Court Opinion

ID: 3002766
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:33:36.695116+00
Date Added: 2024-06-11T15:03:19.080322
License: Public Domain

In the

United States Court of Appeals
              For the Seventh Circuit

No. 08-1103

F RIENDS OF M ILWAUKEE’S R IVERS AND
A LLIANCE FOR THE G REAT L AKES,
                                           Plaintiffs-Appellants,
                               v.

M ILWAUKEE M ETROPOLITAN S EWERAGE D ISTRICT,

                                             Defendant-Appellee.

          Appeal from the United States District Court
              for the Eastern District of Wisconsin.
          No. 02-C-0270—Charles N. Clevert, Jr., Judge.

   A RGUED S EPTEMBER 9, 2008—D ECIDED F EBRUARY 13, 2009

 Before B AUER, C UDAHY, and W OOD , Circuit Judges.
 C UDAHY, Circuit Judge.

                       I. Background
  This case has a long and stormy history. Its full back-
ground was set out in this court’s previous opinion,
2                                               No. 08-1103

Friends of Milwaukee’s Rivers and Lake Michigan Fed’n v.
Milwaukee Metro. Sewerage Dist., 382 F.3d 743 (7th Cir. 2004)
(FMR I). After over six years of litigation and two trips
back and forth between the district court and this court,
we are hopeful that the sun is breaking through.
  For the ease of the reader, a brief review of the facts
and procedural history is provided below.

    A. The Initial Proceedings in the District Court
  Friends of Milwaukee’s Rivers and Lake Michigan
Federation, n/k/a Alliance for the Great Lakes (collectively,
Friends), filed this citizens’ suit against the Milwaukee
Metropolitan Sewerage District (MMSD) under the
Federal Water Pollution Control Act (the Clean Water Act
or the Act), 33 U.S.C. §§ 1251 et seq., in the United States
District Court for the Eastern District of Wisconsin on
March 15, 2002. Friends alleged that certain sanitary
sewer overflows that occurred between January 1, 1995
and September 25, 2001 were violations of MMSD’s
Clean Water Act permit and of the Act itself. They sought
a declaratory judgment, injunctive relief, civil penalties
and costs and fees under the citizens’ suit provision of the
Act. FMR I, 382 F.3d at 751. Later that same day, the
State of Wisconsin (the State) also filed suit against MMSD.
  Within a few months, the State and MMSD reached a
settlement (the 2002 Stipulation), which provided for
expenditures of more than $900 million on various pro-
jects. MMSD agreed to (1) build new Deep Tunnel projects
that increase wastewater storage capacity from 405 to 521
No. 08-1103                                               3

million gallons; (2) upgrade its information and control
technology, including the installation of a Real Time
Control system; (3) reduce infiltration and inflow of storm
water into the system by five per cent; and (4) complete a
number of other projects, including a Capacity Manage-
ment, Operation and Maintenance Program as well as
projects provided for in its long-term facilities plan.
  MMSD then moved to dismiss Friends’ citizens’ suit. The
district court found that the State had commenced and
diligently prosecuted judicial and administrative en-
forcement actions against MMSD. Therefore, it dismissed
Friends’ suit as barred first by the Act and in the alter-
native by res judicata. Friends appealed.

  B. FMR I
   In FMR I, we undertook a comprehensive review of
MMSD’s background, systemic difficulties and ongoing
litigation with the State and with Friends. 382 F.3d at 748-
51. We also recognized the occurrence of a massive,
unprecedented dumping in May 2004 of 4.6 billion gallons
of rainwater laced with raw sewage—including a
sanitary sewer overflow (SSO) of about 500 million
gallons—directly into Lake Michigan and Milwaukee-area
rivers. Id. at 749 n.1.
  We found, first, that the Clean Water Act did not bar
Friends’ suit. The Act strips the courts of subject matter
jurisdiction over citizens’ suits where the State has timely
commenced judicial or administrative enforcement
actions. See 33 U.S.C. §§ 1365(b)(1)(B), 1319(g). Because
4                                                No. 08-1103

