16 ELR 20005 | Environmental Law Reporter | copyright © 1986 | All rights reserved

Sierra Club v. Union Oil Co.

No. C-84-3435 SC (N.D. Cal. October 17, 1985)

The court rules that the five-year statute of limitations in 28 U.S.C. § 2462 governs citizen enforcement suits under the Federal Water Pollution Control Act. The court first rules that plaintiff has not demonstrated that it was entitled to prevail as a matter of law on its motion for summary judgment on liability. The legal issues are in dispute: defendant argues that federal regulations excuse its alleged violations as upsets, and plaintiff counters that those regulations are inapplicable since defendant's permit was issued by the state and contains no upset provision. The court next rules that the five-year statute of limitations for penalty actions in 28 U.S.C. § 2462 applies to plaintiffs' claim and precludes amending the complaint to include violations occurring before 1979. It also holds that plaintiff may not amend its complaint to add more recent violations that it knew about but failed to include in its original complaint, because the delay in raising the claims was due to plaintiffs' inadvertence and would prejudice defendant.

[Other opinions in this case appear at 15 ELR 20890, 16 ELR 20007.]

Counsel for Plaintiff
Catherine C. Volker
%Sierra Club Legal Defense Fund, Inc.
2044 Fillmore St., San Francisco CA 94115
(415) 567-6100

Roger Beers
380 Hayes St., Suite 1, San Francisco CA 94102
(415) 861-1401

Counsel for Defendants
Robert L. Borden
P.O. Box 7442, San Francisco CA 94120
(415) 972-6643

Ronald Hausmann
450 Pacific Ave., San Francisco CA 94133
(415) 788-5000

[16 ELR 20005]

Conti, J.:

Order Denying Plaintiff's Motions For Summary Judgment, For Leave To File An Amended Complaint, And For Reconsideration of Magistrate's Order Denying Further Discovery

This is a citizen's suit brought pursuant to section 505 of the Clean Water Act, 33 U.S.C. section 1365 (the "Act"). Plaintiff alleges numerous violations by defendants of the terms and provisions of defendant Union Oil Company's National Pollutant Discharge Elimination System ("NPDES") permit, and of sections 301 and 402 of the Act, 33 U.S.C. sections 1311 and 1342.

The matter is currently before the court on the following motions:

(1) Plaintiff's motion for summary judgment;

(2) Plaintiff's motion for leave to file an amended complaint;

(3) Plaintiff's motion for reconsideration of magistrate's order denying discovery; and

(4) Defendant Union Oil Company's counter motion for partial summary judgment.

Defendant Union Oil Company of California ("Union") operates an oil refinery and defendant Pacific Gas and Electric Company ("PG&E") operates a steam electric generating plant on adjoining land in Rodeo, California. PG&E discharges its waste through Union's waste treatment plant. Plaintiff maintains that defendants have submitted Discharge Monitoring Reports ("DMR's") and Non-Compliance Reports ("NCR's") which disclose a pattern of frequent and substantial non-compliance with their NPDES permit and the Clean Water Act. Specifically, plaintiff contends that defendants discharged and continue to discharge certainpollutants into San Pablo Bay in violation of the effluent limitations established for such pollutants in defendant's permit.

Plaintiff currently seeks summary judgment with respect to 76 alleged violations which purportedly occurred between April, 1979 and December, 1983. In addition, it seeks to amend its complaint [16 ELR 20006] to allege further violations dating from July, 1977 to March, 1985, and to compel additional discovery in relation thereto.

Defendant Union's counter motion for summary judgment is in fact an opposition to plaintiff's motion to file an amended complaint based on, inter alia, as asserted statute of limitations defense which it would raise against the complaint if filed.

1. Plaintiff's Motion for Summary Judgment

Summary judgment is proper only when there is no genuine issue of material fact or when, viewing the evidence and the inferences that may be drawn therefrom in the light most favorable to the non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed. R. Civ. P. 56(c); Bank of California, N.A. v. Opie, 663 F.2d 977, 979 (9th Cir. 1981); State ex rel. v. Heimann, 663 F.2d 886, 888 (9th Cir. 1980). The burden of establishing the absence of a material fact is on the non-moving party. Adickes v. Kress & Co., 398 U.S. 144, 157 (1970).

