By Robert W. George
US corporations and farmers have cheered the more “business-friendly” approach recently adopted by the Environmental Protection Agency (EPA) but any relief they are experiencing will be short-lived if the plaintiff’s bar gets its way.
Emerging data suggests that some plaintiffs’ firms that have historically targeted corporations for securities and false advertising lawsuits have settled upon Clean Water Act Citizen Suits as their newest business model. One group of lawyers on the leading edge of this new trend is the Philadelphia-based firm of Brodsky & Smith. The firm’s “Environmental Enforcement Team” has filed numerous Citizen Suits, mostly in California, and reportedly served more than 140 “sixty day notices” on EPA and business owners in just the past three years. The damages being sought in these cases are significant including a request for a $200 million fine in the case of Lunsford v. Arrowhead Brass Plumbing (No. 16-cv-08373) still pending before the US District Court for the Northern District of California.
Since its passage in 1972, the Clean Water Act has authorized citizens to assist federal regulators in holding polluters accountable through private actions in federal court. Under Section 505, citizens can sue businesses that violate the Clean Water Act in certain instances. Before filing a citizen suit, the plaintiff must serve a sixty-day notice on the target business and EPA identifying the violations that will be alleged in the lawsuit. EPA can effectively preempt the Citizen Suit by bringing its own enforcement action based on the information in the notice but that typically does not occur. If EPA does not bring its own lawsuit within the sixty day period, the citizen is free to file suit. Any penalties assessed against the defendant must be paid into the US Treasury, but, importantly, the Court can also order a losing defendant to pay attorney’s fees to the plaintiff’s firm that brought the case.
The Citizen Suit provisions of the Clean Water Act are not new. What has changed is that sophisticated plaintiff’s firms have recognized the scalability of this practice in the context of stormwater discharges and are capitalizing on the settlement pressure created by the Clean Water Act’s authorization for penalty amounts of up to $51,570 per day for each violation. The cases being pursued by these firms are not dependent upon catching a company pumping wastes into a waterway through a pipe or a more traditional point source. Instead, these cases target rain-induced discharges that are alleged to be in violation of "general permits” issued by states to regulate a broad range of conduct contributing to stormwater runoff rather than activities unique to a specific facility or site. If your company or farm produces as a byproduct of your operations any material that might qualify as a “pollutant” under the Clean Water Act, has sought coverage under a “general stormwater permit” (e.g., Industrial Permits or CAFO permits) and operates in an area that experiences significant rain events, you are a potential litigation target under this new approach. While not every Citizen Suit notice actually results in a high stakes lawsuit being filed, some do, and many companies are willing to pay settlement money to the plaintiff’s firms on disputed claims to avoid even the remote possibility of a much larger award in litigation.
These dynamics are the perfect ingredients for the type of scalable litigation practice many plaintiff’s firms depend upon to generate consistent revenues. Absent a repeal or modification of the Citizen Suit provisions of the Clean Water Act, which is highly unlikely, plaintiff’s firms across the nation may soon copy the playbook of firms like Brodsky & Smith. If that happens, businesses and farmers in your state could be targeted with these types of claims.
If your business or farming operation receives a sixty-day Citizen Suit notice under the Clean Water Act, our firm would welcome the opportunity to discuss strategies for responding to the threats such notices present.
The information provided above is created the Attorney Robert W. George of Friday, Eldredge & Clark, LLP. Robert’s focus consists of a multifaceted business litigation practice in both federal and state courts and includes defending clients against environmental and toxic tort claims, as well as commercial disputes or involving fraud, theft or unfair competition.
This is not a substitute for legal advice and should be considered for general guidance only. For more information or if you have further questions, please contact one of our attorneys.