Before a Clean Water Act (CWA) citizen suit complaint can be filed, the plaintiff is required to send the alleged violator a 60-day notice letter that reasonably outlines the alleged violations. The 60-day notice period is a critical time for defense counsel to evaluate the case and begin to put in place a defense strategy. This article suggests some priorities for defense counsel who has just received a 60-day notice letter.
Evaluate your client’s compliance. Your first action should always be to evaluate whether your client is in full compliance with the CWA and any applicable National Pollution Discharge Elimination System (NPDES) permits. This should be an in-depth, on the ground evaluation, and not simply a high-level paper review. Often, we encourage clients to have independent consultants perform a compliance review to provide an unbiased, unsugarcoated analysis.
If your client is in compliance then you should paper the record to that effect, including providing a detailed response to the notice letter and perhaps releasing any third-party auditor’s findings. You should be ready to make the case demonstrating compliance before the plaintiffs are permitted to file a complaint. Indeed, doing that may avoid costly litigation altogether.
Determining what to do when violations have occurred is more difficult. Typically, this happens when a notice letter alleges violations of effluent limitations for which a client has reported (i.e., admitted) a violation as required by its NPDES permit. If your client has admitted violations, or violations are otherwise plainly apparent, your defense strategy will likely need to focus on damage mitigation and bringing the facility into compliance. In the CWA context, putting your head in the sand is never a good defense strategy, particularly when violations are clear and obvious. It is an approach that will almost certainly drive up penalties. When facing clear violations ask yourself the following questions: What can the client do now to ensure that future violations do not occur? What can the client do in the next 60 days to demonstrate that it seriously intends to comply moving forward? What would a judge consider (in equity) to be a meaningful step towards compliance? Voluntarily moving into compliance often will result in lower long-term costs to the client (absent the need for cost prohibitive technology), even in the context of litigation.
Analysis of whether your client is in compliance with the CWA does not always lead to a black or white answer. Nonetheless, the notice period gives you a critical 60 days to learn the case, and in many instances make fairly good determinations of future liability. When compliance status is not entirely clear, you still have 60 days to get ahead of plaintiff’s counsel in assembling a record that puts your client in its best light.
Respond to the notice letter. Generally, a written response is a good idea. The reason for the 60-day notice period is to allow an alleged violator to come into compliance and avoid litigation, and citizen groups lack jurisdiction to enforce against wholly past violations. Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 59 (1987). In the Ninth Circuit, however, a plaintiff’s burden of proving that a violation is ongoing has been so minimized that Gwaltney’s prohibition on citizen suits for wholly past violations has become nearly meaningless. Given this, in the Ninth Circuit it is highly unlikely that you can cut off the court’s jurisdiction as a matter of law by demonstrating compliance before the end of the 60-day notice window. But demonstrating compliance can make the lawsuit appear misguided in the eyes of a future judge. A judge likely will hesitate to render significant penalties, or award substantial attorney fees, to a plaintiff that pursues litigation in the face of a shift into compliance.
Responding to the notice letter can also help you establish legal defenses in the future. If a claim is not reasonably identified in a 60-day notice letter, then a court lacks jurisdiction to hear the claim in a subsequent lawsuit. Few courts have strictly enforced the CWA’s notice requirement to require exact particularity, but all courts have required some level of reasonable notice of a plaintiff’s claims. In recent years, this notice requirement has been significantly eroded in the Ninth Circuit, to the point that plaintiffs are doing little more than reciting permit provisions without any supporting facts and then engaging in far-flung discovery to identify the particulars of their claims. Courts have endorsed this form of non-specific pleading, even where plaintiffs failed to reveal their claims until the summary judgement phase of litigation. A response letter is one way to try to force plaintiffs to detail their claims, and also may be used as evidence later to show that the plaintiff failed to properly notice particular claims and was engaged in hide-the-ball litigation.
Another important consideration in a written response is to build the record for a potential penalty hearing. While CWA penalties can accrue at a maximum rate of $54,833 per violation per day, the penalty amount will actually be determined by a court almost entirely based on open ended equitable factors. 33 U.S.C. § 1319(d). If your client has a compelling story to tell about why a violation occurred, why it will not occur again, and can demonstrate a diligent response to the notice letter, then documenting that story in a response letter can go a long way in limiting your client’s potential penalty liability. To this end, we encourage all response letters (whether you believe violations have occurred or not) to be written in anticipation that they will someday be exhibits in a damages hearing.
