Standing Committee Symposium on The Role of Private Institutions in Public Environmental Decisionmaking: Private Watchdogs: Internal Auditing and External Enforcement -- Three Perspectives: A. Environmentalists' Citizen Suits

Standing Committee Symposium on The Role of Private Institutions in Public Environmental Decisionmaking: Private Watchdogs: Internal Auditing and External Enforcement — Three Perspectives: A. Environmentalists' Citizen Suits

Bruce J. Terris

Bruce J. Terris is a private attorney practicing with the firm of Terris, Edgecombe, Hecker & Wayne in Washington, DC.

Up to now you have been hearing of the brave new world in which nice people sit down and talk together, perhaps under the leadership of charming mediators and facilitators, and when they are done, there will be a solution. For my part, I will be talking about the old world, the use of power. It is judicial power, but, essentially, one group of people imposing an outcome on others.

I am talking about situations in which people have violated federal laws, and the question is: what should be done about it? What should be done to stop them, and what should be done to penalize them for the actions that they have taken?

Almost all of the environmental statutes have provisions in them for citizen suits. There are essentially two kinds. The first is an action to compel the agency to do something that it had a nondiscretionary duty to do but has failed to do. The second kind of suit is an action against a private person who has violated the statute. The action can be for injunctive relief, or, under some statutes, for penalties as well.

I want to focus on the second kind of lawsuit, because the first kind is really not very new. The statutes authorizing private suits include provisions to give 60 days notice in writing to the agencies, so that the agency may act first, if it chooses, as an alternative to private law enforcement. They also include, almost always, provisions for the payment of attorney's fees. These provisions are intended not merely to allow citizens to sue; they are deliberate decisions by Congress to encourage suits. Congress has been emphatic about this point.

[17 ELR 10255]

Despite a good deal of discussion, there were only a few, scattered suits against private parties under the Clean Air Act¹ and other environmental statutes, until approximately three years ago, when a wave of lawsuits arose under the Clean Water Act². Today, these suits probably number in the hundreds.

Leaving aside those under the Clean Water Act, why have there not been more such suits? First of all, contrary to popular belief, the attorney's fee provisions are not nearly adequate to encourage people to bring suits — not if they want to eat, at least. Many in industry believe that these suits are a great way for private attorneys to make money. In general, they are being brought either by attorneys who do not depend on them for their incomes (they bring a few of them, and they've got a practice that otherwise will compensate them), or by attorneys who work for environmental organizations and therefore get a steady salary no matter what the outcome is.

Let me introduce you to my own experience. Over the last three years, we brought 26 lawsuits. At $75 an hour, which, few would contest, is a little below the going rate for Washington lawyers, we had more than $1,000,000 invested as of the first of this year. Our return has been almost $50,000. There are not many private law firms on the environmental side who would be ready to carry almost $1,000,000 worth of billing for three years. We hope for good results in the future, but there is no certainty.

Beyond the problem of persuading lawyers to take these cases, outside of the Clean Water Act, the suits are far more difficult than they appear. Often the standards are not clean cut. It is very difficult to find the violations without investing a great deal of work at the start. In addition, there is the enormous cost and burden of finding expert witnesses.

It is not surprising, then, that these suits have not been started, with the exception of the water cases.

What is really different about these cases, about the citizen enforcement of environmental statutes? In the United States, our citizens have considerable ability to sue to enforce statutes, federal and local alike. One may sue to collect damages for oneself, or get injunctions to prevent impending harm. Sometimes the provisions are explicit, sometimes the causes of action are implied.

Up until the last decade, there were many implied causes of action. Thanks to the Supreme Court, this area of the law is on the decline. But the notion that one can sue to enforce a federal statute is not unique.

What is different about the environmental statutes is that one can sue where the harm to oneself has been minimal. This must be defined cautiously, because there still is a standing provision. One has to show the court: I've been hurt. Once the personal harm has been shown, however, from that point on, everybody ignores the question. Under the provisions, there is no right to damages and no right to injunctive relief to protect oneself. The plaintiff is supposedly protecting the public interest.

There are very few provisions in American law traditionally where this has been the case. One, however, is the False Claims Act³. The False Claims Act was enacted by Congress during the Civil War, because there appeared to be widespread fraud in government contracting. The Act invited citizens to sue private companies for fraud and, if they were successful, they could keep one fourth of the damages. It was supposed to be a very powerful inducement for citizen enforcement.

The Supreme Court upheld the False Claims Act as constitutional. By a variety of different mechanisms, however, courts have kept its use to a minimum. Nonetheless, the precedent is there.

