Arguing for the Defense After Gwaltney

Scott M. DuBoff and Scott W. Clearwater

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.

Mr. DuBoff is a partner, and Mr. Clearwater an associate, in the Washington, D.C. law firm of Bishop, Cook, Purcell & Reynolds. Mr. DuBoff attended the University of Wisconsin, graduating with a B.A. in 1969 and a J.D. in 1973, and served as lead counsel to 10 companies participating as amici curiae in Gwaltney. Mr. Clearwater graduated from the University of Rochester in 1981 with a B.S. in chemical engineering and worked as a chemical engineer before attending the College of William and Mary Law School, where he graduated in 1986.

[18 ELR 10123]

The Supreme Court's recent decision in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc.¹ represents an important victory for defendants and would-be defendants in citizen suit litigation under § 505 of the Federal Water Pollution Control Act (FWPCA, also known as the Clean Water Act).² Although bringing a citizen suit under § 505 has been referred to as being "as easy as shooting fish in a barrel,"³ the Supreme Court's decision in Gwaltney has made the "barrel" significantly larger.

Gwaltney reverses the decision below by the Fourth Circuit, and in the process resolves a three-way conflict in the United States Court of Appeals as to whether a suit may be brought under § 505 to impose a civil penalty for National Pollutant Discharge Elimination System (NPDES) permit violations that had been abated prior to the suit.⁴ The Supreme Court holds that a § 505 suit may not be brought for that purpose, and rejects the notion that the scope of citizens' enforcement under the FWPCA is equal to the government's. Gwaltney will have an important effect not only on a number of pending § 505 cases, but also on the types of citizen suits that will be brought in the future. As a result of Gwaltney, there may well be fewer of these suits and jurisdictional and liability issues could be more complex.

Overview of the Court's Opinion

FWPCA § 505(a) authorizes a citizen or private enforcement action against a company "alleged to be in violation" of its NPDES permit. Although court decisions as far back as the late 1970s had suggested that § 505 did not authorize suits for past NPDES violations that had abated prior to suit,⁵ the importance of the Gwaltney issue grew considerably with the great increase in § 505 suits that began in the 1983-84 period.

The key to the Supreme Court's decision is the conclusion that § 505(a)'s "to be in violation" proviso "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 Distinguishing § 505 from the FWPCA's considerably different provisions for government enforcement under § 309, the Supreme Court reasoned that a citizen's claim for civil penalty relief was closely intertwined with the strength of the citizen's claim for injunctive relief.⁷ Suggesting that "it is little questioned" that the federal government may bring enforcement actions to recover civil penalties for wholly past violations, the Court emphasized that Congress envisioned an enforcement role for citizen-plaintiffs "supplementary" to that of the government, and the Court rejected the citizen-plaintiffs' argument that their enforcement authority is "co-extensive with the Government's."⁸

Other aspects of § 505, including its pervasive use of the present tense, further supported the Court's decision that the statute "make[s] plain that the interest of the citizen-plaintiff is primarily forward-looking," and that "the harm sought to be addressed by the citizen suit lies in the present or the future, not in the past."⁹ This interpretation was corroborated by the legislative history, which repeatedly states that § 505 authorizes "abatement" actions brought "for the purpose of halting … pollution," and also states that the statute was expressly "modeled" after the Clean Air Act's citizen suit provision, § 304, which is wholly injunctive in nature.¹⁰

The Court's conclusion that § 505 does not authorize citizen suits for wholly past violations would in all likelihood have precluded a number of citizen suits of the type that have been brought in the past.¹¹ The Court further explained, however, that its interpretation of the statute did not necessarily dispose of the case before it. The Court [18 ELR 10124] reasoned that § 505 "confers jurisdiction over citizen suits when the citizen-plaintiffs make a good-faith allegation of continuous or intermittent violation" and remanded the case to the Court of Appeals for further consideration.¹² The Court rejected Gwaltney's argument that citizen-plaintiffs must prove their allegations of ongoing noncompliance as a jurisdictional prerequisite. Expressing concern regarding the "chronic episodic" violator who is able to avoid permit excursions at the time that the suit is filed, the Court ruled that § 505 "does not require that a defendant 'be in violation' of the Act at the commencement of suit."¹³ On the other hand, the Court emphasized that although a good-faith allegation of ongoing violations will "suffice for jurisdictional purposes," to prevail on the merits the § 505 plaintiff must prove that the defendant is"in violation" of the FWPCA.¹⁴ The Court also related the latter point, proof that the defendant is "in violation," to the mootness doctrine, explaining that a citizen suit could be dismissed as moot where allegations of ongoing noncompliance become false during the course of litigation. The Court cautioned, however, that the burden of demonstrating mootness is a heavy one.¹⁵ Finally, the Court said that Rule 11 of the Federal Rules of Civil Procedure, which requires pleadings to be based on good-faith belief formed after reasonable inquiry, will protect against a flood of § 505 suits being brought on the basis of frivolous allegations of ongoing violations.¹⁶