the State’s actions in this case were not commenced
before Friends filed their citizens’ suit, we held that these
provisions did not apply. 382 F.3d at 757. That holding
is not at issue in this appeal.
  Second, with respect to res judicata, we agreed that two
out of its three requirements had been satisfied: there
had been prior litigation resulting in a final judgment on
the merits by a court with jurisdiction, and there was
identity of the causes of action in the two suits. FMR I,
382 F.3d at 757-58. We found, however, that the record
was insufficient to determine whether Friends were in
privity with the State for purposes of the two actions.
   We explained, “in order for the state agency to be in
privity with the public’s interests, the State’s subsequently-
filed government action must be a diligent prosecution.”
FMR I, 382 F.3d at 759. Looking to the language of the
Act to define “diligent prosecution,” we said, “[o]ur
diligent prosecution analysis of the 2002 Stipulation
will examine whether it is capable of requiring com-
pliance with the Act and is in good faith calculated to
do so.” Id. at 760. We recognized “that diligence on the
part of the State is presumed,” id., and neither perfect
foresight nor success are required. Id. at 759. Notwith-
standing those points, however, “a diligent prosecution
analysis requires more than mere acceptance at face
value of the potentially self-serving statements of a state
agency and the violator with whom it settled regarding
their intent with respect to the effect of the settlement.”
Id. at 760. Therefore, we engaged in a substantive
analysis of whether the 2002 Stipulation was capable of
No. 08-1103                                               5

requiring compliance with the Act and was in good faith
calculated to do so.
  Most of the concerns that Friends raised about the
diligence of the 2002 Stipulation were easily dispensed
with, but we shared their concern that “the planned
improvements to MMSD’s system under the 2002 Stip-
ulation may not in fact result in MMSD’s eventual com-
pliance with the Act and its permit.” Id. at 763. We did
not “feel confident that the 2002 Stipulation will indeed
result in elimination of the root causes underlying the
large-scale violations alleged by the plaintiffs, regardless
of the State’s and MMSD’s self-serving statements that it
is intended to do so.” Id. at 764. Therefore, we could not
say on the basis of the record as it existed before the
district court whether the 2002 Stipulation was cal-
culated to result in compliance with the Act and remanded
for determination of that issue. Id. at 765. Our specific
instructions were the following:
    [T]he district court should determine whether the
    systemic inadequacies of MMSD’s sewerage facilities
    will be sufficiently ameliorated by the proposed
    remedial projects to result in compliance. If the
    district court concludes, after giving some deference
    to the judgment of the State, that there is a realistic
    prospect that violations due to the same underlying
    causes purportedly addressed by the 2002 Stip-
    ulation will continue after the planned improvements
    are completed, the plaintiffs’ suit may proceed. If,
    after a more detailed examination of the 2002 Stip-
    ulation, the district court concludes that no such
    prospect exists, it may so find, provide a thorough
6                                              No. 08-1103

     explanation of its conclusion and consider reinvoca-
     tion of the res judicata bar.
Id. at 765.

    C. The District Court’s Opinion on Remand
  The district court held a two-day evidentiary hearing
and ordered post-hearing briefing to address whether
the 2002 Stipulation was capable of achieving, and calcu-
lated to achieve, compliance with the Act and was there-
fore a diligent prosecution for privity purposes.
  The court began by defining compliance with the Act
as compliance with the permit MMSD had with the State
at the time, citing 33 U.S.C. §§ 1311(a), 1346(a)-(b). That
was the 1997 Wisconsin Pollutant Discharge Elimina-
tion System (WPDES) permit, which prohibited SSOs
subject to certain “exceptions to enforcement,” including
unavoidable bypasses “necessary to prevent loss of life or
severe property damage.” Friends of Milwaukee’s Rivers
and Lake Michigan Fed’n v. Milwaukee Metro. Sewerage Dist.,
No. 02-C-0270, 2007 WL 4410402, at *4 (E.D. Wis. Dec. 14,
2007). The court then noted that the capacity and
physical infrastructure of the sewer system is in turn
determined by the State, including the Wisconsin Depart-
ment of Natural Resources (WDNR), in cooperation
with MMSD. Therefore, the court reasoned, if the capacity
of the system as determined by WDNR was insufficient
to handle the flow of a storm and an SSO was necessary
to prevent severe property damage, that would not neces-
sarily be a violation of the permit.
No. 08-1103                                               7

  The court recognized the hard work that had been done
by the State and MMSD to determine what the capacity
and infrastructure of the system should be. That work
was incorporated into MMSD’s 2010 Facilities Plan and
the 2002 Stipulation. Additionally, the WDNR’s 2001
Report, Sewer Overflows in Wisconsin—A Report to the
Natural Resources Board, was considered in the negoti-
ations for the 2002 Stipulation. Ultimately, the court
said that the 2002 Stipulation “reflects the judgment of
the defendant and the WDNR that flows greater than
those expected on a five-year recurrence interval are so
infrequent that construction of additional infrastructure
is unwarranted from a cost-benefit perspective.” 2007
WL 4410402, at *6. It said, “the Stipulation, which refer-
ences the WPDES permit and the 2010 Plan design stan-
dard, provides the benchmark for compliance in this
case.” Id.
  The court heard testimony from both parties’ experts
regarding whether the projects required by the 2010 Plan
and the 2002 Stipulation would bring MMSD into compli-
ance with its 1997 permit. MMSD’s expert, James T.
Smullen, had over thirty years of experience managing
large overflow reduction projects and using hydraulic
modeling. Id. at *7. He concluded that the improvements
would be “more than adequate to stop the sanitary sewer
overflows that have been targeted in the system.” Id. at *8.
That is, the capacity increases that would result from
the 2002 Stipulation’s projects would be more than
enough to capture SSOs for the five-year recurrence
interval and smaller. Id.
8                                             No. 08-1103

