendant's discharge,” was not known to plaintiffs.

After the interrogatories were propounded, plaintiffs canvas-

sed their memberships and selected five individuals on whom

‘See Sierra Club v. Morton, 405 U.S. 727 (1973).

they would seek to rely for standing. They then obtained af-

fidavits from each of the five to be relied on for standing. Judge

Aldisert, in his concurring opinion in the court of appeals,

described this process by plaintiffs —

“I see PIRG and FOE in the position of the old-time

vaudeville performer's ad in Variety: ‘Have tux, will

travel” PIRG and FOE advertised: ‘Have case, need

live-bodied members/plaintiffs. ” 43a.

He added, “[m]Jaybe the wrong plaintiffs were recruited ...

Whatever the case, constitutional standing is a serious question

here.” 44a.

d. During discovery on the issue of causation, Powell Dutf-

fryn also questioned whether plaintiffs possessed any factual

basis to support their allegations that their members’ alleged

environmental injury was a result of PDT’s discharge. In inter-

rogatories directed to the veracity of the allegations in

paragraphs #6-9 of the complaint, PDT asked PIRG and FOE,

“Do you [plaintiffs] have any factual information

and/or expert reports on the issue of whether defen-

dant’s discharge of pollutants has affected the water

quality and/or the ecosystem of the Kill Van Kull, Up-

per New York Bay and/or Lower New York Bay?” 1j-2).

Plaintiffs answered that they did not in fact possess factual

information or expert reports on the effects of defendant's

discharge on these waters —

“At the present time, plaintiffs do not have any fac-

tual information and/or expert reports regarding the

effects of defendant’s discharge of pollutants on the

water quality and/or the ecosystem of the Kill Van

Kull, Lower New York Bay and/or Upper New York

Bay?” 2j.

During the ensuing five years of litigation, plaintiffs presented

no evidence that there was a causal connection between the

injuries complained of by their members and defendant’s

discharge.‘

e. In the affidavits which plaintiffs produced after locating

the five members identified for standing, PIRG and FOE in-

stead described generally that water in the Kill Van Kull was

polluted and that, if it were cleaner, these members would

recreate more in the area. (See 1(0)-8(0) and decision of the court

of appeals at 10a to lla.) No affiant attested to whether (or how),

if at all, Powell Duffryn’s discharge related to their present or

future activities. No affiant expressed a claim against PDT. Facts

demonstrating causation were not alleged or shown in the

affidavits.

3. a. Each affiant was therefore deposed, during which both

their statements in the affidavits and plaintiffs’ related allega-

tions in paragraphs 6-9 of the complaint were examined.°

Sheldon Abrams, one of the five members, testified that in

fact he does not own property in the vicinity of the Kill Van

Kull, Upper New York Bay or Lower New York Bay (A-263) and

that:

“Q. [By Mr. Edelstein] You don’t engage in any ac-

tivities along the Kill Van Kull, do you?

A. [By Mr. Abrams] No.” A-276. See also 50a.

* In the pretrial order the parties stipulated that, “plaintiffs will not present

testimony on the issue of plaintiffs’ continued standing in this case at the trial

on relief ... [I}f plaintiffs had standing to maintain this action at the time

of this Court's order of January 13, 1986, then plaintiffs continue to have stand-

ing at the time of the trial on relief in this matter and that, if plaintiffs lacked

standing at the outset of this case or at the time of the Court's order of January

13, 1986, then piaintiffs also lack standing at the time of the trial on relief

in this matter.” A-615.

* The entire deposition transcripts are included in the joint appendix in the

court of appeals, at pages A-222 to A-462.

10

He testified that he lives in Monmouth County about 40-50

miles from the Kill Van Kull (A-263), and that his actual ac-

tivities are occasional boating near South Beach ten (10) or more

miles from the Kill Van Kull and PDT. A-274 to 276. He

acknowledged that his alleged interest was “very generalized”

(A-272) and that,

“Q. [By Mr. Edelstein] You can answer this specifically.

Do you have any facts on which to base a personal

claim that you as an individual ... have been, are be-

ing, and will be adversely affected by this defendant's

discharge? |

A. [By Mr. Abrams] J have no personal claim.” (A-286

to A-287) (emphasis added). See also, 5la.

The deposition testimony of Mr. Abrams and each of the other

affiants disclosed further that plaintiffs never asked the affiants

if the allegations in paragraphs #7 and 9 of the complaint, that

defendant’s discharge adversely affected their interests, were

true. A-280, A-453, A-239, A-318 and A-339. Nor did any af-

fiant ever attest that plaintiffs’ allegations in this regard were

true.’

b. Melissa Ven Ditti — Ms. Ven Ditti testified in her deposi-

tion that she has never used the Kill Van Kull for recreational

purposes (A-395 and 52a). Her allegation is that she occasionally

walks at the Kill Van Kull park, which is 1.8 miles to the west

of PDT. A-395. There is no access from the park to the Kill,

A-623. Under examination by PDT, she acknowledged that the

only environmental concern affecting her use of the park is a

smell. A-433, A-397, A-399 and A-410. Powell Duffryn does not

cause the smell. A-2018 to A-2020. (See also concurring opinion

in the court of appeals at page 52a.)

’ The concurring opinion in the court of appeals found that, “... the testimony

at the deposition indicates less facts supporting standing than was found by

the district court.” 50a.

1]

When Ms. Van Ditti was asked by defendant, “[A]jre you

claiming that you have an interest which is being or will be

adversely affected by this defendant’s discharge,” the answer was

“No.” A-426.

c. Cheryl Cummings — Ms. Cummings testified at her deposi-

tion that she has never used the Kill Van Kull for any recrea-

tional activity (A-243), and that none of the area where she walks

at the park has access to the Kill. See 48a-50a and A-243. She

acknowledged that:

“Q. [By Mr. Edelstein] To you personally then the out-

come of this lawsuit won't affect your use of the park,

right?

A. [By Ms. Cummings] Correct.” A-243 and 49a.

She further testified that plaintiffs had not read the allega-

tions of the complaint to her, and instead that she was contacted

__ by plaintiffs’ counsel after suit was started, and then asked only

to “answer a few questions [about] how often I go down there

[to the park], what I do down there, how I enjoy my activities.”

A-232 to 235. Plaintiffs in turn prepared Ms. Cummings’ af-

fidavit on which standing is based, although Ms. Cummings also

testified that if paragraph #7 of the Complaint had been read

to her, she would not have authorized plaintiffs to use her “as

a person on whom they could rely for standing.” A-257

The testimony by Ms. Cummings continues:

“Q. [By Mr. Edelstein] If ... it was important that the

allegations of Paragraph #7 have to be correct as to

you, would you object to participating in this lawsuit?

A. [By Ms. Cummings] Yes.” A-259.

12

Ms. Cummings in further testimony stated,

“Q. [By Mr. Edelstein] Did Barbara [plaintiffs’

paralegal] explain to you that the allegations in this

suit were that there was a direct adverse effect on your

aesthetic, environmental, economic, recreational ac-

tivities due to Powell Duffryn’s discharge?

A. [By Ms. Cummings] No.

Q. If [the allegations in the suit] had been explained

to you, would you have been able to join in this suit?

A. No.

Q. Would you have been able to sign the affidavit?

A. No.” A-248 to A-249, 50a.

d. Andrew Gerbino — Mr. Gerbino’s recreational activities

are south of South Beach, New York (A-314), at a location which

is approximately thirteen miles from Powell Duffryn and the

Kill Van Kull. 5la. As Judge Aldisert noted, Mr. Gerbino's recrea-

tional activities are “thus unaffected by [PDT’s] discharge.” 5la.

He does not own property on the Kill Van Kull, nor in the vicini-

ty of Powell Duffryn. 5(0).

Mr. Gerbino testified further that, as a member of FOE, he

had received a “general questionnaire” asking broadly “how I

felt about various aspects of the pollution in Staten Island”

(A-292-293). After suit was started, he was contacted by FOE’s

attorneys and asked to sign “a general affidavit just backing up

my answers to questions on the questionnaire.” A-296. He testified

that he did so to “verify [his] answers on [the] questionnaire.”

He then became one of plaintiffs’ five members relied on for

standing. A-299.

Judge Aldisert noted that Mr. Gerbino, in his deposition, in

fact “agreed that his generalized assertion in this case is actually

that only, ‘any discharge from anywhere that finds its way to

13

Lower New York Bay adversely affects him ...” ” 5la-52a. When

asked whether it was his position that a discharge “20 miles away

or 50 miles away or a hundred miles away” would adversely af-

fect his interests, if tides “took it to Lower New York Bay,” he

answered, “Yes ....” A-322 to A-323. He agreed that “based on

that generalization” he is “participating in this lawsuit.” A-323.

No claim was asserted against PDT. In fact, Mr. Gerbino was

neither read the complaint, nor asked if the allegations in it

against PDT were true. A-318.

e. Douglas MacNeil — Mr. MacNeil testified that he owns

no property, nor does he reside, at or near the Kill Van Kull or

Powell Duffryn. A-331 to A-333, A-353. He does not recreate

on the Kill Van Kull. A-334 to A-335. He said that he birdwatches

at the park 1.8 miles west of PDT, and expressed the opinion

that if the water were cleaner his birdwatching might be im-

proved. A-357. (PDT’s activities are unrelated to the water con-

ditions at or near the park. See A-2018 to 2020.) He testified

further that he possessed no facts indicating that defendant's

discharge adversely affected him, and that regarding his affidavit

and knowledge of the case, “no one said that [PDT’s] discharge

directly [injures him] and I don’t assert it.” A-347 to 348, em-

phasis added. See Judge Aldisert’s concurring opinion at pages

52a to 53a.

f. None of the deponents testified that they reside in the vicin-

ity of, or own property or recreate in, on or near portions, if

any, of the Kill Van Kull and New York Bay “affected by defen-

dant’s discharge.” 3i. Judge Aldisert observed “no individual

plaintiff was able to say that ... the specific condition that was

the object of his or her complaint was caused by Powell Duf-

fryn.” 53a.

|

4. a. After these depositions were completed, the parties moved

for summary judgment under Fed. R. Civ. P. 56. Plaintiffs sought

judgment on defendant's liability, and PDT requested dismissal

for plaintiffs’ lack of Article III standing. A-82. In support of

its motion to dismiss for lack of standing, PDT submitted ex-

pert affidavits, as described above in paragraph l(c), which

14

were unrebutted both at this motion and throughout all pro-

ceedings below. The evidence showed that Powell Duffryn’s

operations and discharge did nut cause and did not contribute

to the conditions in the Kill Van Kull, Upper New York Bay or

Lower New York Bay that plaintiffs’ members said aggrieved

them. (1k to 2m). These affidavits were in addition to PIRG and

FOE’s certified answers to interrogatories that plaintiffs possessed

no factual information “regarding the effects of defendant's

discharge” on the Kill Van Kull and/or New York Bay.

b. After stating its conclusion that “causation [is shown] merely

by showing violations of the discharge permit” (19f), the district

court upheld plaintiffs’ standing. On the third prong of the

Valley Forge test for Article III standing, that plaintiff's injury

can be “redressed by a favorable decision” (454 U.S. at 472-474),

the district court also held that,

“Plaintiffs have standing to redress their injuries by

seeking relief in the form of general deterrence.” 627

F.Supp. at 1083. (20f).

5. In addition to upholding standing, the district court sum-

marily found PDT to be liable in total for 386 violations of its

NPDES permit. (7a).

Powell Duffryn denied the allegations of liability, submitting

that: (1) plaintiffs had mis-intepreted and misapplied data on

laboratory reports and on the discharge monitoring reports

(“DMRs”) to erroneously allege that violations had occurred;

and that (2) plaintiffs had overcounted or “duplicate” counted

alleged violations. Powell Duffryn proffered affidavits to show,

for example, that violations did not occur in 124 instances alleged

by plaintiffs for the parameters known as biochemical oxygen

demand (“BOD”) and total suspended solids (“TSS”) because

the permit provisions and laboratory data cited by plaintiffs did

not apply to PDT. A-96 to A-99, A-136 to A-139.°

* At trial on the issue of penalties, for example, PDT produced the testimony

of Marian Casper, formerly supervisor at the EPA and in charge of reviewing

(Footnote continued)

15

6. a. In May, 1989 the case was tried on the issues of civil

penalties and injunctive relief. On September 19, 1989 the

district court rendered its judgment penalizing defendant the

total of $3,205,000.00 and issuing a permanent injunction. Of

the $3,205,000.00 penalty, $1,330,000.00 was assessed for the

violations attributable to BOD and TSS.

7. PDT appealed, challenging the summary determination

of liability and the district court’s jurisdiction on the basis that

plaintiffs lacked standing. The court of appeals affirmed on these

issues. la-54a.

In its decision on standing, the court of appeals did not rely

on or refer to proof in the record that the conditions complain-

ed of by plaintiffs, at locations miles distant from PDT, were

in fact a result of PDT’s discharge, or caused by Powell Duf-

fryn. Plaintiffs produced no such evidence. The court noted in-

stead that “several affiants stated that the water has an oily or

greasy sheen they found offensive” and that defendant had

reported discharges in excess of its permit limit for a parameter

known as “oil and grease”. 15a. On this basis the court presumed

that the injury alleged by the plaintiffs, miles from PDT, “may

be fairly traced tc PDT’s effluent.” 15a.

The court of appeals adopted distinct criteria on which an

environmental organization may establish causation for the pur-

poses of Article III standing in all “Clean Water Act cases,” as

differentiated from other types or classes of cases within the

judicial power of the court. The decision holds —

“In a Clean Water Act case, this likelihood [that defen-

dant’s conduct caused plaintiffs’ harm] may be

established by showing that a defendant has (1)

discharged some pollutant in concentrations greater

Powell Duffryn’s DMR(s) for compliance. She testified, corroborating Messrs.

Sprague and Sullivan's affidavits, that,

“Q. [By Mr. Edelstein] “... Did the Agency [EPA] have a policy

whether these [BOD and TSS] requirements were applicable to

these intermittent dischargers [i.e., PDT]?”

A. [By Ms. Casper] Yes ... They did not apply.” A-1921 at lines 2-7.

16

than allowed by its permit (2) into a waterway in

which the plaintiffs have an interest that is or may

be adversely affected by the pollutant and that (3) this

pollution causes or contributes to the kinds of injuries

alleged by the plaintiffs.” 14a, emphasis added.

The court of appeals adopted, as did the district court, a test

for Article III standing where evidence of causation is not

required.

8. Judge Aldisert concurred, expressing “a nagging doubt

about standing.” 4la. He reviewed the evidence adduced at plain-

tiffs’ members’ depositions, and then wrote,

“Throughout my extensive preparation of this case in-

cluding close attention at argument and discussion

with my colleagues at conference, I was persuaded

that the member plaintiffs had failed to show an ac-

tual injury that was traceable to the permit violations.

(4la, emphasis added).

What troubles me from the testimony is any indica-

tion that the injury-in-fact was fairly traceable.” 53a.

In his concurrence Judge Aldisert stated further, “The stand-

ing case put in by [PIRG and FOE! :s so skinny that I am con-

cerned seriously our discussion v” .. aot survive careful Supreme

Court review.” 4la. He explained in this regard that Congres-

sional enthusiasm “for cleansing our nation’s waterways” had

led “environmental organizations and citizen/plaintiffs to

mistakenly believe that they have standing to sue any time a

discharge permit is violated.” 4la-42a. Thus as here they pre-

sent “a gossamer case of standing.” 48a. Summarizing the record

sub judice Judge Aldisert queried,

“Is it [plaintiff's case on standing] enough? I’m not

sure. Were this not an environmental case, it would

not be.” 53a.

17

Concurring in this holding that differentiates “Clean Water

Act cases,” for Article III standing, from other classes of cases,

Judge Aldisert expressed an underlying “notion” that in an en-

vironmental case there are “evolving precepts of standing [ which]

are perhaps expanded a bit when at stake are the great public

policy considerations of insults to our environment.” 53a-54a.

