Appendix — City of New York, New York v. Catskill Mountain Chapter of Trout Unlimited (No. 06-729)

oe _

‘ *

No. OFFI. JF “HE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

Ciry OF NEW YORK, NEW YorK City DEPARTMENT OF

ENVIRONMENTAL PROTECTION, and JOEL A. MIELE, SR..,

Commissioner of Department of Environmental Protection.

Petitioners,

“V.-

CATSKILL MOUNTAINS CHAPTER OF TROUT UNLIMITED, LTD.,

THEODORE GORDON FLYFISHERS, INC., CATSKILL-DELA WARE

NATURAL WATER ALLIANCE, INC., FEDERATED SPORTSMEN’S

CLUBS OF ULSTER COUNTY, INC., RIVERKEEPER, INC., STATE OF

NEW YORK, NEW YORK STATE DEPARTMENT OF

ENVIRONMENTAL CONSERVATION, and ERIN M. CROTTY,

Commissioner of the New York State Department of

Environmental! Conservation,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Second Circuit

APPENDIX TO PETITION FOR A WRIT OF

CERTIORARI

LEONARD J. KOERNER,* MICHAEL A. CARDOZO,

HILARY MELTZER, Corporation Counsel of the

WILLIAM S. PLACHE, City of New York

BRIDGET EICHINGER.** 100 Church Street

of Counsel. New York, NY 10007

*Counsel of Record (212) 788-1585

** Awaiting Admission

November 20, 2006

. APPENDIX TO PETITION

FOR WRIT OF CERTIORARI

TABLE OF CONTENTS

Decision of the United States

Court of Appeals for the Second

Circuit, Dated June 13, 2006

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Memorandum-Decision and Order of the United States

District Court for the Northern District

Of New York, Dated October 4, 2000.00.00. ccc eeeeeeeeeee

Decision and Order of the United States

District Court for the Northern District

of New York, Dated January 19, 2001 ...............:ccececcsseeeseees

Decision of the United States

Court of Appeals for the Second

Circuit, Dated October 3, 2001

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Order of the United States

District Court for the Northern District

Of New YOK, LIMOd UMC. 4, ZOOL ..ccrcsrsvscvesovseresserssqnonevsvevessys

Memorandum-Decision and Order of the United States

District Court for the Northern District

of New York, Dated ;

February 6, 2003 (Reported at 244 F. Supp. 2d 41) ..............

Ordez and Amended Judgment of the United States

District Court for the Northern District

of New York, Dated October 23, 2006 ..................c0cccseccseeees

Order of the United States

Court of Appeals for the Second

Circuit, On Petition for Rehearing and Rehearing

ee 2, CUED ssvcereceeseecoccsesesevecevesvsovecsoeserss A139

Relevant Provisions of Federal Water

ec sconuovevevoreveoneseers A143

United States Environmental Protection Agency,

Notice of Proposed Rulemaking, National Pollutant

Discharge Elimination System (NPDES)

Water Transfers Proposed Rule,

71 Fed. Reg. 32, 887, (proposed June 7, 2006)

(to be codified at 40 C.F.R. pt. 122)

(“Notice of Proposed Rulemaking”’)...............::ccsceseeeeeeeees Al?70

Ann Klee & Benjamin Grumbles, United States

Environmental Protection Agency,

Agency Interpretation on Applicability of

Section 402 of the Clean Water Act to Water Transfers

(Aug. 5, 2005) (“EPA Interpretation”) ................:cccesseeeeeeeees A205

DECISION OF THE UNITED STATES

COURT OF APPEALS FOR THE SECOND

CIRCUIT, DATED JUNE 13, 2006

(Reported at 451 F.3d 77)

REPRODUCED FOLLOWING

Al

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2005

(Submitted: November 21, 2005

Decided: June 13, 2006)

Docket Nos. 03-7203 (L); 03-7253 (XAP)

CATSKILL MOUNTAINS CHAPTER OF TROUT

UNLIMITED, INC., THEODORE GORDON

FLYFISHERS, INC., CATSKILL-DELAWARE

NATURAL WATER ALLIANCE, INC., FEDER-ATED

SPROTSMEN’S CLUBS OF USLTER COUNTY, INC.

and RIVERKEEPER, INC.,

Plaintiffs-Appellees-Cross-Appellants,

- VY .7

CITY OF NEW YORK and NEW YORK CITY

DEPARTMENT OF ENVIRONMENTAL

PROTECTION,

Defendants-Third-Party-Plaintiffs-

Appellants-Cross-Appellees,

JOEL A. MIELE, SR., COMMISSIONER of the

Department of Environmental Protection,

Defendant-Appellant-Cross-Appellee,

- V. -

STATE OF NEW YORK, NEW YORK STATE

DEPARTMENT OF ENVIRONMENTAL CONSERVA-

TION, and ERIN M. CROTTY, Commissioner of the

A2

New York State Department of Environmental

Conservation,

Third-Party-Defendants-Appellees.

Before:

WALKER, Chief Judge,

OAKES and JACOBS, Circuit Judges.

Appeal from a decision of the United States District

Court for the Northern District of New York (Frederick J.

Scullin, Jr., Chief Judge) holding the City of New York

liable for violations of the Clean Water Act, imposing civil

penalties, and awarding injunctive relief to Plaintiffs-

Appellees-Cross-Appellants.

AFFIRMED in part and REMANDED in part.

KARL S. COPLAN, Pace _ Environmental

Litigation Clinic, Inc. (Kara E. Murphy, Legal

Intern, on the brief), White Plains, New York,

for Plaintiffs-Appellees-Cross-Appellants.

HILARY MELTZER, Assistant Corporation

Counsel (Michael A. Cardozo, Corporation

Counsel of the City of New York, William S.

Plache, on the brief), New York, New York,

for Defendants’ -Third- Party-Plaintiffs-

Appellants-Cross-Appellees. |

JAMES M. TIERNEY, Assistant Attorney

General (Eliot Spitzer, Attorney General of the

State of New York, Michelle Aronowitz,

Deputy Solicitor General, Peter H. Lehner,

A3

Chief, Environmental Protection Bureau,

Gordon J. Johnson, Deputy Bureau Chief,

Robert H. Easton, Assistant Solicitor General,

on the brief), Albany, New York, for Third-

Party-Defendants-Appellees.

JOHN M. WALKER, JR., Chief Judge:

The City of New York (“the City”) operates the

Shandaken Tunnel (“Shandaken Tunnel” or “the Tunnel”)

as part of its water-management system that delivers

drinking water to New York City and the immediate

surrounding area. Water from the Tunnel, which is high in

turbidity, discharges into the Esopus Creek (“Esopus

Creek” or “the Creek’’), a trout stream used for flyfishing

and other recreational activities. The Catskill Mountains

Chapter of Trout Unlimited, Inc., Theodore Gordon

Flyfishers, Inc., Catskill-Delaware Natural Water Alliance,

Inc., Federated Sportsmen’s Clubs of Ulster County, Inc.,

and Riverkeeper, Inc. (collectively “Catskills”) brought a

citizen suit against the City, alleging that the City’s use of

the Tunnel without a permit violated the Clean Water Act

(“CWA” or “Act”), 33 U.S.C. §§ 1251 et seq. In an

October 21, 2001, opinion, we held that the CWA permit:

requirements apply to the Shandaken Tunnel discharges

and remanded to the district court. On remand, the district

court assessed a $5,749,000 civil penalty against the City

and ordered the City to obtain a permit for the operation of

the Tunnel. This appeal followed.

BACKGROUND

I. Relevant Clean Water Act Provisions

The purpose of the CWA is “to restore and maintain

the chemical, physical, and biological integnty of the

Nation’s waters.” 33 U.S.C. § 1251(a). As part of the

program to achieve this goal, the Act states that “the

discharge of any- pollutant by any person shall be

unlawful,” id. § 1311(a), unless it is done in compliance

with other provisions of the Act. One of those other

provisions, the National Pollutant Discharge Elimination

System (“NPDES”), id. § 1342(a), establishes a permit

system. Under this provision, the Environmental Protection

Agency (“EPA”) or state administrators may issue a permit

for the discharge of a pollutant at levels below the effluent

limitations specified in the permit. Jd. The CWA broadly

defines “discharge of a pollutant” as “any addition of any

pollutant to navigable waters from any point source.” /d. §

1362(12).

Although the CWA establishes this federal

permitting scheme, the Act also recognizes that states retain

the primary role in planning the development and use of

land and water resources, id. § 1251(b), allocating

quantities of water within their jurisdictions, id. § 1251(g),

and regulating water pollution, as long as those state

regulations are not less stringent than the requirements set

by the CWA, id. § 1370.

Il. The Shandaken Tunnel and the Esopus Creek

As part of the water system that supplies New York

City with its dmnking water, the City maintains the

Schoharie Reservoir in the Catskill Mountains. To deliver

this water eventually to New York City, water from the

Schoharie Reservoir is diverted through the eighteen-mile

Shandaken Tunnel and discharged into the Esopus Creek.

The Creek’s water, in tum, flows into the Ashokan

Reservoir, through the Catskill Aqueduct, to a series of

reservoirs and tunnels along the east side of the Hudson

River, and eventually to New York City. Absent the man-

made diversion through the Tunnel, water from the

Schoharie Reservoir would never reach the Esopus Creek.

Catskill Mountains Ch. of Trout Unltd. v. City of New York,

273 F.3d 481, 484 (2d Cir. 2001) (“Catskills I’’).

Because water in the Schoharie Reservoir contains

suspended solids from both natural and man-made causes,

discharges from the Tunnel into the Creek are more turbid’

than the waters of the Esopus. This turbidity impairs use of

the Esopus for fly fishing and other recreational activities.

Pursuant to state regulations, the City has been studying

ways to reduce the turbidity in the water discharged from

the Tunnel but so far has failed to find a way to do so. Until

this lawsuit, neither the EPA nor the New York State

Department of Environmental Conservation (“NYDEC’”),

the agency that enforces the CWA in New York State, had

ever regulated the turbidity in the Tunnel under the CWA’s

permitting scheme.

Ill. Procedural History

In March 2000, Catskills, recreational users of the

Esopus Creek, brought this citizen suit under the CWA

alleging that the City’s discharge of turbid water from the

Tunnel violated 33 U.S.C. § 1311(a), which, as we said,

prohibits “the discharge of any pollutant” ‘without a

discharge permit. The district court dismissed the claim on

the pleadings, holding that the discharge from the Tunnel

did not constitute an ‘“‘addition” of a pollutant to the Creek

under 33 U.S.C. § 1362(12).

' The parties do not contest that turbidity qualifies as a pollutant under

the CWA.

A6

In October 2001, we reversed after concluding that

the discharge of water containing pollutants from one

distinct water body into another is an “addition of [a]

pollutant” under the CWA. Catskills /, 273 F.3d at 491-93.

As a result, we determined that the discharge from the

Tunnel into the Creek requires a permit.

On remand from Catskills J, the district court

granted summary judgment to the plaintiffs and went on to

deter-mine the civil penalties to be assessed against the

City. The district court concluded that no penalties should

be imposed for the City’s actions prior to June 22, 2002,

eight months after Catskills / put the City on notice that it

needed a permit for the Shandaken discharges. Finding a

delay of more than eight months unreasonable, however,

the district court imposed the maximum penalty for the

period from June 22, 2002, to December 31, 2002, when

the City filed its permit application; the penalty totaled

$5,749,000. This appeal followed.

DISCUSSION

In this appeal, the City asks us to reconsider our

holding in Catskills J that the discharge of turbid water

from the Shandaken Tunnel into the Esopus Creek requires

a permit. The City also argues that the penalty of

$5,749,000 is too high. In a cross-appeal, Catskills argues

that amount Is too low.

We are free to reconsider our holding in Catskills /

if there are cogent, compelling reasons for doing do, such

as a change in controlling law or newly discovered facts.

United States v. Tenzer, 213 F.3d 34, 39 (2d Cir. 2000).

Determining whether we should reconsider requires briefly

revisiting our reasoning in Catskills 1.

I. Catskills I

In concluding that the transfer of turbid water from

the Shandaken Tunnel to the Esopus Creek qualified as the

“discharge of [a] pollutant,” 33 U.S.C. § 131 | (a), requiring

an NPDES permit, Catskills I first noted the CWA’s broad

definition of the “discharge of a pollutant” as “any addition

of any pollutant to navigable waters from any point

source.” /d. § 1362(12). Because the Shandaken Tunnel

“plainly qualifies as a point source,” Catskills I, 273 F.3d at

493, our holding rested, in principal part, on the meaning of

“addition,” which the CWA leaves undefined. We decided

that “‘addition” means the introduction into navigable water

from the “outside world,” with the outside world being

defined as “any place outside the particular water body to

which pollutants are introduced.” /d. at 491.

In reaching this result, we distinguished the “dams

cases,” on which the City relied. In National Wildlife

Federation v. Gorsuch,’ 693 F.2d 156 (D.C. Cir. 1982), and

National Wildlife Federation v. Consumers Power Co. by

862 F.2d 580 (6th Cir. 1988), two sister circuits held that

water taken from a water source and then released back into

> This phrase comes from the definition of the word “addition” urged

by the EPA on the court in National Wildlife Federation v. Gorsuch,

693 P.2d 156, 175 (D.C. Cir. 1982). In Gorsuch, the EPA argued that

an “addition of a pollutant” takes place only if the point source

introduces a pollutant into the water from the outside world. /d.

* Gorsuch involved water released from a dam that, due to its impound-

ment, had a low dissolved oxygen rate, variable water temperature,

high concentrations of dissolved minerals and nutrients, increased

sediment levels, and was supersaturated with air---attributes that can be

harmful to downstream waters and the wildlife inhabiting them. /d. at

161-64.

* Consumers Power involved water pumped from Lake Michigan

through the turbines of a hydroelectric power plant and then released

back into the lake-a process that pureed fish and other aquatic life and

then released their remains as “polluiants” back into the lake. 862 F.2d

at 583.

that same source was not an “addition” to navigable waters

under the CWA, despite the fact that the water so released

contained “pollutants.” 693 F.2d at 183; 862 F.2d at 587.

This case differed from the dams cases, we believed,

because the Tunnel discharges water into the Creek from a

source that is a different, distinct body of water. Catskills I,

273 F.2d at 491-92. In Catskills I, we analogized the dams

cases to a soup ladle scooping soup out of a pot and

returning it to that pot, a type of water transfer known as an

intrabasin transfer. The Tunnel’s discharge, in contrast,

was like scooping soup from one pot and depositing it in

another pot, thereby adding soup to the second pot, an

interbasin transfer. Interbasin transfers, we held in Catskills

/, constitute “additions,” rendering the City’s reliance on

the dams cases misplaced. /d. at 492.

We also rejected the City’s “unitary water” theory

of navigable waters, which posits that all of the navigable

waters of the United States constitute a single water body,

such that the transfer of water from any body of water that

is part of the navigable waters to any other could never be

an “addition.” We pointed out that this theory would lead

to the absurd result that the transfer of water from a heavily

polluted, even toxic, water body to one that was pristine via

a point source would not constitute an “addition” of

pollutants and would not be subject to the CWA’s NPDES

permit requirement. /d. at 493. Catskills I rejected the

“unitary water” theory as inconsistent with the ordinary

meaning of the word “addition.” /d.

Finally, we rejected the contention that the

provisions of the CWA reserving power to the states could

overcome the express permit requirement for water

transfers that result in the addition of pollutants. We

pointed out that “like many complex statutes ... the CWA

balances a welter of consistent and inconsistent goals” but

that “none of the statute’s broad purposes sways us from

what we find to be the plain meaning of its text.” /d. at 494.

AQ

Il. Intervening Legal Developments

Following Catskills I, there have been two relevant

legal developments. The Supreme Court decided South

Florida Water Management District v. Miccosukee Tribe of

Indians, 541 U.S. 95 (2004), and the EPA issued an agency

interpretation addressing the applicability of the CWA’s

NPDES permit requirement to water transfers such as the

one at issue in this case.

Miccosukee was a citizen suit contending that an

NPDES permit is necessary for the South Florida Water

Management District to operate a pump that conveys water

from a polluted canal to an undeveloped wetland. The

pump serves both to prevent the basin surrounding the

canal from flooding and to preserve the wetland area. /d. at

100-01. Consistent with the dams cases, Miccosukee held

that if the canal and the wetlands are not meaningfully

distinct water bodies-an unresolved factual question-no

NPDES permit is required. /d. at 112; cf S.D. Warren Co.

v. Me. Bd. of Envtl. Prot., 126 S. Ct. 1843, 1850 (2006)

(“[I]f two identified volumes of water are simply two parts

of the same water body, pumping water from one into the

other cannot constitute an “addition” of pollutants.”

(quoting Miccosukee, 541 U.S. at 109) ).

On August 5, 2005, the EPA issued an agency

interpretation regarding whether the movement of

pollutants by a water transfer from one navigable water to a

separate one is the “addition” of a pollutant subjecting the

activity to the NPDES permitting requirement. According

to the EPA, several provisions of the CWA indicate

Congress’s intent that such transfers be regulated by the

states, not by the federal NPDES program. The EPA

interpretation argues that, rather than primarily focusing on

the meaning of the word “addition,” as we did in Catskills

I, a “holistic” view of the statute that takes this intent into

account is appropriate.

The City concedes that this EPA interpretation is

not entitled to Chevron deference. See Chevron U.S.A., Inc.

v. Natural Res. Def., 467 U.S. 837 (1984). Instead, the

deference described in Skidmore v. Swift & Co., 323 US.

134 (1944), and United States v. Mead Corp., 533 U.S. 218

(2001), is applicable. We thus defer to the agency interpre-

tation according to its “‘power to persuade.”” Mead, 529

U.S. at 235 (quoting Skidmore, 323 U.S. at 140).

III. Reconsideration of Catskills I

We turn to the City’s request that we reconsider our

holding in Catskills /. Rather than offering “compelling and

cogent” reasons for reconsideration, however, the City

basically serves us warmed-up arguments that we rejected

in Catskills [, with the additional contention that either the

Supreme Court’s Miccosukee decision, the EPA interpreta-

tion, or both compel a result different from the one we

reached earlier. We disagree.

The City first argues that new evidence developed

below and the Supreme Court’s decision in Miccosukee

invalidate the distinction between intrabasin and interbasin

water transfers. The “new evidence” the City points to

simply shows that the release of water from a dam into

down-stream water is no less likely to add pollutants as

would a transfer of water from a distinct water body.

