US v. Windward Properties, Inc.

• Decision Date: 31 March 1993
• Docket Number: Civ. No. 1:91-cv-348-JEC.
• Citation: 821 F. Supp. 690
• Parties: UNITED STATES of America, Plaintiff, v. WINDWARD PROPERTIES, INC., Defendant.
• Court: U.S. District Court — Northern District of Georgia

821 F. Supp. 690

UNITED STATES of America, Plaintiff, v. WINDWARD PROPERTIES, INC., Defendant.

Civ. No. 1:91-cv-348-JEC.

United States District Court, N.D. Georgia, Atlanta Division.

March 31, 1993.

Melissa A. Heath, U.S. EPA, Office of Regional Counsel, Daniel A. Caldwell, III, U.S. Attorney's Office, Keith W. Holman, Atlanta, GA, Jon M. Lipshultz, Stephen L. Samuels, U.S. Dept. of Justice, Environment & Natural Resources Div., Environment Defense Section, Washington, DC, for plaintiff.

C. Christopher Hagy, Teresa Wynn Roseborough, Sutherland, Asbill, & Brennan, Carol Brittain Allums, Windward Properties, Inc., Atlanta, GA, for defendant.

ORDER

CARNES, District Judge.

This case is presently before the Court on Defendant's Motion for Partial Summary Judgment 15, Plaintiff's Motion for Partial Summary Judgment 27, and Plaintiff's Motion to Amend Complaint 33. The Court has reviewed the record and the arguments of the parties and, for the reasons set out below, concludes that the motion to amend should be granted and both motions for summary judgment should be denied.

BACKGROUND

Plaintiff, the United States of America, brought this case as a civil enforcement action pursuant to section 309 of the Clean Water Act ("CWA"), 33 U.S.C. § 1319, seeking injunctive relief and civil penalties against Defendant, Windward Properties, Inc. ("Windward"), for five alleged violations of the CWA at Windward's 3400 acre real estate development in Alpharetta, Georgia. All five violations involve the unpermitted discharge of dredged or fill materials into three streams at the Windward site (Caney Creek, Big Creek, and Camp Creek) and their adjacent wetlands in violation of sections 301 and 404 of the CWA, 33 U.S.C. §§ 1311 and 1344. Count I of the Complaint, which is the subject of Defendant's current motion for summary judgment, alleges violations by Windward between 1979 and 1982 during construction of the Lake Windward Dam. (Compl. ¶¶ 8-25).¹

DISCUSSION

A. Plaintiff's Motion to Amend

Plaintiff has moved to amend its Complaint in this action to add Mobil Land Development Corporation (Georgia) as a defendant and to make technical changes to its factual allegations. The Federal Rules of Civil Procedure provide that leave to amend a complaint should be "freely given when justice so requires." FED.R.Civ.P. 15(a). "Courts have interpreted amendment provisions liberally, in line with the Federal Rules' overall goal of resolving disputes, insofar as possible, on the merits and in a single judicial proceeding." Spartan Grain & Mill Co. v. Ayers, 517 F.2d 214, 220 (5th Cir.1975).² In explaining the amendment standard, the Eleventh Circuit Court of Appeals has observed that "unless a substantial reason exists to deny leave to amend, the discretion of the district court is not broad enough to permit denial." Shipner v. Eastern Air Lines, Inc., 868 F.2d 401, 407 (11th Cir.1989). In determining whether a substantial reason exists to deny leave to amend, the Court must consider the following factors: (1) undue delay, bad faith, or dilatory motive on the part of the movant, (2) repeated failure to cure deficiencies by amendments previously allowed, (3) undue prejudice to the opposing party by virtue of allowance of the amendment, and (4) futility of amendment. Nolin v. Douglas County, 903 F.2d 1546, 1550 (11th Cir.1990).

Defendant expresses concern that amendment of the Complaint will prolong this action unnecessarily. Plaintiff assures the Court, however, that the amendment will cause no delay in this proceeding, (Mem. in Supp. of Pl.'s Mot. to Amend at 7), and the Court will hold Plaintiff to this assurance. Accordingly, in light of the fact that consideration of the above-mentioned factors does not convince the Court that a substantial reason exists to deny Plaintiff's motion, the Court concludes that justice requires allowing Plaintiff to amend its Complaint.

B. Defendant's Motion for Partial Summary Judgment

Defendant has moved for summary judgment as to Count I on two grounds. First, Defendant asserts that the action is barred by the statute of limitations. (Br. in Supp. of Mot. for Summ.J. Def.'s Br. at 11-29). Alternatively, Defendant argues that the action is barred by the doctrine of laches. (Id. at 29-49).

