William H. Rehnquist: We'll hear argument next in Number 98-822, Friends of the Earth v. Laidlaw Environmental Services. Mr. Terris.
Bruce J. Terris: Mr. Chief Justice, and may it please the Court: The district court in this case, after two trials, found that Laidlaw had violated the Clean Water Act 1,412 times. One hundred and thirty of those times had come in the immediate 6 months before the complaint was filed, and another 36 of the violations came after the complaint was filed. The complaint alleged ongoing violations and it sought injunctive relief. Five years... three... five years later, after the complaint had been filed, the district court found that there was no long... that Laidlaw was in substantial compliance and therefore there was no need at that point to issue injunctive relief. Instead, it imposed a penalty of $405,000, specifically to deter future violations. Six years after the suit was filed, the Fourth Circuit held, solely because injunctive relief was no longer in the case, that the case had to be dismissed as moot, and that attorney's fees would not be payable to the plaintiff. We submit that Article III does not compel such a perverse result. The plaintiffs submit that, even though the civil penalty is payable to the United States Treasury, that plaintiffs benefited from the imposition of a penalty because penalties deter future violations.
Sandra Day O'Connor: Well, I guess what happened, perhaps, was the district court handled this at a time before we'd handed down Steel Company.
Bruce J. Terris: That's correct, Your Honor. Steel Company came--
Sandra Day O'Connor: And the Fourth Circuit reviewed it after that case had come down, and apparently placed some reliance on that, right? That seems to be--
Bruce J. Terris: --It relied solely on Steel Company.
Sandra Day O'Connor: --Yes. That seems to be what happened in effect.
Bruce J. Terris: That there--
Sandra Day O'Connor: So it boils down to what we meant in Steel Company--
Bruce J. Terris: --I think that's correct, Your Honor.
Sandra Day O'Connor: --as applied to this case.
Bruce J. Terris: I think that's correct, and I think it also involves what the relationship of Steel Company is to this Court's prior decision in Gwaltney, because our argument is that Gwaltney is precisely this case.
Sandra Day O'Connor: Well, except Gwaltney didn't really get into the circumstances expressly, and I guess Steel Co. did, so we have to reconcile that in some way.
Bruce J. Terris: I think, Your Honor, that Gwaltney did get into the circumstances. It would have been extremely difficult for this Court to over... to have overlooked the fact that there was no injunctive relief in Gwaltney.
Antonin Scalia: This is a jurisdictional point, and our cases are replete with the statements that actions by this Court on jurisdictional matters that do not discuss the jurisdictional matters are not precedential.
Bruce J. Terris: That's correct, Your Honor, but--
Antonin Scalia: And did Gwaltney discuss the jurisdictional matter explicitly?
Bruce J. Terris: --Yes, it did, Your Honor. It discussed both standing and mootness, and--
Antonin Scalia: This aspect of standing?
Bruce J. Terris: --It did not go into the exact aspects of Steel Company, but Your Honor found in Steel Company itself that Gwaltney had... that this Court in Gwaltney had upheld standing, and presumably found that that had been a reasonable determination. One has to assume that the Court did not simply overlook a matter as clear-cut as the fact that injunctive relief had never... had not been issued in Gwaltney and was no longer in the case because it had not been appealed.
Sandra Day O'Connor: Mr. Terris, do you think the Fourth Circuit may have confused mootness with standing?
Bruce J. Terris: I think it certainly confused mootness with standing, because what it did is take a decision of this Court in Steel Company and say that it applied in and of itself, with no further reasoning, to the decision, to the case before it. This Court in Steel Company said explicitly that the rules for mootness were not the same rules for standing. The Government had argued in Steel Company that the law, that this Court has repeatedly laid down that for a case to be moot it must be absolutely clear that the injury would not continue, that when the Solicitor General made that argument, that that argument did not apply in Steel Company because that was a standing case, and you could not use... you could not use that doctrine as a sword instead of a shield, as this Court stated.
Sandra Day O'Connor: --thing if I may. The Roebuck facility has been closed now, as I understand it, and the incinerator removed.
Bruce J. Terris: That is true.
Sandra Day O'Connor: Does that moot the case perhaps?
Bruce J. Terris: There is a substantial question about that--
Sandra Day O'Connor: Yes.
Bruce J. Terris: --about that. What we have... what Your Honors, of course, have done is granted certiorari on a different issue.
Sandra Day O'Connor: Yes.
Bruce J. Terris: What the respective parties have presented to Your Honors is their views of the facts. Those facts, of course, have not been sifted through any type of hearing in the district court. Part of the facilities have been taken down, and part of the facilities still remain. We know that because we had them examined last week, and so in addition the company continues to have its permit. It fought, in fact, to preserve its permit in State court even after the time that the... that it had decided to close, and it negotiated a closure agreement with the State which allows it to reopen an incinerator in the future.
John Paul Stevens: May I ask this question, Mr. Terris. Let's assume for purposes of argument that a week ago the case became totally moot, and everybody would agree with it. Would that exonerate your opponent from paying the civil penalty?
Bruce J. Terris: We do not think so, because we think that under Walling v. James Reuter and the U.S. Bancorp decisions of this Court that when the voluntary actions of the defendant to in effect prevent a decision of a district court from being carried out, that in the interests of justice this Court has the power to vacate the court of appeals decision and to therefore let the district court decision continue to apply.
Antonin Scalia: Mr. Terris, can I ask you, the premise of your argument is that it would surely be okay to grant the penalty relief if injunction relief had also been granted.
Bruce J. Terris: Well--
Antonin Scalia: You don't even think that's a debatable problem.
Bruce J. Terris: --I don't think it is, although the--
Antonin Scalia: Yes.
Bruce J. Terris: --other side debates it.
Antonin Scalia: What cases do you know that have said it is a proper function of courts in private litigation to impose a public penalty, that is, a penalty that does not go to the plaintiff but that goes into the public Treasury?
Bruce J. Terris: I think Gwaltney clearly holds that. There's no sense to Gwaltney, it is absolutely nonsensical to have... for this Court to have sent this case... that case back on remand if a contrary--
Antonin Scalia: It's a major proposition to establish without any discussion about it. I mean, every time you alter from the traditional status quo the functions of the courts you alter also the functions of the other branches of Government, and the States are complaining here because they think that the decision whether to impose a civil penalty or not belongs to the executive branch. It's part of prosecutorial discretion. And by placing that within the courts there is a major alteration of power between the various branches of Government and, in this case, not only between the executive and the judicial at the Federal level, but also between the Federal and the State Governments.