  Plaintiffs’ expert, Dr. Bruce A. Bell, disagreed, and
opined that the added capacity would not be sufficient
to achieve compliance with the 1997 permit. The court
found, however, that Dr. Bell’s analysis did not address
several key facts, such as the 2002 Stipulation’s require-
ment for a Real Time Control System and the most
recent hydraulic modeling data. Id. at *8. It therefore
declined to rely on his opinions.
  The court also had before it testimony from WDNR
employees, including Charles G. Burney, who admitted
that in 2002 WDNR believed that the Stipulation would
result in MMSD’s compliance with the WPDES permit. Id.
at *9. After the May 2004 overflows, however, Burney
changed his mind. At the district court’s evidentiary
hearing, Burney testified that he believed that some of
the overflows, including the 500 million gallon May 2004
SSO, would not have been prevented by the increased
capacity and other improvements required by the 2002
Stipulation. Id. at *10. He also did not feel that the
severity of the storms was a sufficient justification for
the overflows. Id.
  The court did not find Burney’s testimony on this point
reliable or persuasive because Burney had not done
any mathematical modeling with respect to how the
system responded to the storms, accounted for the
impact of several of the 2002 Stipulation’s projects that
had not yet been completed in May 2004 or considered
the fact that not all of the deep tunnel’s pumps were
working at the time of the storms. Id.
  The record before the district court showed that the May
2004 storms were in fact in excess of the five-year design
No. 08-1103                                                  9

storm. Id. Nevertheless, the court said, “MMSD’s modeling
suggests that the SSOs would have been prevented by
the improvements required by the Stipulation.” Id.
Finally, the court did not find relevant the fact that the
WDNR and WDOJ had initiated an additional enforce-
ment action against MMSD (the 2005 enforcement action).
Id. at *11.
  After the hearing, Friends supplemented the record
with evidence of two SSOs that occurred in the spring of
2006: a 570,000 gallon SSO on March 13, 2006, and a 346,000
gallon SSO on April 3, 2006. Friends also sought to intro-
duce a letter from Jo Lynn Traub of the United States
Environmental Protection Agency (EPA) to Amy Smith
of the WDNR. The court rejected this letter as hearsay
that did not qualify for the public records exception
under Fed. R. Evid. 803(8). Additionally, the court said,
“Even if [the letter] fell within Rule 803(8), it is not suffi-
ciently reliable or trustworthy to overcome the rule
against admission of hearsay evidence.” District Court
Order, Appellant’s Short Appendix at App. 022. The
plaintiffs also sought to introduce the summons and
complaint filed in the 2005 enforcement action by the
WDOJ for proof of the matters alleged in it. The court
rejected that as hearsay as well, but admitted the docu-
ments for the limited purpose of proving that the State
had filed suit. Id. at App. 023-24.
  On May 19, 2008, the WDOJ and MMSD resolved the
WDOJ’s 2005 enforcement action with a new stipulation
(the 2008 Stipulation). The 2008 Stipulation said, among
other things, that
10                                                No. 08-1103

     MMSD has accomplished much of the work required
     under the terms of the 2002 Stipulation; has maintained
     compliance with the terms of the 2002 Stipulation,
     including completion of projects in accord with the
     schedule; and has achieved reductions in the
     frequency and volume of wet weather sanitary sewer
     overflows (“SSOs”) and combined sewer overflows
     (“CSOs”) from its system as a result of the improve-
     ments made under the 2002 Stipulation;
                              ...
     The parties believe and acknowledge that implementa-
     tion of the other requirements of the 2002 Stipulation
     will result in the realistic prospect of an end to alleged
     discharge permit violations due to the underlying
     causes addressed by the 2002 Stipulation;
                              ...
     [O]n the basis of its review of MMSD’s progress under
     the 2002 Stipulation as described below, the State
     now believes that because of the steps taken and
     planned by MMSD pursuant to the 2002 Stipulation
     there is no realistic prospect that future permit viola-
     tions due to the same underlying causes addressed by
     the 2002 Stipulation will continue after the planned
     improvements are completed. . . .
Stipulation and Order for Judgment at 1-3.
  The district court found that the 2002 Stipulation was a
diligent prosecution for privity purposes, and therefore
dismissed plaintiffs’ suit on res judicata grounds. Plaintiffs
No. 08-1103                                                    11

appealed the dismissal as well as the denial of their
motions to supplement the record.

