A Citizen's View of Gwaltney

Ann Powers

Editors' Note: In last month's issue, Jeffrey G. Miller analyzed Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., where the United States Supreme Court ruled that plaintiffs in FWPCA § 505 citizen suits must make a good faith allegation of ongoing or intermittent violation. Professor Miller suggested that Gwaltney leaves so many important questions unresolved that it constitutes an "invitation to the dance of litigation." This month, we asked practicing attorneys actively involved in citizen suit litigation to give us their views of Gwaltney. The two Dialogues below consider what Gwaltney may mean for citizen-plaintiffs on the one hand, and industry defendants on the other. The authors of the two pieces offer different interpretations of some aspects of the Court's opinion, and recommend arguments and strategies for parties to pursue. The contrast between the two Dialogues foretells some of the issues and arguments that will comprise the "dance" in FWPCA citizen suits.

Ms. Powers is the Vice-President and General Counsel of the Chesapeake Bay Foundation, which is a nonprofit organization dedicated to the protection and restoration of the Chesapeake Bay. She is involved in the Gwaltney case on behalf of the Chesapeake Bay Foundation.

[18 ELR 10119]

The Supreme Court ruled in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc.¹ that citizens may bring suit against dischargers that they believe to be violating the Federal Water Pollution Control Act (FWPCA),² but jurisdiction will not extend to cases brought for wholly past violations. Both sides claimed substantial victory, which, given the ambiguous language in part of the opinion, is not surprising. The actual impact of the case will not be evident immediately; no doubt it will cause some citizen-plaintiffs to screen their cases with an even more selective eye, but in the long run should not impede citizens' ability to bring meritorious suits. If one thing can be said with certainty, it is that motions practice in these cases will not abate.

The Supreme Court's Opinion

On a practical level, neither side won or lost the case. Plaintiffs had hoped the Court would hold that FWPCA § 505³ conferred on them the same broad right as the government's to sue for penalties for past violations. Defendants had sought to have the right as circumscribed as possible, limited to cases in which the defendant was actually violating the law at the precise time the case was filed.⁴ Justice Marshall, writing for the Court, rejected both positions and chose instead the middle ground suggested by the First Circuit in Pawtuxet Cove Marina, Inc. v. Ciba-Geigy Corp.,⁵ holding that so long as citizens allege ongoing noncompliance with the Act, jurisdiction obtains. The allegation must, of course, comply with Federal Rule of Civil Procedure 11, which requires a pleading to be based on a good faith belief, formed after reasonable inquiry, that "it is well grounded in fact."

The Court took pains to state that it is the allegation that is the key to determining jurisdiction, not the actual fact of violation. In addition, the "to be in violation" language of § 505 does not require that a violation of the statute occur on the day the complaint is filed. Instead, it is "a requirement that citizen-plaintiffs allege a state of either continuous or intermittent violation — that is, a reasonable likelihood that a past polluter will continue to pollute in the future."⁶ Justice Scalia, who filed a partial dissent, agreed that the language "suggests a state rather than an act — the opposite of a state of compliance. A good or lucky day is not a state of compliance."⁷

The pivotal issue in Gwaltney became, therefore, the plaintiffs' good faith in alleging that the company was in ongoing violation at the time the suit was filed. Even [18 ELR 10120] though the Supreme Court did not say so explicitly, it appeared to accept the citizen-litigants' good faith, noting that the District Court had been persuaded that the plaintiffs' allegation "appears to have been made fully in good faith,"⁸ and that the Court of Appeals had acknowledged that "[a] very sound argument can be made that plaintiffs' allegations of continuing violations were made in good faith."⁹ But because the Court of Appeals had ruled that plaintiffs could maintain an action based on wholly past violations of the Act, it had declined to rule on the District Court's alternative holding that the complaint contained a good faith allegation of ongoing violation. The Supreme Court therefore remanded the case "for consideration of this question."¹⁰

Near the close of the majority opinion, Justice Marshall briefly took up the issue of standing. Addressing defendant's contention that a discharger who comes into compliance after the suit is filed deprives plaintiff of standing because there would not be a remediable injury, Marshall observed that it is long established that allegations of threatened or actual injury are sufficient to invoke jurisdiction.¹¹ The opinion goes on to say that defendant may attempt to prove, on a motion for summary judgment, that the allegations are sham or insupportable.¹² At that point plaintiffs would have to put forward some evidence to support the reasonableness of their good faith belief.

