Opposition Brief — Louisville & Jefferson County Metropolitan Sewer District v. United States

| Supreme Court, U.S.

FILED

No. 92-1635

IN THE SUPREME COURT

OF THE UNITED STATES

October Term 1992

\

LOUISVILLE AND JEFFERSON COUNTY

METROPOLITAN SEWER DISTRICT

PETITIONER

UNITED STATES OF AMERICA,

COMMONWEALTH OF KENTUCKY,

NATURAL RESOURCES AND

ENVIRONMENTAL PROTECTION CABINET

RESPONDENTS

On Petition for Writ of Certiorari

to the United States Court of Appeals

For the Sixth Circuit

BRIEF FOR THE RESPONDENT KENTUCKY

IN OPPOSITION TO THE PETITION FOR

WRIT OF CERTIORARI

Brenda Gail Lowe

Department of Law

Natural Resources and

Environmental Protection Cabinet

Fifth Floor, Capital Plaza Tower

Frankfort, Kentucky 40601

(502) 564-5576

COUNTERSTATEMENT OF THE

QUESTION PRESENTED

I. Did the District Court abuse

its discretion in setting aside a

consent decree involving three

governmental entities?

TABLE OF CONTENTS

COUNTERSTATEMENT OF THE QUESTION

PREOGNLOW «© + = 2 © © 6 © © eh ehUhhUhlhlU 1

TABLE OF CONTENTS .. «5 © « » » «© « GS

TABLE OF AUTHORITIES ....... 1i1

OPINIONS BELOW ..+s+ + «© = © © 6 @ 8 2

JURISDICTION . 2. «© © © © © © © © © *@ 5

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED ........ . 7

COUNTERSTATEMENT OF THE CASE... . 8

REASONS FOR DENYING REVIEW ..... 13

ARGUNBNE «© © © ss 6 6+ © © © © # @ « 13

CONCLUSION ..»++s++¢«¢vst* © © © «© @ 19

APPENDIX

ii

=” BEST AVAL

TABLE OF AUTHORITIES

Cases: PAGE

Goodman v. Lukens Steel Company,

482 U.S. 656 (1987) at page 665 15

Graver Tank & Mfg. Co., Inc. v. Linde Air

Products, Co.,336 U.S. 271 (1949)15

Hardin v. Kentucky Utilities Company,

seG 0.8. 1 (1968) ... +» 2 + *

wn

Heath v. De urcy,

888 F.2 1105 (6th Cir. 1989) . 18

Rice Vv. Sicux City Memorial Park

Cemetery, 349 U.S. 70 (1955) . .- 16

Rudolph v. United States,

eye 0.8. 2698 71962) .....-. §

United States v. Oregon,

366 U.S. 643 (1961) ce a. @ = % 5

Williams v. Vukovich,

720 F.2d 909 (6th Cir. 1983) . . 17

Statutes:

33 U.S.C. $1251 et seq a on eer ee eee ef

a

iil

ABLE CO?!

Pie es Se Sere

NO. 92-1635

IN THE SUPREME COURT

OF THE UNITED STATES

October Term 1992

LOUISVILLE AND JEFFERSON COUNTY

METROPOLITAN SEWER DISTRICT

PETITIONER

UNITED STATES OF AMERICA,

COMMONWEALTH OF KENTUCKY,

NATURAL RESOURCES AND

ENVIRONMENTAL PROTECTION CABINET

RESPONDENTS

On Petition for Writ of Certiorari

to the United States Court of Appeals

For the Sixth Circuit

BRIEF FOR THE RESPONDENT IN KENTUCKY

OPPOSITION TO THE PETITION FOR

WRIT OF CERTIORARI

The Respondent, Commonwealth of

Kentucky, respectfully submits the

Petition for Writ of Certiorari should be

denied for the reasons stated herein.

pa

OPINIONS BELOW

Order entered by Chief Judge,

Thomas A. Ballantine, Jr., of

the United States District

Court for the Western District

of Kentucky at Louisville in

the matter of the United States

of America and City of

Louisville v. Louisville and

Jefferson County Metropolitan

Sewer District, Civil Action

No. C 78-0130-L(B), entered

July 3, 1991.

Memorandum entered by Chief

Judge, Thomas A. Ballantine,

.) oo of the United States

District Court for the Western

District of Kentucky at

Louisville in the matter of the

United States of America and

City of Louisville Vv.

Louisville and Jefferson County

2

Metropolitan Sewer District,

Civil Action No. C 78-0130-

L(B), entered November 8, 1991.

A Order entered by Chief Judge,

Thomas A. Ballantine, Jr., of

the United States District

Court for the Western District

of Kentucky at Louisville in

the matter of the United States

of America and City of

Louisville v. Louisville and

Jefferson County Metropolitan

Sewer District, Civil Action

No. C 78-0130-L(B), entered

November 8, 1991.

4. Mandate entered by the United

States Court of Appeals for the

Sixth Circuit on appeal from

the United States District

Court for the Western District

of Kentucky in the matter of

the United States of America

uw

and City of bLouisville v.

Louisville and Jefferson County

Metropolitan Sewer District and

Commonwealth of Kentucky, Civil

Action No. 91-6461, entered

January 12, 1993.

Entered as Mandate March 23,

1993.

Order denying Petition for

Rehearing and Rehearing En Banc

entered by the United States

Court of Appeals for the Sixth

Circuit in the matter of the

United States of America and

City of Louisville Vv.

Louisville and Jefferson County

Metropolitan Sewer District and

Commonwealth of Kentucky, Civil

Action No. 91-6461, entered

March 12, 1993.

JURISDICTION

Petitioner’s application to invoke

the jurisdiction of this Court has

fulfilled the initial requirements of 28

U.8.C. $2257(3). Respondent submits,

nevertheless, that petitioner’s appli-

cation for writ of certiorari should be

denied since the issues presented therein

do not comply with the prerequisites of

Supreme Court Rule 10.

