June 01, 2019

Citizen Suit Trends in California: A Harbinger for the Future of Environmental Enforcement?

Tom Boer and Clare Ellis

It was widely anticipated that the Trump era would be marked by a surge in citizen suit enforcement of environmental laws, to fill a perceived “gap” in government-driven environmental enforcement. This article examines how environmental citizen suits have fared during the Trump era—with specific focus on the Resource Conservation and Recovery Act (RCRA), Clean Water Act (CWA), Endangered Species Act (ESA), and California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (more commonly referred to as “Prop 65”). California courts historically have been important testing grounds for environmental plaintiffs, but in recent years there is evidence that citizen plaintiffs may be beginning to encounter obstacles.

Ultimately, we posit that citizen suits against private companies (i.e., not against the U.S. Environmental Protection Agency (EPA) and other federal agencies) have gained little traction in recent years in both state and federal courts in California. In fact, many suits never survive beyond the dispositive motion phase of litigation. Perhaps surprisingly, data from EPA indicates that the number of citizen suits being pursued by environmental nongovernmental organizations (e-NGOs) against companies in California has declined in the first couple of years of the new federal administration. Various factors may be contributing to this phenomenon, including stringent enforcement of pre-suit notice requirements, citizen plaintiffs’ inability to allege sufficient facts to support their legal claims, increasingly restrictive standing requirements, a climate of mounting skepticism toward the purposes and motivations behind some of these suits, and, for some e-NGOs, a shift in priorities to pursuing claims against EPA (rather than against private companies directly). We examine why citizen suits may be starting to face headwinds in California courts and how an unanticipated “California Effect” of increased citizen suit litigation may ultimately be the establishment of a higher bar for plaintiffs on threshold issues.

Every major federal environmental statute—including RCRA, the CWA, and the ESA—allows citizen suits to be filed in the appropriate federal district court against “any person” who is “alleged to be in violation” of permits, limitations, regulations, orders, or other types of requirements issued under these statutes. 42 U.S.C. § 6972(a)(1)(A) (RCRA); 33 U.S.C. § 1365(a)(1) (CWA); 16 U.S.C. §1540(g)(1)(A) (ESA). The district courts have jurisdiction under these statutes to enforce the requirement alleged to be violated via injunctive relief and, under authorities granted in some statutes like the CWA, to impose civil penalties. These statutes also allow citizen plaintiffs to recover attorneys fees in the event the suit is successful in whole or in material part. RCRA contains an additional provision allowing citizen suits to be brought against “any person” who “has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.” 42 U.S.C. § 6972(a)(1)(B). In addition to imposing civil penalties, in these “imminent and substantial endangerment” (ISE) actions, the court may impose broad injunctive relief to “restrain” any person who has contributed to the activity causing the ISE. 42 U.S.C. §6972(a)(1). Citizen plaintiffs may also sue government officials charged with implementation of the statute to compel performance of a nondiscretionary duty. In the cases of RCRA and the CWA, such suits are brought against the EPA Administrator. 42 U.S.C. § 6972(a)(2); 33 U.S.C. § 1365(a)(2). In the case of the ESA, such suits are brought against the secretaries of the Department of the Interior or the Department of Commerce. 16 U.S.C. §1540(g)(1)(C). (An evaluation of citizen suits against the federal government—associated with implementation of the statute, as opposed to enforcement—is outside the scope of this article.)

California has several environmental statutes allowing for citizen enforcement. As a counterpoint to the analysis of federal citizen suits, we look to California’s Prop 65, which requires businesses to provide warnings about the risks of exposures to certain chemicals. The statute allows citizen enforcement of the warning requirements via suits brought “in the public interest” if certain requirements are met. Cal. Health & Safety Code § 25249.7(d). Among these requirements is the obligation to provide a certificate of merit to the state attorney general (and the district attorney, city attorney, or prosecutor in whose jurisdiction the violation is alleged to have occurred) and to the alleged violator prior to filing suit. The certificate of merit must represent that the Prop 65 plaintiff has consulted with one or more persons of appropriate experience or expertise who has reviewed facts, studies, or data regarding exposures to the chemical that is the subject of the action and that, based upon the information reviewed, the person executing the certificate believes there is a reasonable and meritorious basis for private action. Penalties for Prop 65 can be as high as $2,500 per violation per day, and Prop 65 plaintiffs may also seek attorneys fees, costs, and injunctive relief.

