ELI Concludes Water Act Enforcement Study

The Environmental Law Institute recently concluded an eight month study of enforcement under the Federal Water Pollution Control Act Amendments of 1972 for the National Commission on Water Quality. The Institute's report was part of the Commission's effort under § 315 of the Act to review issues related to the Act's implementation;¹ a draft Commission report to Congress is expected this fall.

Institute staff visited eight states selected by the Commission and their respective Environmental Protection Agency regional offices in order to analyze the Act's progress. Project staff interviewed numerous representatives of state and federal water quality agencies and enforcement offices, public and private sector dischargers, and citizen groups in each of the eight states, as well as the Department of Justice, Environmental Protection Agency, and Office of Management and Budget in Washington.

The summary of the Institute's findings and recommendations which follows is based on the Executive Summary to the report. Requests for copies of the full report should be directed to the National Commission on Water Quality, 1111 18th St. N.W., Washington, D.C. 20036.

Background of the Current Enforcement System

Until the Federal Water Pollution Control Act Amendments of 1972 (P.L. 92-500), the federal role in the regulation of water pollution was restricted primarily to partial funding of sewage treatment construction projects, calling conferences to focus attention on major pollution problems, and reviewing state-issued water quality standards. Procedures for federal enforcement were lengthy, cumbersome, and generally perceived as inadequate to induce compliance by recalcitrant dischargers.

The 1972 Amendments reflected overwhelming congressional support for a comprehensive revision of the Federal Water Pollution Control Act. Unlike past legislation, Congress set firm deadlines for the attainment of technology-based effluent standards. A national permit system was created to provide standards and abatement schedules for every discharger. To meet timetables established in the Act, Congress decided that "the threat of sanction must be real, and enforcement provisions must be swift and direct."²

Two primary sources were used as models for the new enforcement system — the Refuse Act of 1899³ and the Clean Air Act of 1970.⁴ The Refuse Act provided a precedent for setting precise obligations for each discharger in the form of a permit, and for direct federal enforcement against dischargers. The Clean Air Act provided the design for a balance of federal and state regulatory powers: states would be allowed to assume the primary regulatory role by passing legislation that satisfied minimum standards, but the Environmental Protection Agency (EPA) would oversee state administration and retain the authority to enforce directly when the situation demanded. The Clean Air Act also provided a model for citizen suits. One major enforcement tool was added in the FWPCA — civil monetary penalties levied by the courts.

Criteria for Measuring Effectiveness

In order to assess the effectiveness of the enforcement system created by the FWPCA Amendments of 1972, ELI had to establish some evaluative criteria. The most important test is compliance with permit requirements, the ultimate goal of the enforcement system. It is practically impossible, however, to isolate enforcement as a cause of compliance. The extent of compliance depends on many factors having little or nothing to do with enforcement, most notably the expense and difficulty of satisfying discharge permit conditions.

One possible alternative for measuring effectiveness is comparing the number of enforcement actions taken to the number of violations reported. This approach is not totally without merit, but an emphasis on numbers could be seriously misleading. Some successful regulatory agencies rely almost exclusively on informal means of persuasion. Other less successful agencies issue formal orders routinely. An excellent enforcement program might be one that has relatively unimpressive statistics, precisely because it has been successful. Moreover, reported levels of noncompliance and enforcement can be meaningless unless they take into account the relative seriousness of different violations and the reasons why enforcement action may not have been taken.

The most relevant question is whether water pollution officials are acting decisively with respect to violations that involve matters of fault — some element of indifference, negligence, or intentional evasion of duty on the part of a discharger. Agency responses to these types of violations are a good indication of how credible and effective their enforcement program is likely to be. A lenient or indecisive response to recalcitrant cases will suggest to others that one can violate the law with impunity.

Major Findings

As of June 1975, the enforcement system created by the FWPCA was still in the early stages of development. Many permits (including some of the most complex ones) were issued in late 1974 and early 1975 and therefore few deadlines have yet passed. Most states [5 ELR 10159] which have qualified for permit issuing authority under § 402 and most EPA regions were in the process of shifting resources and emphasis away from permit issuance to compliance monitoring and enforcement during the first few months of 1975. Finally, some recalcitrant dischargers who may pose major enforcement problems are still challenging permit terms and effluent standards and are in most cases immune from enforcement action under EPA regulations.⁵

Despite the limitations of such an early analysis, many important issues were evident from the structure of the system and the available enforcement experience, including approximately 30 cases that were filed as of early 1975.