Having considered the dams cases in Catskills I, we were

aware of the presence of pollutants in intrabasin transfers.

Gorsuch includes an extensive discussion of the nature of

water quality changes wrought by dammed water. 693 F.2d

at 161-64. And in Consumers Power, the water at issue

contained fish that were pulverized as they passed through

the turbines of a hydroelectric power plant and then were

reintroduced into Lake Michigan as biological waste. 862

F.2d at 582. Nonetheless, Catskills | concluded that, despite

the presence of pollutants in both interbasin and intrabasin

transfers, interbasin transfers are properly distinguished

All

because they “‘add” pollutants to the navigable waters. See

Catskills ', 273 F.3d at 492. This has not changed.

Nor does the Supreme Court’s decision in

Miccosukee render inter- and _ intra-basin _ transfers

indistinguishable. Miccosukee cited with approval our

“soup ladle” analogy and the distinction between inter- and

intra-basin transfers. 541 U.S. at 109-10. The Court

remanded the case to the district court to determine whether

the water bodies in question were “two pots of soup, not

one.” /d.; cf. S.D. Warren Co., 126 S. Ct. at 1850 n.6. This

remand would be unnecessary if there were no legally

significant distinction between inter- and _intra-basin

transfers.

The City also reasserts the unitary-water theory of

navigable waters. Our rejection of this theory in Catskills 1,

however, is supported by Miccosukee, not undermined by

it. In that case, the Supreme Court pointed out that several

provisions of the CWA seem to distinguish among water

bodies that are part of the navigable waters of the United

States, implying that, at least in the context of the CWA,

the unitary-water theory has no place. 541 U.S. at 105-09.

Miccosukee also noted that the EPA has never endorsed the

theory in any administrative documents. /d. at 107. Indeed,

the Supreme Court pointed out that “the agency once

reached the opposite conclusion.” /d. Thus, Miccosukee did

no more than note the existence of the theory and raise

possible arguments against it. This does not constitute a

change of controlling jaw warranting reconsideration of

this court’s previous decision on the issue.

Finally, the City points to the “holistic” argument,

reflected in the EPA’s 2005 agency interpretation,” to assert

> As noted above, the EPA’s agency interpretation is entitled to

deference only insofar as it has the power to persuade. See Skidmore,

323 US. at 140. Because the EPA and the City assert the same

Al2

that the proper allocation of rights and responsibilities

between the states and the federal government for water

regulation necessitates a reconsideration of our holding in

Catskills I. This proposition is supported by amicus curiae

briefs filed by western states who fear that the Catskills ]

rule will upend state regulation of water rights.

The argument relies on sections 101(g) and 510 of

the CWA, 33 U.S.C. §§ 1251(g), 1370, both of which

expressly reserve the authority of states over the water

within their jurisdiction, as well as section 304(f) of the

CWA, 33 U.S.C. § 1314(f), which governs non-point-

source pollution. Section 101(g) provides that “the

authority of each State to allocate quantities of water within

its jurisdiction shall not be superseded, abrogated or

otherwise impaired.” Section 510 states that “[e]xcept as

expressly provided in this chapter, nothing in this chapter

shall . . . be construed as impairing or in any manner

affecting any nght or jurisdiction of the States with respect

to the waters . :. of such States.” Because, according to the

City, there are no feasible means of reducing the pollution

in the Tunnel, a permit requirement would effectively

amount to a ban on the transfer of water from the Tunnel to

the Creek and thereby interfere with New York’s statutory

water allocation rights.

This argument, too, was raised by the City in

Catskills I, albeit less elaborately, and, as with the.

interbasin/ intrabasin distinction and the unitary-waters

theory, Miccosukee fails to alter the legal landscape to

support the “holistic” theory. The power of the states to

allocate quantities of water within their borders is not

contentions on this point, we address the City and the EPA’s position

as one. For reasons discussed below, we do not find the argument

persuasive and therefore decline to defer to the EPA.

Al3

inconsistent with federal regulation of water quality.

Section 510 provides for the prescrvation of the preexisting

rights of states not in conflict with the other requirements

of the CWA (“except as expressly proved in this chapter”).

Indeed, the Supreme Court has held that “{s]ections 101(g)

and 510(2) preserve the authority of each State to allocate

water quantity as between users; they do not limit the scope

of water pollution controls...” PUD No. 1 v. Wash. Dep't

of Ecology, 511 U.S. 700, 720 (1994)., To be sure,

Miccosukee acknowledged the possibility that “construing

the NPDES program to cover such transfers would . . . raise

the costs of water distribution prohibitively, and violate”

section 101(g). Miccosukee, 541 U.S. at 108. But in the

next sentence, the Court recognized that, despite their

potential cost, such permits nevertheless might be neces-

sary to protect water quality. /d.

Nor does Miccosukee support the EPA and the

City’s argument that the non-point-source provisions of the-

CWA indicate congressional intent to leave interbasin

water transfers outside the NPDES permitting scheme.

Section 304(f) of the CWA directs the EPA to study and

make recommendations for the regulation of pollutants

spread by non-point sources, such as “changes in the

movement, flow, or circulation of any navigable waters or

ground waters, including changes caused by the

construction of . . . flow diversion facilities.” 33 U.S.C. §

1314(f)(2)(F). From this language, the EPA and the City

claim that Congress intended that changes in the circulation

of navigable waters caused by the construction of “flow

diversion facilities,” such as the Tunnel, be exempt from

the permit requirements that apply to point sources. As the

Supreme Court pointed out in Miccosukee, however,

“1314(f(2)(F) does not explicitly exempt nonpoint

pollution sources from the NPDES program if they also fall

within the ‘point source’ definition.” 541 U.S. at 106.

In the end, while the City contends that nothing in

the text of the CWA supports a permit requirement for

interbasin transfers of pollutants, these “holistic” arguments

about the allocation of state and federal nghts, said to be

rooted in the structure of the statute, simply overlook its

plain language. NPDES permits are required for “the

discharge of any pollutant,” 33 U.S.C. § 1311(a), which is

defined as “any addition of any pollutant to navigable

waters from any point source,” id. § 1362(12). It is the

meaning of the word “addition” upon which the outcome of

Catskills I turned and which has not changed, despite the

City’s attempts to shift attention away from the text of the

CWA to its context. In Catskills I, we pointed out. that

complex statutes often have seemingly inconsistent goals

that must be balanced. 273 F.3d at 494. The CWA seeks to

achieve water allocation goals as well as to restore and

maintain the quality of the nation’s waters. The City and

the EPA would have us tip the balance toward the alloca-

tion goals. But in honoring the text, we adhere to the

balance that Congress has struck and remains free to

change.

The City’s final argument for reconsideration is that

other provisions of federal and state law are more appropri-

ate means of regulating the water discharged from the

Shandaken Tunnel. The City points to the Safe Drinking

Water Act, which limits the levels of contaminants that are

allowed in public drinking water; section 303(d) of the

CWA, which regulates pollution levels resulting from

pollution from both point and non-point sources; and

various provisions of state law that regulate water quality.

While these provisions no doubt contribute to the goals of

pollution reduction and regulation, the City does not

explain how their existence invalidates a separate, inde-

pendent requirement imposed by the permitting scheme of

the CWA.

Al5

The City’s plea for reconsideration appears to rest

upon the assumption that regulating the discharge from the

Tunnel would effectively require that the flow be stopped

altogether. This claim seems to us exaggerated. We think

the flexibility built into the CWA and the NPDES permit

scheme, a flexibility that the City has endorsed in a related

proceeding,® will allow federal authority over quality

regulation and state authority over quantity allocation to

coexist without materially impairing either.

We conclude this section with a somewhat detailed

and technical accounting of the flexibilities that exist.

Effluent limitations contained in NPDES permits fall into

two categories: technology-based effluent _limits’

(“TBELs”) and water-quality-based effluent limits

(“WQBELs”).® Where, as here, no applicable national

TBELs have been set, the permit-writer may set TBELs

using best professional judgment. See 33 US.C. §

1342(a)(1)(B); 40 C.F.R. § 125.3. In doing so, NYDEC will

consider the available technologies, costs in relation to

effluent reduction benefits, engineering aspects of various

control techniques, available best management practices,

and nonwater-quality environmental impacts. See 40 C.F.R.

§ 125.3(c), (d). This process thus affords the permit-writer

“considerable flexibility in establishing permit terms and

* The City has acknowledged the NPDES system's flexibility in hear-

ings related to its permit application. See /n re Application of the New

York Cite Department of Environmental Protection, DEC Application

No. 3-5150-00420/0000!1, 2005 N.Y. Envy. Lexis 40, at *24, *26 (June

27, 2005) (Ruling on Issues and Party Status).

’ Technology-based limits are based on the effluent levels that can be

achieved through the use of various water treatment technologies. See

40 CFR. § 125.3.

* Water-quality-based limits are those limits needed to ensure the

appropriate water quality of the receiving water body. That water

quality is specified by the state in which the water body is located.

conditions.” EPA, NPDES Permit Writers’ Manual 69

(1996). Only if the TBELs established by the NYDEC

prove insufficient to achieve the water quality standards set

by the state for the Esopus Creek’ will more stringent

WOBELs be adopted. 33 U.S.C. § 1312(a); 40 C.F.R. §

122.44(d).

If the City is unable to comply with the effluent

limitations adopted by the NYDEC, CWA provisions and

implementing regulations still provide means of enabling

the NYDEC to issue a valid permit to the City. The permit

may include a schedule of compliance, allowing the

permittee to achieve compliance over time. 33 U.S.C. §

1362(17); 40 C.F.R. § 122.47. Indeed, the current draft

permit prepared by the NYDEC in this case includes a

compliance schedule that requires the City to investigate

both technological and structural solutions to the turbidity

problem and to implement those solutions according to a

specified schedule. See NYS Env. Notice Bulletin, Notice

of Completed Application for Shandaken Tunnel Outlet 7-9

(August 4, 2004).

Second, the NYDEC may allow a variance to

WQBELs if the permittee demonstrates that achieving the

effluent limitation contained in the permit is not feasibie.

40 C.F.R. § 131.13; N.Y. Comp. Codes R. & Regs. tit. 6, §

702.17(b).'° A variance is temporary and must include

” With respect to turbidity for water bodies like the Esopus Creek, New

York’s water quality standards require that there be “[n]Jo increase that

will cause a substantial visible contrast to natural conditions.” N.Y.

Comp. Codes R. & Regs. tit. 6. § 703.2.

’ Under N.Y. Comp. Codes R. & Regs. tit. 6, ti 702.17, the City might

be eligible for a variance on the basis that its compliance with the

existing standard is precluded by “naturally occurring pollutant

concentrations,” id. § 702.17(b)(1); “human-caused . . . sources of

pollution,” id. § 702.17(b){3); “dams, diversions or other types of

hydrologic modifications,” id. § 702. 17(b)(4); or the fact that

Al7

conditions to assure that the permittee makes “reasonable

progress . . . toward achieving the [original] effluent

limitations.” Jd. § 702.17(e)(2). It may be renewed subject

to the same requirements. /d. § 702.17(g). Because the City

is investigating means of reducing the turbidity of the

Tunnel’s discharge pursuant to state requirements, a

temporary variance might well provide the time necessary

to implement any reasonable and feasible solutions to the

turbidity problem.

The draft Shandaken Tunnel permit issued by the

NYDEC on August 4, 2004, illustrates additional

flexibilities. The draft permit varies turbidity level

restrictions by season, accepting higher levels at times

when the natural turbidity level of the Creek is higher; it

also contains exemptions from the effluent limitations

when necessary to avoid drought conditions, to remedy

emergency threats, to avert threats to public health or

safety, or to allow repairs to the Schoharie Reservoir. See

NYS Env. Notice Bulletin, Notice of Completed

Application for Shandaken Tunnel Outlet 3, 4 n.2 (August

4, 2004).

The draft permit shows that the NPDES permit

scheme can ensure that the water discharged from the

Shandaken Tunnel will continue to meet the City’s needs

without unnecessarily sacrificing progress toward water

quality goals. We find the City’s position, that federal

regulation of interbasin water transfers will lead.to the ©

termination of those transfers in contravention of the rights

explicitly reserved to the states, to be alarmist and

unwarranted.

compliance would “result in substantial and widespread economic and

social impact,” id. § 702,17(11)(6 ).

At bottom, the City’s arguments for reconsideration

of our holding in Catskills I are simply embellishments of

those made in that case. Neither these arguments nor any

intervening developments lead us to conclude that our

earlier holding was reached in error or should otherwise be

modified. We note that every other court faced with this

issue has reached the same conclusion. See N. Plains Res.

Council v. Fidelity Exploration & Dev. Co.,'' 325 F.3d

1155 (9th Cir. 2003); Miccosukee Tribe of Indians v. S. Fla.

Water Mgmt. Dist.,'* 280 F.3d 1364 (1 1th Cir. 2002);

Dubois v. U.S. Dep't ofAgric.,'? 102 F.3d 1273 (ist Cir.

1996). While we recognize the incremental administrative

burden our interpretation entails, we have little doubt that it

nevertheless permits the City to deliver drinking water to

its citizens while furthering the CWA’s goal to “restore and

maintain the chemical, physical, and biological integrity of

the Nation’s waters.” 33 U.S.C. § 1251(a).

IV. Civil Penalty

'' Northern Plains held that the discharges of groundwater derived from

the extraction of coal bed methane into a river requires an NPDES

permit. The court reasoned that the alteration of the chemical integrity

of the river resulting from those discharges constituted an addition of a

pollutant because such groundwater would not have flowed into the

river but for the company’s methane extraction processes. 325 F.3d at

1163.

'? Before the Supreme Court granted certiorari in Miccosukee, the

Eleventh Circuit held that the transfer of water that was high in

phosphorus from a canal to a wetlands area required an NPDES permit.

280 F.3d at 1366, 1368-69.

'’ Dubois held that, when a ski area pumped water from a polluted river

and discharged it into a pristine pond into which it otherwise would not

(continued. ..)

have flowed as part of a snow-making process, an NPDES permit was

required for the discharge. 102 F.3d at 1296-99.

Al9

Both sides attack the $5,749,000 civil penalty

imposed on the City by the district court. District courts

have broad discretion in calculating civil penalties under

the CWA. See Tull v. United States, 481 U.S. 412, 427

(1987) (noting that “highly discretionary calculations that

take into account multiple factors are necessary in order to

set civil penalties under the Clean Water Act’); United

States v. Smithfield Foods, Inc., 191 F.3d 5 16, 526 (4th

Cir. 1999); Hawaii's Thousand Friends v. Honolulu, 821 F.

Supp. 1368, 1395 (D. Haw. 1993). A district court’s

findings of fact in support of a CWA penaity are reviewed

for clear error, e.g., Smithfield Foods, Inc., 191 F.3d at 526;

Sierra Club, Lone Star Ch. v. Cedar Point Oil Co., 73 F.3d

546, 573 (Sth Cir. 1996); Pub. Interest Research Group of

N.J., Inc. v. Powell Duffryn Terminals, Inc., 913 F.2d 64,

79 (3d Cit.. 1990), and the district court’s determination of

the penalty based on those facts is reviewed for abuse of

discretion, e.g., Smithfield Foods, 191 F.3d at 526; Sierra

Club, 73 F.3d at 573. In calculating civil penalties under

the CWA, the court may begin either with the violator’s

estimated economic benefit from noncompliance (known as

the “bottom-up” method) or with the statutory maximum

allowable penalty (known as the “top-down” method). E.

g., Smithfield Foods, 191 F.3d at 528 & n.7; United States

v. Man. Auth. of Union Twp., 150 F.3d 259, 265 (3d Cir.

1998). This starting figure then may be adjusted after

considering the six factors enumerated in section 309(d) of

the CWA: (1) the seriousness of the violations; (2) the

economic benefit resulting from the violation; (3) any

history of violations; (4) good-faith efforts to comply with

applicable requirements; (5) the economic impact of the

penalty on the violator; and (6) other matters as justice may

require. 33 U.S.C. § 1319(d). E.g., Sierra Club, 73 F.3d at

528, n.7. The court below opted to use the “top-down’”’

method. Although neither party objected to this general

approach, both sides take issue with the details of its

implementation.

The district court began with the maximum

statutory penalty and reduced that number due to factors

mitigating in the City’s favor. First, the district court found

that the seriousness factor mitigated in favor of the City.

Second, because the City’s belief that it did not need a

permit to operate the Tunnel was reasonable until the

October 2001 decision of this court, the district court

determined that the City should not be penalized for its

history of violations. Third, the district court credited the

City’s ongoing efforts to reduce the turbidity of the water in

the Tunnel pursuant to non-CWA regulation and _ its

eventual application for a NPDES permit as indicating a

good-faith effort to comply with applicable requirements.

Finally, the district court considered the City’s reasonable

belief that a CWA permit was not necessary to be a

mitigating factor.

Catskills faults the district court for its

determination that the seriousness factor mitigated in favor

of the City. This determination was based on three

considerations: the pollution at issue resulted from natural

conditions that caused turbidity and not toxic pollutants;

there was no evidence that downstream fish were adversely

affected by the discharge; and finally, the discharge, while

turbid, actually improved the habitat for trout by raising

low water levels. Because these findings have evidentiary

support, we will not disturb them or the district court’s

conclusiem that, taken together, they were a mitigating

facter.

Both parties take issue with the district court’s June

22, 2002, starting date for penalties, after which the court

imposed the maximum penalty. Catskills argues that the

starting date should have been October 21, 2001, the date

of Catskills 1, while the City contends that December 2002

would have been reasonable and that, in any event, the

mitigating factors should have reduced the penalty imposed

after the starting date. The district court did impose the

A21

maximum daily penalty, but for only about nine per cent of

the period for which the district court could have penalized

the City.'* The district court’s choice of starting date

accounted both for a reasonable time for the City to come

into compliance. with the CWA and for the mitigating

factors; it will be sustained.

Both parties also attack the penalty figure based on

the “economic benefit resulting from the violations” factor.