Implementation of the Supreme Court's Decision

The Supreme Court's opinion in Gwaltney necessarily leaves for implementation by lower federal courts matters such as the meaning of "in violation" or "ongoing violation," Rule 11's role in the context of § 505 suits, and the application of the mootness doctrine. These issues will arise in pending cases beginning with the remand in Gwaltney and are likely to shape the types of § 505 suits that are brought in the future.

Meaning of "In Violation"

Two fundamental principles should guide courts in their implementation of the "in violation" proviso in § 505(a). The first is that a company's record NPDES permit excursions cannot be viewed as an undefined, monolithic whole. Instead, the court (and the would-be plaintiff) must focus on individual requirements or parameters under the NPDES permit. Second, the cause and frequency of an excursion of a given parameter must be evaluated to determine if there is a pattern of noncompliance.

Parameter-by-Parameter Analysis. Industrial facilities frequently have several discrete point source discharges. Upstream of the discharges there may be several separate and unrelated wastewater treatment systems. In recognition of those differences the United States Environmental Protection Agency develops separate limitations or parameters for the various pollutants at the different discharges or outfalls. Although Gwaltney did not directly address this issue, the courts, including most recently the Fifth Circuit in Sierra Club v. Shell Oil,¹⁷ have recognized that a violation of an effluent limitation or parameter at one point source is not a violation of any parameter at another point source even if the same pollutant is involved. Instead, as stated in Shell Oil, "when determining whether a permitholder has violated an effluent limitation, one must look at each parameter within each point source independently."¹⁸ That conclusion is supported by the FWPCA's penalty provisions and related legislative history,¹⁹ as well as the Gwaltney opinion itself and the Supreme Court's recognition that past violations wholly unconnected to any present or future wrongdoing cannot serve as the basis for an enforcement suit.²⁰

This aspect of the "in violation" proviso is a necessary corollary to the Supreme Court's conclusion that a citizen suit cannot be brought for wholly past violations. Recent noncompliance with a given parameter should not allow a citizen-plaintiff to resurrect past, previously abated noncompliance of an unrelated parameter or parameters.

Isolated Violations vs. The Chronic Episodic Violator. Gwaltney holds that § 505(a)'s "in violation" proviso extends citizen suit jurisdiction to both continuous and intermittent violations.²¹ Regarding intermittent violations, the focus of the Court's concern is the "chronic episodic" violator.²² This is the violator "who happened not to be in violation at the precise time the citizen brought suit and with special care then avoids polluting while the suit pends."²³ It should be emphasized that in the context of § 505(a), "intermittent" does not simply mean all violations other than those that are continuous. Thus, just as excursions of unrelated parameters cannot be "simply aggregated" to bootstrap an allegation of an ongoing violation, nor can a would-be plaintiff simply aggregate minor, unrelated violations of a given parameter over time, as revealed by a permittee's discharge monitoring reports [18 ELR 10125] (DMRs), and label them "ongoing violations" without regard to the facts underlying those excursions.²⁴

The backdrop for consideration of this point is the well-recognized fact that even the most advanced, state-of-the-art wastewater treatment system is not expected to achieve compliance 100 percent of the time. On the contrary, occasional, isolated excursions are expected at any facility.²⁵ Conversely, the underlying inadequacy of a treatment system or its operation could be temporarily masked on a "lucky day," i.e., a past effluent problem is not recurring at the moment but the underlying cause has not been corrected.²⁶ Whether a permittee fits in the first category or the second is a factual question that is not answered by simply aggregating possible violations over time as shown on a defendant's DMRs. Instead, as the Fifth Circuit recently noted in Shell Oil, where a citizen-plaintiff bases its "in violation" allegation on intermittent, isolated violations it is the plaintiff's burden "to demonstrate that these isolated permit violations were the product of [the defendant's] systematic neglect of discharge limitations or of inadequate pollution control facilities."²⁷ Absent such a showing, there would be no conduct that could serve as the basis for an injunction or, accordingly, the imposition of civil penalties (as the Supreme Court explained in Gwaltney, § 505 does not authorize civil penalties separately from injunctive relief).²⁸