Bruce J. Terris: --There are several... I have several answers, Your Honor. I do not think this is private litigation. This is litigation that the Congress of the United States said should be permissible to private citizens in order to carry out a function that is essentially a governmental function.
Antonin Scalia: But Congress can't say anything. Congress can't... just because Congress has said it, it doesn't mean the courts can do it. There's a proper role for courts.
Bruce J. Terris: I understand that, Your Honor, but I am saying that the Congress has said this is not private litigation, this is public litigation to carry out a public responsibility.
Antonin Scalia: I understand Congress has said it. The issue is whether that's constitutional.
Bruce J. Terris: Let me go on. The States, as far as this case is concerned, have not objected. One State has objected, the State of South Carolina. The other... another group of States, 13 of them, have supported the plaintiff's position. There is no reason to see this case as a... as raising the fundamental question which is a question, I submit, on whether Congress had the power to set up this kind of a mechanism at all.
William H. Rehnquist: Well, you didn't raise that question in your petition for certiorari.
Bruce J. Terris: That's correct. That's quite correct, and it wasn't decided below, so there is no issue before this Court as to whether Congress has the power to create a mechanism in which private citizens can enforce Federal environmental laws. Now, of course, there's a considerable history of private citizens enforcing laws which has been held, upheld by this Court.
Anthony M. Kennedy: This discussion began when we asked whether or not the pendency of an injunctive suit that's live allows you to collect civil penalties which are retroactive, and the respondent's brief quotes Lewis and Casey for the proposition that standing is not dispensed in gross. In Lyons v. City of Los Angeles... the Chokehold case is the same... we looked to each claim to see if there's standing as to each claim.
Bruce J. Terris: That's correct.
Anthony M. Kennedy: So in light of those cases, why is it that you can argue, as you do, as you seem to do, that the impendancy of the injunctive action somehow confers standing to collect civil penalties for the past wrong? That goes against the teaching of those cases, does it--
Bruce J. Terris: That isn't the argument, Your Honor. Our argument is not that injunctive relief gives us the right to sue for civil penalties. Quite the opposite. Our position is that the Congress has set up a scheme in which you can ask for injunctive relief, you can ask for civil penalties, and each of those remedies has to be analyzed independently to determine whether there was redressability.
Antonin Scalia: --And you say that there is no standing requirement for the civil penalties. They stand separately. For injunction, you have to show the injunction will help you, but for the civil penalties, all you have to show is, Congress gave you the right to be a Private Attorney General.
Bruce J. Terris: That--
Sandra Day O'Connor: Or do you have to... do you take the position, rather, that there has to be a reliance on continuing violations of the statute to get the standing? What is your position?
Bruce J. Terris: --Our position is that it is not enough that Congress has said we have the right to sue for civil penalties, any more than it's enough to say that we have the right to sue for injunctive relief. We have got to show redressability under Article III. Our position is that civil penalties, like injunctive relief, deter when there is the possibility of future violations.
Anthony M. Kennedy: So you want us to analyze this case as if you asked just for civil penalties. You'll rise and fall with that, on this issue. It's just as if you sued for backward relief, not for future injunctive relief.
Bruce J. Terris: I do not have to go that far, Your Honor, because, of course, we asked for injunctive relief, as in Gwaltney. We... it is important to us that our case is on all fours, in fact a little stronger than Gwaltney, but our base... but underneath that proposition is the argument that civil penalties are sustainable under Article III if they provide a benefit to the plaintiff.
William H. Rehnquist: But they would have to provide a benefit rather specifically, would they not? I mean, you couldn't sue, say in Virginia and try to get something done out in California.
Bruce J. Terris: That's correct, Your Honor. Our--
Stephen G. Breyer: Finish. Finish your answer.
Bruce J. Terris: --Yes, let me... the district court specifically held in this case that the civil penalties did deter, and we submit that that determination is entitled to weight. I may say also that the court of appeals assumed that was true.
John Paul Stevens: But the court of appeals-- --Did it find that the penalties deterred conduct that had an adverse impact on your clients?
Bruce J. Terris: Excuse me, Your Honor.
John Paul Stevens: Did the district court find that the civil penalties deter conduct that has an adverse impact on your clients?
Bruce J. Terris: It basically found there was not enough likelihood of future violations to justify injunctive relief, because, of course... not a mootness ground. It did not hold against us on mootness grounds as far as injunctive relief is concerned. It held, as a matter of using the basic discretion that a district court has as to whether to issue injunctive relief, not to issue it.
John Paul Stevens: No, but what I want to be clear on, the civil penalties clearly would deter future violations. The question I'm asking is, were the violations established in this case ones that had an adverse impact on your clients?
Bruce J. Terris: Oh... the district court held that there was standing, the court of appeals assumed that there was standing, and we proved standing, so... but that issue, I submit to Your Honors, is not before you.
John Paul Stevens: And did you prove that the violations adversely affected your clients?
Bruce J. Terris: Yes, Your Honor.
John Paul Stevens: Okay.
Bruce J. Terris: It's part of standing.
Ruth Bader Ginsburg: But the court of appeals didn't review that, and one of the questions that I have is, assuming I would agree with you that this case is not moot, mustn't this Court stop there and say, whatever the district court found, the court of appeals didn't review it, so we would say, case not moot, court of appeals stop assuming standing, decide all these questions that you didn't decide. What right would we have, if we agree that the case isn't moot, to decide anything but that?
Bruce J. Terris: I certainly don't think, Your Honor, that you should decide standing, which is... fact-intensive does not raise an issue that's involved in certiorari. The closure issue I think should be sent back to the district court, because there was no record whatsoever on it. I do think it would be appropriate for the attorney's fee issue to be decided by this Court. It is a... it has been fully briefed--
Sandra Day O'Connor: It wasn't even decided in-- --But is there... there's no final judgment there, is there, on the attorney's fees?
Bruce J. Terris: --No, but there was a decision by the--
Sandra Day O'Connor: So--
Bruce J. Terris: --There was a decision by the court of appeals that it will not give attorney's fees if the case is moot, so it's very likely... if we go back to the district court on the closure question, it's very possible that that issue will continue to be lurking in the case.
Sandra Day O'Connor: --I just thought there was no final judgment as to the attorney's fees.
