Opinion ID: 537707
Heading Depth: 2
Heading Rank: 2

Heading: The District Court's Refusal to Award Penalties

Text: 64 The district court, after noting that it sits as a court of equity that may exercise judicial discretion in all cases, held that it would hardly be fair and just to impose civil penalties upon Tyson when in fact it has at all times herein acted in good faith. Slip op. at 9. 65 Tyson argues that the Supreme Court has approved the exercise of discretion by district courts to balance the equities in deciding penalties under the Clean Air Act. See Weinberger v. Romero-Barcelo, 456 U.S. 305, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982). In Romero-Barcelo, plaintiffs brought suit against the Navy for discharge of ordnance in alongshore waters. The Supreme Court affirmed the district court's use of discretion in declining to enjoin naval operations pending compliance with the Clean Water Act where the Court found great harm to the Navy and little harm to the environment. We find that the holding of Romero-Barcelo has little bearing in the instant case, as it speaks to the district court's discretion to refuse to issue an injunction and not to the question of penalties. 66 In the case of civil penalties, a district court's discretion is constrained by Congress' enumeration of factors to be considered when assessing such a penalty. Under the 1987 amendments to the Clean Water Act, Congress stated that: 67 In determining the amount of a civil penalty the court shall consider the seriousness of the violation or violations, the economic benefit (if any) resulting from the violation, any history of such violations, any good-faith efforts to comply with the applicable requirements, the economic impact of the penalty on the violator, and such other matters as justice may require. 68 33 U.S.C. Sec. 1319(d) (emphasis added). Congress' use of the words shall consider suggests that in arriving at a dollar figure for penalties, the court is to take each listed factor into account as well as any additional factors the court feels have bearing on the question of penalties. The legislative history also notes that Congress intended to expressly require the courts to consider [these factors]. H.R.Rep. No. 99-1004 at 132. See also, Tull v. United States, 481 U.S. 412, 422 n. 8, 107 S.Ct. 1831, 1838 n. 8, 95 L.Ed.2d 365 (1987). 69 From a reading of the district court's opinion in the instant case, it appears that the court focused solely on the good faith of the defendant in determining that the plaintiffs were entitled to no award of civil penalties. The court concluded that [i]t would simply be inequitable and unconscionable to impose civil penalties against Tyson when it has displayed the utmost good faith. In support of its finding of good faith, the court noted that upon acquiring the plant from Spring Valley, Tyson immediately began building a state-of-the-art wastewater treatment system. It also noted that Tyson expended over $2.5 million to correct the past violations of its predecessor and that it did so without having been ordered to comply by any court or administrative agency. 70 There is no evidence that in determining penalty amounts the court examined the economic benefit to the violator or the seriousness of the violations. Insuring that violators do not reap economic benefit by failing to comply with the statutory mandate is of key importance if the penalties are to successfully to deter violations. Although there is little evidence in the record on the question of economic benefit, testimony from the deposition of Mark Waller, the former plant manager at the Blountsville facility, indicates that Tyson may have saved over $400,000 in operation and maintenance expenses by operating without utilizing the technology and employees necessary to comply with its permit. 71 In Tull v. United States, 481 U.S. 412, 422-25, 107 S.Ct. 1831, 1838-39, the Supreme Court made clear that economic gain and restoration of the status quo is not the only basis on which penalties should be awarded under the Clean Water Act. In addition, the penalties are designed to punish violators for their non-compliance and to serve the goal of retribution. The Tull Court, citing the EPA Penalty Policy, stated that retribution can be based on the seriousness of the violations, the number of prior violations, and the lack of good-faith efforts to comply with the relevant requirements. Id. at 423, 107 S.Ct. at 1838. Here, there is ample evidence that Tyson engaged in repeated violations which continued well after the complaint was filed. 72 In its order, the district court also stressed that ASLF filed suit against Tyson well after construction of the facility had begun and without investigating the status of the facility. It found that ASLF's attempts to gather information on which it based its complaint indicated a lack of diligence. While the statute allows the court to consider other matters as justice may require, we have difficulty understanding how the due diligence of the citizen-plaintiffs fits into the calculus of penalties. Inclusion of this factor is particularly troubling when the court prevented the plaintiffs from gathering information by imposing a stay of discovery on the merits for nearly two years after the complaint was filed. On remand, therefore, the district court's perception of the efforts of ASLF to secure information should play no role in its calculation of the appropriate fine. 73 The district court concluded that Congress could not have intended for the Clean Water Act to be used as an instrument to generate fines from parties which have made a bona fide effort to bring their operations into compliance with the Act, especially if they did so before a complaint was filed. We disagree. There was one simple and straightforward way for Tyson to avoid paying civil penalties for violations of the Clean Water Act: After purchasing the plant, Tyson could have ceased operations until it was able to discharge pollutants without violating the requirements of its NPDES permit. Tyson chose not to do this and it must now bear the consequences of that decision. 74 ASLF claims that under the statute, pre-complaint violations in this case involve a maximum penalty of over $14 million and post-complaint penalties involve maximum penalties in excess of $9 million. Without passing judgment on the correctness of these assessments, we note that section 309(d) of the Clean Water Act states that [a]ny person who violates ... any permit condition or limitation ... shall be subject to a civil penalty.... This language makes clear that once a violation has been established, some form of penalty is required. In Stoddard v. Western Carolina Regional Sewer Authority, 784 F.2d 1200, 1208 (4th Cir.1986) the court stated that [c]learly, a fine must be imposed when the violations have been as pervasive as those perpetrated by the [defendant] during the extended period from 1978 to 1983. We hold that the district court committed an error of law by failing to assess civil penalties in some amount. We agree with the Stoddard court. Civil penalties are to be assessed against Tyson as a matter of law. While the amount of penalty to be levied is discretionary with the district court, its determination, based solely on the good faith efforts of Tyson to comply with the law, that no penalty was appropriate was and would be an abuse of discretion. 75 Upon remand, the district court should first determine the maximum fine for which Tyson may be held liable. If it chooses not to impose the maximum, it must reduce the fine in accordance with the factors spelled out in section 1319(d), clearly indicating the weight it gives to each of the factors in the statute and the factual findings that support its conclusions. While the court may find the EPA's Penalty Policy helpful in determining the appropriate fines, the court's primary focus should be on the statutory language of section 1319(d). 23