Clean Water Act Citizen Suits: Defense Litigation and ...media.straffordpub.com/products/clean-water-act...Mar 14, 2019 · Clean Water Act Citizen Suits: Defense Litigation and Settlement

Clean Water Act Citizen Suits: Defense

Litigation and Settlement StrategiesNavigating Notice, Standing and Jurisdiction; Interpleading Third Parties

Under the CWA

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THURSDAY, MARCH 14, 2019

Presenting a live 90-minute webinar with interactive Q&A

J. Tom Boer, Partner, Hunton Andrews Kurth, San Francisco

Samuel L. Brown, Partner, Hunton Andrews Kurth, San Francisco

Sean G. Herman, Attorney, Hanson Bridgett, San Francisco

Nathan A. Metcalf, Partner, Hanson Bridgett, San Francisco

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March 14, 2019

Clean Water Act Citizen Suits: Defense Litigation and Settlement Strategies

Samuel BrownPartner, Hunton Andrews Kurth

Tom BoerPartner, Hunton Andrews Kurth

Nathan MetcalfPartner, Hanson Bridgett

Sean HermanPartner, Hanson Bridgett

• Overview of Citizen Suits

• Defenses to Citizen Suits

• Strategies in Preparation for Litigation

• Strategies for Settlement Negotiations

• Case Study: Releases of Pollutants That Enter Surface Waters Through Groundwater – County of Maui

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Program Agenda

• What is a “citizen suit”?• The Clean Water Act (CWA) grants the authority to non-

governmental entities to enforce the statute’s requirements

• Modeled on CAA citizen suit provisions; similar provisions in other environmental-focused statutes (e.g., RCRA).

• Policy Reason: The “central purpose of permitting citizens to abate pollution [is] when the government cannot or will not command compliance.” Gwaltney, 484 U.S. 49 (1987).

• “[C]itizen suits should be handled liberally, because they perform an important public function: ‘It is [Congress’] intent that enforcement of the [CWA] be immediate, that citizens should be unconstrained to bring these [citizen suit] actions, and that the courts should not hesitate to consider them.’” Sierra Club, 834 F.2d 1517 (9th Cir. 1987).

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Citizen Suits 101

• CWA § 505(a)(a): “any citizen may commence a civil action . . . against any person . . . who is alleged to be in violation of an effluent standard or limitation [or] an order issued by the Administrator or a State.”

• “citizen” – A person having an interest which is or may be adversely affected. CWA § 505(g) (see “standing”)

• “person” – Broadly defined, includes federal, state and local governments.

• “effluent standard or limitation” – Includes both unauthorized discharges and those that violate the terms of an NPDES permit.

• More stringent state standards

• Authority under CWA § 505(a) is not unlimited; see, e.g., CWA § 505(b)

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Citizen Suits 101

• *Citizen Suits Are Vehicles for Expanding Scope of CWA

• Keystone CWA Provisions:• “the discharge of any pollutant by any person shall be unlawful,”

except via a permit. CWA § 301(a).

• “discharge of a pollutant” means “any addition of any pollutantto navigable waters from any point source” CWA § 502(12).

• Examples:

• Aerial pesticide application

• Water transfers

• Vessels

• Biological materials

• Stormwater

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Citizen Suits 101

• Inadequate 60-Day Notice

• Diligent Prosecution

• Standing

• Permit Shield

• Continuing Violations

• Subject Matter Jurisdiction

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Defenses to Citizen Suits

• Inadequate 60-Day Notice• CWA § 505(b) – “No action may be commenced . . . prior to

sixty days after the plaintiff has given notice of the alleged violation. . .”

• Notice to EPA and State – opportunity to enforce

• Opportunity for the facility to correct

• Sufficiently specific?

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• Diligent Prosecution• CWA § 505(b)(1)(B) – Citizen suits are barred where EPA or

State is “diligently prosecuting a civil or criminal action in a court of the United States, or a State to require compliance.”

• Diligent prosecution “does not require government prosecution to be far-reaching or zealous. It requires only diligence. Thus, a citizen-plaintiff cannot overcome the presumption of diligence merely by showing that the agency’s prosecution strategy is less aggressive than he would like or that it would not produce a completely satisfactory result.” Piney Run, 523 F.3d 453 (4th 2008)

• Limitations on “diligent prosecution” defense

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• Standing• Based on Article III of the U.S. Constitution, which

limits the power of the federal courts

• “[A]n indispensable part of the plaintiff’s case” Lujan, 504 U.S. 555 (1992)

• If, at any time, there is no standing, either on the motion of a party or of its own accord, the court must dismiss the action.