He expressed the belief that “somehow the Supreme Court might

be inclined to relax its stringent requirements of standing in en-

vironmental cases.” 42a. Judge Aldisert wrote further —

“I join in this opinion ... with the shakiest of

jurisprudential confidence. My intrepidity, ques-

tionable as it is, is the product of abject rationaliza-

tion: If the Supreme Court does not agree to review

and reverse, then perhaps if we are not absolutely cor-

rect, at least we are not totally wrong.” 4la.

REASONS FOR GRANTING THE WRIT

The decision of the court of appeals has identified an entire

class of cases, those arising under the “Clean Water Act,” and

has relaxed Article III’s requirements for standing in these §505

cases. 14a. Proof of causation — that the environmental injury

complained is in fact fairly traceable to and “as a consequence

of” defendant’s conduct — is not required. See contra, Valley

Forge, 454 U.S. at 485.

The court of appeals also has applied new criteria for

“redressability” under Article III in Clean Water Act cases. If

the general “public interest in clean waterways will be served”

by issuance of a penalty or injunction (16a), then plaintiffs need

not prove that the “actual injury” identified by the individual

members, on whom they rely for standing, will be redressed by

“a favorable decision.” Valley Forge, 454 U.S. at 472.

This decision therefore re-crafts both the second and third

requirements for Article III standing — causation and

redressability. In doing so, the decision of the court of appeals is

fundamentally inconsistent with this Court’s application of Ar-

ticle III and the Constitution's limitation on the federal judicial

power. Valley Forge, 454 U.S. at 489-490. The court of appeals

18

has “ignore[{d] [the] unambiguous limitations [imposed by Ar-

ticle III] on ... citizen standing.” Valley Forge, 454 U.S. at 488.

As Judge Aldisert observed, “constitutional standing is a serious

question here.” 44a.

The decision of the court of appeals thus has far-ranging con-

sequences. It opens an entire class of cases, all those brought

under §505 of the Clean Water Act, to lesser criteria for citizen

standing than this Court has permitted. See, e.g., Lujan v. Na-

tional Wildlife Federation, et al., 497 U.S. ___, 110 S.Ct. 3177,

3185-3189, 111 L.Ed.2d. 695, 712-717 (1990). Already these plain-

tiffs have filed at least thirty §505 cases in the district of New

Jersey (8n to 1ln), where the district court is regularly express-

ing its willingness, despite the strictures of Article III, to easily

relax Article III's jurisdictional limitations, as here. In SPIRG

Hercules Inc., 23 E.R.C. 2081, 2085 (D.N.J. 1986) the district

court held, for example —

“.. the [citizen] plaintiff [in a §505 case] need not

make a specific, personalized showing of redressability.

The benefit derived by the general public from the

specific and general deterrence of future violations by

defendant and other polluters through the imposition

of civil penalties suffices ... Consistent with this con-

clusion is the refusal by the District of New Jersey in

the past to require plaintiff to prove that a specific

injury was caused by defendant in order to obtain

standing.” Emphasis added.

The court concluded,

“.. the affiants’ [i.e., plaintiffs’) inability to link the

pollution of the river to defendants’ activities is irrele-

vant.” Id. at 2085, emphasis added.

See also, SPIRG v. AT&T Bell Laboratories, 617 F.Supp. 1190,

1200 (D.N.J. 1985) holding that, “[Clean Water Act) plaintiffs

have standing to sue because the general public interest will

benefit.” A “personalized showing of redressability [is] neither

appropriate nor necessary” for a §505 plaintiff. Id.

19

These cases pronounce a fundamentally flawed perspective

on the Constitutional requirements of causation and redressabil-

ity. Both are intrinsic to Article III standing. The announcement

by the court that proof of causation is “irrelevant,” and that a

personalized showing of redressability is “[inJappropriate and

[un]necessary” in an environmental case under the Clean Water

Act expands judicial power beyond Constitutional limits. See,

United States v. Richardson, 418 U.S. 166 (1974).

These errors are now endorsed by the court of appeals in

Powell Duffryn. In these cases, climaxing in the Powell Duf-

fryn decision, a consistent pattern has emerged, where Article

III is impermissibly truncated in Clean Water Act cases. The

court of appeals has stamped its approval on this erroneous ex-

pansion of federal judicial power.*

In doing so the court has carved out its own “special excep-

tion,” for environmental cases (42a, 53a), from Article III’s

“rigorous requirements.” Valley Forge, 454 U.S. at 475, 488. This

result is emphatically improper: “This philosophy [by the court

of appeals, to relax standing in view of the issue involved] has

no place in our constitutional scheme ... [W]e are unwilling to

countenance such a departure from the limits on judicial power

contained in Article III ....” Valley Forge at 489-490. The court

of appeals’ decision thus so far departs from and misapplies

bedrock principles of Article III standing, and in doing so ex-

poses an entire class of cases to improper Constitutional analysis,

that this Court’s review is warranted.”

* Nationwide, well over one hundred §505 suits have been started (1n to 17n),

with hundreds of additional letters of intent to sue also served. The EPA has

advised that during approximately the last six months, from April 23, 1990

through October 23, 1990, one hundred eight (108) new Notices of Intent to

Sue under § 505 have been filed. See also, e.g., Schwartz & Hackett, “Citizen

Suits Against Private Industry Under The Clean Water Act,” 17 National

Resources Lawyer 327 (1984). In their fee application to the Third Circuit,

plaintiffs’ counsel represented that they alone have initiated sixty (60) §505

cases.

" Valley Forge, 454 US. at 489.

20

Indeed Judge Aldisert noted that in Lujan this Court con-

veyed its “strong signal” that “standing requirements in cases

affecting the environment” are not, “repeat not,” to be “totally

relaxed.” 42a. He cited specifically to the Court’s “insist[ence]”

that courts of appeal “not ... assume that general averments em-

brace the ‘specific facts’ needed to sustain standing.” 43a.

“Wish{ing] [nonetheless] to find standing” in Powell Duffryn,

because it is an “environmental case,” he was willing, as was

the court, to expand the “precepts of standing” in Clean Water

Act cases to assume threshold facts of causation which were un-

proven, and rigorously challenged. 43a, 53a. As a result, general

averments of causation, without supporting specific facts, now

may be presumed as proven in §505 cases. This is an impermissible

result. There is no “principled basis” for it and, instead, it ad-

vances the fallacious theory for standing, advocated by plain-

tiffs, that they need not prove causation in Clean Water Act cases.

See Contra, Valley Forge, 454 U.S. at 472.

There is inherent danger in this proposition. It presumes that

“the judicial power requires nothing more for its invocation”

than issues of importance to plaintiffs and, in turn, urges the

courts to “overstep [their] assigned role in our system of ad-

judicating only actual cases or controversies.” See, Valley Forge,

454 U.S. at 489 and Simon v. Eastern Kentucky Welfare Rights

Org., 426 U.S. 26, 40 (1976). Essentially it permits suit in-

discriminately against any defendant located anywhere along

a watercourse without evidence “of [‘real and immediate’] in-

jury,” and instead based on allegations by plaintiffs of “ ‘con-

jectural’ or ‘hypothetical’ ” causation. O’Shea v. Littleton, 414

U.S. 488, 494 (1974). In Mr. Gerbino’s deposition this unaccep-

table result, falling far short of Article III’s mandate, was

detailed —

“Q. [By Mr. Edelstein] Is there any distance away from

the Lower New York Bay that you would consider a

discharge not being involved? In other words, if there

was a discharge 20 miles away or 50 miles away or

a hundred miles away, would it be your position that

that discharge, if tides took it to Lower New York Bay,

would also similarly adversely affect your interests?

21

A. [By Mr. Gerbino] Yes, extends up to the Atlantic

Highland for that matter.

Q. [It] Doesn’t matter what the discharge is or where

it comes from?...

A. Yes ...

Q. So, your position is that any discharge from

anywhere that finds its way to Lower New York Bay

adversely affects your interest; is that right? ...

A. Yes.

Q. Based on that generalization, you’re participating

in this lawsuit?

A. Right.” A-322 to 323.

Under the decision of the court of appeals standing is “ex-

panded” to permit suit by a citizen, such as Mr. Gerbino, if he

generally alleges use of a waterway, miles distant from defen-

dant (and where defendant’s discharge has no impact), if defen-

dant has filed a discharge monitoring report where an ex-

ceedance of certain parameters in an NPDES permit is noted.

The court does not recognize any point of attenuation between

plaintiffs’ alleged injury and defendant’s conduct — whether

it be “20 miles away [from plaintiffs] or 50 miles away or a hun-

dred miles away,” and no proof of causation between defendant's

discharge and the citizen’s complaint is required. This is not what

Article III permits. It is however the rule of law adopted by the

court of appeals. 14a.

The decision thus is a serious abuse of federal jurisdiction,

and demonstrative of an inherently flawed application of Arti-

cle III. Standing is “perhaps the most important of [the jurisdic-

tional] doctrines” which define and Constitutionally limit the

power, and role, of the federal courts. FW/PBS, Inc. v. City of

Dallas, 493 U.S. ___., 110 S.Ct. 596, 607, 107 L.Ed.2d. 603, 621

(1990) citing Allen v. Wright, 468 U.S. 737, 750 (1984). It cannot

22

be “ ‘inferred argumentatively from averments in the pleadings, ”

and instead must be affirmatively demonstrated in the record.

FW/PBS, Inc., 110 S.Ct. at 608, 107 L.Ed.2d. at 622. Plaintiffs’

allegations relied on for standing “must be true and capable of

proof at trial.” U.S. v. Students Challenging Regulatory Agency

Procedures (SCRAP), 412 U.S. 669, 689 (1973). As a threshold

matter it is plaintiff's burden to prove facts demonstrating that it

is a proper party to invoke the judicial power of the United States.

Warth v. Seldin, 422 U.S. 490 (1975). This requirement cannot be

waived and is one which the court has a “special obligation” to

enforce” Citizen suits under the FWPCA are expressly subject to

these standing requirements. Middlesex County Sewage Authority

v. National Sea Clammers Association, 453 U.S. 1 (1981).

Standing is “ground[ed] in the idea of separation of powers,”

and the fundamental limit on the role of the federal courts in

our system of governance. Allen v. Wright, 468 U.S. at 760. This

is a seminal principle from which the court of appeals has

deviated to satisfy, in Judge Aldisert’s words, a “strong desire

to affirm the district court judgment” because this is an “en-

vironmental case.” To do so the court has given birth to the prece-

dent that “Clean Water Act” plaintiffs need not prove causa-

tion or redressability. Standing was found,

“[OJn the most questionable of grounds — a belief

that somehow the Supreme Court might be inclined

to relax its stringent requirements of standing in en-

vironmental cases.” 42a.”

" FW/PBS, Inc., 110 S.Ct. at 607, 107 L.Ed.2d at 621.

" The issue raised in this petition transcends Clean Water Act citizen suits.

Like Section 505 of the Clean Water Act, numerous other environmental

statutes also authorize private enforcement. This includes Section 310 of the

Comprehensive Environmental Response, Compensation and Liability Act,

42 U.S.C. § 9659; Section 326 of the Emergency Planning and Community

Right-to-Know Act, 42 U.S.C. § 11046; Section 7002 of the Resource Conser-

vation and Recovery Act, 42 U.S.C. § 6972; Section 20 of the Toxic Substances

Control Act, 15 U.S.C. § 2619(a)(1); and Section 304 of the Clean Air Act,

42 U.S.C. § 7604 (as amended by Section 707 of the Clean Air Act Amend-

ments of 1990, P.L. 101-549).

(Footnote continued)

ete eben

23

The “notion” of the court of appeals, that Article III permits

standing without proof of causation or redressability, should be

disabused. Organizational plaintiffs only have standing if an

individual member: (1) has an actual, direct and personal stake

in the outcome (i.e., “injury in fact”), Sierra Club v. Morton,

405 U.S. 727, 734-741, which (2) results from the “putatively

illegal action [of defendant]” (Warth v. Seldin, 422 U.S. 499),

and (3) which is “likely to be redressed by a favorable decision.”

Valley Forge, 454 U.S. 472.

A “generalized grievance” does not confer standing, whether

it be over environmental protection, as here, or over a town’s

housing policies as enacted through its zoning ordinances,

as in Warth v. Seldin, 422 U.S 499. Rather, Article III is

firm in its causation and redressability requirements, and proof

of causation is a prerequisite to standing. Cf. Duke Power Co.

v. Carolina Environmental Study Group, Inc., et al., 438 U.S.

59 (1978).

In the absence of such proof of causation or redressability by

plaintiffs, the defendant is entitled to judgment under Fed. R.

Civ. P. 56:

“.. Rule 56(e) provides that judgment ‘shall be entered’

against the non-moving party unless affidavits or other

evidence ‘set forth specific facts showing that there

is a genuine issue for trial.’ The object of this provi-

sion is not to replace conclusory allegations of the com-

plaint or answer with conclusory allegations of an af-

fidavit ....” Lujan, 110 S.Ct. at 3188, 11] L.Ed.2d at 716.

In view of the substantial and expanding number of statutes dealing with

the environment, relaxing Constitutional standing requirements for Clean

Water Act citizen suits in turn promotes a multitude of similar suits under

other environmental statutes. The lower courts’ decisions in this case sanc-

tion a broad range of similar actions brought under a variety of statutes, allow-

ing plaintiffs to file suit based solely on generalized notions of harm, without

evidence of causation or redressability. For this additional reason, the Court

should grant this petition and affirm the applicability of the causation in fact

and redressability requirements to citizen plaintiffs in environmental cases.

24

Further, the Court has explained the prohibition against

presuming “missing facts” in order to uphold standing, which

is what the court of appeals nonetheless has now authorized on

the crucial issue of causation in all Clean Water Act cases,

“Rule 56(e) is assuredly not satisfied by averments

which state only that one of respondent’s members

uses unspecified portions of an immense tract of ter-

ritory, on some portions of which mining activity has

occurred or probably will occur by virtue of the

governmental action. It will not do to ‘presume’ the

missing facts because without them the affidavit

would not establish the injury that they generally

allege.” Lujan, 110 S.Ct. at 3189, 111 L.Ed.2d. at 716.

Powell Duffryn moved for dismissal under Rule 56, and sub-

mitted unrebutted affidavits that it neither caused nor con-

tributed to the injuries complained of by plaintiffs. PDT directly

certified that the constituents of its discharge do not cause the

conditions complained of by plaintiffs. 3k (par. #26). This in-

cludes its reported exceedance of a general parameter called “oil

and grease.”

There is no evidence linking PDT’s discharge of this parameter

to plaintiffs’ alleged injuries, and the proof, to the contrary, is

that PDT is not the cause of plaintiffs’ claimed injuries. The

court of appeals however presumed missing facts — that when

a defendant reports a discharge of such a generalized parameter,

causation is per se established. This not only wrongly applied

Rule 56, but also propounded an unacceptable rule for Article

III standing: in “Clean Water Act cases” the court will assume

specific facts from general averments of causation and, from

these assumptions, find causation in fact and uphold plaintiffs’

standing. The holding thus entrenches the flawed belief, recur-

ring in §505 cases, that actual proof of causation by plaintiffs

is “irrelevant” and that a personalized showing of redressabi-

lity is “neither appropriate nor necessary.” SPIRG v. Hercules,

supra, and SPIRG v. AT&T, supra. This decision by the court

of appeals should not be permitted to stand and thereby to

control the application of Article III in Clean Water Act cases.

LS nT ee eR Te

25

When essential questions of standing are in issue, certiorari

is warranted. Valley Forge, 454 U.S. 470 (“Because of the

unusually broad and novel view of standing to litigate a substan-

tive question in the federal courts adopted by the court of ap-

peals, we grant certiorari”) and Gladstone Realtors v. Village

of Bellwood, 441 U.S. 91, 99 (1979) (“We granted certiorari ...

because of the important questions of standing raised under Title

VIII of the Civil Rights Act of 1968.”) Here, important ques-

tions of standing in each citizen suit under the Clean Water Act

are directly in issue. May citizen-plaintiffs litigate substantive

questions in the federal courts, under the FWPCA or similar

environmental statutes, in the absence of evidence of causation

or redressability, and based on the court’s presumption of these

missing facts from general controverted averments? Article III

has been directly mis-applied in the decision of the court of ap-

peals, which now stands as precedent that proof of causation

and evidence of redressability are not required in § 505 cases.

