Defense and Litigation Strategies Navigating Notice, Standing and - - PowerPoint PPT Presentation

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

Clean Water Act Citizen Suits: Defense and Litigation Strategies

Navigating Notice, Standing and Jurisdiction; Interpleading Third Parties Under the CWA

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific TUESDAY, MARCH 14, 2017

David Chung, Partner, Crowell & Moring, Washington, D.C. Christopher (Smitty) Smith, Esq., Steptoe & Johnson, Los Angeles

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CLEAN WATER ACT CITIZEN SUITS: DEFENSE AND LITIGATION STRATEGIES

David Y. Chung Crowell & Moring LLP dchung@crowell.com 202.624.2587 Christopher ‘Smitty’ Smith Steptoe & Johnson LLP csmith@steptoe.com 213.439.9452

Overview of Today’s Webinar

I. Defenses/Challenges A. Notice B. Standing C. No WOTUS D. Improper rulemaking challenge E. No Coverage F. Interpleader G. Permit shield H. Wholly past I. Mootness J. Voluntary Cessation K. Nonpoint & point source L. Classification of Operations II. Novel approaches in CWA citizen suits III. Permit shield circuit split

6

Defenses – Challenging Notice

• 33 U.S.C. § 1365(b) – no action may be commenced to enforce an effluent

standard or limitation or an order issued by EPA or a State with respect to such a standard or limitation ― prior to 60 days after the plaintiff has given notice; or ― if EPA or a State has commenced and is diligently prosecuting a civil or criminal action to require compliance with the standard, limitation, or

• rder

except that such action may be brought immediately after such notification in the case of an action under this section respecting a violation of sections 1316 (new source performance standards) and 1317(a) (toxic pollutant effluent standards)

7

Defenses – Challenging Notice

• Hallstrom v. Tillamook County, 493 U.S. 20 (1989): pre-suit notice is a

mandatory precondition and a plaintiff’s failure to comply requires dismissal

• The notice must be specific enough to give the recipient(s) an opportunity to

correct a mistake or give the government entities in charge a reasonable basis upon which to take action. (See 40 C.F .R. § 135.3) Look for:

― Lack of geographic specificity in the NOI; ― Lack of specificity as to particular pollutants; ― Failure to mention dates or what particular requirement was violated; ― Failure to send NOIs to specific entities or failure to mention them in NOIs

• Plaintiffs cannot count on using discovery to fill in the gaps in a notice letter

8

Defenses – Challenging Notice

• Diligent prosecution bar (33 U.S.C. § 1365(b)(1)(B))

― “The bar on citizen suits when governmental enforcement action is under way suggests that the citizen suit is meant to supplement rather than to supplant governmental action.” See Gwaltney of Smithfield,

• Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49 (1987).
• What qualifies as diligent prosecution?

― Active litigation ― Litigation that has resulted in a final judgment, consent decree, or consent order and agreement ― Cases subject to an ongoing consent decree that remains subject to modification

9

Defenses – Challenging Standing

• Plaintiff bears the burden of demonstrating Article III standing: injury-in-fact;

causation; and redressability ― Relevant showing of injury-in-fact is injury to the plaintiff, not injury to the environment. E.g., Friends of the Earth, Inc. v. Laidlaw Envtl.

• Servs. (TOC), Inc., 528 U.S. 167 (2000) (effect on "recreational,

aesthetic, and economic interests" is cognizable injury for purposes of standing); Friends of the Earth v. Gaston Copper Recycling, 204 F .3d 149, 160-61 (4th Cir. 2000).

• Generally, courts set a relatively low threshold for citizen plaintiffs – “injuries

need not be large, an ‘identifiable trifle’ will suffice.” E.g., Public Interest Research Group of New Jersey, Inc. v. Powell Duffryn Terminals, Inc., 913 F .2d 64, 71 (3d Cir. 1990).

10

Defenses – Challenging Standing

• Plaintiffs do not need to show to a scientific certainty that a defendant’s

effluent, and that effluent alone, caused the precise injury alleged by plaintiffs

• “Contribution” test from Powell Duffryn:

― Defendant discharged some pollutant in concentrations greater than allowed by its permit (or without a permit); ― Into a waterway in which the plaintiff has an interest that is or may be adversely affected by the pollutant; and ― The pollutant causes or contributes to the kinds of injuries alleged by the plaintiffs

• Courts will not assume an injury is caused by a defendant solely because

water runs downstream. See Friends of the Earth, Inc. v. Crown Cent. Petroleum Corp., 35 F .3d 358, (5th Cir. 1996).