Have Citizen Suits Increased in California During the Trump Administration?

Interestingly, the data is mixed as to whether citizen suits in California have increased since President Donald Trump took office. Unquestionably, Prop 65 litigation is on the rise: a total of 5,738 pre-suit notices were filed with the state attorney general in the approximately two years since the beginning of the Trump administration on January 20, 2017, as compared to 2,959 such notices filed during the two-year period immediately preceding Trump’s inauguration. See State of Cal. Dep’t of Justice, Proposition 65 Enforcement Reporting, available at https://oag.ca.gov/prop65 (last visited May 20, 2019). Yet data indicates that the increase in Prop 65 cases does not correlate to the change in the federal administration.

One reason is likely a substantial reworking of the clear and reasonable warning regulations—violations of which are nearly always the basis for Prop 65 citizen suits—and which became effective in August 2018. In addition, data provided by EPA Region 9 in response to a Freedom of Information Act request submitted for this article suggests an overall decline in the number of citizen suit notices sent to California alleged violators during the Trump administration. While EPA does not maintain citizen suit notice data for ESA suits, Region 9 provided the following tabulation of all CWA and RCRA citizen notices received by the agency since January 1, 2015, concerning alleged violations at facilities in California:

Year
Number of RCRA 60-Day Notice Letters for California Facilities Number of CWA 60-Day Notice Letters for California Facilities
2015 6 181
2016 30 108
2017 54 63
2018 18 44
2019 0 2

It is similarly difficult to pinpoint the cause of the decline in CWA citizen suit notices. Ostensibly, this decline is attributable to a shift in federal enforcement priorities and an increasing focus by EPA under the current administration on compliance assistance rather than enforcement. Another possibility is the adoption of California’s new Stormwater Industrial General Permit (IGP) in July 2015. See State Water Resources Control Board Order 2014-0057-DWQ. This action, which preceded the Trump administration by several years, may well have interrupted the trend in stormwater citizen suits; either due to an increased focus on compliance by the regulated industry, or by uncertainty within the plaintiffs bar over how citizen actions would fare under the new requirements. The new permit replaced a nearly 20-year-old stormwater IGP that had been relied upon for years for citizen suit claims. The first annual reports under the new IGP were due on July 15, 2016, a date that closely tracks the turning point for the decline in CWA citizen suit notices. Still another possibility is that many of the e-NGOs that had been pursuing CWA citizen suits against private companies have shifted their focus and resources to pursuing claims directly against EPA in an effort to challenge the policies being pursued by the new administration. Time will tell whether this decreasing trend is only temporary or represents a systemic shift in the pursuit of these types of suits in California.

Insufficient Notice: A Jurisdictional Defect

The requirement of pre-suit notice has been a significant impediment to citizen suits brought in California in recent years, due to the fairly exacting standards that courts have imposed to ensure adequate notice to the violator. RCRA, the CWA, and the ESA all require notice to be provided either 60 or 90 days prior to filing suit to the alleged violator, to the state in which the alleged violation occurred, and to the EPA administrator or secretary of the interior, depending upon the type of action being filed. Similarly, California’s Prop 65 requires 60-day notice to the alleged violator, to the state attorney general, and to the district attorney, city attorney, or prosecutor in whose jurisdiction the violation is alleged to have occurred prior to commencing suit. Cal. Health & Safety Code § 25249.7(d)(1). See Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America, 150 Cal. App. 4th 953, 963–64 (Cal. Ct. App. 2007) (explaining in the Prop 65 context that “[n]otice serves dual purposes. It provides the public prosecutor the means to assess whether to intervene on behalf of the public. It further affords the accused an opportunity to forestall litigation by settling with the plaintiff or by curing any violation.”).