Bruce J. Terris: Oh, I think there was. There was... they were denied.
Anthony M. Kennedy: And the court of appeals did not say, as I recall, that they would not award attorney's fees if it was not moot.
Bruce J. Terris: That is true, Your Honor. I don't think they could.
Antonin Scalia: Mr. Terris, could I come back to Justice Stevens' question? I'm not clear whether the deterrence that the court referred to, which would be achieved by this penalty, was deterrence against violating the law at this same facility and in the same manner. I mean, this company still had a permit. They presumably could operate elsewhere. They operated other facilities. It might have been deterrence from violations there that the court had in mind. Is there any reason to believe that it means deterrence from a violation at this very facility?
Bruce J. Terris: I think there is, Your Honor, because no other facilities was raised in the case in the district court. There was never any discussion of that. There's no reason to believe that it was considering anything than the case before it.
David H. Souter: Is the permit specific to the facility?
Bruce J. Terris: Excuse me? Yes.
David H. Souter: So that when they retain the permit, it is for this location only.
Bruce J. Terris: This and only this location.
David H. Souter: Yes.
Bruce J. Terris: I'd like to reserve the rest of my time, Your Honor.
William H. Rehnquist: Very well, Mr. Terris. Mr. Minear, we'll hear from you.
Jeffrey P. Minear: Mr. Chief Justice, and may it please the Court: The court of appeals erred in holding that a citizen's suit under the Clean Water Act must be dismissed as moot if the district court concludes that injunctive relief is unwarranted. The Clean Water Act authorizes private citizens to bring suit to abate ongoing violations, and it provides the district courts with two types of coercive remedies to compel compliance. The district court may ask for civil penalties, or it may grant civil penalties, or it may issue an injunction, and that choice lies with the discretion, the remedial discretion, of the district court. The district court properly exercised its discretion in this case. The citizens brought suit to abate ongoing violations, and the court determined that they were entitled to relief. The court declined to enter an injunction in light of Laidlaw's current compliance status at the time of judgment, but it nevertheless concluded that civil penalties were appropriate, because they would deter future violations by Laidlaw at that site.
William H. Rehnquist: Well, is that consistent with its refusal to issue an injunction, because ordinarily, if you think there are going to be future activities that need to be deterred, you probably would issue an injunction, wouldn't you? It's only if you feel the people have really changed their ways for good that you turn down an injunction.
Jeffrey P. Minear: No, I don't think that's the case, Your Honor. I think if we look at cases involving voluntary cessation, ranging from Gwaltney to City of Mesquite, W. T. Grant, all of those cases recognized that a case might not be moot, but nevertheless injunction relief may nevertheless not be warranted. What has happened in this case--
Antonin Scalia: No-- --That seems to me entirely backwards. I mean, the more radical... the more radical sanction, it seems to me, is to impose a monetary penalty, whereas the lesser one is simply say, you know, don't do this bad thing again, and you're saying the... you're saying here the court found that the probability of their doing it again was small enough that the court was not even willing to wag a finger at them, and yet the court socks them with a monetary penalty in order to prevent them from doing it again.
Jeffrey P. Minear: --Your Honor--
Antonin Scalia: I find that an extraordinary upside-down approach to that.
Jeffrey P. Minear: --Your Honor, I do not think it's extraordinary, because the court would not have simply wagged its finger at Laidlaw. An injunction in this case could have, most likely would have intruded the court into the operations of Laidlaw. For instance, an injunctive could have limited the amount of feed that goes into the incinerator, it could have specified the type of equipment that Laidlaw had to use, all of these things are quite burdensome and intrusive.
Antonin Scalia: It could have. It need not have.
Jeffrey P. Minear: It need not have, but this is why Congress gave courts the power to select the remedy that is most appropriate to ensure compliance.
David H. Souter: But of course the civil penalty looks in both directions, doesn't it?
Jeffrey P. Minear: Its--
David H. Souter: So that the court might have said, well, I'm going to award the civil penalty here in part because of what we find they have done, and in part for deterrent purposes. I mean, it could have... it could have had both rationales, couldn't it?
Jeffrey P. Minear: --That's not what the court did in this case, Your Honor. I think the court made quite--
David H. Souter: What did it say?
Jeffrey P. Minear: --It made quite clear its view on the use of civil penalties, and this appears in the joint appendix at pages 121 through 125.
David H. Souter: What did they say?
Jeffrey P. Minear: What they said, what the court said was that civil penalties here are available to deter future violations, and they do so by depriving--
David H. Souter: So they construed it solely as deterrent in this case.
Jeffrey P. Minear: --In this case, that is the approach the court took, and what's more, the court said the reason why it deters is because it will deprive the party of the economic benefit of noncompliance and thereby take away the incentive to commit future violations. Laidlaw was clearly--
Antonin Scalia: Of course, the penalty doesn't do that. A future penalty would do that.
Jeffrey P. Minear: --This penalty deprived Laidlaw of its... of the benefits of its past noncompliance--
Antonin Scalia: Right.
Jeffrey P. Minear: --and made clear that its future violations--
Antonin Scalia: That won't stop its future violations. What will stop its future violations is the fear that a penalty will be imposed in the future, right? I mean, if it had assurance that no penalty would be imposed in the future, it would keep on its bad ways, wouldn't it, despite--
Jeffrey P. Minear: --But it's the application of the penalty that provides the assurance that it will be applied in the future as well. A penalty that is never applied, of course, has no deterrent effect. This penalty... and one only needs to think in terms of the practical aspects. The plant manager is facing the prospect, we can increase our profits by increasing the throughput in our incinerator, but we're going to violate our permit if we do that. He talks to his lawyer, asks the lawyer, what would be the consequences. If he's told, well, you might simply get an injunction telling you not to do again... do it again, the company will have a strong incentive to go ahead and violate and make those profits. On the other hand, if the counsel says, well, the last time you did this you paid a penalty that took away all the economic benefits of violating that permit, that operates as a powerful deterrent, and that is what we believe the district court was seeking to do in this particular case. Now, I think it's important to recognize, and Laidlaw concedes, the district court had not declined to provide injunctive relief on the ground that defendant's compliance efforts had made this case moot. This Court's decisions, including Gwaltney, made clear that voluntary cessation of unlawful conduct does not moot a case unless it's absolutely clear there's no reasonable prospect for continuance. Laidlaw did not argue or demonstrate that there was mootness of that sort in this case, and so for that reason the court was free to apply the remedy that it thought was appropriate to abate future violations.