11

Defenses – Challenging CWA Jurisdiction

• CWA only applies to “navigable waters,” which the Act defines as

“waters of the United States” (“WOTUS”). 33 U.S.C. § 1362(7)

• EPA/Corps regulations further interpret the term WOTUS by

regulation ― The regulatory definition is in flux, due to pending challenges to the 2015 WOTUS Rule and the recent E.O. and EPA-Corps Notice

• n the 2015 Rule

― Both the prior rule and the 2015 rule set forth exclusions to jurisdiction (e.g., for “waste treatment systems”)

• Claims in citizen suits sometimes have been rejected based on

plaintiffs’ inability to establish that the water bodies at issue are subject to CWA jurisdiction.

12

Defenses – Improper Rulemaking Challenge

• Citizen suit is an improper attempt to challenge (not enforce) a rule. See

Ecological Rights Found. v. Pac. Gas & Elec. Co., 2013 WL 1124089 (N.D. Cal.

• Mar. 1, 2013)

― Suit alleging discharges without an NPDES permit violated the CWA (specifically, EPA’s Industrial Stormwater Rule) ― Citizen suits are intended to enforce the applicable regulations, not to alter them or change the way agencies apply them ― Neither EPA nor the CA Water Resources Board were parties to the sui

13

Defenses – No Coverage

• No stand-alone cause of action for failure to obtain a permit
• Envtl. Prot. Info. Ctr. v. Pacific Lumber Co., 469 F

. Supp. 2d 803, 827 (N.D.

• Cal. 2007)

― “[I]n the absence of an actual addition of any pollutant to navigable waters from any point, there is no point source discharge, no statutory violation, no statutory obligation of point sources to comply with EPA regulations for point source discharges, and no statutory obligation of point sources to seek or

• btain an NPDES permit in the first instance.”
• Alaska Cmty. Action on Toxics v. Aurora Energy Servs., LLC, 2011 WL 13069517

(D. Alaska Jan. 10, 2011)

― “The Court agrees with Defendants that any civil penalties must be based on actual discharges, and not the mere failure to obtain a permit. Plaintiffs may be able to establish that penalties are appropriate based on intermittent

• discharges. But lack of a permit is not, in and of itself, a violation absent a

discharge of a pollutant.”

14

Defenses – Interpleader

• Addresses problem with permittees liability for unpermitted contributors

― A litigation approach to a regulatory problem.

• CWA imposed joint and several liability; contribution can mitigate that liability

― No express right to contribution under CWA

• Interpleader expressly recognized as implied right for CWA citizen suits

― Mid-Valley Pipeline Co. v. S.J. Const., Inc., 847 F .Supp.2d 982 (E.D. Ky. 2012) ― U.S. v. Savory Senior Housing Corp., 2008 WL 631161 (W.D. Va. March 6, 2008)

• Use as a tool to engage unpermitted contributions when faced with CWA suit

15

Defenses – Permit Shield

• Compliance with terms of NPDES permit satisfies obligations under the CWA,

insulating permit-holder from liability for discharges in accordance with permit. ― 33 U.S.C. § 1342(k)

• Policy: to insulate permit-holders from changes in regulations during period of

permit and to relieve permit-holder from having to litigate in an enforcement action, weather the permits are sufficient strict ― E.I. du Pont de Nemours & Co. v. Train, 430 U.S. 112 (1977)

• Seminal Decision: Piney Run Preservation Association v. County Commissioners
• f Carroll County, Maryland, 268 F

.3d 255 (4th Cir. 2001) ― Disclosure + Compliance = No CWA Liability

• Fact intensive inquiry typically involving two types of violations

― Numeric and narrative

16

Defenses – Permit Shield (Case Survey)

• Numeric limitation violations

― Piney Run Preservation Association v. County Commissioners of Carroll County, Maryland, 268 F .3d 255 (4th Cir. 2001)

