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Civil Penalties Provide Relief for Environmental Plaintiffs
Friends of the Earth v. Laidlaw Environmental Services (TOC), Inc., 120 S.Ct. 693 (2000).
Tammy L. Shaw, J.D.
Brad Rath, 3L
January, the United States Supreme Court held that an environmental
group may seek civil penalties under the Clean Water Act even though
the defendant company has voluntarily come into compliance with its
required permit. Laidlaw argued that its subsequent compliance with
the permit limitations rendered the citizen suit moot and that the environmental
plaintiff, Friends of the Earth (FOE), lacked standing to seek civil
penalties because such an award would not redress the plaintiff's injuries.
The Supreme Court disagreed, finding that the defendant's voluntary
compliance with the permit and subsequent shutdown of the facility did
not render the case moot. The Court further held that an award of civil
penalties acts to deter future violations and that those civil penalties,
even though payable to the government and not the plaintiff , do redress
injury suffered by the plaintiff.
In 1972, Congress enacted the Clean Water Act (CWA) which provides for the issuance of National Pollutant Discharge Elimination System (NPDES) permits by the EPA or authorized state agencies. NPDES permits impose limitations on the discharge of pollutants into the Nation's waters and provide for monitoring and enforcement procedures. A suit, known as a citizen suit, to enforce compliance with a permit may be brought by any "person or persons having an interest which is or may adversely be affected", who then must give the alleged violator and the relevant state agency 60 days notice prior to filing suit.1 This notice allows the alleged violator an opportunity to come into compliance with its permit and the state agency time to pursue enforcement measures. Courts have held that citizens lack statutory standing to sue for violations that have ceased by the time the complaint is filed and a citizen may be barred from filing a suit if the EPA or the State has commenced and is "diligently prosecuting" its own enforcement action. Courts are authorized in citizen suit proceedings to enter injunctions and to assess civil penalties, payable to the United States Treasury.
In 1986, Laidlaw Environmental Services, Inc. began operating a hazardous waste incinerator and wastewater treatment plant in Roebuck, South Carolina. Pursuant to the CWA, the South Carolina Department of Health and Environmental Control (DHEC) granted Laidlaw an NPDES permit. The permit authorized the discharge of treated water into the North Tyger River but placed limits on the discharge of several pollutants, including mercury. Between the years of 1987 and 1995, Laidlaw failed to meet the permit's limit on mercury discharge, on 489 occasions.
In 1992, Friends of the Earth (FOE) instituted litigation in an attempt to force Laidlaw to come into compliance with its permit.2 The group notified Laidlaw of its intention to file a citizen suit upon the expiration of the 60 day notice period. In an effort to bar this lawsuit, Laidlaw contacted DHEC and requested that the agency file its own enforcement action against the company. The agency did file suit and subsequently reached a settlement with Laidlaw for $100,000 in civil penalties. At the end of the 60-day notice period, FOE filed this citizen suit alleging noncompliance with the NPDES permit and seeking declaratory and injunctive relief and civil penalties. Laidlaw moved for summary judgment on the ground that FOE lacked standing to bring the suit for its failure to demonstrate injury. Laidlaw also moved to dismiss the action arguing that the citizen suit was barred by DHEC's prior action.
The District Court held that DHEC's action had not been "diligently prosecuted" and allowed the citizen suit to proceed.3 In January of 1997, the court held that Laidlaw had gained an economic benefit of $1,092,581 as a result of its extended period of noncompliance. However, the court assessed a civil penalty of only $405,800, stating that an injunction was inappropriate because Laidlaw had been in substantial compliance with its NPDES permit since August of 1992 and that its entire facility had been closed in 1996. FOE appealed the penalty judgment, arguing that it was inadequate, but did not appeal the denial of the injunctive relief. Laidlaw cross-appealed, arguing that FOE lacked standing and that DHEC's action qualified as a diligent prosecution.
Court of Appeals assumed that FOE initially had standing to bring the
suit, but decided that the case had become moot. Focusing on the element
of redressability, the Court of Appeals declared that the case was moot
because the only remedy available to FOE (civil penalties payable to
the government) would not rectify injury suffered by the plaintiffs.
The Supreme Court granted certiorari to determine whether a defendant's
subsequent compliance renders a citizen suit moot.