As stated in Rule 10 of the Supreme

Court Rules, the granting of a review on

a petition for writ of certiorari is

purely within the discretion of the

Court. Ordinarily a writ will be granted

only where there are special and

important reasons therefor. See Hardin

v. Kentucky Utilities Company, 390 U.S. 1

(1968); United States v. Oregon, 366 U.S.

643 (1961); and Rudolph v. United States,

370 U.S. 269 (1962).

In order to fully apprise this Court

as to the nature of the issue involved,

the respondent will demonstrate the rule

has not been satisfied. A review of this

argument by the Court will demonstrate

the validity of the respondent’s

contention that the granting of the

application for writ of certiorari is not

desirable.

et

Ss e +

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The Clean Water Act, 33 U.S.C.

|

>

COUNTERSTATEMENT OF THE CASE

This case involves the

interpretation of a particular agreement

entered into among three governmental

institutions, Petitioner, the Louisville

ana Jefferson County Metropolitan Sewer

District, (hereinafter MSD), and the

United States of America and the

Commonwealth of Kentucky, respondents.

(Appendix of Kentucky (A.-K.) B.p.2) At

issue is the Morris Forman Treatment

Plant, the largest sewage treatment plant

in the Commonwealth of Kentucky, which

treats the waste water of Kentucky’s

largest city, Louisville. The effluent

from the plant (105 million gallons per

day) (A.K. p.B.2) is discharged into the

Ohio River and sent on its way to the

drinking water supplies of points south

too numerous to mention. In 1972

Congress passed the Federal Water

Pollution Control Act, now evolved into

8

—_ adel

the Clean Water Act, found at 33 U.S.C.

§1251 et seq. That Act, of course,

regulates the discharge of sewage into

the waters of the United States. In

1978, fifteen (15) years ago, the Morris

Forman Treatment Plant was out of

compliance with the Clean Water Act, and

its permit limits under that Act, and the

United States through its Environmental

Protection Agency sought to bring the

plant into compliance. The mechanism

that was utilized was a i981 consent

decree. (A.K. p.B.4) The focus of this

action is the interpretation of the

consent decree.

This action had been originally

brought in April 1978 seeking civil

penalties against MSD for violation of

effluent limitations imposed by its

discharge permit. Under the consent

decree, MSD was to bring the plant into

compliance with the Clean Water Act

9

through a program of corrective action

and improvements. (A.K. p.B.4,5) The

decree provided for protection to MSD

against exposure to fines for violation

of the Clean Water Act while MSD was

attempting to come into compliance. MSD

came into compliance with the limits in

the permit in 1986, but the plant at that

time was not at full capacity for

treating wastewater. (A.K. p.B./) The

United States then moved to terminate the

protections of the consent decree,

arguing that since the plant was in

compliance, the purpose of the consent

decree had been fulfilled, and the

consent decree protection no longer

applied. MSD argued that it was

protected by the decree until the plant

came into compliance at full Capacity,

even though the capacity was never

mentioned in the decree. (A.K. p.B.13)

The Western District of Kentucky

10

disagreed and terminated the decree.

This ended MSD’s_- protection against

enforcement actions.

The Sixth Circuit agreed with the

district court upholding its decision and

noting of MSD’s argument:

"Under MSD’s proposed analysis

of the consent decree, the

purpose of the decree would not

be achieved, so that it must

remain enforced until

additional measures are taken.

Presumably, in the interim, MSD

could continue to take on more

and more customers thus making

the effluent requirements

harder to attain." fAcK.

p.B.16)

The Sixth Circuit affirmed the district

court in finding that the purpose of the

decree was to bring MSD into compliance

with the law. The Sixth Circuit also

noted that there was no indication in the

consent decree that compliance, only

while processing 105 million gallons of

Sewage per day was required. (A.K.

11

eee ae Sn

p.B.17) MSD has now pe -itioned this

Court to review the decision.

The Commonwealth of Kentucky

disagrees with some of the factual

statements made by MSD in its statement

of the case. For example, the

Commonwealti disagrees that under the

consent decree the EPA was required to

fund all remedial work necessary to

correct the defects at the Morris Forman

Treatment Plant. However, even given the

liberties that MSD has taken with the

facts, accepting what MSD says is true,

it is clear, from MSD’s own brief that

review should not be granted in this

matter.

REASONS FOR DENYING REVIEW

THERE ARE NO SPECIAL OR IMPORTANT

REASONS TO GRANT THE WRIT.

There are several basic reasons why

review should not be granted in this

matter.

his The case is fact specific, and

this Court is not a fact finder.

as This case will have no impact

On general federal law, either on federal

constitutional law or on any

interpretation of the Clean Water Act.

: The lower Court’s decision is

in keeping with the basic principles of

public policy.

ARGUMENT

Rule 10 of the Supreme Court Rules

states:

"A review on writ of certiorari

is not a matter of right, but

of judicial discretion. A

petition for writ of certiorari

will be granted only when there

are special and important

reasons therefor."

13

Even a cursory reading of the Petition

will reveal that the reasons for review

qiven by the Petitioner are very fact

specific. On page 15 of the Petition,

the Petitioner states, "the question is

whether or not all of those conditions of

the consent decree were fulfilled,

thereby justifying its termination." The

Petitioner also notes in the Petition

that the issues focus upon the

interpretation to be given a consent

decree. These are not important federal

issues. They are not issues that are

special or important to the United States

and its citizens. These issues may be

important to the Louisville and Jefferson

County Metropolitan Sewer District, but

the consent decree itself is somewhat

unique and questions of its

interpretation are purely questions of

fact. As this Court is previously noted:

"A court of law, such as this

Court is, rather than a court

for correction of errors in

factfinding, cannot undertake

to review concurrent findings

of fact by two court below in

the absence of some very

obvious or exceptional showing

of error." Graver Tank & Mfg.

Co., Inc. v. Linde Air Products

Co., 336 U.S. 271,275 (1949).

See also Goodman v. Lukens

Steel Co., 482 U.S. 656 at page

665.