John Paul Stevens: --May I ask you the question I asked your... the other counsel: supposing the case became moot today, would you still be entitled to the money?
Jeffrey P. Minear: Our view is, we might very well be entitled to the money, and the analysis goes as follows. If the plant had closed before judgment, it's the position of the United States then in that situation, if that eliminates all possibility of future violations, then the case is moot, and the case should just be dismissed. I'm talking about the district court judgment.
John Paul Stevens: Even after the district court has said there should be a penalty.
Jeffrey P. Minear: No, I'm talking about, in that case before the district court.
John Paul Stevens: Oh--
Jeffrey P. Minear: If the plant is closed after--
John Paul Stevens: --I'm asking you... say it becomes moot after the district court makes a finding that they ought to pay $400,000 to the United States.
Jeffrey P. Minear: --I think one of the inquiries that has to be made on remand is whether that closure was prompted by the court's judgment. If the judgment actually was effective--
John Paul Stevens: You seem to be dodging my question. I'm assuming mootness.
Jeffrey P. Minear: --Yes.
John Paul Stevens: Assume it's moot, and everybody agrees it would be moot, except for the fact there may be a fight over whether or not they still have to pay the money, would that prevent it from being moot?
Jeffrey P. Minear: If it's clearly moot, and it was not caused by the... the closing was not caused by the entry of the judgment, in that case we think the appropriate course would be under Bonner Mall and the Walling v. Reuter case to remand the case to the district court with the reimposition of the district court's judgment, and that's governed by--
John Paul Stevens: To reimpose the district court's judgment.
Jeffrey P. Minear: --Reimpose the district court's judgment.
John Paul Stevens: And so then, you think they'd have to pay the money.
Jeffrey P. Minear: They'd have to pay the money.
John Paul Stevens: That's what I was trying ask you. Yes, okay.
Jeffrey P. Minear: And the reason for that is simply as a matter of interest of justice. As this Court indicated in Bonner Mall, if a defendant actually precludes the other party from obtaining relief in this Court, the appropriate course in the interests of justice is to remand the case back to the district court.
David H. Souter: And then that's... I'm sorry. Were you going to-- --No. And that is also true on the assumption that you have pointed out we have to make in this case that the penalty was purely forward-looking. The penalty was purely prospective as a deterrent. You see, I can understand your argument if the penalty had both characters, forward-looking and backward-looking, but in this case, as you've told us, the penalty is entirely forward-looking. If it is moot, so that beyond peradventure there can be no expectation of repetition, I don't understand why the penalty would still be enforceable.
Jeffrey P. Minear: The reason why the penalty is still enforced in that situation is to avoid the gamesmanship that would otherwise result. If a party, a defendant could simply string the litigation along until it becomes moot and then avoid the civil penalties that are imposed--
David H. Souter: Would the injunction stand, if they had issued an injunction?
Jeffrey P. Minear: --Yes, and in fact the Walling case involved the imposition of an injunction, and the injunction was on appeal to this court. It had been granted in the district court, it had been overturned in the court of appeals. At the time that this case was pending before the court, the defendant corporation dissolved, and this court said, in that situation we're nevertheless going to reinstate the district court judgment and allow the parties to determine in the district court what remedies are available in that situation.
Antonin Scalia: Excuse me. They reinstituted the judgment but not the remedy. They didn't reinstitute the injunction.
Jeffrey P. Minear: I believe the injunction was still reinstituted, and the court indicated it would be up to the parties to determine what could be enforced in that situation.
David H. Souter: So it was left as a matter of discretion. Mootness was no bar to the injunction, is what you're saying. That was the necessary--
Jeffrey P. Minear: Yes. Now, I understand Justice Scalia's concern is, if the case is truly moot, why does the injunction continue, but nevertheless, what the court said is, when the case became moot on the way to the Supreme Court, it had the discretion to determine what to do with the case on remand. Now, I would like to focus on the deterrent value of the penalties that are at issue here, because I think this is an important point for this Court to understand. It has indicated in a number of its cases the value of, the deterrent value of civil penalties. In Gwaltney, the Court said that citizens may seek penalties only in a suit brought to enjoin or otherwise abate an ongoing violation. In other words, Gwaltney recognized that civil penalties are available to abate the violation. In addition, this Court said in Tull that courts can deter future violations by basing the penalty on its economic impact, exactly what the district court did in this case, and in Romero-Barcelo, this Court said that an injunction is not the only means of ensuring compliance, citing to civil penalties.
Sandra Day O'Connor: --Well, what about Steel Company, though?
Jeffrey P. Minear: Steel Company is distinguishable, because in that case... if I may finish my answer... it involved a wholly past violation in which civil penalties would have no future deterrent effect. Thank you, Your Honor.
Sandra Day O'Connor: Thank you, Mr. Minear. Mr. Cockrill, we'll hear from you.
Donald A. Cockrill: Thank you, Mr. Chief Justice, may it please the Court: This case comes to this Court in somewhat of an odd posture in that we are here, in the eighth year of this litigation, because the petitioners want this Court to send all of us back to the Fourth Circuit to litigate the issue of additional civil penalties for violations, some of which occurred nearly 13 years ago, none of which caused any measurable environmental harm, based on the petitioner's contention that such additional penalties for long-past violations will somehow deter future discharges at a facility in South Carolina that no longer discharges, and they ask for this relief despite two very important facts. One, they admit that at trial they completely failed to prove specific adverse effects to the environment, and secondly, whatever injuries that they may have had, they now concede were redressed by the district court's ruling in 1997.
William H. Rehnquist: What ruling of the district court is that?
Donald A. Cockrill: It was the district court's 1997 ruling on liability. There was an earlier 1995 ruling called the preclusion ruling that said the lawsuit could go forward. We then tried the case, and the district court ruled in 1997, found violations, and imposed the penalty.
Stephen G. Breyer: Thank you. We've said that you have to take standing issues first, and there's a barrier to the standing issue. That was Steel Co., and there seems to be a barrier to the standing issue, the absolute ruling that if you go and ask for a future... for the penalty, the past penalty in order to deter the future, can't do it, no standing, so we have to address that, don't we, despite 13 years, despite all the things you say.
Donald A. Cockrill: Yes, Your Honor. I mean... yes. That's our position, that under no circumstances should a private party be able to seek penalties, a remedy in which that private party has no personal stake, because there's just no good historical analogue in the Federal system for a private party doing that.