Laidlaw uses the procedural doctrine of "standing" to argue that FOE is not in the position to bring a citizen suit. Article III of the U.S. Constitution limits who may seek relief in a federal court with the doctrine of "standing," which refers to whether a plaintiff has a legally sufficient interest in the case such that he or she is the appropriate party to participate in the lawsuit. This limitation preserves the court's resources for cases in which the parties have a tangible interest in the outcome. Standing requires the plaintiff to demonstrate "injury in fact,"
that the injury be traceable to the defendant's actions and that the injury is likely to be redressed by a favorable judgment.4 Environmental organizations such as FOE often face issues of standing because opposing parties typically argue that the organization itself has not been harmed by any action or inaction and therefore has no standing to sue. This argument may be overcome by a showing that one of the members of the plaintiff-group has suffered actual damage or loss.
doctrine of mootness applies when issues of a case are no longer viable.
Citizen suits face the challenge of mootness when the violations that
trigger the litigation cease before the case is decided. In this case
Laidlaw had come into compliance with its permit following the settlement
with DHEC and had closed its facility prior to this appeal.
Standing. Laidlaw argues that there were no adverse environmental effects resulting from the elevated levels of mercury in the discharge from its incinerator and that FOE failed to prove "injury in fact." The Supreme Court rejected these arguments stating that only injury to the plaintiff (not the environment) must be established to meet the standing requirements and that FOE met its burden of proof by submitting several affidavits from members of FOE describing the adverse effect of Laidlaw's activities on the members' use of the polluted waterway, including canoeing and picnicking.
Next, Laidlaw argued that FOE specifically lacked standing to seek civil penalties because such penalties, payable to the government, offer no redress for FOE's alleged injury. The defendant contends that in failing to appeal the denial of injunctive relief, FOE lost its standing to continue to seek civil penalties. The Court disagreed, citing the CWA's legislative history in which civil penalties are considered to promote immediate compliance by the defendant and to deter future violations. The Court held that a court, acting within its discretion, may award either injunctive and declaratory relief or civil penalties and that such civil penalties are appropriate relief in this case.
While Laidlaw's arguments in the lower court focused on FOE's standing,
the Court of Appeals for the Fourth Circuit brought the doctrine of
mootness into the analysis in its holding that by Laidlaw's compliance
and recent shutdown, the viability of the issues ceased. However, the
Supreme Court declares that it is well settled that a defendant's voluntary
cessation of a challenged activity does not deprive a federal court
of its power to determine that activity's legality. The standard for
determining whether a case is moot, when the defendant has ceased its
conduct, is "if subsequent events made it absolutely clear that the
allegedly wrongful behavior could not reasonably be expected to recur."5
The burden of proof on this standard is with the one claiming mootness
, hence, Laidlaw must show that events make it absolutely clear that
its permit violations could not reasonably be expected to recur. FOE
points out that Laidlaw has failed to make such a showing and that,
in fact, Laidlaw retains its NPDES permit. The Supreme Court decided
that the effect of Laidlaw's compliance and the facility closure on
future violations is a disputed factual matter and should be considered
Supreme Court's decision in this case resolves inconsistency in the
lower courts as to whether the voluntary cessation of a challenged activity
renders a citizen suit moot. The Court points out that in such a situation,
the defendant has the burden of proving that the violations could not
reasonably be expected to recur. Such definitive proof is required before
the issues of a citizen suit will be deemed moot. Further, the Supreme
Court determined that civil penalties, which are payable to the government,
are an appropriate award to redress the plaintiffs' injury. An award
of civil penalties without an injunction is an expression of the need
for deterrence of the challenged conduct and as such is an appropriate
award in a citizen suit. The Supreme Court reversed and remanded the
case to the district court for consideration in keeping with this decision.
1. 33 U.S.C. § 1365(a).
2. Friends of the Earth (FOE) and Citizens Local Environmental Action Network, Inc. (CLEAN) initiated the suit and were later joined in the litigation by Sierra Club.
3. The court found that in imposing the civil penalty of $100,000 against Laidlaw, DHEC had failed to recover, or even to calculate, the economic benefit that Laidlaw received by its noncompliance. More persuasive still, was the fact that Laidlaw's own lawyer had drafted the complaint and paid the filling fees on behalf of the agency.
4. See Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). Lujan describes the standard as "injury in fact", being an injury that is both concrete and either actual or imminent (not hypothetical).
5. See United States v. Concentrated Phosphate Export Assn., Inc., 339 U.S. 199 (1968).
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