Pennsylvania Department of Environmental Resources v. Williamsport Sanitary Authority

No. 79-690 (497 F. Supp. 1173, 15 ERC 1342) (M.D. Pa. September 15, 1980)

ELR Digest

The district court rules that although the Environmental Protection Agency (EPA) erroneously paid to plaintiff state agency sewage treatment works construction funds actually owed to defendant municipality, the Eleventh Amendment requires that defendant's counterclaim for damages be denied. The Pennsylvania Department of Environmental Resources (DER) sought a declaratory judgment confirming its right to retain a portion of the federal funds awarded it by EPA, pursuant to § 206(a) of the Federal Water Pollution Control Act (FWPCA) in connection with the construction of a treatment works owned by defendant Williamsport Sanitary Authority (WSA). Defendant counterclaimed for damages and declaratory and injunctive relief, contending that EPA's payment of money under § 206(a), to facilitate improvements at its sewage treatment plants, should have been paid directly to WSA rather than to DER. DER contended that it is entitled to retain the money as a form of reimbursement because of WSA's receipt of state grant funds prior to the enactment of § 206(a). The district court concludes that EPA violated § 206(a) in paying DER the money and should have paid WSA instead. The court rejects DER's defense that a contract existed which nullified WSA's claim to the funds. The court also rules that the action is neither barred by the state's six-year statute of limitations for claims of conversion nor by an EPA regulation requiring an administrative appeal of an order granting or denying federal financial assistance. The court concludes, however, that § 206(a) does not create a private cause of action, such as the one at bar. A claim for conversion is traditionally one addressed by state courts, and there is no reason to assume Congress intended to create a duplicative federal cause of action. The court further states that even if the FWPCA were to create a private cause of action, the damages claimed would nonetheless be barred by the Eleventh Amendment because WSA is seeking from a federal court an order which will require payment of state funds. It is immaterial that the money entered the state's treasury via federal grants because any funds a state uses to pay ajudgment are state funds for Eleventh Amendment purposes. Thus, WSA's only recourse is to attempt to obtain a judgment in state court.

The full text of this opinion is available from ELR (25 pp. $3.75, ELR Order No. C-1232).

Counsel for Plaintiff
Michael S. Alushin, Ass't U.S. Attorney
P.O. Box 309, Scranton PA 18501
(717) 961-2924

Counsel for Defendants
Ann S. Pepperman, Bret O. Feese
McNerney, Page, Vanderlin & Hall
433 Market St., Williamsport PA 17701
(717) 326-6555

Muir, J.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]