The City argues that it is receiving no economic benefit

from operating the Tunnel without a permit, so this factor

should be treated as a mitigating factor. Catskills, on the

other hand, argues that the City reaped a benefit by not

having to build a filtration plant to screen the turbidity from

the Tunnel’s water, which Catskills says would cost $27

million. Even assuming the feasibility of such a plant, as to

which the district court was skeptical, the district court

found that construction of the plant would not have begun

until 1995 at the earliest. Therefore, only costs that would

have been incurred after that date, a figure consider-ably

below $27 million, would be appropnately considered. In

addition, there is a substantial question as to whether the

City should be faulted for not building a plant during a

period (prior to Catskills f) in which it did not believe it

was in violation of the CWA. Considering the evidence on

both sides of this issue, the district court did not abuse its

discretion in determining that the issue of cost savings to

the City from not building a plant should be deemed neither

a mitigating factor nor a cause for in-creased penalties.

Finally, Catskills challenges the City’s good faith

belief that it did not need a permit to operate the Tunnel.

'* Catskills filed its complaint on March 31, 2000. Because the CWA

has a five--year statute of limitations, 28 U.S.C. ti 2462, that is tolled

sixty days before the filing of a complaint, Sierra Club v. Chevron

U.S.A.. Inc., 834 F.2d 1517, 1524 (9th Cir. 1987), January 30, 1995, is

the date on which the City became liable for penalties.

A???

The district court’s determination that the City had such a

good faith belief, based on credibility assessments, 1s

deserving of deference and nothing in the record leads us to

question it. Neither the EPA nor the NYDEC had ever

indicated the necessity of a permit. The district court’s

decision not to penalize the City for a reasonable, albeit

incorrect, interpretation of a statute is not an abuse of

discretion.

In arriving at the penalty imposed below, the district

court carefully considered the six factors laid out in section

309(d) of the CWA, relied on facts not clearly erroneous,

and did not abuse its discretion in deciding the penalty. We

have, however, uncovered a calculation error. The district

court stated that the maximum statutory penalty for the

final 131 days of 2002 was $31,500 per day. In fact, the

maximum daily penalty remained $27,500 until March of

2004. 40 C.F.R. § 19.4. Thus, the maximum possible

penalty was $62,725,000, not $63,249,000 as stated by the

district court. Had the district court been aware that its

initial calculation of the statutory maximum was $524,000

too high, it might have reduced the penalty by that amount.

Or, even being aware of the true statutory maximum, it

might have imposed the same penalty. Or it might have

arrived at a penalty somewhere in between. Because we

have no way to determine how the district court’s

calculation of the penalty would have differed, if at all, had

it accurately determined the maximum statutory penalty,

we remand the case for recalculation of the penalty in light

of the true statutory maximum.

CONCLUSION

For the foregoing reasons, we affirm the district

court’s judgment except as to the amount of the civil

penalty imposed on the City of New York and remand the

case to the district court to recalculate that penalty.

A23

MEMORANDUM-DECISION AND ORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

NORTHERN DISTRICT OF THE NEW YORK,

DATED OCTOBER 4, 2000

REPRODUCED FOLLOWING

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

CATSKILL MOUNTAINS

CHAPTER OF TROUT

UNLIMITED, INC., THEODORE

GORDON FLYFISHERS, INC.,

CATSKILLDELAWARE

NATURAL WATER ALLIANCE,

INC., FEDERATED

SPORTSMEN’S CLUBS OF

ULSTER COUNTY, INC., and

RIVERKEEPER, INC.,

Plaintuff(s),

-~against-

THE CITY OF NEW YORK, NEW

YORK CITY DEPARTMENT OF

ENVIRONMENTAL

PROTECTION, and JOEL A.

MIELE, SR., COMMISSIONER

OF DEPARTMENT OF

ENVIRONMENTAL

PROTECTION,

Defendant(s).

SEE ee i te et i le te

AVE

1:00-CV-

511

(FJS/

RFT)

APPEARANCES OF COUNSEL

PACE KARL S.

ENVIRONMENTAL COPLAN, ESQ.'

LITIGATION CLINIC,

INC,

78 North Broadway

White Plains, New York

10603

Attorneys for Plaintiffs

CITY OF NEW YORK SUSAN C.

OFFICE OF MOON, ESQ.

CORPORATION

COUNSEL

100 Church Street

New York, New York

10007-2601

Attorneys for Defendants

SCULLIN, Chief Judge

U.S. DISTRICT COURT - N.D. OF N.Y.

FILED OCTOBER 6, 2000, LAWRENCE K.

BAERMAN, CLERK-SYRACUSE

! ’ ~ ° _

With the Court’s permission, Basil Saggos, a law student, argued on

Plaintiffs’ behalt

A26

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Presently before the Court are Defendants’ motions

(1) to dismiss Plaintiffs’ turbidity and thermal discharge

claims, pursuant to Rule 12(b)(1) of the Federal Rules of

Civil Procedure, for lack of subject matter jurisdiction; (2)

to dismiss Plaintiff's suspended solids claim, pursuant to

Rule 12(b)(6) of the Federal Rules of Civil Procedure, for

failure to state a claim upon which relief can be granted;

and (3) for a more definite statement pursuant to Rule 12(e)

of the Federal Rules of Civil Procedure. On September 22,

2000, the Court heard oral argument on these motions and

reserved decision. The following constitutes the Court’s

analysis and conclusions with respect to these motions.

If, BACKGROUND

On November 20, 1998, Plaintiffs mailed notice of

alleged violations of the Clean Water Act (“CWA”) and of

Plaintiffs’ intent to file suit to the Administrator of the

United States Environmental Protection Agency, the New

York State Department of Environmental Conservation,

and to Defendants as required by Section 505(b)(I)(A) of

the CWA, 33 U.S.C. § 1365(b)(1)(A). Fourteen months

later, Plainuffs filed the instant complaint. Plaintiffs

brought this citizen suit seeking declaratory and injunctive

relief under Section 301 of the CWA, 33 U.S.C. § 1311 (a),

against Defendants for allegedly violating the CWA by

their unpermitted and unlawful discharge of pollutants from

the Shandaken Tunnel into Esopus Creek.

Defendants operate the Shandaken Tunnel as part

of the New York City Catskill Water Supply System. See

Complaint at § 20. The Shandaken Tunnel begins at the

Schoharie Reservoir in Delaware County, passes through

Green County, and into Ulster County where it discharges

A27

into Esopus Creek. See id. at 4 19. When the Shandaken

Tunnel is in operation, the intake pipe accepts water from

the Schoharie Reservoir and adds it into the Shandaken

Tunnel. The water flows through the Shandaken Tunnel

and is discharged into Esopus Creek. See id. at 4 21. In the

absence of the Shandaken Tunnel, water from the

Schoharie Reservoir would not reach Esopus Creek

because Esopus Creek is located in a different watershed

than the Schoharie Reservoir. See id. at 4] 22, 37.

The water in Esopus Creek is naturally more clear,

or less turbid and lower in suspended solids, than the water

of the Schoharie basin. See id. at { 23. The New York State

Department of Environmental Conservation (“DEC”) has

designated Esopus Creek, between the outlet of the

Shandaken Tunnel and the inlet of the Ashokan Reservoir,

as a Class A(T) stream. This classification signifies high

quality water that is suitable for a trout fishery. See id. at 4

22. The discharge from the Shandaken Tunnel into Esopus

Creek contains a high level of turbidity and suspended

solids in the form of fine red clay particles. See id. at 44 27-

28. The discharge from the Shandaken Tunnel periodically

contains elevated temperatures that stress trout populations

in Esopus Creek. See id. at 4 30.

The City of New York has neither applied for, nor

been granted, a National Pollutant Discharge Elimination

System (“NPDES”) or a State Pollutant Discharge

Elimination System (“SPDES”) permit for its discharges

into Esopus Creek. See id. at 4 35. Plaintiffs assert . that

Defendants have violated and will continue to violate “an

effluent standard or limitation” under § 505(a)(1)(A) of the

CWA, 33 U.S.C. § 1365(a)(1 (A), because of their illegal

and unpermitted discharge from the Shandaken Tunnel into

Esopus Creek. Sce id. at 4 38.

lil. DISCUSSION

A. Subject Matter Jurisdiction

The CWA authorizes a citizen to bring a suit in

federal court against any person who is alleged to be in

violation of “‘an effluent standard or limitation” as defined

by the CWA. To commence a suit, however, a citizen must

comply with § 1365(b), which provides, in pertinent part,

No action may be commenced -

(1) under subsection (a)(1) of this section -

(A) prior to sixty days after the plaintiff

has given notice of the alleged violation

(i) to the Administrator [of the EPA], (ii)

to the State in which the alleged violation

occurs, and (iii) to any alleged violator of

the standard, limitation, or order, .. .

33 U.S.C. § 1365(b).

The purpose of this notice requirement “‘is to give

[the alleged violator] an opportunity to bring itself into

compliance with the Act and thus likewise render

unnecessary a citizen suit.”* Atlantic States Legal Found.,

Inc. v. Stroh Die Casting Co., 116 F.3d 814, 818 (7"" Cir.

- 1997) (quoting [Gwaltrey,}] 484 U.S. at 60, 108 S. Ct at

383) (other citation omitted}.

In the preseat case, Defendants do not dispute that

Plaintiffs sent them a notice letter. Rather, they claim that

Plaintiffs’ notice letter lacks the specificity required by the

CWA and its regulaticns to put Defendants on notice of the

violations upon which Plaintiffs intended to sue.

Specifically, Defendants contend that Plaintiffs’ letter

failed to identify the specific standard, limitation or order

alleged to have been violated and failed to list two of the

A29

pollutants -- turbidity and thermal discharge - which,

together with suspended solids, form the basis of Plaintiffs’

complaint. Due to this alleged lack of specificity,

Defendants argue that the notice is legally insufficient and,

therefore, the Court lacks subject matter jurisdiction over

Plaintiff's turbidity and thermal discharge claims.

Defendants rely upon Hallstrom v. Tillamook

County, 493 U.S. 20 41989), to support their position that

this Court lacks subject matter jurisdiction over Plaintiffs’

turbidity and thermal discharge claims because Plaintiffs’

notice letter lacks the necessary specificity. The issue

before the Court in Hallstrom was whether compliance

with the Resource Conservation and Recovery Act’s

(“RCRA”) 60-day notice provision (modeled on the

CWA’s notice provision) was “a mandatory precondition to

suit or [could] be disregarded by the district court at its

discretion.” Id. at 23. The Court concluded that “{u]nder a

literal reading of the statute, compliance with the 60-day

notice provision is a mandatory, not optional, condition

precedent for suit.” Id. at 26. Unlike the situation here,

however, the plaintiff in Hallstrom sent no notice letter

prior to commencing suit. Therefore, the Court in

Hallstrom had no occasion to address the sufficiency of the

contents of a RCRA notice. Accordingly, Hallstrorn is not

dispositive of the issue before this Court.

What are dispositive, however, are the EPA’s

regulations which set forth the notice requirements:

* There is no question that had Plaintiffs not complied with the

CWA’s 60-day notice requirement, the Court would have to dismiss

the complaint (even if Defendants had learned about the claims in

another way). Plaintiffs, however, did provide Defendants with

notice. Thus, the question is whether the Court must dismiss the

turbidity and thermal discharge claims because. these claims were

not explicitly mentioned in Plaintiffs’ notice letter.

A30

Notice regarding an alleged violation of

an.effluent standard or limitation or of an

order with respect thereto, shall include

sufficient information to permit the

recipient to identify the specific standard,

limitation, or order alleged to have been

violated, the activity alleged to constitute

a violation, the person or _ persons

responsible for the alleged violation, the

location of the alleged violation, the date

or dates of such violation, and the full

name, address, and telephone number of

the person giving notice.

40 C.F.R. § 135.3(a).

Defendants argue that Plaintiffs’ notice letter fails

to meet those requirements because (1) it fails to provide

notice of the “parameters” or “types” of violations which

Plaintiffs assert in their complaint; (2) it mentions neither

turbidity nor thermal discharge; and (3) it fails to disclose

the activities which allegedly constitute these regulatory

violations.

Plaintiffs’ notice letter states, in pertinent part,

[Plaintiffs] believe that the City of New

York has violated and continues to violate

‘an effluent standard or limitation” under

section 505(a)(1)(A), by discharging

pollutants from a point source without a

permit in violation of section 301(a) of the

CWA, 33 U.S.C. § 1311(a).

Based on data collected by the Catskill

Delaware Natural Water Alliance, Inc.,

Complainants believe that the City of New

York has discharged from the Shandaken

aqueduct, and continues to discharge,

pollutants in the form of Total Suspended

Solids and Settleable Solids into the

Esopus Creek, a class A stream, 6

NYCRR § 862.6. These violations have

occurred and continue to occur every day

that the Shandaken tunnel delivers water

into the Esopus Creek, which has been

every day that the tunnel operates for at

least the past five years (the statute of

limitations period under the Clean Water

Act). .

See Plaintiffs’ Ntice Letter, attached as Exhibit “B” to

the Affidavit of Susan Moon, dated May 25, 2000.

Plaintiffs’ notice letter clearly provides the notice

required by 40 C.F.R. § 135.3(a), at least with respect to

suspended and settleable solids. The only issue, therefore,

is whether turbidity and thermal discharges -- which are not

explicitly mentioned in the notice letter - are similar

enough to suspended and settleable solids to have put

Defendants on notice that these pollutants also formed the

basis for Plaintiffs’ complaint.

In support of their claim that turbidity and thermal

discharge are inseparable from suspended solids, Plaintiffs

direct the Court to the common meaning of these terms. In

this regard, Plaintiffs assert that the term “suspended

solids” is commonly equated with turbidity. See Plaintiffs’

Memorandum of Law at 19 (citing The American Heritage

Dictionary of the English Language (Copyright 1996,

Houghton Mifflin Company) (“turbid is defined as ‘having

sediment or foreign particles stirred up or suspended;

* Plaintiffs’ notice letter also contains the full names, addresses, and

telephone numbers of all Plaintiffs.

A32

muddy,’ while the word turbidity has the meaning

‘muddiness created by stirring up sediment or having

foreign particles suspended.”*). Moreover, Plaintiffs claim

that the EPA, Office of Water, on its website, states that

“higher turbidity increases water temperatures because

suspended particles absorb more heat.” See id, Based upon

these definitions, Plaintiffs conclude that “suspended

solids, turbidity and thermal discharges are inseparably

linked in such a way that the notice of suspended solids

was sufficient to place Defendants on notice thereby

satisfying its purpose.” Id. at 10-11. Based upon the

relationship between suspended solids (which were

referenced in the notice letter) and their effect on turbidity

and water temperature, the Court finds that Plaintiffs’

notice letter sufficiently notified Defendants of these claims

and, therefore, complies with § 135.3(a). Accordingly, the

Court denies Defendants’ motion to dismiss Plaintiffs’

turbidity and thermal discharge claims for lack of subject

matter jurésdiction. |

B. Defendants’ Motion to Dismiss for Failure to

State a Claim

To state a claim for the improper discharge of a

pollutant without an NPDES permit pursuant to § 301 of

the CWA, “five elements must be present: (1) a pollutant

must be (2) added (3) to navigable waters (4) from (5) a

point source.” National Wildlife Fed’n v. Gorsuch, 693

F.2d 156, 165 (D.C. Cir. 1982). Defendants contend that

Plaintiffs have failed to allege sufficient facts to state a

claim that the discharge of suspended sediments into

Esopus Creck is an illegal and unpermitted discharge

within the meaning of the CWA. Specificaily, Defendants

contend that Plaintiffs’ failure to state in their complaint

that suspended sediments are a “pollutant” is fatal to their

claim.

A careful reading of Plaintiffs’ complaint,

however, demonstrates that Plaintiffs have alleged

A33

sufficient facts from which it can be inferred that

suspended sediments are a pollutant. In this regard,

Plaintiffs’ complaint states that “Defendant’s discharges of

suspended solids, turbidity, and heat into the Esopus Creek

are illegal and unpermitted discharges within the meaning

of section 301(a) of the Clean Water Act, 33 U.S.C. §

1311(a).” See Complaint at 39. Since a discharge is illegal

only if the discharged substance is a pollutant, it can

reasonably be inferred from the complaint that Plaintiffs are

alleging that suspended solids are a pollutant within the

meaning of the CWA. Moreover, because in addressing a

motion to dismiss the Court must draw all reasonable

inferences in Plaintiffs’ favor, the Court concludes that

Plaintiffs have sufficiently alleged that suspended solids are

a pollutant for purposes of their CWA claims.

More troubling, and ultimately dispositive of this

motion, is Defendants’ contention that Plaintiffs have failed

to allege that the discharge of suspended solids, turbidity

and heat into Esopus Creek is “an addition” of pollutants

“from” a point source. According to Defendants, an

“addition” occurs only if “the point source itself physically

introduces a pollutant into water from the outside world.”

See Defendants’ Reply Memorandum of Law at 2 (quoting

Nat’] Wildlife Fed’n v. Gorsuch, 693 F.2d 156, 165, 174-75

(D.C. Cir. 1982)). Therefore, Defendants argue that

Plaintiffs’ allegation that Defendants’ redirection of water,

which already contains suspended solids, from one body of

water to another constitutes a point source discharge is not

sufficient to establish an “addition” for purposes of the

CWA. See Defendants’ Memorandum of Law at 14.

In response, Plaintiffs assert that Defendants are

adding pollutants in the form of suspended solids, turbidity

and heat from the Schohane Reservoir through the

Shandaken Tunnel into Esopus Creek. They ciaimn that

“{t]his type of ‘addition’ is precisely what the Clean Water

Act is intended to prohibit, since it has turned a renowned

A34

trout stream into a water body that is now unsuitable for

trout fishing.” See Plaintiffs’ Memorandum of Law at 13-

14. Therefore, Plaintiffs assert that “in order to continue the

discharge of suspended solids, turbidity and elevated

temperatures into the Esopus Creek within the limits of the

law, [Defendants] must be required to apply for and be

granted a NPDES/SPDES permit,” as required by § 402 of

the CWA, 33 U.S.C. § 1342. See id. at 14."

The only case that arguably supports Plaintiffs’

position is Dubois v. United States Dep’t of Agric., 102

F.3d 1273 (1996). Plaintiffs rely upon Dubois for the

proposition that Defendants’ diversion of water is an

“addition” because the Schoharie Reservoir and Esopus

Creek are two separate bodies of water. In response,

Defendants rely upon National Wildlife Fed’n v. Gorsuch,

693 F.2d 156 (D.C. Cir. 1982), and National Wildlife Fed’n

v. Consumers Power Co., 862 F.2d 580 (6" Cir. 1988), to

support their argument that the mere diversion of water

without more does not constitute an “addition.”

