Opinion ID: 169642
Heading Depth: 3
Heading Rank: 1

Heading: Consideration of Improper Factors

Text: Pro Products argues that the district court relied on three improper factors in mitigating Airosol's penalty to zero. We agree. Specifically, the district court first implied that mitigation is proper where a private citizen [rather than the EPA] brought suit against [a defendant] for its Clean Air Act violations. Appx. at 544. The district court also looked to Pro Products' failure to establish at trial that Airosol intentionally violated the Clean Air Act as a mitigating factor. Id. at 543. Finally, the district court found it most important that Pro Products' motivation to enforce the CAA was economic rather than environmental. Id. at 544. We review de novo whether unlisted factors such as these are properly considered other factors as justice may require within the meaning of § 7413(e)(1). See Powell, 913 F.2d at 80; see also United States v. Allegheny Ludlum Corp., 366 F.3d 164, 171 (3d Cir.2004) (concluding that imposition of a penalty under the CWA is reviewed for abuse of discretion, but review of the construction of CWA's penalty provision is plenary). In Powell, a citizen suit under the CWA, the district court granted summary judgment finding that the defendant manufacturer violated the CWA. Powell, 913 F.2d at 69. Following a bench trial on the issue of penalties, the district court assessed $3,205,000 in civil penalties. Id. In calculating the penalty, the district court determined the maximum penalty to be $4,205,000 and reduced that amount by $1,000,000 because the EPA and the [New Jersey Department of Environmental Protection] had failed to diligently prosecute [the violator]. Id. at 69-70. The Third Circuit Court of Appeals reversed in part, finding that the mere failure by governmental agencies to prosecute [an alleged violation] does not allow a court to reduce a penalty. Id. at 81. The court held that such failure by itself is not a factor that may be considered within the other matters as justice may require factor set forth in the CWA's penalty statute. Id. The Powell court also found that because the EPA had not affirmatively recognized and excused noncompliance, governmental inaction was not a basis for mitigation based on the violator's good faith. Id. When calculating the appropriateness of a civil penalty, the CAA, like the CWA, requires a district court to consider certain listed factors, but also permits a district court to consider other unlisted factors as justice may require. Compare 33 U.S.C. § 1319(d) (considering other matters as justice may require), with 42 U.S.C. § 7413(e)(1) (considering other factors as justice may require). Both the CWA and the CAA provide that a citizen suit can only be brought if there is a lack of prosecution by the state, or relevant agency. Compare 33 U.S.C. § 1365(b)(1)(B) (No action may be commenced . . . if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action.), with 42 U.S.C. § 7604(b)(1)(B) (No action may be commenced . . . if the Administrator or State has commenced and is diligently prosecuting a civil action . . . to require compliance.). Thus, the mere failure by governmental agencies to prosecute [a violation] does not allow a court to reduce a penalty. Powell, 913 F.2d at 80. Here, the EPA was aware of the instant litigation, but had not cited Airosol or elected to intervene in this litigation. Appx. at 543. We agree with the Third Circuit's approach in Powell and conclude that the district court erred in relying on agency inaction as a mitigating factor when conducting its CAA penalty analysis. Second, the fact that Pro Products did not establish at trial that Airosol intentionally violated the Clean Air Act is also an impermissible basis for a complete mitigation of Airosol's penalty. Appx. at 543. The Act imposes strict liability upon owners and operators who violate the Act. See Dell'Aquilla, 150 F.3d at 332; B & W Inv. Props., 38 F.3d at 367. This is not to say that intent cannot be considered when assessing a CAA penalty, but here, as regards the district court's placing a burden on Pro Products to establish that Airosol intentionally violated the CAA, it erred. Also, we are mindful that the district court found that from October 4, 1996 to April 30, 2005, Airosol sold 64,017 twelve-ounce cans of Black Knight and 548 twelve-pound cylinders of Black Knight all containing substances banned by the CAA, and that Airosol pursued this course of conduct by relying on a letter it alleges it sent to the EPA, but was never received. Thus, insofar as Airosol's intentions are relevant here, there is insufficient evidence in the record to completely mitigate the imposition of a penalty on these grounds alone. [4] Third, the district court expressly determined that the most important factor in its decision to mitigate Airosol's penalty was the motivation of the citizen plaintiffs who brought suit against Airosol for its CAA violations. We conclude this factor is irrelevant to a determination of the amount of penalty to be imposed under the CAA. First, we have found no authority for the district court's conclusion that a plaintiff's motivation is a significant factor when determining what penalty should be imposed against a CAA violator. Moreover, Congress enacted [the CAA citizen suit provision] specifically to encourage citizen participation in the enforcement of standards and regulations established under this Act. Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 560, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) (citations omitted). Congress intended the section to afford citizens very broad opportunities to participate in the effort to prevent and abate air pollution. Id. (citations omitted). Thus, the fact that a citizen-suit plaintiff may have an economic interest in the outcome of the litigation does not justify mitigation of penalties against the violator. To the contrary, one of the purposes of these penalty provisions is to ensure that companies like Airosol do not gain a competitive advantage from violating the CAA. Powell, 913 F.2d at 79 (Violators should not be able to obtain an economic benefit vis-a-vis their competitors due to their non-compliance with environmental laws.) (citations omitted). In short, there is no principled basis for relying on Pro Products' motivation for bringing the suit, or the fact that the parties are competitors, to determine Airosol's penalty. Thus, the district court's reliance on these factors was error.