Opinion ID: 537707
Heading Depth: 2
Heading Rank: 1

Heading: Determination of Penalties Under the Clean Water Act

Text: 44 In deciding upon the penalty to be assessed against a defendant who has violated its NPDES permit, the point of departure for the district court should be the maximum fines for such violations permitted by the Clean Water Act. Although the amount of the maximum fine is stated at 33 U.S.C. Sec. 1319(d), the language of that section as originally written and as amended is not a model of clarity. Indeed, it leaves several questions regarding the calculation of fines unresolved. 45 Although it would be possible for the district court to resolve these questions on remand, we note that the questions, which involve statutory interpretation, are legal and not factual in nature. Thus, given the lack of Eleventh Circuit law in the area, we set forth our interpretation of the controlling statute in order to provide the court with guidance on remand. 46 Until February 4, 1987, 33 U.S.C. Sec. 1319(d) stated that: 47 Any person who violates sections 1311, 1312, 1316, 1317, 1318, 1328, or 1345 of this title, or any permit condition or limitation implementing any of such sections in a permit issued under section 1342 of this title by the Administrator, or by a State, or in a permit issued under section 1344 of this title by a State ... shall be subject to a civil penalty not to exceed $10,000 per day of such violation. 48 (emphasis added). The Clean Water Act was amended by the passage of the Water Quality Act of 1987, Pub.L. No. 100-4, 101 Stat. 7 (1987). The amendment to section 1319(d), effective February 4, 1987, changed the italicized language to state that a violator shall be subject to a civil penalty not to exceed $25,000 per day for each violation. As Tyson's permit violations occurred both before and after the amendment, maximum penalties must be assessed in accordance with both the pre- and post-amendment language of the statutes. 49
50 In interpreting the language of section 1319(d), courts have come to different conclusions as to whether the pre-amendment Clean Water Act limits a permittee's liability to $10,000 per day even if a permittee has violated discharge limitations for several pollutants on the same day. The district court's initial decision in Gwaltney includes a lengthy discussion of this question. That court, following the decision in United States v. Detrex Chemical Industries, Inc., 393 F.Supp. 735 (N.D.Ohio 1975) held that Section 1319(d) authorizes a maximum of $10,000 per day in civil penalties for violations that are enumerated therein, even where the defendant has violated discharge limitations for several substances during the same day. 611 F.Supp. 1542, 1555 (E.D.Va.1985). The Gwaltney court noted that the statute is ambiguous, but felt that a construction that capped liability at $10,000 per day accurately reflect[ed] the intent of Congress and would provide a substantial deterrent against violations by even the largest corporations where more than a few days of violation are involved. Id. In United States v. Amoco Oil Co., 580 F.Supp. 1042, 1047 n. 1 (W.D.Mo.1984), the district judge, in dicta, construed the language of section 1319(d) to allow for separate penalties for violations of the daily limit for two or more different pollutants, and in Student P.I.R.G. of New Jersey, Inc. v. Monsanto Co., CIV.A. No. 83-2040 (D.N.J. March 24, 1988) (1988 WL 156691), the court reached the same conclusion. 17 The EPA has taken a similar position, stating in its internal document entitled Clean Water Act Penalty Policy For Civil Settlement Negotiations (Penalty Policy) that violations of different parameters at the same outfall are to be counted separately. 18 51 We agree with the district court in Gwaltney that the statutory language of section 1319(d) as originally written is ambiguous and find the varying interpretations given to that language equally plausible. In amending the statute, however, Congress specified that the penalties were not to exceed $25,000 per day for each violation (emphasis added). This language, applicable to violations occurring after February 4, 1987, is, we find, capable of only a single reasonable interpretation: the daily maximum penalty applies separately to each violation of an express limitation. 19 Certainly then, for violations occurring after February 4, 1987, there is no daily cap of $25,000. Instead, each excessive discharge of a pollutant on a given day will subject the polluter to a $25,000 maximum fine. 52 We further find that the slight change in wording in the 1987 amendment points to the proper interpretation of the statute as originally written. The Conference Report accompanying the amendment makes clear that under the Senate bill, section 309 of the Act 33 U.S.C. Sec. 1319 was amended in part to increase the civil judicial penalty limit from $10,000 to $25,000 per violation, [and] to clarify that each distinct violation is subject to a separate daily penalty assessment of up to $25,000.... H.R.Rep. No. 99-1004, 99th Cong., 2d Sess. 132 (emphasis added). 53 Congress' indication that it intended by its amendment simply to clarify the language in the statute as previously written convinces us to follow the Amoco and Monsanto courts' reading of the pre-amendment language and to find that Congress intended the fines to attach to each violation of an effluent limitation separately. 54