                        II. Discussion
   The questions presented in this successive appeal are
relatively narrow. Friends do not challenge the suf-
ficiency of the evidence supporting the district court’s
decision. Instead, they contend that the district court
violated our mandate by not “considering and giving due
weight to: post-stipulation violations of the Act; a post-
stipulation determination by WDNR, with which the
United States EPA concurred, that the 2002 Stipulation
would not bring MMSD into compliance with the Act;
and a post-stipulation enforcement action initiated by
the [WDOJ] against MMSD[.]” Appellant’s Br. at 2. They
argue that “had the district court considered these post-
stipulation events, it would have had no choice but to
find that the 2002 Stipulation did not and does not consti-
tute diligent prosecution by WDNR.” Id. at 12. Addition-
ally, Friends contend that the district court erred by
refusing to admit and consider the letter from the EPA to
the WDNR. For the following reasons, we find that
Friends’ arguments, although entitled to weight, are not
a sufficient basis for reversing the district court.1

1
   The district court had federal question jurisdiction pursuant
to 33 U.S.C. § 1365(a) and 28 U.S.C. § 1331. We have jurisdic-
tion pursuant to 28 U.S.C. § 1291 because the district court
entered a final judgment dismissing this case due to res judicata.
12                                                No. 08-1103

  A. Standard of Review
  Typically, a district court’s dismissal of a case on res
judicata grounds is reviewed de novo, Cole v. Board of
Trustees of University of Illinois, 497 F.3d 770, 772 (7th Cir.
2007); but this is not a typical case. We instructed the
district court to make findings of fact regarding whether
the State’s prosecution of MMSD’s violations of the
Act was diligent and to apply the law as we defined it to
those facts. To do so, the court held an evidentiary
hearing, in which it was necessary, among other things,
to assess the credibility of witnesses. Therefore, the clear
error standard of review is appropriate here. Trustees of
Chicago Painters and Decorators Funds v. Royal Int’l
Drywall and Decorating, Inc., 493 F.3d 782, 785 (7th Cir.
2007) (“In an appeal from a bench trial, ‘[w]e review a
district court’s conclusions of law de novo, and we
review its findings of fact, as well as applications of law
to those findings of fact, for clear error.’ ”) (quoting Keach
v. United States Trust Co., 419 F.3d 626, 634 (7th Cir.
2005)); accord Economy Folding Box Corp. v. Anchor Frozen
Foods Corp., 515 F.3d 718, 720 (7th Cir. 2008); Levenstein v.
Salafsky, 414 F.3d 767, 773 (7th Cir. 2005).

  B. Relevance of Post-stipulation Evidence
  This case finds itself in a unique procedural posture
after our remand in FMR I, the district court’s decision
re-invoking res judicata and now this successive appeal.
Precedent is correspondingly sparse; neither the parties
nor the court have discovered any cases specifically
No. 08-1103                                                  13

addressing the question presented by Friends regarding
the admissibility and weight of post-stipulation evi-
dence to the question of privity and diligent prosecution.
Some lower courts have considered such evidence. See,
e.g., St. Bernard Citizens for Envtl. Quality, Inc. v. Chalmette
Refining, L.L.C., 500 F. Supp. 2d 592, 605-08 (E.D. La. 2007)
(considering post-consent decree events as additional
support for the court’s finding that the consent decree
was the result of diligent prosecution); Gardeski v. Colonial
Sand & Stone Co., Inc., 501 F. Supp. 1159, 1166 (S.D.N.Y.
1980). Those cases did so, however, without squarely
addressing the question whether their consideration of
that evidence was proper. Our general comments in
Supporters to Oppose Pollution, Inc. v. Heritage Group, 973
F.2d 1320, 1324 (7th Cir. 1992), regarding the propriety
of follow-up inquiries into diligence are not controlling
because of the distinct procedural posture of the present
case.2
  Putting the question of post-stipulation evidence aside
for a moment, we note first that the central evidence
bearing on the diligence of a representative’s prosecution
in a case like this one is presumably pre-stipulation
evidence. “[T]he focus of the diligent prosecution
inquiry should be on whether the actions are calculated to
eliminate the cause(s) of the violations.” FMR I, 382 F.3d
at 760. Whether an agreement or judgment is capable of
and in good faith calculated to achieve compliance with

