A U.S. District Court for the Western District of Wisconsin recently approved a joint stipulation dismissing a citizen’s suit filed for alleged violations of the Clean Water Act. In Domino, et al. v. Didion Ethanol, LLC, environmental groups filed a citizen suit against Didion Ethanol, LLC, a large producer of approximately 50 million gallons per year of fuel-grade ethanol distilled from corn.
The environmental groups alleged that Didion had repeatedly violated limits set in its state-issued NPDES permit for certain water treatment additives, total suspended solids as well as the prohibition on the discharge of “floating solids.” While Didion did not admit or deny that these discharges occurred, it argued – after the lawsuit was filed – that it eliminated all discharges by implementing a state-of the-art “Wastewater Reuse System.” Despite the company’s efforts, the district court found that the citizens had standing to sue as some of the violations were ongoing as of the date the complaint was filed and before the reuse system came online.
With liability for the alleged violations all but certain, Didion agreed to pay $65,000 to various community projects “to remediate, improve and protect” the water quality in the communities where the citizens reside, and $185,000 to reimburse the citizens for the cost of their reasonable attorneys’ fees and costs of litigation. The citizens, on the other hand, agreed to dismiss their lawsuit with prejudice. In addition to the $250,000 price-tag to settle the citizen’s suit, Didion paid approximately $525,000 to settle enforcement actions filled by the Wisconsin Attorney General’s Office for the same Clean Water Act violations alleged in the citizen’s suit.
The Clean Water Act, like many federal environmental statutes, imposes strict liability for the release of pollutants – meaning that fines and penalties may be imposed even though violations occurred without fault. Moreover, the evidence that is required to prevail is not difficult to establish. Often times, sufficient evidence may be found in discharge monitoring reports created and maintained by the permit holders. Moreover, the Act entitles successful citizen suit plaintiffs to recover their attorneys’ fees and litigation costs. The Didion litigation highlights the exposure to these often unforeseen litigation risks.
Lessons learned. About 20 years ago, an environmental group (the Atlantic States Legal Foundation) routinely made sweeps of the Midwestern environmental regulators’ files to check for industrial dischargers’ compliance. Those sweeps led to multiple Clean Water Act lawsuits in which Atlantic States sought its legal fees and penalties for routine permit exceedances. These suits were so frequent and successful that a lawyer was quoted in the Wall Street Journal saying that they “were like shooting fish in a barrel.” The Didion case suggest that such suits may be making a come back.
For more information about defenses to citizen suits, please contact Frank Deveau, Brad Sugarman, or any member of Taft’s Environmental Practice Group.