Federal courts in California have held citizen plaintiffs to fairly demanding standards for pre-suit notice, reflecting the purpose of the notice requirements, which is to “[a]t a minimum . . . provide sufficient information . . . so that the [notified parties] could identify and attempt to abate the violation,” thus rendering the suit unnecessary. City of Imperial Beach v. Int’l Boundary and Water Comm’n, 2018 WL 6504081 at *7 (S.D. Cal. Dec. 11, 2018). Because the notice requirement is jurisdictional, “[a] failure to strictly comply . . . acts as an absolute bar to bringing suit under the ESA.” Southwest Ctr. for Biological Diversity v. U.S. Bureau of Reclamation, 143 F.3d 515, 520–21 (9th Cir. 1998). A notice is not, however, “required to list every specific aspect or detail of every alleged violation. Nor is the citizen required to describe every ramification of a violation.” City of Imperial Beach, 2018 WL 6504081 at *7. Where a plaintiff’s complaint ultimately alleges multiple violations, notice may be deemed sufficient where it specifies violations that are “sufficiently similar” to those in the complaint. Id.

In an opinion issued late last year, a federal judge in the Southern District of California considered the adequacy of notice provided by the San Diego Unified Port District and the California cities of Imperial Beach and Chula Vista in a CWA and RCRA citizen suit brought against the U.S. Section of the International Boundary and Water Commission. The alleged violations related to discharges into the Pacific Ocean from a wastewater treatment plant near the international boundary between San Diego, California, and Tijuana, Mexico. The plaintiffs’ notice letter focused on discharges from wastewater collectors and flood control conveyances at the plant, alleging that “nearly continuous unpermitted discharges” had contributed to violations of both RCRA and CERCLA. City of Imperial Beach, 2018 WL 6504081 at *8.

While the court found the plaintiffs’ notice letter sufficient to cover highly concentrated flows created by sediment berms constructed after the notice letter was sent, the court dismissed claims related to waste dispersed by wind, finding that they were outside of the scope of the notice letter. The complaint had alleged that waste transported from the plant’s detention basins using bulldozers and other equipment was deposited into the environment, where it dried and was “mobilized by wind and vehicular traffic, creating inhalation exposure and re-deposition of dust on vegetation that may subsequently be consumed by wildlife.” It also alleged that waste was dispersed by wind after water evaporated from plant facilities, leaving behind dried waste. The court found that these allegations related to a “different kind of violation” than those in the notice letter and that, unlike the allegations relating to the discharge of wastewater from the flood control conveyances and canyon collectors at the facility, defendants did not have sufficient notice that their activities had resulted in the dispersal of waste by wind. As a result, the court did not have jurisdiction over the plaintiffs’ claims.

The case reflects the strength of the notice requirement as a bar to jurisdiction, and it is one of several cases issued in the past few years where California courts have foreclosed citizen suit claims for lack of sufficient notice to the would-be defendants. See, e.g., Kinney v. Three Arch Bay Cmty. Serv. Dist., 723 F. App’x 553 (9th Cir. May 23, 2018); Friends of River v. Nat’l Marine Fisheries Serv., 293 F. Supp. 3d 1151 (E.D. Cal. Feb. 21, 2018).

Insufficient Facts to Support a Claim

Perhaps an even greater obstacle to successful citizen suits in recent years is the requirement to plead facts sufficient to state a claim so as to withstand dismissal under Federal Rule of Civil Procedure (FRCP) 12(b)(6). In assessing the sufficiency of a complaint filed under the citizen suit provisions of federal environmental statutes, courts apply the familiar standard that to survive a motion to dismiss, a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.”

Courts in California have adhered closely to these fundamental principles of pleading. In the RCRA context in particular, courts have dismissed complaints alleging ISE where the plaintiff failed to plausibly allege that the defendant was a “contributor” to disposal of the waste at issue or that an ISE in fact existed. In Ingalls v. AMG Demolition & Environmental Services, for example, a federal judge in the Southern District of California considered a RCRA ISE claim against developers of a residential construction project who allegedly dumped solid waste from the project onto the plaintiff’s property. 2018 WL 2086155 (S.D. Cal. May 4, 2018). The court granted the defendants’ motion to dismiss the RCRA claim, finding that the complaint did not plausibly allege that the defendant was a “contributor” to the disposal of waste onto the property or that ISE existed.