Although none of these cases are directly on point,

they offer some insight into factors courts have considered

to determine what constitutes an “addition” for purposes of

the CWA. In Dubois, the Loon Mountain Recreation

Corporation drew water from Loon Pond and the

Pemigewasset River for its snowmaking operations. After it

- had used the water to pressurize and prevent freezing in its

snowmaking equipment, it discharged the water into Loon

Pond.

* Plaintiffs also contend that they have adequately alleged the

“addition” of a pollutant because water from the Schoharie

Reservoir would not reach Esopus Creek in the absence of the

Shandaken Tunnel and the water of Esopus Creek is naturally more

clear, or less turbid and lower in total suspended solids, than the

water of the Schoharie basin. See Plaintiffs’ Memorandum of Law

at 18.

Based upon these facts, the First Circuit concluded

that the diversion of the river water with its pollutants into

Loon Pond (which was not connected to the river) was an

addition which required a permit under the CWA. In

reaching its decision, the First Circuit specifically

distinguished Gorsuch, which it characterized as involving

a dam that merely accumulated water and Consumers

Power Co., which involved a pump storage facility that

stored water from one source in a different place, from the

situation in Dubois in which water was moved from one

flowing water body into another stationary, cold body of

water. See Dubois, 102 F.3d at 1299.

Unlike Dubois, the court in Gorsuch concluded that

the mere diversion of water did not constitute an “addition”

for purposes of the CWA. In that case, the plaintiff argued

(similarly to Plaintiffs in this case) that any adverse change

in the quality of reservoir water from its natural state

involved a “pollutant” and that release of polluted water

through a dam into a downstream river constituted the

“addition” of a pollutant to navigable waters “from” a point

source. To the contrary, the EPA argued that for an addition

of a pollutant from a point source to occur, the point source

must introduce the pollutant into navigable water from the

outside world. See Gorsuch, 693 F.2d at 174-75. According

to the EPA, dam-caused pollution, in contrast, merely

passed through the dam from one body of navigable water

(the reservoir) into another (the downstream river). In

addition, although the EPA conceded that all adverse water

quality changes are “pollution” - broadly defined in §

1362(19) as “‘the man-made or man-induced alteration of

the chemical, physical, biological, and radiological

integrity of water -- [the] EPA argue[d] that low dissolved

oxygen, cold, and supersaturation were not included in the

narrower statutory term ‘pollutant,’ defined in § 502(6), 33

U.S.C. § 1362(6) as: ‘dredged spoil, solid waste,

incinerator residue, sewage, garbage, sewage sludge,

A36

munitions, chemical wastes, biological materials,

radioactive materials, heat, wrecked or discarded

equipment, rock, sand, cellar dirt and industrial, municipal,

and agricultural waste discharged into the water.’ Id. at 165

(footnote omitted).

The court in Gorsuch recognized that the CWA did

not define what constitutes an “addition of a pollutant.” It

also recognized that Congress had not expressly addressed

whether the EPA should have discretion to define

“addition.” The court noted, however, that Congress had

given the EPA the reasonable discretion to define “point

source” and “pollutant” Therefore, the court concluded that

it was “likely that Congress would have given EPA similar

discretion to define ‘addition’ had it expected the meaning

of the term to be disputed.” Id. at 175. Based upon its

finding that the EPA’s interpretation of “addition” was

reasonable, the court concluded that because the EPA had

concluded that the dam did not “add” pollutants into the

downstream river, its interpretation was entitled to great

deference and must be upheld. See id. at 166-68, 175.

The Sixth Circuit in Consumers Power Co. also

found no “addition” of a pollutant based upon the facts

before it. In that case, the district court had concluded that

the defendant’s hydro-electric facility’s release of turbine

generating water containing entrained fish into Lake

Michigan required an NPDES permit The Sixth Circuit

reversed, finding that the facility’s movement of pollutants

already in the water was not an “addition” of pollutants to

navigable waters of the United States.

Relying upon Gorsuch, the Sixth Circuit concluded

that “[t]o the extent that no more has been shown than that

unclean water flows out of the dam, Congress clearly

displayed an intention to exempt dams from the Clean

Water Act.” Consumers Power Co., 862 F.2d at 586. The

court distinguished the case before it, in which a facility

A37

merely transmitted water coming into it, from the situation

in which the dam itself added pollutants to the water and,

therefore, would be subject to the NPDES permits system.

The court also noted that even if the facility had released

heat into the water, the result would have been the same.

See id. (“Indeed, it is fair to say that the release of water

containing heat could be quite harmful to the fishery

resources inhabiting a lake, yet the harmful character still

would not make the water and its contents an ‘addition’ of

pollutants into navigable waters of the United States.”).

in every case other than Dubois, where a court has

found an “addition” of a pollutant, more has been involved

than the simple diversion of water from one navigable body

of water to another. See, e.g. Committee to Save

Mokelumne River v. East Bay Mun. Utility Dist., 13 F.3d

305 (9" Cir. 1993) (court distinguished Gorsuch and

Consumer Power Co. because the facility did not merely

pass pollution from one body of navigable water to another.

Rather, the source of pollution was “surface runoff that is

collected or channeled by” the defendants from an

abandoned mine site); United States v. Law, 979 F.2d 977

(4" Cir. 1992) (court distinguished Gorsuch and Consumer

Power C., because the defendant’s water treatment system

collected runoff and leachate subject to an NPDES permit

and the system was not part of the “waters of the United

States”); Hudson River Fishermen’s Ass’n v. City of New

York, 751 F. Supp. 1088 (S.D.N.Y. 1990), aff'd without

opinion, 940 F.2d 649 (2d Cir 199I) (court held that the

City had violated the CWA by discharging chlorine and

alum floc into the reservoir without first obtaining a

pollution emissions permit).

In light of the EPA’s interpretation of what

constitutes an “addition” for purposes of the CWA (which

the Dubois court did not consider) and the lack of any

evidence that Defendants added anything to the water in the

Reservoir before releasing it through the Shandaken tunnel,

the Court concludes that Plaintiffs have failed to estabiish a

necessary element of their claim; i.c., that Defendants’

diversion of water from the Schoharie Reservoir to Esopus

Creek through the Shandaken tunnel constitutes an

“addition” of pollutants “from” a _ point source.

Accordingly, the Court grants Defendants’ motion to

dismiss Plaintiffs’ complaint for failure to state a claim

upon which relief can be granted.

. Defendants’ motion for a more definite

statement

In light of. the Court’s decision to grant

Defendants’ motion to dismiss Plaintiffs’ complaint

pursuant to Rule 12(bX6) for failure to state a claim, the

Court denies Defendants’ motion for a more definite

statement as moot.

IV. CONCLUSION

After carefully considering the file in this matter,

the oral arguments and submissions of the parties and the

applicable law, and for the reasons stated herein, it is

hereby

ORDERED that Defendants’ motion to dismiss

Plaintiffs’ complaint for lack of subject matter jurisdiction

is DENIED, and it is further

ORDERED that Defendants’ motion to dismiss

Plaintiffs’ turbidity and thermal discharge claims for failure

to state a clam is GRANTED, and it is further

ORDERED that Defendants’ motion for a more

definite statement is DENIED as moot; and it is further

ORDERED that the Clerk of the Court enter

judgment in favor of Defendants and against Plainuffs and

close this case.

IT IS SO ORDERED.

Dated: October 4 , 2000 Syracuse, New York

S/ 2

Frederick J. Scullin, Jr.

Chief United States District Judge

DECISION AND ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE NORTHERN

DISTRICT

OF NEW YORK, DATED JANUARY 19, 2001

REPRODUCED FOLLOWING

A4]

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

CATSKILL MOUNTAINS

CHAPTER OF TROUT

UNLIMITED, INC., THEODORE

GORDON FLYFISHERS, INC.,

CATSKILL DELAWARE

NATURAL WATER ALLIANCE,

INC., FEDERATED

SPORTSMEN’S CLUBS OF

ULSTER COUNTY, INC., and

RIVERKEEPER, INC.,

1:00-CV-511

(FJS/RFT)

Plaintiff(s),

-against-

THE CITY OF NEW YORK, NEW

YORK CITY DEPARTMENT OF

ENVIRONMENTAL

PROTECTION, and JOEL A.

MIELE, SR., COMMISSIONER OF

DEPARTMENT OF

ENVIRONMENTAL

PROTECTION,

Defendant(s).

APPEARANCES OF COUNSEL

PACE ENVIRONMENTAL | KARL S. COPLAN,

LITIGATION CLINIC, | ESQ.

INC. |

78 North Broadway

White Plains, New York a

}

| 10603

| Attorneys for Plaintiffs |

| CITY OF NEW YORK SUSAN C. MOON, |

| OFFICE OF | ESQ

| CORPORATION

| COUNSEL |

| 160 Church Street |

' New York, New York 10007- |

| 2601

| Attorneys for Defendants

SCULLIN, Chief Judge | |

ORDER

1. INTRODUCTION

After hearing oral argument on Defendants’ motion

on September 22, 2000, the Court issued a Memorandum-

Decision and Order, dated October 6,.2000, in which the

Court, among other things, granted Defendants’ motion to

dismiss Plaintiffs; complaint for failure to state a claim

upon which relief could be granted.

Plaintiffs now move for reconsideration on the

grounds that “the Court committec clear error on the level

of deference appropriate to the EPA interpretation of the

A43

words ‘addition of a pollutant’ for the purpose of the Clean

Water Act, as controlling Supreme Court jurisprudence was

overlooked.” See Plaintiffs’ Memorandum of Law at 3.

Specifically, Plaintiffs argue that, in light of the Supreme

Court’s recent decision in Chnstensen v. Harris County,

120 S. Ct. 1655 (2000), the Court gave too much deference

to the EPA’s interpretation of what constitutes an

“addition” for purpose of the Clean Water Act (“CWA”).

II. DISCUSSION

A. Standard of Review

Generally, the courts in this district recognize only

three possible bases upon which motions for

eee

reconsideration may be granted: ““(1) an intervening

change in controlling law, (2) the availability of new

evidence not previously available, or (3) the need to correct

a clear error of law or prevent manifest injustice.”* Sumner

v. McCall, 103 F. Supp. 2d 555, 558 (N.D.N.Y. 2000)

(quoting In re C-TC 9" Ave. Partnership, 182 B.R. 1, 3

(N.D.N.Y. 1995) (McAvoy, C.J.)). Parties who base their

motion on the third ground have a demanding standard to

meet. Under the “clear error” test, the court’s previous

decision will be disregarded only when the court has a

“clear conviction of error” with respect to a point of law on

which it based its previous decision. See Fogel _v.

Chestnutt, 668 F.2d 100, 109 (2d Cir. 1981). Thus, a party

considering a motion for reconsideration should evaluate

‘whether what may seem to be a clear error of law is in

fact simply a point of disagreement between the Court and

996

the litigant.”* Sumner, 103 F. Supp. 2d at 559 quoting In re

C-TC 9" Ave, Partnership, 182 B.R. at 3).

As discussed beiow, Plaintiffs have not

demonstrated that the Court committed a clear error of law

| in reaching its conclusion that Plaintiffs had failed to

establish that Defendants’ actions constituted an “addition”

for purposes of the CWA. Thereiore, the Court denies their

motion for reconsideration.

B. “Clear Error” Standard

Plaintiffs claim that in light of the Supreme Court’s

AAS

decision in Christensen, the Court committed clear error by

affording too much deference to the EPA’s interpretation of

what constitutes an “‘addition” for purposes of the CWA. In

Christensen, the Court held that agency interpretations such

as those in opinion letters, policy statements, agency

manuals, and enforcement guidelines, do not warrant the

high level of deference afforded by Chevron, U.S.A., Inc.

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

(1984). Leg Chnstensen, 120 S. Ct. at 1662. Rather, the

Court stated that “interpretations contained in formats such

as opinion letters are ‘entitled to respect,’ . . ., but only to

the extent that those interpretations have the ‘power to

,

persuade.””’ Id. at 1663 (internal quotation and citation

omitted)

Based upon this statement in Christensen, Plaintiffs

argue that the EPA’s interpretation of “addition” in

National Wildlife Fed’n v. Gorsuch. 693 F.2d 156 (D.C.

Cir. 1982), is entitled to little deference because that

interpretation was never subjected to adjudication or notice

and comment rulemaking. See Plaintiffs’ Memorandum of

Law at 6. Moreover, Plaintiffs assert that since Gorsuch, is

factually distinguishable from this case, the EPA’s

‘interpretation in Gorsuch should be given even less

deference. Sec id. Defendants oppose Plaintiffs’ motion for

reconsideration on several grounds. First, Defendants argue

that the Court’s dismissal of Plaintiffs’ complaint was

based upon prior case law, not on undue deference to the

EPA’s interpretation of the Clean Water Act. See

Defendants’ Memorandum of Law at 5. Second,

Defendants assert that the Court should not excuse

Plaintiffs’ failure to raise this argument in opposition to

Defendants’ motion to dismiss. See id. at 6-7. Finally,

Defendants contend that there is no reasonable expectation

that reconsideration of the Court’s decision in light of

Christensen would alter the conclusion the Court has

already reached. See id. at 7-8.

Plaintiffs’ argument, in essence, is premised upon

their conclusion that the Court relied entirely upon the

AAT

EPA’s interpretation of the term “addition” in determining

that Defendants’ diversion of water from the Schoharie

Reservoir to Esopus Creek through the Shandaken tunnel

did not constitute an “addition” of pollutants “from” a point

source as required for a violation of the CWA. Sce

Memorandum-Decision and Order at 13. Plaintiffs,

however, place too much emphasis on part of one sentence

in the Court’s Memorandum-Decision and Order. See id.

When this sentence is read in its entirety, it is clear that the

Court did not rely entirely upon the EPA’s interpretation of

the term “addition” as a basis for its conclusion that

Defendants’ actions did not constitute an “addition.” The

sentence reads in full:

In light of the EPA’s interpretation of what

constitutes an ‘addition’ for purposes of the

CWA (which the Dubois court did not

consider) and the lack of any evidence that

Defendants added anything to the water in

the Reservoir before releasing it through the

Shandaken tunnel, the Court concludes that

Plaintiffs have failed to establish a necessary

element of their claim; i.e., that Defendants’

diversion of water from the Schoharie

Reservoir to Esopus Creek through the

A48

Shandaken tunnel constitutes an ‘addition’

of pollutants ‘from’ a point source.

See id.

Moreover, this statement appeared at the very end

of the Court’s decision and followed the Court’s analysis of

the decisions in Gorsuch and National Wildlife Fed’n v.

Consumers Power Co., 862 F.2d 580 (6" Cit. 1988), which

it found persuasive, and after it had distinguished Dubois v.

United States Dep’t of Agric., 102 F.3d 1273 (1996), the

case upon which Plaintiffs relied to support their argument

that Defendants’ diversion of water constituted an

“addition”’ for purposes of the CWA.

When the Court’s reference to the EPA’s

interpretation of the term addition” is read in the context of

the Court’s entire opinion, it is apparent that the Court gave

no more deference to the EPA s interpretation of the term

“addition” than it was entitled to under Christensen; i.e., the

Court relied upon the EPA’s interpretation only to the

extent that it had the power to persuade. As set forth in its

AAO

discussion, the Court found the reasoning in Gorsuch and

Consumers Power Co., to be persuasive in reaching its

conclusion that Plaintiffs had failed to establish that

Defendants’ actions constituted an “addition” for purposes

of the CWA and, thus, had failed to state a claim upon

which relief could be granted.

Plaintiffs obviously disagree with the Court’s

decision and find Dubois more persuasive than Gorsuch

and Consumers Power Co. However, this disagreement

constitutes nothing more than a difference of opinion and

does not rise to the level of a clear error of law which

would warrant granting Plaintiffs’ motion for

reconsideration.

Ill. CONCLUSION

After carefully considering the file in this matter,

the submissions of the parties and the relevant law, and for

the reasons stated herein, it is hereby

ORDERED that’ =—s~wPPilaintiffs’ motion for

reconsideration is DENIED.

ASO

IT ISSO ORDERED.

Dated: January 19, 2001

Syracuse, New York

j

Si _

Frederick J. Scullin, Jr.

Chief United State District Judge

DECISION OF THE UNITED STATES

COURT OF APPEALS FOR THE SECOND

CIRCUIT, DATED OCTOBER 3, 2001

(Reported at 273 F.3d 481)

REPRODUCED FOLLOWING

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated Term of the United States Court of

Appeals for the Second Circuit, held at the United States

Courthouse, Foley Square, in the City of New York, on the

23™ day of October, two thousand and one.

BEFORE: Hon. John M. Walker, Jr., Chief

Judge

Hon. Robert A. Katzmann.

Hon. Richard D. Cudahy"

Circuit Judges.

Docket No. 00-9447

CATSKILL MOUNTAINS CHAPTER OF TROUT

UNLIMITED, INC., THEODORE GORDON

FLYFISHERS, INC., CATSKILL-DELAWARE

NATURAL WATER ALLIANCE, INC., FEDERATED

SPORTMEN’S CLUBS OF ULSTER COUNTY. INC. and

RIVERKEEPER, INC.,

Plaintiffs-Appellants,

V.

THE CITY OF NEW YORK, NEW YORK CITY

DEPARTMENT OF ENVIRONMENTAL PROTECTION

and JOEL A. MIELE, SR., Commissioner of Department of

Environmental Protection,

Defendants-Appellees.

* The Honorable Richard D. Cudahy of United States Court of Appeals

for the Seventh Circuit, sitting by designation.

AS3

Appeal from the United States District Court for the

Northern District of New York.

This cause came on to be heard on the transcript of

record from the United States District Court for the

Northern District of New York and was argued by counsel.

ON CONSIDERATION WHEREOF, it is hereby

ORDERED, ADJUDGED and DECREED that the

judgment of said district court be and it hereby is

REVERSED in part, AFFIRMED in part and REMANDED

for further proceedings in accordance with the opinion of

this Court. Costs are awarded to appeilants.

