Citizen suits under state and federal environmental laws are nothing new. But recent cases brought in California and Massachusetts may indicate a new trend of suits alleging violations of the National Pollution Discharge Elimination System (NPDES) associated with stormwater discharges. These suits have several characteristics that make them attractive to prospective plaintiffs and their lawyers. Further, the enforcement environment (no pun intended) suggests that there is no shortage of potential defendants.
Since the enactment of the landmark Federal Water Pollution Control Act in 1948 and the amendments to it known as the Clean Water Act in 1972, the United States has pursued a goal of eliminating pollution from America’s waterways. Initially, that pursuit was focused on discharges of industrial wastewater and little thought was given to stormwater. That focus began to change, however, with a series of legislative and regulatory developments beginning in the late 1980s.
In 1987, the enactment of the Water Quality Act expanded the NPDES permitting system to explicitly cover stormwater discharges from industrial facilities, construction sites, and municipal separate storm sewer systems (commonly called MS4s). This expansion led to the adoption of so-called NPDES Phase I permit regulations in 1990, which required permits for certain categories of industrial facilities, constructions sites disturbing more than five acres, and MS4s for municipalities with a population of 100,000 or more. Then in 1999, the Environmental Protection Agency adopted the NPDES Phase II permit regulations, further expanding the stormwater permit requirement to cover construction sites disturbing between one and five acres, and smaller municipal MS4 systems.
The expansion of the NPDES permit requirement to cover stormwater discharges has vastly increased the number of facilities and sites requiring permits. At the same time, over the past several years, regulators have seen budgets cut. The result has been that while there is regulatory enforcement of the Clean Water Act’s permitting requirements, that enforcement has been spotty at best, a fact recognized by EPA Administrator Lisa P. Jackson in a July 2, 2009, memorandum:
We are also falling short of this Administration’s expectations for the effectiveness of our clean water enforcement programs. Data available to EPA shows that, in many parts of the country, the level of significant non-compliance with permitting requirements is unacceptably high and the level of enforcement activity is unacceptably low. Our commitment to the rule of law as a foundational principle for EPA requires that we take action against significant violations and that we assure a consistent standard for compliance across the country.
http://www.epa.gov/compliance/data/results/performance/cwa/jackson-ltr-cwa-enf.html. While EPA has undertaken an effort since 2009 to increase compliance with, and enforcement of, Clean Water Act permitting requirements, those efforts have understandably focused on the largest polluters. There are signs now, however, that the public is no longer content to wait for official action.
Under the Clean Water Act (and some equivalent state laws), enforcement of NPDES permits and permitting requirements is not limited to regulators alone. The Clean Water Act provides for citizen enforcement of its provisions, assuming certain notice requirements are met. 33 U.S.C. § 1365. Of great interest to prospective plaintiffs and their lawyers is the fact that the citizen suit provision provides for fee and cost shifting in favor of the prevailing party. Id. And the threat of a citizen suit is bolstered by the substantial civil penalties the Clean Water Act applies—up to $32,500 per violation per day. See 33 U.S.C. § 1319(d), 69 Fed. Reg. 7121 (Feb. 13, 2004). In a stormwater case, a violation will often occur every time it rains. Though the plaintiff in a citizen suit does not receive these penalties, which are paid to the government, they still represent a substantial hammer with which to force a favorable settlement.
Citizen suits for NPDES permit violations, like all suits under the Clean Water Act, must involve a discharge into the “waters of the United States.” That phrase has been the source of great confusion, especially since the U.S. Supreme Court’s decision in Rapanos v. United States, 547 U.S. 715 (2006), in which the Court split over the extent to which isolated wetlands fit within the definition of “waters of the United States” and, therefore, the extent to which the federal government may exercise regulatory power over them. But some parallel state legislation effectively does away with this requirement. For example, Pennsylvania has enacted the Clean Streams Law, which largely parallels the Clean Water Act, including a parallel citizen suit provision. 35 P.S. § 691.601. But unlike the Clean Water Act, the Clean Streams Law applies to discharges into “Waters of the Commonwealth,” which is defined to include virtually all water within the borders of the state. 35 P.S. § 691.1. And because the Clean Streams Law is the statute under which the federal NPDES permit system is implemented in Pennsylvania, any NPDES permit violation is also a violation of the Clean Streams Law.