2
  As noted by the EPA, it is only due to the unique procedural
posture of this case that enough time has passed for significant
post-stipulation events to occur.
14                                              No. 08-1103

the law can usually be (and in most cases should be)
determined as of the time it is executed, based on the
facts then available to the parties. This approach makes
sense, because the question is essentially asking if the
state faithfully discharged its responsibilities to its con-
stituents and achieved what it reasonably believed to be
a solution to the problem. It is also supported by the
comments to the Restatement of Judgments:
     The failure of a representative to invoke all possible
     legal theories or to develop all possible resources of
     proof does not make his representation legally inef-
     fective, any more than such circumstances over-
     come the binding effect of a judgment on a party
     himself . . . . Whether the representation has been
     inadequate is a question of fact to be decided in light
     of the issues presented in the case and the factual
     and legal contentions that might reasonably have
     been expected to be presented.
Restatement (Second) of Judgments § 42 cmt. f (1982).
Moreover, as we noted in FMR I, “diligence does not
require a state agency to have perfect foresight,” and the
State is not required to succeed; it is required only to try,
diligently. 382 F.3d at 759 (citing Supporters, 973 F.3d at
1324). We recognized the possibility that additional
problems, even ones existing before the 2002 Stipulation
was entered, might manifest themselves after the Stipula-
tion without instantly becoming proof of a lack of dili-
gence. Id. at 762. In sum, when the evidence in a case
like this one demonstrates that a citizens’ representative
acted in good faith and obtained relief adequate to
address all known problems in the system and to pre-
No. 08-1103                                               15

vent all foreseeable violations, that constitutes diligent
prosecution, no matter what happens later. Therefore,
Friends’ suggestion that pre-2002 Stipulation evidence is
irrelevant to the determination of diligent prosecution is
misguided. Appellant’s Br. at 16 (“Speculating as to what
the parties intended or thought the 2002 Stipulation
would do was pointless.”).
  As a general matter, consideration of post-stipulation
evidence raises a number of practical objections. For
example, res judicata is an issue that should be immedi-
ately and finally determinable by the courts. If post-
stipulation evidence is relevant to the determination,
citizens’ suits might go on indefinitely as long as any
problems remain in the system or the government con-
tinues with its oversight and enforcement responsibilities.
As noted by the EPA, “[b]ecause there is always the
possibility of new . . . evidence, that approach would
make it extremely difficult to achieve finality as to a [FMR
I] ‘diligent prosecution’ determination.” EPA Br. as
Amicus Curiae at 17 n.4. Friends responds to this argu-
ment by arguing that in this case, the res judicata issue
has not yet been authoritatively decided, and once it is, it
will become “unassailable and not vulnerable to subse-
quent challenges by a plaintiff who has become subject
to the res judicata bar.” Reply at 11. As pointed out by
the EPA, however, this argument may ignore the poten-
tial applicability of procedural mechanisms such as
Federal Rule of Civil Procedure 60(b).3

3
    We do not hereby suggest that it would be appropriate to
                                               (continued...)
16                                                 No. 08-1103

  Second, as is becoming increasingly clear in this case, it
may be difficult for the district courts to determine the
relevance and impact of post-stipulation evidence. The
courts may have to determine whether the new evidence
is proof that the stipulation is not diligent or instead
merely proof that the changes called for by the stipula-
tion have not yet been implemented, or that there are
new problems. Additionally, it may be a difficult task for
the district court to attempt to focus only on the appro-
priate remedy for the violations as they existed years
ago, instead of fashioning a remedy to address the situa-
tion as it is currently developing.
  A third point, related to the second, is the possible
interference with other government enforcement actions
that consideration of post-stipulation evidence might
cause. This point was argued forcefully by the EPA in its
amicus brief. It applies particularly to examination of
pleadings made in other actions or current opinions of
government officials. Similarly, allowing reopening of
previously barred actions based on recently developed
evidence could potentially thwart the ability of the state
to settle cases by undermining the confidence of opposing
parties in the binding nature of a settlement. Finally, it is
arguable that allowing consideration of post-stipulation
evidence in earlier-filed actions could create a kind of
loophole in the Act’s procedural requirements for

