United States
Environmental Protection
Agency
Office of Enforcement and
Compliance Assurance
(2201A)
EPA 300-R-9-005
April 1999
Water Enforcement Bulletin
Issue 15
Water Enforcement Division
April 1999
Eric V. Schaeffer
Director, Office of
Regulatory Enforcement
Brian J. Maas
Director, Water
Enforcement Division
Editor: Joseph G. Theis
(202) 564-4053
Theis.Joseph@epa.gov
An Update of Cases Relating to Water Enforcement
October 1997 - September 1998
Cases in Review
In This Issue
Fourth Circuit, in upholding criminal convictions, holds that
discharges of pollutants to public sewers that flow to waters
of the U.S. are subject to CWA: U.S. v. Hartsell
Third Circuit affirms district court's use of wrongful profits approach
to calculating economic benefit factor of CWA penalty and finds no
error in considering parent companies finances to determine impact
of penalty on violator: U.S. v. Municipal Authority of Union Township
39
Tenth Circuit holds that injunctive relief is not a penalty for purposes
of 28 U.S.C. § 2462 and that the concurrent remedy rule does not
bar the government's claim for equitable relief: U.S. v. Telluride Co. . 41
This publication can be found on the Internet at http://www.epa.gov/oeca/ore/water/waterbull.html
Recycle / Recyclable. Printed with Soy/Canola Ink on paper that contains at least 30% recycled fiber.
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Issue 15 Water Enforcement Division April 1999
TABLE OF CONTENTS
I. Clean Water Act (CWA) 1
A. Jurisdictional Scope of the CWA 1
1. Fourth Circuit, in upholding criminal convictions, holds that discharges of pollutants to public
sewers that flow to waters of the U.S. are subject to CWA: U.S. v. Hartsell 1
2. Ninth Circuit holds that where a proposed solid waste landfill requires the filling of wetlands, the
EPA or an approved state solid waste program has jurisdiction under RCRA and that the USAGE
lacks jurisdiction to regulate such activity under the CWA: Resource Investment v. Corps of
Engineers 1
3. District court holds that CWA does not protect against contamination of groundwater: Allegany
Environmental Action v. Westinghouse Electrical Corp. 2
4. District court holds that an allegation that a discharge of pollutants entered ground water
connected to surface water is sufficient to overcome a motion to dismiss for failure to state a
claim: Mutual Life Insurance Co. v. Mobil Corp. 2
5. District court holds that it lacks subject matter jurisdiction over discharges to surface water via
groundwater: U.S. v. ConAgra. Inc. 3
B. Discharge of Pollutants/Point Sources 5
1. Third Circuit holds that the unpermitted discharge of sections of a dilapidated barge and sand
and paint chips into navigable waters constitute discharges of pollutants in violation of the CWA:
U.S. v. West Indies Transport. Inc. 5
2. Third Circuit holds that uranium mill tailings are not "pollutants" for purposes of the CWA:
Waste Action Project v. Dawn Mining Corp. 6
3. Ninth Circuit holds that the term "point source" does not include any animal: Oregon Natural
Desert Association v. Dombeck 6
4. District court holds the City of Atlanta discharged improperly treated CSO wastewater in
violation of the CWA: Upper Chattahoochee Riverkeeper Fund. Inc.. et al.. v. City of Atlanta .... 7
C. State/Tribe Water Quality Standards 8
1. Third Circuit upholds EPA's "treatment as a state" regulation (40 C.F.R. § 131.8(b)(3)) and
upholds application of tribal water standards to non-consenting, non-tribal members: Montana v.
U.S. Environmental Protection Agency 8
2. D.C. Circuit holds that 40 C.F.R. § 131.20(c) does not impose a mandatory duty on EPA to
approve water quality standards that a State left unchanged following its triennial review:
National Wildlife Federation v. Browner 9
3. District court holds that State law that suspends enforcement of narrative nutrient water quality
standards altered State water quality standards sufficiently to trigger EPA duty to review revised
standards and approve or disapprove of such standards: Miccosukee Tribe v. United States 10
D. NPDES Permits 11
1. Fifth Circuit holds that EPA lacks authority to require Louisiana to consult with FWS and NMFS
as a precondition for becoming authorized to administer the NPDES program: American Forest
& Paper Ass'nv. U.S. EPA 11
2. Eighth Circuit holds that City of Glasgow's discharge of pollutants from a drinking water
treatment facility without a NPDES permit violates CWA, and remands for determination of
whether enhanced permit fees violate State Constitution: State of Missouri v. City of Glasgow ... 12
3. Ninth Circuit remands alleged NPDES permit violation for discharges from storm drain not
owned by defendant to determine whether defendant could be liable as operator of the drain: San
Francisco Baykeeper v. City of Saratoga 13
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4. EAB holds that municipal storm water permits do not need to include numeric effluent
limitations where development of such limitations was infeasible and the permits included best
management practices (BMPs) designed to reduce the discharge of pollutants to the "maximum
extent possible" (MEP) as well as compliance with state water quality standards: In re: Arizona
Municipal Storm 14
5. EAB holds that a NPDES permit provides "shield" against liability for discharge of pollutants
not listed in the permit only when permit applicant has made adequate disclosures during the
application process about the nature of its discharges: In re: Ketchikan Pulp Company 15
E. State Certification 15
1. Second Circuit holds that FERC must include in its licenses all conditions imposed by a State
under its § 401 certification: American Rivers v. Federal Energy Regulatory Commission 15
2. Ninth Circuit holds that certification is required only where a discharge is present: Citizens
Interested In Bull Run v. R.L.K. & Co. 16
3. Ninth Circuit holds that the term "discharge" as used in CWA § 1341 is limited to discharges
from point sources and does not encompass nonpoint source pollution and that, therefore, no
State certification is required for the issuance of cattle grazing permits: Oregon Natural Desert
Association v. Dombeck 17
F. Section 404/Wetlands 17
1. Federal Circuit holds that takings claim accrued upon denial of permit and is thus barred by six-
year statute of limitations: Bayou Des Families Development Co. v. United States 17
2. Federal Circuit holds that withdraw of § 404 permit application from active status based on the
appellant's failure to complete a valid WQC application did not constitute a final decision by the
USAGE: Heck and Assoc.. Inc. v. United States 18
3. Fourth Circuit upholds denial of CWA § 404 permit where detrimental environmental impacts of
the fill project outweigh its benefits: B & B Partnership v. United States 19
4. Fourth Circuit holds that portion of USAGE regulations which define waters of the U.S. to
include those waters whose degradation "could affect" interstate commerce exceeds its authority
under the Clean Water Act and the regulation is invalid: U.S. v. Wilson 20
5. B.C. Circuit affirms rejection of Tulloch Rule: National Mining Association v. U.S. Army Corps
of Engineers 21
6. District court enjoins USAGE from accepting preconstruction notices pursuant to NWP 29 after
June 30, 1998, pending compliance withNEPA: Alaska Center for the Environment v. West .... 22
7. District court holds that slip plowing and disking of delineated wetlands required § 404 permit:
Borden Ranch Partnership v. U.S. Army Corps of Engineers 23
8. District court holds that USAGE has authority to delegate § 404 permit issuance authority to
district engineers: Johnson v. U.S. Army Corps of Engineers 24
9. District court denies plaintiffs summary judgment motion alleging USAGE improperly granted
City of Bessemer a permit for dredge and fill activities in violation of the CWA, USAGE
regulations, and other statutory requirements: Water Works and Sewer Board City of
Birmingham v. U.S. Army Corps of Engineers 24
10. District court holds that soil redeposited through "incidental fallback" constitutes a discharge of
a pollutant for purposes of the Clean Water Act: U.S. v. Feinstein 26
11. Court of Claims holds that wetlands determination and delineation themselves are insufficient to
constitute a compensable taking under the Fifth Amendment: Robbins v. The United States 26
12. District court holds the U.S. Army Corps of Engineers has jurisdiction over isolated intrastate
waters that provide a habitat for migratory birds even if the particular birds on the site do not
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substantially affect interstate commerce: Solid Waste Agency of Northern Cook County v. U.S.
Army Corps of Engineers 27
13. District court reconsiders ruling on sidecasting in light of Wilson and holds sidecasting
constitutes does not discharge for purposes of CWA: U.S. v. Deaton 27
14. District court holds that only EPA, not the USAGE, has statutory authority under the CWA to
bring a civil enforcement action to enforce violations of § 404 where no § 404 permit has been
issued: U.S. v. Hallmark Construction Company 28
15. District court holds that USAGE has authority under CWA to bring an enforcement action in
instances of a permitless discharge of dredge and fill materials into waters of U.S., and sustains
application of migratory bird rule to isolated intrastate wetlands: U.S. v. Hallmark Construction
Company 28
16. District court holds that USAGE cancellation of application for coverage under nationwide § 404
permit based on applicant's inaction and issuance of cease and desist order for potential
CWA/RHA violations were not final agency actions under the APA: Inn of Daphne. Inc.. v. The
United States of America 29
17. District court finds inadequate subject matter jurisdiction where plaintiff challenged USACE's
authority to require a dredge and fill permit based on the fact that USAGE had delegated
authority to issue such permits to the State of Michigan: Charfoos and Co. v. West 30
18. District court upholds USACE's decision to allow coverage under nationwide permits where
USAGE engaged in reasoned decision making and plaintiff failed to offer contradictory evidence
other than expert testimony: Mylith Park Lot Owners Assoc. v. U.S. Environmental Protection
Agency 31
19. Court of Claims holds that under ripeness doctrine plaintiffs takings claim accrued for purposes
of applying the statute of limitations when permit application was denied on the merits and in
such manner as to suggest further efforts would be futile: Cristina Investment Corp. v. United
States 32
G. Citizen Suits 33
1. Jurisdiction 33
a. District court holds that EPA has no mandatory duty to oppose a State's CAFO environmental
strategy that may not be fully consistent with CWA requirements where application of the
strategy has not been shown to result in a violation of CWA standards or orders, nor has the
strategy been shown to effectuate a change in water quality standards: Cross Timbers
Concerned Citizens v. Jane Saginaw. Regional Administrator. U.S. EPA. Region IV: and Paul
Johnson. Chief. U.S. Department of Agriculture 33
b. District court holds USAGE is not a proper defendant for an action under CWA §505(a)(l):
Stewart v. Potts. U.S. Army Corps of Engineers 33
c. District court holds that exercise of EPA Adminstrator's authority to investigate citizen
complaints and to make findings relative to these complaints is discretionary, not mandatory:
Weatherbv Lake Improvement Company v. Browner 34
d. District court holds that plaintiffs' citizen suit seeking civil penalties was moot where
injunctive relief had been granted and no continuing violations were alleged, since civil
penalty would not redress plaintiffs injury: Roland Dubois v. U.S. Department of
Agriculture 35
2. Standing 35
a. Fifth Circuit holds that, in determining whether non-profit corporation has members that
could assert standing for purposes of establishing organization's associational standing,
in
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formal membership is not controlling where there is sufficient "indicia of membership":
Friends of the Earth v. Chevron Chemical 35
b. Tenth Circuit holds that plaintiff lacks standing to challenge endangered species consultation
requirements within EPA's authorization of Oklahoma's NPDES program because such
requirements only apply to sensitive waters and plaintiff failed to allege members discharge to
or intend to discharge to such waters: American Forest & Paper Ass'n v. U.S. EPA 36
3. Enforcement Under Comparable Law as Bar to Citizen Suit 37
a. Eighth Circuit holds that administrative enforcement agreement between State environmental
agency and polluter precludes pending citizen suit seeking civil penalties where such
agreement is the result of a diligently prosecuted enforcement process: Comfort Lake Assoc.
v. Dresel Contracting. Inc. 37
4. Injunctive Relief 38
a. District court finds inadequate basis to issue permanent injunction where there is no proof of
irreparable harm occurring due to violations of flow volume permit limits: Coalition for a
Livable West Side v. NYC PEP 38
H. Administrative Practice 39
1. ALJ holds that prehearing settlement of administrative action must be reduced to writing and that
only the Regional Administrator, not an EPA attorney, can bind Agency in settlement: In the
Matter of: Indoor Air Quality 39
I. Enforcement Actions/Liabilities/Penalties 39
1. Third Circuit affirms district court's use of wrongful profits approach to calculating economic
benefit factor of CWA penalty, and finds no error in considering parent companies finances to
determine impact of penalty on violator: U.S. v. Municipal Authority of Union Township 39
2. Seventh Circuit holds stipulated daily penalty in consent decree was properly enforced: U.S. v.
Krillich 40
3. Tenth Circuit holds that injunctive relief is not a penalty for purposes of 28 U.S.C. § 2462 and
that the concurrent remedy rule does not bar the government's claim for equitable relief: U.S. v.
Telluride Co. 41
4. District court holds that, in the absence of permit language subjecting the permittee to statutory
changes, the permit's penalty language must control in assessing civil penalties: U.S. v.
ConAgra. Inc. 42
5. District court uses "bottom-up" method to calculate civil penalty of $ 12,600,000 for violations of
CWA: U.S. v. Smithfield Foods. Inc. 42
6. District court holds that civil penalties recovered as a result of enforcement actions brought by
the government under the CWA must be paid into the U.S. Treasury: U.S. v. Smithfield Foods.
Inc. 43
7. District court imposes a civil penalty of $1,500,000 for discharging pollutants without a NPDES
permit over a 12-year period where the violation was both serious and prolonged but the
defendants'ability to pay justified some mitigation of the penalty: U.S. v. Gulf Park Water Co. .. 43
8. EAB upholds ALJ penalty assessment on grounds that failure to challenge a State-issued permit
in a timely manner precludes raising objections years later in an enforcement proceeding: In re:
General Motors Corporation 44
9. EAB holds that discharge of sludge removed from treated wastewater and returned to aeration
basin to continue cycle of treatment, violated permit prohibition on discharge of sludge removed
from wastewater during the course of wastewater treatment: In re: Ketchikan Pulp Company ... 45
IV
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10. ALJ imposes statutory maximum penalty of $125,000 where estimate of economic benefit was
adjusted to exclude period barred by statute of limitations: In the Matter of: B.J. Carney
Industries. Inc. 45
11. ALJ holds that respondent's activities following purchase of oil facility constituted a substantial
continuation of activity that supported imposing successor liability: In the Matter of: Heating
Oil Partners 46
J. Criminal Cases 47
1. Fourth Circuit holds that to establish a criminal violation of the CWA the government must prove
defendant's knowledge of facts meeting each essential element of the substantive offense: U.S.
v. Wilson 47
K. Section 311 (Oil and Hazardous Substance Liability) 47
1. ALJ holds prior spill obligates facility to develop SPCC plan: In the Matter of: Philadelphia
Macaroni Co. 47
II. Other Statutes 48
A. SDWA 48
1. Fourth Circuit holds that EPA order, mandating systematic groundwater sampling and providing
bottled water to those with contaminated well water, constitutes a permissible exercise of EPA's
emergency statutory powers: Trinity American Corp. v. U.S. EPA 48
2. EAB rejects challenges to UIC permits: In re: NE Hub Partners 49
B. RCRA 50
1. Ninth Circuit holds RCRA does not authorize citizen suits based on State Subtitle D standards
that are more stringent than the minimum federal criteria: Ashoff v. City of Ukiah 50
2. District court denies motion to dismiss, finding that where hazardous waste remains on-site, the
failure to properly close a hazardous waste facility may constitute a continuing violation:
Cornerstone Realty. Inc. v. Dresser-Rand Company and Ingersoll-Rand Company 51
3. District court grants in part and denies in part motion for preliminary injunction with respect to
RCRA claims, and denies motion with respect to CWA claim due to split of authority regarding
whether the continuing migration of contaminated groundwater constitutes an ongoing violation:
Wilson v. Amoco Corporation 51
4. District court holds that the leaching of hazardous waste into groundwater from hazardous waste
contaminated soil constitutes the continuing disposal of hazardous waste: U.S. v. Power
Engineering Co. 52
C. Paperwork Reduction Act 53
1. District court holds that Paperwork Reduction Act does not require an agency to obtain OMB
approval for the agency to use information that is properly collected in new ways: Tozzi v. U.S.
Environmental Protection Agency 53
2. ALJ holds that PRA defense may be raised after answer has been filed and, regarding certain
RCRA BIF provisions, EPA failed to display an approved OMB control number in both the
Federal Register and the C.F.R.: In the Matter of: Parke-Davis Division Warner-Lambert Co. ... 53
D. Freedom of Information Act (FOIA) 54
1. District court holds that materials subject to FOIA request must be released where notes were not
deliberative and did not concern enforcement matters and release of criminal files would not
interfere with enforcement proceedings: Grine v. Coombs 54
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E. Oil Pollution Act (OPA) 55
1. Ninth Circuit holds State BAP oil spill regulations are not preempted by Federal laws, except for
provisions addressing design and construction requirements, which are preempted: International
Assoc. of Independent Tanker Owners v. Gary Locke 55
2. B.C. Circuit upholds majority of NO A A rule implementing the OP A, adopts NOAA construction
of portions of rule, and vacates two parts of the rule: General Electric Co. v. National Oceanic
and Atmospheric Administration 56
F. EPCRA 58
1. Supreme Court holds that where declarative and injunctive relief sought in citizen suit would not
remedy respondent's alleged injuries associated with wholly past EPCRA violations, respondent
lacked standing to maintain the suit and the courts lacked jurisdiction to hear the suit: Steel Co.
v. Citizens for a Better Environment 58
2. ALJ holds that gravity-based portion of EPCRA penalty should be reduced 100 percent where all
criteria of self-policing policy are satisfied, and that where the self-policing policy is inapplicable
the ERP allows partial reduction: In the Matter of: Bollman Hat Company 59
3. ALJ holds that in calculating proposed penalty for EPCRA violation based on EPCRA ERP the
Agency may not restrict application of adjustment factors contained in ERP to settlement only:
In the Matter of: Catalina Yachts 60
4. ALJ holds that failure to comply with EPCRA § 311 is a continuing violation not barred by the
federal five-year statute of limitation, but that failure to comply with EPCRA § 312 is not a
continuing violation and is not barred under the statute of limitation: In the Matter of: Mafix.
Inc. 60
G. Rivers and Harbors Act (RHA) 61
1. District court holds USAGE did not act in an arbitrary or capricious manner when it found that
numerous houseboats constituted permanently moored floating vessels that required a permit
under the RHA: U.S. v. Hernandez 61
H. Clean Air Act (CAA) 62
1. Fourth Circuit holds that EPA's interpretation of its benzene fugitive emission NESHAP should
be afforded deference, but that the small plant exemption provisions of the rule are insufficient to
provide fair notice absent actual notice: U.S. v. Hoechst Celenese Co. 62
VI
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Disclaimer
The Water Enforcement Bulletin is intended primarily for the use of EPA employees. The summaries contained
in the Water Enforcement Bulletin do not represent an official Agency position with respect to matters in litigation,
nor are they intended to create any rights, duties or obligations, either implied or otherwise, in any third parties.
To make inquiries with regard to the Water Enforcement Bulletin please contact Joseph G. Theis (2243A), U.S.
EPA, 401 M Street, SW, Washington, DC 20460, (202) 564-4053, e-mail: theis.joseph@epa.gov.
Note: The Water Enforcement Bulletin is available on the Internet at:
www .epa.gov/oeca/ore/water/waterbull .html.
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I. Clean Water Act (CWA)
A. Jurisdictional Scope of the CWA
1. Fourth Circuit, in upholding criminal
convictions, holds that discharges
of pollutants to public sewers that
flow to waters of the U.S. are subject
to CWA:
U.S. v. Hartsell. 127 F.3d 343 (4th Cir. Mar. 11
1997).
Appellants, convicted for numerous violations of the
Clean Water Act (CWA), 33 U.S.C. § 1311 et seq.,
appeal their convictions and sentences on
approximately fifty separate assignments of error.
The court specifically confronted the issue of
whether the district court had subject matter
jurisdiction to conduct the initial trial. The 4th
Circuit Appellate Court denied appellant's
contentions in affirming their convictions and
sentences in their entirety.
Appellants argued that their polluting of public
sewer systems is not included under the CWA's
realm of "navigable waters." The court cited both
the "plain language" of the CWA and its legislative
history as the two guiding factors in determining this
argument. The court viewed the definition of
navigable waters as explained in the CWA, "waters
of the United States," as being a purposely broad
concept which treats "navigable" with "limited
import." Furthermore, in determining Congresses
intent, the court directly cites from the CWA's
legislative history to allow "broad federal authority to
control pollution, for 'water moves in hydrological
cycles and it is essential that discharge of pollutants
be controlled at its source.'" S. Rep. No. 92-414,
pg. 77 (1972). The court concluded that both the
plain language and Congress had intended for
public sewer systems to be included in the
CWA's jurisdiction.
2. Ninth Circuit holds that where a
proposed solid waste landfill
requires the filling of wetlands, the
EPA or an approved state solid
waste program has jurisdiction
under RCRA and that the USAGE
lacks jurisdiction to regulate such
activity under the CWA:
Resource Investment v. Corps of Engineers, 151
F.3d 1162 (9th Cir. 1998).
Plaintiff Resource Investments Inc., appealed the
U.S. Army Corps of Engineers' (USAGE) denial of
a § 404 permit for the filling of 21.6 acres of
wetlands as part of construction of a municipal
landfill. USAGE had found that plaintiff failed to
demonstrate a lack of practicable alternatives and
that the project was not in the public interest
because it would degrade wetlands and cause
groundwater contamination. The district court had
affirmed the USAGE'S denial of the permit.
On appeal, the Ninth Circuit reversed and
remanded, holding that "when a proposed
project affecting a wetlands area is a solid
waste landfill, the EPA (or the approved state
program), rather than Corps, will have permit
authority under RCRA." The court reasoned that
solid waste did not fall within the definition of
dredged or fill material, and noted that EPA and the
USAGE have recognized that pollutants discharged
directly into water primarily for the purpose of
disposal were most appropriately regulated under
the NPDES program (i.e., § 402). (See, 42 Fed.
Reg. 37,122 (1977)). The court also found that the
materials used to construct solid waste
landfills—the gravel, soil, and synthetic liners—were
not fill material because their primary purpose was
not to replace any aquatic area with dry land, but
rather to serve as a leak detection and collection
system. In addition, the court stated that the siting,
design, and construction of a solid waste landfill
was specifically regulated under RCRA by EPA and
states with authorized solid waste permit programs.
(See, 40 C.F.R. § 258.12(a)(1)-(4)). The court
observed that the USAGE'S interpretation of its
jurisdiction was unreasonable because it would
result in "regulatory overlap" that would be
inefficient and could result in inconsistent decisions
and policies. The court noted that USAGE had
expressed these very concerns in a March, 1984
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letter from the Assistance Secretary of the Army for
Civil Works to the Administrator of EPA, and had
entered into a 1986 MOU with EPA that provided
that once EPA promulgated its final municipal
landfills rules (which occurred on October 9, 1991),
responsibility for implementing wetlands protection
with regard to solid waste disposal would be solely
the responsibility of EPA. Finally, the court stated
that its decision would give effect to the relevant
provisions of both RCRA and the CWA, ' "while
preserving their sense and purpose."'
3. District court holds that CWA does
not protect against contamination of
groundwater:
Allegany Environmental Action v. Westinghouse
Electrical Corp.. 1998 U.S. Dist. LEXIS 1846 (W.D.
Pa. Jan 30, 1998).
Defendant NESCO, managed and operates a
government laboratory in Pennsylvania. Plaintiffs,
Allegany Environmental Action Coalition (AEAC),
filed a claim that alleged the emissions and
discharges from the laboratory violated various
sections of the CWA, State Clean Streams Act, and
RCRA. With regard to the CWA violations, the
plaintiffs claimed that the defendants illegally
dumped photographic wastes into a septic sewer
system for more than twenty years, which later
leaked into an adjacent hillside and into a lake.
Plaintiff AEAC claimed that with each rainfall that
toxic materials are released into the lake, therefore,
qualifying as a continuing violation. The court
dismissed the Clean Streams and RCRA counts,
without prejudice, for not exhausting administrative
remedies and not citing state law, respectively. The
Clean Water Act claims were dismissed with
prejudice because the claim was based on
groundwater contamination.
In its decision, the court determined that the claim
was not viable because the CWA does not protect
against contamination of groundwater. Much of the
opinion, though, focused on the difference between
past violations involving hazardous materials and
non-hazardous materials. Citing Fallowfield
Development Corp. v. Strunk, 1990 U.S. Dist.
LEXIS 4820 (E.D. Pa. April 23, 1990), the court
noted that "if a person disposes of hazardous waste
on a parcel of property, the hazardous waste
remains on that property insidiously infecting the
soil and groundwater aquifers. In other words, the
violation continues until the proper disposal
procedures are put into effect or the hazardous
waste is cleaned up." The court then noted that
Fallowfield included dicta which distinguished the
potential harm from hazardous waste violations
from CWA violations, stating that if "a person
discharges a pollutant in violation of an effluent
limitation under the Clean Water Act, but comes
into compliance prior to the suit, little is gained by
allowing a citizen suit since the damage has been
done and is effectively irreversible." The court
decided not to decide the issue based on wholly
past violations, and instead dismissed the claim
based on the groundwater contamination issue.
4. District court holds that an
allegation that a discharge of
pollutants entered ground water
connected to surface water is
sufficient to overcome a motion to
dismiss for failure to state a claim:
Mutual Life Insurance Co. v. Mobil Corp., 1988 U.S.
Dist. LEXIS 4513 (N.D.N.Y. Mar. 31, 1998).
Plaintiff Mutual Life of New York brought claims in
November, 1996 against defendant Mobil underthe
CWA and RCRA based on defendant's accidental
release of 750 gallons of gasoline into a monitoring
well and the alleged migration of that gasoline onto
plaintiff's property. Plaintiff also alleged that
equipment failures at defendant's underground
storage tank (UST) caused additional contamination
during October 1988, January 1995, and
September 1995. Defendant moved to dismiss the
complaint based on its alleged failure to state a
claim.
Defendant argued: 1) plaintiff's CWA claim failed as
a matter of law because plaintiff did not allege
defendant discharged pollutants into "navigable
waters"; 2) plaintiff's RCRA claim failed as a matter
of law because plaintiff alleged only past incidents
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of pollution; 3) both the CWA and RCRA claims
were barred by the five-year statute of limitations in
28 U.S.C. § 2462; and 4) the federal court should
have abstained from hearing the case because a
case based on the same facts had been filed in
state court.
With regard to defendant's first argument, the court
acknowledged that it was unclear whether
discharges of pollutants to ground water connected
to surface waters were subject to the CWA because
no circuit court of appeals had directly decided the
issue. The court observed that several district
courts had held "that the CWA does encompass
ground waters that are hydrologically connected to
regulated surface waters." Based on these
decisions, the preliminary stage of this
litigation, the broad interpretation of the term
"navigable waters" under the CWA, and the
purpose of the CWA to protect the quality of
surface waters, the court held that the
allegation that the discharge entered ground
water connected to surface water was sufficient
to state a CWA claim.
As for whether the discharge constituted an
imminent and substantial endangerment as
required under RCRA § 6972(a)(1)(B), the court
stated ' "[a]s long as the waste has not been
cleaned up and the environmental damage has not
been sufficiently remedied, there remains an
ongoing RCRA violation.'" Frisco v. New York, 902
F. Supp. 374, 395 (S.D.N.Y. 1995). The court
observed that where the CWA requires allegations
of continuous or intermittent pollution, RCRA
requires that "the effects of
pollution—endangerment to human health or the
environment—be imminent and substantial." The
court found that at this stage it must accept the
alleged allegations of continued pollution and
imminent and substantial endangerment to human
health as true.
The court also found that the plaintiff's allegation of
an ongoing RCRA violation was sufficient to
preserve its RCRA claim against any applicable
statute of limitation. With regard to plaintiff's CWA
claims, the court held that the five-year statute of
limitations in 28 U.S.C. § 2462 applied to citizen
enforcement actions under the CWA. The court
held, however, that a CWA claim accrues not when
the violations occur, but when citizen plaintiffs
discover them. Atlantic States Legal Found, v. Al
Tech Specialty Steel Corp. 635 F. Supp. 287
(N.D.N.Y. 1986). The court noted that in the
pending state court proceeding the state court
found that the earliest date on which plaintiff could
have known of the spills was July 1991. The court
found that the statute of limitations ran only on
those claims filed more than five years and 60 days
from this date. (The court held that the statute of
limitations was also tolled during the 60 day notice
period.)
Finally, the court rejected the defendant's
abstention argument. The court found that the
defendant had failed to demonstrate that the
pendant state law action had the potential to
materially impact the federal action. The court
stated that "abstention from the proper exercise of
federal jurisdiction is 'the exception, not the rule',"
and that "'the mere potential for conflict in the
results of adjudications, does not, without more,
warrant staying exercise of federal jurisdiction."'
The court granted defendant's motion only with
regard to the subset of CWA claims filed more than
5 years and 60 days from the date of discovery.
5. District court holds that it lacks
subject matter jurisdiction over
discharges to surface water via
groundwater:
U.S.v. ConAgra. Inc.. 1997 U.S. Dist. LEXIS 21401
(D. Id. Dec. 31, 1997).
ConAgra, Inc., ("ConAgra") owns and operates a
beef slaughter house and a Concentrated Animal
Feeding Operation ("CAFO") in Idaho. Consistent
with these activities ConAgra operates an NPDES
permitted wastewater treatment facility which treats
waste from the slaughtering process and holds a
CAFO permit for the feed lot. Plaintiff United States
("U.S.") filed a complaint against ConAgra alleging,
among other acts, that ConAgra: (i) discharged
pollutants not authorized by its NPDES permit; (ii)
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discharged pollutants in excess of its permit limits;
and (iii) failed to comply with NPDES monitoring,
reporting, and record keeping requirements.
The Court addressed a number of pre-trial motions
including: defendant's motion to dismiss claims
regarding discharges to surface water via
groundwater for lack of subject matter jurisdiction;
various motions by the U.S. and ConAgra to strike
testimony and evidence; the U.S.' motion for partial
summary judgment on defendant's affirmative
defenses and on matters of liability; and ConAgra's
motion for partial summary judgment on the issue
of the amount of penalty to be assessed and the
method of penalty calculation.