PDT submits respectfully that the petition for a writ of certiorari

therefore should be granted.

CONCLUSION

For the foregoing reasons, this Court should grant the writ

and reverse the decision of the court of appeals.

Respectfully submitted,

NATHAN M. EDELSTEIN*

RIDOLFI, FRIEDMAN, FRANK,

EDELSTEIN & BERNSTEIN, P.C.

3131 Princeton Pike

Building 6A

Lawrenceville, NJ 08648

(609) 896-0999

Counsel for Petitioner

*Counsel of Record

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Filed: August 20, 1990

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 89-5831

PUBLIC INTEREST RESEARCH GROUP

OF NEW JERSEY, INC. and

FRIENDS OF THE EARTH

V.

POWELL DUFFRYN TERMINALS INC.,

Appellant

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Intervenor

No. 89-5851

PUBLIC INTEREST RESEARCH GROUP

OF NEW JERSEY, INC. and

FRIENDS OF THE EARTH,

Appellants

V.

POWELL DUFFRYN TERMINALS INC.

No. 89-5861

2a

PUBLIC INTEREST RESEARCH GROUP

OF NEW JERSEY, INC. and

FRIENDS OF THE EARTH

V.

POWELL DUFFRYN TERMINALS INC.

WILLIAM B. REILLY,

in his capacity as Administrator,

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Appellant

Appeal from the United States

District Court for the

District of New Jersey

(D.C. Civil No. 84-00340)

Argued May 21, 1990

Before: SCIRICA, NYGAARD

and ALDISERT, Circuit Judges

(Opinion filed August 20, 1990 )

Nathan M. Edelstein, Esq. (Argued)

Ridolfi, Friedman, Frank, Edelstein

& Bernstein

3131 Princeton Pike

Bidg. 6A

Lawrenceville, NJ 08648

Attorney for Appellant/Cross

Appellee

Powell Duffryn Terminals, Inc.

Re ee eee

3a

Bruce J. Terris, Esq. (Argued)

Kathleen L. Millian, Esq.

Terris, Edgecombe, Hecker & Wayne

1121 12th Street, N.W.

Washington, DC 20005

Edward Lloyd, Esq.

111 South Montgomery Street

Trenton, NJ 08611

Attorneys for Appellee/Cross

Appellant

Public Interest Research Group

of New Jersey, Inc. and

Friends of the Earth

Charles J. Sheehan, Esq. (Argued)

United States Department of

Justice

Land and Natural Resources

Division ;

Office of Policy, Legislation and

Special Litigation Room 2127

10th Street & Pennsylvania Avenue,

N.W.

Washington, DC 20530

Lee M. Kolker, Esq.

U.S. Department of Justice

Room 2133, Land & Natural

Resources Div.

Office of Policy, Legislation and

United States Environmental

Protection Agency

4a

OPINION OF THE COURT

NYGAARD, Circuit Judge

In this Clean Water Act citizen suit, the district

court granted summary judgment to plaintiffs Public

Interest Research Interest Group of New Jersey and

Friends of the Earth (collectively “PIRG”), finding that

defendant Powell Duffryn Terminals, Inc. (“PDT”) had

violated its National Pollution Discharge Elimination

System (“NPDES”) permit 386 times over a period of

six years. After a bench trial on the issue of penalties,

the district court permanently enjoined PDT from

violating the terms of its NPDES permit and assessed

$3,205,000 in civil penalties. Both parties appeal. We

will affirm in part and reverse in part.

I. Background Facts and Procedural History

The Federal Water Pollution Control Act (“the

Act”) was enacted by Congress in 1972. The purpose

of the Act is to “restore and maintain the chemical,

physical, and biological integrity of the Nation's

waters” with the goal “that the discharge of pollutants

into the navigable waters be eliminated by 1985.” 33

U.S.C. 8 1251(a)(1).

The Act provides an effective mechanism for

monitoring and limiting polluting discharges. Section

301(a) flatly prohibits anyone from discharging any

pollutant except as permitted by the Act. 33 U.S.C.

§ 1311(a). A person wishing to discharge into the

navigable waters must obtain a National Discharge

Elimination System (“NPDES”) permit. 33 U.S.C.

8 1342. These permits contain detailed limits (or

parameters) on the types and concentrations of

pollutants a permit holder may discharge. A person

5a

who complies with the permit parameters is deemed

to comply with the Act. 33 U.S.C. § 1342(k). The Act

further requires permittees to install and maintain

equipment to test its effluent. 33 U.S.C. § 1318(a).

The test results must then be reported to the

Environmental Protection Agency (‘EPA’) on

Discharge Monitoring Reports (“DMRs”). 40 C.F.R.

88 122.41(j) & 122.48 (1989). A comparison of the

permit limits with the reported concentrations quickly

reveals whether a permittee is complying with its

permit. Finally, the Act permits aggrieved citizens to

sue permit violators. 33 U.S.C. 8 1365.

PDT, a New Jersey corporation, is an NPDES

permit holder operating a bulk storage facility in

Bayonne, New Jersey. This tank farm is located on

land adjacent to the Kill Van Kull, a navigable body of

water. PDT uses the large tanks at the site to store

various liquids owned by others. These liquids include

petroleum products and industrial chemicals. When

liquids are transferred, some spillage occurs. The

spillage mixes with rainwater and the run-off pollutes

the Kill Van Kull.

When PDT acquired the facility, it was subject to

an injunction issued by the United States District

Court for the District of New Jersey. United States v.

El Dorado Terminals Corp., CA No. 77-228 (D.N.J.

April 14, 1977). The injunction required the site

owner to build a wastewater treatment plant by July

1, 1977 to treat the polluted run-off. After purchasing

the facility, PDT did some remedial work at the site.

mainly paving and constructing some ditches and

dikes to channel the rainwater. PDT did not, however,

construct the required wastewater treatment plant

until 1987.

Since 1974, PDT (or its predecessor in interest)

has held a series of NPDES permits which allowed it to

discharge effluent into the Kill Van Kull. PDT’s DMRs

6a

indicate that PDT (or its predecessor) has consistently

and uninterruptedly dumped pollutants into the Kill

Van Kull in concentrations greater than that allowed

by its permit.

Plaintiffs are non-profit corporations concerned

with environmental issues. On January 27, 1984,

they filed a citizen suit against PDT pursuant to

section 505 of the Act, 33 U.S.C. 8 1365(a)', seeking a

judgment of liability, civil penalties and injunctive

relief, alleging that PDT was violating its NPDES

permit. PIRG gave the required sixty-day notice of suit

to the EPA and the New Jersey Department of

Environmental Protection. 33 U.S.C. 8 1365(b).

The district court bifurcated the case, with

liability to be determined first and civil penalties and

injunctive relief, if any, to be considered afterward.

PIRG moved for summary judgment on the issue of

PDT's liability. PDT opposed the motion, alleging that

PIRG lacked standing and that material facts as to

liability were in dispute.

The district court granted PIRG's motion for

summary judgment in an order dated January 13,

1986, finding that PIRG had standing and that PDT

had violated its NPDES permit 154 times from July,

1977 to June, 1984. Student Public Interest Group of

New Jersey, Inc. v. P.D. Oil & Chemical Storage,

1. This section states, in relevant part:

Except as provided in subsection (b) of this section and

section 1319(g)(6) of this title, any citizen may cormmence

a civil action on his own behalf--

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

violation of...an order issued by the Administrator or a

State with respect to...[an effluent] standard or

limitation....

33 U.S.C. 8 1365(a){1).

7a

Inc., 627 F. Supp. 1074 (D.N.J. 1986) (“PIRG I"). PIRG

submitted another motion for summary judgment

alleging that PDT continued to violate its permit

during the litigation. On March 13, 1987, the district

court granted summary judgment to PIRG on an

additional 46 violations.

PIRG moved for a preliminary injunction on May

17, 1988 to enjoin further permit violations by PDT.

The district court denied this motion in part because

PIRG had failed to demonstrate that irreparable harm

was imminent.

PIRG filed its third and final motion for summary

judgment on liability on December 29, 1988, alleging

an additional 190 violations. Four items were

erroneously included and PIRG later removed them

from the list. PDT again opposed summary judgment.

On May 4, 1989, the first day of the bench trial on

penalties, the district court granted PIRG’s motion for

summary judgment, bringing the total number of

PDT's violations to 386.

Following a one week bench trial on the issue of

penalties, the district court found that PDT had

consistently violated its permit and should be

assessed the maximum penalty. Public Interest

Research Group of New Jersey, Inc. v. Powell Duffryn

Terminals, Inc., 720 F. Supp. 1158 (D.N.J. 1989)

(“PIRG II"). The court based the fine on the

seriousness of the violations, the large economic

benefit reaped by PDT by delaying compliance, the

lack of good faith efforts by PDT to comply with its

NPDES permits and the fact that the penalty would

not threaten PDT's economic survival. After

calculating the maximum penalty to be $4,205,000,”

2. Before 1987, section 309(d) of the Act provided for a civil

penalty “not to exceed $10,000 per day of such violation.” 33

U.S.C. 8 1319(d) (1986). This section was amended effective

8a

the district court reduced the penalty by $1,000,000

because the EPA and the NJDEP had failed to

diligently prosecute PDT. The district court ordered

PDT to pay the $3,205,000 into a trust fund to be

used for improving the environment in New Jersey.

Finally, the district court entered a permanent

injunction prohibiting PDT from violating its permit.

PIRG II, 720 F. Supp. at 1160.

PDT contends that the district court erred by

failing to dismiss the case because the plaintiffs lack

standing, by failing to apply a five year statute of

limitations and by granting summary judgment on

liability. PDT also contends that the district court's

factual findings supporting the award of civil

penalties are clearly erroneous and that the injunction

is overbroad. PIRG contends that the nonfeasance of

the EPA and the NJDEP is an illegitimate basis for

reducing the penalty. Although the EPA was not a

party below, we permitted the EPA to intervene to

contest the creation of a private trust fund with the

civil penalties.

Il. Standing

The requirement that a party have standing flows

from the Article Ill requirement of a “case or

controversy.”’ U.S. Const. art. Ill, § 2, cl. 1. Standing

February 4, 1987 to allow a civil penalty “not to exceed 825,000

per day for each violation.” 33 U.S.C. § 1319(d) (1987). The

district court calculated the maximum penalty by multiplying the

363 violations occurring before February 4, 1987 by $10,000 and

the 23 violations occurring after that date by $25,000.

3. In addition to constitutional considerations, there are

prudential limitations that may lead a court to deny standing. In

analysis focuses on whether “a party has a sufficient

stake in an otherwise justiciable controversy to obtain

judicial resolution of that controversy.” Sierra Club v.

Morton, 405 U.S. 727, 732 (1972). PIRG seeks to

represent the interests of its members. Such

“representational standing” is appropriate where 1)

the organization’s members would have standing to

sue on their own, 2) the interests the organization

seeks to protect are germane to its purpose, and 3)

neither the claim asserted nor the relief requested

requires individual participation by its members. See

Hunt v. Washington Apple Advertising Comm'n, 432

U.S. 333, 343 (1977); Automobile Workers v. Brock,

477 U.S. 274 (1986). PDT contends that PIRG's

individual members would not have standing to

pursue this suit on their own, so PIRG lacks standing

to sue.

For individual standing, the Supreme Court

states that:

this case, we need not consider such prudential limitations since

the Act explicitly confers standing to the limits of the constitution.

See Warth v. Seldin, 422 U.S. 490, 501 (1975) (“Congress may

grant an express right of action to persons who otherwise would

be barred by prudential standing rules.”). Section 505(a) of the

Act allows a citizen to bring a civil action against any person “who

is alleged to be in violation of (A) an effluent standard or limitation

under this chapter or (B) an order issued by the Administrator or

a State with respect to such a standard or limitation....” 33 U.S.C.

8 1365(a)(1). Section 505(g) further defines “citizen” as “a person

or persons having an interest which is or may be adversely

affected.” 33 U.S.C. 8 1365(g). The legislative history of this

section indicates that Congress intended by this language to

incorporate the definition of standing set forth in Sierra Club v.

Morton, 405 U.S.C. 727 (1972). See 1972 U.S. Code Cong. &

Admin. News 3668, 3776, 3823; Middlesex County Sewage Auth.

v. National Sea Clammers Ass'n, 453 U.S. 1, 16 (1981).

10a

at an irreducible minimum, Art. III requires the

party who invokes the court's authority to

“show that he personally has suffered some

actual or threatened injury as a result of the

putatively illegal conduct of the

defendant,”...and that the injury “fairly can be

traced to the challenged action” and “is likely to

be redressed by a favorable decision....”

Valley Forge Christian College v. Americans United

for Separation of Church and State, 454 U.S. 464,

472 (1982) (citations omitted). PDT argues that PIRG

failed to establish injury in fact, failed to trace any

injury to PDT’s conduct and failed to show how this

lawsuit could redress any of PIRG's injury. The district

court found otherwise. See PIRG I, 627 F. Supp. at

1081-83. PDT originally challenged PIRG's standing in

a motion to dismiss. Since additional evidence was

submitted on this issue, the district court properly

treated the motion as one for summary judgment.

Fed. R. Civ. P. 12(b). The district court decided that

PIRG had standing and refused to dismiss the action.

In reviewing this decision, we view the evidence in the

light most favorable to PIRG, the non-moving party.

Erie Telecommunications, Inc. v. City of Erie, 853

F.2d 1084, 1093 (3d Cir. 1988). Our review of this

essentially legal question is plenary.

A. Injury in Fact

PIRG asserted generally in its complaint that its

members resided in the vicinity of or owned property

on or near the Kill Van Kull, or recreated on or near

the Kill Van Kull. Complaint {{ 7, 9, Joint App. p.

44-45. PIRG supported these assertions by submitting

affidavits from five members. All affiants state that

they are members of one of the plaintiff organizations

lla

and reside in the vicinity of the Kill Van Kull. The

affiants state that they hike, jog or bicycle along the

shores of the Kill Van Kull. Several affiants state that

they recreate in the Kill Van Kull Park, a public park

located approximately two miles downstream of PDT.

Although no affiant actually boated on the Kill Van

Kull, apparently because of the foulness of the water,

several indicated that they would boat, fish or swim

there if the water were cleaner.‘ See e.g. Affidavit of

Sheldon Abrams, Joint App. p. 2425.

The affiants claimed injury to their aesthetic and

recreational interests because the Kill Van Kull is

polluted. The affidavit of Douglas MacNeil represents

the types of interests asserted. Mr. MacNeil lives in

Westfield, N.J. and is a member of FOE. He stated that

he hikes and birdwatches several times per year at the

Kill Van Kull park, a park adjacent to the Kill Van Kull.

Mr. MacNeil was particularly offended by the brown

color and bad odor of the water. He stated that he

would birdwatch more frequently and enjoy his

recreation on the Kill Van Kull more if the water were

cleaner. 7

These affidavits state an injury sufficient to

satisfy the requirements of Article III. As the Supreme

Court noted in Sierra Club v. Morton, 405 U.S. 727

(1972), harm to aesthetic and recreational interests is

sufficient to confer standing. Sierra Club, 405 U.S. at

735; Middlesex County, 453 U.S. 1, 16-17 (1981).

These injuries need not be Jarge. an “identifiable

trifle’ will suffice. United States v. Students

Challenging Regulatory Agency Procedures (SCRAP),

412 U.S. 669, 689 n. 14. The interests asserted by the

4. For example, Andrew Gerbino stated that he would fish.

clam and crab in the Kill Van Kull if the water were cleaner.

Affidavit of Andrew Gerbino, Joint App. p. 2427.

12a

plaintiffs in this case are more than trifles. The

pollution in the Kill Van Kull has interfered with these

plaintiffs’ enjoyment of this natural resource. Since

PDT has not introduced any evidence to suggest that

the affiants have not legitimately stated injuries in

fact to their aesthetic and recreational interests in the

Kill Van Kull, PIRG has satisfied the first prong of the

Valley Forge test. Accord Friends of the Earth v.