In recent years, starting in California and recently on the East Coast in Massachusetts, a number of cases have been filed by environmental groups invoking the citizen suit provisions of the Clean Water Act to pursue NPDES stormwater permit violators. One example is Natural Resources Defense Council v. County of Los Angeles, a citizen suit arising out of allegations of stormwater discharges by the county of Los Angeles and the Los Angeles County Flood Control District in violation of their NPDES MS4 permits. Natural Resources Defense Council v. County of Los Angeles, 636 F.3d 1235 (9th. Cir. 2011). The NRDC case, which is still ongoing, alleges that the county of Los Angeles and the Los Angeles County Flood Control District have been discharging from their MS4 systems stormwater containing contaminants in excess of their NPDES permit limits into a series of four rivers that ultimately discharge into the Pacific Ocean.
At the district court level, on cross motions for summary judgment, the defendants successfully argued that the plaintiff failed to provide sufficient evidence that the water quality exceedances were caused by the defendants. On appeal, the Ninth Circuit reversed in part and affirmed in part. NRDC, 636 F.3d 1235. Specifically, the Ninth Circuit held that, for two of the rivers in question, the plaintiff had presented sufficient evidence because the testing stations where the exceedances were measured were within the MS4 system itself, which was itself upstream from the rivers. As the court held:
At least some outfalls for the MS4 were downstream from the mass-emissions stations. The discharge from a point source occurred when the still polluted [sic] stormwater flowed out of the concrete channels where the Monitoring Stations are located, through an outfall, and into the navigable waterways. We agree with Plaintiffs that the precise location of each outfall is ultimately irrelevant because there is no dispute that MS4 eventually adds stormwater to the Los Angeles and San Gabriel Rivers downstream from the Monitoring Stations.
Id. at 1252. However, for the other two rivers, the court focused on the fact that the monitoring stations in question were actually in the rivers themselves, rather than within the MS4 or one of its outflows. According to the court, while it was certainly likely that the exceedances measured by those stations were caused or contributed to by the MS4, that causation was merely an assumption without further data to back it up.
It is highly likely, but on this record nothing more than assumption, that polluted stormwater exits the MS4 controlled by the District and the County, and flows downstream in these rivers past the mass-emissions stations. To establish a violation, Plaintiffs were obligated to spell out this process for the district court’s consideration and to spotlight how the flow of water from an MS4 “contributed” to a water-quality exceedance detected at the Monitoring Stations.
Id. at 1253–54.
Also of interest in the NRDC case is the defendants’ argument that they bore no legal responsibility for the discharges in question because they did not, in fact, generate any of the contamination at issue. The defendants argued that the contamination was generated by upstream sources, many of which were likely subject to their own NPDES permit limitations. The court was not impressed with this argument: “Although the District argues that merely channeling pollutants created by other municipalities or industrial NPDES permittees should not create liability because the District is not an instrument of ‘addition’ or ‘generation,’ the Clean Water Act does not distinguish between those who add and those who convey what is added by others—the Act is indifferent to the originator of water pollution.” Id. at 1252–53.
Thus, the lessons to be learned from the NRDC case are twofold. First, the case highlights the necessity of having good data on water quality exceedances before bringing an action to enforce an existing NPDES permit. Second, the case stands as a warning to operators of MS4 systems. While state and federal regulators may be willing to cut cash-strapped municipalities a break, environmental groups are not necessarily going to be as understanding.