With respect to ConAgra's motion to dismiss the
claims regarding discharges to surface waters via
groundwater, the court undertook a review of the
opinion in Umatilla Water Quality Protective Assoc.,
Inc., v. Smith Frozen Foods, Inc., 962 F.Supp. 1312
(D.Or. 1997), and found itself in agreement with
that court's position that discharges of pollutants to
groundwater are not subject to the CWA's NPDES
permit requirements even if the groundwater is
hydrologically connected to surface water. In
support of its position the District Court cited to four
major issues relied upon by the Umatilla court in
reaching its decision and held that it did not have
jurisdiction over the discharges to the surface
water of Indian Creek via groundwater.
Significantly, the court deferred for trial the
important issue of whether discharges to surface
waters via french drains are discharges from a point
source or discharges via groundwater.
Through a motion for partial summary judgment the
U.S. sought liability on issues that ConAgra
discharged pollutants into waters of the U.S. in
excess of effluent limits contained in its NPDES
permit and that ConAgra failed to comply with the
monitoring, record keeping, and reporting
requirements of its NPDES permit. On the issues of
discharges in excess of permit limits and failure to
comply with the monitoring, record keeping, and
reporting requirements the court granted in full the
U.S.' motion for partial summary judgment. In total
the court found ConAgra liable for 632 violations of
the CWA. The court next examined the U.S.'
motion for summary judgment regarding ConAgra's
affirmative defenses. In reviewing defendant's
assertion of an upset defense the court noted
ConAgra's reliance upon the holding in Natural
Resources Defense Council, Inc. v. EPA, 859 F.2d
156(D.C. Cir. 1988). In that case the Circuit Court
held that EPA acted arbitrarily and capriciously in
not extending the upset defense to water quality-
based limitations and ordered EPA to conduct
proceedings to determine whether the defense
should be extended. In the present case the
District Court held that inasmuch as EPA has not
extended the defense, water quality-based
limits are not defensible with the upset defense.
The court next reviewed ConAgra's claim that the
penalty of $25,000 per day sought for each violation
was contrary to the specific terms of its permit.
ConAgra alleged that its permit, which was issued
in 1985 and had been administratively extended
since 1990, specifically provided for civil penalties
not to exceed $10,000 per day for each violation.
Since the permit was issued prior to the 1987
amendments to the CWA which increased the civil
penalties to $25,000 per day for each violation,
ConAgra argued that the U.S. is bound by terms of
the permit and should be prohibited from seeking
the higher fine. The court agreed and held that in
the absence of any language in the permit
subjecting the permittee to statutory changes,
the permit's penalty language must control in
assessing civil penalties.
Plaintiff sought to introduce evidence at trial related
to 33 U.S.C. § 1319(d) factors in order to increase
the amount of penalty that could be assessed. In
opposition ConAgra brought a motion in limine to
exclude evidence regarding a history of violations
and economic benefits (309(d) factors) which
occurred outside the applicable statute of
limitations. The court took note of the general
application of the five year statute of limitations of
28 U.S.C. § 2462 to CWA civil penalties and the
determination by the court in Atlantic States Legal
Foundation, Inc. v. Universal Tool & Stamping Co.,
Inc.. 786 F.Supp. 743 (D.N.D. Ind. 1992), that the
maximum statutory penalty should not be
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decreased because the defendant had a history of
violations. However, the District Court noted that
while the court in Universal Tool did not mitigate the
maximum penalty because of a history of abuses
outside the statute of limitations period, it also did
not use the abuses to increase the penalty. On that
basis and considering other cases addressing
penalty issues, the court held that evidence
relating to the 309(d) factors will not include
evidence of allegations of past violations or
economic benefit which is alleged to have
occurred prior to the statute of limitations
period.
B. Discharge of Pollutants/Point Sources
1. Third Circuit holds that the
unpermitted discharge of sections of
a dilapidated barge and sand and
paint chips into navigable waters
constitute discharges of pollutants
in violation of the CWA:
U.S. v. West Indies Transport, Inc., 127 F.3d 299
(SrdCir. 1997).
On appeal from the District Court of the Virgin
Islands, the 3rd Circuit affirmed convictions and
sentences of the appellant, West Indies Transport,
for violations of the Clean Water Act, the Rivers and
Harbors Act, and various other crimes involving visa
fraud, conspiracy and racketeering. With regard to
the environmental crimes, the primary issue
decided by the court was whether certain barge
management activities (e.g., severing and dropping
portions of barges into the bay, conducting
sandblasting operations on a floating barge)
constituted point source discharges, as defined in
the Clean Water Act. In brief, the court held that
these activities were point source discharges, and
affirmed the lower court convictions.
Appellant owned and operated a dry dock, ship
repair facility and barge towing company in Krum
Bay, St. Thomas. In 1987, appellant obtained
permits to use five barges as fixed docks for its
vessels. Two years later, after a hurricane shifted
the barges from their permitted positions, appellant
lashed the barges together and used them as
docks, repair facilities and housing for their
employees. Appellant was convicted of CWA
violations for severing a damaged stern from one
the barges, sandblasting the hull of another vessel
discharging chips and sand into the bay,
discharging untreated sewage and the illegal
dumping of scrap metal at sea. In addition,
appellants were convicted of several Rivers and
Harbors violations for the unapproved construction
of structures in waters of the U.S.
On appeal, the Third Circuit held that the
appellant's barge salvage/maintenance activities did
in fact result in the discharge of "pollutants" (rebar,
concrete, sand and paint chips) into navigable
waters of the U.S. The court determined that the
barges were "floating craft" and not "vessels"
because of the unsuitability of the barges for
transportation. This distinction was used by the
court to define the barges as point sources (33
U.S.C. § 1362(14)) and to include the discharges of
sewage as violations of § 1311 and§ 1316, and not
§ 1322.
With regard to the Rivers and Harbors Act charges,
the court discarded the appellant's contention that
they did not "knowingly" build an obstruction to
navigation, by characterizing the intentional act of
attaching the barges together, building walkways
and providing electricity to the barges as a
"knowing" construction activity. The court
discharged the appellant's entrapment by estoppel
claim, by holding that Coast Guard and other
private placards on board the barges that explained
the ocean dumping regulations did not relieve
appellant of its legal responsibilities.
A dissenting opinion questioned the majority's
broad interpretation of "point sources", instead
suggesting that the Appellant's actions were
analogous to the Plaza Health intermittent and
manual dumping of blood, which was held not be a
point source. The dissenting judge also
characterized the Rivers and Harbors provision as
requiring "knowing construction" and not "knowing
use" of obstructions to navigation.
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2. Third Circuit holds that uranium mill
tailings are not "pollutants" for
purposes of the CWA:
Waste Action Project v. Dawn Mining Corp., 137
F.3d 1426 (9th Cir. 1998).
Appellant Waste Action Project (WAP) alleged that
appellee, Dawn Mining, had discharged pollutants,
including uranium, silica, heavy metals, sulfates,
phosphates, chlorides, and other chemicals, from
several tailings disposal areas (TDAs) into waters of
the U.S. without a NPDES permit in violation of the
CWA. The district court had granted summary
judgement for Dawn Mining having found that
uranium mill tailings and associated wastes were
"byproduct materials" as defined in § 11 (e)(2) of the
Atomic Energy Act (AEA) and, thus, were not
"pollutants" as defined under the CWA.
The court observed that the appeal presented the
legal question of whether uranium mill tailings are
"pollutants" for purposes of the CWA's NPDES
permit requirements. Appellants argued that the
AEA, as amended by the Uranium Mill Tailings
Radiation Control Act (UMTRCA) (1978), preserved
EPA's authority to regulate uranium mill tailings
under the CWA because such tailings were not
expressly included in the AEA at the time the CWA
was enacted. The court disagreed and held that
uranium mill tailings are not "pollutants" for
purposes of the CWA.
The court reasoned that even though uranium mill
tailings were not defined as "byproducts" under the
AEA when the CWA was enacted, the definition of
"byproducts" in the AEA was amended in 1978 to
expressly include such tailings. The court noted
that EPA regulations exclude "byproduct materials"
as defined in § 11(e)(2) of the AEA from the
definition of pollutant under the CWA. (40 C. F. R. §
122.2). In addition, the court observed that the
CWA legislative history makes it clear that although
the CWA defines "pollutant" to include radioactive
materials, such materials were only intended to
include those radioactive materials not included
within the AEA definition of the terms "source,
byproduct, or special nuclear materials." The court
stated that the AEA vested exclusive authority to
regulate these materials with what was then the
Atomic Energy Commission (now the NRC) and
that the adoption of the UMTRCA "did not alter the
AEA's comprehensive regulatory scheme." The
court observed that UMTRCA amended the
definition of "byproduct material" under the AEA to
explicitly include uranium mill tailings, which had
previously been controlled through the licensing
process for uranium mills. The court recognized
that UMTRCA did provide EPA with authority to
promulgate standards for uranium tailings, but
pointed out that the Act delegated authority to
implement these standards to the NRC. The court
stated that EPA has consistently interpreted its
regulatory authority under the CWA to exclude
materials regulated under the AEA. Finally, the
court cited the unanimous Supreme Court decision
in Train v. Colorado Public Interest Research
Group. 426 U.S. 1 (1975), which held that "'the
'pollutants' subject to regulation under the [CWA]
do not include source, byproduct, and special
nuclear material,'" as supporting this decision
through both its holding and reasoning.
3. Ninth Circuit holds that the term
"point source" does not include any
animal:
Oregon Natural Desert Association v. Dombeck,
151 F.3d 945 (9th Cir. 1998).
The U.S. Forest Service (USFS) appealed from a
ruling that pollution from grazing cattle is subject to
certification under § 401 of the CWA. The USFS
had issued a grazing permit to the Burrils to graze
50 head of cattle in Oregon's Malheur National
Forest, and the cattle allegedly polluted some of the
waters within the National Forest. Appellee
maintained that the USFS had violated the CWA by
not obtaining State § 401 certification prior to
having issued the grazing permit.
After finding that appellee had adequate standing to
bring the original action and that appellee could
properly pursue this suit under the citizen suit
provisions of the CWA, the court addressed the
question of whether the Forest Service grazing
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permit required certification pursuant to § 401 from
the State of Oregon. The court stated that
resolution of this issue turned on whether the term
"discharge" in the § 1341 of the CWA includes point
and non-point source pollution, or only point source
pollution. The court concluded that the term
"discharge" as used in the § 1341 only included
point source pollution, and, therefore, no § 1341
certification was required for the issuance of
USFS cattle grazing permits. The court reasoned
that "the CWA, when examined as a whole, cannot
support the conclusion that § 1341 applies to
nonpoint sources." The court observed that the
1972 CWA replaced the prior reliance on water
quality standards with imposition of effluent
limitations imposed only on point source
discharges. The court noted that under the Act,
nonpoint source discharges were not directly
regulated but were subject to grant-based
programs. It also stated that all of the sections
cross-referenced in § 1341 relate to point sources
discharges. In addition, the court found that the
distinct use of the terms "discharge" and "runoff" in
a manner associated with point source and
nonpoint sources discharges, respectively, further
supported its position. Finally, the court stated that
it agreed "with the Second Circuit that the term
'point source' does not include a human being or
any other animal."
4. District court holds the City of
Atlanta discharged improperly
treated CSO wastewater in violation
of the CWA:
Upper Chattahoochee Riverkeeper Fund, Inc., et
al.. v. City of Atlanta. 1997 U.S. Dist. LEXIS 20334
(N.D. Ga. Nov. 17, 1997).
Plaintiffs the Upper Chattahoochee Riverkeeper
Fund and others brought a citizen suit pursuant to
33 U.S.C. § 1365(a) against defendant the City of
Atlanta alleging the City's combined sewer overflow
(CSO) facilities were responsible for numerous
permit and CWA violations. In its motion for
summary judgment on liability, plaintiffs alleged that
the City failed to monitor its CSOs pursuant to an
approved sampling plan; failed to conduct proper
monitoring, sampling, and recordkeeping as
required by its permit; and failed to maintain
adequate staffing. Plaintiffs also alleged that the
City failed to adequately design the CSO treatment
facilities, that the CSO discharges violated Georgia
water quality standards both in the culverts that
received the wastes and in the natural streams into
which the culverts discharged, and that the City
failed to maintain an alternate power source as
required by the permit. Plaintiffs also brought
common law actions for trespass and nuisance
against the City.
Following review of the permit requirements,
monitoring data, and evidence of violations, the
court took up the nuisance and trespass claims.
The court dismissed a number of plaintiffs on the
grounds that they did not own land along the
affected waterways. The court also found that the
remaining plaintiffs had failed to demonstrate any
injury to their property or failed to show that the City
was the proximate cause of any nuisance and
granted summary judgment to the City on the
trespass and nuisance claims with respect to all
plaintiffs.
The court next undertook a detailed review of the
CWA claims and the liability issues. In reviewing
the allegations that the City failed to maintain
accurate records, the court noted that, despite
plaintiff's allegations, the permits did not require the
City to record the time of day samples were
collected. Plaintiffs also alleged that the City failed
to maintain accurate records with respect to
composite sample collection. In finding for the
plaintiffs on that issue, the court stated that the fact
that the Georgia Environmental Protection Division
(EPD) was aware the City was not obtaining
composite samples was not a defense to intentional
and flagrant falsification of monitoring reports. The
court also found that the City failed to conduct
composite sampling as required by its permits;
never submitted an approved sampling plan to
EPD; failed to treat wastes in accordance with the
CSO plan (the court noted fecal coliform levels at
many thousands of times above permitted levels);
and violated its permits in that it failed to maintain
adequate staffing. The court granted plaintiffs
summary judgment with respect to these issues.
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The court found as a matter of law that the City was
not liable for failing to monitor rainfall and failing to
collect representative samples because the City did
not have an approved monitoring plan. The court
also declined to consider plaintiffs claim that the
City failed to maintain an alternate power source on
the grounds that plaintiffs had not provided 60 days
notice of the alleged violation prior to filing suit as
required by 33 U.S.C. § 1365(b).
Plaintiffs alleged that the CSO discharges in the
culverts violated Georgia water quality standards for
fecal coliforms and metals, however, the City
asserted there was no violation because the
culverts were not "waters of the state." The court
noted that Georgia law (O.C.G.A. § 12-5-22(33))
included "drainage systems" within the definition of
"waters of the state" and that the culverts were
certainly a drainage system. The court concluded
that there was overwhelming data
demonstrating levels of fecal coliform and
metals in the culverts in excess of Georgia
Water Quality Standards and held plaintiffs
were entitled to summary judgment on the issue
that the discharges in the culverts violated the
CWA.
Plaintiffs also contended that the discharges from
the CSOs were causing the natural receiving
streams to violate water quality standards. The
court noted that while the data indicated that the
waters downstream of the culverts did not comply
with state water quality standards for fecal coliform
and metals, the data was inconclusive on the
question of the source of the metals violations since
in some cases the concentration of metals
upstream of the culverts was either zero or within
permissible levels. The court did hold that the
data supported plaintiffs position that the City
was responsible for violations of fecal coliform
standards in the streams and granted plaintiffs
motion for summary judgment on that issue.
C. State/Tribe Water Quality Standards
1. Third Circuit upholds EPA's
"treatment as a state" regulation (40
C.F.R. § 131.8(b)(3)) and upholds
application of tribal water standards
to non-consenting, non-tribal
members:
Montana v. U.S. Environmental Protection Agency,
137F.3d 1135(1988).
Plaintiff-appellants, representatives of the State of
Montana and several municipalities, appealed a
grant of summary judgment for defendant-
appellees, Confederated Salish and Kootenai
Tribes and EPA, regarding appellants challenge to
regulations promulgated by EPA pursuant to § 518
of the CWA that provide for the treatment of Tribes
as states (TAS) for purposes of the NPDES
program. Appellants disagreed with EPA's decision
to grant defendant tribes TAS status for the
purpose of developing water quality standards. The
Tribes' application for TAS was to obtain authority
to establish water quality standards for all point
sources within the boundaries of Flathead Indian
Reservation in Montana, which includes lands
owned by State and municipal interests.
Appellants argued that EPA's TAS regulation was
inconsistent with Supreme Court decisions
regarding when it was appropriate for tribes to
engage in non-consensual regulation of non-tribal
entities. The appellants argued that tribes should
be able to regulate non-tribal entities only when all
state or federal remedies have "been exhausted
and have proved fruitless." The court disagreed,
and held EPA had not committed any material
mistakes of law in delineating the scope of
inherent tribal authority. Rather, the court
pointed out, EPA had carefully followed the lead
cases on this issue (see, Montana v. United States,
450 U.S. 544 (1981) and Strate v. A-1 Contractors,
117 S. Ct. 1404 (1997)) and required that to
regulate non-tribal entities a tribe must demonstrate
that the potential impact of the regulated activity
must be "serious and substantial." The court did
not view Montana as suggesting that "inherent
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authority exists only when no other government can
act."
With regard to EPA's decision applying its
regulations in this case, the court found that the
agency had concluded that the activities of non-
tribal members were sufficiently serious as to pose
serious and substantial threats to tribal health and
welfare. The court observed that prior cases had
held that threats to water rights could be a basis for
invoking inherent tribal authority over non-indians.
The court observed that given that "a water system
is a unitary resource," it would be very difficult to
"separate the effects of water quality impairment on
non-Indian fee land from impairment on the tribal
portions of the reservation." The court observed
that its decision was fully consistent with the Tenth
Circuit's decision in City of Albuquerque v. Browner,
97 F.3d 415 (10th Cir. 1996), where that court
upheld water quality standards that were more
stringent than federal standards because it found
that the authority to establish such standards was
"in accord with powers inherent in Indian tribal
sovereignty." The court affirmed the district
courts decision that EPA's TAS regulations
were valid "as reflecting appropriate delineation
and application of inherent Tribal regulatory
authority over non-consenting non-members."
2. D.C. Circuit holds that 40 C.F.R. §
131.20(c) does not impose a
mandatory duty on EPA to approve
water quality standards that a State
left unchanged following its triennial
review:
National Wildlife Federation v. Browner, 127 F.3d
1126 (D.C. Cir. 1997).
Plaintiffs National Wildlife Federation and others
petitioned the State of Michigan to designate Lake
Michigan an outstanding National resource water
(ONRW). Michigan declined to grant the petition,
and plaintiffs brought a CWA citizen suit against
U.S. EPA for its failure to review Michigan's denial
of plaintiff's petition. EPA moved to dismiss the suit
for lack of subject matter jurisdiction, and the
district court, having found no nondiscretionary duty
on the part of EPA to review the State's decision to
deny plaintiff's petition, granted EPA's motion.
Plaintiffs appealed. On appeal, plaintiffs argued
that EPA regulations imposed a mandatory duty on
the Agency to review and evaluate Michigan's
denial of the plaintiff's petition.
Plaintiffs contended that under 40 C.F.R. §
131.20(c), EPA was required to "review and
approve" both new and revised state water quality
standards, as well as any standards that remained
unchanged following the State's triennial review of
its water quality standards. Plaintiffs asserted that
this requirement was clear from the language of the
regulation, which, in plaintiff's view, required that
EPA review and approve the complete results of the
State's triennial review. In addition, plaintiff's
argued that EPA's interpretation at trial was no
more than a "convenient litigating position," and that
to adopt EPA's position would allow States to
frustrate the goals of the CWA by refusing to revise
their water quality standards at all.
EPA argued that under 40 C.F.R. § 131.20(c) the
Agency was only obligated to review modifications
to the State's water quality standards, since
unchanged standards were previously approved by
the Agency. EPA argued that under the CWA, the
Agency is under a nondiscretionary duty to review
and approve only new or revised state water quality
standards. EPA asserted that plaintiffs provided no
evidence that the Agency had intended to expand
its statutory duties when it promulgated 40 C.F.R.
§ 131.20(c), and provided no evidence supporting
a different interpretation of these regulations.
Finally, EPA noted that under the CWA EPA has
discretionary authority to revise existing State water
quality standards where such standards do not
meet statutory requirements. Thus, EPA had a
mechanism for addressing inadequate State
standards, but one premised on EPA discretion.
The appellate court held that 40 C.F.R. §
131.20(c) did not impose a mandatory duty on
EPA to approve water quality standards that the
State of Michigan left unchanged following its
triennial review. Therefore, the court affirmed
the district court's judgment dismissing
plaintiff's citizen suit and denying its motion for
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summary judgment. The court agreed with EPA
that plaintiffs presented no evidence that EPA had
previously interpreted these regulations in an
inconsistent manner, and, to the contrary, found
that EPA's Water Quality Handbook supported the
Agency's position. The court also observed that
while the regulation in question could be interpreted
so as to support either party's position, plaintiff's
position was not compelled by the language of the
regulation. The court noted that, generally and
within certain limits, federal agencies are entitled to
substantial deference in interpreting their own
regulations. The court found that here EPA's
position was eminently reasonable in light of the
structure and purpose of the water quality standard
regulations as a whole.
3. District court holds that State law
that suspends enforcement of
narrative nutrient water quality
standards altered State water quality
standards sufficiently to trigger EPA
duty to review revised standards and
approve or disapprove of such
standards:
Miccosukee Tribe v. United States, 1998 U.S. Dist.
LEXIS 15838 (Sept. 14, 1998).
Plaintiff Miccosukee Tribe brought a citizen suit
under the CWA against defendant EPA and the
United States asserting that the Everglades Forever
Act (EFA) (1994) had changed Florida's water
quality standards and that EPA had ignored its duty
to review and approve or disapprove of those
revised water quality standards. Previously, the
State had determined that the EFA had not
changed State water quality standards, and, in
correspondence, EPA had agreed with that
assessment. Based on that finding, in a prior action
before this court, the court had dismissed plaintiff's
claim for lack of subject matter jurisdiction, since
the EPA was under no mandatory duty to review the
State's water quality standards. The Eleventh
Circuit reversed, finding that the district court
should have conducted its own factual findings
regarding whether the EFA had changed State
water quality standards. EPA, rather than the court,
did conduct such a review, and concluded in
January of 1998, that the EFA did not change
Florida's water quality standards. In the present
action, both parties moved for summary judgement.
Plaintiffs maintain that the EFA changed Florida's
water quality standards by allowing phosphorus
discharges into the Everglades until 2006, in
contravention of existing narrative water quality
standards (i.e., at levels acknowledged to cause
imbalances in the natural aquatic flora and fauna).
Plaintiffs also argued that the EFA resulted in a
defacto change to State water quality standards,
since under the EFA if farmers implemented BMPs
and paid an agriculture privilege tax they were not
required to implement additional water quality
improvement measures prior to December 31,
2006. Finally, plaintiffs asserted that the EFA
changed State water quality standards because it
failed to implement a 10 ppb phosphorus limit, the
maximum that would ensure ecological balance in
the Everglades. Defendants argued that the EFA
was in effect a compliance schedule, that under the
EFA the existing water quality standards remained
in effect, and that the State was not precluded from
adopting numeric standards at a date before 2003.
Defendants also argued that violation of State water
quality standards did not equate to revisions of such
standards, and that because EPA was powerless to
enforce water quality standards against non-point
source discharges, the BMP and delayed
development of numeric standards represented a
reasonable approach.
The court first held that because EPA had explicitly
considered whether the EFA changed Florida's
water quality standards, plaintiff's citizen suit was
moot. The court reasoned that the district court
was only required to reconsider the EFA's impact
on water quality standards absent action by the
EPA Administrator. However, the court then
reviewed whether EPA's assessment of the impact
of the EFA on Florida's water quality standards was
consistent with the APA. The court held that
EPA's conclusion that the EFA had not altered
State water quality standards was arbitrary and
capricious and not supported by the record.
Rather, the court found that because the EFA in
effect had suspended enforcement of the existing
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narrative water quality standards for nutrients until
2006, and thereby allowed discharges of
phosphorus that violated the State's existing
narrative water quality standards, the Act had
changed the existing water quality standards. The
court observed that neither the CWA not State law
allowed compliance schedules for achieving
compliance with existing State water quality
standards. Moreover, the court stated that federal
law did not allow "anything like a twelve-year
compliance schedule," as would be provided under
the EFA. The court agreed with EPA that mere
violations of State water quality standards did not
equate to revisions of such standards, but
distinguished the instant case because the EFA
specifically authorized such violations. Where this
was the case, the court found that the only
reasonable conclusion was that the State had
changed its law. The court disagreed with EPA's
claim that the EFA required compliance with
existing narrative standards, and found that the Act
only required farmers to develop programs that
"considered" such standards. Finally, the court
rejected EPA's argument regarding the non-point
source nature of the discharges, finding that the
CWA "by allowing non-point sources to violate state
water quality standards until 2006, the EFA violates
both the letter and spirit of the Clean Water Act."
D. NPDES Permits
1. Fifth Circuit holds that EPA lacks
authority to require Louisiana to
consult with FWS and NMFS as a
precondition for becoming
authorized to administer the NPDES
program:
American Forest & Paper Ass'n v. U.S. EPA, 137
F.3d291 (5th Cir. 1998).
Petitioners challenged the final rule in which EPA
delegated to Louisiana responsibility for
administering the NPDES program within that State.
The challenge focused on provisions that required
the State to consult with the FWS and the NMFS
prior to issuing an NPDES permit and, where FWS
or NMFS determined the proposed permit
threatened endangered species, to modify the
permit or face a veto of the permit by EPA pursuant
to EPA's oversight authority.
The Fifth Circuit considered three issues: 1)
whether petitioners waived their right to challenge
the regulation because they did not participate in
the agency proceedings below; 2) whether
petitioners had standing to challenge the rule; and
3) whether EPA had authority to require Louisiana
to consult as a precondition for becoming
authorized to administer the NPDES program.
On the first issue, EPA argued that a party that
does not comment on a final rule waives its right to
challenge that rule in subsequent proceedings. The
court disagreed. The court stated that EPA failed
to identify any provision in the CWA that indicates
that a party's failure to comment waives their right
to judicial review. The court stated that the "statute
allows 'any interested person' that promptly files an
objection to seek review in this court." The court
added that it had never held that failure to raise an
objection during the comment period estopped a
petitioner from raising it on appeal, in fact, the court
noted it had rejected that very argument previously.
Further, the court stated it would have been
particularly unfair to estop petitioners from pursuing
its claims in this instance since EPA modified its
rule subsequent to proposal to include the
consultation requirements. Finally, the court
dismissed EPA's exhaustion of remedies argument
finding that, given the significant public comments
received by the Agency regarding the scope of
endangered species protection, EPA clearly had the
opportunity to consider the issue.
With regard to standing, the court found that
petitioners alleged injury were not purely
hypothetical. Rather, given petitioners need to
renew their permits every five years combined with
EPA's statement that the Agency "wilf object to
permits deemed likely to jeopardize a listed or
proposed species or threaten habitat, petitioners
alleged an actual or imminent injury. The court
rejected EPA's argument that this action could not
redress petitioners injury because Louisiana
remained free to consult with FWS and NMFS on a
voluntary basis, stating that the issue remained
whether EPA had authority to require such
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consultation in a rule. The court also found this
action was ripe for review even though the
regulation had not yet been applied. The court
found that this was a purely legal question and,
given that no further facts would have aided
resolution of the case, and that delay would have
imposed a significant burden on petitioners, the
dispute was ripe for review.
As for whether EPA had authority to require
Louisiana to consult with FWS and NMFS as a
precondition for becoming authorized to administer
the NPDES program, the court held that it did not.
The court followed a Chevron analysis, but did not
accord EPA deference to EPA's interpretation of
the ESA. EPA argued that under CWA § 402(b)
and § 304(i), the nine express requirements for
approval of a state NPDES program constitute
minimum requirements, but that nothing in § 402(b)
prohibits EPA from imposing additional
requirements. The court disagreed, stating that the
language of § 402(b) was non-discretionary and
that such language required EPA to approve a state
program unless that program failed to meet one of
the nine enumerated requirements. The court
observed that EPA's claims were weakened by §
402(b)(6), (which grants EPA veto power over
proposed permits that impair anchorage or
navigation) because "Congress could have, but did
not, grant EPA an analogous veto power to protect
endangered species." The court found that § 304(i)
only required EPA to promulgate regulations
governing the approval process for state programs,
but that it did not alter EPA's authority over such
approvals in any relevant regard. Thus, the court
concluded that Congress had spoken to the issue
presented.
The court distinguished American Iron & Steel
Institutev. EPA. 115 F.3d 979 (D.C. Cir. 1997) from
the present case, finding that AISI addressed §
118(c)(2) of the CWA, which provided a broader
grant of authority than § 402(b) to address aquatic
life and wildlife. Finally, the court found that nothing
in the § 7(a)(2) of the ESA provided EPA with
authority to add additional criteria to § 402(b).
Rather, the court stated that the ESA directs
agencies to use their existing authority to promote
the purposes of the ESA, but that "EPA cannot
invoke the ESA as a means of creating and
imposing requirements that are not authorized in
the CWA."
The court granted the petition and vacated and
remanded that portion of the rule that imposed
consultation requirements and declared that EPA
would veto any permit to which the FWS or NMFS
objects.
2. Eighth Circuit holds that City of
Glasgow's discharge of pollutants
from a drinking water treatment
facility without a NPDES permit
violates CWA, and remands for
determination of whether enhanced
permit fees violate State
Constitution:
State of Missouri v. City of Glasgow, 1998 U.S.
App. LEXIS 18339 (8th Cir. Aug. 10, 1998).
The State of Missouri appealed the district court's
ruling that a State statute requiring the City of
Glasgow to pay increased permit fees to operate its
water treatment facility violated the Missouri
Constitution. The State also claimed the court
improperly ordered the State to issue Glasgow a
discharge permit for its water treatment facility
despite the fact that Glasgow had failed to pay
required fees. Glasgow operated a drinking water
treatment facility that pumped water from the
Missouri River into the facility, treated and
distributed the water, and then pumped some water
as well as some residual sludge back into the river.
On appeal, the State argued that the district court
erred in failing to grant declaratory and injunctive
relief on its claim that the City of Glasgow was
discharging pollutants in violation of federal law.
The State also claimed that it should be able to
collect enhanced annual permit fees from the City.
Glasgow asserted that it did not have to pay the
permit fees because the State statute requiring the
fees violated the Hancock Amendment to the
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Missouri Constitution, which prohibited the State
from reducing the State financed proportion of the
costs of any existing activity or service required of
counties or other political subdivisions. The Eight
Circuit found that the Hancock Amendment worked
only to prevent the State from charging an
increased fee to obtain a permit in order to comply
with the State's own water pollution law. However,
the court found that Glasgow was required to
obtain a permit to comply with both State and
federal law. The court observed that the
Supremacy Clause of the U.S. Constitution dictates
that a State law cannot prevent the administration
and execution of a federal statute and, thus, the
State constitutional provision could not excuse
Glasgow's operation of its water treatment facility
without a permit in violation of federal law. The
Eighth Circuit reversed the district court's judgment
and remanded for issuance of an immediate order
declaring Glasgow to be in violation of the CWA
and enjoining Glasgow from discharging any sludge
from its water treatment facility into the Missouri
River until a permit was issued.