General Findings

Pollution control agencies, particularly at the state level, continue to emphasize informal cooperation, as opposed to issuing warnings, orders, etc., in their dealings with dischargers. This is more often the approach of engineers than lawyers, a difference that sometimes creates internal conflict over enforcement policy.

Enforcement is also most often a graduated process. Government responses vary with the gravity of the violation and the degree of pressure necessary to bring about compliance. Past violations will usually be forgiven if compliance is in the offing, and dischargers will often be given repeated opportunities to comply before serious enforcement action is taken. EPA, however, generally takes a harder line on enforcement and has been more concerned with developing consistent enforcement priorities than most state agencies.

Considerations of technical and economic feasibility continue to play an important role in the choice of appropriate enforcement remedies. Municipalities and federal facilities present special enforcement problems which may call for different treatment than industry.

Negotiation continues to play an important role in enforcement. It is still too early, however, to determine whether the bargaining process will have significant impact on the achievement of the goals and the objectives of the FWPCA Amendments.

Administrative Remedies

Administrative remedies are comprised of a wideranging collection of formal and informal actions short of recourse to the courts. The major categories of administrative remedies are informal communications, including letters and phone calls; formal remedies, including orders and permit modifications; and ancillary remedies, such as publicity, blacklisting, and referral for judicial action.

Such remedies are the staple of every enforcement system because they are quick, flexible, relatively inexpensive, and, in most cases, the only necessary enforcement action. Administrative responses also act as a filter, separating out those cases that merit more serious judicial action. An additional and important function of the administrative process is to focus the issues and, where necessary, to develop a record for later judicial action.

A major advantage of administrative action is that the enforcement agency can work with the discharger. Litigation is adversarial and, many regulatory agencies believe, can provoke a discharger to assume a combative attitude that further delays compliance.

Administrative enforcement is affected by numerous factors, including political and economic variables and the personal commitment of agency staff. No rigorous correlation can be discerned, however, between those factors and the conduct of state enforcement programs.

The choice of an administrative remedy is frequently made on a case-by-case, ad hoc basis. The selection of a remedy is affected by the size and type of discharger, the nature of the violation, the discharger's good faith, and the availability of particular remedies. The most effective state programs are characterized by visibility of "pressure" (the willingness to seek penalties in response to violations), by consistency (and therefore predictability), and by a certain amount of distance between the regulators and the regulatees.

Judicial Remedies

Litigation is time-consuming, complex, expensive and unpredictable. Judicial action is therefore universally the remedy of last resort in all cases except those involving the most flagrant violations.

Such remedies are uncertain because of unresolved legal issues, the difficulties of satisfying certain burdens of proof, differences in the priorities of attorneys responsible for bringing enforcement actions, and variations in the environmental sympathies of judges and juries.

Even when judicial actions are brought, most cases are settled before reaching the trial stage. It is still too early to determine whether or not the terms of these settlements are adequate to preserve the deterrent effect of the enforcement system. EPA considers an action for civil penalties its basic judicial enforcement tool. States more often seek injunctive relief, sometimes in conjunction with a request for penalties.

Monetary penalties are an important deterrent because, unlike injunctions, they penalize past misconduct and reduce the economic advantage gained from noncompliance. Emergency relief, however, may be sought only rarely, because, in order to succeed, the government must show "imminent and substantial endangerment to health or welfare." Prior to 1972, the Federal Water Pollution Control Act required only that the discharge "endanger … the health or welfare of persons."

A growing number of legal issues have arisen which may affect the use of judicial remedies. The following are among the key issues raised in the context of enforcement:

(a) the relationship between administrative orders, civil penalties and criminal fines (e.g., whether all three may be imposed in response to the same violation);

(b) whether negligence must be shown to impose [5 ELR 10160] civil penalties for permit violations;

(d) whether the imposition of civil penalties is so similar to criminal fines that the procedural safeguards afforded criminal defendants must also be provided in civil cases; and

(e) what constitutes a willful or negligent violation for purposes of criminal penalties.