In addition, this case will have no

impact on general federal law. As you

read the Petition, it is obvious that no

constitutional questions have been

raised. No questions concerning the

interpretation of the Clean Water Act, 33

U.S.C. §1251 et seq have been raised,

either. We are dealing with the

interpretation of one consent decree

involving three governmental entities.

Supreme Court Rule 10 notes that

special or important reasons may include

conflicts among the various appellate

courts of this nation or _ conflicts

15

between the lower court decison and the

applicable decisions of this Supreme

Court. These reasons are not present

here nor has it been argued that they

are. In Rice v. Sioux City Memorial Park

Cemetery, 349 U.S. 70 (1955), this Court

discussed some of the considerations

utilized in granting a Petition for Writ

of Certiorari. The Court stated that it

does not sit to satisfy scholarly

interest or for the benefits for

particular litigants. Id. at 74. This

Court is looking for cases that have

national impact and this case has none.

While it may be possible that someday,

somehow, Similar issues based on a

similar consent decree might come up

among similar parties, this Court can

read the statement of the case, and see

that it involves one consent decree

involving one plant in one city. It is

unlikely that the issues raised on this

16

appeal would come up again, and if they

did, perhaps in one or two more cities,

the issue is still far from being

"special" or "important" enough to merit

review by this Court.

Finally, the lower courts have made

their decision in keeping with the broad

principles of public policy and there is

no reason to set those decisions aside.

The Western District of Kentucky did not

abuse its discretion in terminating this

consent decree. A consent decree is in

essence and in the nature of equitable

relief. See Williams v. Vukovich, 720

F.2d 909 (6th Cir. 1983) where the Sixth

Circuit stated:

"Once approved, the prospective

provisions of the consent

decree operate as an

injunction. Id. at 920."

The proper standard for review of matters

like this in the circuit courts is the

"abuse of discretion" standard. See

a7

eas nxweeeeereeeeveranenijesiiiilicnininncntaaii ae ee a rT

ne

Heath v. De Courcy, 888 F.2d 1105 (6th

Cir. 1989). The Sixth Circuit in Heath

has disguinished between those consent

decrees that are entered into by private

parties (See Id. at 1109) and those that

involve institutions and a form of

institutions where a more flexible

approach is favored (See Id. at 1109).

In essence, this decree between

governmental entities was an attempt at

the reform of the institution of a sewage

treatment plant owned by the public and

operated in the public’s interest, and

therefore should fall under the Heath

standard. The trial judge should be

given wide latitude in attempting to seek

a solution that meets the interest of the

public. These are public. entities

litigating with each other. The Western

District of Kentucky, as affirmed by the

Sixth Circuit, was a wisely fashioned

remedy that would promote the interest of

2

)

the people of Kentucky and of all other

states down along the Ohio River. There

is no special or important reason to

determine whether or not the District

Court abused its discretion in

terminating the consent decree and

deciding this case, but it is submitted

that the Sixth Circuit Court of Appeals

has taken that action already and upheld

the decision.

CONCLUSION

There are no special and important

reasons to review this case. For the

reasons set forth above, the Petition for

Writ of Certiorari should be denied.

Respectfully submitted,

{ \

Aa I Toye

‘BRENDA GAIL LOWE ~~,

Commonwealth of Kentucky

Natural Resources and

Environmental Protection Cabinet

Department of Law

Fifth Floor, Capital Plaza Tower

Frankfort, Kentucky 40601

(502) 564-5576

COUNSEL FOR RESPONDENT

19

PROOF OF SERVICE

I, Brenda Gail Lowe, counsel for

Respondent, Commonwealth of eater 3

herein, hereby certify that on the i

day of (ag , 1993 I served the

Petitioner, Louisville and Jefferson

County Metropolitan Sewer District and

Respondents with a Brief for the

Respondent Kentucky in Opposition to the

Petition for Writ of Certiorari by

placing three copies of the same in the

United States mail first class postage

pre-paid and addressed to Laurence uP

Zielke, Eeq., Pedley, ROSS, Zielke,

Gordinier & Porter, 1150 Starks Building,

Louisville, Kentucky 40202, (502) 589-

4600; for service on the United States of

America, Solicitor General, Department of

Justice, Washington, D.C. 20530, and

Winston E. King, Esq., Counsel for City

of Louisville, Assistant Director of Law,

Room 200, 601 W. Jefferson ae

20

Loulsville, Kentucky 40202, (502) 625-

2589, courtesy copies provided to the

Office of the United States Attorney,

Bank of Louisville Bldg., Tenth Floor,

510 West Broadway, Louisville, Kentucky

40202, (502)582-5911 and Peter A. Appel,

Esq., Environmental Enforcement Section,

United States Department of Justice, P.O.

Box 23795, L’ ENFANT Plaza Station

Washington, D.C. 20026, (202)514-2774.

Ay AN

y, 4) a A / g —

} 04 a LM » | / os —

¢ L

oa .

/ os Wk

\PBRENDA GAIL LOWE

APPENDIX A

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

UNITED STATES OF AMERICA

Plaintiff

and

CITY OF LOUISVILLE

Intervening Plaintiff

Vv. No. C 78-0130-L(b)

LOUISVILLE AND JEFFERSON COUNTY

METROPOLITAN SEWER DISTRICT and

COMMONWEALTH OF KENTUCKY

Defendants

MEMORANDUM

This matter is before the Court on

the motions of the defendant, Louisville

and Jefferson County Metropolitan Sewer

District (MSD), and the intervening

plaintiff, City of Louisville (City), for

reconsideration of the Court’s Order of

July 3, 1991 terminating a Consent

Decree. The Consent Decree was entered

as a final judgment on November 24, 1981.

The Environmental Protection Agency

(EPA) brought this action in April, 1978,

LLL A

seeking civil penalties ag ist MSD for

violations of effluent limits imposed by

National Pollution Discharge Elimination

System (NPDES) Permit No. KY 0022411 at

the Morris Forman Wastewater Treatment

Plant (MFWTP). Title 33 U.S.C. §1342.

The NPDES permit had been issued to MFWTP

in 1977 pursuant to the provisions of

the Federal Water Pollution Control Act

(the Clean Water Act).' Title 33 U.S.C.