On the permit fee issue, the Eighth Circuit found
that the State could lawfully increase fees charged
to cities for operating permits without violating the
Hancock Amendment so long as the State
continued to fund the costs of administering the
state water pollution laws in the same proportion as
existed at the time of the Hancock Amendment's
passage. However, there was insufficient evidence
in the record to make such a determination.
Therefore, the Eighth Circuit remanded the case for
a determination of whether the increased permit
fees represented an unlawful decrease in the state-
funded proportion of the costs of administering the
State water pollution laws, and reversed the district
court's ruling ordering the state to issue Glasgow
an operating permit.
3. Ninth Circuit remands alleged
NPDES permit violation for
discharges from storm drain not
owned by defendant to determine
whether defendant could be liable as
operator of the drain:
San Francisco Baykeeperv. City of Saratoga, 1998
U.S. App. LEXIS 3942 (March 5, 1998).
[Note: Disposition not appropriate for publication
and may not be cited to by the courts of this circuit
except as provided by 9th Cir. R.36-3.]
Plaintiff-appellant San Francisco Baykeeper
brought a citizen suit under the CWA that alleged
that the defendant-appellee City of Saratoga had
committed 14,000 violations of its NPDES permit by
allowing the discharge of fecal coliform from a
storm drain owned by CALTRANS but located
within the City's jurisdiction. Upon cross motions
for summary judgment, the district court found that,
under the permit, the City would bear the burden of
proving at trial that the flows discharging from the
storm drain in question came from City-owned
facilities or activities. Appellants acknowledged that
the discharges did not come from City-owned storm
drains and, thus, stipulated to the entry of judgment
and appealed.
The Ninth Circuit found that the district court's order
and stipulated facts incorrectly contemplated liability
"only for discharges from drains owned by the City,
not those found to be operated by the City." The
court stated that under EPA regulations (40 C.F.R.
§ 122.26(a)(3)(vi)) the "City would be liable if it
could be considered the operator" of the storm
outfall at issue. The court acknowledged that
district court may have used the terms "owned" and
"owned or operated" interchangeably, however, the
Ninth Circuit found that because the issue is so
pivotal, it must remand for clarification.
4. EAB holds that municipal storm
water permits do not need to include
numeric effluent limitations where
development of such limitations was
infeasible and the permits included
best management practices (BMPs)
designed to reduce the discharge of
pollutants to the "maximum extent
possible" (MEP) as well as
compliance with state water quality
standards:
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In re: Arizona Municipal Storm, 1998 NPDES
LEXIS 1 (May 21, 1998).
Petitioners appealed from EPA Region IX's denial
of their evidentiary hearing request on several legal
issues pertaining to five NPDES storm water
permits issued to five municipal separate storm
sewer systems (MS4s) (City of Tucson, Pima
County, City of Phoenix, City of Mesa, and the City
of Tempe). Petitioners asserted 1) the Region and
Arizona DEQ improperly met with the permittees
during the comment period; 2) the permits did not
ensure compliance with water quality standards
because they did not contain numeric effluent limits
or whole effluent toxicity (WET) limits; 3) the
permits violate the CWA because they do not
require WET testing of the discharge; 4) the storm
water management programs incorporated into the
permits fail to quantify pollution reduction; 5) the
permits for Pima County and Tucson fail to address
pollution from new areas of development; 6) the
Region improperly allowed the permittees to defer
submission of certain components of their storm
water management programs; and 7) the Region
illegally deferred the requirement that the City of
Tucson demonstrate adequate legal authority to
implement its storm water management program.
The EAB found that issues 4, 5 and 6 were not ripe
for review because portions of the permits had been
withdrawn and would be subject to administrative
review when reissued. With regard to the claim of
having held improper meetings with the permittees,
petitioners asserted that 40 C.F.R. § 124.10-18
required that comments be submitted in writing or
at a public hearing and thus the meetings with the
permittees were improper. Petitioners also
asserted that such meetings constituted improper
exparte communications. The EAB disagreed with
both arguments, finding that nothing in the
regulations barred the Region from scheduling
additional meetings with the permit applicants and
the state prior to permit issuance. The EAB
observed that here none of the issues discussed at
the meetings were new and notes and
documentation from the meetings were placed in
the record so that petitioners were not in any way
prejudiced. In addition, the Region found that the
restriction on ex parte communications imposed
under § 124.78(d) applies only after the granting of
an evidentiary hearing. Here, the EAB observed,
no such hearing was held and therefore this
restriction was not applicable.
Petitioners second claim was that each permit must
include numeric effluent limits that ensured
compliance with state water quality standards. The
EAB disagreed, and found that where, as here,
development of numeric effluent limitations was
not feasible due to the lack of data about the
impact of storm water discharges on receiving
waters in Arizona it was appropriate to include
best management practices (BMPs) in those
elements of the storm water management plan
adopted in the permits and that such BMPs
constituted effluent limits intended to reduce
the discharge of pollutants to the maximum
extent possible (MEP) and compliance with
state waterquality standards. The EAB observed
that the term "effluent limitation" is defined to mean
any restrictions on quantities, rates, and
concentrations of constituents discharged from
point sources. The Board also found the Region's
approach to be consistent with relevant Agency
regulations and policy. The EAB noted that the
permits imposed reporting requirements that might
have provided the basis for "appropriate permit
modifications during the permit term."
With regard to petitioners assertion that annual
WET testing of the discharges should have been
required in the permits, the EAB found that
petitioners failed to adequately explain or discuss
why the Region's response to comments on this
issue was insufficient. The Region had originally
responded that the state's approved toxicity
implementation guidelines called for no toxicity
testing in the relevant cycle of MS4 storm water
permits while a toxicity testing program appropriate
for arid environments was being developed. The
EAB, thus, denied review of this issue.
Finally, with regard to Tucson's authority to
implement a storm water management program
(SWMP), petitioners argued the requirement
imposed under § 122.26(d)(2)(i) had been deferred
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since the permit requires a review of such authority
and the Region's plan was to address any
inadequacy when the next permit term started. The
EAB declined to interpret such action as improperly
deferring the requirements of § 122.26(d)(2)(i).
Rather, the EAB stated that in the absence of
information suggesting that Tucson's general
authority to protect health and the environment was
inadequate, the Region's approach was consistent
with existing regulations.
5. EAB holds that a NPDES permit
provides "shield" against liability for
discharge of pollutants not listed in
the permit only when permit
applicant has made adequate
disclosures during the application
process about the nature of its
discharges:
In re: Ketchikan Pulp Company, CWA Appeal No.
96-7 (May 15, 1998).
Ketchikan Pulp Company (KPC), which operated a
pulp mill in Ketchikan, Alaska, appealed an Initial
Decision assessing a $23,000 civil penalty against
it for alleged violations of CWA § 301 (a). The
alleged violations were based on three discharges
from KPC's mill into Ward Cove, a navigable
waterway adjacent to the mill.
The three discharges involved the following
incidents. First, as part of equipment maintenance,
KPC partially emptied one of its one million gallon
settling tanks at its wastewater treatment plant by
draining a two-year accumulation of flocculent into
Ward Cove through the flocculent drain line.
Second, in order to repair piping at the bottom of
the aeration basin in the secondary wastewater
treatment plant, KPC drained the contents of the
9.3 million gallon aeration basin and discharged an
undetermined amount of sludge into Ward Cove.
Third, employees operating the mill's digesters
cleaned up an accidental spill of approximately
4,450 gallons of magnesium bisulfite (cooking acid)
by washing the substance down through the floor
drains in the digester area, where it went out
untreated, into Ward Cove.
The NPDES permit in effect at the time of the
discharges covered KPC's discharges of effluent
from the mill for the period 1985 to 1990. The
permit contained no effluent limitations for
flocculent or cooking acid; in fact, neither substance
was mentioned in the permit. The permit also
contained no provisions relating to the control or
prevention of industrial spills.
KPC's appeal raised the following issues: 1)
whether the flocculent or cooking acid discharges
were covered under the permit, such that the permit
shielded KPC from liability for those two discharges;
and 2) whether the sludge discharge violated the
terms of the permit.
The EAB found that the permit did not shield
KPC from liability for the flocculent or cooking
acid discharges because KPC did not make
adequate disclosure about either discharge
during the application process. With respect to
the sludge discharge, the EAB found that as part of
the treatment process, the sludge ultimately
discharged was removed from treated wastewater
and returned to the aeration basin to continue the
cycle of treatment. Thus, the sludge in the aeration
basis at the time of discharge clearly was removed
during the course of treatment in direct violation of
the permit's unambiguous prohibition against such
discharge.
Accordingly, the EAB affirmed the Initial Decision as
to KPC's liability under CWA. In addition, the EAB
affirmed the $23,000 penalty, which was not
specifically challenged by either party, for the three
CWA violations.
E. State Certification
1. Second Circuit holds that FERC
must include in its licenses all
conditions imposed by a State under
its § 401 certification:
American Rivers v. Federal Energy Regulatory
Commission, 129 F.3d 99 (2nd Cir. 1997).
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Petitioners American Rivers, Inc., and the State of
Vermont, sought review of several licensing orders
issued by the Federal Energy Regulatory
Commission (FERC), which licensed six
hydropower projects located on rivers in Vermont.
In issuing the licensing orders, FERC refused to
include certain conditions developed by the State
and included in the State's Clean Water Act (CWA)
§401 certification of the license's conformance with
State water quality standards. FERC had found the
conditions to be beyond the scope of Vermont's
authority under the CWA. Petitioners requested
rehearing of the licensing orders before FERC,
which FERC denied. Petitioners then sought review
by the Second Circuit Court of Appeals. The issue
on review concerned the relative scope of authority
of the States and the FERC under the CWA and the
Federal Power Act (FPA).
Petitioners contended that according to the
language of CWA § 401 (d) "... FERC has no
authority to review and reject the substance of a
state certification or the conditions contained
therein and must incorporate into its licenses the
conditions as they appear in state certifications."
FERC argued that it is required to adopt only those
conditions that are within the State's authority to
impose under § 401, and that such conditions must
be reasonably related to protecting water quality
and must otherwise conform to the requirements of
§ 401. FERC also asserted that CWA §§ 401 (a)(3)
and 401(a)(5) support FERC's authority to
distinguish improper conditions. In addition, FERC
maintained that under Keating v. FERC, 288 U.S.
App. D.C. 344, 927 F.2d 616 (D.C. Cir. 1991), it
possessed authority to review and reject conditions
that violated the terms of § 401. FERC argued that
without such authority it would be impossible for the
it fulfill its statutory mission. Finally, FERC asserted
that certain conditions imposed under § 401 were
inconsistent with FPA provisions.
The court held that FERC was required by CWA
§ 401 to include in its licenses all conditions
imposed by a State under its § 401 certification
notwithstanding FERC's view that some of
those conditions were beyond the State's
authority under the CWA. Thus, the court granted
the petition for review, vacated the orders of the
FERC, and remanded the matter for further
proceedings consistent with the opinion. The court
first noted that FERC was not due deference in
interpreting the CWA, since FERC was not
responsible for implementing the CWA. The court
then reviewed the language of CWA § 401 (a) and
§ 401 (d), and noted that the language of § 401 (d),
which requires that State certification "shall become
a condition of any federal license or permit..," was
unequivocal. The court agreed with the FERC
that conditions imposed under §401 must relate
to protecting water quality, but emphasized that
FERC did not have authority to determine which
certification conditions were proper and which
were improper under 401 (d). This, the court
observed, was the "crux of the dispute in this case."
The court observed that prior to issuing the
licensing order to Turnbridge Mill Corporation (the
first order challenged here) FERC's position had
been that it was required under § 401 to include in
its license all conditions imposed through State
certification. The court noted that EPA shared this
view. The court then found that FERC read
Keating, the decision upon which FERC premised
its change of position, too broadly. The court found
that Escondido Mut. Water Co. v. La Jolla Band of
Mission Indians. 466 U.S. 765, 80 L. Ed. 2d 753,
104 S. Ct. 2105 (1984) (Commission required by
mandatory language in FPA to include conditions
deemed necessary by the Secretary of the Interior
for the protection and utilization of Native American
reservation) was more on point. The court also
observed that where a State § 401 certification
included conditions that, in FERC's view, were
improper, the appropriate remedy was for the
licensee to challenge such conditions, or for FERC
to not issue the license.
2. Ninth Circuit holds that certification
is required only where a discharge is
present:
Citizens Interested In Bull Run v. R.L.K. & Co.,
1998 U.S. App. LEXIS 3926 (9th Cir. Mar. 4, 1998).
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[Note: Disposition not appropriate for publication
and may not be cited to or by the courts of this
circuit except as provided by 9th Cir. R. 36-3.]
Appellants brought suit on September 17, 1996,
against R.L.K. & Co., operator of a ski area, for
violations of the Clean Water Act. Appellants
sought a declaratory judgment that R.L.K. violated
the CWA by operating under an invalid Forest
Service permit and by discharging salt; an
injunction ordering R.L.K. to halt its salting pending
Oregon DEQ certification; and civil penalties of
$5,000 per day of salting since April 1992. The
Oregon DEQ certified operation of the ski area on
December 12, 1996. In addition, R.L.K. submitted
an uncontested affidavit that it did not salt between
August 26 and December 12, 1996.
Appellants raised three arguments. First,
appellants cited PUD No. 1 v. Washington
Department of Ecology, 511 U.S. 700, 114 S. Ct.
1900 (1994) in arguing that the permittee's overall
operation was subject to certification, even where
the discharge had ceased (i.e., that "an uncertified
permittee was a violator regardless of any threat of
discharge"). The court disagreed, and found that
in PUD 1 the Court stated "that certification was
authorized once 'once the threshold condition,
the existence of a discharge, is satisfied'."
Second, appellants argued that R.L.K. continued to
discharge salt after it had ceased salting activities
through runoff from snowmelt. The court
observed that such runoff did not appear to
constitute "an 'activity' that may result in a
discharge," as required under 33 U.S.C. §
1341 (a), and held that the issue was not
properly before the court because appellants
failed to raise it in their original brief. Finally,
appellants argued that the district court erred in
concluding that there was no genuine issue
concerning the cessation of salting. Appellants
relied on an affidavit that asserted broken bags of
salt were seen in the Salmon River, and photos
taken by a journalist that showed bags of salt in the
Little Zig Zag Stream. The Circuit Court
concluded that such evidence was not
inconsistent with R.L.K.'s showing that it
ceased salting on August 29, 1996, and held
that no genuine issue of material fact existed.
The court affirmed the lower court's decision.
3. Ninth Circuit holds that the term
"discharge" as used in CWA § 1341
is limited to discharges from point
sources and does not encompass
nonpoint source pollution and that,
therefore, no State certification is
required for the issuance of cattle
grazing permits:
Oregon Natural Desert Association v. Dombeck,
151 F.3d 945 (9th Cir. 1998). See case summary
on page 6.
F. Section 404/Wetlands
1. Federal Circuit holds that takings
claim accrued upon denial of permit
and is thus barred by six-year
statute of limitations:
Bayou Des Families Development Co. v. United
States. 130 F.3d 1034 (Fed. Cir. 1997).
Plaintiff Bayou Des Families (BDF) Development
Corporation alleged that the denial, in September
1979, by the U.S. Army Corps of Engineers
(USAGE) of a CWA § 404 after-the-fact permit to
build a levee constituted a taking of its property
without just compensation, in violation of the Fifth
Amendment. Plaintiff brought suit in the Court of
Federal Claims in July, 1991. That court dismissed
the suit as barred by the six-year statute of
limitations. Plaintiff appealed. On appeal the
central issue before the court was when did BDF's
claim become ripe for adjudication.
Key points in the 25 year history of the case include
the following. BDF sought an after-the-fact dredge
and fill permit in 1975, which was denied by USAGE
in September, 1979. Uncertainty regarding the
placement of a flood and hurricane levee, and plans
to build Jean Lafitte National Park, contributed to
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the USAGE'S delay in acting on the permit
application. Ultimately, the park was established in
1978 (the park contained 1000 of the 2000 acres
that constituted plaintiffs development). BDF
responded to the USAGE'S denial of the permit by
filing suit in district court, which denied BDF's
challenge to the permit denial. Finally, at the
request of Jefferson Parish, USAGE granted a
permit to construct a hurricane levee to the West
Jefferson Levee District. To obtain a right-of-way
for the levee, the Levee District filed an
expropriation suit against BDF. As a result, the
state trial court awarded BDF approximately $15
million.
Plaintiff BDF argued that its taking claim did not
ripen until 1986, when the USAGE granted
Jefferson Parish a permit for a hurricane levee on
an alignment other than that of BDF's ordinal plan.
BDF maintained that since prior to that point it was
possible that the hurricane levee would be built on
BDF's original alignment, BDF's land was not
rendered worthless until the USAGE finally resolved
the matter by issuing the permit. The court
disagreed, and found that the taking accrued on
September 21,1979, the date the USAGE denied
BDF's levee permit. The court observed that
although determining the point in the permit
application process when a final decision is made
by the responsible agency is difficult, plaintiff's
actions in litigating the USAGE'S decision suggests
the finality of the decision. The court also observed
that in the expropriation suit brought by the West
Jefferson Levee District, the Supreme Court of
Louisiana recognized that the USAGE'S denial of
the permit in 1979 destroyed the value of BDF's
land. The court noted that even if the permit denial
in 1979 had not constituted final action on the
permit application, the decision of the federal
district court in 1982 "left no doubt about the legally
binding nature of the government's action."
Ultimately, the court concluded that BDF's wetlands
had no economic value for development purposes
following the permit denial. Because the taking
accrued beyond the six-year statute of
limitations period, the court upheld the Court of
Federal Claims dismissal.
2. Federal Circuit holds that withdraw
of § 404 permit application from
active status based on the
appellant's failure to complete a
valid WQC application did not
constitute a final decision by the
USAGE:
Heck and Assoc., Inc. v. United States, 1998 U.S.
App. LEXIS 1003 (Fed. Cir. Jan. 23, 1998).
Appellant Howard Heck and Associates, Inc.,
appealed the judgment of the Court of Federal
Claims, 37 Fed. Cl. 245 (1997), which dismissed
appellant's complaint and held that the court lacked
jurisdiction over appellant's Fifth Amendment taking
claim because the claim was not ripe for review. In
seeking a CWA § 404 permit, Heck was required to
obtain a water quality certification (WQC) from the
State of New Jersey. Heck submitted a WQC
application to the NJDEP, but never submitted an
adequate alternatives analysis, and NJDEP did not
issue the WQC and ultimately canceled Heck's
WQC application. Heck continued to seek the §
404 permit from the U.S. Army Corps of Engineers
(USAGE), arguing that under CWA § 401 the
requirement for WQC had been waived. Despite
publishing the § 404 permit application for public
notice, however, the USAGE notified Heck that the
WQC requirement could not be waived, and that
USAGE had withdrawn the § 404 application from
active status until the WQC was provided. Heck
subsequently filed a Fifth Amendment takings
claim, which the court found to be not ripe because
the USAGE had never issued a final decision on the
merits.
The central issue on appeal was whether the
USAGE'S withdraw of Heck's § 404 permit
application from active status based on the
failure to complete the application by not
including the WQC constituted a final decision
by the USAGE. The court held that it did not.
The court held that the dismissal of the § 404
application by the USAGE as incomplete was
not a final decision or a decision on the merits.
The court observed that submission of a WQC is a
prerequisite to issuance of a § 404 permit, and that
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under 33 C.F.R. § 320.4(j) the USAGE had
discretion to deny the permit without prejudice if the
State refused to certify compliance with water
quality standards. The court noted that neither the
State of New Jersey nor the USAGE refused to give
its approval; rather, both canceled the application
as incomplete. The court stated that Heck had
failed to demonstrate that NJDEP had made any
decision on the merits that denied Heck
economically viable use of its land and, thus, could
not argue that NJDEP's cancellation of Heck's
WQC application constituted a final decision. The
court observed that Heck remained free to seek the
necessary WQC.
The court found that Heck's other arguments lacked
merit as well. The court stated that Heck had not
demonstrated that the WQC application process
was futile because Heck had never completed the
process and had its application rejected. Nor had
Heck demonstrated that the State of New jersey
had unduly delayed the application process; rather,
the court observed that Heck was responsible for
the delay. The court rejected Heck's hardship
argument as well, finding that any hardship that was
experienced by Heck was due to its own refusal to
complete a valid WQC application. Finally, the
court found that the theory that NJDEP violated
state law in demanding the alternatives analysis
must be challenged in State court. The court
affirmed the judgment of the court of Federal
Claims.
3. Fourth Circuit upholds denial of
CWA § 404 permit where detrimental
environmental impacts of the fill
project outweigh its benefits:
B & B Partnership v. United States, 1997 U.S. App.
LEXIS 36086 (4th Cir. Dec. 24, 1997).
Appellants B & B Partnership challenged the U.S.
Army Corps of Engineers' (USAGE) denial of a
§ 404 permit that would have authorized appellants
to fill 1.5 acres of wetlands as part of developing a
construction and debris landfill. The denial was
based on the USAGE district engineer's findings
that the detrimental environmental impacts of the
project outweighed its benefits, and that appellants
had not demonstrated the absence of practicable
alternatives. The district court had upheld the
USAGE'S decision, and appellants appealed.
Appellants raised two issues on appeal: 1) whether
the district court erred in excluding from review
several documents that pertained to two USAGE
permit decisions addressing other construction and
debris landfills situated in the same county; and 2)
whether the decision in this case by USAGE was
arbitrary and capricious, an abuse of discretion, or
otherwise not in accordance with the law.
Appellants argued that the district court abused its
discretion by denying appellants' motion to
supplement the record with documents pertaining to
USAGE permit decisions (i.e., approvals)
addressing two other construction and debris landfill
situated in the same county. Appellants asserted
the USAGE relied on these documents when it
evaluated appellants' application, however, the
district court had concluded otherwise. The Fourth
Circuit found that appellants had failed to
demonstrate that the USAGE relied on either of
the relevant documents when it evaluated
appellants' application and, therefore, those
documents did not pertain to the merits of the
USAGE'S decision. The Fourth Circuit held that
the district court had not abused its discretion
in denying the motion to admit the documents.
With regard to whether the USAGE'S decision to
deny the permit was arbitrary and capricious,
appellants argued that the USAGE'S conclusions
regarding the environmental impacts of the project
were not supported by facts in the record. The
Fourth Circuit disagreed, and found that the
record provided adequate evidentiary support
forthe USAGE'S findings and conclusions. The
court held that the evidence in the record
provided a rationale basis for the USAGE'S
denial of appellant's permit application.
The court also noted that, contrary to appellants'
assertion, USAGE was not required to submit the
materials that appellant had provided to USAGE in
response to public comments on the permit
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application to the Fish and Wildlife Service, the
National Marine Fisheries Service, and the EPA for
their review. Rather, the court found that under
USAGE regulations (33 C.F.R. § 325.2(a)(2))
USAGE was only required to do so if the district
engineer believed that the supplemental materials
would have affected the public's view of the
proposal. The court observed that here the
supplemental materials were not relevant to the
principal bases for the USAGE'S decision.
4. Fourth Circuit holds that the portion
of USAGE regulations which define
waters of the U.S. to include those
waters whose degradation "could
affect" interstate commerce exceeds
its authority under the Clean Water
Act and the regulation is invalid:
U.S. v. Wilson. 1997 U.S. App. LEXIS 35971 (4th
Cir. Dec. 23, 1997).
Defendants J. Wilson, Interstate General, L.P., and
St. Charles Associates, L.P., appealed felony
convictions for knowingly discharging fill and
excavated material into wetlands without a Clean
Water Act § 404 permit. As part of the
development of a planned community, defendants
had attempted to drain three (of four relevant)
parcels of land that were wetlands by digging
ditches and depositing the excavated dirt next to
the ditches (i.e., sidecasting). In addition,
defendants deposited fill and gravel on three of the
four parcels. On appeal, defendants argued that 1)
the U.S. Army Corps of Engineers' (USAGE)
regulations (33 C.F.R. § 328.3(a)(3)), which in part
define waters of the U.S. to include those waters
whose degradation "could affect" interstate
commerce, exceed the authority of the CWA and
the Commerce Clause of the Constitution
(defendants also asserted that the district court's
instructions to the jury, which were based on §
328.3(a)(3), were improper); 2) the district court
improperly applied CWA requirements to wetlands
that did not have a "direct or indirect surface
connection to otherwaters of the U.S."; 3) the CWA
does not apply to "sidecasting"; and 4) for a felony
conviction under the CWA the mens rea
requirement must be proven for each element of
the violation. Defendants also challenged
evidentiary rulings of the district court, and aspects
of their sentences. The court issued a ruling
resolving only the interstate commerce and criminal
intent issues (i.e. issues 1 and 4). While two of the
three judges on the panel issued opposing opinions
on the sidecasting and adjacency issues, neither
opinion had the support of two judges so as to
constitute an opinion of the court.
Defendants argued that "in allowing the jury to find
a nexus with interstate commerce based on
whether activities 'could affect' interstate
commerce, the [district] court authorized a 'limitless
view of federal jurisdiction,' far more expansive than
the standard recently summarized in U.S. v. Lopez,
514 U.S. 549, 131 L Ed. 2d 626, 115 S. Ct. 1624
(1995). The Fourth Circuit agreed, and held that
in promulgating 33 C.F.R. § 328.3(a)(3), the
USACE "exceeded its congressional
authorization under the Clean Water Act, and
that, for this reason, 33 C.F.R. § 328.3(a)(3)
(1993) is invalid." The Fourth Circuit observed
that under Lopez Congress could clearly regulate
discharges of pollutants that substantially affect
interstate commerce (514 U.S. 549, 558-59). It
also recognized that Congress presumably could
regulate the discharge of pollutants into
nonnavigable waters to the extent necessary to
protect the use or potential use of navigable waters
as instrumentalities of interstate commerce. Finally,
the court observed that Congress arguably has
power to regulate discharges of pollutants into
waters that themselves flow across state lines, or
that connect to waters that do so. However, the
court found that § 328.3(a)(3) "requires neither that
the regulated activity have a substantial affect on
interstate commerce, nor that the covered waters
have any sort of nexus with navigable, or even
interstate, waters." Based on its conclusion
regarding § 328.3(a)(3), the court found that the
district court's jury instruction based on this
regulation was also erroneous.
Defendants further contended that the district court
erred in instructing the jury with regard to the mens
rea required to establish the criminal violations (§
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1319(c)(2)(A)). Specifically, defendants argued that
the CWA required that the government show the
defendants were aware their conduct was illegal,
and also required that the appropriate mens rea be
shown to accompany each element of the offense.
The defendants argued that this case should be
governed by Liparota v. United States, 471 U.S.
419, 85 L Ed. 2d 434, 105 S. Ct. 2084 (1985)
(government had to prove defendant knew his
action was unauthorized in proving violation of food
stamp act). The court distinguished Liparota, and
noted that Liparota did not create a mistake-of-law
defense. Rather, the court found that the structure
of the CWA, it legislative history, and applicable
precedent (see, U.S. v. International Minerals &
Chemical Corp.. 402 U.S. 558, 29. L. Ed. 2d 178,
91 S. Ct. 1697 (1971) (Court declined to find proof
of defendant's knowledge of the illegal nature of his
act was a required element in criminal violation))
supported the conclusion that the government need
not show defendants were aware their acts were
unlawful. Thus, the court declined to hold that
the CWA requires that defendants must have
known their acts were illegal, but did hold that
the CWA "requires the government to prove the
defendant's knowledge of facts meeting each
essential element of the substantive offense."
Because the jury instructions did not adequately
require the government to prove defendant's
knowledge with regard to each element of the
violation, the court found that a new trial was
required.
summary judgment to plaintiffs AMC and enjoined
USAGE and EPA from enforcing the "Tulloch Rule."
(See, American Mining Congress v. U.S. Army
5. D.C. Circuit affirms
Tulloch Rule:
rejection of
National Mining Association v. U.S. Army Corps of
Engineers. 145 F. 3d 1399 (D.C. Cir., 1998).
The parties appealed a district court opinion that
held that the "Tulloch Rule" (which removed the de
minimis exception to the U.S. Army Corps of
Engineers' definition of the term "discharge of
dredged material" and expanded the definition to
include any redeposit, including incidental fallback,
of dredged material) exceeded the U.S. Army Corps
of Engineers' authority under § 404 of the Clean
Water Act (CWA). The district court had granted
Corps of Engineers,
1997).
951 F. Supp. 267 (D.D.C.
Appellees argued that the "Tulloch Rule" exceeded
the USAGE'S statutory authority because it would
regulate incidental fallback which, because it
returns dredged material to virtually the same spot
from which it came, cannot be said to constitute the
addition of a pollutant to jurisdictional waters.
USAGE argued that under the CWA incidental
fallback could be classified as a discharge since the
term "discharge" is defined to include the addition of
a pollutant to navigable waters and the definition of
the term "pollutant" includes "dredged soils" as well
as "rock," "sand," and "cellar dirt." (33 U.S.C. 1362
(12), (6)).
The D.C. Court of Appeals held that incidental
fallback did not constitute the addition of a
pollutant to waters of the U.S. and, thus, that
the "Tulloch Rule" exceeded USAGE'S authority.
The court found incidental fallback constituted a
"net withdrawal, not an addition, of material" and,
therefore, it could not constitute a discharge. The
court observed that "Tulloch Rule" would subjected
"virtually all excavation and dredging performed in
wetlands" to federal regulation and the court found
this to exceed authority granted in the CWA. The
court noted that Congress has established two
distinct statutory programs to address the removal
of dredged materials from waters (i.e., CWA) and
the discharge of dredge and fill material (i.e., the
Rivers and Harbors Act). The court rejected the
appellants arguments that the specific exemptions
in § 404(f) of the CWA support their interpretation
of the term "discharge." In response to arguments
that the court's interpretation of the term
"discharge" would effectively read the regulation of
dredged material out of the CWA, the court stated
that it was not holding that the USAGE could not
legally regulate some forms of redeposit under §
404. The court reiterated, however, that USAGE'S
assertion of jurisdiction over "any redeposit,"
including incidental fallback, went beyond the
agency's permissible authority. The court noted
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that since the CWA establishes no bright line
distinguishing incidental fallback from "regulable
redeposits," "reasoned attempts by the agencies to
draw such a line would merit considerable
deference." The court also distinguished opinions
from several other circuits that supported the
proposition that any redeposit may be regulated
under § 404 finding that such opinions predated the
"Tulloch Rule." The court also rejected appellants
arguments that a more lenient test than Chevron
should be applied here due to the facial challenge
to the regulation.
