ELR Citation: ELR 21073
No(s). IP 89-828 C (S.D. Ind. Mar 22, 1991)

The court holds that a company in the business of coil coating must pay a $2,093,750 civil penalty for violations of pretreatment standards under the Federal Water Pollution Control Act (FWPCA). The court first holds that FWPCA §309(a)(3) does not prevent the government from bringing a civil action for past violations after it ordered the defendant to comply with pretreatment standards in the future. A contrary reading is plainly inconsistent with the strong enforcement policy of the Act. The court further holds that the government's delay in notifying the defendant of violations and bringing suit for those violations does not bar recovery under the doctrine of equitable estoppel or laches. The court calculates the maximum statutory penalty for the defendant's violations from the first date that the defendant could have reasonably known that its satisfaction of state requirements did not satisfy the Environmental Protection Agency. Reducing this amount to take account of mitigating factors, the court holds that the defendant's violations are not serious, because no damage to the environment was proven, and that the defendant demonstrated good faith by making several interim improvements to the existing facilityand delaying construction in order to develop new technology. The court holds that the resulting penalty will not have a detrimental economic impact on the defendant's business, but is larger than the estimated economic benefit to the defendant of noncompliance. Finally, the court holds that it lacks equitable jurisdiction to order the penalty to be paid to entities other than the U.S. Treasury, because the government's claim for injunctive relief has been dismissed.

Counsel for Plaintiff
Michael J. McNulty
Environmental Enforcement Section
U.S. Department of Justice, P.O. Box 7611, Ben Franklin Station, Washington DC 20044
(202) 514-2000

Counsel for Defendant
Renee R. McDermott, John M. Kyle III, Anthony C. Sullivan
Barnes & Thornburg
1313 Merchants Bank Bldg., 11 S. Meridian St., Indianapolis IN 46204
(317) 638-1313