Sections 1251 et seq. Prior to the

execution of the Consent Decree, the EPA

and MSD entered into a Memorandum of

Understanding (MOU) in which the parties

stated their intention to resolve the

litigation and discussed the provisions

subsequently embodied in the Consent

Decree.

NPDES permits are valid for no more

than five years.

MSD stipulated that it had violated

the permit. The Consent Decree provided

that MSD would initiate an Interim

Corrective Action Program (ICAP) and an

Evaluation Program (EP) as the first

steps of a "phased approach" to bring

MFWTP into compliance with “applicable

effluent limitations." Pursuant to those

programs MSD was to implement limited

improvements to the MFWTP and evaluate

the operation of the facility, using

certain tests outlined in Appendix A to

the Consent Decree. MSD was to submit to

EPA written notification of each

corrective action indicated as necessary

during the evaluation period and state

whether the action constituted a major

modification, a minor modification or an

operational improvement. MSD was also to

Submit a "final design report identifying

the performance improvements of minor

modifications and operational improve-

3

B BEST AVAIL

ments, and the cost effectiveness of

major physical modifications that may

improve the performance of the final

settling tanks," along with a summary

report of the test results. Similarly,

MSD was to initiate and complete a

performance test of the oxygen

dissolution capacity of the UNOX reactors

and equipment and submit a summary report

along with recommendations for “any

required structural/equipment modifi-

cations." After completion of the ICAP

and the EP, MSD was to complete a cost

effectiveness analysis of any major

modifications and then submit a Final

Plan and Schedule (FP&S) "for achieving

compliance with all applicable effluent

limitations" to the EPA for its approval.

According to the terms of the Consent

Decree, MSD was to carryout the FP&S only

after i approval | EPA.

BLE COPY

Section V of the Consent Decree

providing for MSD’s interim

compliance states in pertinent part:

(B) The parties recognize that

MSD’s current NPDES-~ permit is

scheduled to expire on June 30,

1982. It is the intent of the

parties that in the NPDES permit

renewal process for the [MFWTP] the

terms of this Consent Decree shall

be taken into account and that, to

the extent permitted by law, the

[EPA] shall propose a renewed

permit, the terms of which are not

inconsistent with those of this

Decree.’

Section VII provides:

The parties have agreed that certain

elements of the current Corrective

Action Program are eligible for

federal funding under the provisions

of the Federal Water Pollution

Control Act, as amended; that they

disagree as to the eligibility of

other elements of the program and

that these elements will be the

subject of an appeal as provided for

under Subpart J, Part 30 of Title 40

-MFWTP’s permit was renewed and the

renewed permit expired in 1987. As of

1990, MSD was still operating under the

expired permit.

of the Code of Federal Regulations;

and that other elements of the

program will be eligible for federal

funding if they are found to be

necessary under the Interim

Corrective Action and _ Evaluation

Progran ..:

The MOU sepa ated into four

categories the items in MSD’s Revised

Corrective Action Program for which

funding was sought. The UNOX reactor

was included in Category C:

"Those items which EPA believes to

be grant eligible, but for which

EPA questions the necessity pending

the evaluations noted above in

Section III. The parties agree

that should the evaluations

indicate that these items are

necessary to meet applicable

effluent limitations, EPA will fund

them promptly, contingent upon the

availability of federal funds."

6

Finally, the Consent Decree provides

that the Court will retain jurisdiction

"for such further orders as may be

necessary or appropriate for the

construction or implementation of this

Decree or for the enforcement or

compliance therewith" and that the Decree

"shall terminate upon application of the

parties."

On June 10, 1983, MSD submitted the

FP&S to EPA for approval and funding.

The FP&S provided for the addition of a

UNOX Battery ("Battery D" or "UNOX") to

the MFWTP. In March, 1985, EPA informed

MSD that it "was not convinced" of the

necessity for Battery D and that its

eligibility would not be considered

"unless its need is demonstrated after

other phases are completed." In

response, MSD retained Camp, Dresser &

McKee, Inc. (CDM), specialists in sewer

plant design, construction and operation

7

to evaluate the need for Battery D. In

June, 1985, CDM’s” report, supporting

MSD’s position, was submitted to EPA. In

August, 1985, EPA notified MSD that it

had “considerable doubt" as to the

necessity of Battery D and that it

believed compliance with effluent limits

could be met with the items already

funded. However, EPA added that it might

reconsider its decision if the funded

items did not bring MFWTP in compliance.

In November, 1988, while the renewed

NPDES permit was still in effect for

MFWTP, MSD received a letter from the EPA

stating:

(T] Final Plan and Schedule (FPS)

developed under Grant No. C210553-03

was conditionally accepted by EPA,

but never officially approved....

Since EPA’s initial receipt and

review of the FPS, the proposed

option to increase the capacity of

unit processes in the plant has been

implemented in accordance with EPA

comments. The implemented plan is

providing wastewater treatment in

accordance with the limits of the

NPDES permit. Therefore, this

letter constitutes EPA approval of

the Final Plan and Schedule.

Only July 20, 1989, Russell Wright, an

EPA representative, contacted William

Gatewood, Manager of the Construction

Grants Branch of the Division of Water

for the Kentucky Department of Natural

Resources and Environmental Protection

Cabinet (KNREPC). Wright informed

Gatewood of a June 29th meeting with MSD

in which the EPA and the Kentucky

Division of Water agreed to MSD’s request

for a "reevaluation of their proposed

project of adding another unox

oxygenation battery, known as Battery D,

to their existing plant." (Emphasis

added) .‘

‘During this time, EPA was

delegating responsibility for wastewater

regulations to the State and a new

discharge permit had been proposed for

9

On November 6, 1989, MSD contacted

KNREPC to set up a time to discuss issues

related to “remaining aspects of the

Final Plan and Schedule Construction

Projects," including Battery D. In the

letter, MSD stated that all necessary

improvements to the MFWTP had been

implemented or were currently under

construction except for Battery D. MSD

also noted that MSD’s service area was

expanding, “additional sludge flows were

not included or anticipated in the

development of the FP& S" and that the

proposed NPDES permit "includes

additional effluent criteria" not

MFWTP by KNREPC. The proposed permit

contained stricter effluent limitations.