The Role of Rule 11

The Supreme Court notes that Rule 11 of the Federal Rules of Civil Procedure will protect defendants from frivolous allegations in § 505 suits.²⁹ Rule 11 requires that "to the best of the signer's knowledge, information and belief formed after reasonable inquiry [the complaint] is well grounded in fact and is warranted by existing law." This language stresses the need for some prefiling inquiry into both the facts and the law to satisfy the affirmative duty imposed by the rule.³⁰ What constitutes "reasonable inquiry" depends on many factors, including the time available for investigation prior to filing a complaint.³¹

If Rule 11 is to serve the protective purpose to which the Supreme Court referred, the rule should be implemented in a manner that is consistent with the pre-complaint procedures of § 505. The mandatory 60-day notice period that must precede the commencement of a suit under § 505 provides an important opportunity for a would-be plaintiff to ascertain the facts regarding the compliance status of the facility at issue. A plaintiff should not confine its pre-complaint investigation to a review of periodic DMRs, which may not accurately reflect a permittee's compliance status. Instead, the would-be plaintiff should inform itself regarding the defendant's compliance history, which would include recent improvements in wastewater treatment facilities. The potential plaintiff would also want to consider the isolated or recurrent nature of violations and the current status of the facility. In other words, for Rule 11 purposes, "good faith" should be evaluated, not in the abstract, but rather on the basis of all information available to the plaintiff.³²

Rule 11 should also govern a party's conduct during trial. If a citizen-plaintiff becomes aware of information after filing suit that the good-faith allegation of continuing noncompliance, "even if originally supported by adequate inquiry, is no longer justifiable he must not persist in its prosecution."³³

Rule 11 concepts also present an opportunity for potential defendants to educate would-be plaintiffs. There may be benefit to the defendant from quickly responding to a 60-day notice letter for the purpose of demonstrating that there is no basis for a suit. This could include a request to meet with the plaintiff in order to provide information that shows that previous violations have abated and ascertain in detail the plaintiff's reaction to that information. In short, although prior to Gwaltney a § 505 plaintiff might have been free simply to disregard as irrelevant the information that a permittee provides in order to show the absence of justification for a § 505 suit, that is no longer the case.

Mootness

A key aspect of the Supreme Court's Gwaltney opinion is the Court's brief discussion of mootness. Mootness is a jurisdictional issue that must be considered whenever it arises and, moreover, must be considered in light of the facts as they exist when the issue is raised.³⁴ Cautioning that to demonstrate mootness, "the defendant's burden 'is a heavy one,'" the Court explains that principles of mootness would require dismissal of a § 505 suit when there is no reasonable expectation that the violations at issue will be repeated.³⁵ Under the Fourth Circuit decision reversed in Gwaltney, mootness was, of course, not an issue: the court of appeals concluded that civil penalties could be imposed regardless of abatement of violations.³⁶

It has been suggested that the Supreme Court's discussion of mootness may encourage defendants to prolong § 505 suits in order to gain time to achieve compliance. That is not a likely scenario. As in any litigation, the parties have remedies to avoid undue delay by their adversaries. [18 ELR 10126] Moreover, this concern invites the question, "Where's the beef?" If compliance is achieved during the course of litigation, then Congress' objectives, including the purpose intended for citizen suits under § 505, are achieved.

Conclusion

Gwaltney represents an important step in upholding Congress' intent regarding FWPCA citizen suits. Contrary to the position held previously by citizen-plaintiffs, citizen enforcement authority under § 505 is not co-extensive with governmental enforcement authority. Instead, citizen suits are intended as a goading mechanism to prompt government enforcement when the need is most pressing, i.e., in cases of ongoing noncompliance. Congress envisioned citizen suits as abatement suits addressed to instances of ongoing noncompliance rather than as a mechanism to punish defendants for past wrongs, a duty that was left to the government. The Supreme Court's decision in Gwaltney is consistent with that overriding goal. We note in this connection the suggestion that as a result of Gwaltney the government will be prompted to file parallel enforcement suits to obtain civil penalties where citizen-plaintiffs cannot. That is not likely. In the past the government has not relied on citizen suits to obtain civil penalties for previously abated noncompliance. Indeed, the government's consistent position has been that § 505 does not authorize such relief.³⁷

As a result of Gwaltney, citizen-plaintiffs will now be required to investigate allegations of noncompliance in order to show, in good faith, that the alleged noncompliance is continuing in nature. Although this mandate may not affect plaintiffs in their filing of 60-day notice letters, it should reduce the number of suits actually filed after would-be plaintiffs have had the opportunity to investigate the recorded violations and potential defendants have educated the plaintiffs regarding the alleged noncompliance. Perhaps Gwaltney will encourage citizen groups to focus their efforts on cases of ongoing noncompliance, where there is an environmental benefit to be gained from a § 505 suit, rather than on cases designed to punish previously abated noncompliance.

