913 F.2d 64 (3rd Cir. 1990), 89-5831, Public Interest Research Group of New Jersey, Inc. v. Powell Duffryn Terminals Inc.

Docket Nº:89-5831, 89-5851, 89-5861.
Citation:913 F.2d 64
Party Name:PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, INC. and Friends of the Earth v. POWELL DUFFRYN TERMINALS INC., Appellant, United States Environmental Protection Agency, Intervenor. PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, INC. and Friends of the Earth, Appellants v. POWELL DUFFRYN TERMINALS INC. PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, INC
Case Date:August 20, 1990
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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913 F.2d 64 (3rd Cir. 1990)

PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, INC. and Friends of the Earth

v.

POWELL DUFFRYN TERMINALS INC., Appellant, United States Environmental Protection Agency, Intervenor. PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, INC. and Friends of the Earth, Appellants

v.

POWELL DUFFRYN TERMINALS INC. PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, INC. and Friends of the Earth

v.

POWELL DUFFRYN TERMINALS INC. Appeal of William B. REILLY, in his capacity as Administrator, United States Environmental Protection Agency.

Nos. 89-5831, 89-5851, 89-5861.

United States Court of Appeals, Third Circuit

August 20, 1990

Argued May 21, 1990.

Rehearing Denied Oct. 11, 1990.

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Nathan M. Edelstein (argued), Ridolfi, Friedman, Frank, Edelstein & Bernstein, Lawrenceville, N.J., for appellant/cross appellee Powell Duffryn Terminals, Inc.

Bruce J. Terris (argued), Kathleen L. Millian, Terris, Edgecombe, Hecker & Wayne, Washington, D.C., Edward Lloyd, Trenton, N.J., for appellee/cross appellant Public Interest Research Group of New Jersey, Inc. and Friends of the Earth.

Charles J. Sheehan (argued), Lee M. Kolker, U.S. Dept. of Justice, Land & Natural Resources Div., Office of Policy, Legislation and Sp. Litigation, Washington, D.C., for Intervenor U.S.E.P.A.

Before SCIRICA, NYGAARD and ALDISERT, Circuit Judges.

OPINION

NYGAARD, Circuit Judge.

In this Clean Water Act citizen suit, the district court granted summary judgment to plaintiffs Public Interest Research Interest Group of New Jersey and Friends of the Earth (collectively "PIRG"), finding that defendant Powell Duffryn Terminals, Inc. ("PDT") had violated its National Pollution Discharge Elimination System ("NPDES") permit 386 times over a period of six years. After a bench trial on the issue of penalties, the district court permanently enjoined PDT from violating the terms of its NPDES permit and assessed $3,205,000 in civil penalties. Both parties appeal. We will affirm in part and reverse in part.

I. Background Facts and Procedural History

The Federal Water Pollution Control Act ("the Act") was enacted by Congress in 1972. The purpose of the Act is to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters" with the goal "that the discharge of pollutants into the navigable waters be eliminated by 1985." 33 U.S.C. Sec. 1251(a)(1).

The Act provides an effective mechanism for monitoring and limiting polluting discharges. Section 301(a) flatly prohibits anyone from discharging any pollutant except as permitted by the Act. 33 U.S.C. Sec. 1311(a). A person wishing to discharge into the navigable waters must obtain a National Discharge Elimination System ("NPDES") permit. 33 U.S.C. Sec. 1342. These permits contain detailed limits (or parameters) on the types and concentrations of pollutants a permit holder may discharge. A person who complies with the permit parameters is deemed to comply with the Act. 33 U.S.C. Sec. 1342(k). The Act further requires permittees to install and maintain equipment to test its effluent. 33 U.S.C. Sec. 1318(a). The test results must then be reported to the Environmental Protection Agency ("EPA") on Discharge Monitoring Reports ("DMRs"). 40 C.F.R. Secs. 122.41(j) & 122.48 (1989). A comparison of the permit limits with the reported concentrations quickly reveals whether a permittee is complying with its permit. Finally, the Act permits aggrieved citizens to sue permit violators. 33 U.S.C. Sec. 1365.

PDT, a New Jersey corporation, is an NPDES permit holder operating a bulk storage facility in Bayonne, New Jersey. This tank farm is located on land adjacent to the Kill Van Kull, a navigable body of water. PDT uses the large tanks at the site to store various liquids owned by others. These liquids include petroleum products and industrial chemicals. When liquids are transferred, some spillage occurs. The spillage mixes with rainwater and the run-off pollutes the Kill Van Kull.