Marshall also notes that plaintiffs must prove the allegations at trial.¹³ Unfortunately, this statement concerning trial is highly ambiguous. What exactly must plaintiffs prove? Up to this point, there has been no indication that the Court's ruling was intended to affect trial on the merits at all. The bulk of the Gwaltney opinion appears to impose only one requirement on plaintiffs: a requirement that they allege ongoing violation in good faith when filing their complaint. (They may, as discussed above, have to present some evidence of their good faith in defense against a motion for summary judgment.) At trial, plaintiffs presumably only need prove that defendant violated the Act as alleged, and not that defendant was likely to continue to pollute in the future. Marshall's statement, really no more than a brief aside, that plaintiffs must prove "the allegations" at trial is therefore puzzling. Read in the context of the entire opinion, it appears that he meant only to say the obvious, that plaintiffs must prove that defendant has violated the Act. Certainly Justice Scalia does not seem to have understood the majority opinion to require proof of ongoing violation at trial, for he said that under the majority's view plaintiffs "can never be called on to prove" their allegations of on going violation.¹⁴

In concluding its opinion, the Court also attempted to allay industry fears of stale cases by noting that, in appropriate circumstances, the mootness doctrine might be involved. But the Court was not establishing new law; rather, it simply observed that "long-standing principles of mootness" would apply to citizen suits, as they would to any other case.¹⁵ The Court went on to caution that the burden on a defendant seeking dismissal on this basis "is a heavy one,"¹⁶ and that the doctrine "protects plaintiffs from defendants who seek to evade sanction by predictable 'protestations of repentance and reform.'"¹⁷ The Court emphasized that it must be "absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur"¹⁸ before a case would be moot. And the cases cited by the Court are explicit that mere voluntary cessation of allegedly illegal conduct does not moot a case even if "the likelihood of further violations is sufficiently remote to make injunctive relief unnecessary."¹⁹ Consequently, the circumstances under which a discharger could prevail on a mootness argument should be extremely few and far between.²⁰ Even if new equipment has been installed, operation and maintenance problems may arise, and companies that have been dilatory in improving their facilities are often no more diligent in their upkeep.²¹

Citizen Suits After Gwaltney

The oft-asked question after Gwaltney is: What effect will it have on citizens' ability to bring lawsuits, and what should citizens do to insure that their cases are not dismissed on jurisdictional grounds? Defendants will now commonly argue that plaintiffs have failed to establish the court's subject matter jurisdiction by not making adequate good faith allegations of ongoing violations, and that plaintiffs' [18 ELR 10121] claims have been rendered moot by the defendants' alleged recent compliance. It is apparent the decision will pose some added burden on citizen litigators. However, most major groups that are actively engaged in litigation under § 505 already employ fairly thorough screening procedures aimed at targeting major violators. Discussions with attorneys for various citizen groups indicate that for the most part they have little litigation in which there are not continuing violations. Considering most groups' limited resources, it makes no sense for them to waste time and effort on violators that do not have serious ongoing noncompliance. Therefore, Gwaltney's ruling will not be a serious impediment to citizen groups.

To the extent that Gwaltney does make matters more difficult for citizen-plaintiffs, they can minimize the adverse consequence of the ruling by taking a number of steps. To head off the argument that defendant brought itself into compliance before the suit was filed, plaintiffs can make sure when deciding to file a sixty-day notice of intent to sue²² that the company involved appears to have ongoing violations. This generally means carefully reviewing available state and federal files. Recordkeeping varies from state to state, and gathering information is seldom as easy a task as defendants like to portray. The records may be located in another city from that of plaintiffs and their counsel, and the files themselves may be poorly maintained. While some states are computerizing their records, it is not uncommon for their entries to be backlogged and for uncataloged documents to be in various stages of the process (including buried in someone's in-box). Nonetheless, it will behoove plaintiffs to obtain as accurate a picture as possible of the potential defendant prior to initiating the litigation process.

At the end of the sixty-day notice period, plaintiffs should again review the potential defendant's status, and be prepared to file suit immediately. Delay inures only to the defendant's benefit, since it allows additional time for a discharger to improve its compliance or prevent future violations, thereby putting itself in a position to attack plaintiff's jurisdictional allegations. Before filing the complaint, citizen-plaintiffs should obtain the discharger's latest submission to the state (or to the Environmental Protection Agency), and make careful inquiries of government staff. Efforts made and information obtained should be documented thoroughly so that plaintiffs can demonstrate readily the factors that supported a good faith belief. If inquiries must be made by phone, rather than in person, documents should be requested and even more careful memorials of conversations and comments should be maintained. Follow-up letters to government officials are important, since the official can correct any misinformation or misunderstanding, thus avoiding unpleasant surprises later. Moreover, if good faith is challenged and a demonstration must be made to the court, it is possible that government employees could be called as witnesses. Having unrefuted written memorialization of their comments makes it more difficult for witnesses' recollections of events to change over time.