MS4s, however, are far from the only potential targets for NPDES related citizen suits. Of potential interest and concern to small businesses are a string of recent cases focusing on smaller facilities that are required to have an NPDES permit but do not. Under the current regulatory scheme, NPDES stormwater permits are required for the following categories of industrial facilities:
- Facilities subject to federal stormwater effluent discharge standards in 40 C.F.R. parts 405–71;
- Heavy manufacturing—i.e., paper mills, refineries, chemical plants, steel mills, foundries;
- Coal and mineral mining and oil and gas exploration and processing;
- Hazardous waste treatment, storage, or disposal facilities;
- Landfills, land application sites, and open dumps with industrial wastes;
- Metal scrap yards, salvage yards, automobile junkyards, and battery reclaimers;
- Steam electric power generating plants;
- Transportation facilities that have vehicle maintenance, equipment cleaning, or airport deicing operations;
- Treatment works treating domestic sewage with a design flow of one million gallons a day or more; and;
- Light manufacturing (for example, food processing, printing and publishing, electronic and other electrical equipment manufacturing, and public warehousing and storage).
40 C.F.R. 122.26(a)(14). These categories, generally defined by Standard Industrial Classification (SIC) codes, cover a broad range of facility types. It is easy to imagine that a small business owner running such a facility might be unaware of the NPDES permit obligation, or unprepared to incur the expense of compliance. And until recently, that small business owner would have faced a limited risk of regulatory action.
A string of recent cases out of Massachusetts have been filed by Clean Water Action, a national environmental group, against a number of small facilities. See, e.g., Clean Water Action v. Connecticut Valley Block Co., Inc., No. 07-cv-10253 (D. Mass.); Clean Water Action v. The Newark Group, Inc., No. 07-cv-10353 (D. Mass.); Clean Water Action v. R&R Industries, No. 09-cv-11883 (D. Mass.); Clean Water Action v. Allied Recycling, No. 09-cv-11954 (D. Mass.). Most of the facilities in these cases are scrap metal recycling or junkyard facilities that lacked the requisite NPDES permit. To the extent it is discernable from the dockets, it appears that each of these cases was resolved with a relatively quick settlement. Based upon the consent decrees entered in some of these cases, it appears that the terms of the settlements generally require that the facility (1) come into compliance with the Clean Water Act; (2) pay the plaintiff’s attorneys’ fees, expert fees, and costs; (3) pay for ongoing monitoring of its stormwater discharges; and (4) donate money to various water-related environmental groups to abate past illegal discharges.
What should be of concern to business owners about these cases is that it is relatively easy for interested parties, whether environmental groups or plaintiffs’ attorneys, to identify facilities that are required to have an NPDES stormwater permit. It is similarly easy to determine whether a facility actually has such a permit. For many states, current permit information is often available on EPA’s ECHO Web site. Moreover, for stormwater cases, discharge dates are easy to determine from historical rainfall data. Depending on the nature of the facility in question, it may be relatively easy to identify facilities whose stormwater discharges are likely to contain contaminants even without testing. This makes facilities lacking the requisite permit low hanging fruit for litigious environmental groups and plaintiffs’ attorneys emboldened by the fee and cost shifting provisions of the Clean Water Act.
In the Clean Water Action cases for which consent decrees are publicly available, the defendants have paid as much as $190,000 each, in addition to their own attorneys’ fees and costs, to resolve the case. See Clean Water Action v. State Line Scrap Company, Inc., No. 09-cv-12008 (D. Mass.). That is a substantial amount of money for a small business, but likely far less than the defendant’s possible exposure.
Given certain state and federal regulators’ laxity with regard to the enforcement of NPDES permitting requirements, particularly with respect to smaller facilities, it seems likely that a large number of potential defendants have substantial exposure. Moreover, the success of groups like Clean Water Action in bringing these suits and securing favorable settlements may well encourage others to do likewise.
Alex P. Basilevsky is an attorney in the environmental department of Obermayer Rebmann Maxwell & Hippel in Philadelphia whose practice includes clients with stormwater-related concerns. He can be reached at Alex.Basilevsky@obermayer.com.
The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.