Inter-and Intra-Governmental Relations

Careful federal review of proposed state National Pollutant Discharge Elimination System permit programs is vital to the effective implementation of the Act. EPA has sometimes been hasty in its review of state programs in order to approve them as soon as possible. Review of available state resources was deficient in several cases.

EPA has also generally not attempted to use its power under § 402 to review state applications to administer the NPDES as an opportunity to help states improve their laws. EPA's role has generally been limited to defining the minimum statutory changes necessary for a state to receive approval under § 402. "Incentive funds" under § 106 (grants conditioned on the performance of specified actions) have been withheld in a few cases to obtain desirable changes in state programs. This approach, however, has not been used as a major instrument for influencing state enforcement practices.

Most EPA regions have adopted a policy of deference to state enforcement. States will generally be given the "first crack" at enforcement under their own laws, even when they do not administer the NPDES. This may occur even when states lack sufficient enforcement authority or are not interested in using their powers aggressively.

In addition, EPA's Enforcement Division emphasizes locating responsibility at the regional level. Regional officials may take enforcement action without clearance from headquarters, except in the event that they seek a sewer hook-up ban under § 402(h), emergency relief under § 504, or self-representation in court under § 506. Guidance from headquarters on issues of national significance has so far been inadequate, but a "cookbook guide" is currently being drafted.

Cooperation between EPA, United States Attorneys, and the Department of Justice is crucial to an effective enforcement program. Early experience has so far generally been good, but serious problems have arisen in isolated cases. EPA's dependence on the Department of Justice has probably resulted in fewer cases being brought and a greater emphasis on developing an administrative record.⁶

Relations between state water pollution agencies and state attorneys general have frequently been poor. State attorneys general often complain that cases referred by agency officials are inadequately documented and prepared; agency officials, on the other hand, criticize the attorneys general for failing to pursue referrals vigorously. Political and professional differences also sometimes affect inter-agency relations.

Special Enforcement Problems: Municipalities and Federal Facilities

Violations by municipalities are frequently associated with the lack of necessary construction grants. Many violations, however, are related to other than capital cost considerations, e.g., operation and maintenance difficulties. EPA policy has not been clearly formulated, and the regions have so far generally not attempted to take strong action against municipal dischargers.

State agencies, on the other hand, have often been much more aggressive against municipalities than EPA. Sewer hook-up bans are particularly effective in generating action when used in growing areas. Other techniques used are contempt actions against city officials and orders requiring that applications for grants be expedited.

Pollution by federal facilities is also a serious problem in some parts of the country. States have so far not been allowed to issue permits to federal facilities (although a recent court decision may change this),⁷ and EPA lacks the clout to enforce against other federal agencies. EPA participates in the ranking of federal facilities for purposes of allocating available pollution abatement funds. The likelihood of citizen or state litigation is an important criterion in this process, a significant fact unknown to many states.

Citizen Suits

Most citizens suits to date have been challenges to EPA's implementation of the Act rather than attempts to enforce permits. Plaintiffs have been successful in nearly all cases. Typically the citizen suit plaintiff has been a large national environmental organization. Local organizations generally lack the funds and expertise required to bring suit.

The provision for judicial award of attorneys' fees to successful plaintiffs does not adequately compensate for the costs of litigation. The Department of Justice actively opposes awards to organized groups, and judges sometimes arbitrarily reduce the amount requested. The possibility of fees is too uncertain to attract most lawyers asked to represent an environmental client.

EPA officials generally approve of the citizen suit provision as an aid to the government position in negotiations with dischargers. Such suits have rarely been a source of delay in agency programs, and citizen enforcement actions may supplement limited agency resources.

A major legal question regarding citizen suits is whether § 505 provides the exclusive procedure for such [5 ELR 10161] suits under the Act. Two United States Courts of Appeals have so far agreed with plaintiffs that suits may be grounded on other federal laws.⁸

Few states have citizen suit provisions, an omission which significantly reduces opportunities for citizen enforcement actions in NPDES states. States with citizen suit statutes have found that such provisions are frequently used by state agencies to abate pollution, circumventing cumbersome procedural requirements in traditional enforcement mechanisms.