1. 108 S. Ct. 376, 56 U.S.L.W. 4017, 18 ELR 20142 (Dec. 1, 1987).

2. 33 U.S.C. § 1365.

3. See Meier, "Citizen Suits" Become a Popular Weapon in the Fight Against Industrial Polluters, Wall St. J., Apr. 17, 1987, at 17.

4. The Fourth Circuit ruled that suit may be brought under § 505 to impose civil penalties for NPDES violations committed entirely in the past. See Chesapeake Bay Foundation, Inc. v. Gwaltney of Smithfield, Ltd., 791 F.2d 304, 16 ELR 20636 (4th Cir. 1986). An earlier Fifth Circuit opinion, Hamker v. Diamond Shamrock Chemical Co., 756 F.2d 392, 15 ELR 20385 (5th Cir. 1985), ruled that suit may be brought only to remedy an ongoing violation. The third decision underlying the three-way conflict, Pawtuxet Cove Marina, Inc. v. Ciba-Geigy Corp., 807 F.2d 1089, 17 ELR 20374 (1st Cir. 1986), cert. denied, 108 S. Ct. 484 (Dec. 7, 1987), held that § 505 precludes a suit based on a wholly past violation, but permits a suit when there is a pattern of intermittent violations, even if there is no violation at the moment suit is filed. See also Sierra Club v. Shell Oil Co., 817 F.2d 1169, 17 ELR 20767 (5th Cir. 1987), cert. denied, 108 S. Ct. 501 (Dec. 14, 1987).

5. See, e.g., City of Evansville v. Kentucky Liquid Recycling, Inc., 604 F.2d 1008, 1014, 9 ELR 20679 (7th Cir. 1979), cert. denied, 444 U.S. 1025 (1980) (§ 505(a)(1) does not provide for suits against parties alleged to have violated an effluent standard or limitation in the past).

6. 108 S. Ct. at 381, 56 U.S.L.W. at 4019, 18 ELR at 20144. As another court suggested, § 505(a)'s focus is "conduct indicative of continuing or renewed violations justifying an injunction, as distinguished from matters over and apparently done with, that would not warrant one." Pawtuxet Cove, 807 F.2d at 1093, 17 ELR at 20376.

7. 108 S. Ct. at 382, 56 U.S.L.W. at 4019, 18 ELR at 20145.

8. Compare 108 S. Ct. at 382, 56 U.S.L.W. at 4019, 18 ELR at 20145 ("citizens, unlike [EPA], may seek civil penalties only in a suit brought to enjoin or otherwise abate an ongoing violaton") with Chesapeake Bay Foundation v. Gwaltney of Smithfield, 791 F.2d 304, 310, 16 ELR 20636, 16 ELR 20638 (4th Cir. 1986) ("the scope of citizen enforcement powers must … be viewed as co-extensive with the enforcement powers of the EPA").

9. 108 S. Ct. at 382, 56 U.S.L.W. at 4019, 18 ELR at 20145.

10. See 108 S. Ct. at 383, 56 U.S.L.W. at 4020, 18 ELR at 20145 citing 118 CONG. REC. 33693 (1972) (Sen. Muskie); see also S. REP. NO. 414, 92d Cong., 1st Sess. 79 (1971) (§ 505 is "carefully restricted" to the same types of actions as § 304 of the Clean Air Act). Section 304 of the Clean Air Act is codified at 42 U.S.C. § 7604.

11. See, e.g., Pawtuxet Cove, 807 F.2d at 1091 (NPDES permit surrendered and the facility's discharge connected to a municipal treatment facility prior to commencement of the § 505 suit); Student Public Interest Research Group of New Jersey v. AT&T Bell Laboratories, 617 F. Supp. 1190, 1192 (D.N.J. 1985) (prior to commencement of the citizen suit, defendant terminated its direct discharge); Student Public Interest Research Group of New Jersey, Inc. v. Ragen Precision Industries, Inc., No. 83-1604 (D.N.J. Dec. 19, 1983) (defendant installed a recirculating filtration and sedimentation system which completely eliminated all discharges from the plant prior to filing of the citizen suit).

