Citizen lawsuits are scary because not only are facility and environmental managers unaware they are in violation with very little notice to make timely adjustments, the public access to suit documents can place a facility under a harsh light. To help navigate the legal complexities surrounding this subject, this article explains the lifecycle of a citizen lawsuit and settlement types.
Are you a facility manager responsible for monitoring thousands of daily tasks? What about a Director of EHS or environment responsible for compliance on tens or hundreds of facilities? The last thing on your mind? A lawsuit. The word itself evokes teeth-clenching, perhaps even traumatic memories of suits past. Well for the non-legal types, we take a high-level overview of the stormwater citizen lawsuit from its’ legal standing to the process and tactics of stormwater litigation. Since the inception of §505 under the Clean Water Act (CWA), citizen suits have increasingly been used as a tactic to “shakedown” facilities for stormw ater violations. The intent of citizen suits in the CWA was due to lawmakers realizing that regulatory agencies could not (time, money, etc.) enforce all provisions and regulated entities of the CWA. While many environmental organizations bringing suit are motivated to prevail on the merits of a claim, others target facilities and pursue litigation deliberately to increase costs and maximize their fees.
Citizen lawsuits are scary because not only are facility and environmental managers unaware they are in violation with very little notice to make timely adjustments, the public access to suit documents can place a facility under a harsh light. The strict liability nature of a suit (e.g. lessened burden of proof) favors plaintiff-centered recovery, allowing for the collection of pricey attorneys fees on top of mitigation and monitoring costs. This dynamic is partly due to the broad interpretation that courts have given to the idea that all discharges of pollutants without a permit are illegal, and partially due to the increasingly subjective interpretation of the CWA permit requirements.
The Notice of Intent to Sue acts as a warning to the facility that they are in violation of the CWA and need to take corrective measures as soon as possible. Required under the statute, an environmental group must file and properly serve a letter on the facility summarizing the alleged National Pollutant Discharge Elimination System (NPDES) Permit violations. This notice must be given at least 60 days prior to the filing of a complaint in federal court, otherwise, the facility can dismiss the claim without prejudice under the Federal Rules of Civil Procedure #12. Basically, this means you as a facility should quickly jump on fixing any and all allegations in a Notice of Intent to Sue prior to the 60-day deadline. While a complaint is often not filed after those 60 days, especially if a company is talking to the plaintiff, you don’t want to delay your response actions. Why should you care? Because the threat of legal action for outdated or insufficient stormwater compliance programs is on the rise. Recently, we analyzed 60-Day Notices of intent to sue received by CA industrial facilities between 2015-2018 and discovered we discovered that citizen-initiated lawsuits filed against manufacturing companies have increased by more than 260%.
60 to 90 days following the Notice of Intent to Sue facilities that haven’t resolved the violations cited in the NOI letter from the environmental group will be served notice that a complaint has been filed against them in federal court. Many environmental groups will seek to include alleged violations of Benchmark levels of the United States Environmental Protection Agency (USEPA) Multi-Sector General Permit (MSGP), even if the USEPA has delegated authority to a state agency and the benchmarks aren’t mentioned in the facility’s state permit. Following the complaint, a facility will have a short window to file their response in the form of an answer or other motion (i.e., dismiss, strike) attacking other issues. Once this has elapsed, the litigation process begins and both sides engage in the exchange of evidence known as “discovery”. It is important to recognize that it may be possible to attack specific allegations of the complaint to challenge the legitimacy of an entire suit by addressing the insufficiency of the plaintiffs’ notice, standing to sue (inadequate connection to harm), and mootness (lacking cognizable legal outcome in litigation for past violations). Engaging in discovery and expert consulting can be risky because, as mentioned above, plaintiffs’ groups have an incentive to drive up costs since they are entitled to “recovery” of their attorney’s fees at the end. CWA citizen suits are well-known to obligate broad document production during discovery because permits set vague standards, such as the requirement that facilities defend the adequacy of their structural Best Management Practices (BMPs) to meet “Best Available Technology (BAT)” and “Best Conventional Technology (BCT)”. The discovery process often takes many months of exchange between parties and the threshold of what evidence is discoverable from a facility is surprisingly low. Filing of a complaint does not preclude the availability of confidential settlements through mediation. Mediation with a neutral third-party can extend beyond traditional settlement to increase the possible resolution options, often exploring litigants’ needs and interests that may be independent of legal issues.
In a 2011 study conducted by the California Water Boards Office of Enforcement, 30 of 60 citizen suit NOIs resulted in private settlements prior to litigation. Settlement privately outside of court sooner rather than later is the easiest option, favored because it is often confidential and both the plaintiff suing and defendant facility agree to terms before a suit can enter court. Both parties must mutually agree that a settlement will leave them better off than continuing litigation, even if it means making compromises. Private settlements are essentially contracts that are enforced only in a secondary lawsuit for breach of contract if specific performance is not followed. Since a secondary suit requires the parties to relitigate in a different court than the one that considered the initial lawsuit, parties may be deterred from the additional expense. Furthermore, when parties disagree to a term in the settlement a court may intervene only under terms the court considers “proper” and must first grant intervention. Consent decrees generally serve a benevolent purpose by allowing parties to settle their claims with less burden and expense of ongoing litigation, but with added judicial oversight. This means the courts ensure regulatory compliance according to the terms outlined, and are binding for the lifetime of decree which is on average 3 years in California. Consent Decrees are documents of dual nature, acting as both a contract and a judgment, and leave of court is required before modifications can be enacted. Often, a court will hold a fairness hearing prior to approving plaintiff’s entry of consent decree focusing on whether the decree resolves the litigation at issue, is consistent under the Constitution, does not impact rights of third parties and appropriately utilizes judicial resources.
A few advantages of a consent decree a facility may consider:
Some disadvantages of consent decrees to consider:
Therefore, it is important to consider the differences between private settlements and consent decrees because each may result in dramatically different levels of public information about the specific terms of agreement being made available. A company’s brand and reputation can carry significant value to shareholders in the form of stock price or consumer business. Mapistry firmly believes that an ounce of prevention is worth more than a pound of cure, so we work tirelessly as experts in industrial stormwater permits to keep facilities compliant. Our litigation intel group uses a comprehensive database of nationwide citizen suits to develop a facility-based risk analysis and alert customers of potential legal action against their operations.
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