• Test:1. Injury in Fact

2. Causation

3. Redressability

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• Ongoing Violation• CWA does not permit citizen suits for wholly past violations;

must show the existence of ongoing violations or the reasonable likelihood of continuing future violations. Gwaltney, 484 U.S. 49 (1987)

• “Wholly past” violation → no jurisdiction

• Upstate Forever v. Kinder Morgan (4th Cir. 2018)• Pipeline no longer releasing pollutants

• Pollutants travelling through groundwater

• “[T]he fact that a ruptured pipeline has been repaired, of itself, does not render the CWA violation wholly past.”

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• Permit Shield• CWA § 402(k) – “Compliance with a permit issued

pursuant to this section shall be deemed compliance”• “The purpose of [402(k)] seems to be . . . to relieve [permit

holders] of having to litigate in an enforcement action the question whether their permits are sufficiently strict.” Dupont, 430 U.S. 112 (1977)

• Disclosure during NPDES permit application• Must be in “compliance”• Implications of generic, narrative permit provisions?

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• Subject Matter Jurisdiction• The third party has the burden of proof

• Unauthorized discharge or violation of terms of permit

• Burden for unauthorized discharge allegation includes demonstrating, as a matter of fact, that there is an:

• addition

• pollutant

• navigable waters

• point source

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Samuel L. Brown

[email protected]

March 14, 2019 Strictly Confidential 17

Questions?

• Document Holds

• Expert Witnesses

• Attorneys’ Fees and Costs

• Litigation options and pathway to resolution

Litigation Strategies & Considerations

• Institute Document Hold Upon Receipt of 60-Day Notice• Avoid spoliation, i.e., the willful destruction or significant

alteration of evidence or failure to preserve property as evidence in pending or reasonably foreseeable litigation. See U.S. v. Kitsap Physicians Svs., 314 F.3d 995 (9th Cir. 2002).

• As soon as a potential claim is identified, a party is under a duty to preserve evidence which it knows or reasonably should know is relevant to the action. In re Napster, Inc. Copyright Litigation, 462 F.Supp.2d 1060, 1067 (N.D. Cal. 2006.)

• Recent amendment to FRCP 37(e) addresses obligations for preserving electronically stored information (ESI)

• Remedies for spoliation: additional discovery, monetary sanctions, rebuttable or mandatory inferences, exclusion of evidence, striking defenses, dismissal, civil contempt



• Use of Experts in CWA Litigation• Consulting expert: work product generally remains confidential

• Testifying expert: produce an expert report and testify• Governed by FRE 702: A witness who is qualified as an expert by

knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

• Considerations: • When to hire experts

• Whether to hire existing experts retained by client (stormwater consultants, NPDES permit experts)

• Daubert challenge as to the validity and admissibility of expert testimony by opposing party





Attorneys’ Fees and Costs

• CWA authorizes award of attorneys’ fees and costs in a citizen suit to “any

prevailing or substantially prevailing party, whenever the court determines that

such award is appropriate.” 33 U.S.C. § 1365(d)

• “Prevailing or substantially prevailing” parties include parties who:

• achieve some of the benefits sought by bringing suit

• prevailed in what the lawsuit originally sought to accomplish

• advance the goals of the CWA

• Being a “catalyst” for change as a result of the suit is arguably enough for

plaintiff to collect fees. Conflicting case law?

• Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983) (fees recoverable in CAA actions where suit

“forced defendants to abandon illegal conduct, although without a formal court order.”

• Cf. Buckhannon Board and Care Home, Inc. v. West Virginia Dept. of Health and Human

Resources, 532 U.S. 598 (2001) (consent decree or judgment necessary for recovery of fees –

arguably interpreting a more narrow statutory provision lacking “substantially” prevailing party).



Attorneys’ Fees and Costs (continued)

• Fees are awarded using a lodestar

calculation. See, e.g., Hensley v.

Eckerhart, 461 U.S. 424 (1983).

• Practice tip: consider a fee expert.

number of hours reasonably expended (potentially

modified, at court’s discretion, by extent of success)

X

reasonable hourly rate equal to the prevailing rate

for similar work in the community.

• Government intervention on fee

demands? Unlikely… but not impossible.

• Department of Justice filed statements in

three lawsuits brought by a firm against

California companies alleging violations of

stormwater discharge limits.

• DOJ asked the U.S. District Court for the

Central District of California to require the

firm to justify attorneys' fees.

• Assess litigation options and develop trial strategy• Priorities and goals of Client

• Cost of litigation; where can success be achieved?