Finally, with regard to remedies, the court found
that once the district court found that the "Tulloch
Rule" was illegal, it was under no further duty to
make explicit findings regarding the elements
necessary for a permanent injunction. Further, the
D.C. Circuit Court found, based on prior decisions
as well, the APA, and concerns regarding a flood of
duplicative litigation, that when, as here, an agency
rule is found to be unlawful, "the ordinary result is
that the rules are vacated—not that their application
to the individual petitioners is proscribed." The D.C.
Circuit Court affirmed the judgment of the district
court.
6. District court enjoins USAGE from
accepting preconstruction notices
pursuant to NWP 29 after June 30,
1998, pending compliance with
NEPA:
Alaska Center for the Environment v. West, 1998
U.S. Dist. LEXIS 6644 (D.AL, April 30, 1998).
Plaintiffs challenged the U.S. Army Corps of
Engineers (USAGE) issuance of its Nationwide
Permit for Single-Family Housing (NWP 29),
asserting that it violated the CWA, NEPA, and the
ESA. Plaintiffs argued that NWP 29 harmed them
by depriving them of opportunities to participate in
the permitting process and by threatening harm to
the environment. Specifically plaintiffs asserted that
1) USAGE could not ensure minimal adverse
environmental effects as required by CWA §
1344(e) through the process used under NWP 29
known as preconstruction notice (PCN); 2)
USAGE'S decision document acknowledged that
NWP 29 would impact threatened and endangered
species in contravention of the ESA; and 3) under
NEPA, USAGE had not adequately considered the
no-action alternative, and had not considered
reducing the one-half acre ceiling and excluding
high-value waters.
Upon motions for summary judgment the court's
review focused on USAGE'S compliance with
NEPA. The court held that because the
USAGE'S Decision Document supporting NWP
29 did not contain meaningful discussion of
why the acreage limitation should not be
smaller and why high-value waters should be
excluded, the decision document did not
constitute an adequate Environmental
Assessment. The court remanded it to USAGE for
further proceedings. The court observed that under
NEPA USAGE was obliged to consider an
appropriate range of alternatives, but had failed to
do so. The court noted that commenters on the
proposed NWP had raised the issues of alternative
acreage ceilings and protecting high-value waters,
but that the Decision Document did not indicate that
USAGE had not fully considered these alternatives.
The court found that USAGE'S decision to reject the
no-action alternative was neither arbitrary and
capricious or unreasonable.
The court then considered whether injunctive relief
was appropriate. The court found that the potential
harm to the environment from the placement of fill
into high-value waters would be serious and
irreversible. In contrast, the court found that the
harm to the USAGE and persons seeking to place
fill for the construction of single family houses was
mitigated by the availability of individual § 404
permits (which would require extra time) and other
NWPs. The court enjoined USAGE from
accepting PCN's pursuant to NWP 29 after June
30, 1998, pending compliance with NEPA
through the issuance of an environmental
assessment that adequately addresses the
exclusion of high-value waters and the use of
an acreage ceiling other than 0.5 acres.
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7. District court holds that slip plowing
and disking of delineated wetlands
required § 404 permit:
Borden Ranch Partnership v. U.S. Army Corps of
Engineers, 1998 U.S. Dist. 1955 (E.D. Cal. Jun. 9,
1998).
The District Court for the Eastern District of
California denied summary judgment motions for
the plaintiff and granted, in part, summary judgment
for the United States. The central issue was
whether plaintiffs violated § 301 of the Clean Water
Act by their failure to obtain a § 404 permit from the
U.S. Army Corps of Engineers (USAGE) prior to
engaging in certain agricultural activities. In making
its decision regarding the cross-motions for
summary judgment, the court ruled that USAGE
had subject matter jurisdiction over plaintiffs
activities, ruled out normal farming exemptions, and
determined that the recapture provision applied.
Plaintiffs owned and operated a farm, Borden
Ranch, in California, and failed to obtain a § 404
permit for deep slip plowing and disking of
delineated wetlands. Plaintiffs claimed that their
plowing activities did not constitute the placement of
fill, and alternatively, argued that these activities
were exempted from § 404 permit requirements as
"normal farming activities." They also made facial
challenges against the applicable regulations, in
additional to commerce clause and due process
claims.
With regard to the subject matter jurisdiction
under § 301, the court held that the plaintiffs
activities were within the jurisdiction of the
USAGE. The court held that the redeposit of
earth can constitute the "addition of a
pollutant" (Rvback v. EPA. 904 F.2d 1276,1285-
86 (9th Cir. 1990) and that the purpose of the
activity was irrelevant (Minnehaha Creek
Watershed Dist. v. Hoffman. 597 F.2d 617, 627
(8th Cir. 1978). Therefore, the court granted the
United States' request for declaratory judgment
that the plaintiffs actions violated section 301.
The court denied plaintiffs contention that the
activities were exempt from the permit
requirements, under the exemption for "normal
farming activities." To be covered by the
exemption, the activity must be part of an
established farming activity, and not part of an effort
to bring an area into farming. The court rejected
plaintiffs arguments about the historical agricultural
uses of the property, and utilized the plaintiffs
admissions of the need to deep rip and disk the
area before it would be suitable for its intended use.
In its holding, the court deferred to the agency's
construction of the Clean Water Act, finding it
reasonable and not in conflict with the expressed
intent of Congress. U.S. v. Riverside Bavview
Homes. Inc.. 474 U.S. 121, 131 (1985).
The court held that plaintiffs activities would be
subject to the recapture provision of the CWA, 33
U.S.C. 1344(f)(2). This provisions requires a permit
for "any discharge of dredged or fill material into the
navigable water incidental to any activity having as
its purpose bringing an area into a use which it was
not previously subject, where the flow or circulation
of navigable waters may be impaired or the reach
of such waters reduced."
The court dismissed the facial challenges to the
validity of the regulations, stating that the challenge
was time-barred by a six year statute of limitations
under the Administrative Procedures Act. 28 U.S.C.
2401 (a). The court also held in favor of the
defendants on the plaintiffs due process claim.
The court stated that the due process claims were
based on notice issues, and could be overcome
where reasonable persons would have known that
their conduct was at risk.
Lastly, the court upheld the validity of the migratory
bird rule, an EPA guideline adopted by the USAGE,
used to determine regulatory jurisdiction over
isolated intrastate waters. The court restated the
holdings under Leslie Salt II, and III, to establish the
validity of the rule in the 9th Circuit.
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8. District court holds that USAGE has
authority to delegate § 404 permit
issuance authority to district
engineers:
Johnson v. U.S. Army Corps of Engineers, 1998
U.S. Dist. LEXIS 8422 (D. MN June 1, 1998).
Plaintiffs, who were farmers, landowners, and
residents of Pennington County, Minnesota, sought
a temporary restraining order and preliminary
injunction suspending the § 404 permits issued by
the U.S. Army Corps of Engineers (USAGE) to the
Red Lake Band of Chippewa Indians and
Pennington County for the River Road Phase III
Project. The project involved realignment and
reconstruction of BIA Route 19. Pursuant to NEPA,
the Red Lake Band of Chippewa Indians had
prepared an environmental assessment that
identified six alternatives, including the preferred
alternative (No. 5), which involved filling 30 acres of
wetlands. Plaintiffs argued that the CWA did not
allow the Chief Engineer to delegate issuance of §
404 permits to the District Engineer, and that the
District Engineer's rejection of the alternatives 1-4
and 6 was "arbitrary, capricious and an abuse of
discretion."
Plaintiffs argued that the decision in U.S. v. Mango,
1998 U.S. Dist. LEXIS 2771 (N.D.N.Y. March 5,
1998) held that the Secretary of the Army did not
have authority to delegate § 404 permit issuance to
District Engineers. However, this court found the
Mango decision erroneous. Rather, the court
found that the CWA did not specifically address
subdelegation of § 404 permit issuance
authority and that the USAGE'S construction of
the statute in delegating permit issuance
authority by regulation was permissible.
Regarding the substantive basis for the permit
decision, plaintiffs argued that the purpose of the
project was to improve safety and traffic flow, and
that all of the alternatives achieved this objective,
including the off-reservation alternatives. Thus,
plaintiffs argued that USAGE'S characterization of
the purpose of the project as "bypassing existing
roads" including local traffic, was an "eleventh hour
change" improperly intended to reject the off-
reservation alternatives. The court disagreed. The
court found that USAGE'S concern about easing
conflicts with local traffic was expressed in the final
draft EA and, thus, was not a last minute change.
Moreover, the court found that USAGE rejected the
off-reservation alternatives based on safety and
traffic concerns, and that the USAGE'S decision
making process evinced a thorough review of the
matter. Given that plaintiffs were not likely to
succeed on the merits, the court declined to issue
injunctive relief.
9. District court denies plaintiffs
summary judgment motion alleging
USAGE improperly granted City of
Bessemer a permit for dredge and
fill activities in violation of the CWA,
USACE regulations, and other
statutory requirements:
Waterworks and Sewer Board City of Birmingham
v. U.S. Army Corps of Engineers, 1997 U.S. Dist.
LEXIS 17215 (N.D. Al. Oct. 22, 1997).
Plaintiff Water Works & Sewer Board of the City of
Birmingham challenged the validity of a permit
issued by defendant U.S. Army Corps of Engineers
(USACE) to the City of Bessemer. The City, which
had been serviced by the plaintiff, desired to build
its own water supply (including intake structure),
treatment and distribution system. The City had
sought a permit under the RHA and CWA § 404 to
build an intake structure and associated pipeline.
The USACE provided public notice of the permit
application, received and considered public
comments on the application, but denied a request
from plaintiff to hold a public hearing on the basis
that a public hearing would not provide additional
information regarding the final decision. On
November 13, 1995, the USACE issued the permit
to build an intake structure and associated pipeline.
The permit was stayed temporarily around March 1,
1996, but went back into effect on March 17, 1997.
Following the USAGE'S denial of the public hearing
plaintiff filed suit contending, among other things
that the permit was improperly issued because: 1)
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the USAGE failed to hold a public hearing in
violation of USAGE regulations, the statutes
governing the USAGE'S permitting process, and the
Due Process clause of the Fifth Amendment; 2) the
USAGE failed to adequately consider the
substantial adverse effects of the permitted activity
on the public interest; 3) the USAGE erroneously
failed to require preparation of an environmental
impact statement in violation of the National
Environmental Policy Act, 42 U.S.C. § 4321, et
seq.; and 4) the USAGE permit would not comply
with the Environmental Protection Agency's
Guidelines for Specification of Disposal Sites for
Dredged or Fill Material, 40 C.F.R § 230 et seq.
The City of Bessemer and the USAGE filed motions
for summary judgment and Water Works filed a
cross motion for summary judgment and a motion
for limited discovery and a hearing.
With respect to plaintiff's claim that the USAGE
failed to comply with its permitting procedures,
following a detailed review of the regulations and
case law the court reasoned that the USAGE had
correctly concluded that plaintiffs written submittals
adequately presented the issues of concern and a
public hearing was not needed for clarification. The
court held that in denying the request for a
public hearing the USAGE acted within its
appropriate range of its discretion and such
denial was neither arbitrary nor capricious.
Regarding whether the USAGE'S refusal to hold a
public hearing violated the Administrative
Procedures Act (APA), the court concluded that the
denial of the hearing violated neither § 5 of the
APA, § 10 of the Rivers and Harbor Act of 1899
(RHA), or § 404 of the Clean Water Act (CWA).
The court observed that, "[a] federal agency is not
required to conduct public hearings before making
a threshold determination as to the need for an EIS
so long as members of the public are given the
opportunity to submit facts which might bear upon
the agency decision." Sierra Club v. Alexander, 484
F.Supp. 455, 471 (N.D.N.Y. 1980). Further, the
court noted that the USAGE'S procedures
adequately complied with CWA § 1344(a), which
mandates an "opportunity for public hearings." The
court observed that if the USAGE determined that
it had the information necessary to reach a decision
and there was "no valid interest to be served by a
hearing, the USAGE had the discretion not to hold
one.
With respect to plaintiff's request for hearings and
discovery, the court stated that "[T]he focal point for
judicial review of an administrative agency's action
should be the administrative record." Preserve
Endangered Areas of Cobb's History, Inc. v. U.S.
Army Corps of Engineers, 87 F.3d 1242,1246 (11th
Cir. 1996). The court noted that where an
administrative agency fails to adequately explain its
decision the proper course of action is to remand
the matter to the agency for additional investigation
or explanation.
Plaintiff asserted that the Corps' public interest
review was intended to be a "broad review" which
must include not only the structures affecting
navigable waters but also those structures that help
fulfill the purpose of the project such as the
treatment plant and pipeline. In a detailed
analysis relying in part on two Circuit Court
cases (see, Winnebago Tribe of Nebraska v.
Ray. 621 F.2d 269 (8th Cir. 1980), and Save the
Bay. Inc. v. U.S. Army Corps of Engineers. 610
F.2d 322 (5th Cir. 1980)), the court held that the
water treatment plant and the aspects of the
project not related to the intake structure and
pipeline crossings were not within the scope of
the USACE's jurisdiction in undertaking the
public interest review.
Plaintiff contended that in failing to consider
impacts of the water withdrawals on human uses of
the river the USAGE conducted an inadequate
CWA § 404(b)(1) analysis, and that the USAGE
failed to make an appropriate evaluation of the
alternatives to a "dredge and fill" action as required
under CWA § 404(b)(2). The court pointed out that
the governing regulation, 40 C.F.R. § 230.50, did
not require the USAGE to consider the impacts of
water withdrawal on water supply in its § 404(b)(1)
review, only impacts on water supply from the
addition of fill into the water. The court also
rejected plaintiff's assertion that the no-action
alternative of purchasing water from plaintiff was a
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practicable alternative in line with § 404(b)(2). As
the court noted, the purpose of the project was to
sever the City's reliance on plaintiff water treatment
and distribution system.
Finally, plaintiff contended that USAGE failed to
conduct a proper alternative analysis in its
environmental assessment. As the court pointed
out, the arbitrary and capricious standard was the
proper one for review of NEPA determinations.
Since the USAGE had reasonably considered
alternatives in its decision making, the court found
no bases upon which to set aside the USAGE'S
decision.
10. District court holds that soil
redeposited through "incidental
fallback" constitutes a discharge
of a pollutant for purposes of the
Clean Water Act:
U.S. v. Feinstein. Case No. 96-232-CIV-FTM-24
(D), Decided June 12, 1998.
The Feinstein's contracted in the 1980's to develop
248 acres of land in Fort Meyers, Florida. The site
was cleared, grubbed, and graded. In June of 1992
the U.S. Corps of Engineers (USAGE) issued a
cease and desist order prohibiting the discharge of
pollutants into the waters of the United States
located on the property. The Government initiated
an action in June of 1996 seeking injunctive relief,
restoration of the polluted waters and civil penalties.
The Feinstein's, citing American Mining Cong, v.
U.S. Army Corps of Eng'rs, argued that soil
redeposited through "incidental fallback" did not
constitute the addition of a pollutant under the
CWA.
The court observed that the Supreme Court
explained in Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, 467 U.S. 837 (1984)
that if the statute is silent or ambiguous with respect
to the specific issue, the court must decide whether
the agency's interpretation is based on a
permissible reading of the statute. Here, the court
determined that Congress did not directly address
the question of whether incidental fallback is
discharge of a pollutant under the CWA. Thus, the
court deferred to the USAGE'S interpretation of the
statute. The court concluded that the USAGE'S
construction of the CWA was permissible. The
court reasoned that case law has established that
the "addition" of a pollutant to U.S. waters
encompasses "redeposit," and that incidental
fallback is "essentially minimal redeposit." The
court further reasoned that because the CWA does
not draw lines based on the amount of pollutant
added (redeposited) it did not make sense to
prohibit "redeposit", but allow incidental fallback.
The court found fault with the American Mining
Cong, decision because that court, faced with the
incidental fallback issue, interpreted the CWA
rather than deferring to the interpretation of the
USAGE and the EPA.
The court concluded that the property contained
wetlands because it had both the characteristic
vegetation and characteristic hydrology of a
wetland. The wetlands satisfied the jurisdictional
requirement by being "hydrologically connected to
and in a continuum with other waters of the United
States," and thus "adjacent" to them.
11. Court of Claims holds that
wetlands determination and
delineation themselves are
insufficient to constitute a
compensable taking under the
Fifth Amendment:
Robbins v. The United States, 1998 U.S. Claims
LEXIS 32 (Feb. 201998).
Plaintiffs contracted to sell 38 acres of land in
Tennessee to a buyer who intended to develop it.
After the U.S. Army Corps of Engineers (USAGE)
determined that the property contained jurisdictional
wetlands, the contract was canceled. Plaintiffs
never submitted a § 404 permit application to
develop the wetlands. Plaintiffs filed a complaint to
recover damages from the USAGE'S alleged taking
of the land sale contract or alternatively, the taking
of the property without compensation in violation of
the Fifth Amendment.
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The court analyzed the takings issue via the "two-
tiered" inquiry outlined in M & J Coal Co. v. United
States. 47 F.3d 1148, 1153-54 (Fed. Cir. 1995).
First, the court assesses the nature of the land
owner's property interest to determine whether a
compensable interests exists. Second, after the
property interest is established, the court
determines whether the government's action
constitutes a compensable taking of private
property for a public purpose. The court added a
third factor to its analysis, the extent to which the
government action interferes with plaintiffs'
reasonable investment-backed expectations, Penn
Central Transp. Co. v. New York City, 438 U.S.
104, 124 (1978). The court explained that
"government action that merely frustrates
expectations under a contract does not constitute a
taking." Thus, the court found that the wetland
determination and delineation themselves were
insufficient to constitute a compensable taking as
they did not supply the requisite government action.
Furthermore, the court noted that the possibility that
the USAGE still could have granted plaintiffs a
permit precluded the wetland determination from
constituting a taking.
12. District court holds the U.S. Army
Corps of Engineers has
jurisdiction over isolated
intrastate waters that provide a
habitat for migratory birds even if
the particular birds on the site do
not substantially affect interstate
commerce:
Solid Waste Agency of Northern Cook County v.
U.S. Army Corps of Engineers, 1998 U.S. Dist.
LEXIS 3994 (D.N. IL E, March 25, 1998).
The Corps initially determined that the property did
not contain any wetlands. The Corps later asserted
jurisdiction over the SWANCC property because
migratory birds had been observed there and the
waters were used or could be used as a habitat by
migratory birds. Two subsequent applications for a
section 404 permit were denied.
The court does not agree with the 4th Circuit, in
U.S. v. Wilson. 133 F.3d 251 (4th Cir. 1997), that
the Lopez decision puts regulation of intrastate
migratory bird habitats beyond the reach of the
commerce clause. Migratory birds are considered
proper subjects for regulation under the commerce
clause. Isolated wetlands provide habitat to
migratory birds whose existence supports interstate
commerce. The migratory bird rule is a valid
application of the CWA because the scope of
jurisdiction under the CWA tracks that of the
commerce clause and the commerce clause allows
regulation of intrastate migratory bird habitats.
13. District court reconsiders ruling
on sidecasting in light of Wilson
and holds sidecasting constitutes
does not discharge for purposes
of CWA:
U.S. v. Deaton, Action No. MJG-95-2140 (Jun. 23,
1998).
The United States brought an action against
defendants James and Rebecca Deaton under §§
301 (a) and 404 of the CWA that asserted
defendants had failed to obtain a permit for
excavating a drainage ditch within a wetland area
and "sidecasting" the excavated material such that
is was deposited next to the ditch within the
wetland. In a Corrected Memorandum and Order
issued September 22,1997, the court had held that
defendants' sidecasting constituted the discharge of
pollutants into water of the U.S. (deemed adjacent
wetlands) in violation of the CWA. In this action,
the court reconsidered that outcome in light of the
Fourth Circuit's decision in U.S. v. Wilson, 133 F.3d
251 (4th Cir. 1997).
Defendants argued that the court lacked jurisdiction
over the Deaton's property and that the sidecasting
did not constitute the discharge of a pollutant into
waters of the U.S. The court focused on the
sidecasting issue and did not address the
jurisdictional question. The court observed that in
Wilson the Fourth Circuit held that sidecasting (i.e.,
the redepositing of soils excavated from a wetland
next to the ditch being created but within the
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wetland) did not involve the addition of pollutants to
the wetland, and therefore did not constitute a
"discharge," as that term is defined under the CWA.
Given this precedent, this court stated it was
obliged to predict that the Fourth Circuit would hold
that sidecasting did not constitute a discharge of
pollutants and, thus, ruled that the sidecasting in
this case did not constitute a prohibited discharge.
Despite this outcome, the court observed because
two of the three judges that heard Wilson did not
join that portion of the Wilson opinion that
discussed sidecasting, the issue may not be well
settled in the Fourth Circuit. Moreover, the court
restated its belief that the reasoning and decisions
of the Fifth, Ninth, and Eleventh Circuits on this
issue, which have held that sidecasting does
constitute discharge, remained more compelling in
the court's view. Nevertheless, the court vacated it
prior decision to extent it held that sidecasting
constituted discharge and granted defendant's
motion for summary judgment.
14. District court holds that only EPA,
not the USAGE, has statutory
authority under the CWA to bring
a civil enforcement action to
enforce violations of § 404 where
no § 404 permit has been issued:
U.S. v. Hallmark Construction Company, 1998 U.S.
Dist. LEXIS 11892 (D. Illinois, July 23, 1998).
Plaintiff the United States sued defendant Hallmark
Construction Company for filling what the U.S.
Army Corps of Engineers (USAGE) deemed a five
acre isolated wetland (Area B) without first
obtaining authorization under § 404 of the CWA.
Plaintiff sought restoration or mitigation, whereas
defendant argued that the U.S. lacked jurisdiction
over Area B, the USAGE was not a proper plaintiff,
and the claim was barred by the statute of
limitations.
The court's decision focused on propriety of the
USAGE, and the U.S. as its representative, as a
plaintiff. Defendant argued that under the CWA the
USAGE had authority to issue and enforce § 404
permits, including the authority to bring a civil action
for violations of § 404 permits, but did not have
authority to seek civil penalties for a "permitless"
discharge. Under § 319(b), defendant argued that
such authority resides solely with EPA. Defendant
added that the 1989 MOU between EPA and the
USAGE improperly allowed USAGE to assume
enforcement authority for violations of § 404
restrictions. Upon examination of CWA §§1319
and 1344, the court agreed, and held that under
these sections of the CWA Congress has not
delegated authority to the USAGE to commence
a civil action to enforce dredge and fill
violations where such violations occur without
a permit. The court observed that only Congress
could delegate such enforcement authority to the
USAGE, and Congress had not done so. The court
acknowledged that the sole judicial decision to
examine this issue reached the opposite
conclusion, however, the court found that decision
did so without citing any authority. Relying on the
language of the CWA, this court declined to
"reallocate the statute's express delegation of
enforcement authority." Based on this holding, the
court dismissed the complaint and declined to
address the remaining arguments.
[Note: The U.S. moved for reconsideration and on
September 9, 1998, this court vacated the above
decision and held that § 404 does grant USAGE
authority to bring an enforcement action in
instances of a permitless discharge, and that the
U.S. was a proper party plaintiff. U.S. v. Hallmark,
14 F. Supp. 2d 1065 (N.D. II. Sept. 9, 1998)].
15. District court holds that USAGE
has authority under CWA to bring
an enforcement action in
instances of a permitless
discharge of dredge and fill
materials into waters of U.S., and
sustains application of migratory
bird rule to isolated intrastate
wetlands:
U.S. v. Hallmark Construction Company, 14 F.
Supp. 2d 1065 (N.D. II. Sept. 9, 1998).
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Plaintiff the United States sued defendant Hallmark
Construction Company for filling what the U.S.
Army Corps of Engineers (USAGE) deemed a five
acre isolated intrastate wetland (Area B) without
first obtaining authorization under § 404 of the
CWA. Plaintiff sought restoration or mitigation,
whereas defendant argued that the U.S. lacked
jurisdiction over Area B, the USAGE was not a
proper plaintiff, and the claim was barred by the
statute of limitations. In a prior decision, this court
held that only EPA, not the USAGE, had statutory
authority under the CWA to bring a civil
enforcement action to enforce violations of § 404
where no § 404 permit had been issued. In its
initial decision, the court found that the U.S. (as
representative for USAGE) was not a proper plaintiff
and dismissed plaintiff's suit. 1998 U.S. Dist. Lexis
11892(N.D. II. Jul. 23, 1998). The U.S. moved for
reconsideration of the July 23rd decision, and the
court considered plaintiffs jurisdictional and statute
of limitations arguments.
On reconsideration the court vacated its earlier
decision and held that § 404 does grant USAGE
authority to bring an enforcement action in
instances of a permitless discharge, and that
the U.S. was a proper party plaintiff. The court
stated that under § 404(s)(3), USAGE clearly could
bring a civil enforcement action in instances where
it could issue a compliance order under § 404(s)(1).
The court then observed that, under the CWA, the
USAGE retained the authority it is was granted
under the Rivers Act to issue permits for dredge
and fill activities. In addition, the court observed
that CWA § 404 provided the USAGE with authority
to issue permits for discharges of dredge and fill
material into navigable waters. The court reasoned
that such power to permit these activities and
materials implied authority to exert control over
them. The court noted that the USAGE currently
has authority over dredge and fill discharge
activities that may be used in non-permitting ways
(e.g., authority to issue cease and desist orders for
unauthorized activity in areas under its control, see,
33 C.F.R. § 209.120(g)(12)(l)). Given all this, the
court stated that "[i]f the Corps has permit control
over wetlands areas to ensure their protection, it
most certainly has the power to stop unlawful
permitless activity that endangers navigable waters.
The authority to issue cease and desist order is
inherent in its control of discharge into navigable
waters."
As for plaintiffs argument that USAGE lacked
jurisdiction over Area B because the USAGE'S
"migratory bird rule" (33 C.F.R. § 328.3(a)(3))
exceeded the limits of Commerce Clause authority,
the court, in an additional memorandum and order,
dismissed defendant's motion for summary
judgement. Defendant asserted that the migratory
bird rule exceeded the authority provided to
Congress under the Commerce Clause, and that
the leading Seventh Circuit case on this issue,
Hoffman Homes. Inc.. v. EPA. 999 F.2d 256 (7th
Cir. 1993) (Hoffman II) (migratory bird rule and
EPA's regulation of isolated wetlands did not violate
the Commerce Clause) should be reexamined
subsequent to U.S. v. Lopez, 514 U.S. 549 (1995)
(federal law imposing criminal sanctions for
possession of handguns in local school zones
exceeded Commerce Clause authority). This court
disagreed and stated that in Hoffman //the Seventh
Circuit explicitly recognized that the cumulative loss
of wetland habitats had reduced the population of
many bird species and had impaired the ability of
people to hunt, trap, and observe those migratory
birds, thereby affecting commerce. In addition, the
court stated it was not clear that Lopez would
dictate a different result in Hoffman II. Finally, the
court found that Hoffman II implied that the USAGE
had not exceeded its CWA authority by regulating
intrastate isolated wetlands, since that court
ultimately applied the USAGE regulatory definition.
Thus, based on the law of the circuit, the court held
that the USAGE did not exceed its authority under
the Commerce Clause or the CWA by regulating
intrastate isolated wetlands as "waters of the U.S."
However, the court found that genuine evidentiary
issues remained as to whether Area B was a
jurisdictional "farmed wetland" or a non-
jurisdictional "prior converted cropland."
16. District court holds that USAGE
cancellation of application for
coverage under nationwide § 404
permit based on applicant's
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inaction and issuance of
cease and desist order for
potential CWA/RHA violations
were not final agency actions
under the APA:
Inn of Daphne, Inc., v. The United States of
America. 1998 U.S. Dist. LEXIS 13991 (S.D. Al.
Aug. 26, 1998).
Plaintiffs brought an action seeking declaratory
judgement that plaintiff was entitled to build a boat
ramp that extended off plaintiffs' property under
nationwide permit 36 and that the U.S. Army Corps
of Engineers' (USAGE) denial of permission to
repair a failed retaining wall under nationwide
permit 3 was arbitrary and capricious. The United
States moved for judgement on the pleadings,
arguing that the USAGE had not taken final agency
action.
Due to concern about prehistoric artifacts possibly
being on plaintiffs' property, USAGE had denied
plaintiffs permission to rebuild the failed retaining
wall under nationwide permit 3 unless plaintiffs
obtained an archeological survey of the property
acceptable to defendant and the State Historical
Preservation Officer. Plaintiff failed to obtain such
a survey and the USAGE ultimately canceled the
application for coverage under the nationwide
permit based on plaintiffs' failure to respond to the
request for the survey.
The central issue was whether the USAGE'S
cancellation of the plaintiffs' application for
coverage under nationwide permit 3 constituted
final agency action. The court held that it did
not. The court cited the provisions of 5 U.S.C. §
704 and several case decisions, including Bennett
v. Spear, 520 U.S. 154 (1997), in finding that in no
way could cancellation of plaintiffs' application for
coverage under the nationwide permit "be
considered 'consummation of the [Corps']
decisionmaking process'," since the decision to
cancel the application was not based on the merits,
but on plaintiffs' inaction, and plaintiffs still could
have applied for an individual permit. In addition,
the court found that no action by USAGE carried
any legal consequence, since plaintiffs had other
legal options for permit coverage and the cease
and desist order merely informed plaintiffs that
USAGE believed that jurisdiction existed. The court
concluded that as of the date the complaint was
filed, the USAGE had neither "granted nor denied
plaintiffs permission to repair the failed retaining
wall, nor had they taken legal action to require the
plaintiffs to abate the potential violations of the RHA
and/or CWA via construction of a boat ramp into
D'Olive Creek." Having found no final agency
action, the court dismissed the action for lack of
subject matter jurisdiction.