FOR THE COURT,

ROSEANN B. MACKECHNIE, Clerk

by s/

Arthur M. Heller,

Administrative Attorney

A54

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2000

(Argued May 25, 2001 Decided: October 23, 2001)

Docket Nos. 00-9447

CATSKILL MOUNTAINS CHAPTER OF

TROUT UNLIMITED, INC., THEODORE

GORDON FLYFISHERS, INC., CATSKILL-

DELAWARE NATURAL WATER

ALLIANCE, INC., FEDERATED

SPORTSMEN’S CLUBS OF ULSTER

COUNTY, INC. and RIVERKEEPER, INC.,

Plaintiffs-Appellants,

oe Y , ae

CITY OF NEW YORK and NEW YORK CITY

“~DEPARTMENT OF ENVIRONMENTAL

PROTECTION and JOEL A. MIELE, SR.,

Commissioner of Department of

Environmental Protection,

Defendants- Appellees,

A55

Before:

WALKER, Chief Judge,

KATZMANN and CUDAHY, * Circuit Judges.

Plaintiff environmental organizations appeal from an

October 6, 2000 order of the United States District Court

for the Northern District of New York (Frederick J.

Scullin, Jr., Chief District Judge) granting defendants’

motion to dismiss under Fed. R. Civ. P. 12(b)(6).

Reversed in part, affirmed in part, and remanded. |

KARL S. COPLAN, ESQ., Pace Environmental

Litigation Clinic, Inc. (Basil B. Seggos, on the

brief), White Plains, New York, for Appellants.

ELLEN S. RAVITCH, ESQ., Office of the

Corporation Counsel of the City of New York

(Michael D. Hess, Stephen J. McGrath, Hillary

Meltzer, and William S. Plache, on the brief), .

New York, New York, for Appellees.

JOHN M. WALKER, JR., Chief Judge:

* The Honorable Richard D. Cuday of the United States Court of

Appeals for the Seventh Circuit, sitting by designation.

A56

Plaintiff environmental organizations Catskill

Mountains Chapter of Trout Unlimited, Inc., Theodore

Gordon Flyfishers, Inc., Catskill-Delaware Natural Water

Alliance, Inc., Federated Sportsmen’s Clubs of Ulster

County, Inc., and Riverkeeper, Inc. (collectively

“Catskill”) appeal from an October 6, 2000 order of the

United States District Court for the Northern District of

New York (Frederick J. Scullin, Jr., Chief District Judge)

granting a motion to dismiss under Fed. R. Civ. P. 12(b)(6)

made by defendants City of New York, New York City

Department of Environmental Protection, and Joel A.

Miele. Sr., Commissioner of the Department of

Environmental Protection (collectively “New York City”

or “the City”). We conclude that some of Catskill’s claims

should not have been dismissed and those that were

properly dismissed should have been dismissed without

prejudice. Accordingly, we reverse in part, vacate in part,

and remand for further proceedings consistent with this

opinion.

BACKGROUND

Since before World War II, New York City has

operated Schoharie Dam and Reservoir in the Catskill

Mountains, to provide drinking water for New York City.

Water is diverted south from the Schoharie Reservoir (“the

Reservoir’) through the Shandaken Tunnel (“the Tunnel’)

for several miles and released into Esopus Creck (“the

Creek”), which in turn empties into Ashokan Reservoir.

The transfer of water from the Reservoir to Esopus Creek

and Ashokan Reservoir facilitates its delivery to New York

City for use as drinking water.

Absent the tunnel, water leaving the Reservoir would

flow north in Schoharie Creek, join the Mohawk River, and

flow into the Hudson River. Water from Esopus Creek, on

the other hand, makes its way southeast to the Hudson by

AS7

way of Ashokan Reservoir. Schoharie Reservoir and

Esopus Creek are hydrologically connected only insofar as

both are tributaries of the Hudson. Under natural

conditions, water from ihe Schoharie Reservoir would

never reach Esopus Creek.

Plaintiffs-appellants primarily represent recreational

users of Esopus Creek. On November 20, 1998, Catskill

sent a letter to the City, the United States Environmental

Protection Agency (“EPA”), and the New York State

Department of Conservation (“NYSDEC”), indicating

Catskill’s intention to file suit in district court under the .

federal Clean Water Act (“CWA,” “the Act’), 33 U.S.C. §

1251 et seq. The Act permits aggrieved parties to bring

civil action to enforce certain of the statute’s requirements

against violators. See 33 U.S.C. § 1365 (“Citizen suits.”).

On March 31, 2000, Catskill filed a complaint in

district court alleging that the City, as owner and owner

and operator of the Schoharie Reservoir and Shandaken

Tunnel, was is violation of 33 U.S.C. § 1311(a), which

prohibits “the discharge of any pollutant” unless those

discharges are conducted in accordance with a duly issued

discharge permit. 33 U.S.C. § 1311(a) (citing permit

requirement in 33 U.S.C. § 1342). Catskill alleged that the

Tunnel! discharges pollutants in the form of “suspended

solids,” “turbidity,” and heat into Esopus Creek. They

alleged that the suspended solids and turbidity are the

result of earth-disturbing activities within the Reservoir’s

_ watershed that produce fine, red-clay sediments in the

Reservoir. They further alleged that the discharges cause

the Creek -to violate state water quality standards for

turbidity and temperature. Esopus Cree«x, Catskill

contended, is naturally clearer and cooler than the water

entering it from the Tunnel and supports “one of the

premier trout fishing streams in the Catskill Region.”

AS5S8

The City responded by moving under Fed. R. Civ. P.

12(b)(1) that the case be dismissed for want of jurisdiction

because Catskill’s notice-of-intent-to-sue letter (“NOI

letter”) was inadequate, and a proper NOI letter, they

argued, is a jurisdictional prerequisite for a CWA citizen

suit. The City also moved pursuant to Fed. R. Civ. P.

12(b)(6) that the case be dismissed because, although the

City admits that it lacks a permit to discharge into Esopus

Creek, it need not obtain one because its releases do not

constitute “discharges” as defined by the CWA.

The distnct court denied the City’s Rule 12(b)(I)

motion, concluding that Catskill’s NOI letter comported

with the requirements of the Act and EPA regulations, but

granted Rule 12(b)(6) motion. It found that, as a matter of

law, the Reservoir and Tunnel did not effect an “addition”

of a pollutant to the Creek, as required to tngger the

CWA’s permit requirement. See 33 U.S.C. § 1362(12)

(defining “discharge of a pollutant” to mean “any addition

of any pollutant to navigable waters from any point

source’). Catskill appealed.

DISCUSSION

The City makes two arguments in support of the

district court’s dismissal. It first argues that the district

court and this court lack subject matter jurisdiction over the

case because Catskill’s NOI letter, required by the CWA’s

citizen suit pro-vision, was inadequate and that a proper

NOI letter is a pre-requisite to the court’s subject-matter

jurisdiction. Second, the City reiterates its successful

argument in the district court, that the complaint failed to

state a claim, because Shandaken Tunnel does not effect an

“addition” of a pollutant, as required to constitute a

“discharge” for which a permit must be sought.

We agree with the City that the NOI letter did not

provide adequate notice of Catskill’s eventual claim

ASI

regarding thermal discharges, but find the letter adequate to

notify the City of the balance of Catskill’s claims. The

district court should have dismissed the thermal discharge

claims without prejudice, however, and we therefore vacate

the judgment with respect to those claims and remand with

direction to dismiss them without prejudice to refiling after

submission of a conforming NOI letter and after the 60-day

delay required by the CWA. We also conclude that the

district court erred in dismissing Catskill’s complaint on

the theory that Shandaken Tunnel does not “discharge”

pollutants into Esopus Creek. We therefore reverse the

judgment on the remaining claims and remand the case for

further proceedings.

I. The Statutory Framework .

We begin with an overview of the regulatory regime.

The CWA’s primary function is to regulate the discharge

of pollutants into navigable waters. Although the Act

contains the lofty goal of eliminating water pollutant

discharges altogether, see 33 U.S.C. § 1251(a)(1), the

regulatory regime it creates requires principally that

discharges be regulated by permit, not prohibited outright.

The Act mandates that “the discharge of any pollutant by

any person shall be unlawful,” 33 U.S.C. § 1311(a),

“{e]xcept as in compliance” with other provisions of the

statute, one of which establishes a permitting program, the

“National Pollutant Discharge Elimination System”

(“NPDES”), 33 U.S.C. § 1342. Section 1342 in tum

provides for the issuance of discharge permits (“NPDES

permits”) that allow the holder to discharge pollutants at ©

levels below thresholds incorporated in the permit. 33

U.S.C. § 1342(a ); see also 40 C.F.R. § 122.1 et seq. In

New York, the NPDES program is administered by

NYSDEC and referred to as the State Pollution Discharge

Elimination System (“SPDES”). See 33 U.S.C. § 1342(b)

(authorizing state implementation of the NPDES program);

N.Y. Envtl. Conserv. Law §§ 17-0105(13), 17-0701.

A60

In the instant case, Catskill alleges that the City has

been violating the CWA’s unpermitted discharge

prohibition by discharging water containing pollutants

from Shandaken Tunnel into Esopus Creek without first

obtaining an NPDES permit. The Act defines “discharge of

a pollutant” to include “any addition of any pollutant to

navigable waters from any point source.” 33 U.S.C. §

1362(12). The Act defines “pollutant,” “navigable waters,”

and “point source,” 33 U.S.C. § 1362(6), (7), and (14) but

the crux of this appeal is the meaning of “addition,” which

the Act does not define.

In addition to providing for enforcement by state

agencies and the EPA, the CWA allows private parties to

enforce its mandates, including the prohibition of

unpermitted discharges in § 1311(a), against alleged

violators in so-called “citizen suits.” See 33 U.S.C. §

1365(a)(1 ), (f). An aggneved plaintiff may bring a civil

action for specific relief, such as the imposition of

particular compliance measures, or civil penalties payable

to the treasury, see 33 U.S.C. § 1365{a), and may recover

attorney’s fees, see 33 U.S.C. § 1365(d). At least 60 days

prior to filing, however, the prospective plaintiff must

provide notice of its claims to the potential defendant, the

EPA, and the state in which the violations allegedly

occurred. See 33 U.S.C. § 1365(b)(1)(A). If a competent

state or federal enforcement agency brings a civil

enforcement action against the defendant prior to the

citizen complaints being filed, or an administrative

enforcement proceeding prior to the plaintiff's NOI letter,

the citizen suit is pre-empted and must be dismissed. See

33 U.S.C. §§ 1319(g)(6), 1365(b)(1)(B).

I]. Catskill’s Notice of Intent to Sue

-The City claims that Catskill’s NOI letter was

inadequate because, while it was provided in a timely

fashion to the proper parties, the letter failed to give the

A6él

City adequate notice of the claims that Catskill intended to

bring. Catskill’s complaint as filed alleged discharges of “a

high! * of turbidity,” “suspended solids,” and “elevated

tempe. — -es.” Yet the NOI letter stated only that the City

has discharged “pollutants in the form of Total Suspended

Solids and Settleable Solids into the Esopus Creek.” The

City argues that by failing to provide notice of the claims

of turbidity and thermal. discharges ultimately alleged in

the complaint, the NOI letter was fatally detective,

requiring the suit to be dismissed. Although the district

court did not rely on this theory in dismissing the

complaint, we may affirm on a basis not relied on by the

district court. See Name.Space, Inc. v. Network Solutions,

Inc., 202. F.3d 573, 584 (2d Cir. 2000). We conclude that

the NOI letter failed to notify the City of Catskill’s thermal

discharge claims, but that fact does not invalidate Catskill’s

complaint in its entirety. Accordingly, we hold that those

claims were properly dismissed.

The CWA does not describe the content of the

required notice. but directs that “[nJotice . . . shall be given

in such manner as the Administrator shall prescribe by

regulation.” 33 U.S.C. § 1365(b). The EPA has adopted

such regulations. which mandate, inter alia, as follows:

Notice regarding an alleged violation of an

effluent standard or limitation or of an order

with respect thereto, shall include sufficient

information to permit the recipient to identify

the specific standard, limitation, or order

alleged to have been violated, the activity

alleged to constitute a violation, the person

Or persons responsible for the alleged

violation, the location of the alleged

violation, the date or dates of such violation,

and the full name, address, and telephone

number of the person giving notice.

A62

40 C.F.R. § 135.3(a). In the past, we have refused to

“allow form to prevail over substance” in considering the

content required of an NOI letter, and have looked instead

to what the particular notice given may reasonably be

expected to accomplish. Dague v. City of Burlington. 935

F.2d 1343, 1354 (2d Cir. 1991), rev’d in part on other

grounds, 505 U.S. 557 (1992).

The City contends that the EPA regulations require a

potential plaintiff to include in an NOI letter each separate

pollutant that will be alleged in a subsequent complaint as

the. basis of a violation of the Act. At least one circuit has

adopted such a rule. See Pub. Interest Research Group v.

Hercules, 50 F.3d 1239, 1248 (3d Cir. 1995). On this

theory, for example, a plaintiff could not bring suit for

discharges of mercury, lead, and copper if the NOI letter

alleged violations based only on discharges of copper. In

that case, the claims of copper violations would stand, but

the claims based on mercury and lead discharges would

need to be dismissed. We agree with the City that such a

rule logically follows from the regulatory scheme and

therefore adopt it.

The EPA regulations require that an NOI letter

“include sufficient information to permit the recipient to

identify the specific standard, limitation, or order alleged to

have been violated, [and] the activity alleged to constitute a

violation.” 40 C.F.R. § 135.3(a). We believe that to be

“sufficient,” the information provided must include the

pollutant alleged to be the basis of a violation subsequently

alleged in the complaint.

Because each discharge of a pollutant represents a

distinct violation of the Act, see 33 U.S.C. § 1311(a) (“the

discharge of any pollutant . . . shall be unlawful”); Ati.

States Legal Found., Inc. v. Tyson Foods, Inc., 897 F.2d

1128, 1138 n.19 (11" Cir. 1990), identification in an NOI

letter of a pollutant allegedly discharged is essential to

A63

provide adequate notice of the alleged violation.

Discharges of mercury and lead, for instance, could he

distinct violations, each subject to penalties of up to

$25,000 per day. See 33 U.S.C.§§ 1319(d), 1365(a). To

provide adequate notice of each violation that will be

targeted in the citizen suit, the NOI letter must differentiate

pollutants from nonpollutants and one pollutant from

another. The rationale for such a rule is most apparent in

the context of a suit alleging discharges in excess of

NPDES permit limitations, in which the defendant may he

discharging some pollutants lawfully and _ others

unlawfully. To enable the defendant to identify each:

violation that will be alleged, then, the NOI letter must

specify each pollutant unlawfully discharged that will be

alleged in a subsequent complaint. The principle applies

equally where, as here, the defendant has failed altogether

to obtain a permit. To state a claim based on unpermitted

discharges, the plaintiff must allege some pollutant that

was discharged without a permit. It follows, then, that to

the extent the plaintiff intends to prosecute multiple

violations involving multiple pollutants, each pollutant that

will be the basis of such a claim must be set forth in the

NOI letter.

The policies underlying the NOI requirement are

furthered by this rule The notice and 60-day delay

requirements allow a potential defendant to identify its own

violations and bring itself into compliance voluntarily, thus

making a costly lawsuit unnecessary. See Hallstrom v.

_ Tillamlook County, 493 U.S. 20, 29-30 (1989); Dague, 935

F.2d at 1351; see also Gwaltney of Smithfield, Ltd. v.

Chesapeake Bay Found., 484 U.S. 49 (1987) (holding that

if the defendant ceases its violations prior to the filing of

the complaint, the action is barred). Specific knowledge of

the pollutants allegedly discharged unlawfully makes it

easier for the defendant to promptly rectify the problem.

Cf Atl. States Legal Found., Inc. v. Stroh Die Casting Co.,

A64

!

—_—_——_

116 F.3d 814, 819-20 (7" Cir. 1997) (“In practical terms,

the notice must be sufficiently specific to inform the

alleged violator about what it is doing wrong, so that it will

know what corrective actions will avert a lawsuit. . . . The

key to notice is to give the accused company the

opportunity to correct the problem.”’).

The notice and delay requirements are also designed

to allow the enforcer of first resort, the EPA or the

appropriate state agency, to bring its own enforcement

action, see Hallstrom, 493 U.S. at 29, which would

preempt the citizen lawsuit, see 33 U.S.C. § 1365(b)(1)(B).

Inclusion of each pollutant forming the basis of a alleged

violation better allows enforcement agencies to identify

and prosecute a potential defendant’s violations, giving

effect to Congress’s intention that citizen enforcers

supplement, not supplant, public enforcement. See id.

(citing Gwaltney, 484 U.S. at 60).

Accordingly, we hold that an NOI letter must identify

with reasonable specificity each pollutant that the

defendant is alleged to have discharged unlawfully. Failure

to do so will justify a district court’s dismissing claims

based on pollutants not properly noticed.

Turning to the case at hand, we conclude that

Catskill’s NOI letter adequately notified the City of some

but not all of the violations subsequently alleged in the

complaint. The district court found, and Catskill argues on

appeal, that inclusion of “suspended solids” and “settleable

solids” was sufficient to notify the City of Catskill’s claims

of turbidity and thermal discharges, because of the logical

and empirical associations between suspended solids on the

one hand and turbidity and thermal discharges on the other.

We agree with respect to Catskill’s claims of turbidity

discharges, but not with respect to thermal discharges.

A65

Turbid water, by definition, is water carrying high

levels of solids in suspension. The presence of elevated

levels of suspended solids inevitably produces iurbidi‘y.

“Turbid” is defined as “having the lees or sediment

disturbed: thick or opaque with matter in suspension.”

Webster's Third New International Dictionary 2464

(1981). Water cannot be turbid without suspended solids,

and some level of turbidity is inherent where suspended

solids are preseni. Because each logically depends on the

other, notice of discharges of suspended solids is sufficient

to notify of an eventual claim based on discharges of

“turbidity.”

On the other hand, the relationship between suspended

solids and temperature is one of association, not identify.

To be sure, increased turbidity often produces increased

water temperature. Particles suspended in water absorb

heat, raising the temperature of the water. But the presence

of suspended solids does not inevitably raise water

temperature. The effect of suspended solids on

temperature depends on a third variable, radiant heat,

usually in the form of sunlight. Increased turbidity in a

cold, dark place may not affect the temperature of the

water at all, or may do so only infinitesimally, because no

source of radiant heat is present. As a result, unlike

suspended solids and turbidity, there is no necessary

relationship between suspended solids and increased

temperature. The relationship is only one of frequent

association under ordinary circumstances.

