United States District Court, Southern District of California
January 28, 1999
NATURAL RESOURCES DEFENSE COUNCIL; SAN DIEGO BAYKEEPER; KENNETH J. MOSER, PLAINTIFFS,
SOUTHWEST MARINE, INC., DEFENDANT.
The opinion of the court was delivered by: Brewster, Senior District Judge.
ORDER GRANTING MOTION FOR RECONSIDERATION AND AFFIRMING OPINION
AND ORDER OF NOVEMBER 20, 1998
Defendant Southwest Marine (SWM) brings a motion to reconsider
this Court's Opinion and Order of November 20, 1998.*fn1 That
Order denied SWM's motion in limine seeking to preclude potential
imposition of civil penalties for alleged violations of the Clean
Water Act.*fn2 The Motion
to Reconsider is GRANTED;*fn3 however, the Order of November 20,
1998 is AFFIRMED.
Defendant's motion is an elaboration of the argument put forth
in its original motion. Defendant continues to insist that Steel
Co. v. Citizens for a Better Env't, 523 U.S. 83, 118 S.Ct. 1003,
140 L.Ed.2d 210 (1998), represents a new overarching principle of
constitutional jurisprudence whereby citizen suit plaintiffs
never have standing to seek penalties for violations of an
environmental statute if those penalties are payable to the U.S.
Treasury.*fn4 Defendant's position is without exception, i.e.,
civil penalties are never available to citizen suit plaintiffs,
no matter if the Defendant may be engaged in continuing
violations of the Clean Water Act.
A. Steel Co. Does Not Apply With Continuing Violations
Defendant reads Steel Co. too broadly. Steel Co. involved
the limited situation in which an environmental advocacy group
sought civil penalties — and only civil penalties — for wholly
past violations of the Emergency Planning and Community
Right-to-Know Act of 1986 (EPCRA), 42 U.S.C. § 11046(a)(1).
Steel Co. did not involve allegations of ongoing violations nor
did the facts suggest that there was a likelihood that such
violations might occur in the future. Because Steel Co. did not
address the issue of penalties in the context of ongoing
violations, nor address when civil penalties are requested in
addition to other remedies, Steel Co. did not invalidate all
statutorily-provided civil penalties in citizen suit cases
Defendant asserts that the issue of wholly past violations was
"immaterial," "irrelevant," and "made no difference" to the
Steel Co. analysis. By ignoring the facts of Steel Co.,
Defendant is able to assert that penalties can never serve as a
deterrent, regardless of the status of alleged violations.*fn5
That is not the holding of Steel Co. In Steel Co., in the
absence of a continuing violation or the imminence of a
threatened violation, the request for civil penalties did not
confer standing because plaintiff could only have a "generalized"
interest in imposing civil penalties which would be paid to the
U.S. Treasury and thus any injury suffered would not be
redressed. 118 S.Ct. at 1018.
The instant matter is quite different. Plaintiffs have alleged,
does not dispute, sufficient concrete, particularized, and actual
injuries to confer standing to bring their case. See, e.g.,
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct.
2130, 119 L.Ed.2d 351 (1992). Likewise, Plaintiffs have alleged
continuing violations that contribute to the alleged injuries.
The question then is — will the potential or actual imposition of
civil penalties help remedy Plaintiffs' alleged injuries?
Civil penalties may have a remedial effect if they deter
Defendant's alleged violations. Deterrence comes in two forms —
specific and general. As stated, Steel Co. held that penalties
that only contribute to "generalized deterrence" were
insufficient to satisfy standing's redressability prong. 118
S.Ct. at 1018. Without deciding whether penalties should be
imposed, this Court finds that the possible imposition of
monetary penalties would contribute to specifically deterring
current violations alleged to be harming Plaintiffs. With alleged
continuing violations, because there are alleged current harms,
in contrast to wholly past violations, a court does not have to
engage in an abstract evaluation of whether a defendant may or
may not repeat its illegal conduct and cause future harms. The
alleged malfeasance is immediate and tangible, and the imposition
of civil penalties may help stop it. If there is specific
deterrence of Defendant's conduct, then there is redress on an
equivalent basis to any injunction this Court could issue. The
Court also notes that Plaintiffs have asked this Court to apply a
portion of any penalties imposed to local projects that have a
beneficial impact on San Diego Bay. This Court has taken a
similar step in previous litigation. See United States v. City
of San Diego, 1991 WL 163747, *5 (S.D.Cal. April 18, 1991). The
availability of this alternative strengthens the redressability
aspect of civil penalties in significant measure.