Consolidated Rail Corp., 768 F.2d 57, 61 (2d Cir.

1985) (affidavit by FOE member was sufficient to

confer standing on organization where member stated

that he drove on bridge over body of water and was

offended by its appearance).

B. Fairly Traceable

PDT contends that PIRG has failed to demonstrate

that the injuries suffered by its members are fairly

traceable to PDT's exceedances of its NPDES permit.

In support of its motion for summary judgment on

this issue, PDT submitted the affidavit of LeRoy

Sullivan, an engineering consultant, who stated that

to “a reasonable scientific certainty...{[PDT's]

operations do not adversely affect water quality in the

Kill Van Kull at or about the Kill Van Kull Park.... It is

also my opinion that [PDT's] operations do not

adversely affect water quality in the Kill at any other

location except perhaps in some purely speculative

and theoretical way.” Affidavit of LeRoy Sullivan, p. 2,

Joint App. p. 93. PDT also submitted the affidavit of

Allen Dresdner, a professional planner and

consultant, who testified to the heavily industrialized

character of the Kill Van Kull and stated his opinion

that the poor water conditions complained of by the

plaintiffs did “not originate from Powell Duffryn nor

are they related to Powell Duffryn’s discharges.”

Affidavit of Allen Dresdner, p. 18, Joint App. p. 126.

13a

In denying PDT's motion for summary judgment’,

the district court stated that PIRG could “show

causation merely by showing violations of the

discharge permits.” PIRG I, 627 F. Supp. at 1083.

PDT asserts that this is an erroneous statement of the

law of standing and that Valley Forge and its progeny

require a close causal link between the content of a

defendant's effluent and the harm complained of by

the plaintiffs. Although we agree that a permit

exceedance alone is not sufficient to satisfy the second

prong of Valley Forge, the facts are sufficient here to

trace PIRG's injuries to PDT's

The requirement that plaintiffs injuries be “fairly

traceable” to the defendant's conduct does not mean

that plaintiffs must show to a scientific certainty that

defendant's effluent, and defendant's effluent alone,

caused the precise harm suffered by the plaintiffs. A

plaintiff need not prove causation with absolute

scientific rigor to defeat a motion for summary

5. To the extent that PDT argues that summary judgment was

inappropriate because of a dispute of material fact, we disagree. It

was PDT which filed the motion to dismiss which was

subsequently converted into a motion for summary judgment.

PDT represented in filing this motion that PIRG had failed as a

matter of law to establish standing. It cannot now argue that

facts were in dispute and that a trial was necessary.

6. We note that Valley Forge itself provides little guidance.

since the Court found that the plaintiffs had failed to establish

injury in fact, and so never reached the question of causation.

Valley Forge. 454 U.S. at 436.

l4a

judgment.’ The “fairly traceable” requirement of the

Valley Forge test is not equivalent to a requirement of

tort causation. Cf. Duke Power Co. v. Carolina

Environmental Study Group, Inc., 438 U.S. 59, 78

(1978).

The standing requirement ensures that parties

will not “convert the judicial process into ‘no more

than a vehicle for the vindication of the value interests

of concerned bystanders.’ Valley Forge, 454 U.S. at

473 (quoting United States v. SCRAP, 412 U.S. 669,

687 (1973)). In order to demonstrate that they are

more than “concerned bystanders,” plaintiffs need

only show that there is a “substantial likelihood” that

defendant's conduct caused plaintiffs’ harm. Duke

Power Co., 438 U.S. at 75 n. 20 (1978). In a Clean

Water Act case, this likelihood may be established by

showing that a defendant has 1) discharged some

pollutant in concentrations greater than allowed by its

permit 2) into a waterway in which the plaintiffs have

an interest that is or may be adversely affected by the

pollutant and that 3) this pollutant causes or

contributes to the kinds of injuries alleged by the

plaintiffs.®

7. Of course, plaintiffs must, if challenged, prove their

allegations at trial. In this case, however, PDT waived its right to

cross-examine PIRG'’s members at trial and stipulated that

standing should be decided based on the record as it stood at the

time of the motion for summary judgment. Joint App. p. 615.

8. In many of these cases, there are several parties discharging

into the affected waterway. In order to obtain standing, plaintiffs

need not sue every discharger in one action, since the pollution of

any one may be shown to cause some part of the injury suffered.

The size of the injury is not germane to standing analysis. SCRAP,

412 U.S. at 689 n. 14.

15a

This will require more than showing a mere

exceedance of a permit limit. Thus if a plaintiff has

alleged some harm, that the waterway is unable to

support aquatic life for example, but failed to show

that defendant's effluent contains pollutants that

harm aquatic life, then plaintiffs would lack standing.

In this case, several affiants stated that the water had

an oily or greasy sheen they found offensive.*? PDT’s

permit contained limits on the oil and grease PDT

could discharge in its effluent. Joint App. p. 2154.

PDT’s reports to the EPA indicate that PDT has

discharged oil and grease in excess of these limits.

Thus the aesthetic injury suffered by the plaintiffs

may fairly be traced to PDT's effluent.'® PIRG has

satisfied the second prong of the Valley Forge test.

C. Redressability

The final prong of the Vailey Forge test requires

9. See e.g. Affidavit of Mylissa Ven Ditti, Joint App. p. p.243!

(water was brown and greasy in appearance), Affidavit of Sheldon

Abrams, Joint App. p. 2425 (water had an oily sheen). Affidavit of

Andrew Gerbino, Joint App. p. 2425 (water had an oily sheen).

10. Plaintiffs need not show “to a scientific certainty” that the

oil they saw came from PDT's effluent. This tort-like causation is

not required by Article Ill and is apparently an attempt by PDT to

negate the strict liability standard of the Act. Since the Act

forecloses PDT from raising such an argument at the liability

stage, PDT attempts to raise it under the guise of standing. Thus

the affidavits submitted by PDT did not entitle it to summary

judgment on the issue of standing. To negate PIRG’s affidavits,

PDT must show that either 1) that it does not discharge oil and

grease into the Kill Van Kull in exceedance of its permit or 2)

plaintiffs’ statements that they saw oil on the water are “in fact

untrue.” SCRAP, 412 U.S. at 689.

16a

that plaintiffs demonstrate that their injuries are

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

Forge, 454 U.S. at 472 (quoting Simon v. Eastern

Kentucky Welfare Rights Org., 426 U.S. 26, 41

(1976)). This requirement is closely related to the

“fairly traceable” element. While the fairly traceable

element focuses on the connection between the

defendant's conduct and the plaintiffs injury, the

redressibility factor focuses on the connection

between the plaintiffs injury and the judicial relief

sought. Allen v. Wright, 468 U.S. 737, 753 n. 19

(1984). PDT argues that PIRG has failed to

demonstrate how civil penalties and injunctive relief

could redress the injuries complained of by PIRG’s

members. PDT is simply wrong.

The purpose of the Act is to restore the chemical,

physical and biological integrity of the nation’s

waters. Where a plaintiff complains of harm to water

quality because a defendant exceeded its permit

limits, an injunction will redress that injury at least in

part. If PDT complies with its permit, the pollution in

the Kill Van Kull will decrease. Plaintiffs need not

show that the waterway will be returned to pristine

condition in order to satisfy the minimal

requirements of Article II.

There is also a connection between civil penalties

and the injuries to PIRG’s members. Where Congress

has expressly granted a right of action and plaintiffs

have shown “a distinct and palpable injury,” plaintiffs

“may invoke the general public interest in support of

their claim.” Warth v. Seldin, 422 U.S. 490, 501. The

general public interest in clean waterways will be

served in this case by the deterrent effect of an award

of civil penalties. Penalties will deter both PDT

specifically and other NPDES permit holders generally.

Thus PIRG’s members’ injuries may be redressed by a

favorable decision in this case. See Student Public

17a

Interest Group of New Jersey, Inc. v. AT & T Bell

Laboratories, 617 F. Supp. 1190, 1200-1 (D.N.J.

1985), accord Chesapeake Bay Foundation, Inc. v.

Gwaltney of Smithfield, Ltd., 890 F.2d 690, 695 (4th

Cir. 1989), Sierra Club v. Simkins Indus., Inc., 847

F.2d 1109 (4th Cir. 1988), cert. denied, 109 S.Ct.

3185 (1989). Under current constitutional

requirements this plaintiff has standing.

Ill. Statute of Limitations

The district court held that no statute of

limitations should apply to citizen suits brought

under the Act because to do so would contravene the

substantive federal policy of the Act. PDT argues that

the five year federal statute of limitations contained in

28 U.S.C. 8 2462 should apply." PIRG does not

attempt to defend the district court's reasoning, but

nonetheless contends that no statute of limitations

should apply. PIRG argues that since section 510” of

11. This section provides:

Except as otherwise provided by Act of Congress, an

action, suit or proceeding for the enforcement of any

shall not be entertained unless commenced within five

years from the date when the claim first accrued if,

within the same period, the offender or the property is

found within the United States in order that proper

service may be made thereon.

28 U.S.C. 8 2462.

12. Section 510 provides, in relevant part:

Except as expressly provided in this chapter, nothing in

this chapter shall (1) preclude or deny the right of any

18a

the Act, 33 U.S.C. 8 1370, authorizes states to impose

more stringent requirements on polluters than those

provided by federal law, and since New Jersey imposes

no limitations on similar actions brought under state

environmental laws, see New Jersey Department of

Environmental Protection v. Ventron Corp., 182

N.J.Super. 210, 440 A.2d 455, 463 (1981), affd, 94

N.J. 473, 468 A.2d 150 (1983), the more stringent

state procedural rule should control.

The Act contains no relevant statute of

limitations.” Ordinarily, we would look to state law

and borrow the most relevant state limitations period.

DelCostello v. International Bhd. of Teamsters, 462

U.S. 151, 158 (1983). But where state statutes of

limitation are “unsatisfactory vehicles for the

enforcement of federal law..., it may be inappropriate

to conclude that Congress would choose to adopt state

rules at odds with the purpose or operation of federal

substant‘ve law.” Id. at 161. Especially where there is

a relevant federal statute of limitations, courts need

not borrow from state law. Occidental Life Ins. Co. v.

State...to adopt or enforce (A) any standard or limitation

respecting discharges of pollutants. or (B) any

requirement respecting control or abatement of

pollution; except that... such State...may not adopt or

enforce any effluent limitation...which is less

stringent...than the effluent limitations...under (the

Act].

33 U.S.C. 8 1370.

13. The Act does contain a limitations period for actions

brought to challenge EPA's rules or decisions. 33 U.S.C.

8 1369(b)( 1).

19a

EEOC, 432 U.S. 355, 367 (1977), Johnson v. Railway

Express Agency, Inc., 421 U.S. 454, 462 (1975).

The federal statute identified by PDT in this case

is relevant, because citizen suits under the Act are

t to enforce a civil fine. By its terms, it would

apply to an EPA proceeding under the Act. See Sierra

Club v. Chevron U.S.A., Inc., 834 F.2d 1517, 1521

(9th Cir. 1987). Since plaintiffs in a citizen suit are

acting as an adjunct to government enforcement

actions, Gwaltney of Smithfield v. Chesapeake Bay

Foundation, Inc., 108 S.Ct. 376, 383 (1987), citizens

should be subject to the same limitations period as

the government. The Act envisions a scheme whereby

citizen suits supplement government efforts. Thus

applying a different state law could frustrate this

scheme by allowing citizens to bring suits where the

government would be barred or vice versa.

The Court of Appeals for the Ninth Circuit has

employed similar reasoning in Sierra Club v. Chevron

U.S.A., Inc., 834 F.2d 1517 (9th Cir. 1987) to

conclude that section 2462, rather than the California

statute of limitations contained in the Porter-Cologne

Water Quality Act, Cal. Code Civ. Proc. & 338(9),

should apply to citizen suits under the Act.

Analogizing a Clean Water Act citizen suit to a

ent enforcement or qui tam action, the court

noted that citizen suit plaintiffs do not personally

benefit from the suit. Since citizen plaintiffs

“effectively stand in the shoes of the EPA,” the court

concluded that the federal statute of limitations

should apply. Sierra Club v. Chevron U.S.A., Inc., 834

F.2d at 1522. This holding is consistent with

decisions in other jurisdictions. See e 9. Atlantic

States Legal Foundation v. Al Tech Specialty Steel

Corp., 635 F. Supp. 284, 287 (N.D.N.Y. 1986),

Connecticut Fund for the Environment v. Job Plating

Co., 623 F. Supp. 207, 213 (D.Conn. 1985), Friends

20a

of the Earth v. Facet Enterprises, Inc., 618 F. Supp.

532, 536 (W.D.N.Y. 1984).

PIRG attempts to distinguish the decisions

applying section 2462 by noting that they all involved

state limitations periods shorter than that provided by

section 2462. Thus, PIRG argues, no decision resolved

the question of whether section 510 of the Act allows a

state to adopt a longer limitations period than that

allowed by federal law.

We are not persuaded that section 510 of the Act

allows a state to adopt its own statute of limitations

for citizen suits. The language of this section allows

states to adopt “any requirement respecting control or

abatement of pollution,” so long as that requirement

is not less stringent than the federal requirements. 33

U.S.C. 8 1370(1)(B). We read this language as

affording states considerable flexibility in setting more

stringent effluent standards. Only a strained reading

of this section would authorize states to set their own

limitations periods for citizen FWCPA suits.

Particularly since the right of citizens to sue under the

Act was granted by Congress with the intent “to

supplement rather than supplant governmental

action,” Gwaltney, 108 S.Ct. at 383, we conclude that

14. We note, however, that the New Jersey district courts have

consistently held for various reasons that no statute of limitations

applies to citizen suits under the Act. See Public Interest

Research Group of New Jersey v. U.S. Metals Refining Co., 681

F. Supp. 237, 239 (D.N.J. 1987), Student Public Interest

Research Group of New Jersey v. AT & T Bell Laboratories, 617

F. Supp. 1190, 1202 (D.N.J. 1985), Student Public Interest

Research Group of New Jersey v. Tenneco Polymers, 602 F.

Supp. 1394, 1398-99 (D.N.J. 1985). But see. Public Interest

Research Group of New Jersey v. Witco Chemical Corp.. C.A. No.

89-3146 (D.N.J. May 17, 1990) (applying five year statute of

limitations).

21a

section 510 does not implicitly authorize states to

allow citizen suits where the EPA itself would be time

barred. **

PIRG argues that if a five year statute of

limitations is applied to this action, the time period

should begin when the defendant filed its DMRs

rather than at the time of the discharge. This makes

sense since the responsibility for monitoring effluent

rests with the defendant, 33 U.S.C. 8 1318(a)(4)(A).

and the public cannot reasonably be deemed to have

known about any violation until the permit holder

files its DMRs. Thus we hold that the five year statute

of limitations period does not begin to run until the

DMRs listing the violations are filed. Accord Atlantic

States Legal Found. v. Al Tech Specialty Steel Corp..,

635 F. Supp. 284, 287 (N.D.N.Y. 1986).

The Act requires citizen plaintiffs to give sixty

days notice to the EPA and the state where the alleged

violations occurred before filing a complaint. 33

U.S.C. 8 1365(b)(1)(B). PIRG urges that the

limitations period should be tolled froin the time the

plaintiffs file their sixty day notice letter until the

complaint is filed. Since prior notice to an

administrative agency is a jurisdictional prerequisite

to filing suit, cf. Proffitt v. Rohm & Haas, 850 F.2d

1007, 1011 (3d Cir. 1988), equitable considerations

favor tolling the statute of limitations during the sixty

15. PIRG's argument that application of section 2462 will

interfere with the New Jersey enforcement scheme is without

merit. The NJDEP may bring actions under New Jersey

environmental law subject to New Jersey procedural rules. But

citizens wishing to bring actions under the federal Act must

satisfy the five year statute of limitations. In light of Gwaltney's

recognition that citizens may not sue for wholly past violations.

this issue only arises where. as here. there is a long history of

permit exceedances.