To state a plausible claim for RCRA “contributor” liability, a plaintiff must allege that the defendant was “actively involved in” or “ha[d] some degree of control over the waste disposal process.” Ingalls, 2018 WL 2086155 at *3. In Ingalls, the plaintiff pled that defendants only “contributed to the generation, handling, storage, treatment, transportation, and disposal” of the waste at issue, but failed to plead facts that would show that the defendants played an “active role with a more direct connection to the waste,” as would have been necessary to establish their “contributor” status. As pled, the court found that the plaintiff’s allegations were “nothing more than ‘threadbare recitals of the elements of a cause of action, supported by mere conclusory statements’” that could not withstand a motion to dismiss.

Pleading issues may be difficult for citizen plaintiffs to cure by simply amending the complaint. While a party may amend a pleading “as a matter of course” within 21 days of service, in all other cases a pleading may be amended only with the opposing party’s written consent or the court’s leave. FRCP 15(a). Leave may be denied where amending the complaint would be futile, or the amended complaint would still be subject to dismissal. See, e.g., Franco v. City and Cty. of San Francisco, 2012 WL 3010953 (N.D. Cal. 2012). In California Environmental Protection Association v. Sonoma Soil Builders, for instance, the court denied the plaintiff’s motion to amend its complaint to add a new defendant because that defendant’s operations at the site that was the subject of the alleged violations had ended. 2018 WL 1242252 (N.D. Cal. 2018). As the court explained, a citizen suit may be brought only for “continuous or intermittent,” and not wholly past, violations. Because the plaintiff could not allege facts supporting continuing CWA violations by the defendant it sought to add to the complaint, the court denied leave to amend on the basis that amendment would be futile.

A further obstacle to curing pleading issues by amendment is that plaintiffs in citizen suits are limited to pleading only facts and allegations that were included in the pre-suit notice. As noted above, a plaintiff will not be able to add allegations and facts into an amended complaint in an effort to navigate a motion to dismiss if the claims were not clearly articulated in the original notice letter. In addition, plaintiffs are precluded from shoring up deficient pleadings using facts discovered after the notice letter was sent. Where a plaintiff is unable to access sufficient facts to support his or her claims, or where the necessary facts become known after service of the pre-suit notice letter (and were thus not included in the notice), the suit is likely vulnerable to dismissal under FRCP 12(b)(6).

Standing Requirements

Citizen plaintiffs in federal courts must satisfy traditional Article III standing requirements of injury, causation, and redressability. This has proven to be an insurmountable challenge for some plaintiffs where they are unable to establish a connection between the violation alleged and any particular harms that could be redressed through the litigation. In a recent CWA citizen suit, for example, a judge in the Southern District of California dismissed a counterclaim by the chemical company Monsanto against the City of San Diego on the basis of standing. City of San Diego v. Monsanto Co., 334 F. Supp. 3d 1072 (S.D. Cal. 2018). The city had originally initiated the action, alleging that polychlorinated biphenyl (PCB) contamination of the San Diego Bay and municipal stormwater system had created a public nuisance. Monsanto counterclaimed under the CWA citizen suit provision, alleging that the city’s own discharges into the San Diego Bay had contributed to the PCB contamination in violation of the CWA. 334 F. Supp. 3d at 1078. Monsanto alleged that, as a result of the city’s discharges, it had incurred various costs related to investigation and analysis of contamination sources in the Bay. It claimed as the harm sought to be redressed by its counterclaim that “the City’s PCB-laden discharges increase[d] [Monsanto’s] potential liability” in the action before the court and its litigation exposure generally.

The court dismissed Monsanto’s CWA counterclaim on standing grounds, however, finding that its allegations of economic harm and contingent liability were insufficient to satisfy Article III standing requirements. Expenditures related to investigation of the sources of PCB contamination in the Bay, while necessary to address the contamination, were not sufficient to establish “significant immediate injury” that was “directly” affecting Monsanto. The court thus dismissed Monsanto’s CWA counterclaims for lack of subject matter jurisdiction.