Stephen G. Breyer: Well, what about treble damage plaintiffs in antitrust cases? What about qui tam plaintiffs? What about all the instances in State law where you have a person called a Private Attorney General? Not perfect analogies, but why not good enough?
Donald A. Cockrill: I think in State law... obviously, the Federal system has a separation of power consideration that State law doesn't. In a qui tam action, obviously the plaintiff, who is suing on behalf of the Government, at least gets a portion of the take.
Stephen G. Breyer: If he gets $13.50 he can put a million into the Treasury, but if in fact what he gets is some assurance that there won't be pollution again, he can't put the money in the Treasury.
Donald A. Cockrill: Well, to answer the first part of it, if you got $13.50 out of a million dollar judgment, I'm not sure that's enough of a personal stake, but I know--
Stephen G. Breyer: I sometimes exaggerate. [Laughter] Mr. Minear, it's not universally agreed that qui tam actions are constitutional anyway, is it?
Donald A. Cockrill: --No, it's not, Your Honor, and there's a lot of--
Antonin Scalia: And this Court has never faced the question, has it?
Donald A. Cockrill: --It has not, and... but my point is that at least that qui tam plaintiff has some personal stake by virtue of the statute, the False Claims Act, giving that quit tam plaintiff a--
Antonin Scalia: Quit tam squared, you might say.
Donald A. Cockrill: --I'll agree with that, although I'm not sure I understand it. [Laughter]
David H. Souter: We have learned not to do that. [Laughter] Mr. Cockrill, the district court said they were in violation, and I... the reason I'm not giving an injunction is because I think that this penalty is enough of a deterrent. If the district court was wrong about that, isn't the implication that it would have given the injunctive relief as the only redress that this plaintiff would have standing to pursue? The district court didn't say, an injunction's out of the question. It said, I want to deter this defendant, and I think the best way to do that is through a monetary penalty to take away the benefit of the violation.
Donald A. Cockrill: I don't think that's completely correct, Your Honor, for this reason. The district court denied the injunction for very good reasons. The citizens' suit was filed in June of 1992. Two months later, as the district court found, the company was in substantial compliance. The district court found that 5 years prior to the citizens' suit there was continuous activity on the part of the company, good faith compliance efforts, working with the State, and that the citizens' suit basically came in at the end of that process, so the district court felt that because this was not an indifferent company that was galvanized into action by the citizens' suit, and because it came into substantial compliance within 2 months of the citizens' suit by finally figuring out the technology problem, there really wasn't a need for an injunction. The district court... and that's just obvious from the record, and--
Ruth Bader Ginsburg: I thought that the district court suggested that the plaintiff was the galvanizing factor and that the defendant itself had tried to get the State into the act and, indeed, drafted the pleadings for the State court suit that was filed, and that was all a nice cozy deal between the defendant and the State.
Donald A. Cockrill: --The district court did not find that.
Ruth Bader Ginsburg: Well, the district court did say, I am not going to do what the statute, if everything was above-board would require, that is, not take this case because there is an adequate remedy going on in the State court. Didn't the district court, in order to continue in this case, have to say why it was not crediting the State proceeding?
Donald A. Cockrill: Yes. The district court ruled that the State's prior enforcement of these same penalties was not diligent, based primarily on the district court's feeling that the penalty, $100,000 that the State imposed upon Laidlaw, was not sufficient because it did not calculate or attempt to recover a theoretical economic benefit of noncompliance. Going back to your earlier question, the district court did not find that this citizens' suit was the catalyst for Laidlaw coming into compliance. In fact, the district court found that when the State sued Laidlaw and entered a consent decree on June 10, 1992, in order to obey that consent decree, Laidlaw shut down for substantial periods of time.
Ruth Bader Ginsburg: Well, why did the district court say, and one of the reasons that I'm not giving injunctive relief, it's not simply that I assigned a whopping penalty, but down the road there will be substantial counsel fees?
Donald A. Cockrill: The district court did say that, and it underscores the uncertain nature of penalties. Our position is very clearly, the penalties are clearly the central issue. They cannot find redress in a compensatory fashion. Everybody agrees to that, because they're paid to the sovereign. The only way you get there is through deterrence, and historically, of course, equity provides a personal redress, declaratory judgments and injunctions which are designed specifically for that purpose. Here, a penalty is overly broad. Mr. Minear mentioned the Tull case. The Tull case points out multiple objectives, but in this particular case, it simply, or in any case, while you may easily say, and I would agree, that penalties as a general matter have some general deterrent effect, any legislation with some type of penalty or sanction is going to have a general, nonspecific effect, but to try to predict the specific effect becomes a very cumbersome and a very difficult proposition, and nothing... and that's shown in this case. And I think Congress recognized that when they... in the Clean Water Act citizen suit provision, because they lump penalties and injunctive relief together.
William H. Rehnquist: What do you mean when you say, penalties have to have a specific effect, Mr. Cockrill?
Donald A. Cockrill: What I mean, Your Honor, is to redress an injury under Article III, it... the burden on the plaintiff is to show that the relief requested, that there is a substantial likelihood that that relief will redress that injury.
William H. Rehnquist: And do you challenge here that the penalties here imposed would have that effect?
Donald A. Cockrill: Oh, indeed I do. I think these penalties imposed here had no deterrent effect.
William H. Rehnquist: Because, what, the conduct had already ceased?
Donald A. Cockrill: Yes, because looking at this... deterrence to me implies, someone doesn't want to do something that's right, and you have to goad them into it. Based on this record, including the 5 years of continuous effort before the citizens' suit, you cannot draw that conclusion, and that's why, in fact, the district court lowered the penalty below this calculated economic benefit, because Laidlaw's compliance efforts had been in good faith, had not caused environmental harm, and had--
John Paul Stevens: Well, you-- --I don't think that's... you say the district court thought that the penalties were less than the economic benefit? That's not what he said. He said he was removing the economic benefit.
Donald A. Cockrill: --No, he didn't, Your Honor.
John Paul Stevens: Similarly, only by removing the economic benefit of noncompliance can a civil penalty ensure that a violator receive no economic advantage.
Donald A. Cockrill: You read that correctly, Your Honor. You're reading from the 1995 district court opinion, where the district court very forcefully said, to be an effective deterrent, a penalty must remove the economic benefit. At that point you're at a wash, and then some, to make it a true penalty. In the 1997 decision, the economic benefit was $1.1 million. The penalty was $405,000.