• Narrative standard violations

― Ohio Valley Environmental Coalition v. Fola Coal Company, LLC, 845 F .3d 133 (4th Cir. 2017) ― Tennessee Clean Water Network v. Tennessee Valley Authority, 2016 WL 5944722 (M.D. Tenn. Sept. 9, 2016) ― NRDC v. Metropolitan Water Reclamation District of Greater Chicago, 175 F .Supp.3d 1041 (N.D. Ill. 2016) ― Ohio Valley Environmental Coalition, Inc. v. Marfolk Coal Company, Inc., 966 F .Supp.2d 667 (S.D. W.V. 2013)

17

Defenses – Wholly Past

• Citizen suits require ongoing violations in order to be actionable, i.e.,

not “wholly past”

• Seminal Decision: Gwaltney of Smithfield, Ltd. v. Chesapeake Bay

Foundation, 484 U.S. 49 (1987)

• Policy: prospective relief requires ongoing violations
• Methods to establish an ongoing violation –

― Proving violations that continued on or after the complaint was filed ― Offering evidence of a continuing likelihood of a recurrence in intermittent or sporadic violations

18

Defenses – Legacy GW migration Cases

• Expansive interpretations –

― Ohio Valley Environmental Coalition, Inc. v. Hernshaw Partners, LLC, 984 F .Supp.2d 589 (S.D. W.V . 2013) ― Sierra Club v. El Paso Mines, Inc., 421 F .3d 1133 (10th Cir. 2005) ― Umatilla Waterquality Protective Ass’n v. Smith Frozen Foods, Inc., 962 F .Supp. 1312 (D. Or. 1997) ― Werlein v. U.S., 746 F .Supp. 887 (D. Minn. 1990), class cert. vacated by 793 F .Supp. 898 (D.

• Minn. 1992)
• Narrow interpretations –

― Aiello v. Town of Brookhaven, 136 F .Supp.2d 81 (E.D. N.Y . 2001) ― Friends of Santa Fe County v. LAC Minerals, Inc., 892 F .Supp. 1333 (D. N.M. 1995) ― Connecticut Coastal Fishermen’s Ass’n v. Remington Arms Co., 989 F .2d 1305 (2d Cir. 1993) ― Pawtuxet Cove Marina v. Ciba-Geigy Corp., 807 F .2d 1089 (1st Cir. 1986) ― Hamker v. Diamond Shamrock Chem. Co., 756 F .2d 392 (5th Cir. 1985) ― Brewer v. Ravan, 680 F .Supp. 1176 (M.D. Tenn. 1988)

19

Defenses – Mootness

• Can be conflated with “wholly past,” but is distinct from diligent

prosecution ― Diligent prosecution bars citizen suits filed after a governmental enforcement action has been commenced

• Conversely, mootness applies when the government action is taken

after the citizen enforcement action has been commenced ― Ohio Valley Environmental Coalition, Inc. v. Consol of Kentucky, Inc., 2014 WL 1761938 (S.D. W.V. April 30, 2014)

20

Defenses – Voluntary Cessation

• Voluntary cessation of permit violations can nullify CWA remedy

― Variation on mootness/wholly past defense

• “[M]ere cessation of illegal activity in response to pending litigation does not

moot a case, unless the party alleging mootness can show that the ‘alleged wrongful behavior could not reasonable expected to recur.” ― NRDC v. County of Los Angeles, 840 F .3d 1098 (9th Cir. 2016) (quoting Rosemere Neighborhood Ass’n v. U.S. Env. Prot. Agency, 581 F .3d 1169 (9th Cir. 2009))

• Burden of proof rests with discharger

― Affirmative evidence that it is “absolutely clear that the alleged wrongful behavior could not reasonably be expected to recur, not just ‘more likely than not.’”

21

Defenses – Nonpoint Source

• Exempt from NPDES permitting requirements

― “nonpoint source” undefined in CWA

• USEPA Guidance on “nonpoint source” definition

― “[nonpoint source pollution] is caused by diffuse sources that are not regulated as point sources and normally is associated with agricultural, silvicultural, urban runoff, runoff from construction activities, etc. Such pollution results in human-made or human-inducted alteration of the chemical, physical, biological, and radiological integrity of water. In practical terms, nonpoint source pollution does not result from a discharge at a specific single location (such as a single pipe) but generally results from land, runoff, precipitation, atmospheric deposition, or percolation.”