Facts that reasonably give rise to a good faith belief that defendant is in violation will vary considerably. For instance, many companies file Discharge Monitoring Reports (DMRs) on a monthly basis. Others, however, may be required to do so only quarterly or even semi-annually. Consequently, the most recent DMR on file may be several months old. For a facility reporting semi-annually, with a long history of violations, it may not be at all unreasonable to believe that it continues to violate its permit, even if the last DMR is several months old. Moreover, just because a company has a month or two free of violations does not mean that it may not be an "intermittent" violator against whom citizens may file suit.

During the 60-day notice period, potential citizen-litigants may be contacted by defendant or its attorney, who will undoubtedly attempt to convince the citizens that a "state of compliance" has been achieved, and defendant has returned to rectitude. Defendants will attempt to place their situation in the best light possible, and to make their own records demonstrate that no reasonable person could in good faith believe that there continues to be a problem. Citizen-litigants must carefully assess each case on its own facts, but not automatically be deterred by defendants' tactics.

In drafting the complaint, care must be taken to allege an ongoing violation, and, of course, injunctive relief should be sought. Once the case is filed, plaintiffs should attempt to move it forward as expeditiously as possible, and ask for an early hearing if there are motions relating to jurisdictional issues. Depending on the arguments defendants raise, plaintiffs may wish to pursue early discovery to prepare for such a hearing. In some cases, serving interrogatories with the complaint may even be an effective method of narrowing the issues. Plaintiffs should seriously consider moving for a preliminary injunction, and would be well-advised to push the case or hearing to trial as soon as possible. In any event, they should have their own expert actively involved from the outset so he or she may assist with affidavits to refute those that may be submitted by defendants, and prepare for any proceedings. While plaintiffs should make every effort to keep inquiries as focused as possible, and limited to the papers, they should be prepared for the possibility of fairly extensive evidentiary hearings.

Where a defendant challenges plaintiffs' good faith or raises a mootness argument, plaintiffs should be prepared for certain special situations. First, defendant may claim that there is no ongoing violation because it has ceased discharging directly into the waterway. However, defendant may instead be discharging into a sewer system. In such a case plaintiffs should point out that indirect dischargers must comply with pretreatment requirements and permits, and may well continue to violate the Act.

Second, defendants may urge that courts find evidence of ongoing violations only where the same particular requirement, or parameter, of a permit is violated over time. In other words, defendants may try to argue that a violation of one, then another, and then yet another parameter cannot together constitute the basis for an allegation of continuing violation. Plaintiffs will resist this kind of argument strenuously, since there is no basis in the Act for adopting the parameter-by-parameter approach. Section 505 allows a citizen to sue anyone alleged to be in violation of "an effluent standard or limitation," which is defined to include a permit.²³ Congress intended the Act to be easily and quickly enforceable in "simple proceedings [18 ELR 10122] suitable for summary judgement."²⁴ To examine compliance on a parameter-by-parameter basis would require elaborate inquiries into the relationships among various effluent parameters, outfalls, and waste treatment devices just to determine the scope of the court's jurisdiction.²⁵

Conclusion

For the last several years citizen suits have generated most of the reported FWPCA cases. Defendants have raised numerous legal issues, but by and large the courts have resolved them in favor of the citizens. As a result, until recently suits under § 505 were beginning to be relatively streamlined. Issues concerning the use of DMRs, the applicable statute of limitations, diligent prosecution, and a number of other topics have been fairly well laid to rest. That trend will now be reversed as dischargers develop a whole new range of arguments to pursue. Citizens can only hope that the courts will be as unsympathetic to defendants' contentions as they have often been in the past. And even if citizens do not always prevail, we can take some comfort from the fact that by seeking to defeat a citizen suit on jurisdictional grounds, a discharger may be achieving the ultimate goal of the act: compliance.²⁶

1. 108 S. Ct. 376, 18 ELR 20142 (1987). The Natural Resources Defense Council is, along with the Chesapeake Bay Foundation, a citizen-plaintiff in this action.

2. 33 U.S.C. § 1251 et seq.