MSD asserted to KNREPC that it would not

be able to meet the more stringent

standards in the proposed permit without

the addition of Battery D.

10

provided for or anticipated in the FP&S.

On July 17, 1990, the United States,

on behalf of the EPA and joined by the

Commonwealth of Kentucky, filed a motion

to terminate the Consent Decree on the

basis of MSD’s compliance with its NPDES

permit from 1986 through 1990. On August

17, 1990, MSD submitted to KNREPC for

approval a design for bioroughing towers

to be constructed at MFWTP in lieu of

Battery D and on October 1, 1990, EPA

notified MSD that a federal grant for the

bioroughing towers had been approved. On

July 3, 1991, this Court terminated the

Consent Decree, finding that the

underlying purpose of the Decree had been

satisfied.

The parties agree that a Consent

Decree must remain in effect so long as

its continued enforcement is necessary to

effectuate its purposes. The purpose of

the Consent Decree in the case at hand

11

was to bring MFWTP into compliance with

the law.° The parties’ argument over when

the Consent Decree may properly terminate

stems from conflicting interpretations of

critical terms of the Decree. MSD argues

that all the work identified in the FP&S

has not been completed and therefore, the

Consent Decree may not be terminated.

The United States argues that MFWTP’s

SuPhat authority of a federal

district court to adopt a consent decree

comes only from the statute which the

decree is intended to enforce. If there

is a ‘purpose’ to be effectuated, it is

the purpose of the stature pursuant to

which the government seeks relief.

Within that framework the parties strike

their bargain." United States v. Motor

Vehicle Manufacturers Assoc. of the

United States, 643 F.2d 644, 650 (9th

Cir. 1981).

12

compliance with effluent limitations at

any stage of major modifications, set

forth in the FP&S and approved by EPA,

required termination of the Consent

Decree.

Consent decrees have been recognized

as having attributes of both contracts

and judicial acts. United States v. ITT

Continental Baking Co., 420 U.S. 223, 236

n. 10, 95 S.Ct. 926, 934 nn. 10, 43

L.Ed.2d 148 (1975); United States v.

Armour & Co. 402 U.S. 673, 681-82

S.Ct. 1752, 1757, 29 L.Ed.2d 256 (1971).

Principles of contract law are used for

purposes of interpreting the meaning of a

consent decree. Only when the language

of a consent decree is not clear on its

face, have courts been forced to resort

to equitable considerations to define the

limits of a consent decree. Chrysler

Corp. v. United States, 316 U.S. 556, 62

S.Ct. 1146, 86 L.Ed. 1668 (1942).

13

We find that the language of the

decree is quite clear and that its

purposes have been accomplished.

Appendix A of the Consent Decree

provides for MSD to undertake a series of

interim steps to determine whether

limited improvements would bring about

compliance with "applicable effluent

limitations." A cost effectiveness

analysis of suggested major plant

modifications was to be implemented in

the event that the interim steps did not

result in compliance and only then was

the FP&S to be developed by MSD. Nothing

in the language of the Consent Decree or

the Memorandum of ierstanding compels

the conclusion that the EPA was required

to approve the entire FP&S as initially

submitted by MSD. It appears from the

face of the Consent Decree that MSD’s

requirement to implement any of the FP&S

was contingent on EPA’S approval of any

ee

part of the FP&S. The record shows that

MSD formally approved the FP&S and found

MSD to be in compliance with “applicable

effluent limitations" in November of

1988. MSD does not deny that it was in

compliance with the renewed NPDES permit

in November of 1988 and it had been in

compliance until 1990. Therefore, the

duties of EPA and MSD under the terms of

the Consent Decree ended as of November,

1988. The July 20th, 1989, letter to

KNREPC from the EPA does not suggest that

the EPA changed its position as to the

requirements of the Consent Decree.

In addition, Section V_ of the

Consent Decree contemplates that the

"applicable effluent limitations"

referred to throughout the Consent Decree

are those limitations imposed by the

NPDES permit issued in 1977 and the

15

renewed permit which expired in 1987.°

MSD requested approval of Battery D from

the KNREPC based on a projected increase

in effluent flow and the _ heightened

requirements of a proposed NPDES permit.

The City and MSD argue that the

Consent Decree may only be terminated on

the agreement of all parties and

therefore, the Court did not have

jurisdiction to terminate the Consent

Decree.

Section XII provides: "This Decree

shall terminate upon application of the

parties." This provision simply allows

the parties to terminate the Decree by

agreement; it does not divest the Court

of jurisdiction to end the Decree upon

the motion of any party and a finding

that the purposes of the Decree have been

fulfilled.

‘See footnote 2.

16

An appropriate order has been

entered this 8th day of November, 1991.

THOMAS A. BALLANTINE, JR.

Chief Judge, U.S. District Court

kms493/apendx1l1.bgl

APPENDIX B

w

~

NO. 91-6461

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

CITY OF LOUISVILLE

Intervening Plaintiff-Appellee,

On Appeal from the United States

District Court for the

Western District of Kentucky

LOUISVILLE AND JEFFERSON COUNTY

METROPOLITAN SEWER DISTRICT

Defendant-Appellant,

COMMONWEALTH OF KENTUCKY,

Defendant-Appellee

Before: MERRITT, Chief Judge; and

GUY and RYAN, Circuit

Judges.

Ralph B. Guy, .) oo Circuit Judge.

Defendant, Metropolitan Sewer District,

appeals the district court’s order

terminating a 1981 consent decree. On

appeal, defendant argues that the purpose

of the consent decree has not been

achieved and therefore the court should

not have terminated the decree. We agree

with the district court that the purpose

of the consent decree has been

accomplished and therefore affirm.

I.