3
   (...continued)
apply Rule 60(b) in these circumstances, or that district courts
should exercise their discretion to do so, but only note that it
is possible that plaintiffs would attempt to invoke it.
No. 08-1103                                               17

citizen suits by allowing consideration of later viola-
tions that are not the subject of a properly filed citizens’
suit.
  Despite these pitfalls, we reject the position that post-
stipulation evidence is wholly irrelevant or should gener-
ally be found to be such. The concept of relevance is
broad and excluding all post-stipulation evidence would
be inconsistent with its reach. After all, the proof of the
pudding is in the eating. Post-stipulation evidence is
sometimes directly probative of the adequacy of a stipula-
tion and the diligence of a prosecution. It may provide
a valuable epilogue: objective evidence of what actually
happened. This is supported by some of the language
we used in FMR I: for example, we instructed the
district court to consider whether the 2002 Stipulation
was “capable” of ending violations and whether it had a
“realistic” prospect of doing so. 382 F.3d at 760, 765.
   It would be difficult to provide guidance regarding all
conceivable types of post-stipulation evidence and we
will not attempt to do so. Its probative weight and, in
clear cases, even its admissibility, will depend on the
particular circumstances of each case and the district
courts should have broad discretion to determine what
weight to afford it, or, if clearly appropriate, to exclude
it. In general, the difficulties that attend it must be dealt
with as best they can in the interest of full evidentiary
disclosure. We do not encourage the district courts to
shut their eyes to the obvious, or even to the plausible.
With all of that background, we now turn to Friends’
arguments that the district court in this case erred by
18                                              No. 08-1103

refusing to give their post-stipulation evidence con-
clusive deference.

     1.   Post-stipulation SSOs
  Friends’ main argument is that the district court failed to
consider or give enough weight to the post-stipulation
evidence they offered. First, they point to the SSOs in
2004 and 2006 and say, “[t]he best evidence of whether
the 2002 Stipulation would result in compliance with the
Act are the SSOs that continued to occur . . . .” Appellant’s
Br. at 16. The May 2004 SSO was indeed a massive event,
as we noted in FMR I. 382 F.3d at 749 n.1. But there are
many reasons why the occurrence of a post-stipulation
SSO, without more, is not necessarily conclusive proof
of a lack of diligence.
  First, the improvements called for in the 2002 Stipula-
tion should be understood by all parties to take time to
implement. Many projects will take years to complete. It
is to be expected that SSOs due to the same causes ad-
dressed by the 2002 Stipulation would continue to occur
for a time before the Stipulation’s projects are complete.
Second, as discussed above, the district court found that
under the 1997 WPDES permit, an SSO caused by a storm
that was bigger than the system was designed to handle
would not necessarily put MMSD in violation of the
permit. An SSO resulting from an exceptionally large
storm would therefore not conclusively prove that the
2002 Stipulation was not capable of complying, and
No. 08-1103                                                 19

calculated to comply, with the permit.4 Finally, an SSO
resulting from independent causes, such as, for example,
a broken pump, would also not lead to the conclusion
that the 2002 Stipulation was not a diligent prosecution.
  For these reasons, as well as the practical difficulties of
considering post-stipulation evidence in general, the
burden to lay a proper foundation for evidence of
post-stipulation SSOs, and to establish that significant
weight should be accorded such evidence, must be
placed on the proponent of the evidence. To demonstrate
a significant evidentiary weight, that party must show
that the SSO (1) resulted from the same underlying
causes as were addressed by the 2002 Stipulation; (2) was
a violation of the applicable permit; (3) would not have
been prevented by the stipulation’s projects, if those
projects had been completed; and (4) that the proffered
evidence satisfies all other generally applicable evidentiary
requirements. This approach is consistent with FMR I,
where we said, “[i]f the district court concludes, after
giving some deference to the judgment of the State, that
there is a realistic prospect that violations due to the same
underlying causes purportedly addressed by the 2002

4
  The parties disagree regarding whether the 2003 permit treats
such SSOs similarly to the way the 1997 permit treated them.
Because drafting had not even begun for the 2003 permit by
the time the 2002 Stipulation was entered, see Transcript of
Hearing of August 24, 2005, at 227, it is irrelevant to this
appeal. Additionally, any argument that the district court
improperly interpreted the 1997 permit has been forfeited.
20                                              No. 08-1103

Stipulation will continue after the planned improvements
are completed, the plaintiffs’ suit may proceed.” 382 F.3d
at 765. Further, MMSD conceded at oral argument that
if Friends were able to make this required showing, its
position on the relevance of post-stipulation SSOs might
be different—and the evidence might be relevant. As to
admissibility, in contrast to weight, as we have
indicated, we think a clear showing should be required
to support exclusion.
  Contrary to Friends’ contention, the district court did
consider the post-stipulation SSOs. It found, in reliance
on evidence from the Southeast Wisconsin Regional
Planning Commission (SEWRPC), that the May 2004
storms were in excess of the five-year design storm (and
therefore that the SSOs would not have constituted viola-
tions of the permit). 2007 WL 4410402, at *10. Additionally,
the court recognized that MMSD’s modeling showed
that the May 2004 SSO would have been prevented by
the improvements required by the 2002 Stipulation. Id. This
modeling is explained in detail in MMSD’s briefing. See
Appellee’s Br. at 21-24 (also citing to an audit report
prepared for Milwaukee Mayor Tom Barrett that sup-
ports MMSD’s conclusion). The district court appears to
have found MMSD’s evidence persuasive, and it is not
our function to re-weigh the evidence.
  In contrast, Friends offered no evidence, other than the
opinion of Mr. Burney (discussed below),5 much less any
hydraulic modeling or other quantitative evidence, in