Accordingly, to be sufficient, the allegations in an

NOI letter must suggest that these ordinary circumstances

were also prevalent. Where alleged circumstances. indicate

that suspended solids and increased temperature are very

likely to be associated, notice of suspended solids may be

sufficient to notify a reasonable person of a thermal

discharge claim. In the instant case, Catskill’s NOI letter

does not state that such circumstances were prevalent.

A66

For the foregoing reasons, we hold that Catskill’s

claims of unpermitted thermal discharges were properly

dismissed under Rule 12(b)(6). However, those claims

should have been dismissed without prejudice. Thus we

vacate so much of the judgment as dismissed Catskill’s

thermal discharge claims with prejudice and remand those

claims with direction that they be dismissed without

prejudice to refilling after full compliance with 33 U.S.C.

1365(b)(1)(A).

Ill Interbasin Transfer as a “Release” Under

the CWA

As we have noted, the CWA prohibits, unless

otherwise allowed by permit, “the discharge of any

pollutant,” 33 U.S.C. 1311(a), which the Act defines to

mean “any addition of any pollutant to navigable waters

from any point source,” 33 U.S.C. § 1362(12). The statute

does not define “addition.” The City argues that the release

of water from Schoharie Reservoir into Esopus Creek is

not an “addition,” citing National Wildlife Federation v.

Gorsuch, 693 F.2d 156 (D.C. Cir. 1982), and National

Wildlife Federation v. Consumers Power Co., 862 F.2d 580

(6" Cir. 1988), both of which accorded substantial

deference to the EPA’s position that the CWA’s discharge

permit requirement does not apply to discharges from

dams. Catskill counters that the Gorsuch and Consumers

‘ Power courts accorded unjustified deference to the EPA’s

interpretation of “addition,” that the cases are

distinguishable on their facts, and that the City’s conduct

here qualifies as an “addition” under the plain meaning of

that word. We agree with Catskill and accordingly reverse

the district court and remand for further proceedings on

Catskill’s remaining claims.

A. The EPA’s Position and the Proper Standard of

Deference

A67

In several policy statements made in opinion letters

and reports to Congress in the 1980s and 1980s, the EPA

took the position that dam releases should not be

considered “discharges” under the CWA and thus NPDES

permits would not be required for those releases.’ See

Gorsuch, 693 F.2d at 167-69. This position was never

formalized in a notice-and-comment rulemaking or formal

adjudication under the Administrative Procedure Act, 5

U.S.C. §§ 553, 554, although the EPA subsequently

reiterated its position in the Gorsuch and Consumers

Power cases, as a defendant and amicus curiae,

respectively. See’ Consumers Power, 862 F.2d at 583;

Gorsuch, 693 F.2d at 165. Both courts rested their

decisions on the conclusion that the EPA position deserved

substantial deference and was reasonable. Given

subsequent Supreme Court decisions governing judicial

deference to federal agencies’ constructions of the statutes

that they implement, we hold that the EPA position is due

less deference than that accorded it by the Gorsuch and

Consumers Power courts.

In 1982, in Gorsuch, the District of Columbia Circuit

deferred to the EPA’s position that dam releases wer not

“additions” under the CWA, which it upheld as a

reasonable construction of the statute. The Gorsuch

plaintiffs had sued the EPA under 33 U.S.C. § 1365(a)(2),

seeking a declaration that the EPA had a nondiscretionary

duty to require NPDES permits from dam operators. After

an extensive exegesis of the CWA’s statutory text,

structure, and legislative history, the court concluded that

the EPA could reasonably conclude that dam releases were

' The original documents in which the EPA staked out its position

were not included in the filings before this court and were not

published in the usual sources of administrative law, the Code of

Federal Regulations at.d the Federal Register. We accordingly base

our discussion of the EPA’s position on that included in the District of

Columbia Circuit’s comprehensive opinion in Gorsuch.

A68

not “additions.” See 693 F.2d at 170-83. Notwithstanding

the court’s extensive investigation of legislative intent, its

relied ultimately on deference to the agency:

[W]e emphasize the narrowness of our

decision. It is not our function to decide

whether EPA’s interpretation . . . is the best

one or even whether it is more reasonable

than the Wildlife Federation’s interpretation.

We hold merely that EPA’s interpretation is

reasonable, not inconsistent with

congressional intent, and entitled to great

deference; therefore, it must be upheld.

693 F.2d at 183. In 1988, the Sixth Circuit reached the

same conclusion. See Consumers Power, 862 F.2d at 584-

87.

If the EPA’s position had been adopted in a

rulemaking or other formal proceeding, deference of the

sort applied by the Gorsuch and Consumers Power courts

might be appropriate. Instead, the EPA’s position is based

on a series of informal policy statements made and

consistent litigation positions taken by the EPA over the

years, primarily in the 1970s and 1980s. Recent Supreme

Court cases emphasize that such agency statements do not

deserve broad deference of the sort accorded by the

Gorsuch and Consumers Power courts.’ See United States

v. Mead Corp., 121 S. Ct. 2164 (2001); Christensen v.

Harris County, 529 U.S. 576 (2000). In Christensen, the

Supreme Court held that “‘[i]nterpretations such as those in

opinion letters — hke imterpretations contained in policy

7

Consumers Power expressly applied the standard of deference

elaborated in Chevron U.S.. Inc. v. Natural Resources Defense Council,

467 US. 837 (1984). See 862 F.2d at 584-85. Gorsuch, which predated

Chevron, applied essentially the same degree of deference. See 693

F.2d at 166-67.

A69

statements, agency manuals, and enforcement guidelines,

all of which lack the force of law — do not warrant

Chevron-style deference.” 529 U.S. at 587. “Instead,” the

Court continued, “interpretations contained in formats such

as opinion letters are ‘entitled to respect’ . . . but only to the

extent that those interpretations have the ‘power to

persuade.’” /d. (citation omitted). The Court consequently

held that an opinion letter by the Department of Labor

deserved only this form of limited deference in its

interpretation of a provision of the Fair Labor Standards

Act. See id.

Like positions taken by the Department of Labor in its

opinion letter in Christensen, the EPA position on dam

discharges has never been articulated in circumstances that

would give it the “force of law.” Gorsuch describes only a

series of letters and several presentations for Congress in

reports and testimony that outlined the EPA’s position. See

Gorsuch, 693 F.2d at 167-69. None of these sources come

close to the sort of formal, binding articulation of an

agency’s views that would justify Chevron deference after

Christensen. That the EPA later relied on its position in-

litigation does not alter our analysis; a position adopted in

the course of litigation lacks the indicia of expertise,

regularity, mgorous consideration, and public scrutiny that

justify Chevron deference. See Bowen v. Georgetown

Univ. Hosp., 488 U.S. 204, 212 (1988); Ball v. Memphis

Bar-B-Q Co., 228 F.3d 360, 365 (4th Cir. 2000); S. Utah

Wilderness Alliance v. Dabney, 222 F.3d 819, 828 (10th °

Cir. 2000).

However, as Mead and Christensen make clear, courts

do not face a choice between Chevron deference and no

deference at all. Administrative decisions not subject to

Chevron deference may be entitled to a lesser degree of

deference: the agency position should be followed to the

extent persuasive. See Mead, 121 S. Ct. at 2175-76 (citing

Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). For

A70

the reasons that follow, however, we do not find the EPA’s

position to be persuasive.

B. Defining “Addition”

The EPA’s position, upheld by the Gorsuch and

Consumers Power courts, is that for there to be an

“addition,” a “point source must introduce the pollutant

into navigable water from the outside world.” Gorsuch,

693 F.2d at 165. We agree with this view provided that

“outside world” is construed as any place outside the

particular water body to which pollutants are introduced.

Given that understanding of “addition,” the transfer of

water containing pollutants from one body of water to

another, distinct body of water is plainly an addition and

thus a “discharge” that demands an NPDES permit.

Both Gorsuch and Consumers Power essentially

involved the recirculation of water, without anything added .

“from the outside world.” Such recirculation, they

concluded, could not be an “addition.” In Gorsuch, water

was released from a reservoir through a dam to the stream

below. Plaintiffs complained that such a release amounted

to a regulated discharge under the Act, requiring a permit.

The reservoir above the dam and the stream below, at least

arguably, were sufficiently the “same” water that the

release might not be considered an “addition”; nothing was

introduced to the water that was not, in some sense, already

there. See 693 F.2d at 174-75.

In Consumers Power, the defendant had withdrawn

water from Lake Michigan, along with some surprised fish,

for hydroelectric power generation. The water and fish

were then returned to the Lake after passing through

hydroelectric generators, which pureed some of the fish.

The court found that returning the fish to the Lake, albeit in

a different form, was not an “addition” because the fish had

already been there. See 862 F.2d at 586. Indeed, the court

A7l

concluded that “(t]he water which passes through the

(defendant’s hydropower works] never loses its status as

water of the United States.” /d. at 589. The navigable

water was recirculated, but nothing was added. The Sixth

Circuit therefore also concluded that the releases from the

defendant’s hydropower works were not “introduced from

the outside world.” See id. at 586. Beyond Consumers

Power, several cases from other circuits, despite having

found “additions” to have occurred, in dicta reiterated the

Gorsuch holding. See, e.g., Comm. To Save Mokelumne

River v. E. Bay Mun. Util. Dist., 13 F.3d 305, 308-09 (9th

Cir. 1993); United States v. Law, 979 F.2d 977, 979 (4th

Cir. 1992) (“Where ‘pollutants’ exist[ | in the waters of the

United States before contact with these facilities, the mere

diversion in the flow of the waters [does] not constitute

‘additions’ of pollutants to the water.”’).

The Gorsuch and Consumers Power decisions

comport with the plain meaning of “addition” assuming

that the water from which the discharges came is the same

as that to which they go.’ If one takes a ladle of soup from

a pot, lifts it above the pot, and pours it back into the pot,

one has not “added” soup or anything else to the pot

(beyond, perhaps, a de minimis quantity of airborne dust

that fell into the ladle). In requiring a permit for such a

“discharge,” the EPA might as easily require a permit for

Niagra Falls.

The present case, however, strains past the breaking

point the assumption of “sameness” made by the Gorsuch

and Consumers Power courts. Here, water is artificially

diverted from its natural course and travels several miles

> We need not and do not decide whether those courts were correct in

accepting that the source and destination waters were identical and thus

whether we would reach their conclusions if presented with the same

facts.

A72

from the Reservoir through Shandaken Tunnel to Esopus

Creek, a body of water utterly unrelated in any relevant

sense to the Schoharie Reservoir and its watershed. No

one can reasonably argue that the water in the Reservoir

and the Esopus are in any sense the “same,” such that

“addition” of one to the other is a logical impossibility.

When the water and the suspended sediment therein passes

from the Tunnel into the Creek, an “addition” of a

“pollutant” from a “point source” has been made to a

“navigable water,” and the terms of the statute are satisfied.

In Dague v. City of Burlington, 935 F.2d 1343 (2d Cir.

1991), we implicitly held the release of polluted water from

one water body to a distinct, less-polluted water body to be

an addition of pollutants to the latter. We concluded that a

“discharge” had occurred where leachate from a landfill

entered a pond and thereafter water from the pond, polluted

with the leachate, flowed through a culvert into a

surrounding marsh. We held that (1) the pond and marsh

were different navigable waters; (2) the culvert was the

relevant point source; and (3) the release of pond water

through the ? was a “discharge.” We thus necessarily

implied that the transfer of water from the pond to the

marsh was an “addition” /d at 1354-55. We also expressly

rejected the defendant’s argument that the water flowing

from pond to marsh was not an “addition,” noting that

“({ujnder this argument, pollutants would be ‘added’ only

when they are introduced into navigable waters for the first

time.” /d. at 1354.

The First Circuit reached a similar conclusion in

Dubois v. U.S. Dep’t of Agriculture, 102 F.3d 1273 (\st

Cir. 1996). In that case, a ski resort operator on

Department of Agriculture property pumped water without

a permit from a polluted river into a less-polluted pond to

operate its snowmaking equipment. The court held that the

transfer of polluted water from one water body to a distinct

water body constitutes an “addition” of pollutants to the

A73

destination water body. The court emphasized that the two

bodies of water, for all relevant purposes, were distinct:

although water naturally flowed from the pond into the

river, water would never naturally flow from river to pond.

That difference made the pumping an “addition.” See id. at

1296-97. The court distinguished Gorsuch and Consumers

Power as involving movement of water within the same

water body. See id. at 1299.

The City also argues that “addition” draws meaning

from its association with the phrase “from point source.”

This view misunderstands the import of the term “point -

source,” which does not necessarily refer to the place

where the pollutant was created but rather refers only the

proximate source from which pollutant is directly

introduced to the destination water body. A pipe from a

factory draining effluent into a navigable water is a point

source, but the factory itself is not. This is clear from the

text of the Act, which defines “point source,” in relevant

part, as any discernible, confined and discrete conveyance,

including but not limited to any pipe, ditch, channel,

tunnel, conduit, well, discrete fissure, container, rolling

stock, concentrated animal feeding operation, or vessel or

other floating craft, from which pollutants are or may be

discharged.

33 U.S.C. § 1362(14). Under most circumstances, a “pipe,

ditch, channel, tunnel, [or] conduit” is unlikely to have

created the pollutants that it releases, but rather transports

them from their original source to the destination water

body.

As a “tunnel,” Shandaken Tunnel plainly qualifies as

a point source. The tunnel itself need not have created the

pollution; it is enough that it conveys the pollutants from

their original source to the navigable water. See United

States v. Plaza Health Labs., Inc., 3 F.3d 643, 646 (2d Cir.

1993). The City’s proposed interpretation of “from a point

A74

source” is inconsistent with the CWA’s definition of a

point source.

Given the ordinary meaning of the CWA’s text and

our holding in Dague, we cannot accept the Gorsuch and

Consumers Power courts’ understanding of “addition,” at

least insofar as it implies acceptance of what the Dubois

court called a “singular entity” theory of navigable waters,

in which an addition to one water body is deemed an

addition to all of the waters of the United States. See

Dubois, 102 F.3d at 1296-97. We properly rejected that

approach in Dague. . Such a theory would mean that

movement of water from one discrete water body to

another would not be an addition even if it involved a

transfer of water from a water body contaminated with

myriad pollutants to a pristine water body containing few

or no pollutants. Such an interpretation is inconsistent with

the ordinary meaning of the word “addition.”

Even if we were to conclude that the proper

application of the statutory text to the present facts was

sufficiently ambiguous to justify reliance on the legislative

history of the statute, see Blum v. Stenson, 465 U.S. 886,

896 (1984), that source of legislative intent would not help

the City. The legislative history is silent on the meaning of

“addition.” See Gorsuch, 693 F.2d at 175. Instead, the

City relies principally on evidence from other provisions of

the statute that Congress sought (1) to target industrial and

municipal wastes specifically, see Plaza Health Labs., 3

F.3d at 647, and (2) to leave the regulation of water

supply—and therefore dam and reservoir operations—to

the states, see 33 U.S.C. § 1251(g) (“It is the policy of

Congress that the authority of each State to allocate

quantities of water within its jurisdiction shall not be

superseded, abrogated, or otherwise impaired by this

[Act].’’).

A75

‘Yet like many complex statutes (and the CWA is

among the most complex), the CWA balances a welter of

consistent and inconsistent goals. In contrast with the

policies cited by the City, the CWA also expressly includes

a broad and uncompromising policy of “restor[ing] and

maintain{ing] the chemical, physical, and biological

integrity of the Nation’s waters.” 33 U.S.C. § 1251(a).

Artificially transferring water and pollutants between

watersheds as the City has done here might well interfere

with that integrity, as Catskill has alleged. Moreover, in

the past we have applied the Act’s proscriptions beyond

industrial discharges. See Concerned Area Residents for

the Env’t v. Southview Farm, 34 F.3d 114 (2d Cir. 1994)

(involving discharges of agricultural waste).

In any event, none of the statute’s broad purposes

sways us from what we find to be the plain meaning of its

text. Cf Plaza Health Labs., 3 F.3d at 647 (“The narrow

questions posed by this case . . . may not be resolved

merely by simple reference to [the CWA’s] admirable

goal[s].”") Where a statute seeks to balance competing

policies, congressional intent is not served by elevating one

policy above the others, particularly where the balance

struck in the text is sufficiently clear to point to an answer.

We find that the textual requirements of the discharge

prohibition in § 1311(a) and the definition of “discharge of

a pollutant’ in § 1362(12) are met here.

CONCLUSION

The judgment of the district court is hereby reversed

in part, vacated in part, and the case is remanded. We

vacate so much of the judgment as dismissed Catskill’s

thermal discharge claims and remand the direction that

those claims be dismissed without prejudice to refilling

after full compliance with 33 U.S.C. § 1365(b) (1) (A).

The remainder of the judgment dismissing the complaint is

A76

reversed and remanded for further proceedings consistent

with this opinion. Costs are awarded to the appellants.

ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE

NORTHERN DISTRICT

OF NEW YORK, DATED JUNE 4, 2002

REPRODUCED FOLLOWING

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

CATSKILL MOUNTAINS CHAPTER

OF TROUT UNLIMITED, INC.,

THEODORE GORDON FLYFISHERS,

INC., CATSKILLDELAWARE

NATURAL WATER ALLIANCE, INC.,

FEDERATED SPORTSMEN’S CLUBS

OF ULSTER COUNTY, INC., and

RIVERKEEPER, INC.,

Plaintiff(s), 1 .99.cVy-51]

dita: (FJS/RFT)

THE CITY OF NEW YORK, NEW

YORK CITY DEPARTMENT OF

ENVIRONMENTAL PROTECTION,

and JOEL A. MIELE, SR.,

COMMISSIONER OF DEPARTMENT

OF ENVIRONMENTAL

PROTECTION,

Defendant(s).

APPEARANCES OF COUNSEL

PACE ENVIRONMENTAL | KARL S. COPLAN,

LITIGATION CLINIC, | ESQ.

INC.

78 North Broadway

White Plains, New York

10603

Attorneys for Plaintiffs

A79

CITY OF NEW YORK WILLIAM PLACHE,

OFFICE OF | ESQ.

CORPORATION HILARY

COUNSEL MELTZER, ESQ.

100 Church Street

New York, New York 10007-

2601

Attorneys for Defendants

SCULLIN, Chief Judge

U.S. DISTRICT COURT-N.D. OF N.Y.

