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United States District Court, Southern District of California

January 28, 1999


The opinion of the court was delivered by: Brewster, Senior District Judge.


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 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 Co.

B. Civil Penalties are Available Irrespective of Grant of
  Injunctive Relief

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).).

III. Conclusion

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.


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