5
  Burney characterized the conclusions of the SEWRPC report
as “fairly bogus.” Reply at 9.
No. 08-1103                                                21

support of their argument that the post-stipulation SSOs
were proof that the 2002 Stipulation was not diligent. They
also did not attempt to rebut MMSD’s showing that the
May 2004 SSO would have been contained had the 2002
Stipulation projects been completed. Therefore, Friends
did not fulfill their burden to show that those SSOs were
of decisive weight, even if properly admissible. In the
case before us, the district court did not abuse its discre-
tion by considering the post-stipulation SSOs, and having
considered them, it was not clearly erroneous for the
court to decline to give them decisive weight. As we
have indicated, it is not our role to perform this
analysis again.

    2.   The State’s post-stipulation opinions
  Friends’ second main point is that the district court
should have disregarded MMSD’s modeling evidence, the
SEWPRC report and the fact that one of the pumps was
not working, and instead deferred to Burney’s opinion
and the fact of the initiation of the 2005 enforcement action.
  Burney said that the overflows that occurred in late
May of 2004 “were beyond what would have been con-
trolled by the projects contained in the 2002 Stipulation.”
Transcript of Hearing of August 24, 2005, at 205. The
district court declined to give conclusive weight to
Burney’s testimony because, it said,
    Burney admitted that he did not do any mathematical
    modeling to determine how the system responded to
    the storm. He further admitted that the capacity
    expansions had not been built as of May 2004; that
22                                               No. 08-1103

     many other provisions of the Stipulation had dead-
     lines beyond May of 2004; that he had not analyzed
     the amount of flow that would have been reduced
     by the [inflow and infiltration] projects included in
     the Stipulation; that he had not analyzed the impact
     of the CMOM program called for in the Stipulation;
     and that he had not analyzed how the inoperability of
     one deep tunnel pump affected flow at the time of
     the 2004 storm.
2007 WL 4410402, at *10.
  We did instruct the district court to “give some deference
to the judgment of the State.” FMR I, 382 F.3d at 765. We
did not, however, instruct it to give conclusive deference
to the judgment of one state official without regard to
other evidence. In fact, we instructed the court to engage
in a detailed analysis of the 2002 Stipulation and not to
take the parties’ statements at face value. Id. at 760, 765.
The district court’s assessment of the reliability of Mr.
Burney’s testimony was therefore not clearly erroneous.
   It was also not clearly erroneous for the district court to
hold that the fact that the State initiated a new enforce-
ment action did not prove a lack of diligence with respect
to the 2002 Stipulation. The district court noted our state-
ment in FMR I that “[i]f any additional operational or
management problems have become evident since the
2002 Stipulation, the State and MMSD are entitled by the
Act to an opportunity to resolve them before the plain-
tiffs may jump into the fray.” 382 F.3d at 762. The fact
that a new enforcement action has been initiated does
not logically compel the conclusion that the 2002 Stipula-
No. 08-1103                                                 23

tion was not diligent, or even that the State held the
belief that it was not.6
  Moreover, Friends’ argument that we should give
conclusive deference to the opinion of the State would
now require that we defer to its recent statements in the
2008 Stipulation, which resolved the 2005 enforcement
action. Those statements include the following: “the State
now believes that because of the steps taken and planned
by MMSD pursuant to the 2002 Stipulation there is no
realistic prospect that future permit violations due to
the same underlying causes addressed by the 2002 Stip-
ulation will continue after the planned improvements
are completed.” Stipulation and Order for Judgment at 3.
This formulation appears to deliberately track our lan-
guage in FMR I. 382 F.3d at 765.
  When asked at oral argument why the 2008 Stipulation
does not eviscerate their argument, Friends cited to
Board of Trustees of Knox County Hosp. v. Shalala, 135 F.3d
493 (7th Cir. 1998), for the proposition that “[a]s a general
matter, the case for judicial deference is less compelling
with respect to agency positions that are inconsistent with
previously held views.” Id. at 502 (quoting Pauley v.
BethEnergy Mines, Inc., 501 U.S. 680, 698 (1991)). Curiously,
Friends fail to recognize that this proposition would also
apply to Burney’s earlier opinions, weakening them as
much as it might weaken the 2008 Stipulation. Regardless,