FILED JUNE 4, 2002

LAWRENCE K. BAERMAN, CLERK-SYRACUSE

ORDER

Plaintiffs commenced this action under the citizen

suit provision of the Clean Water Act (“CWA”), 33 U.S.C.

§ 1365, to enjoin Defendants from polluting the Esopus

Creek, a world-class trout ‘stream, with highly turbid,

muddy water, and for civil penalties for past violations.

Presently before the Court is Plaintiffs’ motion for

_ partial summary judgment declaring that Defendants are in

violation of the CWA, 33 U.S.C. § 1311(a), every day that

Shandaken Tunnel is in operation and that Defendants have

violated CWA § 1311(a) on at least 347 days between

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February 1, 1995 and December 30, 1998. On May 29,

2002, the Court heard oral argument with respect to this

motion. At that time, the Court orally granted Plaintiffs’

motion for partial summary judgment and advised counsel

that a written Order would be forthcoming. The following

constitutes the Court’s written decision with respect to the

pending motion.

The CWA prohibits the addition of any pollutant

into navigable waters from any point source by an person

without a permit. See 33 U.S.C. §§ 1311(a), 1362(12).

Violators of r prohibition are strictly liable. See

Connecticut Fund for the Env't, Inc. v. Upjohn Co., 660 F.

Supp. 1397, 1409 (D. Conn. 1987).

In the present case, there is no dispute that Esopus

Creek is a navigable water, that Defendants are persons.

within the meaning of the CWA, and that Defendants do

not have a permit. Nor can there be any dispute that the

Shandaken Tunnel is a point source and that suspended

sediment constitutes a pollutant now that the Second

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Circuit has held that “{w]hen the water and the suspended

sediment therein pass from the [Shandaken] Tunnel into the

{Esopus} Creek, an ‘addition’ of a ‘pollutant’ from a ‘point

source’ has been made to a ‘navigable water,’ and the terms

of the statute are satisfied.” Catskill Mountains Chapter of

Trout Unlimited, Inc. v. City of N.Y., 273 F.3d 481, 492 (2d

Cir. 2001).

pan Defendants filed papers in opposition to

Plaintiffs’ motion, they conceded in their papers as well as

at oral argument thaf “{unnder the Second Circuit’s

decision, because the City has discharged and continues to .

discharge water containing suspended solids and turbidity

through the Shandaken Tunnel into Esopus Creek, and

‘because the City has no Clean Water permit for those

discharges, . . . it may be viewed as strictly liable under the

Act.” See Defendants” Memorandum of Law at 2.

Given: that the Second Circuit has already

determined that whenever Defendants divert water and

suspended sediment through the Shandaken Tunnel into

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Esopus Creek, “the terms of the statute have been

satisfied,” Catskill Mountains Chapter of Trout Unlimited,

Inc., 273 F.3d at 492, and Defendants’ concession that in

light of the Second Circuit’s decision they have violated the

CWA, the Court concludes that Plaintiffs are entitled to

partial vinnineey judgment with respect to the issue of

liability. Accordingly, the Court hereby

ORDERS that Plaintiffs’ motion for partial

summary judgment with regard to the issue of liability is

GRANTED; and the Court further

ORDERS that the parties are to contact Magistrate

‘Judge Treece’s chambers within ten days of the date of this

Order to schedule a conference to discuss how this nites

can be expedited to ensure that a trial on the issue of

damages can be scheduled as soon as possible.

IT IS SO ORDERED.

Dated: June 4, 2002

Syracuse, New York

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s/

Frederick J. Scuilin, Jr.

Chief United States District Judge

A&4

MEMORANDUM-DECISION AND ORDER OF THE

UNITED STATES

DISTRICT COURT FOR THE NORTHERN

DISTRICT OF NEW YORK, DATED FEBRUARY 6,

2003

(Reported at 244 F. SUPP. 2d 41)

REPRODUCED FOLLOWING

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

---- -- ---- X

sree

———————

CATSKILL MOUNTAINS

CHAPTER OF TROUT

UNLIMITED, INC., THEODORE

GORDON FLYFISHERS, INC.,

CATSKILLDELAWARE

NATURAL WATER ALLIANCE,

INC., FEDERATED

" SPORTSMEN’S CLUBS OF

ULSTER COUNTY, INC., and

RIVERKEEPER, INC., paetdiend

Plaintiff(s),

-against-

THE CITY OF NEW YORK, NEW

YORK CITY DEPARTMENT OF

ENVIRONMENTAL

PROTECTION, and JOEL A.

MIELE, SR., COMMISSIONER OF

DEPARTMENT OF

ENVIRONMENTAL

PROTECTION,

Defendant(s).

- @ wawoeownwaewoconacece 4

APPEARANCES OF COUNSEL

PACE ENVIRONMENTAL | KARL S. COPLAN,

LITIGATION CLINIC, | ESQ.

INC. MEGAN BRILLAULT,

78 North Broadway Legal Intern

White Plains, New York} LISA COX, Legal

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10603 Intern

Attomeys for Plaintiffs NICOLE PARISI-

| SMITH, Legal Intern

JOHN PAUL, Legal

Intern

CITY OF NEW YORK WILLIAM PLACHE,

OFFICE OF | ESQ.

CORPORATION HILARY MELTZER,

COUNSEL ESQ.

100 Church Street JANET SIEGEL, ESQ.

New York, New York 10007-

2601

Attorneys for Defendants

SCULLIN, Chief Judge

U.S. DIST. COURT-N.D. OF N.Y. .

FILED FEBRUARY 6, 2003

LAWRENCE K. BAERMAN

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

On November 20, 1998, Plaintiffs served

Defendants, the New York State Department of

Environmental Conservation (“DEC”), and __ the

Environmental Protection Agency (“EPA”) with a Notice

of Intent to Sue. On March 31, 2000, Plaintiffs filed their

complaint in this action. See Dkt. No. 1. On October 6,

2000, this Court dismissed Plaintiffs’ turbidity and thermal

discharge claims for failure to state a claim. See Dkt. No.

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19. Thereafter, on October 21, 2001, the Second Circuit

reversed in part this Court’s decision and remanded this

action for further proceedings. See Dkt. No. 32.

Subsequently, Plaintiffs filed a motion for partial

summary judgment, seeking a declaration that Defendants

had violated the Clean Water Act (“CWA”), 33 U.S.C. §

1311(a), by diciaabie turbidity and suspended solids

from the Shandaken Tunnel into the Esopus Creek without

a permit, including 347 days between February 1, 1995

and December 30, 1998.' See Dkt. No. 44. On June 4,

2002, the Court granted Plaintiffs’ motion for summary

judgment on the issue of liability and directed the parties

to contact Magistrate Judge Treece’s chambers to discuss

how this action could be expedited to ensure that a trial on

the issue of damages could be scheduled as soon as

possible. See Dkt. No. 66.

' According to Defendants’ Exhibit “D-17,” the Shandaken Tunnel was

in operation on 1,015 days between February |, 1995 and December

30, 1998.

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The Court held a bench trial commencing on

January 8, 2003, to determine the amount of civil penalties,

if any, that Defendants should be required to pay pursuant

to 33 U.S.C. § 1319(d), and what form of injunctive relief,

if any, the Court should impose upon Defendants for

operating the Shandaken Tunnel without a SPDES permit

in violation of the CWA. Pursuant to Rule 52(a) of the

Federal Rules of Civil Procedure, the following constitutes

the Court’s findings of fact and conclusions of law with

respect to these issues.

Il. DISCUSSION

A. Findings of Fact

Plaintiffs Catskill Mountains Chapter of Trout

Unlimited, Inc. (““CMCTU”), Theodore Gordon Flyfishers,

Inc. (“TGF”), Catskill-Delaware Natural Water Alliance

(“CDNWA”), Federated Sportsmen’s Clubs of Ulster

County, Inc. (“FSC”), and Riewineiie. Inc., are not-for-

profit corporations organized under the laws of the State of

New York. Members of CMCTU, TGF, CDNWA, and FSC

A8&9

live near the Esopus Creek and enjoy the Esopus Creek for

numerous activities, including, but not limited to,

flyfishing. Riverkeeper, whose mission is to protect the

environmental resources of the Hudson River and its

tributaries, including the Esopus Creek, has members who

fish in the Esopus Creek.

At trial, Bert Darrow, a member of TGF and

CMCTU and a professional flyfisherman and _ licensed

flyfishing guide, testified that prior to 1996 he used the

Esopus Creek as his primary fishing location for personal

as well as business uses. However, since that time, the

turbid water in the Esopus Creek has made fishing difficult

because the trout cannot see cast lines and flies and

dangerous because the fishermen cannot see the bottom of

the Creek. As a result, he does not fish in the Esopus Creek

very often, and he takes his clients to other streams.

Ron Urban and Bruce Duffy, who are also members

of CMCTU, testified that they have observed a significant

increase in turbidity in the Esopus Creek below the

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Shandaken Tunnel and that they find that the turbidity 1s

visually offensive and creates unsafe conditions for wading.

Brother John Farrell, a member of ESC, has fished in the

Esopus Creek since the mid-1980s. He testified that since

1996 he has observed that the Esopus Creek below the

Shandaken Tunnel has become more turbid, causing it to be

unsafe and affecting his aesthetic enjoyment of the Esopus

Creek. He also testified that he very seldom fishes below

the Shandaken Tunnel, except with an older friend who

lives on the Esopus Creek in that area.

Defendant City of New York, by and through

Defendant New York City Department of Environmental

Protection (“NYCDEP”’), is the owner and operator of the

largest unfiltered drinking water supply in the United

States.2 Defendants provide high quality water to more

than nine million residents of New York State, including

eight million people who live in New York City and

approximately one million people who live in Westchester,

AQ]

Putnam, and Rockland Counties. Defendant NYCDEP

conducts and oversees operation of the Shandaken Tunnel.

The Catskill water supply system provides

approximately forty percent of New York City’s daily

drinking water needs under normal operating conditions.

This system consists of two reservoirs, the Ashokan and the

Schoharie. The Shandaken Tunnel began operating in 1924.

The water in the Schoharie Reservoir is diverted to the

Esopus Creek, the main tributary to the Ashokan Reservoir,

through the Shandaken Tunnel. The Shandaken Tunnel has

a flow capacity of up to 650 million gallons per day. When —

the Shandaken Tunnel is in operation, water from the

Schoharie Reservoir enters the Shandaken Tunnel ieee

an intake channel on or in the bed of the Schoharie

Reservoir. The Shandaken Tunnel runs approximately ~

eighteen miles from the intake structure at the Schoharie

Reservoir to the portal from which it discharges into the

Esopus Creek eleven miles upstream of the Ashokan

? Defendant Joel Miele is the Commissioner of NYCDEP.

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Reservoir. The Catskill aqueduct, which moves water from

the Ashokan Reservoir to New York City’s Kensico

Reservoir in Westchester County, has a capacity of up to

610 million gallons per day. Two aqueducts bring water

from the Kensico Reservoir into New York City.

The Catskill Mountains are characterized by

extensive deposits of silts and clays that are continuous for

miles in the valleys through which streams tributary to the

Catskill reservoirs now flow. The Ashokan Reservoir is

designed to provide settling time to minimize the turbidity

of Catskill water by the time it enters the Catskill aqueduct

on its way to New York City so that the water entering

New York City’s distribution system meets drinking water

standards. The water discharged through the Shandaken

Tunnel into the Esopus Creek is frequently substantially,

visibly more turbid and higher in suspended solids than the

receiving water because of the system design and the

geology of the Schoharie drainage basin. The suspended

solids present in the Schoharie Reservoir are caused, at

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least in part, by erosion in the Schoharie Watershed,

including erosion resulting from land disturbance from

human activities.

The New York State Department of Environmental

Conservation (“DEC”) has designated the Esopus Creek,

between the outlet of the Shandaken Tunnel and the inlet of

the Ashokan Reservoir, as a class A(T) stream. The water

quality standard for discharges of turbidity to a class A(T)

stream is “no increase that will cause a substantial visible

contrast to natural conditions.” N.Y. Comp. Codes R. &

Regs. tit. 6, § 703 {2) (2002).

Pursuant to 33 U.S.C. § 1342, the Administrator of

the EPA has delegated to the State of New York the

authority to issue State Pollutant Discharge Elimination

System (“SPDES”) permits to dischargers in this State.

DEC is the state agency that administers the SPDES

program in New York. Defendants do not have a CWA

permit or a SPDES permit for the operation of the

Shandaken Tunnel, and, until the Second Circuit’s decision

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on October 21, 2001, they maintain that they believed that

they did not need a SPDES permit to operate the

Shandaken Tunnel. Defendants operated the Shandaken

Tunnel without a permit and, thus, in violation of the CWA

on a total of 2,326 days from February 1, 1995 to

December 31, 2002. See Defendants’ Exhibit “D-17;”

Letter to Court dated January 23, 2003.”

B. Conclusions of Law

I. Standing

An organization has standing to bring an action on

behalf of its members if it can establish that “its members

would otherwise have standing to sue in their own right, the

interests at stake are germane to the organization’s purpose,

and neither the claim asserted nor the relief requested

requires the participation of individual members in the

lawsuit.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.

* After the trial was completed, the Court requested that Defendants

submit a record of the discharges through the Shandaken Tunnel for

the calendar year 2002, rather than rely upon an approximation based

upon prior history. Defendants responded to the Court’s request with

the January 23, 2003 letter and attached chart.

A95

(TOC), Inc., 528 U.S. 167, 181 (2000) (citation omitted).

To establish individual standing a person must show

(1) [that he/she] has suffered an “injury in fact” that

is (a) concrete and particularized and (b) actual or

imminent, not conjectural or hypothetical; (2) the

injury is fairly traceable to the challenged action of

the defendant; and (3) it is likely, as opposed to

merely speculative, that the injury will be redressed

by a favorable decision.

Id. at 180-81.

In the present case, the testimony of Bert Darrow,

Ron Urban, Bruce Duffy, and Brother John Farrow

establishes that Plaintiffs have standing to bring this suit on

behalf of their members. Each of these individuals testified

that, at least since 1996, Defendants’ discharge of water

through the Shandaken Tunnel into the Esopus Creek has

interfered with their enjoyment of the Esopus Creek -- both

aesthetically and in their ability to fish safely in the Esopus

Creek --and, in the case of Bert Darrow, has interfered with

his ahdiaie as a fly-fishing guide. Such injury is both

concrete and particularized as well as fairly traceable to

Defendants’ actions. In addition, a decision in Plaintiffs’

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favor - i.e., requiring Defendants to reduce the turbidity of

the water that flows through the Shandaken Tunnel into the

Esopus Creek - will redress their injuries.

Accordingly, based upon the testimony of

Plaintiffs’ members, the Court concludes that Plaintiffs

have standing to bring suit against Defendants under the

citizen-suit provision of the CWA.

peeavins 2. Civil Penalties

As noted, this Court previously determined, upon remand

from the Second Circuit, that Defendants had violated the

CWA. Thus, the only remaining issue is the amount of

civil penalties and the nature of the injunctive relief that

the Court should assess against Defendants.° In making its

* The Court notes that Defendants have never challenged Plaintiffs’ ”

standing. Moreover, at the summary judgment stage, both this Court

and the Second Circuit implicitly concluded that Plaintiffs had

standing to maintain this suit.

* Defendants conceded that, in light of the Second Circuit’s October

21, 2001 decision, they were liable for violating the CWA.

* Several courts have stated that “[c]ivil penalties are mandatory

once Clean Water Act violations are found, although the amount

t be assessed is wholly within the discretion of the court.

Hawaii's Thousand Friends v. City & County of Honolulu, 821 F.

A97

determination, the Court must keep in mind that the

purpose of the CWA’s penalty provision is “deterrence

with respect to both the violator’s future conduct (specific

deterrence) and the general population regulated by the Act

(general deterrence).” United States v. Mun. Auth. of Union

Township, 929 F. Supp. 800, 806 (M.D. Pa. 1996), aff'd,

150 F.3d 259 (3d Cir. 1998) (citation omitted). To attain

the goal of deterrence, the penalty must have two

components: (1) “it must encompass the economic benefit

of noncompliance to ensure that the violator does not profit

from its violation of the law” and (2) it “must include a

punitive component in the form of a sum in addition to

Supp. /368, 1394 (D. Haw. 1993) (citing Atlantic States Legal

Foundation v. Tyson Foods, Inc., 897 F.2d 1128, 1142 (11th Cir.

1990); Stoddard v. Western Carolina Regional Sewer Authority,

784 F.2d 1200, 1208 (4th Cir. 1986)); see also Piney Run Pres.

Ass'n v. County Comm'rs of Carroll County, 82 F. Supp. 2d 464,

470 (D. Md. 2000), vacated and remanded on other grounds, 268

F.3d 255 (4th Cir. 2001) (“The ‘highly discretionary calculations

necessary to assess penalties [under the CWA) are particularly

within the purview of trial judges’ and, therefore, are granted wide

deference.” (quotation omitted)). In addition, some courts have held

that the issues of intent and fault are not relevant to the issue of

whether the court should impose penalties but are only relevant

with respect to the issue of the amount of the penalty. See, e.g.,

United States v. Ohio Edison Co., 725 F. Supp. 928, 934 (N.D.

Ohio /98¥9) (citations omitted).

A98

economic benefit which accounts for the degree of

seriousness and/or willfulness of the violations.” /d.

Section 1319 of the CWA sets forth six factors that

a court must consider when determining the amount of civil

penalties to impose against a defendant:

[1] the seriousness of the violation

or violations, [2] the economic

benefit (if any) resulting from the

violation, [3] any history of such

violations, [4] any good-faith efforts

to comply with the applicable

requirements, [5] the economic

impact of the penalty on the

violator, and [6] such other matters

as justice may require.

33 U.S.C. § 1319(d).

Moreover, when applying these factors to a particular

situation, “courts generally employ either a ‘top-down’ or

‘bottom-up’ method.”’ Piney Run Pres. Ass'n v. County

Comm'rs of Carroll County, 82 F. Supp. 2d 464, 470 (D.

Md. 2000), vacated and remanded on other grounds, 268

’ The Second Circuit has not determined whether the “top-down” or

the “bottom-up” approach is the appropriate means of calculating

civil penalties under the CWA.