12. 108 S. Ct. at 385, 56 U.S.L.W. at 4021, 18 ELR at 20146.

13. 108 S. Ct. at 385, 56 U.S.L.W. at 4021, 18 ELR at 20146; see also Hamker v. Diamond Shamrock Chemical Co., 756 F.2d at 399, 15 ELR 20388 (Williams, J., specially concurring) (§ 505(a)'s "in violation" proviso is clearly broad enough to include "the chronic episodic violator or the violator who intentionally 'turns off the spigot' just before a citizen brings suit").

14. 108 S. Ct. at 385-386, 56 U.S.L.W. at 4021, 18 ELR at 20146-47 (emphasis added).

15. 108 S. Ct. at 386, 56 U.S.L.W. at 4021, 18 ELR at 20147.

16. 108 S. Ct. at 385, 56 U.S.L.W. at 4021, 18 ELR at 20146.

17. 817 F.2d 1169, 17 ELR 20767 (5th Cir. 1987).

18. 817 F.2d at 1173, 17 ELR at 20769; see also Sierra Club v. Kerr-McGee Corp., No. 84-1764 (W.D. La. Oct. 29, 1985).

19. See generally § 309(d), 33 U.S.C. § 1319(d) and H.R. REP. NO. 50, 99th Cong., 1st Sess. 28 (1985) (§ 309(d) civil penalty limitation applies to each separate permit violation; FWPCA enforcement scheme is directed to violations of individual pollutant parameters).

20. 108 S. Ct. at 386, 56 U.S.L.W. at 4021, 18 ELR at 20147.

21. 108 S. Ct. at 385, 56 U.S.L.W. at 4021, 18 ELR at 20146.

22. 108 S. Ct. at 385, 56 U.S.L.W. at 4021, 18 ELR at 20146; see also 108 S. Ct. at 387, 56 U.S.L.W. at 4022, 18 ELR at 20147 (Scalia, J., concurring).

23. Hamker v. Diamond Shamrock Chemical Co., 756 F.2d at 399, 15 ELR at 20388 (Williams, J., specially concurring).

24. See Sierra Club v. Shell Oil, 817 F.2d at 1173, 17 ELR at 20769.

25. See Marathon Oil Co. v. Environmental Protection Agency, 564 F.2d 1253, 1272-73 (9th Cir. 1977); Weyerhaeuser v. Costle, 590 F.2d 1011, 1056-57, 9 ELR 20284, 20304 (D.C. Cir. 1978); American Petroleum Institute v. Environmental Protection Agency, 661 F.2d 340, 350, 12 ELR 20076, 20080 (5th Cir. 1981).

26. 108 S. Ct. at 387, 56 U.S.L.W. at 4022, 18 ELR at 20147 (Scalia, J., concurring). Permittees should, as a practical matter, prepare and retain contemporaneous records regarding all abatement measures implemented in response to intermittent violations.

27. Sierra Club v. Shell Oil Co., 817 F.2d at 1173-74, 17 ELR at 20769. As noted above in note 4, subsequent to the Supreme Court's Gwaltney decision, the Court denied Sierra Club's petition for a writ of certiorari in Shell Oil.

28. See 108 S. Ct. at 382, 56 U.S.L.W. at 4019; 18 ELR at 20145.

29. 108 S. Ct. at 385, 56 U.S.L.W. at 4021, 18 ELR at 20146.

30. See FED. R. CIV. P. 11, Advisory Committee note.

31. Id.

32. See, e.g., Unioil, Inc. v. E.F. Hutton & Co., Inc., 809 F.2d 548, 557 (9th Cir. 1986) (whether a reasonable inquiry was made must be determined in light of the circumstances present, including whether there was ample time for investigation).

33. Southern Leasing Partners, Ltd. v. McMullan, 801 F.2d 783, 788 (5th Cir. 1986).

34. See Timms v. Metropolitan School District of Wabash County, Indiana, 722 F.2d 1310, 1314 (7th Cir. 1983).

35. 108 S. Ct. at 386, 56 U.S.L.W. at 4021, 18 ELR at 20147, quoting United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953).

36. 791 F.2d at 308, 16 ELR 20638 (it is "undisputed that Gwaltney had ceased violating its permit" before the citizen suit was instituted).

37. Brief for the United States as Amicus Curiae, Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation Inc., Supreme Court No. 86-473.