Opinion ID: 547478
Heading Depth: 1
Heading Rank: 6

Heading: The Trust Fund

Text: 76 The district court determined that paying the civil penalties into the United States Treasury would not satisfy the purposes of the Act, and instead ordered that the penalties be paid into a trust fund. This trust fund would then be used to directly impact environmental problems in New Jersey. PIRG II, 720 F.Supp. at 1168. 77 Neither party appealed this portion of the district court's order. We granted leave for EPA to intervene to contest this issue. EPA argues that all civil penalties assessed pursuant to the Act must be paid to the United States Treasury. PIRG counters that the district court could, in the exercise of its equitable jurisdiction, create a trust fund. Our review of this legal question is plenary. 78 The Act itself does not specify where the civil penalties are to be paid. The legislative history of the citizen suit provision, however, makes clear that Congress intended that the penalties be paid to the Treasury. Any penalties imposed would be deposited as miscellaneous receipts and not be recovered by the complainant. S.Rep. No. 92-414, 92d Cong., 2d Sess. 133, reprinted in 1972 U.S.Code Cong. & Admin.News 3668, 3745. Congress intended that any penalties assessed in a citizen suit be treated as miscellaneous receipts. Under the Miscellaneous Receipts Act, any person having custody of such public funds must deposit them in the Treasury within three days of receipt. 32 31 U.S.C. Sec. 3302(c)(1). 79 Courts have consistently stated that penalties in citizen suits under the Act must be paid to the Treasury. See e.g. Gwaltney of Smithfield v. Chesapeake Bay Found., 484 U.S. 49, 108 S.Ct. 376, 379, 98 L.Ed.2d 306 (1987) (If the citizen prevails in such an action, the court may order injunctive relief and/or impose civil penalties payable to the United States Treasury); Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1, 14 n. 25, 101 S.Ct. 2615, 2623 n. 25, 69 L.Ed.2d 435 (1981) (Under the FWPCA, civil penalties, payable to the Government, also may be ordered by the court); Atlantic States Legal Found. v. Tyson Foods, Inc., 897 F.2d 1128, 1131 n. 5 (11th Cir.1990) (Penalties paid as a result of a Sec. 1365 suit do not go to the plaintiff who instituted the suit, but rather are paid into the United States Treasury); Sierra Club v. Simkins Indus., Inc., 847 F.2d 1109, 1113 (4th Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 3185, 105 L.Ed.2d 694 (1989) (the judicial relief of civil penalties, even if payable only to the United States Department of the Treasury, is causally connected to a citizen-plaintiff's injury); Sierra Club v. Chevron U.S.A., Inc., 834 F.2d 1517, 1522 (9th Cir.1987) (any penalties recovered from such an action are paid into the United States Treasury); see also Sierra Club Inc. v. Electronic Controls Design, Inc., 909 F.2d 1350 (9th Cir.1990). 80 Ordering that civil penalties be paid to the Treasury is entirely consistent with Congress' intent that citizen suits supplement the enforcement authority of the EPA. Directing that penalties be paid into the Treasury ensures that citizens bring suits to protect the public health and welfare, and not for private gain. Middlesex County, 453 U.S. at 18 n. 27, 101 S.Ct. at 2624 n. 27. PIRG nonetheless argues that the district court could have created this trust fund through its equitable jurisdiction when ordering injunctive relief. This is true and we do not reject PIRG's argument that in a Clean Water Act case, a court may fashion injunctive relief requiring a defendant to pay monies into a remedial fund, if there is a nexus between the harm and the remedy. But here, once the court labeled the money as civil penalties it could only be paid into the Treasury. Thus we will reverse that portion of the district court's order creating the trust fund and remand with instructions that the court order the penalties paid into the United States Treasury.