Why did Congress develop citizen's suits in the environmental area? Some of the reasons are explicit in the legislative history. Others can be inferred from what one knows generally about administrative and judicial processes.

There was obviously a hesitation to leave law enforcement solely to administrative agencies. There was a suspicion that somehow the agency might be co-opted by the regulated industries. It is an old problem, and it is particularly serious with regard to the states. The states are supposed to be the main enforcers of environmental statutes, yet the states have very serious problems going up against major industries. The industries are politically powerful, and they have a good deal of prestige within their communities. Local governments have a reluctance to go after people who may decide to move out. We heard yesterday about the relationship between Camden, New Jersey and Campbell's Soup. While perhaps an extreme example, the Camden dilemma is repeated in a less acute form across the country.

The national environmental statutes were enacted in part to prevent that kind of thing from happening. The idea was to reduce the power of industry to play one locality off another and keep standards everywhere relatively low.

A uniform statute may help to prevent that kind of state shopping, but there are great differences in enforcement, which can be just as much of an inducement for industries to choose some states over others.

Although the problem is acute with the states, it has also been serious with regard to the Environmental Protection Agency (EPA), particularly over the last few years. The Gorsuch era served as a very powerful indictment of the wisdom of leaving the environmental statutes to EPA.

A second reason that Congress developed environmental citizen's suits is that Congress intended strict enforcement of these statutes. In other words, leaving aside the prospect of co-option of, or misconduct by, an agency, Congress did not want a negotiated regulatory system. Until these citizen suits started, the history of dealings between EPA and industry, and the states and industry (under, for example, the Clean Water Act) reflected a negotiated regulatory regime. People came in and said to the agency: We're having trouble complying with our permit. After checking to see whether it was true, the agency would say: That's okay. We'll give you a few more years, or we'll think about changing the permit. Then they would take years and years, and at times never even deal with that permit.

The third reason had to do with resources. Neither EPA nor the states have the resources to enforce these statutes in a comprehensive way. This would mean going after every major or medium polluter in every state — not in two years, five years or twenty years, but, rather, within a reasonable time after their violations began.

And finally, there was the theory of privatization currently espoused by President Reagan. What could be better than turning over law enforcement to somebody else? After all, it's cheap, and somebody else can do the job. In a sense it is a user fee. The costs of turning it over are met by the people who violated the law, because they have to pay the attorney's fees.

There are of course possible dangers, as well as benefits, from private enforcement of environmental statutes. Private people can act in a venal way. There is an opportunity in these [17 ELR 10256] suits for blackmail. Even if plaintiffs lose their suit, the defendants can be put to a very substantial expense, over what is likely to be a period of several years. The industries often claim they are being blackmailed even if they are not. Many of them believe that they are far from deserving to be penalized. Some even suggest when we first talk to them that they deserve a medal. True, there have been 200 violations of their permit, but they have excellent reasons for it. Overall, they claim, they have acted better than almost everybody else, and should be commended.

Another drawback of these suits is that the private parties may be incompetent. They may destroy good cases. EPA or the states may not have gotten to those cases and, by the time they act, the case has been lost or, perhaps, settled for inadequate penalties. This is not the general case, however. The people that have brought these cases up to now, by and large, have outperformed EPA.

A third problem is the generation of inconsistency in federal and state regulatory policies. Industry says: You are suing us, but the state has already looked at this, and it thinks that it's a bad idea to sue.

The answer to such complaints is that state policies and EPA policies that let people off the hook are not consistent with Congress's policy. Congress wanted strict enforcement of these laws. If there is a legitimate reason to excuse people, it should be brought to the attention of Congress.

Another objection is that these suits contribute to the agency's burdens. EPA does have to monitor them. Our cases at times have issues in common with enforcement issues in EPA cases. If EPA allows us to litigate them to the end, and we lose them, it will seriously hurt EPA's position. Similarly, when private parties agree to settlements, the question arises: Are we selling out? Are we, in effect, agreeing to settlements that will undermine the regulatory regime as EPA sees it? At times, the courts may even require EPA to examine settlements.

How has it worked? Based on the Water Act cases, there is no evidence at all that the private parties have been either venal or incompetent. This does not mean that they may not be so at some time in the future. EPA, for its part, has had to do some extra work. For example, it has had to file amicus briefs in some of our cases in order to protect its own position. While EPA's position usually has been the same as that of the environmentalists, EPA tries to avoid the risk that the court will decide against environmental enforcement without realizing that it is thereby hurting the EPA.