17. District court finds inadequate
subject matter jurisdiction where
plaintiff challenged USAGE'S
authority to require a dredge and
fill permit based on the fact that
USAGE had delegated authority to
issue such permits to the State of
Michigan:
Charfoos and Co. v. West, 1998 U.S. Dist. LEXIS
7112 (ED. Mich. 1998).
Plaintiff Charfoos and Co., obtained a state permit
to fill 43 acres of wetlands and sought a federal
permit to do the same, while simultaneously
challenging the U.S. Corps of Engineers (USAGE)
jurisdiction to require the federal permit. Plaintiffs
asserted that the subject wetlands were not
navigable waters and were not adjacent to
navigable waters, and therefore were subject only
to the State of Michigan's permit authority. The
USAGE had delegated authority to issue wetland
permits to Michigan, with the exception of waters
used or susceptible to use in interstate commerce
and adjacent wetlands. The State program
operated pursuant to an MOA, which listed those
waters for which permitting authority was not
delegated, and provided for joint permitting of
activities in such waters. The defendant USAGE
challenged the courts subject matter jurisdiction to
hear the case, arguing that the court could not
entertain a challenge to the USAGE'S jurisdiction
over a specific wetland.
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In deciding this case, the court followed Southern
Ohio Coal v. Office of Surface Mining Reclamation
and Enforcement, 20 F.3d 1418 (6th Cir. 1994)
(district court lacked jurisdiction to review pre-
enforcement action by EPA where delegated state
issued discharge permit for untreated mine water
and EPA threatened to issue compliance order if
discharge was not stopped). The court observed
that the holding of Southern Ohio applied not
only to orders issued once a violation had been
identified, but also to the investigatory work
necessary to discover a violation, and to
challenges to the jurisdiction of the oversight
agency to issue pre-enforcement orders. The
court observed that such a challenge, which the
court viewed as analogous to plaintiffs
challenge here, was improper at this time. The
court also rejected plaintiffs claims that final agency
action had occurred, and found that judicial review
was not available under the APA because under
Southern Ohio the Sixth Circuit had held that the
CWA precluded review of pre-enforcement actions.
The court also rejected plaintiff's arguments that
they were only seeking to enforce their contractual
rights under the MOA. Finally, the court rejected
plaintiffs claim that under Leedom v Kvne, 358 U.S.
184 (1958), the court could review agency actions
that were '"in excess of its delegated powers and
contrary to a specific [statutory] prohibition."' The
court found that Leedom was inapplicable here
because the USAGE had not acted in a manner
clearly '"outside of it delineated authority."'
18. District court upholds USAGE'S
decision to allow coverage under
nationwide permits where USAGE
engaged in reasoned decision
making and plaintiff failed to offer
contradictory evidence other than
expert testimony:
Mylith Park Lot Owners Assoc. v. U.S.
Environmental Protection Agency, 1998 U.S. Dist.
LEXIS 3227 (Mar. 17, 1998).
Plaintiff Mylith Park Lot Owners Association sought
judicial review under the APA of the U.S. Army
Corps of Engineers' (USAGE) decision to authorize
construction of a berm and sewer line for a housing
development pursuant to nationwide permits 12 and
26, rather than subject to individual permits as
authorized under 33 U.S.C. § 1344. In a prior
decision issued on November 14,1997, Magistrate
Judge Bobrick of this court issued a report and
recommendations that defendant's motion for
summary judgment be granted and plaintiff's motion
for summary judgment be denied. Plaintiffs sought
an extension to file objections to these
recommendations, but never filed those objections.
In this action, the district court reviewed the
November 14,1997 recommendations to determine
whether they were arbitrary and capricious or the
result of an abuse of discretion, in violation of the
APA.
Plaintiffs argued that the USAGE'S issuance of
general permit coverage for the berm and sewer
line was arbitrary and capricious because USAGE
had not engaged in a meaningful evaluation of the
data and scientific evidence, had relied on
inaccurate or unscientific environmental
evaluations, had disregarded the opinions of
plaintiff's expert, did not consider local impacts on
wildlife, and had ignored the amount of wetlands
that would be impacted by the project. The court
first held, based on plaintiffs failure to file
objections to the November 14, 1997
recommendations, that plaintiffs had waived
their right to appeal those recommendations.
The court then held that the November 14,1997
recommendations contained no error of law and
that the findings of fact upon which the
recommendations were based had adequate
support in the record. The court, therefore,
granted defendant's motion for summary
judgement.
The court stated that plaintiffs had provided little, if
any, evidence that challenged the validity of the
scientific data used by the USAGE to formulate its
decision. The court noted that USAGE required the
permittee to notify USAGE prior to filling any
wetlands so that it could conduct a review of
whether an individual permit was warranted, and
that the USAGE concluded that the project would
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"not cause more than a minimal adverse impact on
the wetlands." The court also pointed out that
based on the highly deferential standard of review
applied to the USAGE'S decision, plaintiffs expert's
opinion, for which little or no foundation and basis
had been provided, was irrelevant as a matter of
law. The court further observed that the record
demonstrated that USAGE had considered potential
impacts on local plant life as well as threatened and
endangered species, and had considered the
berms potential effect on the wetland, as well as on
flooding and groundwater. Given how USAGE had
proceeded and the fact that the project would only
adversely affect 0.9 acres of wetland, the court
found that USAGE'S decision was "not arbitrary and
capricious nor the result of an abuse of discretion."
19. Court of Claims holds that under
ripeness doctrine plaintiff's
takings claim accrued for
purposes of applying the statute
of limitations when permit
application was denied on the
merits and in such manner as to
suggest further efforts would be
futile:
Cristina Investment Corp. v. United States, 40 Fed
Cl. 571 (1998).
Plaintiffs Cristina Investment Corp., and Cris
Realms Inc., broughtaclaim on February21,1995,
against the U.S. Army Corps of Engineers (USAGE)
asserting that USAGE'S selection of an alignment
for a government levee proscribed the development
of plaintiff's wetland property and constituted a
taking of such property, which should have been
compensated in the amount of $ 2,156,000. On
September 21, 1979, USAGE had denied a
separate § 404 permit application (that of Bayou
des Families Development Corp., or BDF) for a
private levee in a different alignment that would
have allowed plaintiffs development.
Defendant argued that all events fixing liability had
occurred by September 21, 1979, and, therefore,
plaintiff's claim was barred by the six-year statute of
limitation (28 U.S.C. § 2501). Plaintiffs argued that,
notwithstanding the USAGE'S denial of BDF's
permit application on September 21, 1979, legal
challenges to the denial of the BDF permit and local
political debate suggested the possibility that either
BDF or USAGE would locate a levee such that
plaintiffs development could proceed. Plaintiffs
argued by analogy to the Dickinson stabilization
principle, which provides that a takings claim that
arises from a continuing physical process does not
accrue until the physical process has stabilized,
(See, U.S. v. Dickinson. 331 U.S. 745, 749 (1947)).
Under this principle plaintiff maintained that their
claim did not accrue until the political process
affecting location of the levee had stabilized, which
was in either 1989 or 1990. The court observed
that the Dickinson principle only applied to takings
that involved a continuous physical process and,
therefore, it was not the correct analytical
framework within which to consider plaintiffs'
claims. Rather, the court stated that the ripeness
doctrine was appropriate framework within which to
consider plaintiffs' claims.
Underthe ripeness doctrine, the court observed
that a government denial of a permit would be
considered final, and any related takings would
accrue, if the property owner had made a proper
permit application and such application was
denied on the merits and in such a way as to
suggest that reapplication for a modified plan
would be futile. Applying these criteria to the
claims presented by plaintiff Cristina Investment
Corp., the court found that the USAGE'S September
21, 1979 denial of BDF's permit application was
final because USAGE'S decision had addressed the
merits of BDF's proposal and had rejected it on
ecological grounds, including the "unchanging fact
that the wetlands at issue here were within a
protected [national park] zone." Based on this, the
court found that plaintiff's claim accrued as of
September 21, 1979 and held that plaintiff's claim
was barred by the six-year statute of limitation. The
court denied plaintiff Cris Realms claim based on
the fact that it did not own the property in question
as of the date of the government's final action.
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G. Citizen Suits
1. Jurisdiction
a. District court holds that EPA has
no mandatory duty to oppose a
State's CAFO environmental
strategy that may not be fully
consistent with CWA
requirements where application
of the strategy has not been
shown to result in a violation of
CWA standards or orders, nor has
the strategy been shown to
effectuate a change in water
quality standards:
Cross Timbers Concerned Citizens v. Jane
Saginaw, Regional Administrator, U.S. EPA, Region
IV: and Paul Johnson, Chief, U.S. Department of
Agriculture, 1997 U.S. Dist. Lexis 20346 (N.D.
Texas, December 16, 1997).
Plaintiffs sought relief against the U.S. EPA and
U.S. Department of Agriculture, Natural Resource
Conservation Service (NRCS), for allegedly failing
to take action regarding a Texas strategy
developed by the Tarleton Institute for Applied
Environmental Research (TIAER) that addressed
concentrated animal feeding operations (CAFOs)
as non-point source discharges. Plaintiffs alleged
that the strategy violated the CWA, and that EPA
both failed to act regarding the strategy and
condoned it by providing grants to support the
strategy. Defendants argued that the court had no
jurisdiction to hear the claims brought against EPA
or NRCS under the Clean Water Act.
Plaintiff asserted jurisdiction under the citizen suit
provisions of the CWA (33 U.S.C. § 1365(a)), as
well as under the APA (review of final agency action
to determine whether it was arbitrary and
capricious). Under the citizen suit provisions of the
CWA, plaintiffs argued that EPA had a mandatory
duty to oppose the State's environmental strategy
which did not comply with the standard or permit
that EPA had already required under the CWA.
The court disagreed. The court found that
plaintiffs lacked jurisdiction under § 1365(a)(1)
because the plaintiffs: 1) had not asserted any
violation of an effluent standard or limitation or
of an order of EPA or a state, as required by §
1365(a)(1), and 2) because § 1365(a)(1) could not
be read as providing a basis for a citizen suit
against the EPA as adminstrator of the CWA
because to do so would render § 1365(a)(2)
meaningless. (See, Bennet v. Spear. 520 U.S.
154 (1997)). The court also found that plaintiffs
lacked jurisdiction under § 1365(a)(2) because
EPA was under no mandatory duty to act
regarding the strategy document. The court
stated that EPA had fulfilled its duty under 33
U.S.C. § 1311(e) by having promulgated effluent
limitations for feedlots (see, 40 C.F.R. § 412) and
having applied those guidelines to CAFOs in Texas
through a general CAFO permit issued in 1993.
The court also examined whether any duty was
imposed under 33 U.S.C. § 1313, and found that
plaintiff had neither argued that the strategy
document constituted a change in state water
quality standards, nor had plaintiffs taken the
requisite actions to trigger EPA's duty to act on
such changes, if indeed any changes had occurred.
Thus, the court held that plaintiff's claim was not
ripe for review. The court observed that
adjudication of these claims should be deferred until
EPA had the opportunity to accomplish its duties
and the plaintiff had the opportunity to clarify and
finalize its case if EPA failed. The court also noted
that this suit appeared to be an action for
enforcement, and that under well established Fifth
Circuit law, "enforcement decisions are strictly
discretionary with the EPA."
With regard to plaintiff's APA argument, the court
held that it may not review the agency action in
question for arbitrariness or capriciousness
because it did not constitute a "final agency action"
as required under the APA.
b. District court holds USACE is not
a proper defendant for an action
under CWA §505(a)(1):
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Stewart v. Potts, U.S. Army Corps of Engineers,
1997 U.S. Dist. LEXIS 17388 (S.D. Tex. Oct. 30
1997).
Plaintiffs S. Stewart, the Houston Audubon Society,
and the Sierra Club, brought suit against the District
Engineer for the U.S. Army Corps of Engineers
(USAGE), the Secretary of the Army (collectively
federal defendants), and the City and Mayor of
Lake Jackson. The suit sought relief under the
Administrative Procedure Act (APA), the Clean
Water Act (CWA) and the Declaratory Judgment
Act (DJA) for violations of National Environmental
Policy Act (NEPA) and the CWA. The claims were
based on the USAGE'S issuance of a CWA § 404
permit to the City of Lake Jackson. Plaintiffs
alleged that in considering the permit application
and issuing the § 404 permit, the USAGE
improperly eliminated a substantial area within the
proposed golf course site from classification and
consideration as wetlands.
The federal defendants filed a partial motion to
dismiss the claims that arose under the CWA.
Defendants argued that under CWA § 505(a)(1),
the CWA citizen suit provisions authorized suit
against regulated parties, but not against the
USAGE or EPA. The court agreed, and held that
plaintiffs could not maintain a suit against the
USAGE under § 505(a)(1) of the CWA for an
alleged violation of USAGE'S duty to administer
the § 404 permit program. The court observed
that the USAGE was not a proper defendant to an
action under 505(a)(1). (See, Bennett v. Spear,
520, U.S., 154, 117S. Ct. 1154, 137 L Ed. 2d 281
(1997) (where a provision of the ESA analogous to
the citizen suit provision of the CWA was held to
only allow civil actions against regulated parties)).
The court granted the federal defendant's motion to
dismiss the CWA claims.
The federal defendants also argued that plaintiffs
could not bring their claims under the federal
mandamus provision, 28 U.S.C. § 1361, and, again,
the court agreed. The court found that the
mandamus provisions applied "only where
government officials clearly have failed to perform
non-discretionary duties." The court observed that
although the USAGE'S decision regarding permit
issuance must follow proper procedures, that
decision was entitled to deference. Thus, the court
held that defendants owed no duty to the plaintiffs
that would have provided for review of the plaintiff's
claims under the Mandamus Act. These claims
were also dismissed.
Although the court dismissed plaintiff's claims under
the Clean Water and Mandamus Acts, the court
found that plaintiff's claims under the APA could
properly be brought. The court instructed the
parties to file summary judgment motions
addressing plaintiff's APA claims.
The City of Lake Jackson filed a motion to dismiss
the complaint in its entirety. The City argued that
plaintiff's APA and NEPA claims against the City
should have been dismissed because the City was
a non-federal entity. The court agreed and
dismissed these claims. With regard to the CWA
claims, the City argued that plaintiff's had not
alleged the City was in violation of an effluent
standard or order and, again, the court agreed and
found that the plaintiffs had failed to state a claim
against the City for violation of the CWA (i.e.,
plaintiffs had failed to plead a prima facie case for
violation of the CWA). Finally, with respect to
plaintiff's request for a declaratory judgment stating
that the City would have been in violation of the
CWA if the City had attempted to build the golf
course, the court found that the Declaratory
Judgment Act did not expand the jurisdiction of
federal courts, and since plaintiffs lacked
jurisdiction under the CWA, they had no basis to
seek declaratory judgment. The court dismissed
these claims as well.
c. District court holds that exercise
of EPA Adminstrator's authority
to investigate citizen complaints
and to make findings relative to
these complaints is discretionary,
not mandatory:
Weatherby Lake Improvement Company v.
Browner. No. 96-115-CV-W-8 (W.D. Mo. Aug. 17,
1997).
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Plaintiff, Weatherby Lake Improvement Company,
brought a citizen suit alleging that developers either
discharged pollutants into the Weatherby Lake
watershed or failed to install and maintain proper
erosion and sedimentation controls. In addition,
plaintiff sued the EPA Adminstrator for allegedly
failing to perform the nondiscretionary act of
withdrawing approval of the state NPDES permitting
program where it was not being administered
according to the CWA requirements pursuant to 33
U.S.C. § 1251 et seq. The court found that EPA's
authority to investigate citizen complaints and
to make findings of violations, which would
then force EPA to withdraw state authority to
administer a state NPDES program, is
discretionary, not mandatory. The court
explained that plaintiff could petition EPA to
commence proceedings to withdraw an approved
NPDES program, or it may maintain suit against
those defendants allegedly violating CWA
requirements. However, plaintiff failed to state a
claim against EPA upon which relief could be
granted and failed to demonstrate that the court
had subject matter jurisdiction over its claim against
the EPA. Accordingly, the court granted defendant
Browner's motion to dismiss the claims against
EPA.
d. District court holds that plaintiffs'
citizen suit seeking civil penalties
was moot where injunctive relief
had been granted and no
continuing violations were
alleged, since civil penalty would
not redress plaintiffs injury:
Roland Dubois v. U.S. Department of Agriculture,
1998 U.S. Dist. LEXIS 15198 (D. N.H. Sept. 30,
1998).
Plaintiffs brought a citizen suit that sought injunctive
relief as well as to compel defendant, Loon
Mountain Recreation Corporation, to pay civil
penalties resulting from violations of the Clean
Water Act. The initial disposition of this case had
been appealed to the First Circuit and remanded
from that court with instructions for the district court
to grant injunctive relief, which was in fact granted.
The remaining issue before the district court was
whether civil penalties should be assessed against
Loon for past violations. Loon moved to dismiss in
light of the fact that an injunction was already in
place and that plaintiff's civil claim did not present
a justiciable case.
The district court examined the issues of standing
and mootness in the context of Steel Co. v. Citizens
for a Better Env't. 140 L.Ed. 2d 210, 118 S. Ct.
1003 (1998), which held that a plaintiff seeking
declarative and injunctive relief for past violations of
EPCRA lacked standing since such remedies would
not redress any legitimate Article III injury. Here,
the court found that the holding of Steel Co., was
equally applicable to citizen suits seeking civil
penalties under the CWA since both require such
penalties to be paid to the U.S. Treasury. Plaintiffs
argued that this case could be distinguished
because they had alleged continuing violations.
The court stated that even if Steel Co., could be
distinguished, plaintiffs claims became moot when
the court issued its injunction against further
violations. The court observed that since plaintiffs
had not alleged any violations of the terms of the
injunction, nor offered evidence of any continuing
violations, an award of civil penalties would not
deter further violations. The court observed that
since the CWA requires that civil penalties be
paid to the federal government, plaintiffs
"deriving comfort and joy from the fact that the
U.S. Treasury is not cheated, [did] not redress a
cognizable injury under Article III." Thus, the
district court held that plaintiffs claim for civil
penalties was moot, regardless of whether they had
standing to seek such penalties when the suit was
brought. The court granted Loon's partial motion to
dismiss for lack of subject matter jurisdiction.
2. Standing
a. Fifth Circuit holds that, in
determining whether non-profit
corporation has members that
could assert standing for
purposes of establishing
organization's associational
standing, formal membership is
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not controlling where there is
sufficient "indicia of
membership":
Friends of the Earth v. Chevron Chemical, 129 F.3d
826(5thCir. 1997).
Plaintiffs appellants Friends of the Earth (FOE)
brought a citizen suit under the Clean Water Act
(CWA) against Chevron for violations of the terms
of Chevron's NPDES permit. The district court
dismissed the action for lack of subject matter
jurisdiction, having found that FOE lacked
associational standing because it had no members
under corporate law. FOE's bylaws provided that
its membership requirements were to be set by its
board of directors, but that board had never acted
to determine such requirements. FOE appealed.
The appellate court first observed that the Supreme
Court in Hunt v. Washington State Apple
Advertising Commission, 432 U.S. 333, 97 S. Ct.
2434, 53 L. Ed. 2d 383 (1977) established that an
organization can assert associational standing to
represent the interests of its members where it
could show 1) one or more the organization's
members would have standing on his or her own
right; 2) the interests the organization seeks to
protect in the lawsuit are germane to the purposes
of the organization; and 3) the nature of the case
does not require the participation of the individual
member as plaintiffs. The appellate court then
noted that the central issue in this appeal pertained
to the first criterion under Hunt, whether FOE had
members who would have been entitled to standing
on their own right.
The court observed that an organization's form
under state law does not affect its federal standing
(see, Sierra Association for the Environment v.
Federal Energy Regulatory Commission, 744 F.2d
661 (9th Cir. 1984)). Rather, the court followed
Hunt and decisions from other circuits in
applying a functional approach that focused on
using an "indicia of membership" test to
determine whether FOE had members whose
interests FOE could represent in court. In
applying this test, the court observed that the
purported members of FOE elected its governing
body, financed its operations, had voluntarily
associated themselves with FOE, and had
consistently asserted they were members of FOE.
In addition, the court observed that the suit was
within FOE's central purpose, and, thus, within the
"scope of reasons that individuals joined the
organization." Based on these facts, the court
concluded that FOE had associational standing to
represent its members. The court reversed the
district court decision and remanded the case for
reconsideration.
The dissent argued that the majority unnecessarily
extended the standards for associational standing
to non-profit corporations by improperly expanding
Hunt, a case that involved a State agency, to cover
non-profit corporations, and by selectively citing
other authority. The dissent also asserted that FOE
had clear procedures to establish its membership
under the laws of the District of Columbia, and
failed to do so. In reaching its decision, the dissent
argued that the majority had effectively relieved
FOE of some of its Article III standing burden.
b. Tenth Circuit holds that plaintiff
lacks standing to challenge
endangered species consultation
requirements within EPA's
authorization of Oklahoma's NPDES
program because such requirements
only apply to sensitive waters and
plaintiff failed to allege members
discharge to or intend to discharge
to such waters:
American Forest & Paper Ass'n v. U.S. EPA, 154
F.3d 1155 (10th Cir. 1998).
Plaintiff American Forest & Paper Association
challenged EPA's approval of the Oklahoma
National Pollutant discharge Elimination System
permit program, particularly those portions of the
program that address endangered species
consultation procedures between Oklahoma and
the U.S. Fish and Wildlife Service (FWS). In
applying for authorization to administer the NPDES
program, Oklahoma agreed to a procedure that
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specified how ODEQ and FWS would work together
to ensure NPDES permits for discharges to
sensitive waters complied with ESA requirements.
This procedure was formally adopted in an MOU,
which was incorporated by reference in the final
rule approving Oklahoma's NPDES program.
Plaintiffs argued that EPA acted beyond it authority
by requiring Oklahoma to comply with the ESA
through the consultation process that was made a
condition of the State's NPDES authorization. EPA
countered that plaintiffs lacked standing to bring the
challenge, that the challenge was not ripe, and that
the Agency had acted within the scope of its
authority.
The court held that plaintiffs lacked standing to
challenge approval of Oklahoma's NPDES
program, including the consultation
procedures, because plaintiffs had not
established that any of their members held
NPDES permits to discharge into sensitive
waters or planned to apply for such permits.
The court observed that, as an association, plaintiff
would have standing to bring suit on behalf of its
members if it could show that any of its members
would have standing to bring suit on there own
behalf. But the court found that because plaintiff
failed to assert that any of its members held permits
to discharge to sensitive waters in the State, or
planned to seek such permits, plaintiff had failed to
demonstrate sufficient "injury in fact" for purposes
of establishing Article III standing. The court stated
that plaintiff had failed to show that its members
were "among the injured." The court acknowledged
that after oral argument the Fifth Circuit held in
American Forest & Paper Ass'n v. U.S. EPA, 137
F.3d 291 (5th Cir. 1998) that plaintiff had standing
to challenge EPA's authorization of Louisiana's
NPDES program on similar grounds as alleged
here, but stated it was unclear from that opinion
whether the consultation process imposed in
Louisiana was limited to sensitive waters or applied
to all permit applications. Thus, the court found that
the Fifth Circuit decision was not necessarily
inconsistent with this court's decision.
3. Enforcement UnderComparable Law
as Bar to Citizen Suit
a. Eighth Circuit holds that
administrative enforcement
agreement between State
environmental agency and
polluter precludes pending citizen
suit seeking civil penalties where
such agreement is the result of a
diligently prosecuted
enforcement process:
Comfort Lake Assoc. v. Dresel Contracting, Inc.,
1998 U.S. App. LEXIS 3733 (8th Cir. Mar. 5 1998).
Plaintiffs Comfort Lake Association, Inc., brought a
citizen suit under the CWA seeking injunctive relief,
civil penalties, and costs and attorney's fees against
defendants Dresel Contracting Inc., and Fain
Companies for alleged violations of the storm water
regulations imposed under the CWA. Defendants
were granted an NPDES permit in the Fall of 1994
to address storm water discharges related to
construction of a Wal-Mart, and did not fully comply
with the sedimentation and erosion control
requirements. After a warning letter the Minnesota
Pollution Control Agency (MPCA) followed by
several inspections and issuance of two notices of
violation, defendants brought the site into full
compliance on May 19, 1995. The NPDES permit
was terminated in April, 1996. However, in May,
1996, MPCA issued a negotiated stipulation
agreement that imposed $12,203 in civil penalties
for all alleged permit violations known as of the
effective date of the agreement.
Following the first warning letter from MPCA,
plaintiffs had submitted a notice of intent to file a
citizen suit under CWA § 1365. The district court
had granted defendant's motion for summary
judgment and in a separate order denied plaintiffs
an award of costs and attorneys fees. Thus, the
issues presented in this case were whether M PCA's
enforcement action precluded plaintiff's claims for
injunctive relief and civil penalties, and whether the
district court abused its discretion in denying an
award to plaintiffs of costs and fees.
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With regard to the preclusion issue, the court first
examined injunctive relief and then civil penalties.
The court observed that MPCA's determination that
there was no further likelihood that violations would
recur because construction was complete and the
permit terminated was entitled to deference. The
court agreed with the Second Circuit that the claim
for injunctive relief was moot unless plaintiffs could
prove there was a realistic prospect that the
violation alleged would continue notwithstanding the
permit termination and stipulation agreement."
(See, Atlantic States Legal Found, Inc. v. Eastman
Kodak Co.. 933 F.2d 124,127 (2d Cir. 1991). The
court concluded that plaintiffs had not provided
evidence to contradict the stipulation agreement.
As for civil penalties, the court held that MPCA's
enforcement action did preclude plaintiff's effort to
obtain more severe penalties. The court stated that
although the stipulation agreement was not a res
judicata or collateral estoppel bar like a judicially
approved consent agreement, it did constitute a
final agency enforcement action that resulted from
diligent prosecution. The court found such a result
consistent with the supplementary role of citizen
suits as enforcement actions, and indicated that a
contrary result would discourage such informal
agreements as reached here. Finally, the court
concluded that since plaintiffs citizen suit had not
been a catalyst to the State's enforcement action,
no costs and attorneys fees were due plaintiffs.
4. Injunctive Relief
a. District court finds inadequate
basis to issue permanent
injunction where there is no proof
of irreparable harm occurring due
to violations of flow volume
permit limits:
Coalition for a Livable West Side v. NYC PEP, 1998
U.S. Dist. LEXIS 1955 (S.D. NY., Feb. 20, 1998).
Plaintiffs brought a citizens suit under the CWA that
alleged the New York Department of Environmental
Protection (DEP) had violated the CWA permits for
the North River Wastewater Treatment Plant and
the Wards Island Wastewater Treatment Plant by
exceeding the limits on the volume of flow directed
to these plants. Plaintiffs requested that the court
enjoin DEP from making additional hook-ups to
sewage service for Wards Island and North River
until the plants have adequate capacity to manage
the increased flow, and requested the appointment
of an expert to monitor operations at these plants.
DEP moved for summary judgment, asserting that
the flow limits were not subject to enforcement
under § 505 of the CWA. Previously, the New York
State Department of Environmental Conservation
(DEC) had brought administrative enforcement
actions against DEP regarding both plants that
resulted in consent agreements. In prior decisions,
the district court held that the these consent orders
did not bar or render moot the citizens suit and had
granted plaintiff summary judgment as to liability.
The two central issues presented here were
whether the flow limits exceeded the requirements
of the CWA and therefore were not enforceable
pursuant to the Act's citizen suit provisions; and
whether an injunction was justified. On the first
issue, the court found that the flow limitations
in the State permits were consistent with
federal requirements and, thus, were amenable
to enforcement through citizen suit. The court
found that DEP's reliance on Atlantic States Legal
Foundation, Inc., v. Eastman Kodak Co., 12 F.3d
353 (2d Cir. 1994), was misplaced, as the permits
issued in this instance did not encompass "a
greater scope of coverage than that required by
federal law."
With regard to plaintiffs request for permanent
injunctive relief, the court found that plaintiffs
had not demonstrated irreparable injury and
inadequate legal remedies. The court observed
that plaintiffs had not demonstrated that the permit
violations threatened the integrity of the receiving
waters for these plants. In addition, the court noted
that the defendant had submitted affidavits
demonstrating that both plants had been in
compliance with their flow permit limits since 1994.
The court further found no basis to appoint a
special master and, thus, denied defendant's
motion and dismissed plaintiffs' claims.
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H. Administrative Practice
1. ALJ holds that prehearing
settlement of administrative action
must be reduced to writing and that
only the Regional Administrator, not
an EPA attorney, can bind Agency in
settlement:
In the Matter of: Indoor Air Quality, 1997, No.
Docket CAA- III-074.
Respondent Solomon Schechter Day School of
Philadelphia, Inc., moved for an order to enforce
what it claimed was an oral settlement agreement
between itself and U.S. EPA. EPA opposed the
motion to enforce settlement and requested that the
motion and accompanying exhibits be stricken.
EPA denied that its counsel had orally agreed to
settle and maintained that, irregardless, such an
agreement would have been unenforceable as
matter of law.
The court stated that prehearing settlements of
administrative actions are government by Rule 18
of the Consolidated Rules of Practice. (40 C.F.R.
22.18). The court found that under Rule 18 any
settlement must be reduced to writing and that
only the Regional Administrator can formally
settle a case on half of EPA. Under Rule 18, an
EPA attorney does not have the authority to bind
the Agency by way of settlement. The court
granted EPA's motion to strike with respect to
documents that related to settlement negotiations,
citing 40 C.F.R. 22.22, which provides for the
exclusion of evidence "relating to settlement which
would be excluded in federal courts under Rule 408
of the Federal Rule of Evidence." The court
allowed in two documents that did not specifically
identify the settlement positions of the parties.
I. Enforcement
Penalties
Actions/Liabilities/
1. Third Circuit affirms district court's
use of wrongful profits approach to
calculating economic benefit factor
of CWA penalty, and finds no error
in considering parent companies
finances to determine impact of
penalty on violator:
U.S. v. Municipal Authority of Union Township, 1998
U.S. App. LEXIS 16440 (3rd Cir. July 20, 1998).
Appellant Dean Dairy, a subsidiary of Dean Food
I nc., appealed the amount of civil penalties imposed
for 1,754 violations of its IU permit and 79 instances
of interference with Union Township's POTW,
which occurred between July 1989 and April 1994.