22a

days while the EPA considers whether to prosecute.

We see no reason why citizen plaintiffs should be

faced with what is effectively a two month shorter

limitations period than that binding the EPA."* Sierra

Club v. Chevron U.S.A., Inc., 834 F.2d 1517, 1524

(9th Cir. 1987). The statute should not, however, be

tolied until the lawsuit is actually filed. That would

permit citizens to file their sixty day notice and then

delay filing the actual lawsuit as long as they wished.

effectively extending the limitations period beyond

that applicable to the government. Id. at 1524 n. 5.

Thus, we conclude that the statute of limitations is

tolled only for the statutory sixty day notice period. We

will reverse the district court to the extent it held that

no statute of limitations applies to citizen suits under

the Act and remand for adjustment of the penalty

award.

IV. Summary Judgment on Liability

16. The notice requirement was imposed by Congress to allow

government enforcement agencies to prosecute permit violations

of which they may not have been aware. S.Rep. No. 414, 92d

Sess., repri in 1972 U.S. Code Cong. & Admin.

through 12. On remand, the district court should adjust the

penalty award accordingly.

23a

In reviewing a grant of summary judgment, we

apply the same test as the district court should have

used initially. Erie Telecommunications, Inc. v. City

of Erie, 853 F.2d 1084, 1093 (3d Cir. 1988). PDT

raises numerous objections to the summary judgment

on the issue of liability. Although characterized by

PDT as disputes of fact, the objections are actually

disputes of law."* We will consider each objection in

turn.

A. The Single Operational Upset Defense

When Congress amended the Act in 1987, it

added the following language to sections 309(c)(5), (d),

& (g\(3):

For purposes of this subsection, a single

operational upset which leads to simultaneous

violations of more than one pollutant parameter

shall be treated as a single violation.

33 U.S.C. 8 1319(c)(5), (d), & (g3).”

PDT seizes upon this language and argues that, in all

18. PDT does raise some factual issues. These mostly concern

PIRG’s reading of the laboratory reports and DMRs PDT is

required by law to keep. 40 C.F.R. 8 122.41(j) (1969). We have

carefully reviewed the record before the district court. keeping in

mind the Supreme Court's admonition that a dispute of fact is

material “if the evidence is such that a reasonable jury could

return a verdict for the nonmoving party.” Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). We conclude that PDT

failed to create a material dispute of fact so as to preclude entry of

summary judgment.

19. The language in subsection 309(d) applies to civil

penalties, the other subsections apply to criminal penalties and

administrative actions.

24a

instances where one discharge violated more than one

permit parameter, the district court erred by finding

liability for more than one violation. PDT claims that

this language indicates Congress intended that

simultaneous violations in a single non-complying

discharge constitute only a single violation.

We note initially that the single operational upset

(“SOU”) defense is not a defense to liability, but relates

only to the amount of penalties the district court may

impose.” The SOU defense is contained in

subsections relating to calculation of penalties, see

e.g. 33 U.S.C. 8 1319(d), and by its terms it is limited

to the subsection in which it is contained. Thus even

if we were to find that PDT was entitled to invoke the

SOU defense, this would not preclude summary

judgment on liability. Since it could effect the

calculation of penalties, we will consider PDT's

argument. For the reasons that follow, we conclude

that PDT is not entitled to the SOU defense.”

We do not agree with PDT that the SOU defense

20. Thus the SOU defense differs from the “upset” defense

provided by the EPA's regulations. 40 C.F.R. § 122.41(n) (1989).

This “upset” defense may be raised as an affirmative defense to

liability. To qualify for this defense, a permit holder must meet

certain requirements, including reporting the incident to the EPA

within 24 hours. 40 C.F.R. 8 122.41(m)(3\( iii) (1989). PDT argued

before the district court that it was entitled to this defense. The

district court found that PDT had failed to provide any evidence

that it qualified for the “upset” defense. PIRG I, 627 F. Supp. at

1087.

21. In light of our determination that the SOU defense is not

available to PDT for any of the exceedances, we need not reach the

question of whether the amendment to section 1319(d) should be

applied retroactively.

25a

indicates Congress intends that any single discharge

which violates several permit parameters be counted

as a single violation.” The statute states that a “single

operational upset,” not any “single non-complying

discharge,” should be counted as one violation. While

neither the statute nor the legislative history further

define “single operational upset,” we conclude that an

“upset” means some unusual or extraordinary event.

We are guided in our interpretation of this ambiguous

statutory language by the reasonable interpretation

given this term by the EPA. Chevron U.S.A., Inc. v.

Natural Resources Defense Council, 467 U.S. 837,

843-45 (1984).

The EPA has defined “single operational upset”

as:

An exceptional incident which causes

simultaneous, unintentional, unknowing (not

the result of a knowing act or omission),

temporary noncompliance with more than one

Clean Water Act effluent discharge pollutant

parameter. Single operational upset does not

include...noncompliance to the extent caused

22. PDT relies on United States v. Detrex Chemical Indus.,

Inc., 393 F. Supp. 735 (N.D. Ohio 1975) and the original d’strict

court opinion in Gwaltney I, 611 F. Supp. 1542 (E.D. Va. 1985).

aff'd, 791 F.2d 304 (4th Cir. 1986), rev'd on other grounds, 484

U.S. 49 (1987). We do not find either of those cases relevant to

this‘appeal. Those cases construed the pre-1987 language of

section 1319(d), which specified that the maximum penalty was

“not to exceed $10,000 per day of such violation.” In the 1987

amendments to the Act. Congress amended the statutory

in section 1319(d) to allow a maximum penalty “not to

exceed 825,000 per day for each violation.” This amendment

clarified that violations of the Act were to be counted on a

parameter by parameter basis. Atlantic States Legal Foundation

v. Tyson Foods, Inc., 897 F.2d 1128, 1137-39 (11th Cir. 1990).

26a

by improperly designed or inadequate treatment

facilities.

EPA Guidance Interpreting “Single Operational

Upset,” Addendum B to Brief of Intervenor EPA at p.

9.

This Guidance further defines an “exceptional”

incident as a “non-routine malfunctioning of an

otherwise generally compliant facility.” Id.

PDT. introduced no evidence that the violations in

this case were the result of anything except PDT’s own

recalcitrance. There was no evidence that a sudden

violent storm, or bursting tank, or other exceptional

event caused these exceedances. It is disingenuous at

best for PDT to argue that it was in a near continual

state of operational upset for the six years of violations

involved in this suit. We conclude that PDT has not

demonstrated that it is entitled to the SOU defense for

these violations.

B. Violations of the BOD and TSS Parameters

PDT's permit contained limitations on the

discharge of BOD (biochemical oxygen demand) and

TSS (total suspended solids). PDT argues that any

exceedances of these parameters should not result in

liability under the Act,” since BOD and TSS

limitations apply only to continuous dischargers and

PDT discharged intermittently until May 1987.% In

23. PDT has not cited any case, statute or regulation to

support its contention that the limits should not apply to

intermittent dischargers.

24. With the installation of the Zimpro water treatment system

in May 1987, PDT began discharging on a continuous basis. Since

1987, PDT has violated its BOD and TSS limitations twenty-two

times.

27a

support of this argument, PDT submitted the

affidavits of Dr. Jeffrey Waxman, an environmental

consultant, Ronald Sp e, Corporate Secretary of

PDT, and Leroy Sullivan.

PDT asserts that BOD and TSS limits were

automatically and inadvertently inserted in all

permits, rather than just the permits of continuous

dischargers. Whatever the merits of PDT’s argument

on the applicability of the BOD and TSS limits,

section 1369(b)(2) of the Act clearly states that EPA

action in issuing a permit “shall not be subject to

judicial review in any civil or criminal proceeding for

enforcement.” 33 U.S.C. 8 1369(b)(2). Under New

Jersey law, a permittee wishing to challenge a

condition of a permit must request agency review

within thirty days of the receipt of the permit. N.J.

Admin. Code tit. 7, § 14A-8.9. The final agency

determination may be appealed to the Appellate

Division of the New Jersey Superior Court. N.J. R.

App. P. 2:2-3(a).*

25. PDT also attempts to rely on the testimony of former EPA

employee Marian Casper to support its argument that BOD and

TSS limits did not apply to PDT. This testimony was not before

the district court at the liability stage. since Ms. Casper testified

only at the trial on penalties.

26. Because authority for administering the NPDES permit

program has been delegated to New Jersey, the requirements of

New Jersey law would control. See 33 U.S.C. 8 1342(c). Under

federal law. PDT would have had 120 days to appeal its permit to

this court. See 33 U.S.C. § 1369(b)(1); but see Connecticut Fund

for the Environment v. Job Plating Co., 623 F. Supp. 207, 216

(D.Conn. 1985) (permittee could have challenged permit in both

state agency and federal court). This distinction ts academic,

since PDT failed to appeal its permit terms to anyone.

28a

Because PDT never challenged the BOD and TSS

limits in its permit until PIRG brought this

enforcement action, it may not challenge them now.

By failing to challenge a permit in an agency

proceeding, PDT has lost “forever the right to do so,

even though that action might eventually result in the

imposition of severe civil or criminal penalties.” Texas

Mun. Power Agency v. EPA, 836 F.2d 1482, 1484-85

(Sth Cir. 1988) (quoting Texas Mun. Power Agency v.

EPA, 799 F.2d 173, 175 (5th Cir. 1986)). Accord

Connecticut Fund for the Environment v. Job Plating

Co., 623 F. Supp. 207, 216-17 (D.Conn. 1985). The

district court properly found that PDT was liable for

exceeding the BOD and TSS parameters in its

permits.”’

C. Counting of Violations

PDT argues that PIRG “double counted” violations

and that the district court improperly granted

summary judgment for these violations. PDT

identifies essentially two varieties of overcounting.

First, a single reported exceedance for a pollutant was

counted as a violation of both the average

concentration limit and the maximum concentration

limit for that pollutant. Second, a single reported

exceedance for a pollutant was counted as a violation

of both the seven day discharge limit and the thirty

day discharge limit for that pollutant.

PDT's first argument is easily refuted. PDT's

permits provide limits for both the daily average and

27. PDT's claim that liability for BOD and TSS violations

would violate due process is utterly meritless. Due process was

available to PDT, in the form of an administrative challenge to the

permit. PDT was not denied due process; it simply failed to use

the process available to it.

29a

daily maximum concentration of certain pollutants.

See e.g. 1978 NPDES Permit, Joint App. p. 2145.

These are clearly separate limitations and we see no

reason why PDT should not be penalized separately for

violating each limiiation.* While the permit requires

that PDT test a minimum of three effluent samples

there is no limit on the maximum number of samples

that PDT may test. Therefore, if one sample contained

a concentration in excess of the maximum for a

particular pollutant, PDT could have taken measures

to clean up its discharge and take more samples in the

hope that later samples would have lower

concentrations and so bring the daily average within

the permit limits. PDT did not do so and therefore is

subject to penalties for violating both the average and

maximum concentration limits.

The second variety of overcounting alleged by PDT

involves multiple limits for the same parameter. PDT

contends that the district court erred by counting a

single exceedance as a violation of both the seven day

average limit and the thirty day average limit. PDT

argues that section 1319(d) of the Act prohibits

multiple penalties for such a “single operational

upset.” As we held, the single operational upset

defense of section 1319(d) is not available to PDT in

this case. PDT’s argument on this point is without

‘28. .. We have already rejected PDT's argument that violations

may not be counted on a parameter by parameter basis. See supra

note 22. To the extent PDT argues that the SOU defense of 33

U.S.C. 8 1319(d) precludes such “double counting.” we have

already concluded that the defense is not available to PDT.

30a

merit.”

For the foregoing reasons, we conclude that the

district court did not err by griorting summary

judgment against PDT.

V. Calculation of Civil Penalties

The Act sets forth several factors a district court

must consider when imposing civil penalties. These

factors are enumerated in section 309(d) of the Act:

In determining the amount of a civil penalty the

court shall consider the seriousness of the

violation or violations, the economic benefit (if

any) resulting from the violation, any history of

such violations, any good-faith efforts to comply

with the applicable requirements, the economic

impact of the penalty on the violator, and such

other matters as justice may require.

33 U.S.C. 8 1319(d).

After a bench trial on the issue of penalties, the

district court assessed the maximum penalty for each

of PDT's violations. The court then reduced the total

by $1,000,000 because the EPA and NJDEP failed to

diligently prosecute PDT. PDT argues that the district

court's factual findings on the seriousness of the

violations and the economic benefit of noncompliance

to PDT were clearly erroneous. PIRG argues that the

29. There is, however, the interesting question of whether the

district court undercounted the number of violations in this case.

The Eleventh Circuit has interpreted the language of section

1319(d) as requiring that an exceedance of a thirty day average

limit be counted as thirty violations. Atlantic States Legal Found.

v. Tyson Foods, Inc., 897 F.2d 1128. 1139-40 (11th Cir. 1990).

We do not consider whether the district court in this case erred by

counting an exceedance of the thirty day limit as one violation.

since PIRG expressly waived this argument at oral argument.

Transcript of Oral Arg. at p. 56.

3la

district court erred as a matter of law by reducing the

penalty because of the nonfeasance of governmental

agencies. We will consider each contention in turn.

A. Factual Finding on Seriousness of the Violations

In considering the seriousness of PDT's

violations, the district court stressed that there were a

very large number of violations and that many

violations exceeded the permit limits by 100 to 1000

percent. PIRG II, 720 F. Supp. at 1161, 1163. The

court also noted that at least ten violations involved

toxic substances and many others involved pollutants

known to harm marine life. Based on these factors,

the court concluded that PDT's “386 violations were

very serious in nature.” PIRG II, 720 F. Supp. at 1163.

PDT argues that the district court's factual

finding of seriousness was clearly erroneous. “Under

the clearly erroneous standard, a finding of fact may

be reversed only if it is completely devoid of a credible

evidentiary basis or bears no rational relationship to

the supporting data.” American Home Products Corp.

v. Barr Laboratories, Inc., 834 F.2d 368, 370-71 (3d

Cir. 1987). Despite this extremely limited standard

of review, PDT contends that the district court's

finding is erroneous because there was no

particularized showing of the harm PDT's effluent

caused in the Kill Van Kull. |

The district court's finding is amply supported by

the record. PDT’s argument that its discharges did

30. PDT attempts to avoid this deferential standard of review

by asserting that plenary review is appropriate where the district

court’s determination was based on documentary evidence.

Appellant's Brief at p. 44. Since Fed. R. Civ. P. 52(a) was amended

in 1985 to include findings based on documentary evidence, the

outdated cases cited by PDT are inapposite.

32a

not seriously harm the Kill Van Kull is contradicted by

EPA and NJDEP documents detailing the

environmental harm caused by each pollutant PDT

discharged. The district court properly relied upon

these reports, PIRG II, 720 F. Supp. at 1161-62, and

the large number of gross exceedances in concluding

that PDT’s violations were serious.

B. Factual Finding on Economic Benefit

PIRG offered several theories for calculating how

PDT profited by not complying with the Act; all based

on the argument that PDT could have hauled its

wastewater off-site for treatment while it constructed

a treatment facility. In considering the economic

benefit to PDT, the district court concluded that PDT’s

benefit under any proposed theory was “far in excess

of the statutory maximum [penalty].” PIRG II, 720 F.

Supp. at 1163. PDT argues that this finding is clearly

erroneous.

Precise economic benefit to a polluter may be

difficult to prove. The Senate Report accompanying

the 1987 amendment that added the economic benefit

factor to section 309(d) recognized that a reasonable

approximation of economic benefit is sufficient to

meet plaintiffs burden for this factor.

Violators should not be able to obtain an

economic benefit vis-a-vis their competitors due |

to their noncompliance with environmental

laws. The determination of economic benefit or

other factors will not require an elaborate or

burdensome evidentiary showing. Reasonable

approximations of economic benefit will

suffice.

S.Rep. No. 50, 99th Cong., Ist Sess. 25 (1985)

(emphasis supplied).