Louisville and Jefferson County

Metropolitan Sewer District (MSD) was

created pursuant to enactments of the

Kentucky Legislature, Ky. Rev. Stat.

§76.010, to develop and operate a

Sanitary and storm sewer system in

Jefferson County, Kentucky. In the late

1970s, defendant contracted with Blount

Brothers to build the Morris-Foreman

Waste Water Treatment Plant (MFWTP) ,

which was completed in 1974. The design

plans, approved by the Environmental

Protection Agency, anticipated sewage

flow of 105 million gallons per day.

MFWTP was issued a National Pollutant

Discharge Elimination System (NPDES)

permit by the EPA in 1977 pursuant to

applicable provisions of the Clean Water

Act. This permit required MSD to meet

specific effluent limitations for

biochemical oxygen demand (BOD) and total

Suspended solids (TSS). Unfortunately,

substantial defects in design caused the

plant’s effluent to exceed its permit

limits. Major litigation ensued between

MSD and Blount Brothers, resulting in a

multi-million dollar settlement. How-

ever, MSD was still faced with a plant

that was not complying with its permit

requirements.

In April 1978, the EPA brought an

enforcement action against MSD for

violating the plant’s permit. MSD faced

Civil penalties of $10,000 per day for

violating its permit. 33 U.S.C. §1319(d)

(1986). Over the next two years, the

parties came to an agreement,

memorialized in a "Memorandum of

Understanding," and entered into a

consent decree. According to appendix A

of the consent decree, MSD was’ to

undertake two steps to bring the plant

into compliance with its permit. MSD was

to conduct an "Interim Corrective Action

Program" to ascertain if limited

improvements to the plant could bring

about compliance with applicable effluent

limitations and an “Evaluation Program"

to determine the relative feasibility and

economic efficiency of alternative

improvements. If these steps showed that

the MFWTP could not achieve compliance

with applicable effluent limitations

without major physical modifications,

then MSD was to submit a "Final Plan and

Schedule" detailing the major physical

modifications and equipment modification

required. According to the consent

decree, "({u]pon approval by EPA Region

4

IV, MSD shall carry out that Final Plan

and Schedule." (App.62). The agreement

also established those items EPA would

fund and would not fund, those items the

parties disagreed upon funding, and those

items the EPA felt were eligible for

funding but would not approve unless

shown to be necessary. The consent

decree provides:

Although §1319(d) OF 33. U.8.€.

provides that penalties may be sought for

violation of applicable effluent

limitations, EPA has elected not to seek

such penalties in this instance in light

of MSD’s substantial efforts including

both studies and physical work to correct

the deficiencies which have prevented

MFWTP from achieving applicable effluent

limitations.

(App.54).

MSD proceeded to undertake the

actions required by the consent decree,

completing the Interim Corrective Action

Program and Evaluation Program. The

Final Plan and Schedule was submitted to

the EPA in 1984. One item MSD felt was

needed was an additional UNOX reactor,

also referred to as Battery D. The EPA

disagreed with the necessity of this

item. In 1985, the EPA approved the

Final Plan and Schedule, except for the

additional UNOX reactor.

While the various studies were being

conducted, events were changing the

volume and quality of the sewage coming

into the plant. In 1981, a substantial

portion of MSD’s sewer system was

destroyed by a series of explosions.

Additionally, industrial sewage began to

diminish in the area. Carl Neumayer, the

director of operations and maintenance of

MSD, stated in his affidavit:

As a result of the decrease in

industrial sewage discharged into

MSD’s system, coupled with the

Interim Corrective Actions

undertaken by MSD in compliance with

the Consent Decree, the quality of

MSD’s discharge effluent began to

consistently meet the BOD and TSS

effluent limitations set forth in

MSD’s EPA-issued discharge permit.

(App.116). The parties agree that, from

1986 until 1989 and for several months in

1990, the plant was meeting the permit

requirements. In July 1990, the EPA

moved for a termination of the consent

decree, "certif[{[ying] that the defendants

have fully complied with the provisions

of the Sonnet Decree." (App.64).

In the meantime, in 1989, MSD had

requested the EPA to re-evaluate the need

for the additional UNOX reactor that the

EPA omitted from its approval of the

Final Plan and Schedule. Under the Clean

Water Act, the EPA can give grants to

assist the construction of wastewater

treatment plants. 33 U.S.C. §1281(g)

(1986 & Supp.1992). But under the

complex procedures for grants, the EPA

must wait until the state has certified a

project and has determined that the

project has priority over other works

within the state. 33 U.S.C. §1284/(a) (3)

5

(1986). On July 20, 1989, the EPA,

following the established procedures for

grants under the Clean Water Act,

authorized the Commonwealth of Kentucky

to review MSD’s' request for a re-

evaluation of the need for the additional

UNOX reactor. On August 17, 1990, after

the EPA file its motion for termination

of the consent decree, MSD submitted a

proposal for bioroughing towers, in lieu

of UNOX reactor, to the Commonwealth of

Kentucky, arguing it was required because

of additional sludge flows that were not

included or anticipated in the

development of the Final Plan. As Carl

Neumayer explained in his affidavit:

MSD has been consistently

expanding its sewer lines throughout

Jefferson County in compliance with

the mandate imposed by KRS 76.010 in

order to accommodate area

development, population expansion

and public’ health needs. In

addition, MSD has assumed

responsibility for treating sewage

previously treated by private

package sewage treatment plants so

8

as to eliminate discharge of

inadequately treated sewage into

Kentucky’s waterways. In the last

several years industrial discharges

into MSD‘s sewer system have

increased. As a result, despite

MSD’s application of its best

efforts, the MFWTP during

Significant portions of 1989 and

1990 has failed to achieve the

effluent limitations imposed by the

EPA-issued discharged permit.

(App. 116-17). Kentucky certified the

bioroughing towers on August 22, 1990,

one month after the government sought to

terminate the consent decree. On Octo-

ber 1, 1990, the EPA approved funding for

the project. MSD projects the

bioroughing towers’ completion date to be

sometime in 1995.

