Environmental Citizen Suits: Strategies and Defenses

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1 Environmental Citizen Suits: Strategies and Defenses Tom Lindley August 2008 Topics Federal laws create options for citizen suits CWA, CAA, RCRA, TSCA, ESA, etc. Initial investigation and evaluations Corrective actions Client objectives Business objectives Litigation defenses Litigation considerations Trends Penalties Attorneys fees Settlements Avoiding such suits: audits

2 Clean Water Act Citizen Suits 33 U.S.C. 1365(a)(1): against any person... alleged to be in violation of (A) an effluent standard or limitation... or (B) an order issued by the [EPA] or State "Effluent standard or limitation" means: unlawful act under 33 U.S.C. 1311(a); effluent limitation or standard of performance; or an NPDES permit or condition thereof Clean Water Act Citizen Suits Ongoing violation is required: Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found. Inc., 484 U.S. 49 (1987) At time of complaint: good faith belief that violation is ongoing Summary judgment: post-complaint violations or reasonable likelihood of future violations

3 Clean Water Act Citizen Suits Notice: 60-day notice required except: violations of 33 U.S.C (new source performance standards) and 33 U.S.C. 1317(a) (toxic pollutant effluent limitations) Venue: federal district court in the judicial district in which the discharge source is located Clean Water Act Citizen Suits Preclusion 33 U.S.C. 1365(b)(1)(B): if EPA or the State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States t or a State, t no citizen suit may be commenced 33 U.S.C. 1319(g)(6)(A): any violation shall not be subject to a civil penalty action if EPA, Corps, or State (under comparable law) is diligently prosecuting or has concluded administrative penalty action But see 33 U.S.C. 1319(g)(6)(B): limitations in 309(g)(6)(A) do not apply if the citizen suit is filed before commencement of an administrative action, or if 60-day notice has been given before commencement of an administrative action and the citizen suit is commenced before the 120 th day after the date that the notice is given

4 Clean Water Act Citizen Suits Remedies: declaratory and injunctive relief; civil penalties of $27,500 per violation per day Attorneys fees, expert witness fees, and costs to any prevailing or substantially prevailing party, if the court determines the award is appropriate Clean Air Act Citizen Suits 42 U.S.C. 7604(a)(1): against any person... alleged to have violated (if there is evidence that the alleged violation has been repeated) or to be in violation of (A) an emission i standard d or limitation... or (B) an order issued by the [EPA] or a State "Emission standard or limitation" means: schedule or timetable of compliance; emission limitation;, standard of performance or emission standard; control or prohibition respecting motor vehicle fuel or fuel additive; any permit condition; or any standard, limitation, or schedule established under Title V

5 Clean Air Act Citizen Suits 42 U.S.C. 7604(a)(3): against any person who proposes p to construct or constructs any new or modified major emitting facility without a [required permit] or who is alleged to have violated... or to be in violation of any condition of such permit Clean Air Act Citizen Suits Ongoing violation perhaps not required by CAA (Congress amended CAA in 1990) But some courts have held that citizens must demonstrate ongoing violations to have constitutional standing to sue. Anderson v. Farmland Indus., Inc., 70 F. Supp. 2d 1218 (D. Kan. 1999); Berry v. Farmland Indus., Inc., 114 F. Supp. 2d 1150 (D. Kan. 2000); see also Steel Co. v. Citizens for a Better Env t, 523 U.S. 83 (1998).

6 Clean Air Act Citizen Suits Notice: 60-day notice required except violations of 7412(i)(3)(A) or (f)(4) (hazardous air pollutant emission standards) except violation of order issued by EPA under 7413(a) (order to comply with SIP) Venue: federal district court in the judicial district in which the stationary source is located Clean Air Act Citizen Suits Preclusion: 42 U.S.C. 7604(b)(1)(B): if EPA or the State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States or a State, no citizen suit may be commenced

7 Clean Air Act Citizen Suits Remedies: declaratory and injunctive relief; civil penalties of $27,500 per violation per day Also up to $100,000 of penalty award may be used to fund beneficial mitigation projects to enhance the public health or the environment 42 U.S.C. 7604(g)(2) Attorneys fees, expert witness fees, and costs to any party, if the court determines the award is appropriate Evaluate the 60-Day Notice I. Investigate Alleged Facts Unpermitted activities? Violations of permit conditions? Reporting violations? II. Assess Frequency of Violations Wholly past? Ongoing? III. Conduct Facility Audit Other potential issues?

