By Michael Einhorn and Nancy Wilms
In California Sportfishing Protection Alliance v. Chico Scrap Metal, Inc., Case No. 11-16959 (9th Cir. July 22, 2013), plaintiff California Sportfishing Protection Alliance (“Plaintiff”) alleged that defendants Chico Scrap Metal and its owners (“Defendants”) violated California’s Industrial Activities Storm Water General Permit, a National Pollutant Discharge Elimination System (“NPDES”) general permit governing industrial storm water discharges from Defendants’ facilities (the “Permit”). A three-judge Ninth Circuit panel reversed the lower court dismissal of the suit, holding that the action was not prohibited by the “diligent prosecution” bars found in the Clean Water Act (“CWA”).
The CWA permits citizens to sue to enforce the CWA’s prohibition against discharging pollutants without a NPDES permit. 33 U.S.C. § 1365(a)(1). However, the CWA provides that such citizen suits are barred where an agency or a State is “diligently prosecuting a civil or criminal action in a court of the United States, or a State to require compliance” with a standard or limitation under the CWA, or related order issued by the governmental entity. 33 U.S.C. § 1365(b)(1)(B). The CWA also provides that citizen suits are barred where a State “has commenced and is diligently prosecuting an action under a State law comparable to” the administrative penalty provisions of the CWA. 33 U.S.C. § 1319(g)(6)(A)(ii).
In this case, Defendants successfully argued to the district court that the CWA barred Plaintiff’s claims under 33 U.S.C. § 1365(b)(1)(B). On appeal, Defendants argued that Plaintiff’s claims were barred as well under the 33 U.S.C. § 1319(g)(6)(A)(ii) bar. The Ninth Circuit disagreed; it held that § 1365(b)(1)(B) does not apply because the state had not commenced an action in court “to require compliance” with the relevant NPDES permit, and that § 1319(g)(6)(A)(ii) does not apply because the state had commenced no administrative penalty action comparable to the one under the CWA.
The Defendants operate scrap metal recycling facilities in Butte County, California subject to the requirements of the Permit. In 2007, the California Department of Toxic Substances Control (“DTSC”) began investigating Defendants’ facilities, and discovered hazardous contamination. DTSC ordered Defendants to investigate and characterize the contamination. After Defendants failed to comply with DTSC’s order, the Butte County district attorney filed civil and criminal actions in 2007 and 2008 against Defendants, alleging violations of state air quality, hazardous waste and occupational safety laws, among others. Significantly, none of the criminal charges or civil causes of action related to the CWA or violations of the Permit. These actions were resolved by a plea agreement in October 2008 which required, among other things, Defendants to clean up hazardous substances at their facilities and otherwise abide by consent orders issued by DTSC in 2008.
In January 2010, the United States Environmental Protection Agency (“EPA”) inspected Defendants’ facilities and determined they were not in compliance with the Permit. Soon after, in March 2010, the Plaintiff sent notice to Defendants as well as state and federal agencies of its intent to sue Defendants under the CWA for violations of the Permit. After receiving the notices, the agencies did not bring any enforcement proceedings under the CWA; consequently, in May 2010, Plaintiff filed its action. Thereafter, in June 2010, the California Water Quality Control Board notified Defendants that they were in violation of the Permit, based on the EPA inspection. Defendants then moved to dismiss the Plaintiff’s action, arguing that the CWA’s “diligent prosecution” bars applied.
First, Defendants argued that a government action “comparable” to one brought under the CWA is sufficient to trigger the § 1365(b)(1)(B) bar against private actions. The Ninth Circuit disagreed, noting that while a different “diligent prosecution” bar found at § 1319(g)(6)(A)(ii) applies where state actions “comparable” to administrative penalty actions are being “diligently prosecuted,” there is no reference to “comparable” state actions found in the language of § 1365(b)(1)(B). Accordingly, the court found that because the actions filed by the Butte County district attorney “aimed to enforce only laws other than the Clean Water Act, § 1365(b)(1)(B) does not bar this action.”
Defendants also argued that the 2008 consent orders were broad enough to require compliance with the Permit and CWA, triggering the section 1365(b)(1)(B) bar. Again the Ninth Circuit disagreed, holding that § 1365(b)(1)(B) did not apply because only an action that is “in a court” triggers the § 1365(b)(1)(B) bar against citizen suits, while administrative proceedings do not. The court found that the 2008 consent orders by DTSC were not the result of an action “in a court,” and that they therefore did not trigger the private action bar.
Seeking then to apply the statutory bar under § 1319(g)(6)(A) (ii), Defendants argued both that they had been prosecuted under California statutes that provide for penalties and that they are exposed to administrative penalties in the event they violate the 2008 consent orders. However, the Ninth Circuit noted that § 1319(g)(6)(A)(ii) only applies when a state has pursued an action “comparable to this subsection,” and that the relevant subsection, § 1319(g), provides only for the assessment of administrative penalties. Therefore, the court held that the state actions in court did not constitute administrative proceedings and thus did not trigger the statutory bar “even if the state laws under which the penalties were assessed were ‘comparable’ to the Clean Water Act in a general sense.”
With regard to the 2008 consent orders, the Ninth Circuit cited authority holding that for the § 1319(g)(6)(A)(ii) bar to apply, “the comparable state law must contain penalty provisions and a penalty must actually have been assessed under the state law.” Quoting Knee Deep Cattle Co. v. Bindana Inv. Co., 94 F.3d 514 (9th Cir. 1996). The court found that here, the 2008 consent orders notified Defendants that they may be liable for penalties for failure to comply, but did not actually assess administrative penalties in the orders themselves. The court held that even if the state statute cited in the 2008 consent orders were “comparable” to § 1319(g) of the CWA, “Defendants’ potential liability under the consent orders does not trigger the bar of § 1319(g)(6)(A)(ii).” (Emphasis in original.) Since the state had not commenced an administrative penalty proceeding comparable to one by the EPA under § 1319(g), the Ninth Circuit concluded that Plaintiff’s claims were not barred.