ELR Citation: ELR 20610
No(s). s. 89-1661-WA et al (8th Cir. Dec 18, 1990)

The court holds that the district court erred in denying citizens the right to intervene in a Federal Water Pollution Control Act (FWPCA) enforcement action, the district court properly dismissed the citizens' FWPCA claims against a city based on res judicata, and the district court properly imposed a $43,000 civil penalty against a poultry processing plant. The court first holds that it lacks jurisdiction over the citizens' appeal of the district court's denial of its first motion to intervene in the Environmental Protection Agency's (EPA's) enforcement action against the city for permit violations at its publicly owned treatment works (POTW). The appeal was not filed within the required 60 days of the denial of the motion. The court next holds that it has jurisdiction over the citizens' appeal of the district court's denial of their second motion to intervene in EPA's enforcement action. The appeal was timely filed and the second motion was not merely a back door attempt to revive the district court's denial of the first motion. By the time the second motion was filed, there was a proposed consent decree between EPA and the city. The court holds that the district court erred in denying the citizens the right to intervene, because the FWPCA expressly provides for intervention as of right. However, because this was harmless error, the court remands only for the limited purpose of allowing the citizens to seek attorneys fees. The court holds that the district court properly refused to consolidate the EPA action and the citizen suit. The citizen suit contained claims not relevant to the EPA action. Further, the citizen suit was to be tried before a jury, while the EPA action was to be tried before the court. The court holds that the citizens' FWPCA claims against the city were barred under the doctrine of res judicata by entry of the consent decree between EPA and the city. The court rules that citizen suits brought prior to a government action are properly dismissed when a consent decree is entered in a later-filed EPA action. The court holds that EPA's decision not to commence an enforcement action against the poultry processing plant does not bar the citizens from suing the company. The court holds that the FWPCA's prohibitions against POTW "interference" and "pass-through" are not unconstitutionally vague and adequately notified the company that it should refrain from causing the city to violate its NPDES permit. The court holds that the district court properly found that the citizens' complaint makes a good faith allegation of ongoing violations. The court holds that the district court erred in instructing the jury on direct discharger liability and liability of NPDES permit holders, because the poultry processing plant is an indirect discharger that could not be liable under those theories. However, the court holds that this error was cured when the judge issued the proper instruction on indirect discharger liability. The court holds that the district court properly assessed a $43,000 civil penalty against the company for FWPCA violations. The district court's failure to instruct the jury that a violation of a 30-day average effluent limitation constitutes 30 days of violation was harmless error, and the district court's assessment of a $1,000 penalty per violation was within its discretion. The district court's failure to refer to the language of FWPCA §309(d) regarding the factors to be considered in assessing a penalty was not reversible error, because the district court considered those factors. The court holds that the district court's exclusion of evidence of prior violations was, at most, harmless error, and that the district court properly excluded evidence of a settlement in prior litigation.

Turning to the citizens' common-law claims, the court holds that the district court erred in directing a verdict against an award of punitive damages. The district court improperly determined that punitive damages were not available because the company did not intentionally pollute to punish the citizens. Under Arkansas law, knowledge and indifferenceare sufficient for punitive damages; a deliberate intent to injure is not required. The court holds that the district court erred in directing a verdict against a citizen on the basis of the credibility of the witnesses. The court holds that the district court erred in directing a verdict against the medical claims of 10 citizens. The court holds that the district court erred in instructing the jury on the inverse condemnation issue that the city must have intended to take the property. The district court also erred in instructing the jury to consider enhancement of the value of plaintiff's land from the extension of the city water to the property. The jury should only have considered any enhancement that was the direct result of a taking.

One judge dissents from the court's affirmance of the district court's FWPCA penalty calculation against the company. The faulty instruction on the effect of monthly average violations was not harmless error.

[A district court decision is published at 20 ELR 20278.]

Counsel for Appellants
James Bruce McMath
The McMath Law Firm
711 W. Third St., P.O. Box 1401, Little Rock AR 72203
(501) 376-3021

Counsel for Appellees
William B. Lazarus
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Constance G. Clark
Davis, Cox & Wright
19 E. Mountain St., Fayetteville AR 72702-1688
(501) 521-7600

M. Samuel Jones III
Wright, Lindsey & Jennings
2200 Worthen Bank Bldg., 200 W. Capitol Ave., Little Rock AR 72201
(501) 371-0808

Before LAY, Chief Judge, BRIGHT, and TIMBERS,^* Circuit Judges.