― EPA Office of Water , Nonpoint Source Guidance 3 (1987)

22

Defenses – Nonpoint Source (Stormwater)

• Nonpoint source: runoff “that is not collected or channeled and then

discharged, but rather runs off and dissipates in a natural and unimpeded manner, is not a discharge from a point source”

― Northwest Environmental Def. Ctr. v. Brown, 640 F .3d 1063 (9th Cir. 2011, rev’d

• n other grounds, Decker v. Northwest Environmental Center, 133 S.Ct. 1326

(2013) (citing League of Wilderness Defenders/Blue Mountains Biodiversity Project v. Forsgren, 309 F .3d 1181, 1184 (9th Cir. 2002))

• Point source: “runoff is collected in a system of ditches, culverts, and channels

and is then discharged into a stream or river, there is a ‘discernable, confined and discrete conveyance’ of pollutants, and there is therefore a discharge from a point source”

― Northwest Environmental Defense Center v. Decker, 728 F .3d 1085 (9th Cir. 2013) (citing 33 U.S.C. § 1362(14))

23

Defenses – Point Source

• Conveyance = point source

― “point sources are not distinguished by the kind of pollution they create or by the activity causing the pollution, but rather by whether the pollution reaches the water through a confined discrete conveyance.”

― Sierra Club v. BNSF Railway Company, 2016 WL 6217108 (W.D. Wash. Oct. 25, 2016) (citing Trustees of Alaska v. EPA, 749 F .2d 549 (9th Cir. 1984))

• Proximity to WOTUS determines nonpoint/point source

― League of Wilderness Defs/Blue Mts. Biodiversity Project v. Forsgren, 309 F .3d 1181 (9th Cir. 2002) (pesticides sprayed directly over water = non-point source) ― Sierra Club v. BNSF Railway Company, 2016 WL 6217108 (W.D. Wash. Oct. 25, 2016) (trains traveling adjacent to and above water = point source) ― Alaska Cmty. Action on Toxics v. Aurora Energy Servs., LLC, 940 F .Supp.2d 1005 (D. Alaska 2013), rev’d on different grounds, 765 F .3d 1169 (9th Cir. 2014) (stationary coal piles ½ mile from WOTUS = nonpoint source)

24

Defenses – Classification of Operations

• Example: industrial permit not applicable to non-industrial operations
• Entertainment facility not classified under SIC

― Environmental World Watch, Inc. v. The Walt Disney Company, 2014 WL 10979866 (C.D. Cal. April 9, 2014)

• Off-site industrial facilities that support industrial facilities are covered

― Ecological Rights Found. v. Pac. Gas & Elec. Co., 2011 WL 445091 (N.D.

• Feb. 4, 2011)
• Off-site industrial facilities that support non-industrial facilities not covered

― Ecological Rights Found. v. Pac. Gas & Elec. Co., 2013 WL 1124089 (N.D.

• Cal. Mar. 1, 2013)

25

Novel Approaches to CWA Citizen Suits

• Artificial subsurface drainage system is “point source” and requires permit

― Board of Water Works Trustees of the City of Des Moines v. Sac County Board of Supervisors et al. (N.D. Iowa)

• Nitrate pollution from farming activities collecting in drainage districts

― Discharging to WOTUS through groundwater conduit

• State law Immunity

― System owned and operated by political subdivision (drainage district) ― Iowa Supreme Court weighs in ― CWA claims not addressed

26

Novel Approaches to CWA Citizen Suits

• Rail car as a “point source” (Sierra Club v. BNSF Railway Co., W.D. Wash.)

― Coal deposits on land that end up in water do not constitute point source discharges ― However, “[c]oal particles allegedly discharged by BNSF trains that travel adjacent to and above the waters at issue are point source discharges because there is a discrete conveyance: the BNSF trains that travel directly next to or across the water.”