The district court had imposed a civil penalty of $
$4,031,000 for these violations. The district court
used a bottom-up approach to calculating the
penalty (i.e., calculating the economic benefit and
adjusting that figure based on the remaining five
factors in 33 U.S.C. § 1319). The district court
found that had appellant's Fairmont plant reduced
production sufficient to comply with its permit
conditions, it was likely appellant would have lost a
major customer (PennMaid), and such loss would
have reduced appellant's revenues by $ 417,000
per year. This amount was then multiplied by the
time period of the violation, and then doubled to
provide a proper deterrent and punishment.
In this action, appellant Dean Dairy challenged the
district court's analysis of two of the six factors
considered in determining the civil penalty: the
economic benefit of the violations to Dean Dairy,
and the economic impact of the penalty upon the
Dean Dairy.
Appellant first challenged the district court's the use
of a "wrongful profits" approach to calculating the
economic benefit that resulted from the violations.
Under the wrongful profits approach, the district
court examined documented revenues that
appellant was able to retain through conduct that
violated the CWA, but which would have been lost
to appellant had appellant reduced its production
volume to achieve compliance with the conditions in
its IU permit. Appellants argued that the parties
had stipulated that appellants had received no
economic benefit from delaying the capital
investment necessary to achieve compliance, that
no published case had used the "wrongful profits"
approach, that such an approach was inconsistent
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with EPA policy, and that the government unfairly
surprised appellant by the use of this approach.
The court rejected each of these arguments.
After describing the reasons for considering
economic benefit in determining civil penalties and
noting that the maximum statutory penalty that
could have been imposed was $ 45,825,000 (based
on a top-down approach), the Third Circuit
emphasized that the CWA does not prescribe the
precise methodology that must be used in
calculating civil penalties and, thus, the district court
had considerable discretion in determining its
approach. The court observed that the facts of this
case were unique because the appellant lost money
due to its noncompliance (the fees it paid to the
POTW exceeded the cost of building and operating
its own pretreatment system). In such
circumstances, the court found that use of the
"wrongful profits" approach was neither in
conflict with the CWA nor with economic
principles, and that such an approach
represented a method other than calculating
delayed or avoided capital expenditures to
remove the economic incentive for violating the
CWA where a violator was neither willing to
install the requisite treatment nor reduce
production and forego some portion of its
revenue. With regard to the remaining arguments,
the court found that EPA guidelines were not
applicable to calculating civil penalties at hearing or
trial, and that such guidelines did indeed recognize
use of the wrongful profits approach in specific
situations. The court also found that the
government had provided sufficient notice with
regard to the wrongful profits approach throughout
the trial and had reserved its right to demonstrate
appellants economic benefit from actions other than
having delayed the capital expenditures needed to
come into compliance.
Regarding consideration of the finances of
appellant's parent company, Dean Foods, Dean
Dairy argued that Dean Foods was not a party to
this action and had exercised insufficient control to
justify piercing the corporate veil. The court
rejected this argument and stated that only Dean
Dairy was penalized in this action. The court
explained that Dean Foods was only considered
with respect to ensuring that appellant Dean Dairy
had the ability pay the penalty imposed. The court
found that such consideration was appropriate,
particularly where, as here, Dean Dairy did not
retain its revenues but transferred them to Dean
Foods. The court affirmed the order of the district
court.
2. Seventh Circuit holds stipulated
daily penalty in consent decree was
p ro pe rl y e nf o reed:
U.S. v. Krillich. 126 F.3d 1035 (7th Cir. 1997).
Defendant Krillich appealed a $1.3 million judgment
imposed against him for failing to fulfill the
conditions of a consent decree, which required the
defendant to create a 3.1 acre wetland mitigation
site at a development site. The consent decree
contained a schedule with interim dates and a date
for completing the planting of the mitigation area of
May 15, 1993. The decree also included a force
majeure provision and specified that any changes
were to be in writing.
Krillich claimed that too much rain in June, 1993
prevented him from being able to complete the
required grading and excavation, and that too little
runoff from the development resulted in the failure
of the mitigation site to take on the characteristics
of a wetland. Krillich attempted on several
occasions to obtain extensions of the deadlines in
the consent decree, but when EPA rejected such
requests, never petitioned the court as the terms of
the consent decree allowed. The issue on appeal
was whether the district court properly ordered
Krillich to pay the $2,500 daily stipulated penalty.
Krillich argued that the government, through its
conduct, modified the consent decree; for
enforcement purposes, consent decrees are
interpreted as contracts and that under Illinois law
he was protected by the doctrine of impossibility
and frustration; and the government should be
equitably estopped from enforcing the penalty
provisions. The court rejected all of these
arguments. The court observed that
correspondence between Krillich, EPA, and DOJ
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clearly established that the government expected
Krillich to comply with the terms of the agreement.
The court observed that with regard to a new plan
offered by Krillich, such correspondence even
discussed potential alternatives to the daily penalty
provisions. The court specifically noted that despite
the clear and consistent nature of the government's
position, Krillich had not petitioned the court for
resolution of the conflict. With regard to the theory
of impossibility and frustration, the court observed
that these contract law provisions were akin to the
force majeure provisions in the consent decree.
The court declined to allow Krillich to rely on
impossibility and frustration when Krillich had not
been able to establish that he deserved relief under
the force majeure conditions of the decree. Finally,
the court found that, given the difficulty of proving
estoppel against the government, the fact that EPA
worked extensively with Krillich in an attempt to
complete the job, and the fact that the government
was very clear that the deadlines in the consent
agreement were unchanged, "estoppel is out of the
question."
The court held that the stipulated daily penalty
was properly enforced but, upon the
governments request, recalculated the penalty
to cover one month less noncompliance (for a
final penalty of $1,257,500).
3. Tenth Circuit holds that injunctive
relief is not a penalty for purposes of
28 U.S.C. § 2462 and that the
concurrent remedy rule does not bar
the government's claim forequitable
relief:
U.S. v. Telluride Co.. No. 97-1236 (10th Cir. June
25, 1998).
The United States appealed the district court's
grant of partial summary judgement to appellees
Telluride Co., Mountain Village Inc., and Telluride
Ski Area, Inc., (Telco) that dismissed the
government's claims for violations of the CWA that
occurred prior to October 15, 1988 based on the
five-year statute of limitations (28 U.S.C. § 2462).
The government had claimed that Telco had
illegally filled 45 acres of wetlands between 1981
and 1989. Based on these alleged violations, the
government had sought both civil penalties and
injunctive relief. The injunctive relief sought to
enjoin the further discharge of material, restore
damaged wetlands, and require the replacement of
wetlands where damaged wetlands could not be
restored. The district court applied the concurrent
remedy rule (i.e., when legal and equitable relief are
available concurrently, and the applicable statute of
limitations bars application of the legal remedy, a
court must withhold the equitable remedy as well) to
hold that § 2462 barred the government's claim for
injunctive relief. The issues on appeal were: 1)
whether § 2462 should have been held to bar
equitable relief where, by its terms, it applies to "any
civil fine, penalty or forfeiture," and 2) whether the
district court erred in having applied the concurrent
remedy rule to bar the government's equitable
claims.
With regard to whether the relevant statute of
limitations applied to equitable relief, the court
first stated that it was appropriate to interpret §
2462 narrowly against the government because
in the absence of a clear congressional
expression to limit the time within which the
government may act in its governmental
capacity, no time limitation applies. (See. E.I.
DuPont de Nemours & Co. v. Davis. 264 U.S.
456, 462 (1924)). Moreover, the court noted that
' "statutes of limitation sought to be applied to
bar the rights of the government, must receive
a strict construction in favor of the
government."' Id. The court then considered
arguments regarding whether the language of §
2462 (... "an action, suit or proceeding for the
enforcement of any civil fine, penalty, or forfeiture,
pecuniary or otherwise, shall not be entertained
unless commenced within five years from the date
when the claims first accrued...") made that
provision applicable to non-monetary penalties,
such as injunctions. The court concluded that it did,
reasoning that the term "otherwise" modified the
term "penalty." However, the court then found
that an injunction as sought here did not
constitute a penalty because the injunction
sought only to restore the wetlands that had
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been damaged to the status quo or to create
new wetlands where restoration was not
possible. The court characterized such a remedy
as restorative in nature.
On the second issue, the court found that the
district court had erred in applying the
concurrent remedy rule to bar the government's
equitable claims. The court observed that in
making its decision the district court had relied on
U.S. v. Windward Properties, Inc., 821 F.Supp. 690
(N.D. Ga. 1993), which had applied the concurrent
remedy rule to bar the government's claims for
legal and equitable relief, but that the Eleventh
Circuit had abrogated the Windward decision in
U.S. v. Banks. 115F.3d916, 919(11th Cir. 1997).
The court observed that the Banks decision
rejected application of the concurrent remedy rule
to the government "when it seeks equitable relief in
its enforcement capacity under the traditional
principles of construction discussed above." The
court stated, "for the same reasons applied in
Banks, we conclude the concurrent remedy rule
does not bar the government's claim for equitable
relief."
4. District court holds that, in the
absence of permit language
subjecting the permittee to statutory
changes, the permit's penalty
language must control in assessing
civil penalties:
U.S.v. ConAgra. Inc.. 1997 U.S. Dist. LEXIS 21401
(D. Id. Dec. 31,1997). See case summary on page
3.
5. District court uses "bottom-up"
method to calculate civil penalty of
$12,600,000 for violations of CWA:
U.S. v. Smithfield Foods, Inc., 972 F. Supp. 338
(E.D. Va. 1997).
On May 30, 1997, the court granted partial
summary judgment on counts I through V to the
United States for defendant Smithfield's violations
of the CWA. On July 18, 1997, the court granted
partial summary judgment on counts VI and VII to
the United States. The court previously found that
defendant was liable for 164 days of violation for
count V, late reporting. In this matter, the court
sought to determine 1) the days of violation for
counts l-IVand VII; 2) defendant's maximum liability
for the violations; and 3) the appropriate civil
penalty.
In calculating the days of violation, the court
first observed that it would count each violation
of a monthly average or loading limit as a
violation of every day of the month in which the
violation occurred. In addition, the court
observed that where multiple violations of the
permit occurred on the same day, the court
would deem each violation to constitute
separate day of violation. The court noted that §
309(d) of the CWA provides for a "civil penalty not
to exceed 25,000 per day for each violation"
(emphasis added), which the court observed was
not the same as a maximum penalty of $25,000 per
day. Based on the testimony of an EPA
Environmental Scientist and the defendant's DMRs,
the court found the following days of violation of
defendant's permit limits: 5112 days for
phosphorus; 459 for ammonia; 200 for kjeldahl
nitrogen (TKN); 72 for fecal coliform; 63 for total
suspended solids; 4 for pH; 4 for cyanide; 4 for
chlorine; and 1 for oil and grease. The court found
a total of 5919 days of violation of effluent limits in
the permit.
With respect to count VII, recordkeeping violations,
the court observed that defendants' records up to
December 1993 were destroyed by an employee,
and thus, defendant did not have adequate records
until December 31, 1996. The court found that the
defendant was in violation of the CWA
recordkeeping requirements for 884 days. The
defendant argued that the destruction of the
records should only have constituted a single day of
violation, but, given the strict liability nature of the
CWA, and the need to create an incentive to
comply with the recordkeeping requirements rather
than to destroy relevant records, the court declined
to treat 884 days of missing records as a single day
of violation. Overall, the court found that there were
a total of 6,982 days of violation (this total included
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violations discussed above and 15 days stipulated
to by the defendant for violation of submission of
false discharge monitoring reports), and a total
maximum statutory penalty of $174,550,000.
The court then considered the §309(d) factors to
establish the appropriate civil penalty. Key factors
in the courts reasoning were the fact that
defendants' effluent limit violations (5919 days of
violation) were frequent and severe and had a
significant impact on the environment and the
public; its late reporting violations (15 days of
violation) were moderately serious and could have
been prevented but were not made in bad faith;
defendants' submission of inaccurate DMRs (15
days of violation) was extremely serious and could
have been prevented through the use of
safeguards; and defendant's destruction of and
failure to maintain records (884 days of violation)
were extremely serious and also could have been
prevented through the use of safeguards. The
court did note that defendants made some efforts to
eliminate their discharges by connecting to the local
treatment works, believed their discharges were
permissible pursuant to a State order, provided
altered records to Virginia DEQ, and directed its
employees to comply with CWA requirements.
The court used a "bottom-up" method of
calculating the economic penalty, starting with
the defendants' economic benefit of non-
compliance ($4.2 million), and adjusting upward
from there based on the § 309(d) factors.
Accordingly, the court found the appropriate
civil penalty to was $12,600,000.
6. District court holds that civil
penalties recovered as a result of
enforcement actions brought by the
government under the CWA must be
paid into the U.S. Treasury:
U.S. v. Smithfield Foods, Inc., 1997 U.S. Dist.
LEXIS 18934 (E.D. Va. Nov. 26, 1997).
On August 8, 1997, the District Court for the
Eastern District of Virginia entered a judgment
against the defendants for $12,600,000 in civil
penalties. The court order the plaintiff to submit a
proposal for the allocation of all or part of the
penalty to the restoration of the Chesapeake Bay
and its tributaries, specifically the James and Pagan
Rivers. The government's response indicated that
according the CWA, caselaw, congressional intent,
and public policy, Smithfield had to pay the full
$12,600,000 into the U.S. Treasury.
The court observed that the CWA does not
specify where civil penalties are to be paid, but
noted that the Miscellaneous Receipt Act (31
U.S.C. § 3302(c)(1)) required "that 'a person
having custody of possession of public money'
must deposit the money with the Treasury
within a certain time limit." The court then
stated that is was its belief that a penalty,
imposed pursuant to a federal statute, in an
action brought by the federal government,
constituted public money, and, as such, it had
to be deposited in the U.S. Treasury.
The court observed that with respect to citizen suits,
it was clear that Congress intended penalties to be
paid into the Treasury. See S Rep. 92-414, at 133
(1972), reprinted in 1972 U.S.C.C.A.N. 3668,3745.
The court found only one case that examined the
issue in the context of suits brought by the
government. This case held that "once an
assessment was labeled as a civil penalty, the
money must be paid to the treasury." U.S. v. Roll
Coater. Inc.. 1991 U.S. Dist. LEXIS 8790 (S.D. Ind.
1991). The court also observed that recent bills to
amend the CWA would have provided authority to
direct penalties towards "beneficial uses," but no
such bills had yet become law.
Although the court observed that depositing the
penalties into the treasury did not, from a policy
perspective, seem to be the most effective means
of redressing environmental problems, the court
ordered that the full penalty be paid into the U.S.
Treasury.
7. District court imposes a civil penalty
of $1,500,000 for discharging
pollutants without a NPDES permit
over a 12-year period where the
violation was both serious and
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prolonged but the defendants'
ability to pay justified some
mitigation of the penalty:
U.S. v. Gulf Park Water Co.. 1998 U.S. Dist. LEXIS
12802 (S.D. Miss., Mar. 11, 1998).
In a prior decision, defendants Gulf Park Water Co.,
Johnson Properties, Inc., Glenn K. Johnson and
Michael Johnson, were found liable for discharging
pollutants from their wastewater treatment facility
into waters of the U.S. without a NPDES permit. In
this action, the court determined the amount of civil
penalties.
The court observed that defendants were in
violation of the CWA permitting requirements for 12
years (since 1985), having failed to connect their
wastewater treatment facility in Ocean Springs,
Mississippi, to the central POTW. The court
observed that in 1985 the Chancery Court of
Jackson County, Mississippi ordered defendants to
cease these discharges and find a lawful alternative
method of managing their wastewater. The district
court found that, based on the five-year statute of
limitations, defendants had committed at least
1,825 violations of the CWA. The court noted the
maximum penalty per violation was $ 25,000 per
day for violations that occurred through January 30,
1997, and $ 27,500 per violations for violations that
occurred after January 30, 1997.
Noting the split of authority regarding the
methodology for calculating civil penalties, the court
followed U.S. v. Marine Shale Processors, 81 F.3d
11329 (5th Cir. 1996) and chose to employ a top-
down method for calculating the penalty. The court
then reviewed the six statutory factors pertinent to
calculating civil penalties under the CWA. With
regard to the seriousness of the violation, the
court found that the violations were serious
solely by virtue of their 12 year duration. The
court stated that defendants knew that a perm it was
required and simply ignored that requirement. The
court rejected the argument that the violations
were any less serious because their were other
sources of pollution on the Gulf Coast, and
stated that the U.S. "is not required to establish
that environmental harm resulted from the
defendants' discharges, in order for this Court
to find the discharges 'serious'." The court
found that the defendants' discharges constituted
both an actual and potential threat to public health
and the environment. The court declined to
mitigate the civil penalty based on a lack of actual
harm.
With regard to economic benefit, the court
considered the testimony of plaintiff's expert, that
the defendants enjoyed approximately $1.2 million
benefit based on delayed and avoided costs, and
the court adjusted this estimate for incorrect
assumptions. The court concluded that $600,000
was a reasonable estimate of economic benefit.
The court then considered defendants' history of
violations and observed that defendants remained
in violation for a prolonged period, and continued to
act in violation even after the complaint in this
action had been filed. In fact, the court observed
that only an action seeking an order of contempt
prompted defendants to start the process of coming
into compliance. With regard to good faith efforts
to comply with the CWA, the court found that
although defendants were recalcitrant, there were
some mitigating circumstances that warranted
consideration and justified slight mitigation. In
assessing the economic impact of any penalty on
the defendants, the court considered plaintiff's
expert's estimate that defendants could pay a
penalty of $ 5,300,000 based on assets that could
be sold, versus defendants' expert's testimony that
defendants could not pay any penalty based on
defendant's tenuous financial condition. A special
master was appointed and ultimately concluded that
defendants could pay a penalty in excess of
$1,000,000, which the court recognized was a
significant reduction in the potential penalty. The
court concluded that defendants must pay a civil
penalty of $ 1,500,000 for their CWA violations.
8. EAB upholds ALJ penalty
assessment on grounds that failure
to challenge a State-issued permit in
a timely manner precludes raising
objections years later in an
enforcement proceeding:
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In re: General Motors Corporation, 1997 CWA
LEXIS 13 (Dec. 24, 1997).
On June 16, 1988, the Michigan Department of
Natural Resources (MDNR) issued General Motors
(GM) a storm water discharge permit containing
numerical discharge limits for copper, lead, and
zinc. The permit provided for an appeal to the
Michigan Water Resources Commission (MWRC)
within 60 days of permit issuance. GM never filed
an administrative challenge to the permit. The
permit also stated that a permit renewal request
must be submitted by April 1, 1990. GM did not
submit its renewal application until May 18, 1990.
It was undisputed that discharges from the GM
facility outfall exceeded the permit's limitations for
copper, lead, and zinc. In May and December of
1991, prior to filing a complaint, EPA Region V
issued two notices of violation and orders for
compliance requiring certain actions be taken.
After the Region filed its complaint in March 1993,
GM made three requests to MDNR to terminate the
permit. The first two requests were denied, and the
third request was granted on December 20, 1994,
after GM had completed appropriate actions to
come into compliance.
GM raised three issues in this appeal: 1) whether
the permit was void ab initio because the State of
Michigan lacked the authority to issue the permit; 2)
whether, in this case, copper, lead, and zinc, could
be considered "pollutants" under CWA; and 3)
whether the permit expired by operation of law in
1990 because GM did not file a timely request for
renewal.
The EAB held that because GM failed to exhaust
its administrative remedies understate law, GM
could not raise objections to the permit five
years later in an enforcement proceeding. The
EAB found that whatever the merits of GM's
argument as to Michigan's alleged lack of authority
to issue the permit in light of the 1987 CWA
amendments, those arguments could and should
have been raised before the state entity that issued
the permit, or to the MWRC in an administrative
appeal following permit issuance in 1988. Similarly,
having failed to timely challenge the inclusion of the
permit limitations for copper, lead and zinc, GM
could not collaterally attack their inclusion in the
enforcement proceeding. In addition, the permit did
not expire by operation of law in 1990 because the
permit renewal was requested prior to its expiration;
both GM and MDNR behaved as if the permit
remained in effect; and GM failed to file a timely
objection to continuation of the permit. Finally, GM
did not point to any error, and the EAB found
nothing erroneous, in the penalty calculation.
Accordingly, the EAB agreed with the ALJ's
decision to reject the merits of GM's arguments and
affirmed the civil penalty of $62,500 assessed
against GM.
9. EAB holds that discharge of sludge
removed from treated wastewater
and returned to aeration basin to
continue cycle of treatment, violated
permit prohibition on discharge of
sludge removed from wastewater
during the course of wastewater
treatment:
In re: Ketchikan Pulp Company, CWA Appeal No.
96-7 (May 15, 1998). See case summary on page
15.
10. ALJ imposes statutory maximum
penalty of $125,000 where
estimate of economic benefit was
adjusted to exclude period barred
by statute of limitations:
In the Matter of: B.J. Carney Industries, Inc., 1998
CWA LEXIS 1 (Jan. 5, 1998).
On June 9, 1997, the EAB issued a remand order
to determine: 1) how much of the $167,000
economic benefit associated with the improper
discharge of process wastewater accrued within the
statute of limitations period; and 2) an appropriate
penalty based on the factors in CWA § 309. (See,
In re: B.J. Carney Industries, 1997 CWA LEXIS 1
(June 9, 1997)). The remand instructed the ALJ to
subtract from the $167,000 that portion of the
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benefit the accrued outside of the statute of
limitations.
Complainant's expert testified that the respondent's
economic benefit from the initial date of
noncompliance, January 26,1984, through the date
the penalty was deemed paid, July 1, 1997, was
$266,917. (Note: the same expert had calculated
respondent's economic benefit of $167,000 at the
initial hearing). She calculated that the economic
benefit that accrued from the initial date of
noncompliance through the date when the statute
of limitations did not bar enforcement, October 12,
1985, was $14,689. Subtracting this amount from
either the $266,917 or the $167,000 amount
yielded in excess of the $125,000 statutory
maximum penalty. Respondent argued that the
$14,689 amount was incomplete because there
was a "compounding" of that amount in the years
after October 12, 1985 in complainant's analysis.
The ALJ rejected this assertion, and found that
respondent had failed to demonstrate any flaw in
complainant's estimate. Respondent also argued
that complainant's analysis did not exclude
operating and maintenance costs after respondent
closed the facility in 1990. The ALJ found,
however, the such costs were in fact excluded.
Finally, respondent argued that a different weighted
cost of capital should have been used after October
1993. The ALJ found this argument immaterial,
since the statutory maximum penalty had been
received by October 1993.
Respondent submitted arguments regarding the
gravity of the violations and other factors that
mitigated the penalty assessment, however, the
ALJ found that the EAB had sustained the findings
of the initial hearing with regard to gravity and
mitigating factors. Based on the EAB's instructions
not to retry matters already decided and reviewed,
the ALJ did not consider respondent's arguments
on these points. The gravity portion of the penalty
remained $9,000. Given respondent's reluctance to
come into compliance, the ALJ also rejected
arguments that justice or equitable considerations
warranted a reduction in the penalty. Based on the
economic benefit and gravity of the violation, the
ALJ imposed the statutory maximum penalty of
$125,000.
11. ALJ holds that respondent's
activities following purchase of
oil facility constituted a
substantial continuation of
activity that supported imposing
successor liability:
In the Matter of: Heating Oil Partners, 1998 CWA
LEXIS 8 (Sept. 21, 1998).
U.S. EPA filed a complaint and sought a partial
accelerated decision that alleged that respondent
committed a series of violations of the oil pollution
prevention regulations. Violation of these
regulations, found in 40 C.F.R. Part 112, subject
the owner or operator of the facility to the
assessment of civil penalties, pursuant to the CWA
§ 311 (b)(6)(ii). Respondent acquired an oil terminal
(facility) that had been in violation of the CWA prior
to respondent's purchase and which continued in
violation (i.e., remained essentially unchanged) for
at least several months after the acquisition. EPA
sought a penalty of $125,000 and a determination
that respondent would be responsible for successor
liability on the basis of substantial continuation of
the oil business. The respondent denied liability for
the violations.
The ALJ observed that although, generally, the
purchaser of an asset does not acquire the
liabilities of the company that sold the assets,
the purchaser may acquire seller's liability if: 1)
the parties agree to that effect; 2)the transaction
amounts to a de facto merger; 3) the transaction
is fraudulently entered into to escape liability;
or 4) the purchasing company is merely a
continuation of the business enterprise of the
seller. The ALJ observed that federal courts have
broadened the "mere continuation" exception, most
notably, under CERCLA, and often consider the
following factors in determining whether a corporate
successor should be held potentially liable under
the "substantial continuity" theory: 1) retention of
the same employees; 2) retention of the same
supervisory personnel; 3) retention of the same
production facilities in the same location; 4)
retention of the same name; 5) production of the
same product; 6) continuity of assets; 7) continuity
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of general business operations; and 8) whether the
successor holds itself out as the continuation of the
pervious enterprise. Federal courts have also
found that EPA may extend liability to successor
corporations for the purpose of enforcing statutes to
assess civil penalties.
The ALJ found that EPA had established several
elements of the "substantial continuity" theory.
Based on this, the ALJ found respondent's
activity constituted a continuation of the prior
company, which could be held liable for the
violations alleged in the complaintthat occurred
during the period the facility was owned by the
prior company. Respondent's liability for alleged
violations and the amount of civil penalty remained
in dispute. The ALJ noted that the finding of
substantial continuity was irrelevant from the
standpoint of deciding the amount of the civil
penalty because both the penalty estimated for all
violations occurring prior to and after respondent's
ownership (i.e., $234,572) and the penalty
estimated for only the period of respondent's
ownership (i.e., $205,772) exceeded the statutory
maximum. EPA asserted that the resolution of the
issue of successor liability "is important because it
may affect the knowledge and culpability
attributable to respondent." The ALJ observed that
this assertion alone would not have been proper
grounds for EPA's motion, but the fact that
respondent's knowledge and culpability remained
as disputed material facts made the case
justiciable.
J. Criminal Cases
1. Fourth Circuit holds that to establish
a criminal violation of the CWA the
government must prove defendant's
knowledge of facts meeting each
essential element of the substantive
offense:
U.S. v. Wilson. 1997 U.S. App. LEXIS 35971 (4th
Cir. Dec. 23, 1997). See case summary on page
20.
K. Section 311 (Oil and Hazardous
Substance Liability)
1. ALJ holds prior spill obligates
facility to develop SPCC plan:
In the Matter of: Philadelphia Macaroni Co., 1998
CWA LEXIS 5 (May 28, 1998).
EPA filed a complaint that charged respondent
Philadelphia Macaroni Company violated § 311(j)
and 40 C.F.R. Part 112 by failing to prepare an
SPCC plan within six months of installing a 10,000
gallon oil tank at its Warminster, Pennsylvania
facility. The complaint, which was based on an
EPA inspection conducted on January 29, 1997,
sought a penalty of $33,420. Respondent asserted
that it was not required to develop an SPCC plan
because a discharge of oil from its facility could not
reasonably have been expected to reach navigable
waters. In addition, respondent argued that EPA's
proposed penalty was arbitrary and excessive. A
prior state inspection had indicated that respondent
had discharged oil into a tributary of Pennypack
Creek on January 11,1996.
The ALJ found that pursuant to 40 C.F.R. §
122.3(b), the prior discharge of oil into a
navigable water of the U.S. triggered
respondent's obligation to develop an SPCC
plan by April 3, 1996. The ALJ observed that
EPA's inspection found that respondent had not
developed an SPCC plan in a timely manner
and, therefore, respondent had violated § 311(j).
In addition, the ALJ found that respondent's
assertion that a discharge of oil from its facility
could not reasonably have been expected to reach
navigable waters was contrary to a preponderance
of evidence in the record. Specifically, the ALJ
observed that although the enclosed tank was one-
quarter mile from the nearest tributary, a sump
pump was 10 feet from the tank and that pump
emptied directly into the tributary. The ALJ added
that the January 11 spill was discharged into the
tributary through the automatic sump pump after
the tank overflowed.
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In calculating the penalty, the ALJ applied the
statutory factors specified in § 311 (b)(6)(B)(iii). The
ALJ agreed with EPA that failure to submit a SPCC
plan was a most serious violation, but reduced the
penalty amount by 10 percent because respondent
was a pasta maker not in the oil storage business,
secondary containment for the tank itself had been
provided, and respondent took measures to prevent
a recurrence of the January 11 spill. No adjustment
was made for any other factors.
II. Other Statutes
A. SDWA
1. Fourth Circuit holds that EPA order,
mandating systematic groundwater
sampling and providing bottled
water to those with contaminated
well water, constitutes a permissible
exercise of EPA's emergency
statutory powers:
Trinity American Corp. v. U.S. EPA, 1989 U.S. App.
LEXIS 17751 (4th Cir. Aug. 4, 1998).
Petitioner Trinity American Corp., sought review of
an emergency order issued pursuant to the SDWA
that mandated systematic groundwater sampling
and the distribution of bottled water within a three-
quarter mile radius west-southwest of its property.
Trinity owned and operated a polyurethane foam
plant in the Glenola Community of Randolph
County, North Carolina. Prior to and during Trinity's
ownership, the land had been contaminated with
various toxic chemicals due to the mismanagement
and improper disposal of such chemicals on the
property (and in part due to prior use of some of the
property as a landfill).
In 1989, the State health department fined the
company and forced it to remove 28,000 pounds of
diesel fuel-contaminated soil. And in 1994, the
State health department found that Trinity's
groundwater was contaminated with dichloroethene
and trichloroethene in excess of the maximum
allowed by EPA. A site assessment revealed that
toxic chemicals contaminated the wells that
supplied drinking water to Trinity and the 3-D
Upholstery Shop. In 1996, the Randolph County
Health Department, issued Trinity a final notice to
"cease and desist" from chronic pumping and
disposal of sewage and industrial wastewater
directly onto the ground. Shortly thereafter, the
State health department also found several
violations of North Carolina health codes due to
Trinity's improper storage and disposal of sewage
and industrial waste. In December 1996, Trinity
entered into a consent decree with the state health
department, attempting to remedy the problems
found in the site assessment.
Subsequently, EPA investigated the groundwater
contamination in and around the Trinity site and
confirmed the contamination found in the site
assessment and also found contaminated water in
two other wells. On the basis of its investigation,
EPA issued an emergency order in which it
concluded that chlorinated solvents and petroleum
hydrocarbons from the Trinity site had been
detected above maximum allowable levels in private
supply wells located to the west-southwest of the
Trinity property. Due to the high concentrations of
these contaminants, EPA found that current use of
the groundwater might present an imminent and
substantial endangerment to human health. EPA
also determined that the State's efforts were
insufficient to protect the public health.