• Opposing Requests for immediate injunctive relief – TRO or PI• Standard: (1) a strong likelihood of success on the merits, (2) the possibility of

irreparable injury to plaintiff if preliminary relief is not granted, (3) a balance of hardships favoring the plaintiff, and (4) advancement of the public interest.

• If TRO or PI is suspected: prepare in advance

• Motion to Dismiss | FRCP 12(b)(1) | Lack of Subject Matter Jurisdiction

• Does the complaint sufficiently allege subject-matter jurisdiction

• Intended to assess the legal feasibility of complaint, not whether plaintiff will prevail

• Potential options for 12(b)(1) motion: no unauthorized discharge



• Motion to Dismiss | FRCP 12(b)(1) | Failure to state a claim upon which relief may be granted

• Plaintiffs must allege facts that “state a claim to relief that is plausible on its face,” i.e., facts that “have nudged their claims across the line from conceivable to plausible.” Bell Atlantic v. Twombly, 550 U.S. 544 (2007).

• A claim is plausible if the complaint contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” and if there is “more than a sheer possibility that a defendant has acted unlawfully.” Ashcraft v. Iqbal, 556 U.S. 662 (2009).

• Extrinsic evidence generally not considered unless it was integral to, and explicitly relied on in the complaint.

• Limitations on what can be achieved by motion to dismiss• Limited options to pursue dismissal

• Often disfavored by trial court because entirely terminates case

• If dismissal is granted, will often be without prejudice (allowing an amended complaint)




• Motion for summary judgment | FRCP 56• Standard: court shall grant summary judgment if the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.

• A court must view the evidence “in the light most favorable to the opposing party.”

• Battle of the experts – a competent plaintiff will make prevailing on summary judgment difficult.

• A true “battle of the experts” generally necessitates a trial. See, e.g., Gicla v. United States, 572 F.3d 407, 414 (7th Cir. 2009) (explaining that “classic battle of the experts” requires “the factfinder to determine what weight and credibility to give the testimony of each expert …”).

• Challenge to standing – uncommon to find unprepared plaintiff


• Jury trial – Do you want it and/or can you avoid or limit it?• Right to a jury trial exists to determine liability under the CWA.

• No right to a jury trial for CWA penalties or other remedies.

• See U.S. v. Toll, 481 U.S. 412 (1987)



J. Tom Boer

[email protected]


Questions

Strafford Webinar – March 14, 2019

Nathan Metcalf

Clean Water Act Citizen Suits: Defense Litigation

and Settlement Strategies

• Hire Counsel– Attorney Client Privilege/

Attorney Work Product

– Engage citizen enforcer

• Hire Consultant (QISP)

• Litigation Hold - Keep Records

• Eliminate potential ongoing violations

• Evaluate liability and strengths/weaknesses of claims

• Evaluate cost/benefits of settlement

Response – 60-Day Period

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• Business Decision– Majority of claims settle

• Litigation is expensive and time consuming– What is your exposure to

liability?

– Potential penalties – up to $53,484 per day, per violation

• What are the settlement costs and terms– Citizen Enforcer will be

involved in stormwaterprogram

– Requirements beyond permit conditions

– Flexibility on BMP’s and financial terms

LITIGATE OR SETTLE?

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• Litigation costs –including attorneys fees

• Potential negative publicity– Regulatory scrutiny

• Diversion of resources to fight claims and respond to discovery

• Ultimate Settlement?

Litigation Consequences

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• Discovery– Facility Inspections

• Dry and Rainy Weather

– Document Requests

– Interrogatories and Requests for Admissions

– Depositions of Knowledgeable People

• Expert Discovery –Consultants and Engineers

LITIGATION

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• Prevailing plaintiff entitled to attorneys fees and expert fees

• Liability – up to $53,484 per day, per violation

• Factors Court considers:– Seriousness of

violation

– Economic benefit of violator

– History of violations

– Good faith efforts

– Economic impact of penalty

Civil Liability and Attorneys Fees

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• In Court or out of

Court settlement?

• Two general types

of relief:

– Injunctions

– Monetary

payments

• Operational

changes

TYPICAL SETTLEMENT TERMS

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INJUNCTION SETTLEMENT TERMS

Citizen Group OversightTwo to Five Years

Facility inspections

Yearly report to the citizen group

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• Reimbursement of costs, including legal fees

• Environmental Project funding

• Payments for compliance monitoring and oversight

• Stipulated penalties – Paid for failing to

comply with consent decree terms

– Usually for missing deadlines

PAYMENT SETTLEMENT TERMS

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• Update/amend

operations/SWPPP

• Install additional BMPs

– Expensive technology or

structural improvements

• Testing of more storm

events, sample locations

& constituents than

required under permit

– Compare sample result

against “triggers”