Actions brought under California’s Prop 65 may also encounter difficulties related to standing, particularly since plaintiffs often allege Prop 65 violations as a basis for claims under California’s Unfair Competition Act (UCA), Cal. Bus. & Prof. Code § 17200 et seq. The UCA requires, with respect to standing, that plaintiffs bringing section 17200 claims be able to demonstrate injury in fact or losses of money or property as a result of the alleged unfair competition. Cal. Bus. & Prof. Code § 17204.

Climate of Skepticism

Questionable practices. Yet another significant barrier to environmental citizen suit litigation in recent years is the increasing climate of skepticism regarding plaintiffs’ motivations and the merits behind such suits. Citizen suit provisions allow individuals or groups to act as “private attorneys general” to enforce environmental laws, and accordingly, “the purpose of such a suit is to protect and advance the public’s interest” in the environment “rather than to promote private interests.” United States ex rel. Darian v. Accent Builders, Inc., 2005 WL 8161697 at *5 (C.D. Cal. 2005). California has been at the forefront of CWA citizen suits—particularly for alleged stormwater violations—for years. Industry stakeholders have been concerned that an increasing percentage of these citizen suits effectively amount to a shakedown. This concern is referenced, in a recent Forbes article: “As the number of citizen suits increase, so too does the risk of abusive litigation––lawsuits motivated not by environmental protection but by the desire to shakedown businesses for monetary settlements and attorneys’ fees. . . . One especially easy theory to advance in citizen-suit litigation is unlawful stormwater pollution. Stormwater regulations are exceedingly broad, and almost any business . . . is vulnerable to a lawsuit. In many cases, attorneys’ fees can far exceed the damage from the alleged violations, leading companies to settle rather than litigate.” Marc Robertson, Environmental Ambulance Chasing: DOJ Urges Court to Scrutinize Clean Water Citizen-Suit Settlements, Forbes, June 26, 2018.

In the past, the government has not generally agreed with these concerns. In 2011, for example, the California State Water Resources Control Board evaluated CWA citizen suit enforcement and concluded that the “limited information collected . . . indicates that citizen suit enforcement in California fulfills the role contemplated by the Clean Water Act. For the most part, citizen enforcement does not conflict with the enforcement priorities of the regional water boards, but instead acts as an independent complement to the enforcement activities of the Water Boards.” Reed Sato, director, SWRCB Office of Enforcement, Citizen Suit Enforcement Under the Federal Clean Water Act (May 2011).

Nonetheless, there are indications that courts and public officials are beginning to raise concern that citizen suit litigation is increasingly being used as a vehicle to enrich plaintiffs’ attorneys rather than to seek redress for environmental harms. For example, the U.S. Department of Justice (DOJ) recently filed a “statement of concern” regarding a consent decree proposed in settlement of a CWA citizen suit brought in federal district court in the Central District of California. See United States’ Statement of Concern and Recommendation that Plaintiff File a Motion to Enter the Proposed Consent Decree, Lunsford v. Arrowhead Brass & Plumbing LLC, No. 2:16-cv-08373 (C.D. Cal. May 18, 2018). DOJ explained that under the proposed consent decree, the plaintiff would be paid $15,000 “for claimed services to be rendered as an environmental ‘monitor’” and his attorneys would be paid $76,500. It noted that the law firm representing the plaintiffs in the case had filed 158 notice-of-violation letters against various other alleged violators in the previous two years. According to DOJ, “[m]any of the claims had been resolved out of court, with little or no oversight, and the firm has received almost $700,000 in CWA-related attorneys’ fees over a two-year period.” DOJ had “general concerns” with the firm’s practices, including that its plaintiffs tend to be “repeat players in [a] high-volume practice,” that plaintiffs received direct payments from alleged violators, and that the settlements failed to ensure ongoing compliance monitoring by qualified personnel (despite the fact that monitoring money was repeatedly and expressly directed to individual plaintiffs in the suits). DOJ found little indication in the consent judgements negotiated by the firm that the suits sought to advance the goals of the CWA.