In an earlier motion for summary judgment, defendants argued that of the 76 alleged violations of its permit, 11 did not constitute actual exceedances of its effluent limitations. Defendants further argued that the remaining 65 alleged violations were caused by heavy storms or other circumstances beyond its control, and hence were excusable as "upsets" within the meaning of 40 C.F.R. section 122.41(n). Because there remained a factual dispute regarding whether the alleged storms and other events qualified as "upsets," this court denied defendants' motion on that ground alone and did not reach the legal issue of whether the asserted "upset" defense was available to defendants.

In its present motion for summary judgment, plaintiff argues, inter alia, that a matter of law no "upset" defense is available to defendants, and hence, that defendants are liable for the reported exceedances under any set of facts. The court disagrees.

In 1974, California Regional Water Quality Control Board ("Regional Board"), as authorized by the EPA pursuant to section 402(b) of the Act, 33 U.S.C. section 1342(b), issued Union's NPDES permit without any provision for an upset defense. The State Water Resources Control Board ("State Board") subsequently denied Union's petition to have an upset provision included in its permit. At the time, the State Board's position, that the Act did not require inclusion of upset provisions in NPDES permits, was consistent with that of the EPA.

Subsequently, however, the Ninth Circuit held that the EPA's failure to provide for an upset defense in NPDES permits was in violation of the Act. Marathon Oil v. EPA, 564 F.2d 1253, 1272-73 (9th Cir. 1977). In response to the Ninth Circuit's decision in Marathon, the EPA reversed its earlier position and required the inclusion of upset provisions in NPDES permits. 40 C.F.R. section 122.41(n).

In its motion for summary judgment, plaintiff concedes all of the above, but argues that state-issued NPDES permits such as Union's, unlikeEPA-issued permits, are not subject to the Ninth Circuit's holding in Marathon Oil or to the regulation implemented in response thereto, codified at 40 C.F.R. section 122.41(n). In the case of state-issued NPDES permits, plaintiff argues, states are authorized to impose more stringent requirements than those promulgated by the EPA, and are specifically authorized to omit upset defenses from NPDES permits, as was done here. See 40 C.F.R. section 123.25 and explanatory note thereto. In short, plaintiff argues that since compliance with the Act is determined by reference to the permit, and since Union's permit, as issued by the Regional Board and approved by the State Board, does not provide for an upset defense, any exceedances of permit limitations reported by defendants are per se violations of the Act, without regard to whether such exceedances were caused by upset conditions.

In response, defendants concede that federal regulations permit states to impose stricter requirements than the EPA, including the omission of upset defenses from state-issued permits, but argue that on the facts of the present case, the state is precluded from doing so as a matter of state law. Specifically, defendants contend that section 13377 of the California Water Code prohibits the Regional Board from imposing more stringent requirements than federal requirements in NPDES permits unless the Regional Board makes specific findings regarding the "water quality" necessity for imposing those requirements. In support of its position, defendant cites to Southern California Edison Co. v. State Water Resources Control Board, 116 C.A.3d 751 (1981). That case held that under Cal. Water Code section 13377 the State Board's findings were inadequate for it to set limitations on waste discharges where the Board failed to explain how a specific use or uses would benefit from the implementation of stricter standards than those imposed by the EPA. Id. at 761. Accordingly, defendants contend that since the State Board herein made no findings regarding the necessity of omitting an upset defense, it should likewise be prohibited, under Southern California Edison, from precluding such a defense.

Inasmuch as the parties present conflicting legal arguments, the court finds that neither party has demonstrated that it is "clearly entitled to prevail as a matter of law," as required by Fed. R. Civ. P. 56(c). Hence, plaintiff's motion for summary judgment must be denied. Accordingly, the court need not at this time address plaintiff's additional arguments regarding the weight to be accorded Union's DMR's or the number of days during which the alleged violations occurred.