55 Another difficulty that courts have faced is the proper way to calculate the penalty for a violation of a monthly average. For each effluent characteristic the NPDES permit lists both a daily maximum discharge limitation and a daily average discharge limitation. The daily maximum is defined by the permit as the highest value of a sample result obtained during a single day. The daily average is defined as the arithmetic mean value of all sample results for a particular pollutant obtained during a calendar month. Typically, the daily average discharge limitation for the month is much lower than the daily maximum, reflecting the fact that harm may be done in the aggregate even when the defendant stays within the maximum limitations for each day. 56 The language of the statute does not make clear whether the penalty for a monthly violation 20 should consist of a fine for each day of that month or of a single fine of $10,000 (or $25,000). In Gwaltney, the Fourth Circuit agreed with the district court's holding that a violation of a monthly average should be deemed to involve a violation of each of the days of that month. 791 F.2d 304 (4th Cir.1986). The court reasoned that: 57 While the statute does not address directly the matter of monthly average limitations, it does speak in terms of penalties per day of violation, rather than penalties per violation. This language strongly suggests that where a violation is defined in terms of a time period longer than a day, the maximum penalty assessable for that violation should be defined in terms of the number of days in that time period. 58 Id. at 314 (emphasis in original). Thus, under the Gwaltney court's reading of the pre-amendment statute, violating a monthly limitation in a month with thirty days would subject a polluter to a maximum penalty of $300,000 per pollutant. Under the statute as amended, a polluter would be subject to a maximum penalty of $750,000 for that month. The EPA agrees in its Penalty Policy that violation of a monthly average effluent limitation should be counted as 30 violations. But see, Monsanto, CIV.A. No. 83-2040, 1988 WL 156691 (holding that a violation of the daily average should not be applied to every day that month, but should only be counted as a single violation). 59 We find the reasoning of the Fourth Circuit persuasive and consistent with the language of section 1319(d). Although the maximum penalty for a monthly violation may seem high, we note, as did the Gwaltney court, that section 1319(d) only serves to set a maximum penalty. In choosing the correct penalty to be awarded, the district court may take into account the reasons why the daily average limitation was violated in a particular month. For instance, one polluter may violate its daily average because it discharges just below the limit of the daily maximum every day of the month. 21 Another polluter may violate the daily average because it has an excessive discharge on a single day. It may be appropriate for the district court to assess higher penalties for the polluter engaging in high discharges on a daily basis than for the polluter who violates the monthly limitation because of a single discharge. 60
61 A final question that must be resolved is whether the imposition of penalties for a monthly violation forecloses penalties for daily violations within that month. Based on its holding that $10,000 was an absolute maximum per day regardless of the number of violations, the district court in Gwaltney held that no penalties for violations of the daily maximum should be imposed for months in which the polluter violated the monthly average. 611 F.Supp. at 1555. 62 As noted above, we do not read the pre- or post-amendment language to impose an absolute ceiling on the amount of penalties that may be imposed on a single day. However, we find that because discharge of a single pollutant may be the cause of both daily and monthly violations, fining the violator twice may result in imposing two fines for the same illegal act. We decline to interpret the statute to create this result. Thus, if a polluter is guilty of violating the daily average discharge limitation of pollutant A, and also violates the daily maximum limitation of only pollutant A, then the maximum fine for discharge of pollutant A would be $10,000 (or $25,000) times the number of days in the month. If, however, the polluter also violates the daily maximum of pollutant B, one would add each of those daily violations to the fine for the monthly violation of pollutant A. 22 63