In determining economic benefit, the district

33a

court found as a matter of fact that facilities for

off-site treatment of PDT’s wastewater did not exist

prior to 1982. Relying on the testimony of PDT's

expert, Leroy Sullivan, the district court found that

from 1982 until 1987 PDT could have hauled its

by PDT to calculate an economic benefit in excess of

$4,205,000. PIRG Il, 720 F. Supp. at 1162-63.

PDT, understandably upset by a penalty based on

testimony of its own experts and corporate officers,

argues that “plaintiffs cannot fairly use [the Sullivan]

letter” to prove that off-site treatment was possible

and therefore the district court's finding of economic

and the testimony of Sullivan at the bench trial.

Indeed, the district court would have been remiss if it

failed to consider these highly probative pieces of

evidence. The district court's finding that the

economic benefit to PDT exceeded the statutory

maximum penalty of 84,205,000 is not clearly

|

C. Reduction of the Penalty Based on the Nonfeasance

of the EPA and NJDEP

The district court reduced the total penalty in this

case, stating:

With regard to defendant's “good faith”

attempts to comply with the Act, the Court will

adjust the statutory maximum downwards by

$1,000,000.00 because of the actions and/or

non-actions taken on behalf of the United

34a

States Environmental Protection Agency and

the New Jersey Department of Environmental

Protection. The Court finds that had they acted

more diligently in making defendant comply,

the violations in this case would have ceased

long ago. Therefore, these two governmental

bodies are partially to blame for the defendant's

lack of compliance for the years at issue.

PIRG II, 720 F. Supp. at 1166-67 (emphasis supplied).

PIRG and Intervenor EPA argue that the district court

erred as a matter of law by using the nonfeasance of

governmental bodies to support adjusting PDT's

penalty. We exercise plenary review over this question

of law.

PIRG and intervenor EPA claim that the district

court erred by even considering the inaction of NJDEP

and EPA. They point out that section 1319(d)

specifically lists what a district court may consider

when setting penalties and that the government's lack

of diligence in prosecuting permit violators is not

those factors. PIRG and EPA ignore, however,

the fact that the statute allows the district court to

consider “such other matters as justice may require.”

33 U.S.C. 8 1319(d). We must consider whether the

district court could properly consider the nonfeasance

of the EPA and NJDEP under this factor.

PIRG contends that, since government inaction is —

a prerequisite to a citizen suit under the Act, 33

U.S.C. 6 1365(b)(1)(B) (“No action may be

commenced...if the Administrator or State has

commenced and is diligently prosecuting a civil or

criminal action”), the district court should not reduce

the penalty amount because of the EPA's and NJDEP’s

lack of diligence. We agree with PIRG that mere failure

by governmental agencies to prosecute an NPDES

permit holder does not allow a court to reduce a

35a

penalty. Nevertheless, there may be instances where

the district court may consider a government agency's

inaction and the permittee’s reaction when setting

civil penalties in a citizen suit. In a case where a

defendant has failed in a good faith attempt to comply

with its permit because of technical or economic

problems and the EPA has affirmatively recognized

and excused noncompliance, justice may require that

a court adjust the penalty amount.

In this case, we conclude that the district court

did not find that justice required a reduction. The

court made the penalty reduction “(with regard to

defendant's ‘good faith."” PIRG II, 720 F. Supp. at

1166. This directly contradicts the district court's

earlier conclusion. The district court carefully

reviewed the communication between PDT and EPA

during the six year period involved in this suit and

concluded that PDT's actions did not rise “to the level

of ‘good faith,’” and that “defendant, motivated

possibly by greed or apathy, chose to procrastinate.”

PIRG Il, 720 F. Supp. at 1165. In light of this finding,

the district court's reduction of the penalty cannot be

even impliedly based on the “as justice may require”

factor.** Since PDT did not make good faith efforts to

comply with the Act, the district court erred by

reducing the penalty because of the EPA’s inaction.

We will reverse the district court’s order as to the

amount of penalty and remand for recalculation of the

penalty without the reduction.

VI. The Trust Fund

The district court determined that paying the civil

31. In addition, the correspondence between PDT and EPA would

not support a finding that the EPA excused PDT’s noncompliance.

This correspondence at best indicates that EPA acquiesced in

PDT's footdragging.

36a

penalties into the United States Treasury would not

satisfy the purposes of the Act, and instead ordered

that the penalties be paid into a trust fund. This trust

fund would then be used “to directly impact

environmental! problems in New Jersey.” PIRG II, 720

F. Supp. at 1168.

Neither party appealed this portion of the district

court’s order. We granted leave for EPA to intervene to

contest this issue. EPA argues that all civil penalties

assessed pursuant to the Act must be paid to the

United States Treasury. PIRG counters that the

district court could, in the exercise of its equitable

jurisdiction, create a trust fund. Our review of this

legal question is plenary.

The Act itself does not specify where the civil

penalties are to be paid. The legislative history of the

citizen suit provision, however, makes clear that

Congress intended that the penalties be paid to the -

Treasury. “Any penalties imposed would be deposited

as miscellaneous receipts and not be recovered by the

complainant.” H. Rep. No. 92-911, 92d Cong., 2d

Sess. 133, reprinted in 1972 U.S. Code Cong. &

Admin. News 3668. Congress intended that any

penalties assessed in a citizen suit be treated as

“miscellaneous receipts.” Under the Miscellaneous

Receipts Act, any person having custody of such

public funds must deposit them in the Treasury

within three days of receipt.** 31 U.S.C. 8 3302(a)(1).

32. PIRG refers to other portions of the legislative history of

the Act which suggest that monies paid in settlement of suits

could be used to fund environmental projects. Of course a party

may compromise its claim however it sees fit. See United States v.

Armour & Co., 402 U.S. 673, 681 (1971). Once penalties are

imposed, legislative history is clear that the funds are to be paid

into the Treasury.

37a

Courts have consistently stated that penalties in

citizen suits under the Act must be paid to the

Treasury. See e.g. Gwaltney of Smithfield v.

Chesapeake Bay Found., 108 S.Ct. 376, 379 (1987)

(“If the citizen prevails in such an action, the court

may order injunctive relief and/or impose civil

penalties payable to the United States Treasury”);

Middlesex County Sewerage Auth. v. National Sea

Clammers Ass'n, 453 U.S. 11, 14.n. 25 (1981) (“Under

the FWPCA, civil penalties, payable to the

Government, also may be ordered by the court”):

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

897 F.2d 1128, 1131 n. 5 (11th Cir. 1990) (“Penalties

paid as a result of a § 1365 suit do not go to the

plaintiff who instituted the suit, but rather are paid

into the United States Treasury”); Sierra Club v.

Simkins Indus., inc., 847 F.2d 1109, 1113 (4th Cir.

1988), cert. denied, 109 S. Ct. 3185 (1989) (“the

judicial relief of civil penalties, even if payable only to

the United States Department of the Treasury, is

causally connected to a citizen-plaintiffs injury”):

Sierra Club v. Chevron U.S.A., Inc., 834 F.2d 1517,

1522 (9th Cir. 1987) (“any penalties recovered from

such an action are paid into the United States

Treasury”); see also Sierra Club v. Electronic Controis

Design, Inc., 703 F. Supp. 875 (D.Or. 1989) (district

court refusing to approve consent judgment in a

citizen suit under the Act where settlement provided

that monies be paid to Sierra Club Legal Defense

Fund).

Ordering that civil penalties be paid to the

Treasury is entirely consistent with Congress’ intent

that citizen suits supplement the enforcement

authority of the EPA. Directing that penalties be paid

into the Treasury ensures that citizens bring suits to

protect the public health and welfare, and not for

private gain. Middlesex County, 453 U.S. at 18 n. 27.

38a

PIRG nonetheless argues that the district court could

have created this trust fund through its equitable

jurisdiction when ordering injunctive relief. This is

true and we do not reject PIRG’s argument that in a

Clean Water Act case, a court may fashion injuuctive

relief requiring a defendant to pay monies into a

remedial fund, if there is a nexus between the harm

and the remedy. But here, once the court labeled the

money as civil penalties it could only be paid into the

Treasury. Thus we will reverse that portion of the

district court's order creating the trust fund and

remand with instructions that the court order the

penalties paid into the United States Treasury.

VIl. The Permanent Injunction

As part of its final order, the district court entered

the following permanent injunction:

The defendant, Powell Duffryn Terminals, Inc.

(P.D. Oil and Chemical Storage, Inc.), is hereby

restrained and enjoined from making or

causing any discharges into the Kill Van Kull

from its waste water treatment plant in

Bayonne, New Jersey that exceed any limitation

and/or fail in any way to comply with the terms

and conditions of the National Pollution

Discharge Elimination System (NPDES) Permit

issued to and effecting Powell Duffryn

including its present permit, NJ 003361, an)

and all additions and/or amendments and any

and all permits that may hereafter be issued by

any agency, state or federal, that is issued

pursuant to the Clean Water Act, 33 U.S.C.

6 1251, et seq.

PIRG Il, 720 F. Supp. at 1169.

The district court entered this injunction after

considering equitable principles as required by

39a

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

and Amaco Production Co. v. Village of Gambell, 480

U.S. 531 (1987). A court may only enter a permanent

injunction “after a showing of both irreparable injury

and inadequacy of legal remedies, and a balancing of

competing claims of injury and the public interest.”

Natural Resources Defense Council v. Texaco

Refining and Marketing, Inc., No. 89-3684, slip op. at

17-18 (3d Cir. filed June 20, 1990).

PDT argues that the district court erred by

entering the injunction because there was no evidence

of irreparable harm. PDT states that the district court

denied PIRG's earlier motion for a preliminary

injunction because there was no evidence of

irreparable harm, and that no further evidence of

harm was produced by PIRG. Thus PDT concludes

that the permanent injunction could not properly be

entered. We review the district court's grant of

permanent injunctive relief for abuse of discretion.

International Union v. Mack Trucks, Inc., 820 F.2d

91, 94-5 (3d Cir. 1987).

In an unpublished opinion dated October 28,

1988, the district court denied PIRG’s motion for a

preliminary injunction because it was not convinced

that irreparable harm was imminent. The court based

this finding in part on the fact that PDT’s DMRs

demonstrated that its permit compliance had vastly

improved. Nevertheless, since PDT had again violated

its permit after the court denied PIRG’s motion, the

district court could properly conclude that an

injunction was now appropriate. E.P.G., University of

Texas v. Camenisch, 451 U.S. 390, 394 (1981) (grant

or denial of preliminary injunction not dispositive of

later request for a permanent injunction). We

conclude that the district court did not abuse its

discretion by issuing this permanent injunction.

PDT also challenges the scope of the injunction.

40a

Fed. R. Civ. P. 65(d) requires injunctions to “be

specific in terms” and to “describe in reasonable

detail...the act or acts sought to be restrained.” PDT

argues that the district court order is a broad “obey

the law” injunction and should be vacated for lack of

specificity.

Overbroad language in an injunction that

essentially orders a party to obey the law in the future

may be struck from the order. Calvin Klein Cosmetics

Corp. v. Parfums de Coeur, Ltd., 824 F.2d 665, 669

(8th Cir. 1987). Nonetheless, “the degree of

particularity required of an injunction depends on the

subject matter involved.” Calvin Klein, 824 F.2d at

669 (citing Ideal Toy Corp. v. Plawner Toy Mfg.

Corp., 685 F.2d 78, 83 (3d Cir. 1982)).

Counsel for PIRG conceded at oral argument that

the injunction in this case must be limited to the

permit existing at the time of the action. Tran. Or.

Arg. at 82. We will strike that portion of the injunction

which purports to enjoin PDT from violating future

permits. We do not find the portion of the injunction

directing PDT not to discharge in violation of its

current permit lacking in specificity. PDT’s permit

provides detailed and very specific limitations on

PDT's discharge. Thus we will affirm the portion of

the injunction prohibiting PDT from discharging in

violation of its permit.

VII. Conclusion

For the foregoing reasons, we will reverse in part,

affirm in part, and remand for further proceedings

consistent with this opinion. Each party to bear its

own costs. |

4la

ALDISERT, Circuit Judge, Concurring.

I join in the opinion of the court and write

separately only to express a nagging doubt about

standing.

Throughout my extensive preparation of this case

including close attention at argument and discussion

with my colleagues at conference, | was persuaded

that the member/plaintiffs had failed to show an

actual injury that was traceable to the permit

violations. | am now willing to join my colleagues’

view. But I feel somewhat like Lord Byron's fair

maiden in Don Juan, c 1, dedication cxvii,

A little more she strove, and much repented,

And whispering “I will ne‘er consent” -- consented.

For the purposes of this case, I am willing to agree

that the live bodies met the test. But barely. The

standing case put in by the Public Interest Research

Group (PIRG) and Friends of the Earth (FOE) is so

skinny that I am concerned seriously our discussion

will not survive careful Supreme Court review. I join in

this opinion, therefore, with the shakiest of

jurisprudential confidence. My _ intrepidity.

questionable as it is, is the product of abject

rationalization: If the Supreme Court does not agree

to review and reverse, then perhaps, if we are not

absolutely correct, at least we are not totally wrong.

I.

By enacting the Federal Water Pollution Control

Act (FWPCA), especially the provisions that authorize

any “person or persons having an interest which is or

may be adversely affected” to bring a suit “against any

person ... who is alleged to be in violation of [a

discharge permit],"° Congress has expressed its

enthusiastic support for the cleansing of our nation’s

42a

waterways. 33 U.S.C. § 1365(g) and (a) (1). My

concern is that this enthusiasm has _ led

environmental organizations and citizen/plaintiffs to

; mistakeniy believe they have standing to sue any time

a discharge permit is violated. The Constitution and

decisions of the Supreme Court and this court clearly

demonstrate this is not the case. Even where

statutory standing has been established, the test of

constitutional standing must still be met.

I have been extremely troubled because I have a

strong desire to affirm the district court judgment. |

am convinced that Powell Duffryn Terminals, Inc. was

a deliberate polluter and deserved appropriate

penalties for many acts in violation of the conditions

of its discharge permit. I find standing here only on

the most questionable of grounds -- a belief that

somehow the Supreme Court might be inclined to

relax its stringent requirements of standing in

environmental cases.

| On June 27, 1990, however, the Court did not

assuage my concern in handing down its decision in

| Lujan v. National Wildlife Federation, __ U.S. —_.

58 U.S.L.W. 5077 (1990). I am quick to recognize that

Lujan is not precise precedential authority, but it

does nevertheless constitute a direction that the Court

desires us to travel in environmental law cases. In

Lujan the Court faced a question of statutory, as

distinguished from constitutional, standing.

Moreover, the Court construed the Federal Land Policy

and Management Act of 1976, the National

Environmental Policy Act of 1969 and the

Administrative Procedure Act, and not the FWPCA.

Yet, the Court's action sent a strong signal to all of us:

It was not, repeat not, totally relaxing its standing

requirements in cases affecting the environment.

The Court held that the affidavits of the National

Wildlife Federation member/plaintiffs were factually

ne, one

43a

insufficient to confer standing to challenge a decision

ee of the Bureau of Land Management. It determined

that because of the lack of specificity in the affidavits

of its members, the National Wildlife Federation had

failed to establish that the interests of the two

member/plaintiffs were affected by the bureau's

actions.

The Court insisted that affidavits of the

member/plaintiffs show that the “injury [the affiant)

\) complains of (his aggrievement, or the adverse effect

| upon him) falls within the ‘zone of interests’ sought to

be protected by the statutory provisions whose

violation forms the legal bases for his complaint.” Id.

at 5080. The Court directed us not to “assume{] that

general averments embrace the ‘specific facts’ needed

to sustain” standing. Id. at 5082. If such are the

Court's requirements to prove standing under a

statute, it follows, a fortiori, that the Court requires

some stringency in meeting Article Ill standing, the

issue before us here. Nevertheless, | still am inclined

to find standing. Perhaps my wish to find standing is

father to the thought, but in view of Lujan, I hope it is

not, as John Greenleaf Whittier put it, a “wish that

failed of act.”