John Paul Stevens: Well, did he agree the economic benefit was 1.1, or was that what your opponent argued?
Donald A. Cockrill: No, that's what he agreed. They argued it was--
John Paul Stevens: Oh, I see.
Donald A. Cockrill: --I think, three or four million we, of course, were lower, and he... we were, like, at $900,000. He said 1.1, but I'm going to penalize you less than half of that because of these mitigating factors, and that's in fact... that was, of course, the basis of Friends of the Earth's appeal in the Fourth Circuit, that that penalty was not only a nonpenalty, but it had the opposite effect. It encouraged and rewarded violations.
David H. Souter: Yes, but didn't he also anticipate counsel fees at the time he set the $400,000?
Donald A. Cockrill: He did. He did, Your Honor.
David H. Souter: So he figured that more money was going to come out of their Treasury at some point as a result of the totality of their actions.
Donald A. Cockrill: Yes. He said this $400,000, when coupled with what we might have to pay, and what they paid me-- [Laughter] --that that, all taken together, would, he believed would be a deterrent. But what that shows, Your Honor, is that the penalty wasn't, in the district court's mind, a sufficient deterrent, because he had to add other things to it.
David H. Souter: But it doesn't follow from that that the penalty was not a deterrent, and it doesn't follow from that that in fact a... and it doesn't follow from historical practice, either, it seems to me, that the penalty cannot be a deterrent unless it is tied more specifically to specific action, because equity frequently depends upon the accrual of coercive penalties. And so it seems to me that the use of the penalty procedure without necessarily tying it to the economic value of a particular practice is in fact consistent with historical equity practice, and I don't see that there is any radical departure from what the judge did here from what equity courts have done in the past.
Donald A. Cockrill: Well, in equity, clearly you have, you know, an injunction. Clearly a court has the power to enforce that injunction with coercive fines. In this case, under the Clean Water Act, these penalties from the district court, 90 percent, 97 percent I think of the penalties were pre-complaint. These penalties were completely retrospect... retroactive, going to the... not prospective, punishing for past conduct, and that's the basis--
David H. Souter: This may get to a point that is semantic, and I'm not sure of the answer. I just can't remember what the court said well enough. As I... is it fair to say, in... consistent with what you just told me, that the court required the particular past actions which it identified as a condition of awarding the penalty, but at the same time said, the reason I'm awarding the penalty is not merely, as it were, based on the excuse that they did bad things that I've identified, but I'm awarding them for prospective purposes to see that they don't do those bad things again. Is that a fair characterization of what the court did?
Donald A. Cockrill: --I don't think it's fair. It's not... for this reason. The district court said that the Clean Water Act mandates that I award a penalty, and that is the reason, if you look at the entire record, he felt obligated to do it. Indeed, by the language that was--
David H. Souter: And it was mandated because he found they had done certain bad things.
Donald A. Cockrill: --He found violations.
David H. Souter: Okay.
Donald A. Cockrill: Yes.
Sandra Day O'Connor: Well, here there was an allegation of continuing violations.
Donald A. Cockrill: That's correct, Your Honor.
Sandra Day O'Connor: And suppose the plaintiffs included people who lived along the river and who swam in it regularly and complained of the mercury discharges, and alleges violations that continued even after the filing of the complaint, amends the complaint, it's going on. Now, do you say, under those circumstances, if the court found all of those things, it could not award a civil penalty, at the same time denying an injunction, as a means of deterring continuing violations?
Donald A. Cockrill: I think that's what I'm saying, Your Honor, for this reason.
Sandra Day O'Connor: Even if all those things that I've said are true.
Donald A. Cockrill: Right. Continuing violations, at the time of the lawsuit, I think under Article III that penalties are simply unavailable to a private party.
Sandra Day O'Connor: Okay, so you raise the constitutional issue--
Donald A. Cockrill: Yes.
Sandra Day O'Connor: --by way of a defense.
Donald A. Cockrill: I think as a statutory matter--
Sandra Day O'Connor: Now, did the Fourth Circuit rest on some grounds of mootness as opposed to standing?
Donald A. Cockrill: --They did.
Sandra Day O'Connor: Do you think we need to send it back for a review of standing?
Donald A. Cockrill: No, I don't, unless you over... of course, if you reverse the Fourth Circuit, then you can obviously take up the standing issue and the statutory issue raised in the briefs, or you could remand it. We would prefer that this Court take it up.
Anthony M. Kennedy: I take it you agree that, as a general matter, penalties deter conduct.
Donald A. Cockrill: In a nonspecific, attenuated fashion that will vary from case to case, yes, sir, I do.
Anthony M. Kennedy: Well, but this is the basis of much of our criminal law and so forth.
Donald A. Cockrill: It is. A deterrent effect--
Anthony M. Kennedy: All right. Let's assume that with this violator, penalties would deter conduct.
Donald A. Cockrill: --We're going to assume--
Anthony M. Kennedy: Let's make that assumption.
Donald A. Cockrill: --That penalties deter conduct.
Anthony M. Kennedy: That an industry or business, that I'm concerned about this because I may have a penalty. Let's make that assumption. What difference does it make if the penalty goes to the Government as opposed to a private plaintiff so far as deterrence is concerned?
Donald A. Cockrill: I think under that hypothetical, if you could make the assumption, I would tend to agree that there's a much stronger case for allowing a private party to seek a penalty, because that private party's going to see a real benefit. That's not the case here, but I would agree, but to me there is no way that anyone could make the statement that as a general rule, penalties deter. It just is too... this Court's precedents in the Linda R.S., the Simon case, even Steel Company, make that point that when you--
John Paul Stevens: May I ask this question, Mr. Cockrill. You've referred to nonspecific deterrence. I don't quite understand that. If one assumes... and I don't know if this is a fair statement or not... that there had been periodic discharges of mercury in front of, say, one of the plaintiff's private property that adversely affected the value of that property, or their ability to fish or swim, or something like that, and if the penalty is designed to prevent a repetition of what had gone on before, why wouldn't that be sufficiently specific? Why are you referring to nonspecific--
Donald A. Cockrill: --Well, I guess I go back to this decision, to the Court's decision in Tull, where it pointed out that in the congressional history of the Clean Water Act the purposes of a penalty, while they include deterrence, the primary purpose is retribution, punishment, that there's also a restitutional purpose, whereas as I mentioned, an injunction is specifically designed to proscribe or regulate future conduct, and that's what I say when it's nonspecific. The deterrent effect is there at some level, but--
John Paul Stevens: --How could it be more specific? If it says don't... it is a remedy designed to prevent that which was wrongfully done in the past from being done in the future, and the thing that was wrongfully done in the past is specifically shown by the evidence, and therefore wouldn't the deterrence be equally specific?