As the redress Plaintiffs seek is related to remedy of a
specific injury, Steel Co.'s concern that the monetary penalty
remedy will only impart "psychic satisfaction," or that the
Plaintiffs will only derive "comfort and joy" from the potential
levy of monetary penalties, is not implicated. 118 S.Ct. at 1019.
The risk of allowing citizens to take on the mantle of purely
public prosecutors without consideration of their own injuries is
likewise not at issue. Plaintiffs' interest in conforming
Defendant's conduct to the dictates of the Clean Water Act is not
an "undifferentiated" interest in enforcing the rule of law, but
instead in stopping behavior they allege is causing it legally
Defendant argues that Steel Co.'s language stating that
injunctive relief would remedy harms caused by ongoing violations
implies by negative inference that civil penalties are precluded
even with ongoing violations.*fn7 118 S.Ct. at 1019.
First, the Court is hesitant to read too much of a negative
inference from this language, especially considering the Court's
decision in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay
Found., 484 U.S. 49, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987), that
civil penalties are available for ongoing violations. The absence
of any suggestion in Steel Co. that Gwaltney is no longer
good law is instructive. Second, such a negative inference flies
in the face of established jurisprudence holding that monetary
penalties do have a deterrent effect. See, e.g., Bennett v.
Spear, 520 U.S. 154, 117 S.Ct. 1154, 1163-64, 137 L.Ed.2d 281
(1997); Department of Revenue of Mont. v. Kurth Ranch,
511 U.S. 767, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994) ("Criminal fines,
civil penalties, civil forfeitures, and taxes all share certain
features: They generate government revenues, impose fiscal
burdens on individuals and deter certain behavior.") (emphasis
added); Hudson v. United States, 522 U.S. 93, 118 S.Ct. 488,
494, 139 L.Ed.2d 450 (1997); City of Los Angeles v. Lyons,
461 U.S. 95, 112-113, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) (implying
that compensatory damages may deter future illegal conduct).
Likewise, Congress, by including provision for civil penalties in
citizen suits implicitly determined that civil penalties have a
deterrent effect.*fn8 See, e.g., S.Rep. No. 228, 101st Cong.,
1st Sess. 373 (1989), reprinted in 1990 U.S.C.C.A.N. 3386, 3756
("[A]ssessment of civil penalties for violations . . . [is]
necessary for deterrence, restitution, and retribution" under the
Clean Air Act with citizen suits.); Tull v. United States,
481 U.S. 412, 422-23, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987) ("[A
court] may also seek to deter future violations by basing the
penalty on [a violation's] economic impact. Subsection 1319(d)'s
authorization of punishment to further retribution and deterrence
clearly evidences that this subsection reflects more than a
concern to provide equitable relief."); Weinberger v.
Romero-Barcelo, 456 U.S. 305, 314, 102 S.Ct. 1798, 72 L.Ed.2d 91
(1982) ("An injunction is not the only means of ensuring
compliance [with the Clean Water Act]. The FWCPA . . . provides
for fines and criminal penalties."). Most corporations facing the
possibility of $25,000-per-day fines would rethink the activities
that are alleged to be harming an individual.
Likewise, Defendant's argument that Steel Co. can be read
consistently with Gwaltney, and still preclude all citizen suit
claims for civil penalties is in error. In Gwaltney, the
plaintiff's complaint alleged ongoing violations of the Clean
Water Act, but these alleged violations had apparently ceased by
the time the case reached the Supreme Court. Despite this
knowledge, the Court remanded the case for a determination of
remedy, barring only a consideration of civil penalties for
wholly past violations. As such, Gwaltney's implicit holding is
that civil penalties are available when continuing violations are
alleged at the time of the filing of the complaint.*fn9 See,
e.g., Jim Heckler, EPCRA Citizen Suits After Steel Co. v.
Citizens for a Better Environment, 28 Envtl.L.Rep.