Trinity argued that 1) it was protected under an
"innocent landowner" defense; 2) it did not
contribute to the contamination; 3) the EPA
emergency order displaced the State's authority to
protect groundwater; and 4) no evidence
demonstrated that any person had actually
consumed contaminated water. The Eighth
Circuit rejected each of these arguments,
finding that no innocent landowner defense
existed under the SDWA, the record supported
EPA's conclusion that Trinity contributed to the
groundwater contamination, State action was
reasonably viewed as inadequate to protect
public health and thereby foreclose the need for
EPA action, and that EPA need not prove that
anyone had consumed contaminated water,
only that contaminants in or likely to enter an
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underground source of drinking water may pose
an imminent substantial endangerment to the
health of persons. Having found a rational
basis for EPA's decision, the court held that the
order constituted a permissible exercise of
EPA's emergency powers under the SDWA and
denied Trinity's petition for review.
2. EAB rejects challenges to UIC
permits:
In re: NE Hub Partners. 1998 UIC LEXIS 1 (May 1,
1998).
Petitioners filed for review of two underground
injection control (UIC) permits issued by Region III
to NE Hub Partners that would allow the
construction and operation of up to ten Class III UIC
wells for solution mining and up to ten Class I wells
for brine disposal. Petitioners used the area
proposed for the wells—a sandstone formation—for
storage of natural gas. Petitioners presented both
substantive and procedural challenges. The
substantive challenges concerned technical
criticisms of permit conditions regarding the
construction and operation of the UIC wells. The
procedural claims addressed the adequacy of the
Region's response to comments, as well as other
claims, including, reopening the comment period.
Regarding the solution mining permits, petitioners
argued 1) the permit conditions that addressed
drilling mud loss during well construction would lead
to the migration of contaminants and natural gas to
underground drinking water sources; and 2) the
permit conditions that addressed the cementing of
well casings were inadequate to prevent the
migration of contaminants to underground drinking
water sources. The EAB rejected both of these
arguments, finding first that the UIC permits
contained adequate conditions to ensure
compliance with the requirements of 40 C.F.R.
§ 146.32 (prevent migration of fluids into or
between underground sources of drinking
water), the Region had adequately considered
petitioner's concerns, and that a difference of
expert opinion, without more, did not
demonstrate the Region's action was clearly
erroneous or an important matter of policy or
exercise of discretion. As to the cementing issue,
the EAB also rejected petitioner's claims, finding
that the permit conditions specified adequate
means of verifying the integrity of the well casings
and ultimately preventing the migration of
contaminants.
With regard to the brine permits, petitioners argued:
1) the maximum injection pressure was calculated
incorrectly and was too high; 2) the area of review
(for corrective action and monitoring) was too small;
3) the corrective action requirements were
developed improperly; and 4) the monitoring
requirements were based on incomplete information
and were inadequate; and 5) additional analysis of
the liquid to be injected was required. The EAB
rejected each of these arguments, finding: 1) the
Region included an MIP permit condition that
satisfied the regulatory standard despite using in
part guidance developed for Class II wells; 2) the
site-specific area of review was calculated in
conformance with the requirements of § 146.6(a);
3) the Region included sufficient corrective action
conditions (e.g., plug and abandon 6 wells) and
explained the basis for determining such conditions,
which adequately fulfilled the corrective action
requirements; 4) the Region developed a
monitoring system for the brine wells that
considered and was protective of petitioners gas
storage operation and conformed with relevant
regulatory requirements; and 5) NE Hub adequately
characterized both the water to be injected into the
salt deposits and the salt that would be dissolved to
injected as brine.
The petitioners also raised three procedural claims:
1) that the Region did not adequately respond to
comments submitted by petitioners on the draft
permits; 2) the Region should have reopened the
comment period due to changes in the permitted
activity and the receipt of new information; and 3)
EPA lacked jurisdiction because NE Hub decided
not to inject the brine produced from the first two
solution mining wells. The EAB rejected these
arguments, finding: 1) the Region considered and
responded to all significant comment in
conformance with 40 C.F.R. § 124.17; 2) the
changes in the permitting activity were not germane
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to issuance of the UIC permit and the two pieces of
"new" information received during remand of the
permits did not raise a substantial new question or
issue; and 3) NE Hub reserved the right to use the
wells for disposal of brine from the remaining
solution mining wells. Moreover, the EAB stated
that EPA's role was not to assess what might
constitute excess capacity but, rather to determine
whether the wells as proposed would comply with
the requirements of the SDWA. The petition was
denied.
B. RCRA
1. Ninth Circuit holds RCRA does not
authorize citizen suits based on
State Subtitle D standards that are
more stringent than the minimum
federal criteria:
Ashoff v. City of Ukiah. 130 F.3d 409 (9th Cir.
1997).
Plaintiff Ashoff brought a RCRA citizen suit that
asserted the City of Ukiah's solid waste disposal
site had violated RCRA, the CWA, and State law.
The district court dismissed the RCRA claim for
lack of subject matter jurisdiction and also
dismissed the CWA claim. The court concluded
that RCRA did not authorize citizen suits in federal
court to enforce state regulations authorized under
Subtitle D of RCRA, but indicated that Ashoff could
file a complaint alleging violations of the federal
minimum criteria. Instead of doing so, Ashoff
appealed. The question on appeal was whether
RCRA authorized citizen suits in federal court for
violations of State standards that are more stringent
than the federal criteria.
Ashoff argued 1) RCRA allows States to enact
more stringent standards and nothing in RCRA bars
suits on such standards, 2) limiting citizen suits in
such cases would be contrary to congressional
intent, 3) other environmental statutes such as the
CWA and CAA authorize citizen suits based on
more stringent state standards, and 4) limiting
claims to those based on minimum federal criteria
would allow landfill owners to defeat RCRA citizen
suits by arguing in every case that the state
standard is more stringent. The court rejected
these arguments and held that RCRA does not
authorize RCRA citizen suits based on State
Subtitle D standards that are more stringent
than the minimum federal criteria.
The court first observed that RCRA does authorize
citizen suits on the basis of the minimum federal
Subtitle D criteria (40 C. F. R. Part 258) in states with
approved Subtitle D (municipal solid waste landfill)
permit programs. The court found that this was so
because the state standards became effective
pursuant to the RCRA provisions (i.e., the federal
criteria gave the state standards legal effect under
federal law). Following from this, however, the
court concluded that "RCRA does not authorize
suits based on State standards that are more
stringent than the federal criteria because they do
not become effective pursuant to RCRA. When a
State elects to create more stringent standards,
nothing in RCRA gives them legal effect. Their legal
effect flows from State law."
The court noted that the district court had
suggested that citizens suits could not be brought
to enforce State Subtitle D regulations once the
State program was authorized by EPA. The court
stated this was incorrect. The court observed that,
for the reasons discussed above, citizen suits under
RCRA could be brought by any person, whether in
an authorized or unauthorized state, to enforce
compliance with the statutory and regulatory
standards. The court stated that EPA had
endorsed numerous times the use of RCRA citizen
suits to enforce the Subtitle D criteria regardless of
whether the Agency had approved a State/tribal
permit program.
The court observed that although other
environmental statutes establish a similar
relationship between EPA and the States, and allow
citizen suits to be based on more stringent state
standards, these statutes differ from RCRA and,
therefore, cannot be read to support plaintiffs
claims. The court noted that the CWA explicitly
requires States to create more stringent standards
(26 U.S.C. § 1311(b)(1)(C)). The court also
observed that the citizen suit provision of the CWA
specifically incorporates orders issued by a State.
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(26 U.S.C. § 1365(a)(1)). The court stated that
RCRA has no analogous provisions. Finally, the
court observed that to adopt plaintiff's reading might
improperly interfere with State sovereignty, and
may chill States from adopting more stringent
standards.
2. District court denies motion to
dismiss, finding that where
hazardous waste remains on-site,
the failure to properly close a
hazardous waste facility may
constitute a continuing violation:
Cornerstone Realty, Inc. v. Dresser-Rand Company
and Ingersoll-RandCompany, 1997U.S. Dist. Lexis
21740 (D. Conn. September 30, 1997).
Plaintiffs brought a civil suit seeking injunctive relief
and damages against defendants, the current and
former owners of commercial property, based on a
failed real estate transaction that resulted when
contamination was found on the property. Plaintiffs
brought a variety of state law claims, as well as two
RCRA claims, specifically failure to properly close
a hazardous waste generating facility and failure to
properly close a hazardous waste management
facility. Defendants moved to dismiss six of
plaintiff's claims, including the RCRA claims.
Defendants argued that both the RCRA claims were
time-barred by the five-year statute of limitations in
28 U.S.C. § 2462 because the failure to properly
close the facility occurred more than five years
before these claims were filed. Plaintiffs contended
that the RCRA claims were continuing violations
that tolled the limitations period.
The court held that the obligation of an owner
or operator of hazardous waste facility to
properly close that facility continued for as long
as the facility remained unclosed and
hazardous waste remained at the site. The court
stated that the closure regulations and relevant
caselaw supported the assertion that the obligation
to undergo closure continued where, as here,
hazardous waste remained on the property. The
court found that because the obligation to properly
close the facility continued beyond the date when
defendants shut down the facility, plaintiff's failure
to meet its closure obligations prevented the
violation from being complete, which prevented the
statute of limitations from tolling. Based on this
continuing obligation and plaintiff's allegation that
hazardous waste materials remained on the
property, the court found that the RCRA claims
should not be dismissed because the plaintiff may
have been able to prove a continuing violation.
3. District court grants in part and
denies in part motion for preliminary
injunction with respect to RCRA
claims, and denies motion with
respect to CWA claim due to split of
authority regarding whether the
continuing migration of
contaminated groundwater
constitutes an ongoing violation:
Wilson v. Amoco Corporation, 1998 U.S. Dist.
LEXIS 57 (D. Wyo. Jan. 2, 1998).
Plaintiffs, citizens of Casper, Wyoming, brought a
citizen suit under RCRA and CWA alleging that
defendants, Amoco Corporation, Burlington
Northern Railroad Company, and Steiner
Corporation, discharged and released hazardous
and toxic contaminants from their respective
Casper facilities thereby injuring the public health
and the environment as well as plaintiffs' properties.
Plaintiffs sought a preliminary injunction requiring
defendants to contain the discharges and
remediate the contaminated property.
At Amoco's petroleum refinery and tank farm
located along the North Platte River, the court
found that environmental concerns included
groundwater contamination, lead contamination,
sulfuric acid contamination, asbestos
contamination, benzene contamination, and various
forms of contamination that potentially remained in
the large volume of underground piping beneath the
refinery. The court also found that Amoco, in
working with EPA and Wyoming Department of
Environmental Quality (WDEQ) to address the
environmental concerns, exhibited a pervasive
corporate attitude to delay, deter, and deceive.
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At the Burlington Northern (BN) rail yard facility,
testing confirmed diesel and oil contamination and
a substantial plume of PCE extending across the
property. At Steiner's former dry cleaning facility, a
significant PCE plume existed that originated in the
vicinity of the facility and extended underneath the
BN yard and eventually to the North Platte River.
Both parties denied any responsibility for the PCE
contamination.
At the time of filing, there were no ongoing
operations at the Amoco and Steiner facilities, and
plaintiffs did not charge that BN's current operations
resulted in new discharges of contaminants into the
groundwater. As such, with a few exceptions as to
Amoco, the alleged ongoing violation with respect
to all three defendants was the continuing migration
of the contaminated groundwaterto the North Platte
River. "Given the split of authority as to
whether such ongoing migration constituted a
CWA violation," and the failure of the parties to
brief the court on this issue, the court declined
to consider the CWA claim and proceeded
solely under RCRA.
Because plaintiffs sought a mandatory injunction,
which was more burdensome than a prohibitory
injunction, plaintiffs were required to demonstrate
entitlement to the injunction by heavy and
compelling evidence. With respect to Amoco, the
court applied the traditional equitable factors in
determining if an injunction was appropriate, and
found that the balance of equitable factors tipped
heavily in favor of the issuance of an injunction.
However, given that a trial on the merits was six
months away, the court determined that it was
unreasonable to issue a plenary order requiring the
requested remediation, since it could not be
accomplished within that time. The court did
consider it practicable to order Amoco to undertake
a number of other investigative, monitoring, and
interim measures.
As for the contamination the court found attributable
to BN, i.e., the diesel fuel, the evidence did not
clearly indicate an existing threat to human health
or the environment. The court found that any threat
posed by the mere presence of a nonhazardous
substance such as diesel was not sufficiently
severe to warrant comprehensive injunctive relief
only six months before trial.
With regard to Steiner, the court found that
plaintiffs' evidence did not clearly show that Steiner
was a significant contributor to the PCE plume or
that the plume constituted an imminent and
substantial endangerment to health or the
environment. The court was reluctant to impose the
considerable burden of investigating and
remediating a plume for which Steiner almost
certainly did not bear sole responsibility.
Accordingly, the court granted in part and denied in
part plaintiffs' motion for preliminary injunction with
respect to their RCRA claim against Amoco, and
ordered specific injunctive relief. Plaintiffs' motion
was denied with respect to their CWA claim against
all defendants, and denied in all respect as to BN
and Steiner.
4. District court holds that the leaching
of hazardous waste into
groundwater from hazardous waste
contaminated soil constitutes the
continuing disposal of hazardous
waste:
U.S. v. Power Engineering Co., 1998 U.S. Dist.
LEXIS 8650 (June 10, 1998).
The United States, on behalf of U.S. EPA, brought
an overfile enforcement action against defendant
Power Engineering and Jack Lilienthal, a third party
defendant, for violations of RCRA stemming from
the operation of a metal refinishing facility and the
failure to properly manage and dispose of
hazardous waste generated by the facility. The
action sought a preliminary injunction that required
defendants to document that they had secured the
resources to properly close the facility and to pay
third-party claims that may have arisen from its
operation. Defendants, in relevant part, argued that
the facility operated in compliance with Colorado
hazardous waste regulations and therefore was
exempt from financial assurance requirements.
The court concluded that the facility continued to
dispose of hazardous waste in three distinct ways
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and thus was not in compliance with Colorado
hazardous waste regulations. First, the court found
that the hexavalent chromium condensate mist (i.e.,
suspended liquid) generated by air scrubbers and
that settled onto soil within the facility constituted a
hazardous waste.
Second, the court found that the facility's failure to
remediate soil contaminated by a yellow/orange
liquid that leaked from air scrubbers down the west
side of the facility's main building constituted
continuing disposal of hazardous waste because
such waste continued to leach chromium into
groundwater. Defendant's argued that the leaks
were repaired in 1994 and, thus, disposal had
ceased. The court disagreed, and based on
numerous prior decisions, held that the
leaching of hazardous waste into groundwater
from hazardous waste contaminated soil
constituted the continuing disposal of
hazardous waste. The court observed "the
overwhelming majority [of decisions] have found
continuing violations for substantive violations of
RCRA when the environmental harms caused by
the violations are curable, even when the
affirmative act that initiates the violation occurred on
a single day." The court noted that because the
definition of the term "disposal" in RCRA includes
the term "leaking" disposal occurs both when a solid
or hazardous waste is first deposited onto the
ground as well as when such wastes migrate from
their initial disposal location.
Finally, the court found that the facility failed to
remediate three open waste piles of contaminated
soil excavated from beneath chrome-plating tanks.
The court ordered defendants to provide financial
assurance valued at $3,500,000.
C. Paperwork Reduction Act
1. District court holds that Paperwork
Reduction Act does not require an
agency to obtain OMB approval for
the agency to use information that is
properly collected in new ways:
Tozzi v. U.S. Environmental Protection Agency,
1998 U.S. Dist. LEXIS 6234 (D.C. Cir. Apr. 21,
1998).
Plaintiffs sought a preliminary injunction that would
have restricted EPA from using TRI data for the
Sector Facility Indexing (SFI) Project, a project that
seeks to integrate existing environmental records
from several publicly available data bases. The
information compiled in these data bases was
collected pursuant to OMB approvals obtained in
conformance with the requirements of the
Paperwork Reduction Act. Plaintiffs argued that
EPA could not use the TRI data for the SFI project
without first obtaining a separate OMB approval for
this new use of the data. Plaintiffs asserted that
EPA's use of the data for the SFI project constituted
a "substantive or material modification." Plaintiffs
also argued that EPA and OMB should have
reviewed the proposed new uses of the data based
on a public comment period, and that OMB should
have made a determination of the new uses'
practical utility pursuant to 44 U.S.C. § 3508.
The court found that republishing the TRI data
in another form did not constitute making a
substantive or material modification to the data.
The court observed that the information itself
was not modified in any way, nor was the
manner in which is was collected. In addition,
the court found that OMB does not have to
separately approve each and every new use of
information properly collected. Rather, the
court observed that the proper focus for OMB
approval under the PRA is on the collection of
information, not the agency's subsequent use
of the collected information.
2. ALJ holds that PRA defense may be
raised after answer has been filed
and, regarding certain RCRA BIF
provisions, EPA failed to display an
approved OMB control number in
both the Federal Register and the
C.F.R.:
In the Matter of: Parke-Davis Division Warner-
Lambert Co.. 1998 RCRA LEXIS 2 (Jan. 2, 1998).
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EPA filed a complaint against respondent Parke-
Davis that alleged violations of EPA's Boiler and
Industrial Furnace (BIF) regulations promulgated
under RCRA. Respondent moved for an
accelerated decision dismissing count I of the
complaint on the grounds that EPA failed to comply
with requirements imposed under the Paperwork
Reduction Act (PRA). EPA argued that respondent
had waived its PRA defense because it had failed
to raise this defense in its answer. EPA also
argued that there was only a partial lapse in
obtaining OMB approval.
Count I involved five separate information request
regulations [40 C.F.R. §§ 265.13 (general waste
analysis), 265.15 (general inspection requirements),
265.16 (personnel training), 265.54 (amendment of
contingency plan), and 265.112 (closure plan;
amendment of plan)]. The ALJ rejected EPA's
waiver argument, citing Lazarus. Inc.. TSCA
Appeal No. 95-2 (September 30, 1997) for the
proposition that respondent could raise a PRA
defense after an answer had been filed. The ALJ
observed that, as stated in Lazarus, use of a PRA
defense could only be barred where it was "so
untimely as to prejudice the complainant, or
'interfere with the [judge's] duty to conduct an
efficient adjudication'." The ALJ stated that EPA
did not argue it was prejudiced and that given the
prehearing status of the case, EPA could not
substantiate such an argument. Accordingly, the
ALJ barred EPA from prosecuting the respondent
for the first three alleged violations.
With regard to § 265.54, EPA asserted an incorrect
but current OMB control number was displayed in
the C.F.R., and notice of OMB approval was
published in the Federal Register. Similarly, with
regard to § 265.112, EPA asserted that a "blanket
display" indicating OMB approval appeared at the
end of 40 C.F.R. § 265.120. In addition, EPA
argued that notice of the OMB approval number
was published in the Federal Register. The ALJ
found that these efforts failed to comply with
the plain wording of the PRA, which requires
that EPA display the control number from the
approved ICR in both the Federal Register and
the C.F.R.
D. Freedom of Information Act (FOIA)
1. District court holds that materials
subject to FOIA request must be
released where notes were not
deliberative and did not concern
enforcement matters and release of
criminal files would not interfere
with enforcement proceedings:
Grine v. Coombs. 1997 U.S. Dist. LEXIS 19578
(W.D. Pa. Oct. 10, 1997).
Plaintiffs Grine et al., brought nine claims against
defendants Coombs etal., related to contamination
of plaintiff's property allegedly caused by
defendants. One claim was a Freedom Of
Information Act (FOIA) claim against the U.S. EPA,
which asserted that EPA failed to release results of
soil tests of plaintiff's property and that EPA
improperly withheld non-exempt documents that
related to an alleged chemical spill on the
defendant's property and that could have been the
source of the contamination. Plaintiffs sought six
distinct items of information and the court had
previously granted EPA summary judgment with
regard to two of those items. This court examined
EPA's summary judgment motion for the remaining
four items.
The first of the remaining four items was the log
book of the EPA On-Scene Coordinator (OSC).
EPA had provided to plaintiffs a copy of the log
book with portions not relevant to the plaintiff's case
redacted. The court reviewed the entire log in
camera and, with the exception of two limited
entries, found that EPA had provided all portions of
the log that were responsive to plaintiffs FOIA
request. The court denied EPA's motion with
regard to the two limited excerpts.
The second item consisted of several EPA inter-
office memoranda in the form of e-mail. EPA
asserted that this information was protected under
EPA's deliberative process privilege, since it played
a part in Region Ill's decision as to what, if any,
Superfund removal action would be taken at the
plaintiff's property. Plaintiffs argued that there was
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never any truly deliberative process regarding
Superfund removal because the level of
contamination was not sufficient. The court,
following in camera review, held that the
withheld material was covered by the
deliberative process privilege, since the
redacted material was pre-decisional in nature
and contained deliberative information.
The third item concerned certain notes of Daniel
Isales, Assistant Regional Counsel, made from a
September, 1995, phone conversation with Dan
Holler of the Pennsylvania DEP. EPA argued that
these notes where protected under either attorney
work product doctrine, or the deliberative process
privilege. The court held that the notes were not
protected under either privilege. The courted
concluded that the notes essentially contained
factual information and that they were predecisional
in nature, since they post-dated the decision to
forgo federal removal action. The court also held
that the notes were not protected under the
attorney work-product privilege, since they did
not reflect mental impression, opinions, or
strategies concerning anticipated litigation. The
court observed that the notes did not suggest
consideration of any Superfund enforcement action,
and consideration of such action was inconsistent
with the OSC's representation that EPA had
decided in March 1995, not to take further action at
the plaintiff's property. The court denied EPA's
motion with regard to this item.
The last items considered were several documents
from EPA's Criminal Investigation Division. With
regard to fourteen entries in the OSC's logbook,
the court observed that even if these were
compiled for law enforcement purposes, EPA
did not demonstrate how disclosure of these
entries would interfere with potential law
enforcement proceedings. Thus, the court
ordered production of this information. With regard
to six Reports of Investigation (ROIs), the court
found that although they were compiled for law
enforcement purposes under the "rational
nexus" test, following review, the information
was not deemed so sensitive that "its
production would reasonably be expected to
cause interference with any pending
enforcement proceedings." The court ordered
production of this information as well. Finally, with
regard to two Memoranda of Interviews (MOIs),
the court found that these documents also were
not of such a sensitive nature that their
disclosure would likely interfere with any
pending enforcement proceedings. EPA had
also asserted that these MOIs were exempt
under § 552(b)(7)(C) of the APA, but the court
found no compelling privacy interest was
served by restricting access to these MOIs.
E. Oil Pollution Act (OPA)
1. Ninth Circuit holds State BAP oil
spill regulations are not preempted
by Federal laws, except for
provisions addressing design and
construction requirements, which
are preempted:
International Assoc. of Independent Tanker Owners
v. Gary Locke. 1998 U.S. App. LEXIS 12894 (9th
Cir. Feb. 4, 1998).
Appellants sought review of the district courts grant
of summary judgment finding that each of 16 of
Washington State's Best Available Protection (BAP)
regulations were not preempted by the Oil Pollution
Act of 1990 (OPA) and other federal laws. The
State's BAP regulations impose requirements on oil
tankers to prevent oil spills.
The state defendants argued that OPA § 1018
provides that nothing in the OPA preempted states
from imposing "additional liability or requirements
with respect to the discharge of oil or other pollution
by oil." Appellants countered that § 1018 applied
only to Title I of the Act, and did not affect
preemption imposed by other provisions of the Act.
The court found such a reading at odds with the
plain language of § 1018, which states that
'"nothing in this Act" preempts states from
"imposing any .... requirements with respect to the
discharge of oil or other pollution by oil".' The court
found that the savings provisions of § 1018
applied to all the titles of the OPA. The court
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declined, however, to apply the savings
provision of § 1018 to other federal tanker
regulation statutes.
The court then examined whether other federal
statutes addressing tanker regulation preempted
the state BAP regulations. The court first
addressed conflict preemption. Appellants
maintained that the BAP regulations frustrated the
purposes and objectives of Congress in adopting
the current legislative scheme applicable to oil
spills. The court disagreed. The court looked at
the overall purposes and objectives of Congress in
passing the Tank Vessel Act (TVA), the Ports and
Waterways Safety Act (PWSA), the Port and
Tanker Safety Act (PTSA), and the OPA, and found
that the most recent statute—the OPA—reflected
Congressional "willingness to permit state efforts in
the areas of oil spill prevention, removal, liability
and compensation. The court declined to strike
down the BAP regulations on the basis of
conflict preemption. The court also found that the
regulations did not frustrate relevant international
agreements, stating that strict uniformity was not
required by these agreements and that the
international agreements in this field only
established minimum standards. The court also
declined to consider new treaty-based arguments
raised for the first time by EPA on appeal.
With respect to field preemption, the court observed
that in Ray v. Atlantic Richfield Co., 435 U.S. 151,
55 L Ed. 2d 179, 98 S. CT. 988 (1978), the
Supreme Court decided that in enacting the PWSA
Congress had effectively preempted the field of
tanker design and construction, but not all other
potential avenues of state regulation. The Ninth
Circuit found that "virtually all of the challenged
BAP regulations impose operational
requirements rather than design and
construction requirements." Thus, the court
found that these requirements were not
automatically subject to preemption under Ray.
However, the court did find that the State's BAP
regulatory provisions that addressed navigation
and emergency towing equipment (§ 317-21-
265(1) & (2)) did constitute design and
construction requirements,
preempted by the PWSA.
which were
Finally, the court addressed whether any of the
BAP regulations were expressly preempted by
federal law. Appellants argued that some of the
BAP regulations were expressly preempted by
existing Coast Guard regulations promulgated
pursuant to the OPA. However, the court found
that because § 1018 of the OPA prohibits the
preemption of state law, the regulations at issue
were not valid (i.e., the Coast Guard had acted
beyond the scope of its delegated powers).
Appellants then argued that the BAP regulations
violated the Commerce Clause (i.e., impermissibly
burdened interstate commerce). However,
appellants failed to argue that the incidental burden
imposed by the BAP regulations on interstate
commerce was clearly excessive in relation to the
"putative local benefits," or that BAP regulation
"discriminate in favor of in-state interests." Thus,
the court found this argument to be without merit.
The court reversed the district court's grant of
summary judgment regarding WAC § 317-21-265,
but affirmed the decision with regard to all other
challenged BAP regulations.
2. D.C. Circuit upholds majority of
NOAA rule implementing the OPA,
adopts NOAA construction of
portions of rule, and vacates two
parts of the rule:
General Electric Co. v. National Oceanic and
Atmospheric Administration, 128 F.3d 767 (D.C.
Cir. 1997).
Industry and insurance company petitioners
challenged the National Oceanic and Atmospheric
Administration's (NOAA's) final regulation for
implementing the Oil Pollution Act. The final rule
addressed trustee assessment of natural resource
damage (61 Fed. Reg 440-510 [1996]). The final
rule established a three stage procedure for
assessing injuries resulting from oil spills and for
implementing plans to restore damaged natural
resources. The three stages included a pre-
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assessment phase, restoration planing phase, and
restoration-implementation phase.
Industry petitioners argued that in promulgating the
rule NOAA acted in an arbitrary and capricious
manner by allowing the use of contingent valuation
in assessing natural resource damage. Specifically,
industry petitioners argued that NOAA had ignored
its expert panel's recommendations that this
technique must be used pursuant to stringent
standards. Petitioners also asserted that it was
arbitrary for NOAA not to bar contingent valuation.
Finally, petitioners maintained that it was wrong to
extend passive use valuations to temporary losses
of natural resources (i.e., industry petitioners
argued that passive loss occurred only where loss
was permanent). The court disagreed with all of
these arguments. The court found that it was
sufficient that the rule allowed for the use of several
valuation techniques, provided they produce valid
and reliable results. Moreover, the court found that
it had ruled not to bar contingent valuation in a prior
case (see, Ohio v. U.S. Dept. of the Interior, 880
F.2d 432, 478 (D.C. Cir. 1989)). Finally, regarding
temporary passive losses, the court found that the
issue was not ripe for review.
Industry petitioners also argued that since OPA
delegated oil removal authority to the President,
NOAA exceeded its authority in promulgating a rule
that provided trustees with authority to remove
residual oil. On this issue the court found that
NOAA had failed to adequately explain the
differences between the proposed rule and the final
rule, as well as other issues regarding roles,
authority, and responsibility, and, thus, had failed in
undertake reasoned decision making.
Finally, industry petitioners argued that NOAA acted
arbitrarily in including monitoring and oversight
costs, as well as administrative, legal, and
enforcement costs within the definition of
"reasonable assessment costs." The court found
that, with regard to monitoring costs, the OPA was
silent. The court then found that NOAA's acted
reasonably in finding that monitoring was an
essential step in restoration. With regard to the
inclusion of legal fees within reasonable
assessment costs, NOAA did not oppose vacatur of
the definition of assessment costs to the extent it
referred to attorney fees.
The court identified several issue on which the
parties had reached agreement and discussed
these only to document NOAA's representations.
Finally, insurance petitioners raised several
arguments, none of which the court found had
merit. First, the court observed that insurance
petitioners had no standing to argue that 15 C.F.R.
§ 990.20(b), which would allow trustees that had
begun damage assessments under CERCLA to
switch to the final rule, was impermissibly
retroactive. The court found that petitioners had
shown neither concrete nor imminent injury.
Second, the court found that nothing in the plain
language of § 1002 or § 1006 of the OPA excluded
the use of passive use values. Third, the court
found that the rule did not need to address the
OPA's liability limits, since the rule did not affect a
responsible party's right to invoke those limits.
Fourth, the court found that the rule did not impinge
on responsible parties' rights to seek contribution
from other parties. Finally, the court found that the
rule's requirements that remediation plans be
"reliable and valid" adequately constrained the
trustee's discretion in assessing resource damage.
The court vacated the definition in 15 C.F.R.
990.30 of "reasonable assessment costs" to the
extent it included legal fees, and vacated §
990.53(b)(3)(i)'s authorization of residual
removal authority. The court adopted NOAA's
construction of § 990.51 (trustee must prove
causation); § 990.52(d)(3)(ii) (the term estimate
is synonymous with calculate); and § 990.27(b)
(trustee must develop site-specific restoration
plan). The court upheld the remainder of the
rule.