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F.3d 255 (4th Cir. 2001) (citation omitted); compare Union

Township, 929 F. Supp. at 806 (finding that “top-down”

approach is not appropriate and choosing, instead, to “begin

with economic gain and add a sum to that figure guided by

the other § 1319(d) factors and the need for punishment and

deterrence’); with Atlantic States Legal Found., Inc. v.

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

(finding that “top-down” approach is the appropriate

methodology for calculating CWA penalties).

If the “top-down” approach is used, the court will

“first calculate the maximum penalty based on the $25,000

[$27,500 or $31,500] per day figure,® then adjust the figure

down, as necessary, to account for the six factors listed in

§ 1319(d).” Piney Run, 82 F. Supp. 2d at 470 (citing

[Smithfield, 191 F.3d] at 528 n.7); see 40 C.F.R. § 19.4. If,

on the other hand, the court employs the “bottom up”

* The maximum penalty is $25,000 per day for violations occur'ing

_ on or before January 30, 1997, see 33 U.S.C. § 1319(d), $27,500

per day for violations occurring between January 31, 1997 and

August 19, 2002, and $31,500 per day for violations occurring

thereafter, see 40 C.F.R. § 19.4.

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method, the court will first “determine the economic

benefit the defendant derived by violating the [CWA], and

then adjust that figure upward or downward using the

remaining five factors in § 1319(d).” Piney Run, 82 F.

Supp. 2d at 470 (citing /Smithfield, 191 F.3d at 528)).

For the reasons addressed below in its discussion of

the economic benefit factor, based upon the circumstances

of this case, the Court concludes that the “top down”

approach provides the appropriate manner in which to

determine the amount of civil penalties that should be

awarded against Defendants for their violations of the

CWA.

a. Maximum amount of penalties

Although the parties stipulated that the Shandaken

Tunnel discharged water into the Esopus Creek on 1,983

days between February 1, 1995 and December 31, 2001,

and approximately 150 days in 2002, the Court reviewed

Defendants’ Exhibit “D-17” (Bates 15935-15942), plus the

additional data for the year 2002, which the Court

Al0l

requested, and determined that the Shandaken Tunnel was

in operation for a total of 2,326 days during this period: 308

days (1995) + 185 days (1996) + 247 days (1997) + 275

days (1998) + 320 days (1999) + 280 days (2000) + 349

days (2001) + 362 days (2002).

Using these numbers, the Court then calculated the

maximum civil penalties as follows:

Year Days Maximum Penalty Total

Per Day

1995 308 $25,000 $ 7,700,000

1996 185 $25,000 $ 4,625,000

1997 3 $25,000 $ 75,000

244 $27,500 $ 6,710,000

1998 275 $27,500 $ 7,562,500

1999 = 320 $27,500 $ 8,800,000

2000 = =280 $27,500 $ 7,700,000

2001 349 $27,500 $ 9,597,500

2002 = 231 $27,500 $ 6,352,500

131 $31,500 $ 4,126,500 _

TOTAL: $63,249,00

Using this figure as a starting point, the Court will

address each of the six factors set forth in § 1319(d) in turn.

b. The seriousness of the violation or violations

To determine the seriousness of a defendant's

violations, the court should consider “the frequency and

severity of the violations as well as their effect on the

environment.” Piney Run, 82 F. Supp. 2d at 471 (citing

United States v. Smithfield Foods, Inc., 972 F. Supp. 338,

343 (E.D. Va. 1997)). Although some courts have

acknowledged _ that “a significant penalty maybe

appropriate even absent proof of actual negative effect,” id.

(citing (/Smithfield, 972 F. Supp.] at 344), other courts

have found that the lack of material environmental harm is

a significant mitigating factor even though the defendant

has violated the CWA a significant number of times. See

Atlantic States Legal Found. Inc. v. Universal Tool &

Stamping Co., Inc., 786 F. Supp. 743, 747-49 (N.D. Ind.

1992) (finding that, even though the defendant had violated

its CWA permit more than 1,900 times during the relevant

period, the lack of material environmental harm was a

significant mitigating factor).

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As noted, Defendants operated the Shandaken

Tunnel without a permit, and thus violated the CWA, on

2,326 days between February I, 1995 and December 31,

2002.’ While this is a significant number of violations, the

Court must also weigh the fact that the turbidity and

suspended solids which Defendants discharged through the

Shandaken Tunnel were not toxic and, at least in part, were

the result of the natural conditions of the water that flowed

through that Tunnel. Moreover, although there was some

evidence at trial that the trout below the Shandaken Tunnel

were smaller than the trout above the Shandaken Tunnel,

there was no evidence of a significant decrease in the

number of trout or of any trout kill as a result of the

discharges. In fact, there was evidence that without the

” February 1, 1995 is the appropriate starting date for determining

the amount of civil penalties to be awarded in this case because

“in citizen enforcement actions the five-year statute of limitations

period (set forth.in 28 U.S.C. § 2462] is tolled sixty days before

the filing of the complaint, to accommodate the statutorily-

mandated sixty-day notice period.” Sierra Cluh v. Chevron U.S.A...

Inc., 834 F.2d 1517, 1524 (9th Cir. 1987). Since Plaintiffs filed

their complaint in this action on March 31, 2000, the five-year

statute of limitations was tolled on February 1, 1995.

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discharge of the water through the Shandaken Tunnel, there

would have less habitat for trout because of low water

levels. Based upon this evidence, the Court considers this

clement to be a mitigating factor.

c. The economic benefit resulting from the

violations

The economic benefit that the violator enjoys as a

result of violating the CWA is “{a] critical component of

any penalty analysis under the [CWA] ....” United States v.

Allegheny Ludlum Corp., 187 F. Supp. 2d 426, 436 (W.D.

Pa. 2002). “The goal of economic benefit analysis is to

prevent a violator from profiting from its wrongdoing.” /d.

(citing Dean Dairy, 150 F.3d at 263). Since it is difficult to

prove precise economic’. benefit, ‘“‘reasonable

approximations ... will suffice.’’ Piney Run, 82 F. Supp. 2d

at 470 (quoting Smithfield, 191 F.3d at 529). In making this

determination, “the court must endeavor to reach a

‘rational estimate of [the violator’s] economic benefit,

resolving uncertainties in favor of a higher estimate."**

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Union Township, 929 F. Supp. at 806 (quotation omitted).

“The estimate ‘must encompass every benefit that

defendants received from violation of the law.’ /d.

(quotation omitted). “It would eviscerate the [CWA] to

allow violators to escape civil penalties on the ground that

such penalties cannot be calculated with precision.” /d. at

806-07.

There are two elements to the calculation of

economic benefit: “(1) the benefit that .1e [defendant]

received from delayed capital spending (i.e., money saved

by delay in issuing and making payments on general

obligation bonds to finance the construction of the required

pollution control equipment); and (2) the operating and

maintenance (“O & M”’) expenses for the pollution control

equipment that the [defendant] avoided operating during

the period compliance was delayed.” Hawaii's Thousand

Friends, 82] F. Supp. at 1387.

Plaintiffs did not submit any evidence with respect

to the benefit that Defendants received by delaying capital

A106

spending. Rather, they focused their proof with respect to

economic benefit on the operating and maintenance

expenses that Defendants would have incurred had they

built a coagulation plant near the Shandaken Tunnel. Dr.

Bell testified that, by not building a coagulation plant,

Defendants saved $27,083,833 in operational and

maintenance costs for the period of February 1, 1995

through December 31, 2001. Although Defendants offered

the testimony of David Nickols to rebut Dr. Bell’s figures

and the feasibility of Dr. Bell’s design and his estimates of

operational and maintenance costs, they did not present any

other figure for the Court’s consideration. In fact, based

upon Mr. Nickols’ testimony, if the Court were to take

some of Defendants’ arguments into consideration, the

potential “economic benefit” to Defendants of not building

a coagulation plant would increase.

That being said, however, the Court has some

problems with Dr. Bell’s testimony as it relates to the

economic benefit that Defendants received as a result of

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their violation of the CWA. First, the Court canis the

feasibility of Dr. Bell’s plan, both from a design and

construction eile as well as an operational and

maintenance perspective since he did not take into account

the environmental impact of his design or the on-going

effects on the environment -- such as the increased traffic --

that the construction of such a plant would have. In

addition, Dr. Bell did not take into consideration the time

required to design and construct such a facility. Mr.

Nickols, however, estimated that it would take several

years.

Allowing for several years to construct a

coagulation plant of the type Dr. Bell suggested, the Cour

then must determine the appropriate date from which to

measure the economic benefit of not constructing.such a ©

facility. If the Court were to measure the operational and

maintenance savings from February 1, 1995, as Dr. Bell

did, this would require a finding that Defendants should

have begun work on the design and construction of a

A 1TNHe

coagulation plant in approximately 1990.'° If, on the other

hand, the Court determines that Defendants should have

begun work on the design and construction of a coagulation

plant on February 1, 1995 (when the statute of limitations

was tolled for purposes of this action), November 20, 1998

(the date on which Plaintiffs served Defendants with their

Notice of Intent to Sue), or October 21, 2001 (when the

Second Circuit issued its decision), the operational and

maintenance costs that Plaintiffs avoided would be far less

than the $27,083,833 that Dr. Bell estimated because

Defendants would not have incurred such costs until

several years after they began construction on _ the

coagulation plant. ||

'° It wou'd be unreasonable for the Court to measure Defendants’

economic benefit from this date in light of the Court’s finding, see

discussion infra Part 11.B.2.d, that it was reasonable for Defendants

to believe, prior to October 21, 2001, that they did not need a

SPDES permit to operate the Shandaken Tunnel.

'' Assuming that it would have taken Defendants five years to

design and build a coagulation plant, the earliest date that such a

plant would have come on line, using February 1, 1995, as a

Starting date, is approximately February 1, 2000. Applying the

numbers in Dr. Bell’s Table 5-1, see Plaintiffs’ Exhibit “P-83,” the

approximate operational and maintenance costs that Defendants

A109

Nonetheless, despite the Court’s problems with Dr.

Bell’s opinion regarding the economic benefit that inured to

Defendants by not building a coagulation plant, the Court

finds that this element is not a mitigating factor.’

d. Any history of such violations

In determining the history of a defendant’s

violations, the court must consider “not only pone

violations in the past, but also the duration and continuity

of the [defendant’s] present violations.” Piney Run, 82 F.

Supp. 2d at 471 (citing Smithfield Foods, 972 F. Supp. at

avoided by not having the coagulation plant in operation for the

years 2000 through 2002 is roughly $13,684,759 ($4,198,979

(2000) + $4,551,718 (2001) + $4,934,062 (2002), assuming that

the costs in 2002 increased by 8.4% over 2001. This is a very

rough estimate because in Dr. Bell's table all costs are shown in

2001 dollars and the Court’s 2002 costs are not.

'? The Court notes that § 1319(d)’s economic benefit

element, the purpose of which is, at least in part, to ensure that a

violator does not gain an economic advantage over its

competitors, is of limited assistance to a court’s determination of

the appropriate amount of civil penalties to assess against a

municipality which does not compete to provide water to its

citizens. Moreover, a court must balance the economic feasibility

of any proposed solution against the need of the municipality's

citizens for an adequate water supply.

A110

349).

The evidence adduced at trial demonstrated that

Defendants recognized the need to address, and have

worked to formulate a plan to address, the turbidity

problem in the Catskill system since 1993.'> However, as

Dr. Principe testified, Defendants did not believe that they

needed a SPDES permit to operate the Shandaken Tunnel

until October 21, 2001, when the Second Circuit concluded

that such a permit was necessary.

The Court finds that Defendants’ belief, prior to

October 21, 2001, that they did not need a SPDES permit to

operate the Shandaken Tunnel was reasonable. In this

"In 1993, a Filtration Avoidance Determination (“FAD”) was

issued, which addressed the turbidity problems in the Catskill

system. See Defendants’ Exhibit “D-12” - “Short- and Long-term

Plans to Reduce Turbidity in Schoharie and Ashokan Reservoirs,”

dated June 1993; Defendants’ Exhibit “D-14” - “Determination on

Filtration of New York City’s Catskill and Delaware Water

Supplies, dated January 19, 1993; Defendants’ Exhibit “D-23” -

“Short- and Long-terra. Plans to Reduce Turbidity in Schoharie

and Ashokan Reservoirs, 1993 4th Quarter Report,” dated January

1994. In addition, the most recent FAD, dated November 2002,

included long-term programs to reduce turbidity with time lines.

See Defendants’ Exhibit “D-61” - “New York City Filtration

Avoidance Determination,” USEPA - November 2002 - “Surface

Water Treatment Rule Determiantion for New York City’s

Catskill/Delaware Water Supply System.”

Alll

regard, the Court notes that, although the EPA and DEC

closely monitored the quality of Defendants’ water supply

pursuant to other statutes and were aware that Defendants

discharged water through the Shandaken Tunnel as part of

their water system, Dr. Principe testified that neither the

EPA nor DEC ever suggested to Defendants that they

needed a SPDES permit to operate the Shandaken Tunnel.’

For these reasons, the Court finds that this element is a

mitigating factor.

e. Any good faith efforts to comply with the

applicable requirements

Once Defendants were aware that they were

required to have a SPDES permit to operate the Shandaken

Tunnel (October 21, 2001), they began discussions with

DEC to determine what information DEC would need

before it could issue Defendants such a permit. Although

Defendants and DEC met on only one or two occasions

'* In fact, on numerous occasions, DEC required Defendants to

release water through the Shandaken Tunnel. See, e.g. Defendants’

Exhibits “D-6,” “D-8.”

Ali2

during the year following the Second Circuit’s decision, as

Dr. Principe noted, at the time Defendants received the

Second Circuit’s decision, shortly after the terrorist attack

on September 11, 2001, they were in the midst of

addressing other serious issues, including the safety of New

York City’s water supply.'® In addition, although

somewhat belatedly, Defendants did file a SPDES permit

application on December 31, 2002.'°

Based upon the evidence presented at trial, the

Court concludes that Defendants’ failure to apply for a

SPDES _— until fourteen months after the Second

Circuit’s decision does not evidence a lack of good faith.

When viewed against the backdrop of the September 11,

2001 terrorist attack arid Defendants’ compelling need to

'* The Court notes that it found Dr. Principe to be a very credible

and forthright witness, who readily acknowledged the need to

address the turbidity problem in the Catskill water supply system.

Moreover, the Court found Dr. Principe’s knowledge of Defendants’

water supply system and the regulations that govern this system to

be very helpful to its analysis.

'© Dr. Principe acknowledged that at least part of the impetus for

filing the permit at that time was the pending trial in this matter.

A113

ensure, as their first priority, that New York City’s water

supply was safe, this delay -- although somewhat extended

-- was not undue. Moreover, although Plaintiffs make much

of the fact that everything that Defendants have done in the

past with respect to the turbidity problem was done because

of other statutes, and not in an attempt to comply with the

CWA, the Court is not convinced that the particular

impetus for Defendants’ actions is as important as the fact

that Defendants have made efforts to abate the turbidity

problem and continue to do so. Accordingly, based upon

Defendants’ ongoing efforts to address the turbidity issue

and the fact that Defendants reasonably believed that they

did not need a SPDES permit to operate the Shandaken

Tunnel prior to the Second Circuit’s decision on October

21, 2001, the Court finds that this element is a significant

mitigating factor.’ ’

'? The Court notes, however, its concern that Defendants provided

the Court with very little evidence to explain why they apparently

failed to take any affirmative steps to comply with the Second

Circuit’s October 21, 2001 decision in a more expeditious manner.

Had they done so, the Court would have been inclined to find that this

All4

f- The economic impact of the penalty on the

violator

“The central purpose of CWA penalties is to deter

the defendant, and others, from committing future

violations.” Piney Run, 82 F. Supp. 2d at 472 (citation

omitted). “A davai award that is limited to economic

benefit, therefore, is no deterrent at all because the violator

would be no worse off than if it had complied in the first

place.” /d. (citation omitted); see also Hawaii's Thousand

Friends, 821 F. Supp. at 1396 (finding that the economic

impact of the penalty was not a mitigating factor where the

-penalty would result in only “a slight increase in the

monthly rates paid by users of the sewer system’).

The only evidence at tnal with regard to this

element indicates that Defendants could absorb the

maximum penalty without serious consequences to their

financial well-being. At his deposition, William

element required an even greater mitigation of the maximum penalty

allowable under § 1319(d).

A115

Kusterbeck, Treasurer of the New York City Water Board,

stated that the New York City Water Board maintains a

$60,000,000 operations and maintenance reserve fund,

equal to one month’s operations and maintenance expenses,

in part, to pay for unanticipated NYCDEP expenses

incurred in water supply or distribution. See Transcript of

Deposition of William Kusterbeck, dated September 18,

2002, at 28. Moreover, every million dollars in assessed

penalties will result in only a one-time $.30 increase in the

average water user’s annual rate payment. Thus, the Court

concludes that this element is not a mitigating factor.

g. Such other matters as justice may require

Assessing a monetary penalty in this one would be

tantamount to saying that if you believe in good faith that

your activities are not subject to a CWA permit and neither

the EPA nor DEC has ever indicated that you needed such

a permit, you can be penalized if a citizen suit is

commenced against you and the court finds that you are

wrong. See United States v. Bay-Houston Towing Co., Inc.,

197 F. Supp. 2d 788, 826 (E. D. Mich. 2002). Thus, the

Court finds that this element is a mitigating factor.

h. Calculation of civil penalties

As noted, the Court has used the top-down approach

to calculate the amount of civil penalties to be assessed

against Defendants. Therefore, the Court began its

calculation with the maximum civil penalties that could be

awarded against Defendants for the period from February

1, 1995 through December 31, 2002, i.e., $63,249,000.

Having analyzed the other § 1319 factors, the Court finds

that the lack of material environmental harm, Defendants’

reasonable belief, prior to October 21, 2001, that they did

not need a SPDES permit to operate the Shandaken Tunnel,

and Defendants’ efforts to address the turbidity problems,

both before and after October 21, 2001, are mitigating

factors. The Court also finds that, at the time of the Second

Circuit’s decision, it was reasonable for Defendants to

focus much, if not all, of their attention upon the need to

protect the water supply from any future terrorist attacks.

All?

Thus, their delay in submitting an application for a SPDES

permit for at least several months was reasonable. Although

the Court finds that the fourteen month delay was

somewhat extended, the Court, nonetheless, concludes that

an eight month delay, 1.c., unt

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