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United States v. Allegheny Ludlum Corp.

ELR Citation: 34 ELR 20029
Nos. No. 02-4346, (3d Cir., 04/28/2004)

The Third Circuit affirmed in part, vacated in part, and remanded in part a district court order finding a company liable and assessing penalties against it for violating the CWA at five of its manufacturing facilities. Contrary to the district court's holding, the laboratory error defense—where the error resulted in overreporting—is not inconsistent with the CWA's regime of strict liability. Rather, inasmuch as the penalty imposed is for an unlawful discharge and not for faulty reporting, deprivation of the defense would not advance the purpose of the CWA and it would be grossly unfair, especially in view of the presence of companion provisions of the CWA imposing liability for monitoring and reporting violations. In addition, the district court's application of a 12.73% interest rate to calculate the company's economic benefit was an abuse of discretion because the court's calculation of the company's weighted average cost of capital was unsupported by the evidence. Last, the court held that district courts have discretion to determine how many violation days should be assessed for penalty purposes for the violation of a monthly average limit, based on whether violations are already sufficiently sanctioned as violations of a daily maximum limit. Because the district court did not have the benefit of this standard, its penalty assessment was remanded for further proceedings.