8 Take Corrective Actions Stop all alleged violations or confirm no violations Review agency file Seek independent technical evaluations Make operational changes? Comply with past reporting reqs? Obtain permit? Client Objectives Defeat/narrow lawsuit Minimize/defeat i i any penalties Minimize/defeat attorneys fees Avoid other adverse results from suit Avoid future lawsuits Move on with business objectives

9 Response Considerations Litigation holds to preserve information* Insurance coverage/claim notice* Disclosure of suit in SEC filings Dealing with the news media* Preparing a litigation risk assessment Reservations for litigation costs/losses Litigation Holds to Preserve Information Complying with duty to preserve Developing, implementing and monitoring a litigation hold Identifying relevant documents and data; interviewing key players (including consultants and contractors)

10 Insurance Coverage/Claim Notice Recognize when a "claim" has been made against you Locate and catalog any potentially applicable insurance policies immediately Recognize the need for professional assistance Give notice as soon as possible Cooperate with reasonable requests from insurers Evaluate the insurers' response to tender; pay attention to details of defense offered Don't automatically ti take "no" " for an answer Determine what types of liability insurance you should carry Dealing with the News Media Assign a media spokesperson Don't try to dissuade Return phone calls promptly Be up front and honest or decline to comment Move quickly Anticipate questions and formulate message Don t try to answer every question Explain and be accurate Provide background/off the record Don't denigrate opposition Dispose of negative story quickly

11 Litigation Defenses Plaintiff's standing Mootness Improper notice Diligent prosecution by agency Action not authorized by statute Truly not liable on facts Litigation Considerations 1. Requests for immediate injunctive relief Opposing injunctive relief: Act quickly Try to establish informal agreements Appear in court 2. Motion strategy: Dismissal/summary mmar judgment 3. Discovery responses from defendant and its consultants

12 Litigation Considerations (cont.) 4. Agency involvement Effects of involvement May defeat suit by diligent prosecution Can provide protections in any event Benefits to Agency? Preparation for related suits against agency Agency practices DEQ Ecology Litigation Considerations (cont.) 5. FRCP Rule 68 offers of judgment At least 10 days prior to trial If offer not accepted within 10 days, then if final judgment less than offer, offeree must pay costs incurred after offer Subsequent offers not precluded after first offer

13 Recent Developments Special standing status for plaintiff states Given a state's "stake in protecting its quasi-sovereign interests, [a state] is entitled to special solicitude in our standing analysis. " Massachusetts v. EPA, 549 U.S., 127 S. Ct (2007) ESA's consultation regs do not apply to transfer to states of NPDES authority Consultation reqs applies only to discretionary federal actions, Nat'l Assoc. of Home Builders v. Defenders of Wildlife, 551 U.S., 127 S. Ct (2007) Recent Topics CWA cases Nexus or not to navigable waters (Rapanosp and progeny; EPA/Corps guidance) Standing determined on date claim filed Attorneys' fees Granted only for prevailing claims CAA Who has standing?

14 Penalty Defenses Evaluate actual alleged environmental harm alternatives Review EPA s and State s actual penalty assessments for similar situations Review agency guidance on penalty assessment rationales Prepare arguments re: proposed result Defeating Plaintiffs Fees or Getting Your Own Past: P was substantially prevailing if its suit was catalyst for agency enforcement action that resulted in end of violations. Fee request must be legally related to relief claimed by P Buckhannon, 532 U.S. 598 (2001) rejected catalyst approach in civil rights context. Sierra Club, 351 F.3d 840 (8th Cir. 2003) applies Buckhannon in environmental context to hold P must receive some relief on the merits Relief must materially alter legal relationship so that D s behavior directly benefits P Change in behavior must be judicially sanctioned, not simply voluntary Standards now bit less clear

15 Settlement Considerations Ongoing violations Litigation cost analysis Agency enforcement Cost/benefit analysis Ultimate objectives Beware: Settlements do not preclude agencies or other third parties from suing PREPARE GETTING TO YES : THE MUTUAL GAINS APPROACH TO NEGOTIATION Clarify your mandate and define your team Estimate your BATNA 1 (and theirs) Improve your BATNA (if possible) Know your interests Think about their interests Prepare mutually beneficial options CREATE VALUE Explore interests on both sides Suspend criticism Invent without committing Generate options and packages that make the pie larger Use neutrals to improve communication DISTRIBUTE VALUE Behave in ways that build trust Discuss standards or criteria for dividing the pie Use neutrals to suggest possible distributions Design nearly self-enforcing agreements FOLLOW THROUGH Agree on monitoring arrangements Make it easy to live up to communications Align organizational incentives and controls Keep working to improve relationships Agree to use neutrals to resolve disagreements 1 Best Alternative to a Negotiated Agreement. (Thanks to the Consensus Building Institute, Cambridge, MA)

16 Avoid Suits with Internal Compliance Audits! Where you can avoid such a lawsuit, less costly to do so Use a regular audit program to review operations and permitting Do so through attorney/client and state privileges QUESTIONS?