Atlantic States Legal Foundation v. Universal Tool & Stamping Co.

• Decision Date: 13 March 1992
• Docket Number: No. F 87-95.,F 87-95.
• Citation: 786 F. Supp. 743
• Parties: ATLANTIC STATES LEGAL FOUNDATION INC., Plaintiff, v. UNIVERSAL TOOL & STAMPING CO., INC., Defendant.
• Court: U.S. District Court — Northern District of Indiana

786 F. Supp. 743

ATLANTIC STATES LEGAL FOUNDATION INC., Plaintiff, v. UNIVERSAL TOOL & STAMPING CO., INC., Defendant.

No. F 87-95.

United States District Court, N.D. Indiana, Fort Wayne Division.

March 13, 1992.

COPYRIGHT MATERIAL OMITTED

Peter G. Mallers II, Fort Wayne, Ind., Richard J. Kilsheimer, Kaplan Kilsheimer & Foley, New York City, for plaintiff.

Milford M. Miller, Edward J. Liptak, Livingston, Dildine, Haynie & Yoder, Fort Wayne, Ind., for defendant.

MEMORANDUM DECISION AND ORDER

WILLIAM C. LEE, District Judge.

On April 23, 1990, this court awarded partial summary judgment to plaintiff Atlantic States Legal Foundation, Inc., 735 F.Supp. 1404, ("Atlantic States") on the issue of defendant Universal Tool & Stamping Company's, ("Universal Tool") liability for discharging excessive amounts of pollutants in violation of its permit limitations under provisions of the Federal Water Pollution Control Act ("Clean Water Act"), 33 U.S.C. § 1365. The matter of the appropriate relief to be granted was tried before this court from January 13 through January 17, 1992. The following Findings of Fact and Conclusions of Law are entered pursuant to Federal Rules of Civil Procedure 52(a), after examining the entire record and determining the credibility of the witnesses.

FINDINGS OF FACT

Plaintiff is a not-for-profit corporation organized under the laws of the State of New York with its principal place of business in Syracuse, New York, with members in the State of Indiana. Plaintiff is dedicated to protecting and restoring the natural resources, particularly the water resources of the United States.

Defendant, Universal Tool, manufactures automotive jacks at a plant located at Butler, Indiana, and employs approximately 400 people. The manufacturing process involves machining bar and flat stock steel into automotive jacks. During the relevant time period involved in this litigation, the automotive jacks went through a cleaning process followed by one of three finishing processes: zinc plating followed by chrome coating, iron phosphating followed by painting, or zinc phosphating followed by an oil coating. In December, 1989, the zinc plating was discontinued in-house to eliminate the use of the toxic metal chrome.

On January 1, 1974 the Administrator of the Environmental Protection Agency (EPA) authorized the Indiana Steam Pollution Control Board¹ to issue National Pollutant Discharge Elimination System (NPDES) permits in the State of Indiana, pursuant to Section 402(a) and (b) of the Clean Water Act, 33 U.S.C. § 1342(a) and (b). Universal Tool's effluent discharge was first regulated under a NPDES permit in 1975 and Universal Tool has had various such permits from that time to the present. On April 28, 1984 IDEM issued Universal Tool NPDES Permit No. IN000639, allowing the discharge of pollutants² into Teutsch Ditch with specific conditions. Defendant was required to establish and maintain records, install, use and maintain monitoring equipment, sample effluents, and report on a regular basis to IDEM regarding the facility's discharge of pollutants.³

It is undisputed that Universal Tool has not achieved compliance with its permit limitations. Where a permittee is in violation of an NPDES discharge limitation, it is also "in violation of ... an effluent standard or limitation under the Act," 33 U.S.C. § 1365(a)(1), which makes the permittee subject to citizen suits. Id. For citizen suits under the Clean Water Act, Congress has authorized the district courts to assess appropriate civil penalties under Section 309(d) of the Act. 33 U.S.C. § 1365(a). Section 309(d), 33 U.S.C. § 1319(d), prior to its amendment in 1987 provided:

Any person who violates §§ 301, 302, 306, 307 or 308 of this Act or any permit condition or limitation implementing any of such sections in a permit issued under § 402 of this Act by the Administrator ... shall be subject to a civil penalty not to exceed $10,000 per day of such violation.

Consequently, each violation of the NPDES permit limitation, prior to the 1987 amendments, subjects the defendant to a statutory maximum penalty of up to $10,000.00 per day of such violation. However, in 1987 Congress increased the statutory maximum penalty of up to $25,000.00 per day of such violation. Therefore, a permittee's violations occurring on or after February 4, 1987 are subject to a penalty of up to a maximum of $25,000.00 per day of such violation.