A response letter can also be key to setting the narrative of the case. In effort to drive up penalties, plaintiffs routinely attempt to portray industrial dischargers as careless destroyers of the natural environment. Ignoring these accusations only plays into the narrative that your client is recalcitrant. Demonstrating that your client is not a bad actor and building a counter narrative early in the case can be important in mitigating damages.
Consider the value of agency involvement. Whether there is value in having an enforcement agency involved is largely dependent on where and why the citizen group brought the case. In theory, the reason for the 60-day notice window is to allow state enforcement agencies to become involved. The CWA envisions that state agencies will take the lead as the primary enforcers of the CWA, and that citizen suits will be used as an enforcement tool only when state agencies fail to act. Gwaltney at 60. With this enforcement dynamic in mind, the CWA includes a diligent prosecution bar that prohibits citizen suits from being filed where an agency is diligently enforcing the CWA. 33 U.S.C. § 1365(b)(1)(B). Circuit courts are widely split on the reach of the diligent enforcement bar. The Ninth Circuit has consistently concluded that state enforcement statutes do not satisfy the CWA’s mandates, entirely foreclosing the diligent enforcement defense. Thus, enforcement actions in the states where we practice (Oregon and Washington) are not a deterrent to citizen plaintiffs, and indeed piggy-back lawsuits brought over the top of agency enforcement actions are becoming fairly regular occurrences.
Other circuits, including the First, Fourth, Fifth, and Seventh, have preserved the intent of the diligent prosecution bar, and agency involvement before a citizen suit is filed may be a defense to a citizen suit. In such jurisdictions any prior agency enforcement should immediately be highlighted in a response letter, and it may make sense to seek out agency involvement. Agency enforcement is generally preferable because it provides more certainty to defendants, results in faster resolution of the matter, typically results in lower penalties, and does not entail the risk of having to pay the opposing parties’ attorney fees. However, in the Ninth Circuit getting an agency involved after receiving a notice letter is rarely advantageous, because you are opening the client up to a double penalty.
One situation, even in the Ninth Circuit, where it is important to get agencies involved are cases where citizens are attempting to force a category of previously unpermitted facilities to obtain NPDES permits. In our experience, such facilities are generally relying (rightly or wrongly) on an agency’s representation that a permit is not needed. This type of litigation can often be critical to the future operations of entire industries, and such cases often involve key legal interpretation issues related to exceptions in the CWA. See, e.g., Decker v. Nw. Envtl. Def. Ctr., 568 U.S. 597 (2013). If your client is being sued for its reliance on an agency interpretation, it is critical to get the agency involved as soon as possible to defend its interpretation of the law.
Get on the ground and understand the operation. Many citizen suits allege violations of narrative provisions of NPDES permits, instead of reported effluent limitation violations. For example, citizens routinely allege failures to comply with permit provisions that require facility inspections, equipment cleaning, material handling procedures, and pollution prevention plan drafting. Defending this type of CWA claim requires a detailed understanding of your client’s operations, and what constitutes compliance is often much fuzzier than in the typical effluent limitation violation case. Time spent gaining an understanding of how your client complies with narrative permit provisions is critical in enabling you to explain to a court how compliance is occurring. When it comes to this type of claim, you should spend time identifying key documents and key witnesses well in advance of a complaint even being filed. Only after you fully understand your client’s operations and compliance program can you chart a proper defense strategy, and thus we recommend this type of field learning occur as early as possible.
In conclusion, the 60-day notice period is a critical preparation period for your client’s defense against a CWA citizen suit. When this period ends you, as defense counsel, should be fully apprised of the strengths and weaknesses of your case. Is your client in compliance? Out of compliance? Is it unclear? If the client is not in compliance you need to have a plan in place to right the ship and minimize penalty exposure by demonstrating concrete steps that are being taken to ensure future compliance. If the client is in compliance, the potential plaintiffs should know how you reached that conclusion. Under no circumstance should your client set the notice letter aside and take a “wait and see” approach.