F. EPCRA
1. Supreme Court holds that where
declarative and injunctive relief
sought in citizen suit would not
remedy respondent's alleged
injuries associated with wholly past
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EPCRA violations, respondent
lacked standing to maintain the
suit and the courts lacked
jurisdiction to hear the suit:
Steel Co. v. Citizens fora Better Environment, 1998
U.S. LEXIS 1601 (March 4, 1998).
Plaintiff-respondent Citizens for a Better
Environment brought a citizen suit against
defendant-petitioner Chicago Steel and Pickling
Company for past violations of EPCRA seeking
declarative and injunctive relief (petitionerfiled all of
the overdue forms required under §§ 11022 and
11023 prior to the commencement of the citizen
suit). The district court held that because petitioner
had brought its filings up to date by the time the
complaint was filed, the court lacked jurisdiction to
entertain a suit for present violations. In addition,
the district court held that because EPCRA does
not provide relief for purely past violations,
respondent's complaint was not a claim upon which
relief could be granted. The Seventh Circuit
reversed, concluding that EPCRA authorizes citizen
suits for purely past violations. Petitioners then
sought review by the Supreme Court, which
accepted the case to resolve a conflict between the
Sixth and Seventh Circuits.
The Supreme Court stated that the case presented
two issues: whether EPCRA authorizes suits for
purely past violations; and, whether respondent had
standing to have brought the action. A key focus of
the opinion was on which issue should be decided
first. The Court declined to endorse the
"doctrine of hypothetical jurisdiction" for
purposes of addressing the merits question
first. Rather, the Court considered the standing
question first, and held that because none of
the relief sought would have remedied
respondent's alleged injuries, respondent
lacked standing to maintain the suit and,
therefore, the Supreme Court and the lower
courts lacked jurisdiction to entertain the suit.
Three Justices wrote separate concurring opinions
and the majority spent much of the opinion
responding to Justice Steven's concurrence.
Justice Stevens argued that the Court has the
authority to answer the statutory (i.e., merits)
question first and because EPCRA does not appear
to provide for jurisdiction over citizen suits for past
violations, the Court should not decide the
constitutional issue. The majority disagreed, and
found that the merits question of whether §
11046(a) permitted the cause of action was not a
"jurisdictional" question. The majority distinguished
Gwaltney of Smithfield Ltd, v. Chesapeake Bay
Foundation, Inc., 848 U.S. 49 (1987), stating that
the relevant statutory provision in Gwaltney
suggested the existence of subject matter
jurisdiction, whereas here, § 11046(c) of EPCRA
should not be read to make the elements of §
11046(a) jurisdictional. The Court also asserted
that in no case has it called "the existence of a
cause of action 'jurisdictional,' and decide that
question before resolving a dispute concerning the
existence of an Article III case or controversy."
The Court also declined to endorse the concept of
hypothetical jurisdiction (finding it proper to proceed
immediately to the merits despite jurisdictional
questions where the merits question is more readily
resolved and the prevailing party on the merits
would be the same as the prevailing party were
jurisdiction denied), which the Court observed has
been "embraced" by several Courts of Appeals.
The Court stated that such a practice "carries the
courts beyond the bounds of authorized judicial
action and thus offends fundamental principles of
separation of powers."
In addressing the standing question, the Court
focused on the redressability element required
under Article III standing (the "likelihood that the
requested relief will redress the alleged injury.").
The Court explained that none of the items of relief
sought would have served to eliminate the effects
of the late reporting on respondent or reimburse
respondent for losses caused by the late reporting.
The majority reasoned that the declaratory
judgment was of no value to the respondent. In
addition, the Court observed that the penalties
authorized by EPCRA are payable to the U.S.
Treasury, not respondent and, thus, the penalties
did not redress any injury to respondent.
Furthermore, the Court found that any 'interest in
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attorney's fees is insufficient to create an Article III
case or controversy where none exists on the
merits of the underlying claim.' Lewis v. Continental
Bank Corp., 494 U.S., at 480 (citing Diamond v.
Charles. 476 U.S. 54, 70-71(1986)).
In other concurring opinions, Justice O'Connor
joined by Justice Kennedy noted that the Court's
opinion shouldn't be read as setting out a list of
circumstances under which courts may exercise
judgment in holding off on difficult jurisdiction issues
when the case can be resolved on the merits in
favor of the same party. Justice Breyer would not
make it a requirement to first address jurisdiction,
then the merits.
2. ALJ holds that gravity-based portion
of EPCRA penalty should be reduced
100 percent where all criteria of self-
policing policy are satisfied, and that
where the self-policing policy is
inapplicable the ERP allows partial
reduction:
In the Matter of: Bollman Hat Company, 1998 EPA
App. LEXIS 3 (Mar. 17, 1998).
EPA filed a complaint alleging respondent had
committed seven violations of EPCRA for failing to
file toxic chemical release forms several chemicals
over several years. The complaint proposed a civil
penalty of $39,716, which EPA asserted had been
calculated in accordance with EPA's August, 1992
Enforcement Response Policy (ERP) for EPCRA
section 313. Respondent acknowledged the
violations but challenged the penalty amount and
requested a hearing. Respondent asserted that
EPA had failed to grant respondent certain penalty
reductions allowed under the ERP for the delisting
of a chemical and for other factors as justice may
allow.
At hearing EPA disclosed that it had relied upon
EPA's self-policing policy to determine what
adjustments should be made to the gravity-based
penalty set pursuant to the ERP. With regard to
count one, EPA initially calculated a gravity-based
penalty of $25,000 based on the delay, size of the
business, and amount of chemical of concern used.
Then EPA had allowed a 75 percent reduction
under the self-policing policy because the
respondent had self-disclosed and met eight of the
nine criteria specified in the self-policing policy
needed to obtain a complete waiver of the gravity-
based penalty (as for the ninth criterion, EPA
asserted that respondent failed to prevent future
violations). Upon reviewing the facts, the ALJ found
that respondent had discovered all of the violations
simultaneously and had acted to both achieve
compliance and prevent future violations. The ALJ
concluded that respondent had satisfied all nine
of the criteria needed to obtain a complete
waiver of the gravity-based penalty and granted
a waiver of 100 percent of the gravity-based
penalty.
For counts two through five, the ALJ similarly found
that because respondent had self-disclosed the
violations prior to EPA action and, as explained
above, had met all nine criteria specified in the self-
policing policy needed to obtain a complete waiver
of the gravity-based penalty, complete waivers of
the gravity-based penalty amount were warranted.
For count six, EPA asserted it had not reduced the
$8,893 proposed penalty because respondent had
not self-reported the violation prior to EPA action.
Respondent argued that prior to being contacted by
EPA it had started to gather the data needed to
complete the reporting form. The ALJ found the
record supported this assertion, but observed that
respondent had not notified EPA regarding the
violation and efforts to come into compliance.
Based on this, and the fact that respondent had
intentionally decided to wait to file the forms until a
data collection system was in place, the ALJ
concluded the self- policing policy did not apply.
Nevertheless, pursuant to the ERP the ALJ allowed
a 55 percent reduction for respondent's attitude (30
percent) and other factors as justice may require
(25 percent).
Finally, regarding count seven, the EPA proposed
a penalty of $8,893. The ALJ first corrected this to
$9,074 to account for six additional days of
violation, and then reduced this amount 55 percent
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to $4,083 for the same reasons discussed
immediately above.
3. ALJ holds that in calculating
proposed penalty for EPCRA
violation based on EPCRA ERP the
Agency may not restrict application
of adjustment factors contained in
ERP to settlement only:
In the Matter of: Catalina Yachts, 1998 EPCRA
LEXIS 4 (Feb. 2, 1998).
Complainant EPA charged respondent Catalina
Yachts, Inc., with seven counts of violating EPCRA
§ 313 related to its use of specified chemicals in
excess of the applicable threshold quantities and its
failure to submit toxic chemical release forms to the
Administrator and the State. EPA proposed that a
penalty totaling $175,000 be assessed for these
violations. Respondent asserted that it was a small
business that was initially unaware of its obligations
under EPCRA and that once it became aware of its
obligation to comply with EPCRA it did so in a
timely manner. Respondent asserted that EPA
indicated that it had used the EPCRA Enforcement
Response Policy (ERP) in calculating the proposed
penalty and that EPA had informed respondent that
the agency had no authority to reduce the penalty
by more than the 30 percent specified in the ERP.
Respondent argued that because the ERP had not
been promulgated pursuant to notice and comment
rulemaking under the APA rigid adherence to the
ERP was neither necessary nor lawful.
The ALJ found that the appropriate penalty for the
EPCRA violations was $39,792. The ALJ first
found that count VII should have been calculated on
a per day basis since the violation since the
relevant Form R was submitted within one year
(324 days). Therefore, the gravity-based penalty
should have been $173,274. Subject to this
change, the ALJ found prima facie that the ERP
provided a reasonable basis for determining the
gravity-based penalty.
The ALJ then examined EPA's application of the
adjustment factors specified in TSCA § 16. At the
outset, the ALJ noted that respondent had waived
any defense regarding inability to pay and the effect
of the penalty on respondent's ability to continue to
do business. The ALJ observed that since acetone
was delisted under EPCRA during the period of the
alleged violations, EPA was willing to reduce
penalty 25 percent ($12,500). In examining the
factors of cooperation and compliance specified in
the ERP, the ALJ first held that EPA's practice of
only considering such factors in settlement
negotiations was arbitrary and capricious, since
once the agency has elected to determine the
penalty according to the ERP it may not " 'pick
and choose' the provisions of the ERP with
which it will comply." The ALJ found that a 15
percent reduction was warranted for cooperation
(i.e., respondents commitment to environmental
compliance), and that an additional 15 percent
reduction was warranted because respondent had
no prior violations and had made good faith efforts
to comply (combined reduction of $51,982). The
ALJ then further adjusted the penalty based on
other matters as justice may require. Here, citing
Spang & Company, EPCRA Appeal Nos. 94-3 &
94-4 (EAB, Oct. 20, 1995), the ALJ found that
previously incurred environmentally beneficial
expenditures totaling an estimated $230,000
justified a $69,000 credit against the proposed
penalty.
4. ALJ holds that failure to comply with
EPCRA § 311 is a continuing
violation not barred by the federal
five-year statute of limitation, but
that failure to comply with EPCRA §
312 is not a continuing violation and
is not barred under the statute of
limitation:
In the Matter of: Mafix, Inc., 1998 EPA App. LEXIS
6 (Feb. 12, 1998).
EPA filed a complaint that alleged Mafix had
committed six violations of EPCRA, three each of
§§ 311 and 312, by failing to submit in a timely
manner material safety data sheets and emergency
and hazardous chemical inventory forms. The
Agency sought a civil penalty of $84,000 for these
violations. Mafix asserted that the violations were
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barred by the applicable federal five-year statute of
limitations. All the alleged violations occurred at
least five and one-half years prior to when EPA filed
its complaint.
The ALJ focused on whether any of the six
violations constituted continuing violations, which
had the potential to affect the application of the five-
year statute of limitation. The ALJ observed that
continuing violations have been recognized by
the EAB under RCRA and TSCA. (See, Harmon
Electronics, Inc., RCRA (3008) Appeal No. 94-4
(March 24, 1997); and Lazarus, Inc., TSCA
Appeals No. 95-2 (September 30, 1997). The
ALJ observed that in determining whether a
requirement was continuing in nature key
considerations included the statutory language,
including relevant legislative history, and
implementing regulatory language. The ALJ
noted that the EAB in Lazarus stated that
"words and phrases connoting continuity and
descriptions of activities that are typically
ongoing are indications of a continuing nature.
In contrast, a continuing nature may be negated
by requirements that must be fulfilled within a
particular time frame."
The ALJ observed that § 311 imposed a one-time
filing obligation that served an important public
safety and health purpose, and found that both of
the factors supporting finding that the violation of
counts l-lll were continuing violations. The ALJ
stated that the need for the LEPC, the SERC, and
the fire department to have the MSDS information
did not decrease with the passage of time. Thus,
the ALJ concluded that only the actual filing of
the MSDS would satisfy the requirements of
EPCRA § 311 and begin the running of the five-
year statute of limitations. The ALJ found that
counts l-lll of EPA's complaint were not barred
by the statute of limitations.
With regard to counts IV-VI, which involved
violations of EPCRA §312, the ALJ observed that
the inventory submission requirement was not a
one-time event, but was imposed annually. The
ALJ found this to be critical (again, citing Lazarus).
The ALJ reasoned that Matrix's failure to submit the
inventory forms by the filing date of March 1
resulted in the accrual of a violation of § 312. He
added that although Matrix remained obligated to
comply with the inventory submission requirement
after the March 1 submission date, that date
marked the end of the "period for which the
offending party may be held liable under EPCRA
Section 312 liability." With regard to § 312, the ALJ
found the federal five-year statute of limitations
begins to run "from the time that the owner or
operator should have filed the emergency and
hazardous chemical inventory form, but didn't."
G. Rivers and Harbors Act (RHA)
1. District court holds USAGE did not
act in an arbitrary or capricious
manner when it found that
numerous houseboats constituted
permanently moored floating
vessels that required a permit under
the RHA:
U.S. v. Hernandez. 979 F. Supp. 70 (D. P.R. 1997).
The government brought a class action suit under
§§ 403 and 409 of the Rivers and Harbors Act
(RHA) that sought injunctive relief to compel
defendants to remove their houseboats from La
Parguera (a natural reserve in Puerto Rico that
contains mangrove forests on the shoreline and a
series of off-shore cays and bays that are navigable
waters of the U.S.). The RHA prohibits any
obstruction of waters of the U.S., and makes it
unlawful to build, among other things, any
permanently moored floating vessel, without a
permit. Based on a finding that the primary use of
these houseboats was as weekend or vacation
homes, rather than means of transportation, the
USAGE determined that the houseboats were
permanently moored floating vessels. None of the
houseboat owners had RHA permits to moor their
houseboats in La Parguera.
Following the issuance of cease and desist orders
from the U.S. Army Corps of Engineers (USAGE),
48 owners sought RHA after-the-fact permits to
moor. The USAGE denied 41 of these applications,
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based on the objections of EPA, the Fish and
Wildlife Service, (FWS) and the National Marine
Fisheries Service (NMFS). Permit denials were
based in part on the fact that the FWS had issued
a biological opinion that stated the issuance of the
relevant RHA permits would have likely jeopardized
the yellowed shoulder blackbird. In addition, the
court observed that mooring houseboats in La
Parguera had been found to cause a detrimental
environmental impact and was inconsistent with
Puerto Rico's coastal zone management program.
The court reviewed the USAGE'S denial of the RHA
permits to determine whether the agency had
acted in an arbitrary and capricious manner. The
court observed that USAGE had thoroughly
investigated the nature of the houseboats and
concluded that, despite the ability of the houseboats
to navigate (albeit inefficiently), and their
possession of locally issued boating licenses, the
primary use of the houseboats was as weekend or
vacation homes. The court also observed that the
RHA provided the USAGE with broad discretion in
regulating United States waterways (see, U.S. v.
Alameda Gateway, Ltd., 953 F. Supp. 1106 (N.D.
Gal. 1996), and that, after considering the intended
use, navigability, construction, and environmental
impact of the houseboats, the USAGE made a
rational determination that these houseboats were
permanently moored floating vessels. The court
concluded that the USAGE had not acted in an
arbitrary or capricious manner when it found
that the houseboats were permanently moored
floating vessels and had denied the RHA after-
the-fact permits. Accordingly, the court granted
the government's request for injunctive relief.
The court also rejected arguments by several
owners that had acquired their houseboats after the
application proceedings in 1988-90, and owners
who received a "no-permit-required" letter in 1990,
that they had been denied their due process rights.
Rather, the court reiterated that non of these
houseboats had RHA permits as required by § 10,
and stated that those persons who had received the
no-permit-required letter were clearly informed by
letter in 1993 that if they did not move their boats
they would be subject to suit. The court also noted
that § 10 does not require that the USAGE hold a
hearing prior to making a determination. It added
that the "no-permit- required" owners had received
notice of their alleged violations in 1990.
H. Clean Air Act (CAA)
1. Fourth Circuit holds that EPA's
interpretation of its benzene fugitive
emission NESHAP should be
afforded deference, but that the
small plant exemption provisions of
the rule are insufficient to provide
fair notice absent actual notice:
U.S. v. Hoechst Celenese Co.. 128 F. 3d 216, 1997
U.S. App. LEXIS 29362 (4th Cir. Oct. 27, 1997).
The United States brought suit on behalf of EPA
against Hoechst Celenese Corp., (HCC) for alleged
violations of the benzene fugitive emission source
National Emission Standard for Hazardous Air
Pollutants (NESHAP) (40C.F.R. Part 61, Subparts
a, J, and V) at HCC's Celriver plant in Rock Hill,
South Carolina. These regulations exempt' "any
equipment in benzene service that is located at a
plant site designed to produce or use less than
1,000 megagrams of benzene per year." ' (40
C.F.R. § 61.110(c)(2)). HCC interpreted this
exemption as exempting their Celriver plant
because it did not consume more than 1,000
megagrams of benzene per year. EPA asserted
that HCC's Celriver plant did not qualify for the
exemption and, even if it did qualify for the
exemption, HCC could not claim exempt status
because it had never applied to EPA for the
exemption. The district court had upheld EPA's
interpretation of the regulations, but found that HCC
lacked fair notice of EPA's interpretation of the
exemption and, therefore, refused to hold HCC
liable for any violations of the regulations.
On appeal, the 4th Circuit considered two issues: 1)
whether EPA's interpretation of its own regulation
should be afforded deference; and 2) whether and
when HCC was afforded fair notice of EPA's
interpretation of the benzene rule exemption.
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The court found that the plain language of the
regulation did not indicate any intent to limit the
meaning of the term "use" to consumption.
Moreover, the court found that EPA's interpretation
of the term "use" was logical and consistent with
both the purpose of the Clean Air Act and the
purpose of the exemption itself (a "small plant
exemption"). The 4th Circuit thus agreed with
the district court that EPA's interpretation of its
own regulations deserved deference.
With regard to the fair notice issue, the court
considered two distinct time frames: 1) the period
from 1984, when the benzene rule was
promulgated, to 1989, when EPA first became
aware of the violation and contacted HCC; and 2)
the period that followed contacts between EPA and
HCC until 1992, when HCC came into compliance
with the regulations. With regard to the first time
frame, EPA argued that the term "use" is a broad
term and that the exemption at issue should have
been interpreted narrowly by HCC. EPA also
asserted that the purpose of the exemption—to
exempt small plants—clearly did not support
application to the large Celriver plant. However, the
court focused on whether in this specific instance
defendant HCC lacked reasonable notice regarding
the scope of the regulations. The court declined to
hold that the regulations, their preamble, or their
purpose, "clearly put HCC on notice that the
Celriver plant did not qualify" for the exemption.
Moreover, the court declined to find that HCC had
reason to know its "exemption claim rested on
extremely shaky grounds" and, therefore, triggered
a duty to request clarification from the EPA.
Rather, the court concluded that HCC's contacts
with the Texas Air Control Board (TACB) and EPA
Region 6, regarding two other HCC facilities located
in Texas, gave HCC reason to believe that "its
interpretation of the exemption—equating 'use' to
'consumption,' was accurate." Based on this, and
references in the rulemaking record that equate
use of the term 'use' with 'consume,' the court
concluded that HCC had not received fair notice
of EPA's interpretation between 1984 and 1989.
The court further found that the benzene
NESHAP did not provide fair notice that a plant
owner must apply for the small plant exemption,
nor did it provide fair notice that the owner of
an exempt plant must file an initial report.
With regard to the 1989-1992 time period, the court
observed that EPA had contacted HCC in June,
1989, to clarify the scope of the exemption and
suggest that the Celriver plant may very well be
subject to the benzene NESHAP. The court noted
that internal HCC minutes (July 1989) indicated the
company understood the implications of the EPA
letter addressing interpretation of the exemption (a
second, more definitive letter was sent from EPA to
HCC in August, 1989). Thus, the court
concluded that EPA's 1989 communications
were sufficient to put HCC on notice of EPA's
interpretation of the benzene NESHAP
exemption and HCC was liable for violation of
that NESHAP from August, 1989, until it came
into compliance. The court affirmed the district
court's order except "as to whether after August
1989, HCC Celriver had notice of EPA's
interpretation of the NESHAP exemption" and the
court remanded the case for the reconsideration of
applicable penalties.
Judge Niemeyer dissented from the finding that
HCC had received fair notice following August,
1989. The dissent found that is was unreasonable
and unfair to impose penalties in a situation where
the language of the relevant rule was not clear and
HCC relied on the interpretation of one EPA Region
over another, highlighting the fact that EPA itself
"could not agree on the proper reading of its own
regulation."
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Issue 15 Water Enforcement Division April 1999
INDEX OF CASES
Alaska Center for the Environment v. West, 1998 U.S. Dist. LEXIS 6644 (D.AL, April 30, 1998) 22
Allegany Environmental Action v. Westinghouse Electrical Corp., 1998 U.S. Dist. LEXIS
1846 (W.D. Pa. Jan 30, 1998) 2
American Forest & Paper Ass'n v. U.S. EPA, 137 F.3d 291 (5th Cir. 1998) 11
American Forest & Paper Ass'n v. U.S. EPA, 154 F.3d 1155 (10th Cir. 1998) 36
American Rivers v. Federal Energy Regulatory Commission, 129 F.3d 99 (2nd Cir. 1997) 15
Ashoffv. City of Ukiah. 130 F.3d 409 (9th Cir. 1997) 50
B & B Partnership v. United States. 1997 U.S. App. LEXIS 36086 (4th Cir. Dec. 24, 1997) 19
Bayou Des Families Development Co. v. United States, 130 F.3d 1034 (Fed. Cir. 1997) 17
Borden Ranch Partnership v. U.S. Army Corps of Engineers, 1998 U.S. Dist. 1955
(E.D. Cal. Jun. 9, 1998) 23
Charfoos and Co. v. West. 1998 U.S. Dist. LEXIS 7112 (E.D. Mich. 1998) 30
Citizens Interested In Bull Run v. R.L.K. & Co.. 1998 U.S. App. LEXIS 3926 (9th Cir. Mar. 4, 1998) . 16
Coalition for a Livable West Side v. NYC PEP. 1998 U.S. Dist. LEXIS 1955
(S.D. NY., Feb. 20, 1998) 38
Comfort Lake Assoc. v. Dresel Contracting, Inc., 1998 U.S. App. LEXIS 3733
(8th Cir. Mar. 5 1998) 37
Cornerstone Realty, Inc. v. Dresser-Rand Company and Ingersoll-Rand Company, 1997
U.S. Dist. Lexis 21740 (D. Conn. September 30, 1997) 51
Cristina Investment Corp. v. United States, 40 Fed Cl. 571 (1998) 32
Cross Timbers Concerned Citizens v. Jane Saginaw, Regional Administrator, U.S. EPA,
Region IV: and Paul Johnson, Chief, U.S. Department of Agriculture, 1997 U.S. Dist.
Lexis 20346 (N.D. Texas, December 16, 1997) 33
Friends of the Earth v. Chevron Chemical, 129 F.3d 826 (5th Cir. 1997) 36
General Electric Co. v. National Oceanic and Atmospheric Administration, 128 F.3d 767
(D.C. Cir. 1997) 56
Grine v. Coombs. 1997 U.S. Dist. LEXIS 19578 (W.D. Pa. Oct. 10, 1997) 54
Heck and Assoc., Inc. v. United States, 1998 U.S. App. LEXIS 1003 (Fed. Cir. Jan. 23, 1998) 18
In re: Arizona Municipal Storm. 1998 NPDES LEXIS 1 (May 21, 1998) 14
In re: General Motors Corporation, 1997 CWA LEXIS 13 (Dec. 24, 1997) 45
In re: Ketchikan Pulp Company, CWA Appeal No. 96-7 (May 15, 1998) 15, 45
In re: NE Hub Partners. 1998 UIC LEXIS 1 (May 1, 1998) 49
In the Matter of: B.J. Carney Industries, Inc., 1998 CWA LEXIS 1 (Jan. 5, 1998) 45
In the Matter of: Bollman Hat Company, 1998 EPA App. LEXIS 3 (Mar. 17, 1998) 59
In the Matter of: Catalina Yachts. 1998 EPCRA LEXIS 4 (Feb. 2, 1998) 60
In the Matter of: Heating Oil Partners. 1998 CWA LEXIS 8 (Sept. 21, 1998) 46
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Issue 15 Water Enforcement Division April 1999
In the Matter of: Indoor Air Quality, 1997, No. Docket CAA - III-074 39
In the Matter of: Mafix. Inc.. 1998 EPA App. LEXIS 6 (Feb. 12, 1998) 60
In the Matter of: Parke-Davis Division Warner-Lambert Co., 1998 RCRA LEXIS 2 (Jan. 2, 1998) ... 53
In the Matter of: Philadelphia Macaroni Co.. 1998 CWA LEXIS 5 (May 28, 1998) 47
Inn of Daphne, Inc., v. The United States of America, 1998 U.S. Dist. LEXIS 13991
(S.D. Al. Aug. 26, 1998) 30
International Assoc. of Independent Tanker Owners v. Gary Locke, 1998 U.S. App. LEXIS
12894 (9th Cir. Feb. 4, 1998) 55
Johnson v. U.S. Army Corps of Engineers, 1998 U.S. Dist. LEXIS 8422 (D. MN June 1, 1998) 24
Miccosukee Tribe v. United States, 1998 U.S. Dist. LEXIS 15838 (Sept. 14, 1998) 10
Montana v. U.S. Environmental Protection Agency, 137 F.3d 1135 (1988) 8
Mutual Life Insurance Co. v. Mobil Corp.. 1988 U.S. Dist. LEXIS 4513 (N.D.N.Y. Mar. 31, 1998) 2
Mylith Park Lot Owners Assoc. v. U.S. Environmental Protection Agency, 1998 U.S. Dist.
LEXIS 3227 (Mar. 17, 1998) 31
National Mining Association v. U.S. Army Corps of Engineers, 145 F. 3d 1399 (D.C. Cir., 1998) .... 21
National Wildlife Federation v. Browner, 127 F.3d 1126 (D.C. Cir. 1997) 9
Oregon Natural Desert Association v. Dombeck, 151 F.3d 945 (9th Cir. 1998) 6, 17
Resource Investment v. Corps of Engineers, 151 F.3d 1162 (9th Cir. 1998) 1
Robbins v. The United States. 1998 U.S. Claims LEXIS 32 (Feb. 20 1998) 26
Roland Dubois v. U.S. Department of Agriculture, 1998 U.S. Dist. LEXIS 15198 (D. N.H.
Sept. 30, 1998) 35
San Francisco Baykeeper v. City of Saratoga, 1998 U.S. App. LEXIS 3942 (March 5, 1998) 13
Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 1998
U.S. Dist. LEXIS 3994 (D.N. IL E, March 25, 1998) 27
State of Missouri v. City of Glasgow, 1998 U.S. App. LEXIS 18339 (8th Cir. Aug. 10, 1998) 12
Steel Co. v. Citizens for a Better Environment, 1998 U.S. LEXIS 1601 (March 4, 1998) 58
Stewart v. Potts, U.S. Army Corps of Engineers, 1997 U.S. Dist. LEXIS 17388 (S.D. Tex.
Oct. 30 1997) 34
Tozzi v. U.S. Environmental Protection Agency, 1998 U.S. Dist. LEXIS 6234 (D.C. Cir.
Apr. 21, 1998) 53
Trinity American Corp. v. U.S. EPA. 1989 U.S. App. LEXIS 17751 (4th Cir. Aug. 4, 1998) 48
U.S. v. ConAgra. Inc.. 1997 U.S. Dist. LEXIS 21401 (D. Id. Dec. 31, 1997) 3, 42
U.S. v. Deaton. Action No. MJG-95-2140 (Jun. 23, 1998) 27
U.S. v. Feinstein. Case No. 96-232-CIV-FTM-24 (D), Decided June 12, 1998 26
U.S. v. Gulf Park Water Co.. 1995 U.S. Dist. LEXIS 12802 (S.D. Miss., Mar. 11, 1998) 44
U.S. v. Hallmark Construction Company, 14 F. Supp. 2d 1065 (N.D. II. Sept. 9, 1998) 28
U.S. v. Hallmark Construction Company, 1998 U.S. Dist. LEXIS 11892 (D. Illinois, July 23, 1998) ... 28
U.S. v. Hartsell. 127 F.3d 343 (4th Cir. Mar. 11 1997) 1
U.S. v. Hernandez. 979 F. Supp. 70 (D. P.R. 1997) 61
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U.S. v. Hoechst Celenese Co.. 128 F. 3d 216, 1997 U.S. App. LEXIS 29362
(4th Cir. Oct. 27, 1997) 62
U.S. v. Krillich. 126 F.3d 1035 (7th Cir. 1997) 40
U.S. v. Municipal Authority of Union Township, 1998 U.S. App. LEXIS 16440
(3rd Cir. July 20, 1998) 39
U.S. v. Power Engineering Co., 1998 U.S. Dist. LEXIS 8650 (June 10, 1998) 52
U.S. v. Smithfield Foods. Inc.. 972 F. Supp. 338 (E.D. Va. 1997) 42
U.S. v. Smithfield Foods. Inc.. 1997 U.S. Dist. LEXIS 18934 (E.D. Va. Nov. 26, 1997) 43
U.S. v. TellurideCo.. No. 97-1236 (10th Cir. June 25, 1998) 41
U.S. v. West Indies Transport, Inc., 127 F.3d 299 (3rd Cir. 1997) 5
U.S. v. Wilson. 1997 U.S. App. LEXIS 35971 (4th Cir. Dec. 23, 1997) 20, 47
Upper Chattahoochee Riverkeeper Fund, Inc., et al., v. City of Atlanta, 1997 U.S. Dist.
LEXIS 20334 (N.D. Ga. Nov. 17, 1997) 7
Waste Action Project v. Dawn Mining Corp., 137 F.3d 1426 (9th Cir. 1998) 6
Water Works and Sewer Board City of Birmingham v. U.S. Army Corps of Engineers,
1997 U.S. Dist. LEXIS 17215 (N.D. Al. Oct. 22, 1997) 24
Weatherby Lake Improvement Company v. Browner, No. 96-115-CV-W-8 (W.D. Mo.
Aug. 17, 1997) 34
Wilson v. Amoco Corporation, 1998 U.S. Dist. LEXIS 57 (D. Wyo. Jan. 2, 1998) 51
66
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