The parties have stipulated that the specific permit violations that are the subject of this suit are for the period May 1, 1984 through November 30, 1988. Thus, Universal Tool's violations occurring from May 1, 1984 through February 4, 1987 are subject to a penalty of up to a maximum of $10,000.00 per day of such violation and those violations occurring from February 4, 1987 through November 30, 1988 are subject to a penalty up to a maximum of $25,000.00 per day of such violation.

Both parties agree that during the subject period there were 413 violations for exceeding the daily maximum limitation and 53 violations for exceeding the monthly average limitation. However, plaintiff contends that a violation of the monthly average limitation should be counted as a daily violation for each day of that month (i.e. 30 daily violations per month). See Atlantic States Legal Foundation, Inc., v. Tyson Foods, Inc., 897 F.2d 1128, 1139-40 (11th Cir.1990); Chesapeake Bay Foundation v. Gwaltney of Smithfield Ltd., 611 F.Supp. 1542, 1552-53 (E.D.Va.1985), aff'd, 791 F.2d 304 (4th Cir.1986), rev'd and remanded on other grounds, 484 U.S. 49, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987), remanded, 844 F.2d 170 (4th Cir.), judgment reinstated, 688 F.Supp. 1078 (E.D.Va.1988), aff'd in part, rev'd in part and remanded, 890 F.2d 690 (4th Cir.1989). If there is an average daily violation and a maximum violation for the same parameter during a particular month (e.g., a violation of a month mass loading limitation and of a daily mass loading limitation for the same parameter) it cannot be counted twice (i.e., it is only counted as 30 daily violations). Tyson Foods, 897 F.2d at 1140. Defendants, understandably, take the position that a violation of the daily average should not be applied to every day of the month, but should only be counted as a single violation on those days where the average was exceeded. See Student Public Interest Research Group of New Jersey, Inc. v. Monsanto Company, 29 E.R.C. 1078, 1988 WL 156691 (D.N.J.1988).

This court agrees with the majority of courts that have ruled on the issue and with the reasoning set forth in the Gwaltney decision. The Fourth Circuit reasoned that:

While the statute does not address directly the matter of monthly average limitations, it does speak in terms of penalties per day of violation, rather than penalties per violation. This language strongly suggests that where a violation is defined in terms of a time period longer than a day, the maximum penalty assessable for that violation should be defined in terms of the number of days in that time period.

Id. at 314 (emphasis original). In addition, the language of section 1319(d) established the methodology for imposing a maximum penalty. Any reasons as to why the monthly average limitation was exceeded (and therefore not to be considered a daily violation for each day of that month) can be factored into the district court's determination of the actual penalty to be imposed. Tyson Foods, 897 F.2d at 1139. The court therefore finds that the 53 violations of monthly average limitations will be deemed to involve a violation for each of the days of that month.

The court does not agree with the analysis of the Monsanto court. The Monsanto court determined that a monthly violation should only establish a single violation on the day of the monitored report. However, that determination was arrived at by taking into consideration mitigating circumstances before a maximum penalty was established. This court believes that in order to comply with the provisions of the Act, the mitigating factors must be considered after the maximum penalty is established. Accordingly, the defendant has violated its permit 1,977 times for a statutory maximum penalty of up to $25,830,000.00.

I. Mitigating Factors

The penalty of $25,830,000.00 is a maximum penalty, not a mandatory one. Congress intended the penalty to provide a substantial deterrent, however courts were instructed to determine the actual penalty in light of several mitigating factors; including, the seriousness of the violations, the economic benefit (if any) resulting from the violation, any history of such violations, any good faith efforts to comply with the application requirements, the economic impact of the penalty on the violator, and such other matters as justice may require. 33 U.S.C. § 1319(d).

A. Seriousness of the Defendants Violations

Notwithstanding the sheer number of violations by the defendant, the court finds there has been minimal environmental damage as a result of the violations. See United States of America v. Roll Coater, Inc., 21 Envtl.L.Rep. 21073, 1991 WL 165771 (S.D.Ind.1991) lack of harm as a mitigating factor not foreclosed by changes in the standard in determining liability. The results of a three year field investigation⁴ concluded that any quantifiable impact from Universal Tool's discharge was limited to that portion of Teutsch Ditch between Universal Tool's discharge point and the confluence of Teutsch Ditch and Big Run Creek.⁵ However, no evidence indicated that these conditions were being carried to Big Run Creek and the St. Joseph River. In fact, high levels of contaminants were found in Teutsch Ditch upstream of Universal Tool's discharge point, suggesting that there were significant point and non-point sources of pollutants in addition to Universal Tool.⁶ But even with the multiple pollution sources entering Teutsch Ditch, sufficiently high water quality existed in the lower portions of...