On July 3, 1991, the district court

entered its order terminating the consent

decree. After MSD moved the court to

reconsider its order, the court entered

its final order terminating the consent

decree on November 8, 1991. MSD argued,

as it does on appeal, that until the

bioroughing towers are completed the

Final Plan and Schedule has not been

"carried out" because the UNOX reactor

(substituted with the bioroughing towers)

was in MSD’s proposed Final Plan. In its

memorandum, the court explained:

The parties agree that a

Consent Decree must remain in effect

so long as its continued enforcement

is necessary to effectuate its

purposes. The purpose of the

Consent Decree in the case at hand

was to bring MFWTP into compliance

with the law.’ The parties’ argument

over when the Consent Decree may

properly terminate stems from

conflicting interpretations of

critical terms of the Decree. MSD

argues that all the work identified

in the FP&S has not been completed

and therefore, the Consent Decree

may not be terminated. The United

States argues that MFWTP’s

compliance with effluent limitations

at any state of major modifications,

set forth in the FP&S and approved

by EPA, require termination of the

Consent Decree.

Consent decrees have been

recognized as having attributes of

both contracts and judicial acts.

United States v. ITT Continental

Baking Co., 420 U.S. 223, 236 n. 10,

95 S.Ct. 926, 934 n. 10, 43 L.Ed.2d

148 (1975); United States v. Armour

& Co., 402 U.S. 673, 681-82, 91

S.Ct. 1752, 1757, 29 L.Ed.2dad 256

(1971). Principles of contract law

are used for purposes of

interpreting the meaning of a

consent decree. Only when the

language of a consent decree is not

clear on its face, have courts been

forced to resort to equitable

considerations to define the limits

of a consent decree. Chrysler Corp.

v. United States, 316 U.S. 556, 62

S.Ct. 1146, 86 L.Ed. 1668 (1942).

We find the language of the

decree is quite clear and that its

purposes have been accomplished.

Appendix A of the Consent

Decree provides for MSD to undertake

a series of interim steps’ to

determine whether limited

improvements would bring about

compliance with "applicable effluent

limitations." A cost effectiveness

analysis of suggested major plant

modifications was to be implemented

in the event that the interim steps

did not result in compliance and

only then was the FP&S to be

developed by MSD. Nothing in the

language of the Consent Decree or

the Memorandum of Understanding

compels the conclusion that the EPA

was required to approve the entire

FP&S and initially submitted by MSD.

It appears from the face of the

Consent Decree that MSD’s

requirement to implement any of the

FP&S was contingent on EPA’s

approval of any part of the FP&S.

The record shows that MSD formally

approved the FP&S and found MSD to

11

be in compliance with "applicable

effluent limitations" in November of

1988. MSD does not deny that it was

in compliance with the renewed NPDES

permit in November of 1988 and it

had been in compliance until 1990.

Therefore, the duties of EPA and MSD

under the terms of the Consent

Decree ended as of November 1988.

The July 20th, 1989, letter to

KNREPC from the EPA does not suggest

that the EPA changed its position as

to the requirements of the Consent

Decree.

In addition, Section V of the

Consent Decree contemplates that the

"applicable effluent limitations"

referred to throughout the Consent

Decree are those limitations imposed

by the NPDES permit issued in 1977

and the renewed permit which expired

in 1987. MSD requested approval of

Battery D from the KNREPC based on a

projected increase in effluent flow

anda the heightened requirements of a

proposed NPDES permit.

SuThe authority of a federal

district court to adopt a consent

decree comes only from the statute

which the decree is intended to

enforce. If there is a ‘purpose* to

the effectuated, it is the purpose

of the statute pursuant to which the

government seeks relief. Within

that framework the parties strike

their bargain." United States v.

Motor Vehicle Manufactures Assoc. of

the United States, 643 F.2d

644,650(9th Cir. 1981).

(App. 176-178) footnote 6 omitted).

rT.

On appeal, defendants dispute the

governments’ assertion and the district

court’s conclusion that the purpose of

the consent decree has been met. MSD

argues that the purpose of the consent

decree was to bring the MFWTP into

compliance with its permit limits while

operating at its design capacity of 10:

million gallons of sewage flow per day.

Defendant initially opposed _ the

entering of the consent decree, taking

"the position that the more appropriate

means of resolving the issues would be an

extension of its existing NPDES permit.or

an administrative order." (App. 86).

Thus, we confront the facial anomaly,

recognized by the district court in its

memorandum and order denying defendant’s

request for a stay, issued July 2, 1992,

13

eee CLL LLL LLL LLL LLL LLL LLL

of a defendant arguing it has not

completed all the requirements of the

consent decree and therefore the decree

should not be terminated. Normally,

liability under the Clean Water Act is

strict, regardless of how efficiently an

individual operates a plant. See United

States v. Texas Pipeline Co., 611 F.2d

345 (10th Cir. 1979). Through the

consent decree, defendant was allowed to

avoid penalties so long as it, in good

faith, used its best efforts to run the

plant as efficiently as possible and take

the required steps in

Although defendant did consistently m

its permit requirements

in a row, ;t seeks to maintain tne

completed. '

Defendant argues that the only

reason the plant was able to meet its

permit requirements for those years was

due to decrease in sewage flow and a

concurrent increase in the "quality" of

incoming sewage. MSD asserts that the

government’s position taken to the

extreme is ludicrous: the plant could

have met the permit requirements from day

one be reducing its intake. However, MSD

fails to see the parallel in its

argument; taken to its extreme, MSD’s

position is untenable. What if the

bicroughing towers fail to bring the

‘When this action was first brought,

the civil penalties were $10,000 per day.

The Clean Water Act has_ since been

amended to provide for civil penalties up

to $25,000 per day. 33 U.S.C. $3339 (a)

(Supp. 1992).

plant within its permit limits while

operating at the design capacity? Under

MSD’s proposed analysis of the consent

decree, the purpose of the decree would

not be achieved, so it must remain in

force until additional measures are

taken.2 Presumably, in the interim, MSD

could continue to take no more and more

-

customers, thus making the effluent

oa

requirements harder to attain.

