U.S. v. Smithfield Foods, Inc.

• Decision Date: 30 May 1997
• Docket Number: Action No. 2:96cv1204.
• Citation: 965 F.Supp. 769
• Court: U.S. District Court — Eastern District of Virginia
• Parties: UNITED STATES of America, Plaintiff, v. SMITHFIELD FOODS, INC., Smithfield Packing Company, Inc., and Gwaltney of Smithfield, Ltd., Defendants.

965 F.Supp. 769

UNITED STATES of America, Plaintiff, v. SMITHFIELD FOODS, INC., Smithfield Packing Company, Inc., and Gwaltney of Smithfield, Ltd., Defendants.

Action No. 2:96cv1204.

United States District Court, E.D. Virginia, Norfolk Division.

May 30, 1997.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Susan Lynn Watt, Asst. U.S. Atty., Norfolk, VA, Lois J. Schiffer, U.S. Dept. of Justice, Washington, DC, Yvette C. Roundtree, Asst. Regional Counsel, U.S.E.P.A. Office of Regional Counsel, Philadelphia, PA, Nadine Steinberg, U.S.E.P.A., Washington, DC, Sarah D. Himmelhoch, Richard Hong, U.S. Dept. of Justice/Environmental Enforcement Section, Washington, DC, for Plaintiff.

Anthony F. Troy, Mays & Valentine, Richmond, VA, Patrick M. Raher, James T. Banks, John G. Roberts, Jr., Patrick D. Traylor, Hogan & Hartson, L.L.P., Washington, DC, for Defendants.

OPINION

REBECCA BEACH SMITH, District Judge.

This matter is before the court on (1) the Motion to Join the Virginia State Water Control Board and the Virginia Department of Environmental Quality as Parties to this Action filed by Smithfield Foods, Inc., and its subsidiary companies Smithfield Packing Co., Inc., and Gwaltney of Smithfield, Ltd. (hereinafter "defendants" or "Smithfield"), on March 14, 1997, and (2) the Motion for Partial Summary Judgment on Liability and Section 309(g)(6) Issues filed by the United States on March 10, 1997. For the reasons stated from the bench, the court DENIES defendants' Motion to Join the Virginia State Water Control Board and the Virginia Department of Environmental Quality as Parties to this Action. For the reasons stated below, the court GRANTS the United States' Motion for Partial Summary Judgment on Liability and Section 309(g)(6) Issues.

I. Factual and Procedural History

Smithfield Foods, Inc. is a publicly-held Delaware corporation that owns and operates two pork processing and packing plants in Smithfield, Virginia, namely Smithfield Packing (a Virginia corporation) and Gwaltney (a Delaware corporation), that discharge wastewater. The wastewater generated by the Smithfield Packing and Gwaltney facilities is treated by two wastewater treatment plants operated by Smithfield Foods, Outfalls 001 and 002. The discharge through Outfall 001 generally originates from the Smithfield Packing plant, while the discharge through Outfall 002 generally originates from the Gwaltney plant. Between at least August, 1991, and the present, defendants discharged treated wastewater from Outfall 001 into the Pagan River, a tributary of the James River. Treated wastewater was also discharged by defendants into the Pagan River through Outfall 002 from at least August, 1991, until June, 1996, when Outfall 002 was connected to the Hampton Roads Sanitation District ("HRSD") system.

A. The Clean Water Act

The Clean Water Act ("Act") was enacted by Congress "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." Section 101, 33 U.S.C. § 1251. In order to achieve these goals, Section 301(a) of the Act prohibits the discharge of pollutants into the waters of the United States by any person except as authorized by specific provisions of the Act. 33 U.S.C. § 1311(a). Section 402, one of the specified sections, establishes the National Pollutant Discharge Elimination System ("NPDES"). 33 U.S.C. § 1342. Under the NPDES program, the Administrator of the Environmental Protection Agency ("EPA") may issue permits to point sources¹ authorizing the discharge of pollutants in accordance with specified limitations and conditions. Section 402(a), 33 U.S.C. § 1342(a). Section 301(b) of the Act authorizes the EPA to establish nationally applicable effluent limitations for point sources, 33 U.S.C. § 1311(b), which are incorporated into the discharger's permit along with any other requirements established pursuant to the Act. Section 402(a), 33 U.S.C. § 1342(a).

