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This is a follow-up to our original post outlining Brodsky & Smith’s voluminous output of notices of intent to sue, entitled Explaining the Drastic Increase in Stormwater Citizen Lawsuits.

On Friday, May 18, the U.S. Department of Justice (DOJ) intervened in three proposed consent decrees with a Statement of Concern and Recommendation. The consent decrees were submitted to the DOJ as part of the 45-day approval process described in the Clean Water Act citizen suit requirements. These three proposed consent decrees were lawsuits filed against facilities by Brodsky & Smith, a law firm renowned in California for “shakedown” style citizen suits.

Figure 1.  The staggering number of notice of intent to sue letters (60-Day Notices) filed by Brodsky & Smith between Jan. 2015 and Dec. 2017

The DOJ highlighted the following general concerns with Brodsky & Smith’s citizen suit practice:

  1. Concerns regarding repeat plaintiffs, multiple plaintiffs at the same address, and no indications of plaintiff qualifications for monitoring,
  2. Volume of lawsuits compared to litigation capacity, low ratio of federal lawsuits, and high ratio of voluntary case closure, and
  3. Little indication that consent judgments seek to enforce the CWA.

Will this action by the DOJ slow down the rate of citizen suits in California?

Attorney Bill Funderburk’s firm, Castellón & Funderburk, LLP, has been in regular communication with the DOJ for the past year about Brodsky & Smith’s practices. Funderburk released a statement that the DOJ’s actions “draw a line on potentially abusive Clean Water Act lawsuits and settlements” and “potentially represent a watershed in rectifying and curbing abusive lawsuit and settlement practices.”

Figure 2. Number of 60-Day Notices in California for 2015 – 2017 and forecasted number of 60-Day Notices for 2018 – 2020

However, even though Brodsky & Smith has not filed a single notice of intent to sue (60-Day Notice) this year, presumably due to the DOJ’s investigation, the first several months in 2018 showed no slow down of 60-Day Notices in California. As of May 15, 110 facilities have received 60-Day Notices in California this year, which is on pace for the 309 Mapistry has forecasted for 2018. The growing number primarily stems from:

  1. New environmental groups entering the domain, such as the questionably named California Environmental Protection Association (CEPA), which is not to be confused with the California Environmental Protection Agency.
  2. Consistent filings from historical environmental groups like the Waterkeeper Alliance groups (e.g. San Diego Coastkeeper and San Francisco Baykeeper) and California Sportfishing Protection Alliance (CSPA).

None of these environmental groups and law firms filing 60-Day Notices in 2018 meet the three of the DOJ’s concerns listed above.

How does this affect my facilities?

While the DOJ’s crackdown on Brodsky & Smith is good news for California facilities, the unfaltering increase in citizen suits is not. Mapistry’s litigation team has been studying risks and trends in citizen suit data and recommends that high-risk facilities in California immediately implement a proactive approach to their stormwater compliance program. High-risk facilities include facilities that are in the waste management, metal recycling, or concrete industries, have one or more pollutants in Level 2, have outstanding Level 1 or Level 2 reports, discharge to an impaired water body, or discharge metals in stormwater. Refer to this article to read about the five steps to implementing a proactive compliance program.

Questions Answered by the DOJ

The DOJ provides evidence that answers some of the lingering questions from originally looking into Brodsky & Smith’s procedures. Each of the answers below consists of text pulled directly from the United States’ Statement of Concern and Recommendation for the following three cases.

  1. Gary Lunsford v. ArrowHead Brass Plumbing
  2. Luke Delgadillo v. Miller Castings
  3. Alfonso Lares v. Reliable Wholesale Lumber

How is Brodsky & Smith incentivizing citizens to file suit against a facility?

Congress did not authorize CWA citizen suit plaintiffs, such as Plaintiff Garcia, to receive damages or other monetary compensation. […] Yet, contrary to what the CWA permits, every Brodsky & Smith CWA settlement instrument the United States has reviewed initially contained a direct payment to the plaintiffs. Indeed, the United States understands that Brodsky & Smith’s standard settlement template includes a $1,000 direct payment to the plaintiff.

What is Brodsky & Smith’s motive in filing so many lawsuits?

Many of these claims have been resolved out of court, with little or no oversight, and the firm has received almost $700,000 in CWA-related attorneys’ fees over a two-year period.

Has any other law firm used this approach before?

The United States has not identified any firm, solo practitioner, or organization having filed a similar volume of citizen suit actions in a similar timeframe over the 41-year history of CWA citizen suit litigation. The practice of initiating and settling a large volume of CWA citizen suits appears a novel innovation.

What facilities did Brodsky & Smith target?

Since 2016, most of 158 NOVs sent by Brodsky & Smith target dischargers that appear to be small businesses.

How many 60-Day Notices turned into complaints filed in court?

According to a letter dated November 30, 2017, from Brodsky & Smith to the Department of Justice (DOJ), the firm settled 22 of these [60-Day Notices] without filing a complaint and decided not to pursue 37 of these matters. […] Starting in October of 2016, two [Brodsky & Smith] attorneys have filed nineteen CWA citizen suit cases in the Central District of California.

Why did the DOJ decide to step in?

The United States expressed concerns with the settlements provided; namely 1) terms providing for $1,000 payments to be made directly to the plaintiffs; 2) lack of meaningful injunctive relief or enforcement mechanisms; and 3) substantial attorney’s fees (totaling $94,500 for the settlement agreements resolving the three filed cases), but no civil penalty, restoration, mitigation or other environmentally beneficial project.

Does Brodsky & Smith hire an environmental consultant?

(“Miller Castings shall make a one-time payment of Five Thousand Dollars ($5,000) to compensate Plaintiff for costs and fees to be incurred for monitoring . . .”). There is no evidence that Plaintiff has technical experience in developing or assessing the implementation of BMPs. The process of repeatedly, and expressly directing monitoring money and other payments to an individual plaintiff is suspect and—based on the information available for review—appears inappropriate.

What role did Open Data play in enabling Brodsky & Smith?

California’s Stormwater Multiple Application and Report Tracking System (SMARTS) is an online database where dischargers electronically file the required documents that can be accessed by the public. The system increases accountability by allowing the Regional and State Board staff, as well as EPA and the public (including citizen plaintiffs), to access data about discharged pollutants. […] Brodsky & Smith routinely undertook what counsel characterized as an “extensive investigation” prior to issuing an NOV, which involved an online review of California’s online SMARTS database, PACER, California registration records, EPA benchmarks, and water quality standards and NOAA rain data, as well as “internet investigation.” Counsel represented that a Brodsky & Smith employee would then review records at the offices of the Regional Water Quality Control Board and that an outside expert would travel to each facility to inspect and photograph discharge points.

Read our original post describing Brodsky & Smith’s questionable practices: Explaining the Drastic Increase in Stormwater Citizen Lawsuits.

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