I see PIRG and FOE in the position of the old-time

vaudeville performer's ad in Variety: “Have tux, will

travel.” PIRG and FOE advertised: “Have case, need

live-bodied members/ plaintiffs.” The questions for

this court are: Were the recruited live bodies

sufficiently injured to sustain this action, or more

specifically, was theirs an “injury [that] fairly can be

traced to the challenged action,” or otherwise stated,

did they “show injury in fact resulting from the action

which they seek to have the court adjudicate?” Valley

Forge Christian College v. Americans United for

| Separation of Church and State, Inc., 454 U.S. 464,

472, 473 (1982).

| ee

44a

Maybe the wrong plaintiffs were recruited. Or,

perhaps the plaintiffs were not sufficiently coached

before their depositions. Whatever the case,

constitutional standing is a serious question here.

Il.

There is no doubt that standing can be based on

environmental, aesthetic and non-economic injury.

Sierra Club v. Morton, 405 U.S. 727, 738 (1972). The

more important question, however, is whether the

individuals recruited by PIRG and FOE alleged

injuries sufficient to sustain standing to bring this

case.

The doctrine of standing limits the court's power

to adjudicate conflicts pursuant to the “case or

controversy” requirement of Article III of the

Constitution. Warth v. Seldin, 422 U.S. 490 (1975). It

was plaintiffs’ burden, which cannot be waived, to

establish standing as a threshold matter. Id. Citizen

suits under the FWPCA are expressly subject to this

standing requirement. Middlesex County Sewerage

Auth. v. National Sea Clammers Ass'n, 453 U.S. 1

(1981). Even when Congress has acted to confer

standing to litigate a statutory claim, “the

requirements of Article Ill remain: ‘the plaintiff still

must allege a distinct and palpable injury to himself,

even if it is an injury shared by a large class of other

possible litigants." Simon v. Eastern Kentucky

Welfare Rights Org.. 426 U.S. 26, 41 n. 22 (1976)

(quoting Warth v. Seldin, 422 U.S. 490, 501 (1973)).

The essence of the standing inquiry is whether

the parties seeking to invoke the court's jurisdiction

have “alleged such a personal stake in the outcome of

the controversy as to assure that concrete adverseness

which sharpens the presentation of issues upon

which the court so largely depends for illumination of

difficult constitutional questions.” Baker v. Carr, 369

45a

U.S. 186, 204 (1962). As refined by subsequent

reformulation, this requirement of a “personal stake”

has come to be understood to require a plaintiff to:

[1] “show that he personally has suffered some

actual or threatened injury as a result of the

putatively illegal conduct of the defendant,”

. and (2) that the tnjury “fairly can be traced to

the challenged action” and [3] “is likely to be

redressed by a favorable decision.”

Valley Forge, 454 U.S. at 471 (citations omitted).

I am even willing to concede that plaintiffs in this

case have established an injury-in-fact that is

redressable. My concern is with the second tier of the

standing analysis mandated by Valley Forge, supra.

We must decide if there is sufficient immediacy and

reality to the allegations such that the injury alleged

can be “fairly traced” to Powell Duffryn. To do this we

must apply these constitutional standards to the

findings of the district court.

Ill.

a

What makes this case so difficult is that Powell

Duffryn Terminals, Inc. is an egregious wrongdoer. A

persuasive argument can be made that, as a business

decision, it deliberately chose to exceed the discharges

allowed under the permit because, from a financial

standpoint, normal profits from its operations were

such as to offset any financial penalty imposed from

violating terms of its permit.

The district court held that from September 1977

through November 1988, Powell Duffryn committed

386 violations involving 11 pollutants of the effluent

limitations in its National Pollutant Discharge

Elimination System permits:

Parameter Number of Violations

Total Organic Carbon (TOC) 8

pH 63

Total Suspended Solids (TSS) 66

Bioassay l

Oil and Grease 48

Hexavalent Chromium 2

Petroleum Hydrocarbons 27

Methylene Chloride G

Phenol l

Biochemical Oxygen Demand (BOD) 80

Chemical Oxygen Demand (COD) 81

TOTAL 386

PIRG v. Powell Duffryn Terminals, 720 F. Supp.

1158, 1160-61 (1989). Many of its violations exceeded

the effluent limitations in fts permit by great

amounts. Of the 386 violations. 260 exceeded the

applicable permit limitation by over 100 percent and

86 violations exceeded the limits by more than 1,000

percent. A-19, A-3824 to A-3834. Powell Duffryn’s

violations involved toxic pollutants and pollutants

which EPA has determined to be harmful to aquatic

life.

If the receiving waters of Powell-Duffryn's

discharge were crystal clear waters of a sylvan lake or

an uncontaminated mountain stream, it would be

easy to relate the alleged injury sustained by the

member/plaintiffs to the company's discharge. But.

the Kill is not the river once so eloquently described by

Justice Douglas:

The river, for example, is the living symbol of all

the life it sustains or nourishes -- fish, aquatic

insects, water ouzels, otter, fisher, deer, elk, bear,

and all other animals, including man, who are

47a

dependent on it or who enjoy it for its sight, its

sound, or its life. The river as plaintiff speaks for

the ecological unit of life that is part of it. Those

people who have a meaningful relation to that

body of water -- whether it be a fisherman, a

canoeist, a zoologist. or a logger -- must be able to

speak for the values which the river represents

and which are threatened with destruction.

Morton, 405 U.S. at 743 (Douglas, J., dissenting). And

complainants do not allege an injury like that once

described by Justice Holmes:

The nuisance set forth in the bill was one which

would be of international importance, -- a visible

change of a great river from a pure stream into a

polluted and poisoned ditch.

Missouri v. Illinois, 200 U.S. 496, 518 (1906). The

brute fact is that Powell Duffryn illegally discharged

pollutants into the Kill Van Kull, one of the most

industrialized waterways in the United States, if not

the world.

The Kill lies between Staten Island, New York and

the northern shore of New Jersey. It is part of the very

busy greater Port of New Jersey and New York

Channel complex and it links Newark Bay, to the east.

with Arthur Kill Channel to the west. The entire shore

is industrialized with the exception of Kill Van Kull

Park, located two miles to the west of the facility. On

the shore are the Bayonne Sewage Treatment Plant

and the Port Richmond Sewage Treatment Plant.

These two plants discharge up to 60 million gallons of

treated sewage per day on the Kill and are located

within 200-300 yards of the park. A-621-622, 121.

The Kill lost its pristine beauty many years ago. It

is not the same body of water that greeted Hendrick

Hudson and Peter Stuyvesant. Recent history best

describes the state of the Kill today. During the period

;

:

!

)

;

:

;

;

48a

between submission of this case and the writing of

these opinions the Kill has been the site of repeated

gigantic oil spills from the many tankers that ply its

waters. For example, on June 7, a British flag oil

tanker ran aground while docking in the New Jersey

side of the Kill Van Kull in New York Harbor, spilling

260,000 gallons of fuel oil into the waterway. New

York Times, June 8, 1990, at Al, col. 5.

In was the fifth major oil spill in the area since

January... . The recent rash of spills in Kill Van

Kull and connecting Arthur Kill has brought

harsh criticism of the oil industry from

environmentalists and state officials. The

waterways separate New Jersey from New York's

Staten Island, and are along industrialized areas.

Los Angeles Times, June 8, 1990, at A3, col. 1.

What we have here is an acknowledged egregious

polluter discharging into an already polluted

industrial waterway located in a severely threatened

ecosystem. Against this backdrop we must decide

whether the pollution complained of by PIRG’s and

FOE’s member/plaintiffis can be traced to the pollution

discharged by Powell Duffryn.

IV.

At best, the testimony of PIRG’s and FOE’'s

member/plaintifis constitutes only a gossamer case of

standing. The member/plaintiffs may have been

injured, but there is very shaky proof that the stated

injuries were traceable to this polluter.

A.

Cheryl Cummings, whose family home in

Bayonne, New Jersey, is one block from the Kill Van

Kull, has used Kill Van Kull Park for biking and

jogging for 19 years. Ms. Cummings testified that the

on ee EG

49a

pollution of the Kill Van Kull has diminished her

enjoyment of the Park. She described the water of the

Kill Van Kull as having “a film” which is “sometimes

like a rainbow or sometimes like greenish-yellow.”

A-483, 253. “The park is often not a pleasant place to

be.” A-483, 2423. Student Public Interest Research

Group of New Jersey v. P.D. Oil & Chemical Storage,

Inc., No. 84-340, slip op. at 13 (D.C. N.J., Jan. 13,

1986) (hereinafter D.Ct. Op. I]. However, when Ms.

Cummings was deposed by counsel for Powell Duffryn,

she admitted:

Q. [By Mr. Edelstein] To you personally then the

outcome of this lawsuit won't affect your use of

the park, right?

A. [By Ms. Cummings) Correct.

In fact, she further testified that she had never

read the allegations of the complaint, and —

Q. [By Mr. Edelstein) If you had been read

paragraph #7 by any representative of Terris &

Sunderland, would you have authorized them to

use you as a person on whom they could rely for

standing?

A. [By Ms. Cummings] No.

A.-257. The testimony continues:

Q. [By Mr. Edelstein] If... it was important that

the allegations of Paragraph #7 have to be correct

as to you, would you object to participating in this

lawsuit?

A. [By Ms. Cummings] Yes.

A-259. Ms. Cummings in further testimony stated,

Q. [By Mr. Edelstein) Did Barbara [plaintiffs’

paralegal] explain to you that the allegations in

50a

this suit were that there was a direct adverse

effect on your aesthetic, environmental,

economic, recreational activities due to Powell

Duffryn’s discharge?

A. [By Ms. Cummings] No.

Q. If [the allegations in the suit] had been

explained to you, would you have been able to join

in this suit?

A. No.

Q@. Would you have been able to sign the

affidavit?

A. No.

A-248 to A-249.

B. ;

Sheldon Abrams, a member of Friends of the

Earth, has noticed that the shores of the Kill Van Kull

“are black and there is an oily sheen on the water”

during his regular drives there. A-483, 2425. Mr.

Abrams boats in Lower New York Bay, into which the

Kill Van Kull flows. He stated that he would enjoy

boating in New York Bay more if the water flowing

into it from the Kill Van Kull were cleaner, and that he

would boat and fish in the Kill Van Kull itself if it were

cleaner. D.Ct. Op. I at 13-14.

Again the testimony at the deposition indicates

less facts supporting standing than was found by the

district court. Mr. Abrams testified that he does not

own property ‘n the vicinity of the Kill Van Kull, Upper

New York Bay or Lower New York Bay and that:

Q. [By Mr. Edelstein] You don't engage in any

activities along the Kill Van Kull. do you?

A. [By Mr. Abrams] No.

eS on me A

5la

Mr. Abrams occasionally fishes approximately ten

miles south of the Powell Duffryn site. He further

testified that his alleged interest was ‘very

generalized” and that,

Q. [By Mr. Edelstein] You can answer this

specifically. Do you have any facts on which to

base a personal claim that you as an individual

... have been, are being, and will be adversely

affected by this defendant's discharge?

A. [By Mr. Abrams] I have no personal claim.

A-286 to A-287.

C.

Andrew Gerbino, also a Friends of the Earth

member, lives on the Staten Island side of the Kill Van

Kull. He believes that the pollution of the Kill Van Kull

and Lower New York Bay has decreased the value of

his home. A-484, 2427.

Mr. Gerbino used to walk along the Staten Island

side of the Kill Van Kull, but he no longer does

because it is so polluted. Mr. Gerbino also stated that

he can no longer eat any crabs or clams caught in the

area, although in the past “all these waters used to be

used for lobster catching, clamming, and crab

catching. You don't see anyone doing that anymore.”

D.Ct. Op. I at 14.

Mr. Gerbino testified that occasionally he drives

over the Bayonne Bridge approximately two miles west

of Powell Duffryn Terminals. His only recreational

activities are south ‘of South Beach, New York,

approximately thirteen miles from Powell Duffryn and

the Kill Van Kull, and thus unaffected by its

discharge. He agreed that his generalized assertion in

this case is actually that only, “any discharge from

anywhere that finds its way to Lower New York Bay

52a

adversely affects [him]... .”

A-323.

D.

Melissa Ven Ditti testified that she has never used

the Kill Van Kull for recreational purposes. A-395. Her

only involvement is that she occasionally walks at the

Kill Van Kull Park, four blocks from her family home,

at a location that is approximately 1.8 miles to the

west of Powell Duffryn, and there is no access from the

park to the Kill. The only environmental concern

affecting her use of the park is a smell. She stated that

“the water in the Kill Van Kull looks polluted and

greasy. It has garbage floating in it and is brown. On

some days it smells. If the water were not polluted, |

would swim in it.” A-2431. Powell Duffryn does not

cause the smell, A-2018 to A-2020, and there is no

allegation or evidence that it dumped garbage in the

water.

When Ms. Ven Ditti was asked by defendant,

“[Ajre you claiming that you have an interest which is

being or will be adversely affected by this defendant's

discharge,” her answer was “No.” A-426.

E.

Douglas MacNeil said that his activities were

birdwatching at the park about five times a year,

almost two miles from Powell Duffryn. His major

complaint:

As a birdwatcher, which is my main

recreational activity in this area, if the waters are

a certain quality, there will be more or less

wildlife. If there’s more, than it’s better for me.

Besides that, if the waters are unappealing to _

me as ari individual, it will inhibit me from using

the area for birdwatching. In fact, it does. I don't

.

ee eee ee yee ee.

Trametes

RNY Me

53a

come here as often as | might if I felt the water

was better.

A-357.

He further testified, however, that he possessed

no facts indicating that Powell Duffryn’s discharge

adversely affected him, and that “no one said that its

discharge directly [injures him] and I don't assert it.”

A-347 to A-348.

V.

What troubles me from the testimony is any

indication that the injury-in-fact was fairly traceable.

Each member/plaintiff complained of pollution in

general. There was very little, if any, attempt to link

the injuries alleged to the pollution caused by Powell

Duffryn. Even if I concede that the individual

plaintiffs were injured by the pollution in the Kill, no

individual plaintiff was able to say that in this highly

polluted waterway, the specific condition that was the

object of his or her complaint was caused by Powell

Duffryn.

The two sewage treatment plants’ daily run-off

consisted of 60 million gallons of treated sewage. The

oil spills, the chemical processing facilities and the

heavy ocean traffic have all contributed to this

pollution. Yet, we as a court are faced with a lone

defendant.

I believe that the foregoing is a fair summary of

the evidence of the injuries and the “injury in fact

resulting from the action they seek to have the court

adjudicate.” Valley Forge, 454 U.S. at 472-474. Is it

enough? I'm not sure. Were this not an environment

case, it certainly would not be. I come down on the

side of standing with stated qualms that are soothed

somewhat by the notion that the evolving precepts of

standing are perhaps expanded a bit when at stake

54a

are the great public policy considerations of insults to

our environment.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

Sor the Third Circutt

po seen

aaa ee

55a

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 89-5831

PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY,

INC. and FRIENDS OF THE EARTH

V.

POWELL DUFFRYN TERMINALS INC.,

Appellant

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Intervenor

No. 89-5851

PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY,

INC. and FRIENDS OF THE EARTH,

Appellants

V.

POWELL DUFFRYN TERMINALS INC.

No. 89-5861

PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY,

INC. and FRIENDS OF THE EARTH

V.

POWELL DUFFRYN TERMINALS INC.

WILLIAM R. REILLY, in his capacity as Administrator,

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Appellant

Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil No. 84-00340)

56a

Nos. 89-5831, 89-5851 and 89-5861

Page 2

Present: SCIRICA, NYGAARD and ALDISERT, Circuit Judges

JUDGMENT

This cause came to be heard on the record from the United

States District Court for the District of New Jersey and was

argued by counsel on May 21, 1989.

On consideration whereof, it is now here ordered and ad-

judged by this Court that the judgment of the said District Court

entered September 20, 1989, be, and the same is hereby reversed

in part, affirmed in part and the cause is remanded to the said

District Court for further proceedings consistent with the opi-

nion of this Court. Each party to bear its own costs.