Donald A. Cockrill: --It may or may not, Your Honor. That's what I'm saying.
Stephen G. Breyer: All right, well, if it may or may not... if it may or may not, why can't... why isn't Congress free to make a judgment that as a general matter there will be cases in which the fact that a plaintiff collects money for a past injury helps to deter this defendant from doing the same thing in the future? Can't Congress make the judgment that there are a lot of cases like that?
Donald A. Cockrill: I think Congress can make the judgment.
Stephen G. Breyer: If Congress can make the judgment, then what is it about Article III that prevents them from saying that a person who's had injury in the past, and might have injury in the future, can bring a lawsuit to create in this case that specific deterrence?
Donald A. Cockrill: Justice Breyer, I think Congress can make the judgment, as they do in the legislative history of the Clean Water Act, that penalties will have a number of effects, including a general deterrent effect. I do not think Congress could make the judgment that penalties do deter in every instance, because--
Stephen G. Breyer: No, they're not saying every. What they're saying is, there are a number of cases in which they will specifically deter, and because we think there are quite a few cases like that, there may be some, maybe your case, where it wouldn't be true, but we think there are quite a few, and therefore we give standing to people to use that enforcement mechanism.
Donald A. Cockrill: --Well, they give... under that hypothetical, of course, you're getting closer to penalties deterring in the great majority of cases. I don't think Congress can legislate Article III requirements. As far as, if Congress declares that penalties deter, or that they deter in the great majority of cases, I don't think that's going to supply, necessarily, the redress in Article III, and clearly, here, under these facts, when the district court ruled in '97... and Mr. Chief Justice, you asked... you brought out the point, you can't sue in Virginia to get something in California. My colleague agreed with that. That's exactly what the argument is in the reply brief, and I'm referring to page 7, where we're told, through the affidavit of a paralegal, that even if we stop discharging, which we have, permanently, that Laidlaw and its corporate affiliates have other facilities. Well, first, Laidlaw doesn't, but our affiliates do in other States, and there have been recent violations of those, and--
Ruth Bader Ginsburg: But that was an end argument. They made five or six arguments, and that was--
Donald A. Cockrill: --Yes, ma'am, but I... but my point was that they have taken the position that penalties imposed in South Carolina will deter facilities in Kentucky and Texas that aren't really before the court to benefit--
Ruth Bader Ginsburg: --But mainly they said, we don't have much of a record on this closing, we do have the permit still alive, and there's nothing that this Court can decide on that. There's one position that you had about mootness that I was not clear on, and that was, you seem to say it's their fault because they didn't appeal from the denial of injunctive relief. Suppose they had, would there then be no mootness question?
Donald A. Cockrill: --If they had appealed the denial of injunctive relief, I think the court, the Fourth Circuit could have heard the... it would not have been moot for that reason, for the statutory reason--
Ruth Bader Ginsburg: That would have saved the case for mootness, even if the Fourth Circuit agreed with the district court that, all things considered, injunctive relief was unnecessary.
Donald A. Cockrill: --Yes, I think that's--
David H. Souter: Then your rule is simply going to turn this into a kind of appellate pleadings game.
Donald A. Cockrill: --No. We're not suggesting that someone, that a plaintiff who has been denied injunctive relief take an appeal, even though the plaintiff feels that the injunction was properly denied. That's not what we're saying. We're saying the Fourth Circuit--
David H. Souter: On your rule, the plaintiff is always going to feel that, because the plaintiff is going to know that in fact reliance on the penalties is going to get him nothing, because there won't be any penalty left, and he'll have to appeal the denial of the injunction, or he'll get nothing.
Donald A. Cockrill: --Well, I think as a matter of statutory construction under the Clean Water Act you must always have... in order to get penalties, they must be coupled with a request for injunctive relief. As a matter of Article III--
David H. Souter: And in your rule, in order to keep penalties, any penalty awarded must be accompanied by a continuing request for injunction at the appellate stage.
Donald A. Cockrill: --Yes. Under the Clean Water Act, that's correct, but we're not suggesting that people take appeals in which they don't have a good faith belief. In this case--
David H. Souter: But I... well--
Donald A. Cockrill: --they made the decision not to do it, and that's all we're saying, is that once they made the decision to continue the litigation on appeal, seeking only a remedy that would not redress any injury that they had, that that, in effect, mooted the case--
David H. Souter: --Well, that turns--
Donald A. Cockrill: --of the Steel Company.
David H. Souter: --That may leave an interesting question, but it turns the case into rather a sport, I suppose.
Donald A. Cockrill: I don't think it--
David H. Souter: Nobody's ever going to make this mistake again, if you win.
Donald A. Cockrill: --Well, except if they take up the injunction and the civil penalties, I think Steel Company... Justice Kennedy said under the Lyons case and the Casey case, and also Ashcroft v. Mattis, you look at each remedy individually and if there's not Article III jurisdiction for a particular remedy, it's not going to save that remedy to couple it with a remedy such as an injunction that does have an Article... that is grounded in Article III.
Stephen G. Breyer: No, but the problem is that if you admit that they have standing to get an injunction, because an injunction will stop repetition--
Donald A. Cockrill: Yes.
Stephen G. Breyer: --and if you admit that in the long run, the mind run of cases, Congress could believe that in the mind run of cases, collecting these kind of penalties will stop repetition, then you must think that they have standing and redressability to get this kind of penalty. That's the Article III argument. That's why... that's the argument that once you go down the road of saying an injunction is okay, even though they're somewhat strangers, and once you say that this has the same effect, in many cases, as an injunction in terms of specific deterrence, even if not in yours... that's a matter for other places to decide... then you must say that there is standing here. Oh, I didn't understand you to say that you could waive the requirement of deterrence in a particular case. What is your position there? Justice Breyer believes that you've said that it's enough, as I understand it-- --That Congress-- --that Congress has found in the generality of cases that penalties will deter. Right. Now, do you agree with that?