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When PDT acquired the facility, it was subject to an injunction issued by the United States District Court for the District of New Jersey. United States v. El Dorado Terminals Corp., CA No. 77-228 (D.N.J. April 14, 1977). The injunction required the site owner to build a wastewater treatment plant by July 1, 1977 to treat the polluted run-off. After purchasing the facility, PDT did some remedial work at the site, mainly paving and constructing some ditches and dikes to channel the rainwater. PDT did not, however, construct the required wastewater treatment plant until 1987.

Since 1974, PDT (or its predecessor in interest) has held a series of NPDES permits which allowed it to discharge effluent into the Kill Van Kull. PDT's DMRs indicate that PDT (or its predecessor) has consistently and uninterruptedly dumped pollutants into the Kill Van Kull in concentrations greater than that allowed by its permit.

Plaintiffs are non-profit corporations concerned with environmental issues. On January 27, 1984, they filed a citizen suit against PDT pursuant to section 505 of the Act, 33 U.S.C. Sec. 1365(a) 1, seeking a judgment of liability, civil penalties and injunctive relief, alleging that PDT was violating its NPDES permit. PIRG gave the required sixty-day notice of suit to the EPA and the New Jersey Department of Environmental Protection. 33 U.S.C. Sec. 1365(b).

The district court bifurcated the case, with liability to be determined first and civil penalties and injunctive relief, if any, to be considered afterward. PIRG moved for summary judgment on the issue of PDT's liability. PDT opposed the motion, alleging that PIRG lacked standing and that material facts as to liability were in dispute.

The district court granted PIRG's motion for summary judgment in an order dated January 13, 1986, finding that PIRG had standing and that PDT had violated its NPDES permit 154 times from July, 1977 to June, 1984. Student Public Interest Group of New Jersey, Inc. v. P.D. Oil & Chemical Storage, Inc., 627 F.Supp. 1074 (D.N.J.1986) ("PIRG I"). PIRG submitted another motion for summary judgment alleging that PDT continued to violate its permit during the litigation. On March 13, 1987, the district court granted summary judgment to PIRG on an additional 46 violations.

PIRG moved for a preliminary injunction on May 17, 1988 to enjoin further permit violations by PDT. The district court denied this motion in part because PIRG had failed to demonstrate that irreparable harm was imminent.

PIRG filed its third and final motion for summary judgment on liability on December 29, 1988, alleging an additional 190 violations. Four items were erroneously included and PIRG later removed them from the list. PDT again opposed summary judgment. On May 4, 1989, the first day of the bench trial on penalties, the district court granted PIRG's motion for summary judgment, bringing the total number of PDT's violations to 386.

Following a one week bench trial on the issue of penalties, the district court found that PDT had consistently violated its permit and should be assessed the maximum penalty. Public Interest Research Group of New Jersey, Inc. v. Powell Duffryn Terminals, Inc., 720 F.Supp. 1158 (D.N.J.1989) ("PIRG II "). The court based the fine on the seriousness of the violations, the large economic benefit reaped by PDT by delaying compliance, the lack of good faith efforts by PDT to comply with its NPDES permits and the fact that the penalty would not threaten PDT's economic survival. After calculating the maximum penalty to be $4,205,000, 2 the district court reduced the

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penalty by $1,000,000 because the EPA and the NJDEP had failed to diligently prosecute PDT. The district court ordered PDT to pay the $3,205,000 into a trust fund to be used for improving the environment in New Jersey. Finally, the district court entered a permanent injunction prohibiting PDT from violating its permit. PIRG II, 720 F.Supp. at 1168.

PDT contends that the district court erred by failing to dismiss the case because the plaintiffs lack standing, by failing to apply a five year statute of limitations and by granting summary judgment on liability. PDT also contends that the district court's factual findings supporting the award of civil penalties are clearly erroneous and that the injunction is overbroad. PIRG contends that the nonfeasance of the EPA and the NJDEP is an illegitimate basis for reducing the penalty. Although the EPA was not a party below, we permitted the EPA to intervene to contest the creation of a private trust fund with the civil penalties.

II. Standing

The requirement that a party have standing flows from the Article III requirement of a "case or controversy." 3 U.S. Const. art. III, Sec. 2, cl. 1. Standing analysis focuses on whether "a party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy." Sierra Club v. Morton, 405 U.S. 727, 732, 92 S.Ct. 1361, 1364, 31 L.Ed.2d 636 (1972). PIRG seeks to represent the interests of its members. Such "representational standing" is appropriate where 1) the organization's members would have standing to sue on their own, 2) the interests the organization seeks to protect are germane to its purpose, and 3) neither the claim asserted nor the relief requested requires individual participation by its members. See Hunt v. Washington Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383 (1977); Automobile Workers v. Brock, 477 U.S. 274, 106 S.Ct. 2523, 91 L.Ed.2d 228 (1986). PDT contends that PIRG's individual members would not have...

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