Attest:

Sally Mvros

Clerk

August 20, 1990

APPENDIX B

Ib

APPENDIX B

EXCERPTS FROM TRANSCRIPTS OF TRIAL

PROCEEDING ON MAY 4, 1989

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

PIRG, et al, : CIVIL ACTION

NO. 84-340

Plaintiffs, :

: HON. NICHOLAS

v. : H. POLITAN

POWELL DUFFRYN TERMINALS, : ORDER

INC. (P.D. Oil & Chemical Storage,

Inc.),

Defendant.

For the reasons outlined in this Court’s Opinion, dated

September 19, 1989,

IT IS on this 19th day of September, 1989,

ORDERED that:

1. The defendant, Powell Duffryn Terminals, Inc. (P.D. Oil

& Chemical Storage, Inc.), shall pay as a civil penalty for viola-

tions of its National Pollutant Discharge Elimination System

(NPDES) Permit the sum of $3,205,000.00.

2. The defendant, Powell Duffryn Terminals, Inc. (P.D. Oil

& Chemical Storage, Inc.), is hereby restrained and enjoined

from making or causing any discharges into the Kill Van Kull

from its waste water treatment plant in Bayonne, New Jersey

that exceed any limitation and/or fail in any way to comply with

the terms and conditions of the National Pollutant Discharge

Elimination System (NPDES) Permit issued to and effecting

Powell Duffryn, including its present permit, NJ 003361, any

and all additions and/or amendments and any and all permits

that may hereafter be issued by any agency, state or federal,

that is issued pursuant to the Clean Water Act, 33 U.S.C. § 1251,

et seq.

3. MORRIS PASHMAN, DONALD A. ROBINSON, and

JOEL A. PISANO, are hereby appointed Trustees to receive the

penalties assessed against the defendant pursuant to this Order

and accompanying Opinion, to investigate ways in which said

monies may be disbursed to implement the intent of the Opi-

nion and Order and to disburse said funds pursuant to further

order of this Court.

4. Pursuant to 33 U.S.C. § 1365 (d) which provides that the

Court “may award costs of litigation (including reasonable at-

torneys’ and expert witness fees) to any party, when the Court

determines such an award is appropriate”, plaintiff is directed,

within thirty (30) days of this Opinion and Order, to submit

to the Court affidavits detailing services rendered and costs in-

curred in connection with this suit. Defendant will be given an

additional twenty (20) days to respond to plaintiffs’ affidavits.

After receipt of the parties’ submissions, the Court will render

an appropriate award with regard to fees.

/s/ Nicholas H. Politan

NICHOLAS H. POLITAN

s U.S.D.]J.

3b

FOR PUBLICATION

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

PIRG, et al, : CIVIL ACTION

NO. 84-340

Plaintiffs, :

: HON. NICHOLAS

v. : H. POLITAN

POWELL DUFFRYN TERMINALS, : OPINION

INC. (P.D. Oil & Chemical Storage,

Inc.),

Defendant.

POLITAN, District Judge

APPEARANCES:

Bruce J. Terris, Esq.

Kathleen L. Millian, Esq.

TERRIS, EDGECOMBE, HECKER & WAYNE

1121 12th Street, N.W.

Washington, D.C. 20005

Attorneys for Plaintiffs,

Michael Gordon, Esq.

GORDON, GORDON & HALEY

80 Main Street

West Orange, NJ 07052

Attorneys for Plaintiffs

Nathan M. Edelstein, Esq.

RIDOLFI, FRIEDMAN, FRANK, EDELSTEIN &

BERNSTEIN, PC.

3131 Princeton Pike, Bldg. 6A

Lawrenceville, NJ 08648

Attorneys for Defendant

4b

The case before this Court presents another chapter in the

never ending American environmental tragedy. A recalcitrant

company in the private sector of the economy combined with

the lethargic enforcement of the applicable statutes and regula-

tions by the New Jersey Department of Environmental Protec-

tion and the Federal Environmental Protection Agency, has

caused a continuing, if not constant, 1] year contribution to the

pollution of the Kill Van Kull. It is indeed sad that none of the

participants cared sufficiently about the public trust - the en-

vironment - to take meaningful steps to avert the tragedy. This

Court will not stand idly by to either, explicitly or tacitly, con-

done such inaction. For the reasons hereafter set forth, signifi-

cant monetary penalties are necessary.

Before the Court is the question of the amount of civil

penalties to be assessed against defendant, Powell Duffryn Ter-

minals, Inc., for polluting the Kill Van Kull in violation of the

Clean Water Act, 33 U.S.C. §§ 125], et seg (the “Act”). Plain-

tiffs also seek a permanent injunction prohibiting defendant from

violating its National Pollutant Discharge Elimination System/

New Jersey Pollutant Discharge Elimination System (“NPDES/

NJDPDES”), Permit No. NJ 0003361.

By Orders dated January 13, 1986, March 13, 1987, a:.d May

4, 1989, this Court determined that defendant had violated its

Permit for a total of 386 times. Plaintiffs argue that the defen-

dant should be fined the statutory maximum penalty which,

in this case, is $4,205,000.00. The defendants counter that the

assessment of civil penalties is discretionary with the Court and

none are warranted in this case.

Section 505(a) of the Act, 33 U.S.C. 1365(a) authorizes this

Court to assess “any appropriate civil penalties under Section

309(d) of this Act.” Section 309(d), 33 U.S.C. 1319(d), prior to

its amendment in 1987 provided:

Any person who violates §§ 301, 302, 306, 307, or 308

of this Act, [or] any permit condition or limitation im-

plementing any of such sections in a permit issued

under § 402 of this Act by the Administrator . . . shall

5b

be subject to a civil penalty not to exceed $10,000.00

per day of such violation.

Consequently, each violation of the NPDES permit limita-

tion, prior to the 1987 amendments, subjects the defendant to

a statutory maximum penalty of $10,000.00 per violation.

However, in 1987 Congress increased the statutory maximum

to $25,000.00. Therefore, defendant’s violations occurring on

or after February 4, 1987 are subject to a penalty of up to

$25,000.00. Of the 386 violations, 363 of them occurred prior

to February 4, 1987; 23 occurred after that date. Defendant is

therefore liable for a maximum penalty of $4,205,000.00

Section 309(d) of the Act requires the Court to consider specific

factors in determining the appropriate civil penalty to be assessed

for violations of the Act.

In determining the amount of a civil penalty the court

shall consider the seriousness of the violation or viola-

tions, the economic benefit (if any) resulting from the

violations, any history of such violations, any good-faith

efforts to comply with the applicable requirements,

the economic impact of the penalty on the violator,

and such other matters as justice may require.

§ 309(d), 33 U.S.C. § 1319(d).

The Court held a non-jury trial on the issue of what, if any,

monetary penalty should be assessed against defendant and

what, if any, injunctive or other equitable relief should be

granted. Both parties have submitted extensive proposed Find-

ings of Fact and Conclusions of Law. In the interests of clarity,

I will first set forth my factual determinations and then pro-

ceed to the legal conclusions.

Plaintiffs Public Interest Research Group of New Jersey and

Friends of the Earth, are non-profit corporations committed to

environmental issues. Defendant P.D. Oil & Chemical Storage,

Inc., operates a bulk chemical storage and transfer facility in

Bayonne, New Jersey. Defendant's facility “receives bulk liquid

commodities owned by others and holds them in storage tanks

for loading, upon instruction from the commodity owners, to

rail cars, tank trucks or ocean going tankers [via the Kill Van

Kull].” SPIRG v. P.D. Oil & Chemical Storage, Inc., 627 F. Supp.

1074, 1080 (D.N.J. 1986). Between September 1977 and

November 1988, defendant committed 386 violations of the ef-

fluent limitations in its 1974, 1981 and 1986 permits. These vicla-

tions are summarized in the following table:

Parameter Number of Violations

Total Organic Carbon (TOC) 8

pH 63

Total Suspended Solids (TSS) 66

Bioassay 1

Oil and Grease 48

Hexavalent chromium 2

Petroleum Hydrocarbons 27

Methylene Chloride 9

Phenol 1

Biochemical Oxygen Demand (BOD) 80

Chemical Oxygen Demand (COD) 81

Total 386

Of the 386 violations, 368 were violations of effluent limita-

tions which had previously been violated. Two hundred sixty

of those violations exceeded the applicable permit limitations

by over 100%. One hundred ninety-five of them, exceeded the

permit limitations by more than 200%. One hundred twenty-

seven of them exceeded the applicable permit limitation by over

400 % . Eighty-six of them exceeded the permit limitations by

1,000%.

Pursuant to the requirements of the Act, 33 U.S.C. § 1317(a),

the EPA has published a list of toxic pollutants which includes

phenol and methylene chloride. The EPA recently listed the 100

hazardous substances posing “the most significant potential

threat to human health.” 52 Fed. Reg. 12866 (April 17, 1987).

The EPA's list is divided into four groups of 25 substances each

in descending order or priority. Methylene chloride is priority

group I and phenol is in priority group II. The defendant has

7b

violated the effluent limitations in its permit for methylene

chloride 9 times. The defendant has violated its effluent limita-

tion for phenol once, but its permit has only contained that

limitaiton since August 1987. Defendant has committed 10 viola-

tions of toxic pollutant limitaitons in its permit.

BOD and COD effluent limitations are designed to limit the

amount of oxygen demanding material which is discharged in-

to receiving waters. “BOD is a measure of the oxygen require-

ment exerted by micro-organisms to stabilize organic matter.

Waste water entering [a body of water] exerts an oxygen de-

mand thereby depleting the amount of oxygen available for use

by fish and plants. Without adequate oxygen, fish and plants

die, eventually choking [the body of water].” United States v.

Metropolitan District Commission, 23 ERC 1350, 1353 n.4 (D.

Mass. 1985). Defendant’s discharge of BOD and COD is par-

ticularly harmful because of oxygen deficiencies in the Kill Van

Kull and the connected water-ways in the New York Harbor

complex. New Jersey’s Department of Environmental Protec-

tion, Division of Water Resources, has noted these deficiencies

in the New Jersey 1980 State Water Quality Inventory, Report

to the Congress throught the Environmental Protection Agency,

April 1980. That Report stated, at page 3, that “as in the past,

the waters [of the Interstate Sanitary District] are plagued by

.. . low levels of dissolved oxygen.” The 1982 State Water Quality

Inventory reported that “although [the Interstate Sanitation

District Waters] show a general overall improvement since the

last ... inventory was compiled, District Waters are still plagued

by low dissolved oxygen values during the summer months.” The

1986 New Jersey Water Quality Inventory reported that “District

Waters meet dissolved oxygen requirements during the winter;

however, in some locations, dissolved oxygen values in the sum-

mer drop below standards for extended periods.” Defendant’s

discharges added to the depletion of oxygen in the Kill Van Kull.

“TSS, or Total Suspended Solids, is an indication of the

physical quality of the water. Very high levels of suspended solids

can effect the ecology of [a body of water] by inhibiting light

transmission needed for photosynthesis by which plants survive.”

United States v. Metropolitan District Commission, 23 ERC at

8b

nN

1553 n.4. The EPA has stated, and this Court recognizes that

suspended solids can have an adverse affect on fish growth and

reproduction and reduce the supply of food available to the fish.

See EPA, Quality Criteria for Water, pp. 404-408 (1976). Defen-

dant has violated the TSS limits of its permit 66 times.

As this Court has already noted, defendant’s ROD and TSS

effluent limitations are water based quality standards. See

SPIRG v. P.D. Oil, 627 F. Supp. at 1088-1089. Water quality

based effluent limitations are those which are designed to in-

sure that water quality standards are met. Water quality stan-

dare's, in turn, have been established to protect, restore, main-

tain and enhance a body of water so that it supports it designated

uses and attains the fishable and swimmable goals of the Act.

See 33 U.S.C. §§ 131, 1312, and 1313; 40 C.F.R. 122.44(d). Any

violations of these water quality based effluent limitations causes

some degree of harm to he water quality of the Kill Van Kull.

Defendant has violated its permit ‘with respect to oil and

grease 48 times. New Jersey's 1980 State Water Quality Inven-

tory stated at page ] that “the waters [of the Interstate Sanita-

tion District] are .. . high in oil and grease . . . ” That Report

also stated at page 2 that “the quality of the District’s watérs

is continuously degraded by ... large concentrations of both

heavy metal and oil entering the waters from inadequately

treated municipal and industrial wastes.” The 1982 Water Quali-

ty Inventory stated that “District waters are still degraded by

oil and grease. . . ” Defendant’s discharges of oil and grease have

added to the problems relating to these pollutants in the Kill

Van Kull.

The EPA has determined that “a pH range of 6.5 to 9.0 ap-

pears to provide adequate protection for the life of fresh water

fish and bottom dwelling invertebrate fish food organisms. Out-

side of this range, fish suffer adverse psychological effects with

an increase in severity as the degree of deviation increases until

lethal levels are reached.” EPA, Quality Criteria for Water, p.

341. Defendant has violated the pH limits of its permit 63 times.

Since the installation of a water treatment system known as

“Zimpro” in May 1987, the frequency of defendant's violations

9b

has diminished substantially. However, the defendant has

acknowledged violations of its permit since Zimpro’s installa-

tion. Defendant offers no substantial evidence that it will not

violate its permit in the future. Defendant’s environmental con-

sultant, LeRoy Sullivan, did not testify that defendant will not

violate its permit in the future. Rather, he stated that defen-

dant’s waste water treatment plant is “adequate to meet the per-

mit limits.” Although the plant may be “adequate” to meet the

permit limits if properly operated by defendant, Mr. Sullivan

offered no testimony that the treatment plant, as actually

operated by defendant, will meet the discharge limits contained

in the permit in the future. Mr. Sullivan’s testimony provides

no basis for the Court to conclude that “the wrong will not be

repeated”. Gwaltney of Smithfield Limited v. Chesapeake Bay

Foundation, 108 S.Ct. 376, 386 (1987).

Defendant's violations cause harm to the environment. This

Court finds that based upon defendant’s operations to this point,

it is reascnable to conclude that its permit will be violated in

the future.

Plaintiffs have attempted to convince the Court to penalize

defendant for violated their permit from 1977 to 1987. Plain-

tiffs argue that whereas the technology to build a waste water

treatment plant may not have been in existence in 1977, defen-

dant had the option of hauling their waste water to an off-site

treatment facility and thereby achieve compliance with their

permit. The Court, however, is not convinced that facilities were

available to treat defendant’s waste water from 1977 until 1982.

The Court finds that the defendant could have complied with

its NPDES/NJPDES permit by hauling its waste water off-site

from 1982 through April 1887, when it installed the Zimpro

treatment plant and by hauling a portion of its waste water off-

site from May 1987 through March 1988 in order to operate the

facility in compliance with its permit. Defendant’s,environmen-

tal consultant, LeRoy Sullivan, testified that the DuPont

Chamberworks facility in South Jersey was available to accept

large qualities of waste water for treatment and disposal as early

as 1982 or 1983. It has been stipulated by the parties by the

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10b

DuPont facility did not accept waste water for off-site treat-

ment prior to 1982. Mr. Sullivan estimated that the cost of defen-

dant’s waste water off-site for treatment and disposal was ap-

proximately $.11 or .12 per gallon in 1985 dollars. Defendant

1as no records of the amount of its flow to the Kill Van Kull

or any period from September 1977 through June 1985. Based

upon Mr. Sullivan’s estimate, the Court determines that defen-

dant’s discharge from September 1977 through March 1988 was

approximately 66 million gallons. Therefore, it is clear that the

defendant enjoyed a considerable economic advantage by not

hauling its waste water off-site for treatment and neglecting its

permit limitations.

Using the standards contained in the Act, 33 U.S.C.. § 1319(d),

the Court will now make findings as to each of the factors to

be considered in assessing a penalty. As has already been noted

by this Court, § 1319(d), as amended, provides that

in determining the amount of a civil penalty the Court

shall consider the seriousness of the violation or viola-

tions, the economic benefit (if any) resulting from the

violation, any history of such violations, any good faith

efforts

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