– NAL, Benchmarks, and

California Toxics Rule

(CTR)

TYPICAL SETTLEMENT TERMS

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• Pick your battles– There will be compromises

• Get input from a qualified consultant (QISP)

• Keep as close to permit terms as possible

• Leave operational flexibility/ BMP implementation through the term of the settlement– Iterative process

– Performance based standards

SETTLEMENT TIPS

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• Compliance

• Perception

– Everything is Public

• SWPPP

• Compliance History

• Analytical Data

• Annual Reports

CITIZEN SUITS AVOIDANCE

SMARTSStorm Water Multiple Application and

Report Tracking System

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Questions?

Nathan MetcalfHanson Bridgett(415) [email protected]

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Strafford Webinar – March 14, 2019

Sean G. Herman

[email protected]

Clean Water Act Citizen Suits: Defense Litigation

and Settlement Strategies

• Unless permitted, “the discharge of any pollutantby any person shall be unlawful.” 33 U.S.C. §1311(a).

• The “discharge of a pollutant” means “any addition of any pollutant to navigable waters from any point source.” 33 U.S.C. §1362(12).

• Does the Act only prohibit adding pollutants that are “directly discharged” from point sources to navigable waters?

Indirect Discharge Theory

https://cfpub.epa.gov/watertrain/moduleFrame.cfm?parent_object_id=2725

42

• Justice Scalia:

– “The Act does not forbid

the ‘addition of any

pollutant directly to

navigable waters from

any point source,’ but

rather the ‘addition of

any

pollutant to navigable

waters.’”

– Rapanos v. U.S. (2006)

547 U.S. 715, 743.


https://www.usgs.gov/media/images/ephemeral-stream-during-low-flow-conditions

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• 40 year old wastewater treatment facility

• Treated wastewater discharged from Class V UIC wells

• Tracer dye study confirmed that treated wastewater traveled a half-mile through groundwater from the wells to the Pacific Ocean.

• Ninth Circuit held that the County was liable because, in part, the pollutants were “fairly traceable from the point source to a navigable water.”

County of Maui v. Hawai’i Wildlife Fund

https://archive.epa.gov/region9/water/archive/web/html/uic.html

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• Several hundred thousand gallons of gasoline spilled from a ruptured, underground pipeline into soil and groundwater

• Gasoline plume then migrated to waterways

• Fourth Circuit held that a plaintiff must allege a “direct hydrological connection between ground water and navigable waters in order state a claim under the CWA for a discharge of a pollutant that passes through ground water.”

Kinder Morgan v. Upstate Forever

https://www.wrdw.com/content/news/Lawsuit-to-come-against-Kinder-Morgan-years-after-Belton-petroleum-spill-398251111.html

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• Is an NPDES permit required for discharges to groundwater that migrate to navigable waters?

• Groundwater ≠ Point Source

• Groundwater ≠ Navigable Water


0 + 0 = 1?

46

• Concerned Area Residents for Env't v. Southview Farm, 34 F.3d 114 (2d Cir. 1994)

– Irrigation system sprayed liquid manure into air over dairy farm fields, which then flowed through a swale to a drain tile that lead directly into a stream.

• Vill. of Oconomowoc Lake v. Dayton Hudson Corp., 24 F.3d 962 (7th Cir. 1994)– Pollutants from retention pond seeped into groundwater and potentially migrated to

navigable waters.

• Sierra Club v. Virginia Electric & Power Co., 903 F.3d 403 (4th Cir. 2018)– Coal ash stored in settling pond leached into groundwater and migrated to nearby creeks

• Kentucky Waterways Alliance v. Kentucky Utilities Co., 905 F.3d 925 (6th Cir. 2018)

– Coal ash stored in ponds migrated into groundwater and contaminated nearby lake.

• 26 Crown Associates, LLC v. Greater New Haven Regional Water Pollution Control Authority, 2017 WL 2960506 (D. Ct. 2017)

– Untreated sewage from backflows during heavy rainfalls allegedly seeped from basements into groundwater, and potentially released to Long Island Sound.

• Toxics Action Center, Inc. v. Casella Waste Systems, Inc. 347 F.Supp.3d 67 (D. Mass. 2018)

– Pollutants from landfill travelled through groundwater to wetlands and navigable waters.


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• Other trends in

citizen suits using

the indirect

discharge theory?


?

48

Documents

Clean Water Act Citizen Suits: Defense Litigation and ...media.straffordpub.com/products/clean-water-act...Mar 14, 2019 · Clean Water Act Citizen Suits: Defense Litigation and Settlement