ELR Citation: ELR 21216
No(s). s. 89-5831 et al (3d Cir. Aug 20, 1990)

The court holds that a public interest group has standing under the Federal Water Pollution Control Act (FWPCA) to sue a New Jersey corporation for violations of its national pollutant discharge elimination system (NPDES) permit, and civil penalties must be paid to the U.S. Treasury and not to a trust fund created by the district court. The court first holds that the plaintiffs have established standing. Injury to plaintiffs' birdwatching and recreational interests from bad colors and odors in a polluted waterway near the company's facility is sufficient to confer standing and is traceable to the company's effluent. An injunction will redress their injury because the company's compliance with its NPDES permit will decrease pollution in the waterway. Similarly, civil penalties will deter the company and other NPDES permit holders generally. The court next rules that the five-year federal statute of limitations in 28 U.S.C. §2462 applies in FWPCA citizen suits. The FWPCA contains no relevant statute of limitations, and since a relevant federal statute of limitations exists for enforcement of civil fines, the court need not borrow from state law. Citizen suits are brought to enforce a civil fine, and since plaintiffs in a citizen suit are acting as an adjunct to government enforcement actions, citizens should be subject to the same limitations period as the government. The court also rules that the statute of limitations is tolled only during the statutory 60-day period after citizen plaintiffs file notice of their intent to sue, not until the complaint is filed.

The court next holds that the district court did not err in granting summary judgment against the company on the issue of liability. The company was not entitled to the single operational upset defense because no sudden violent storm, bursting tank, or other exceptional event caused the company's effluent exceedances. Further, the company's challenge to its permit parameters was untimely because it was not brought earlier in agency proceedings. The court holds that the plaintiff properly calculated the company's permit violations by counting single exceedances of a pollutant limit as violations of both the average concentration limit and the maximum concentration limit and by counting a single exceedance of a pollutant limit as a violation of both the seven-day and the 30-day discharge limits. The court next holds that the district court properly found that the company had consistently violated its NPDES permit and should be assessed the maximum penalty. The violations were serious, and the company profited from noncompliance and failed to make good-faith efforts to achieve compliance. However, the court reverses the district court's decision to reduce the penalty from $4.2 million to $3.2 million because of governmental inaction. Mere failure to prosecute an NPDES permit holder does not allow a court to reduce a penalty, and the district court's penalty reduction is not within the interests of justice. Finally, the court holds that the penalties must be paid to the U.S. Treasury and not to a trust fund created by the district court. Congress intended that any penalties assessed in a citizen suit be treated as miscellaneous receipts, and once penalties are imposed, the funds must be paid to the Treasury under the Miscellaneous Receipts Act.

A concurrence agrees that plaintiffs have standing, based on public policy considerations for protecting the environment, but concludes that the plaintiffs' injury is not easily traceable to the company's polluting activities.

Counsel for Appellant/Cross Appellee
Nathan M. Edelstein
Ridolfi, Friedman, Frank, Edelstein & Bernstein
3131 Princeton Pike, Bldg. 6A, Lawrenceville NJ 08648
(609) 896-2900

Counsel for Appellee/Cross Appellant
Bruce J. Terris, Kathleen L. Millian
Terris, Edgecombe, Hecker & Wayne
1121 12th St. NW, Washington DC 20005
(202) 682-2100

Before Scirica and Aldisert, JJ.