• After a 6-day bench trial in Nov. 2016, the parties reached a settlement in

principle; parties proposed a consent decree on March 3, 2017 ― BNSF avoids NPDES permit coverage ― BNSF must conduct a “Car Cover Study,” remove significant accumulations of coal or petcoke from certain areas, and complete supplemental environmental projects

27

Novel Approaches to CWA Citizen Suits

• “Conduit theory” of CWA liability (Hawai’i Wildlife Fed’n v. County of Maui,

9th Cir.) — District court held that NPDES permits are required if: (1) pollutants

• riginate from some “point source,” and (2) eventually “find their way”

to navigable water, “regardless of how they get there” — In the district court’s view, the conduit between the point source and the navigable water “need not be confined and discrete.” — What about Congress’s intent to distinguish between point sources and nonpoint sources?

28

Novel Approaches to CWA Citizen Suits

• Similar cases have been filed in other courts in recent years involving

discharges to groundwater/groundwater migration, with varying results

— Cape Fear River Watch v. Duke Energy Progress, Inc., 25 F . Supp. 3d 798 (E.D. N.C. 2014) (“Congress did not intend for the CWA to extend federal regulatory authority

• ver groundwater

, regardless of whether that groundwater is eventually or somehow ‘hydrologically connected’ to navigable surface waters.”). — Yadkin Riverkeeper v. Duke Energy, 141 F .Supp.3d 428 (M.D. N.C. 2015) (court “has jurisdiction under the CWA to adjudicate claims where pollutants travel from a point source to navigable waters through hydrologically connected groundwater serving as a conduit between the point source and the navigable waters”). — Sierra Club v. Dominion VA Power, 145 F .Supp.3d 601 (E.D. Va. 2015) (finding Yadkin “significant and instructive”) — San Francisco Herring Ass’n v. Pac. Gas & Elec. Co., 81 F . Supp. 3d (N.D. Cal. 2015) (following County of Maui and denying MTD)

29

Permit Shield Circuit Split

• Split centers around whether disclose + compliance is enough to qualify

for protections afforded by permit shield defense

• 4th Circuit – Ohio Valley Environmental Coalition v. Fola Coal Company,

LLC, 845 F .3d 133 (4th Cir. 2017) — Circuit court affirmed district court ruling that narrative water quality standards incorporated in NPDES permit require compliance even when unspecified constituent is disclosed and contemplated

• 6th Circuit – Sierra Club v. ICG Hazard, LLC, 781 F

.3d 281 (6th Cir. 2015)

• Circuit court affirmed district court ruling that disclosed and

contemplated, but unspecified, constituents not listed in NPDES Permit cannot give rise to liability

30

4th Circuit – Fola Coal Company

• Permit incorporated WV narrative water quality standards by reference

― “The discharge or discharges covered by the WV/NPDES permit are to be of such quality as not to cause violation of applicable water quality standards adopted by the Department of Environmental Protection, Title 47, Series 2”

• Discharges increased conductivity which violated WV narrative water quality

standards ― Constituents that led to increased conductivity were disclosed and contemplated by regulators ― Under Piney, permit shield should have provided protection…it didn’t.

― Numeric limitations vs. narrative water quality standards

• Trending: narrative water quality standards eviscerating permit shield

― NRDC v. Metropolitan Water Reclamation District of Greater Chicago, 175 F .Supp.3d 1041 (N.D. Ill. 2016)

31

6th Circuit – ICG Hazard

• Permit did not specifically identify limitations for constituent after it was disclosed and

contemplated, thus discharges of constituent not permit violations ― “[I]t is clear that the permit is intended to identify and limit the most harmful pollutants while leaving the control of the vast number of other pollutants to disclosure requirements.”

• Selenium – constituent at issue – was disclosed to permitting authority

― Disclosure came through a one-time sample at a time during the life of the permit. ― Separate disclosure not necessary when applying for permit renewal/expansion

• Contemplation at the time applying for permit renewal/expansion

― “ICG’s discharge of selenium was within KDOW’s reasonable contemplation because KDOW knew at the time it issued the general permit that the mines in the area could produce selenium.” ― General contemplation appears to suffice

32

QUESTIONS?

33

David Y. Chung Crowell & Moring LLP dchung@crowell.com 202.624.2587 Christopher ‘Smitty’ Smith Steptoe & Johnson LLP csmith@steptoe.com 213.439.9452