-

Wn

1

a

ct

2uThe whole purpose of the Co

Decree was to correct [the plant’s)

defects. It follows that until all the

defects are corrected, the purpose of

the Consent Decree has not been met."

(Def’s Brief at 16). To counteract the

extremity of their position, defendant,

in response to the government’s motion

to terminate the consent decree, moved

for modification of the decree setting

date certain for

The parties agree that the consent

decree should terminate when the purpose

of the decree has been fulfilled. They

differ significantly on what that purpose

18. The “four corners" of a consent

decree are examined to determine its

scope. Firefighters Local Union No. 1784

v. Stotts, 467 U.S. 561, 574 (1984). We

agree with the district court that the

purpose of the consent decree was to

bring the plant into compliance with the

law; indeed, its violation of the law is

what prompted the EPA to bring the

initial enforcement action. There is no

indication in the consent decree that

compliance while processing 105 million

gallons of sewage was required.

This conclusion is further bolstered

by an examination of the Clean Water

Act’s purposes. A consent decree should

be construed against the background of

the statue under which the action was

17

brought. Las Vegas v. Clark County, 755

F.2a 697, 702 (9th Circ. 1985); United

States v. Motor Vehicle Mfrs. Ass’Nn of

the United States, Inc., 643 F.2d 644,

(Oth Cir. 1981). The Clean Water Act

ON

UI

io

does not contemplate compliance with

NPDES permit while operating at design

capacity; 1t requires compliance with

permits, period. If a plant must reduce

Ww

)

permits have a duration of five years,

ct

9)

\y

a)

(dD

general rule, subsequen perm}

supposed to be no less stringent

one befcre 1t 33 U.S § (1342) (0) (4

(Ss 1a 0% ThHrenr =n om -_ a

upp. 1992 Through continued

enforcement of the consent decree, MSD 1S

seeking to be held to the eff ent

=> 7 —o 4 —

limitations of a permit 1ssuea fifteen

pecause

additional UNOX reactor was in MSD’s

original Final Plan and Schedule and that

because the EPA eventually approved its

construction, MSD should be allowed to

complete it without the risk of civil

penalties. When the parties entered into

the consent decree, the additional UNOX

reactor was in the category of those

items that were eligible for funding but

would not be funded unless their

necessity was shown. It was not until

after the MFWTP has been meeting its

permit limits for several years that an

increase in sewage quantity caused the

EPA, through the Commonwealth of

Kentucky, to find the additional UNOX

reactor (substituted by the bioroughing

towers) necessary. The 1978 consent

decree’s purpose was not to correct the

design problems of the MFWTP for future

increase sewage flow, but to correct the

problems so that the then current

19

effluent met the permit limits. Indeed,

the EPA seemed correct in its evaluation

of the need for the additional UNOX

reactor. The modifications the EPA

approved without the UNOX reactor helped

the MFWTP to finally achieve its permit

limits, and to do so for several years.

Additionally, this litigation 1S

primarily between two institutions -- tne

Environmental Protection Agency and the

Louisville and Jefferson County

Metropolitan Sewer District.

(Cjonsent decrees which regulate

institutional conduct are

fundamentally different from consent

decrees between private parties

(Tjhey affect more than the rights

of the immediate litigants. The

decrees reach beyond the parties

involved directly in the suit and

impact on the public’s right to the

sound and efficient operation of its

institutions.

Heath v. De Courcy, 888 F.2d 1105, 1109

(6th Cir. 1989). Considering the

public’s interest in compliance with the

Clean Water Act, we are not prepared to

say that a plant that was able to comply

with its required effluent limitations

for several years should now be allowed

to again violate its permit with impunity

while constructing new equipment. For 11

years, MSD has been allowed to use its

"best efforts" to fix the problems at the

plant without the fear of stiff civil

penalties, and for several years the

plant was able to comply with its permit.

As the district court recognized, the

purpose of the consent decree was

achieved.

AFFIRMED.

Filed 1/12/93

Issued as Mandate 3/23/93

,

A

UNITED STATES V. METROPOLITAN SEWER

DISTRICT

MERRITT, Chief Judge, dissenting.

The Conser Decree is a contract between

the government and the sewer district I

disagree with the ourt’s holding that

"the purpose of the consent decree was

achieved" and that the decree should,

therefore, be terminated The “effluent

limitations" were met for only a snort

'

?

period at very low levels of discnarge

oxygenation towers to correct the

problem. This work will cause part of

the plant to remain shut down until

ompletion These additions are tne type

of improvements contemplated in the

decree. The decree was entered to give

the sewer district a change to maxe sucn

improvements. While this new

construction lS golng on, the plant

cannot meet effluent Limitations

Although the agreement is more than a

decade old, the plant cannot meed the

standards in the part because the EPA did

not authorize construction of the new

towers until 1990.

There is no suggestion in the record

that the district has not done everything

it can under the consent decree to comply

with the effluent standards. The sewer

district advised EPA years ago that the

towers would be needed, but EPA

disapproved until two years ago. With

construction incomplete, why should the

decree end now? Why now subject the

district to another lawsuit and to

$25,000 a day in penalties. If the

district is breaching the decree, it

should be required to comply, but there

is no such claim. And there is no claim

that the plant has ever met effluent

limitations at its design capacity or at

its present levels of effluent discharge.

23

It may be administratively more

convenient for EPA to have the agreement

terminated now. It may be unfair to some

cities which have no comparable agreement

to require them to pay penalties when

they fail to meet effluent limitations.

It may be that EPA made a bad deal when

it signed this consent decree. But none

of these are reasons: which justify

termination of the settiement agreement.

The only reason the government gives as a

justification for seeking termination --

"the purpose of the decree has_ been

satisfied" --is simply not the case.

There may be other reasons to terminate

the agreement, but this one is a legal

fiction. It sets a bad precedent to

allow the contract to be set aside on

this basis. I would not simply defer to

the government in such matters of

contract construction and enforcement.

24

The government is, after all, a party to

the contract.

kms 493/apendx2.bg1

25