10306 (1998).*fn10 Steel Co. does not upset this facet of
Gwaltney, despite Steel Co.'s discussion of Gwaltney in
relation to the concept of statutory standing.*fn11
Defendant replies that it is the not the generalized or
specific nature of the deterrence at issue, but who is the
recipient of the damages sought, that precludes imposition of
civil penalties. Defendant reads Steel Co. as meaning that
since an interest in monies paid to the U.S. Treasury can never
remedy an injury, one never has standing to assert a claim for
damages. Defendant is properly focused on the injury, but, for
the above stated reasons, i.e. because civil penalties can remedy
Plaintiffs' asserted injuries by deterring Defendant's alleged
violations, the Court concludes that civil penalties awarded to
the U.S. Treasury may remedy the Plaintiff's injuries.
Finally, Defendant's argument that Steel Co. pronounces a new
constitutional principle regarding standing is premised on a
fundamental misconception of the nature and limitations of the
judicial branch. As stated in the Court's previous Order, courts
decide cases; they do not issue constitutional pronouncements.
Courts, even the Supreme Court, do not interpret the Constitution
in the abstract. Courts only do so in the context of a specific
case or controversy. Indeed, statements of the law that are
unnecessary to support the court's holding, and which are
unrelated to the facts, are properly considered dicta. The very
basis for the doctrine of standing is to ensure that courts do
not operate as Defendant insists the Court must have in Steel
B. Civil Penalties are Available Irrespective of Grant of
On the assumption that civil penalties are never an appropriate
remedy, Defendant bootstraps from Steel Co. to argue that this
Court should hold that Plaintiffs must have standing to bring
their case and then must have an additional layer of standing to
seek a particular remedy. In this manner, Defendant is arguing by
alternative avenue that even if there are ongoing violations, a
citizen suit plaintiff is barred from seeking civil penalties. In
its previous Order, this Court concluded that standing is not an
analysis performed on each remedy sought by a plaintiff. Put
another way, if a plaintiff has Article III standing to seek at
least one remedy, that plaintiff has standing to seek other
available remedies even if a court would conclude that that same
plaintiff would not have standing with respect to an additional
remedy otherwise insufficient.
Defendant takes exception to the Court's view on this point,
citing City of Los Angeles v. Lyons, 461 U.S. at 102, and a
list of cases following Lyons.*fn12 Defendant asserts that
these cases hold that standing is required for each and every
remedy sought by a plaintiff. Defendant reads Lyons as holding
that "a plaintiff must have standing to seek each form of relief
it requests; or, put another way, that standing to seek one form
of relief, such as injunctive relief, does not automatically
confer standing to seek other relief, such as penalties." See
Reply, p. 1-2.
This Court has stated that standing stems from the "cases or
controversies" language of Article III; standing is not
inherently focused on the specific remedies a plaintiff seeks
unless no remedy sought could redress a plaintiff's injuries.
Defendant has refined its argument, and cited new case law. Upon
further review, the Court again concludes that Lyons and its
progeny do not upset that usual proposition. The narrow 5-4
decision in Lyons turned in great measure on the issue of
police conduct, an unwillingness to assume that a governmental
body would not comply with the law in the future, and more
general separation of powers concerns. See Lyons, 461 U.S. at
112, 103 S.Ct. 1660; see also Allen v. Wright, 468 U.S. 737,
760-761, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984).*fn13 Every case
cited by Defendant is, like Lyons, a case involving allegations
of harm from official or quasi-official conduct. Even those
courts issuing broad characterizations of the holding of Lyons
do so in the limited context of plaintiffs seeking injunctive
relief against governmental action. See, e.g., Nat. Maritime
Union, 824 F.2d at 1234. In sum, Lyons has not been
transmogrified into a principle governing only private actors.
Defendant fails to cite a single case outside the state action
context in which a claim for damages — in the presence of ongoing
violations — has been subjected to a separate standing
analysis.*fn14 This is "a case brought . . . to enforce specific
legal obligations whose violation works a direct harm," Allen v.
Wright, supra, 468 U.S. at 761, 104 S.Ct. 3315, and so Lyons
and its progeny are not applicable.
Next, Defendant argues that Steel Co.'s citation to Linda
R.S. v. Richard D., 410 U.S. 614, 93 S.Ct. 1146, 35 L.Ed.2d 536
(1973), and Simon v. Eastern Kentucky Welfare Rights Org.,
426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976), implies that
Steel Co.'s holding is not limited to cases where only wholly
past violations are alleged. Again, Defendant is in error. Both
Linda R.S. and Simon involved suits against a governmental
entity in the hope that changes in government practice or
behavior might change the behavior of a private third-party and
thus benefit the plaintiff. As such, both cases are inapposite.
