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NATURAL RESOURCES DEF. COUNCIL v. SOUTHWEST MARINE

January 28, 1999

NATURAL RESOURCES DEFENSE COUNCIL; SAN DIEGO BAYKEEPER; KENNETH J. MOSER, PLAINTIFFS,
v.
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

I. Introduction

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.

II. Analysis

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 without exception.

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, and Defendant 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 cognizable injuries.*fn6

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 ...


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