There is some inconsistency between the positions of the environmental plaintiffs, EPA, and the states. Many of these suits would never have been brought by EPA. There has been a decision in some form, at some level of the agency, not to bring them. In the face of this inconsistency, I submit that we are right and the agencies are wrong, because our position reflects what Congress intended.

What has been the effect of these lawsuits? There has been a drastic change in the regulatory atmosphere under the Water Act. I am told that industry now looks at the Water Act in a completely different way. It used to be that if a permit was a little too strict, the industry didn't worry about it, didn't go to court, didn't appeal — it wasn't necessary. They went in and talked to the agency. Maybe the agency could be convinced not to enforce it too strictly or, maybe not to enforce it for a few years. That has ended. Industry cannot trust the agency today. It is not because the agency will "doublecross" it, but because there are citizens out there who do not have to accept whatever bargain has been struck with the agency. Permits are taken seriously today.

The results are good and bad. The good result is that what is on paper presumably is what will be enforced and probably what the industries will do. They do not want to run the risk that a couple years later they will be tagged for hundreds of thousands or even millions of dollars in penalties.

For the last couple of years, the average amount in EPA's penalty settlements has been rising quickly. It now knows that its work will be judged and compared with the work of others. No longer does it operate in a monopolistic enforcement world.

In general, the water cases have worked very well. Their benefits will not occur under other environmental statutes, however, unless the existing statutes are changed to make private enforcement less difficult. Such a change would help EPA, the states and their citizens.

In any event, citizen enforcement is not a panacea. It cannot replace agency enforcement. Even under the Water Act, where so many cases have been brought, it does not do so. In other areas, citizen enforcement does not even make a dent, because, despite appearances, the statutes are not formulated to permit these suits to be filed.

Discussion

PARTICIPANT: Have you seen any citizen suits in which the attorney representing neighborhoods and environmental groups is using the case for political reasons in a given area rather than for legitimate enforcement purposes?

I am talking about a recent rash of cases aimed at landfills and dumps brought by attorneys representing landowners, but they throw in Superfund, RCRA, the Clean Water Act, and the Clean Air Act. It is really more of a guise to bring state or EPA action directed at the landfill than it is a so-called citizen suit.

TERRIS: I'm not experienced in that particular slice of environmental law. However, I do regard it as perfectly legitimate for citizen groups to use what judicial power they have to put pressure on people who they think are not complying with the law.

PARTICIPANT: Bruce, once you've litigated a case to completion, and the government has chosen not to enter the case, what is your view about whether the government ought to be bound by res judicata to the results that you've achieved? After all, the environmental group is suing on behalf of the public, and the penalty is being paid to the treasury.

TERRIS: I think that they should be bound, and I think that it is possible to ensure that they are bound. I think settlements should be supervised by the government. The government should examine the settlements to make sure that they're acceptable, or they enter the suit at the beginning so they can participate. Although the government does not have any legal right under the statute to get a copy of the complaint, they are getting it in most cases through the cooperation of the environmental groups. Either they should participate or not — either way they should be bound. It puts some burden on them to do a little bit of work, but it seems to me that it is the only fair way. As a practical matter, at any rate, very few courts are going to impose double penalties on anyone.

PARTICIPANT: Are there any statistics on the number, the success rate, and the average settlement for these citizen suits? Also, what are your plans for the future, given the extent of your firm's investment in these cases? Can we expect successive waves, or are you becoming a bit disillusioned with the process?

[17 ELR 10257]

TERRIS: There are some statistics, but not good ones. The cases arising over the last three years were brought under the Clean Water Act, and so were supposed to be quite easy to litigate. The scheme is simple: a company declares what they discharge; one need only compare it to the permit, and if there is a violation, it looks like an open and shut case. However, only one case has come to final judicial resolution and it is on appeal. Those that were not settled are tied up in all kinds of different ways. So we really don't know very much about what willhappen.

Most lawyers on the defendant's side in the Water Act cases appear to believe today that they're going to lose. Summary judgment has been granted in perhaps twenty cases on the environmental side. It now appears that almost one hundred percent of the Water Act cases are going to be won by the environmentalists. The problem is going to be deciding on appropriate relief. Will the penalties be a slap on the wrist, say, $20,000, or will they be $500,000? In the one case that went to conclusion, the penalty was somewhere over a million.

What are we going to do? We're going to bring more cases. We know how to go about it now, and we're about to start on the next wave.

1. 42 U.S.C. §§ 7401-7642, ELR STAT. 42201.

2. 33 U.S.C. §§ 1251-1376, ELR STAT. 42101.

3. 31 U.S.C. §§ 3729 et seq.