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 stormwater 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.
What are 60-Day Notices of Intent to Sue?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%.
I Received a 60-Day Notice, Can I Avoid a Lawsuit?Intent to Sue Notices have been criticized because the 60-day window is not nearly long enough for facility managers to make all necessary structural modifications. More often than not, the notices are costly to defend and allude to violations that are hard to control because large facilities contain heavy machinery exposed to rain, or allege presence of trace metals naturally present in soils. In addition, allegations are often for previous sampling results (yes, that pesky publicly reported data) that unless you can time travel are going to be hard to show you changed those conditions and sampling results. Facilities should always be cognizant of proactive measures they have taken and they can make use of both substantive or procedural defenses. When it is clear that a violation has occurred, it may be prudent for the facility to invite the state agency with delegated authority to initiate a “compliance action” that resolves the issue quickly rather than allowing it to remain exposed to advocacy groups and attorneys. Another option to toll the 60-day clock is seeking an enforcement action through the government, which could be costly in itself. However, regulatory agencies have been reluctant to act when asked by facilities and they also will likely not give you a written clean bill of compliance health either. Either way, notices of intent to sue should be taken seriously and acted on as soon as possible, even if a facility manager suspects the facility has recently been within compliance. At this stage, the best practice is to get all relevant stormwater discharge documentation in order. Facility managers should obtain access to data that indicates adherence to the NPDES permit and their Storm Water Pollution Prevention Plan (SWPPP) for the past 5 years, which is the mandated deadline (statute of limitations) to file suit in federal court (28 U.S.C. § 2462). This means you need five years of inspection forms, sampling reports, map updates, SWPPP changes, BMPs installed and maintained, and training sessions held.
Complaint Filed: Litigate the Suit or Settle?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.
Settle Privately or Wait to Seek Out a Consent Decree?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:
- Saves ongoing litigation costs and forgoes determinations of fault at trial.
- Provides a vehicle for resolving disputes concerning the interpretation of the agreement and for making adjustments due to changes in circumstances.
- Promotes future compliance because the decree is entered amicably and parties face the pressure of violating the law by not complying to their own terms.
- Court-generated construction of terms if parties are unable to agree on the content of a settlement during negotiations.
- Public access to consent decrees promotes transparency and avoids some of the negative “sue-and-settle” stigmas.
- On average consent decrees in California cases since 2015 resulted in payments over $79,000 per every single facility which includes future monitoring costs, plaintiff attorneys fees (greater than 50% of total), and monetary donations to an environmental mitigation project.
- Unlike mediation-driven private settlements, consent decree judgments are not confidential which can give unwanted publicity to a facility for years to come. (There are exceptions where certain parts can remain private.)
- Decrees can be restrictive if modifications need to be made since the average length is at least 3 years, others being as long as 4 to 5 years.
- A court may also order broader terms of relief than the original complaint plead.
- A consent decree also may require government defendants to perform acts that are not otherwise legally mandated in the General Permit, such as sampling for additional parameters.
- Percival, Robert V., “The Bounds of Consent: Consent Decrees, Settlements and Federal Environmental Policy Making”, 1987 U. Chi. Legal F. 327, 348.
- Mongeon, Catherine. “Annual Review of Environmental and Natural Resources Law: Note: Environmental Conservation Organization v. City of Dallas Creates Unnecessary Burdens for Citizen Suits under the Clean Water Act”, 36 Ecology L.Q. 237
- Johnson, Stephen M., “Sue and Settle: Demonizing the Environmental Citizen Suit”, 37 Seattle U. L. Rev. 891
- Cole, Sarah R., “Managerial Litigants? The Overlooked Problem of Party Autonomy in Dispute Resolution”, 51 Hastings L.J. 1199