Linda R.S. involved a suit to require a prosecutor to institute
an action for nonpayment of child support against the father of
an illegitimate child. Simon involved the effect of a tax
exemption on a hospital's provision of services to potential
users of those services. In both cases, the Court was concerned
with the indirectness of the injury to the plaintiff, and the
uncertainty that any order issued by a court would redress that
injury in light of the fact that the defendant was not the direct
causal agent of that injury. Only with respect to police
misconduct cases has the Court ever suggested that redressability
might be lacking in the absence of third-party action. See,
e.g., Lyons, 461 U.S. at 105, 103 S.Ct. 1660; O'Shea v.
Littleton, 414 U.S. 488, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974);
Steel Co., 118 S.Ct. at 1018 n. 7. In the instant matter, there
is no such qualm regarding the directness and redressability of
the plaintiffs' alleged injuries.
This Court's conclusion is buttressed by the wide swath of case
law holding that civil penalties are available to a plaintiff
even if the issue of injunctive relief becomes moot. Mootness
with respect to the claim for injunctive relief does not moot the
remedy of civil penalties. The Court notes that, in order to
reach its result, Laidlaw held contrary to seven other circuit
courts of appeal. See, e.g., Comfort Lake Ass'n, Inc. v. Dresel
Contracting Inc., 138 F.3d 351 (8th Cir. 1998); Atlantic States
Legal Found. v. Stroh Die Casting Co., 116 F.3d 814, 820 (7th
Cir.), cert. denied, ___ U.S. ___, 118 S.Ct. 442, 139 L.Ed.2d 379
(1997); NRDC v. Texaco Ref. & Mktg. Inc., 2 F.3d 493, 503 (3d
Cir. 1993); Atlantic States Legal Found., Inc. v. Pan Am.
Tanning Corp., 993 F.2d 1017, 1021 (2d Cir. 1993); Carr v. Alta
Verde Indus. Inc., 931 F.2d 1055, 1065 n. 9 (5th Cir. 1991);
Atlantic States Legal, Found. v. Tyson Foods Inc.,
897 F.2d 1128 (11th Cir. 1990); Pawtuxet Cove Marina Inc. v. Ciba-Geigy
Corp., 807 F.2d 1089, 1094 (1st Cir. 1986), cert. denied,
484 U.S. 975, 108 S.Ct. 484, 98 L.Ed.2d 483 (1987).
Finally, if a plaintiff is able to demonstrate an injury
sufficient to meet the standards of Article III, a court should
not deliberately undermine the ability to redress those injuries
by denying the availability of certain remedies. As stated,
Congress has statutorily given citizen suit plaintiffs the right
to seek civil penalties for ongoing violations of the Clean Water
Act based on the finding that such penalties help deter these
violations. First, the notice provision of the Clean Water Act
already allows an alleged violator to come into compliance with
the Act in a manner that then precludes a citizen suit. To make
the issue of penalties moot after an alleged violator failed to
respond to plaintiff's notice of suit would render the notice
section superfluous. Second, the Court finds the reasoning of the
Third Circuit persuasive:
"A citizen suit would lose much of its effectiveness
if a defendant could avoid paying any penalties by
post-complaint compliance. If penalty claims could be
mooted, polluters would be encouraged to `delay
litigation as long as possible, knowing that they
will thereby escape liability even for post-complaint
violations, so long as violations have ceased at the
time the suit comes to trial.' Moreover, whether or
not damage claims are mooted would depend on the
vagaries of when the district court happens to set
the case for trial. We cannot embrace a rule that
would weaken the deterrent effect of the Act by
diminishing incentives for citizens to sue and
encourage dilatory tactics by defendants." NRDC v.
Texaco, 2 F.3d at 503-05 (citing Atlantic States
Found., Inc. v. Tyson Foods, Inc., 897 F.2d 1128,
1137 (11 Cir. 1990).).
The Supreme Court may one day decide that plaintiffs bringing
citizen suits do not have standing under any circumstances to
seek civil penalties payable to the U.S. Treasury. But that was
not at issue in Steel Co. and thus was not decided. Current
case law, statute, and the better policy arguments demonstrate
that civil penalties are available to a citizen suit plaintiff.
This Court is constrained to apply the law as it stands today,
not speculate as to evolving trends. Having reconsidered its
previous order of November 20, 1998, that Order is AFFIRMED.
IT IS SO ORDERED.