Donald A. Cockrill: No, sir, I don't.
William H. Rehnquist: Well, what is your position?
Donald A. Cockrill: My position is that, while Congress has noted a general deterrent effect, which I agree with, it's reasonable to presume that any penalty or sanction will have some unknown, general effect. Traffic laws do. Some people speed, some people--
Stephen G. Breyer: Specific effect.
Donald A. Cockrill: --It... the specific effect will vary from person to person, and that's our position, that penalties are not specific enough, and you cannot predict the effect of a penalty on a--
William H. Rehnquist: Well, but is your position, then, that penalties can never do the job, or that it's a case-by-case thing, that in some cases you can show that a penalty does have specific deterrence, or that since Congress has found that penalties are enough, that that would be true in all cases?
Donald A. Cockrill: --Well, I think in some cases, penalties will deter. I would think it would be a bad thing to make... to send it back to the Federal courts for a case-by-case determination. It's a difficult determination to make, Mr. Chief Justice, what the effect of a penalty is going--
William H. Rehnquist: What is your position on it, though?
Donald A. Cockrill: --My position on--
William H. Rehnquist: What is... do you agree that there was sufficient deterrence for Article III purpose in this particular case?
Donald A. Cockrill: --No, Your Honor, I don't. I think the penalties that were imposed had no deterrent effect, because Laidlaw came into compliance on its own, and was basically on the verge of compliance before the citizens' suit was filed. I think the penalty here were exactly because... what the district court said, I'm mandated to do it, and he based it entirely on past violations and then said, I believe this, with the other costs, will deter, but it is just too uncertain in any case, and it creates a lot of confusion, and that's especially shown here, where at one point in the Fourth Circuit the petitioners felt that these were an ineffective deterrent and now feel that they're an effective deterrent, and I think--
Ruth Bader Ginsburg: Mr. Cockrill--
Donald A. Cockrill: --that shows the problem.
Ruth Bader Ginsburg: --can I ask you, before you're finished with this other issue about counsel fees, there is a split in the circuits on the so-called catalyst theory--
Donald A. Cockrill: There is.
Ruth Bader Ginsburg: --which the Fourth Circuit rejected. Is it appropriate for this Court, whatever it does on the mootness part, to resolve that circuit split on catalyst versus no catalyst, that you've got to get something positive from the judgment?
Donald A. Cockrill: If you overrule the Fourth Circuit, and remand to the Fourth Circuit these other jurisdictional questions, I think it would be premature. If you... I think the Government takes that position, too, that that should be handled on remand. If you--
Ruth Bader Ginsburg: But handling it on remand, if you're a district court, you already know what your circuit court has said, that is, no catalyst theory, so it would leave this--
Donald A. Cockrill: --What I'm saying, Justice Ginsburg, is, on remand to the Fourth Circuit, to consider the standing argument based on lack of harm and the statutory jurisdiction argument based on the diligent prosecution, subject matter defense, if you send those back to the Fourth Circuit, then I think it would be premature for this Court to decide the attorney's fee issue. The Fourth Circuit may decide that there was no initial jurisdiction, either constitutional or statutory, and that will resolve it. If you affirm the Fourth Circuit and say they were correct, then it might be proper that the case did become moot at the time they appealed. Then I concede that it may be proper to take up the attorney's fees issue at that time. Now, I wanted... in the few remaining minutes that I have, I wanted to address a question by Justice O'Connor. You asked, did the closure moot. I think it clearly did. We did retain the permit. In our Rule 21 suggestion of mootness motion we have an affidavit that says why we did that, to make it more attractive to a prospective purchaser, kind of like someone who sells a restaurant and keeps an ABC license. It's easier to transfer. The more... perhaps the more difficult question is, if we did moot it by our unilateral action, what should happen, and I would ask the Court to keep in mind the Bonner Mall decision that says the Court may make a disposition of the whole case, as justice may require, taking into account the nature and character of the conditions that led to the mootness.
William H. Rehnquist: --Thank you, Mr. Cockrill. Mr. Terris, you have 3 minutes remaining.
Bruce J. Terris: Your Honors, in both Tull and Romero-Barcelo this Court said that the Clean Water Act's penalties were intended to deter, as... and of course it had other purposes as well. The district court specifically found, and this is on the joint appendix, on page 182, that the penalty that it was imposing, together with attorney's fees which it contemplated the plaintiffs would receive, and the attorney's fees which the defendant's counsel obviously have received, would constitute deterrence, so the... Laidlaw's argument before this Court that there is not specific deterrence in this case is in the face--
William H. Rehnquist: Well--
Bruce J. Terris: --of the determination by the district court after 10 days of trial.
William H. Rehnquist: --Could the district court, Mr. Terris, simply say to defendant, I know you've hired a very expensive lawyer in this case, you're going to have to pay him a lot of money, so we don't need any more deterrence for your violation?
Bruce J. Terris: Well, Your Honor... Your Honor happens to have hit on one of the central grounds of our appeal to the court of appeals, which was that we take the position that the economic benefit has to be stripped from the violator without taking into account attorney's fees, particularly since the attorney's fees could not be known to the district court at the time. I think that was a mistake. But the point that I'm making here is, because that issue is... clearly is not before Your Honors, the point that I'm making to Your Honors is that the district court clearly found that the penalty it was imposing was a deterrent against future violations, that is, specific deterrence, and I submit that it is a concrete benefit to the plaintiffs. I want to come back to the question about whether... whether, if you deny injunctive relief, then you can't grant civil penalties, that injunctive relief is not a lesser form of relief, and I think that is very clearly shown in Romero-Barcelo. There, this Court said that injunctive relief should not lie under the facts of that case under the Clean Water Act, but it then pointed out, although it did not faithfully anticipate this Court's later ruling in Department of Energy v. The State of Ohio about sovereign immunity, but it then pointed out that penalties were an alternative to injunctive relief, and I submit to Your Honors that is exactly what we have in this case. What the district court found was that there was... that there was not enough likelihood of violations to justify the extraordinary relief of injunctive relief. It said that the defendant did not need to show no chance of violations in order to defeat injunctive relief under the ordinary four-part test for injunctions, but it then quite clearly said, when it got to civil penalties, that that was a deterrent, and it would stand in place of injunctive relief. Thank you.
William H. Rehnquist: Thank you, Mr. Terris. The case is submitted.
Speaker: The honorable court is now adjourned until tomorrow at ten o'clock.