6
  Friends do not appeal the district court’s decision admitting
the summons and complaint for the sole purpose of showing
that a new enforcement action had been initiated.
24                                              No. 08-1103

we see the 2008 Stipulation as further support for the
district court’s not unreasonable determination that
Burney’s opinions were unsupported and not due con-
clusive deference.7

    C. Evidentiary Rulings
  Friends have repeatedly faulted the district court for
failing to consider a purported conclusion by the EPA that
the 2002 Stipulation would not ensure compliance with
the Act. They do so again here. The statements at issue
are found in a November 3, 2004 letter from Jo Lynn
Traub of the United States EPA to Amy Smith of the
WDNR, in which Traub was following up on a meeting
between the two organizations on August 13, 2004. Friends
seize on the words used by Traub and argue that they
show that “EPA concluded that the 2002 Stipulation
would not result in compliance with the Act, [but] the
District Court . . . refused to allow that conclusion
into evidence.” Appellant’s Br. at 20. It seems that the
language that Friends are focusing on is the following,
taken from the last page of the letter:
     The 2002 Stipulation with MMSD focused largely on
     reducing impacts of SSOs through increasing storage

7
  Friends also argue that the 2008 Stipulation is undermined
by statements made by the EPA in letters that Friends sub-
mitted to this court. This argument is not persuasive because
the EPA’s statements do not relate to the mandate of the
district court or to the questions presented to this court.
No. 08-1103                                                        25

      capacity in the tunnel system. At our meeting, you
      indicated that had all the additional controls required
      by the stipulation been completed, the May 2004
      overflow events would still have occurred. We recom-
      mend that MMSD be required both to take a more
      active role in monitoring and controlling the volumes
      of flow entering their system from the satellites, and
      to implement CMOM in their separated collection
      system earlier than scheduled in the stipulation. . . .
Appellant’s Separate Appendix at 117.
  Friends moved to admit this letter into evidence twice
during the district court’s evidentiary hearing and the
district court denied the motions. They then moved the
court to reconsider that ruling, arguing that the letter is
admissible as a public record under Federal Rule of
Evidence 803(8)(A) as setting forth the “activities” of the
EPA.8 The district court denied that motion as well,

8
    This hearsay exception provides,
        The following are not excluded by the hearsay rule, even
      though the declarant is available as a witness . . .
          (8) Public records and reports. Records, reports, state-
          ments, or data compilations, in any form, of public
          offices or agencies, setting forth (A) the activities of the
          office or agency, or (B) matters observed pursuant to
          duty imposed by law as to which matters there was a
          duty to report, excluding, however, in criminal cases
          matters observed by police officers and other law
          enforcement personnel, or (C) in civil actions and
                                                       (continued...)
26                                                   No. 08-1103

holding that the letter did not qualify as a public record
under the hearsay exception in Rule 803(8), and that
“[e]ven if Exhibit 26 fell within Rule 803(8), it is not
sufficiently reliable or trustworthy to overcome the rule
against admission of hearsay evidence.” District Court
Order, Appellant’s Short Appendix at App. 020-22.
  “We . . . review the district court’s evidentiary rulings
only for abuse of discretion, and we ‘will not reverse
unless the record contains no evidence upon which the
trial judge rationally could have based his decision.’ ”
Wasson v. Peabody Coal Co., 542 F.3d 1172, 1175-76 (7th
Cir. 2008) (quoting United States v. Savage, 505 F.3d 754,
760 (7th Cir. 2007)). The district court had a reasonable
basis for excluding this letter as failing to satisfy the
requirements of Rule 803(8). It does not appear to
support Friends’ assertion that it shows that EPA had
concluded that the 2002 Stipulation would not bring
MMSD into compliance with the Act or that EPA agreed
with WDNR’s conclusion. This was confirmed at oral
argument by counsel for the EPA, who said that the
Traub letter was only repeating the opinion of the WDNR
and not stating an opinion of the EPA. Therefore, the

8
    (...continued)
           proceedings and against the Government in criminal
           cases, factual findings resulting from an investigation
           made pursuant to authority granted by law, unless
           the sources of information or other circumstances
           indicate lack of trustworthiness.
Fed. R. Evid. 803(8).
No. 08-1103                                              27

district court was within its discretion when it found
that the letter did not set forth the activities of the EPA.
Moreover, even if any abuse of discretion had occurred,
it would have been harmless.

                     III. Conclusion
  For the foregoing reasons, we A FFIRM the judgment of
the district court.

                           2-13-09