In response, the court required plaintiffs to file a motion to enter the proposed consent decree. The plaintiffs’ motion defended the particular consent decree proposed in Lunsford, and its practices generally, in response to the DOJ Statement. Despite DOJ’s opposition to the motion, the court entered the consent decree, explaining that “[w]hile the Court shares the Government’s concern about collusive settlements, the Court finds that this [proposed consent decree] is fair, reasonable, and equitable, and does not violate the law or public policy.” Civil Minutes (In Chambers)—Court Order, Lunsford v. Arrowhead Brass & Plumbing LLC, No. 2:16-cv-08373 (C.D. Cal. Aug. 3, 2018). While this particular case may be an outlier, it reflects DOJ’s use of its role in citizen suit settlements to inquire into the motives behind the suits and the manner in which they are conducted.

Dubious outcomes. The public and government response to the Prop 65 cases filed against Starbucks Corporation and other coffee sellers illustrates widespread concerns about the purpose of the statute’s warning requirements and the appropriateness of warnings for commonplace products where the risks to consumers are not well-substantiated. The lawsuit against Starbucks and others, filed in 2010, alleged Prop 65 violations for failure to provide warnings related to acrylamide, a chemical that is a natural by-product of the coffee bean roasting process (and commonly found in bread, potato chips, and other cooked food products). In March 2018, after a bench trial, a superior court judge issued a proposed statement of decision, concluding that the defendants had failed to meet the burden of proof on their defenses, including that acrylamide poses no “significant risk” for cancer, as defined under Prop 65. Proposed Statement of Decision After Trial (Phase II), Council for Educ. and Res. on Toxics v. Starbucks Corp., No. BC435759 (Los Angeles Sup. Ct., Mar. 28, 2018). As a result of the ruling, sales of coffee in California would require the establishment to provide customers with a clear and reasonable warning that coffee contains a chemical “known to the State of California to cause cancer.” The editorial board of the Los Angeles Times responded to the ruling by characterizing the result as “an unfortunate outcome of a ridiculous lawsuit by an opportunistic attorney that never should have been filed.” L.A. Times Editorial Board, Coffee Isn’t Going to Kill Anyone. California Needs a Smarter System to Let Us Know What’s Dangerous, L.A. Times, June 19, 2018.

The federal government also reacted negatively to the outcome of the citizen suit. The Food and Drug Administration released a statement raising “deep[] concern[] . . . [about] requir[ing] coffee sold in California to be labeled with a cancer warning because of the presence of . . . acrylamide. . . . [R]equiring a cancer warning on coffee, based on the presence of acrylamide, would be more likely to mislead consumers than to inform them.” Statement from FDA Comm’r Scott Gottlieb, M.D., on FDA’s Support for Exempting Coffee from California’s Cancer Warning Law (Aug. 29, 2018).

Shortly after the ruling, the California Office of Environmental Health Hazard Assessment (OEHHA) (the state agency charged with Prop 65 regulation) responded by proposing a regulation to establish that exposures to Prop 65–listed chemicals in coffee, such as acrylamide, “that are produced as part of and inherent in the processes of roasting coffee beans and brewing coffee” pose no significant risk of cancer. See OEHHA, Proposed Regulation, Exposures to Listed Chemicals in Coffee Posing No Significant Risk (July 15, 2018). OEHHA then took an unusual step of seeking to remove the superior court judge that issued the March 2018 ruling from a related injunction case, citing a “perception of prejudice and lack of impartiality.”

Higher Bar on Threshold Issues Going Forward?

Growing concerns about the merits and motivations behind citizen suits brought under various federal and state environmental statutes create the potential for California courts to impose a higher standard for such suits in the future. These concerns may mean that courts, the public, and agencies charged with enforcing the statutes in question will view citizen suits with increasing scrutiny, particularly with respect to threshold issues such as notice, standing, and whether the factual allegations are sufficient to state a claim for relief.

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Tom Boer and Clare Ellis

Mr. Boer is a partner and Ms. Ellis an associate in the San Francisco office of Hunton Andrews Kurth LLP. They may be reached at jtboer@hunton.com and cellis@hunton.com, respectively.