2. Plaintiff's Motions for Leave to File an Amended complaint and for Reconsideration of the Magistrate's Order Denying Discovery

Plaintiff seeks leave to file an amended complaint in order to allege additional violations which purportedly occurred between July, 1977 and March, 1985, and to conduct additional discovery in relation thereto.

Defendants oppose this motion on several grounds. First, they argue that permitting an amendment of the complaint to include allegations of pre-1979 violations would be futile, since such claims are time-barred by the federal statute of limitations set forth at 28 U.S.C. section 2462. Second, defendants contend that the motion should be denied in any event under the relevant Ninth Circuit criteria since there was undue delay in bringing it and since granting it would result in prejudice to defendants. Finally, defendants argue, as an independent ground for denial, that plaintiff was aware of the existence of the reports upon which the proposed additional allegations are based at the time it filed its original complaint. The court agrees with defendants.

As regards the statute of limitations issue, 28 U.S.C. section 2462 provides that:

Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five (5) years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon.

Since under Middlesex County Sewerage Authority v. National Sea Clammers Association, 453 U.S. 1 [11 ELR 20684] (1981), plaintiff cannot recover damages under Section 505 of the Act, but can only require defendants to pay penalties for past violations and/or enjoin them from committing future violations, the instant action must be characterized as one for federal statutory civil penalties. Accordingly, the five year statute of limitations set forth in 28 U.S.C. section 2462 would apply to any claims for violations pre-dating June, 1979. See Friends of the Earth v. Facet Enterprises, Inc., 22 ERC 1143 (B.N.A.) [15 ELR 20106] (W.D.N.Y. 1984); Chesapeake Bay Foundation et al v. Bethlehem Steel Corp., Civil No. 4-84-1620, slip op. [15 ELR 20785] (D. Md. May 6, 1985). United States v. C & R Trucking, 537 F. Supp. 1080, 1083 [12 ELR 20966] (N.D. W. Va. 1982). Since the pre-June, 1979 allegations could thus not survive a motion to dismiss, plaintiff's motion to add them by amendment must be denied as futile. See Deloach v. Woodley, 405 F.2d 496, 497 (5th Cir. 1968).

The court finds that plaintiff should likewise be precluded from adding the remainder of the proposed allegations, for several reasons. First, many of these allegations are based on documents which were available to plaintiff at the time it filed its original complaint. The only reason plaintiff gives for not adding them to its complaint at that time is its own inadvertence. Second, all of the proposed allegations are in any event based on information which was available to plaintiff months in advance of the present motion, filed two weeks before trial. Finally, defendants are correct in pointing out that permitting plaintiff to amend and compel further discovery at this stage would be highly prejudicial to defendants. In light of the foregoing, the court finds that the relevant factors set forth by the Ninth Circuit for deciding a motion to amend, particularly [16 ELR 20007] those of prejudice and delay, weigh heavily against plaintiff herein. See Hurn v. Retirement Fund Trust of Plumbing, etc., 648 F.2d 1252 (9th Cir. 1981). See also, Jordan v. County of Los Angeles, 669 F.2d 1311 (9th Cir. 1982); Marine Midland Bank v. Keplinger & Associates, Inc., 94 F.R.D. 101 (S.D.N.Y. 1982). Accordingly, plaintiff's motion for leave to amend is denied, as is its companion motion for reconsideration of the magistrate's order denying further discovery.

In accordance with the foregoing, it is hereby ordered that:

(1) Plaintiff's motion for summary judgment is denied;

(2) Plaintiff's motion for leave to file an amended complaint is denied; and

(3) Plaintiff's motion for reconsideration of the magistrate's order denying discovery is denied.


In accordance with the order entered by the court herein, it is hereby ordered, adjudged and decreed that:

(1) Plaintiff's motion for summary judgment is denied;

(2) Plaintiff's motion for leave to file an amended complaint is denied; and

(3) Plaintiff's motion for reconsideration of the magistrate's order denying discovery is denied.

16 ELR 20005 | Environmental Law Reporter | copyright © 1986 | All rights reserved