Although the primary responsibility for the administration of the Act lies with the Administrator of the EPA, Section 101(d), 33 U.S.C. § 1251(d), Congress has stated that the participation of the public must be provided for, encouraged, and assisted, see Section 101(e), 33 U.S.C. § 1251(e), and that the "primary responsibilities and rights of States" to control pollution and manage natural resources must be recognized, preserved, and protected. Section 101(b), 33 U.S.C. § 1251(b). Consequently, Section 402(b) of the Act allows a state to become involved in the administration of the NPDES program for discharges within that state's boundaries. 33 U.S.C. § 1342(b). Congress retained in the EPA, however, "close and continuing oversight and supervision of the state program," including the authority to withdraw EPA approval of the state NPDES program in extreme situations. United States v. Cargill, Inc., 508 F.Supp. 734, 740 (D.Del.1981) (citing Section 402(c)(3), 33 U.S.C. § 1342(c)(3)). Accordingly, while the enforcement provision of the Act, Section 309, 33 U.S.C. § 1319, gives "primary responsibility to the state with an approved NPDES system," it also places "significant authority in the EPA to oversee the state's administration and to step in itself in appropriate situations." Id.

Once the EPA determines that it should assume enforcement responsibility with regard to a violator, the EPA may issue an order requiring compliance, "commence a civil action for appropriate relief" pursuant to Section 309(b), 33 U.S.C. § 1319(b), or institute administrative proceedings pursuant to Section 309(g), 33 U.S.C. § 1319(g). Not only may the EPA pursue injunctive relief, but the Act also provides for civil penalties not exceeding "$25,000 per day for each violation." Section 309(d), 33 U.S.C. § 1319(d).

B. The Permits and Special Orders relating to defendants

In March, 1975, the EPA authorized the Commonwealth of Virginia to issue permits governing the discharge of pollutants into navigable waters within the Commonwealth. Pursuant to this authorization, the Virginia State Water Control Board ("Board") issued Permit No. VA0059005 ("Permit") to Smithfield on May 13, 1986. The Permit placed various restrictions on the operation of Smithfield's wastewater treatment plants, including limitations on the amount and concentration of certain pollutants in the wastewater. In addition, the Permit required Smithfield to monitor the wastewater discharged from the outfalls, submit Discharge Monitoring Reports ("DMRs") reporting the results of wastewater sampling and analysis, submit the results of annual toxicity testing, and retain all sampling and analysis data for three years. The 1986 Permit imposed stricter total Kjeldahl nitrogen ("TKN") limits on Smithfield than prior permits governing Outfalls 001 and 002.²

Pursuant to its authority to promulgate state environmental standards more stringent than those required by federal law, the Commonwealth promulgated its "Policy for Nutrient Enriched Waters" ("Policy"), effective May 25, 1988, which provided for the control of discharges of nutrients from point sources affecting state waters designated "nutrient enriched waters." Va. Admin. Code tit. 9, § 25-40-10 et seq. The Policy required the Board to reopen and modify the permits of point sources discharging into nutrient enriched waters to include a monthly average phosphorus effluent limitation of 2.0 mg/l. The Pagan River is designated a "nutrient enriched water." Va. Admin. Code tit. 9, § 25-260-350(17). Because the Policy applied to defendants' facilities, on June 3, 1988, Smithfield filed a petition of appeal in Isle of Wight Circuit Court challenging the 2.0 mg/l standard as not reasonable and practical of attainment.

Notwithstanding Smithfield's appeal, the Board reopened and modified Smithfield's Permit to include the 2.0 mg/l phosphorus limitation on January 4, 1990. The modified January 4, 1990 Permit, which was approved by the EPA, retained the requirements of the 1986 Permit, but added the phosphorus limitation of 2.0 mg/l and required monitoring for total nitrogen. Part I.C. of the Permit included the following "Schedule of Compliance" for the total phosphorus limitations: (1) initiate design of facilities within 30 days after the modification date of the permit; (2) submit plans to the Board within 90 days from # 1; (3) commence construction within 30 days of the Board's approval of the plans; (4) complete construction within 29 months of # 3; and (5) achieve compliance with final effluent limitations 30 days after completion of construction. Jan. 4, 1990 Permit, Part I.C., at 3. Smithfield appealed the modified 1990 Permit. Since the new phosphorous limitations were not required in other states, the company considered moving its operations outside of Virginia if forced to comply.

After conducting negotiations with Smithfield, the Board elected to settle the dispute concerning the phosphorus limitations by issuing a Special Order on March 21, 1990. In the March, 1990 Special Order, the Board first explained the deadlines imposed by the modified 1990 Permit: Smithfield was "required to commence design of treatment works to achieve compliance with th[e] phosphorus limitation on February 4, 1990, and complete design within 90 days thereafter. Smithfield is further required to attain full compliance with the phosphorus limitation by January 4, 1993." March 21, 1990 Special Order at 1.³ Because Smithfield challenged the schedule of compliance for the phosphorus limitations in Part I.C. as unreasonable and not practicable of attainment, the Board agreed "to defer commencement of the schedule in Part I.C. of the 1990 Permit until December 1, 1990." Id. at 2.⁴ The Special Order also continued the interim effluent limits for TKN. Id. The Board noted that "[t]he remainder of the Permit shall remain in effect pending further action by the Board." Id. In return, Smithfield agreed, inter alia, to (1) study the available costs and technologies involved in achieving...