Alternatives

EPA's enforcement arsenal might be strengthened by allowing the agency to assess limited penalties administratively. Administrative penalties would allow EPA greater flexibility by filling the gap between administrative orders and judicial remedies. This approach has numerous state and federal precedents and has been endorsed by the Administrative Conference of the United States.⁹

State enforcement producedures would benefit from a reduction in the number of penalty-free opportunities they afford dischargers to delay compliance. This problem is particularly acute in states which allow a discharger to obtain de novo judicial review of administrative orders in state courts, even where the discharger has failed to challenge such orders at the administrative level.

Section 309 of the FWPCA could be amended to clear up ambiguities (such as the relationship between the various penalties) and to allow EPA greater flexibility. Judicial remedies could also be strengthened by a program for educating the judiciary and state attorneys general in the problems associated with water pollution.

EPA could adopt a comprehensive tracking and monitoring system accessible to the public. Current review of violations and citizen suits is incomplete and often haphazard, a major obstacle to any evaluation of the effectiveness of EPA's enforcement program. In addition, coordination between state program officials and attorneys responsible for enforcement might be improved. This is a serous problem in many states. One remedy might be for EPA to encourage (possibly through § 106 grants) frequent, regular discussions of policy and problems between the two groups.

EPA might make better use of the § 402 process for approval of state NPDES programs and program grants under § 106 to improve state enforcement. EPA may need additional legislative authority in this area, however. States could also be allowed to issue NPDES permits to federal facilities. This policy would better reflect the federal/state partnership intended by the Act and would improve chances for effective regulation of a serious source of pollution.

Additional means might be adopted to encourage citizen participation in the implementation of the Act. One alternative might be to provide funds for citizen action other than litigation, such as participation in administrative proceedings. And more resources might be made available for enforcement at both the state and federal level. The current trend toward resource cut-backs threatens the integrity of the entire enforcement program.

Conclusion

It is still early to pass final judgment on the efficacy of the enforcement system created by the 1972 FWPCA Amendments. While the inclusion of potentially large penalties in the Act created expectations of strong enforcement efforts, aggressive enforcement has been rare. In addition many questions must be answered before the system can be pronounced a success. Foremost among the issues clouding the Act's future are the willingness of United States Attorneys, state attorneys general, and the courts to read the Act broadly and enforce aggressively, the necessity for state water quality agencies to overcome past tendencies to compromise pollution abatement schedules, and the pervasive shortage of enforcement personnel essential to the integrity of the entire system. Key structural deficiencies include the lack of an administrative penalty procedure, which seriously impairs the flexibility of EPA's options, and the inadequacy of provisions for EPA review of state NPDES permit programs.

1. The Commission is required to report to the Congress on the basis of a "full and complete investigation and study of all of the technological aspects of achieving, and all aspects of the total economic, social, and environmental effects of achieving or not achieving the effluent limitations and goals" set forth in the Act.

2. Senate Committee Report No. 92-414 at 65.

3. 33 U.S.C. § 407, 2 ELR 41141.

4. 42 U.S.C. § 1857 et seq. (1970), ELR 41201.

5. 40 C.F.R. 125.35(d)(2), ELR 46434.

6. Section 506 empowers EPA to bring cases rejected by the United States Attorney and Department of Justice, but this provision is expected to be used rarely, if ever. This development is discussed at some length in Chapter VI of the report.

7. EPA v. California, 511 F.2d 963 (9th Cir. 1975), 5 ELR 20213, appeal docketed, 43 U.S.L.W. 3669 (June 23, 1975).

8. Vermont Natural Resources Council v. Brinegar, 5 ELR 20068 (2d Cir. 1974), and NRDC v. Train, 5 ELR 20046 (D.C. Cir. 1974), aff'g 4 ELR 20108 (D.D.C. 1973).

9. Recommendation 72-6, Civil Money Penalties as a Sanction, 2 Recommendations and Reports of the Administrative Conference of the United States (Adopted Dec. 14, 1972).