3. 33 U.S.C. § 1365.

4. Gwaltney argued that because its last reported violation occurred several weeks before the citizen groups filed their complaint, the District Court lacked subject matter jurisdiction.

5. 807 F.2d 1089 (1st Cir. 1986), 17 ELR 20374, cert. denied, 108 S. Ct. 484 (1987).

6. 108 S. Ct. at 381, 18 ELR at 20144.

7. Id. at 387, 18 ELR at 20147.

8. Chesapeake Bay Foundation, Inc. v. Gwaltney of Smithfield, Ltd., 611 F. Supp. 1542, 1549 n.8, 15 ELR 20663 n.8 (4th Cir. 1986), aff'd, 791 F.2d 304, 16 ELR 20636 (4th Cir. 1986), vacated and remanded sub nom. Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc., 108 S. Ct. 376, 18 ELR 20142; see 108 S. Ct. at 385, 18 ELR at 20146.

9. 791 F.2d at 308 n.9; see 108 S. Ct. at 385, 18 ELR at 20146.

10. 108 S. Ct. at 386, 18 ELR at 20147.

11. 108 S. Ct. at 385, 18 ELR at 20146.

12. Id.

13. 108 S. Ct. at 385, 18 ELR at 20146-47.

14. 108 S. Ct. at 386-387, 18 ELR at 20147 (emphasis added). Justice Scalia objected strongly to the majority's decision that plaintiff need only demonstrate a good faith belief to show jurisdiction, and would never be required to show the actual existence of an ongoing violation at the time the suit was brought. However, even under his preferred theory, the results would generally be the same as those obtained by the majority. Plaintiff would only be required to demonstrate that at the time the complaint was filed defendant was in a "state of noncompliance," which was defined in terms very similar to those used by the majority. But the fact that defendant achieved compliance by the time of trial would be irrelevant because "subject matter jurisdiction 'depends on the state of things at the time of the action brought'; if it existed when the suit was brought, 'subsequent events' cannot 'oust] [' the court of jurisdiction." 108 S. Ct. at 387, 18 ELR at 20147, quoting Mullen v. Torrance, 9 Wheat. 537, 539, 6 L. Ed. 154 (1824).

15. 108 S. Ct. at 386, 18 ELR at 20147.

16. 108 S. Ct. at 386, 18 ELR at 20147, citing United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953).

17. 108 S. Ct. at 386, 18 ELR at 20147, quoting United States v. Oregon State Medical Society, 343 U.S. 326, 333 (1952).

18. 108 S. Ct. at 386, 18 ELR at 20147, quoting United States v. Phosphate Export Association, Inc., 393 U.S. 199, 203 (1968) (emphasis by Gwaltney court).

19. See United States v. Phosphate Export Association, Inc., supra note 18, at 203. Moreover, a plaintiff who makes agood faith allegation of ongoing violations "may recover a penalty judgment for past violations even if the injunction proves unobtainable." Pawtuxet Cove Marina, Inc. v. Ciba-Geigy, 807 F.2d at 1094.

20. It is instructive that, even though the Court discussed the mootness doctrine, it apparently did not think it applied in the Gwaltney case, since it remanded solely for consideration of the good faith issue.

21. The company most likely to prevail on a mootness argument might be one that had ceased operation completely and surrendered its permit. But in Sierra Club v. Hanna Furnace Corp., 636 F. Supp. 527 (W.D.N.Y. 1985), the court refused to dismiss the case as moot even though defendant had sold its plant equipment and permanently ceased operations. The court found no "convincing evidence that defendant cannot recommence operations." Id. at 529 (emphasis in original).

22. FWPCA § 505(b), 33 U.S.C. § 1365(b), requires such notification.

23. 33 U.S.C. § 1365(f)(6).

24. Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1058, 9 ELR 20284, 20305.

25. Defendants will no doubt rely on a decision by the Fifth Circuit in Sierra Club v. Shell Oil Co., 17 F.2d 1169, 17 ELR 20767 (5th Cir. 1987), cert. denied, 108 S. Ct. 501 (U.S. Dec. 14, 1987), petition for rehearing pending, No. 87-131, in urging a parameter-by-parameter approach. The court's analysis, however, is legally unsupported, and ignores the practical difficulties of the approach.

26. Where a case is dismissed on jurisdictional grounds because of a "suddenly repentant" defendant, plaintiffs may still recover litigation costs. 108 S. Ct. at 386 n.6, 18 ELR at 20147 n.6.