1. Statute of Limitations

The parties apparently agree that this action is governed by 28 U.S.C. § 2462, which provides that an action "shall not be entertained unless commenced within five years from the date when the claim first accrued ..."³ Both parties also agree that the critical question in this case is when the Government's claim "accrued." Defendant asserts that a CWA claim accrues on the date of the violation—in this case, not later than March 1982—and, as a result, Plaintiff's claim is barred by the statute of limitations as this action was not filed until February 14, 1991. Plaintiff, on the other hand, raises three arguments in opposition to the motion for summary judgment. First, the Government asserts that the claim did not accrue until Defendant's unlawful activities were discovered. (Pl.'s Mem. in Opp'n to Mot. for Summ.J. Pl.'s Mem. at 9). Second, Plaintiff argues that Windward's unlawful actions constitute an ongoing violation. (Id. at 16). Finally, Plaintiff alleges that the statute of limitation does not apply to the Government's request for injunctive relief. (Id. at 22).

a. Statutes of limitation and injunctive relief

As an initial matter, the Court must determine whether § 2462 applies at all to Plaintiff's request for injunctive relief. Plaintiff argues that, because that section applies only to actions "for the enforcement of any civil fine, penalty or forfeiture," it does not apply to requests for injunctive relief. (Pl.'s Mem. at 22-23). The Court concludes, however, that the weight of authority dictates a contrary result. The majority of courts that have considered the question, including the United States Supreme Court, have held that when legal and equitable relief are available concurrently (i.e., when an action at law or equity could be brought on the same facts), "equity will withhold its relief ... where the applicable statute of limitations would bar the concurrent legal remedy." Cope v. Anderson, 331 U.S. 461, 464, 67 S.Ct. 1340, 1341, 91 L.Ed. 1602 (1947). See also Russell v. Todd, 309 U.S. 280, 289, 60 S.Ct. 527, 532, 84 L.Ed. 754 (1940); United Transp. Union v. Florida East Coast Ry., 586 F.2d 520, 524 (5th Cir. 1978) (when "both legal and equitable relief are sought ... the statute of limitations bars both"); Gilbert v. City of Cambridge, 932 F.2d 51, 57 (1st Cir.) ("It is settled ... that where legal and equitable claims coexist, equitable remedies will be withheld if an applicable statute of limitation bars the concurrent legal remedy."), cert. denied, ___ U.S. ___, 112 S.Ct. 192, 116 L.Ed.2d 153 (1991); Nemkov v. O'Hare Chicago Corp., 592 F.2d 351, 354-55 (7th Cir.1979); Saffron v. Department of Navy, 561 F.2d 938, 942-43 (D.C.Cir.1977), cert. denied, 434 U.S. 1033, 98 S.Ct. 765, 54 L.Ed.2d 780 (1978).⁴ In this case, it is apparent that legal and equitable remedies are available concurrently, as the Government has requested both civil penalties and injunctive relief. (Compl. at 12). Accordingly, the limitations period provided by § 2462 applies to Plaintiff's request for both legal and equitable relief.

b. Accrual of the Government's claim

Defendant asserts that Plaintiff's claim in Count I accrued not later than March 1982 (the last date on which an alleged discharge of a pollutant into the waters of the United States occurred in connection with the construction of the Lake Windward Dam) and, as a result, the claim is barred by the five year statute of limitations. (Def.'s Br. at 19). As its initial argument in opposition, Plaintiff asserts that its claim did not accrue until the Government discovered Defendant's unlawful activities. (Pl.'s Mem. at 9).

It appears that the majority of courts that have interpreted § 2462 in the context of alleged violations of the CWA have adopted some type of "discovery rule" under which the claim does not accrue until the Plaintiff knew (or, perhaps, reasonably should have known) of the violation.⁵ The initial CWA cases in which a discovery rule was adopted involved actions brought to enforce effluent limitations against National Pollution Discharge Elimination System ("NPDES") permit holders.⁶ In Atlantic States Legal Found. v. Al Tech Specialty, 635 F.Supp. 284, 287 (N.D.N.Y.1986), the United States District Court for the Northern District of New York held that the statute of limitations did not begin to run when the NPDES violations at issue actually occurred, but rather when the reports that documented those violations were filed with the EPA.⁷ Underlying the court's decision was the concern that "to hold that the statute begins to run when violations actually occur, as opposed to when they are discovered, would impede, if not foreclose, the remedial benefits of the statute." Id. at 288. See also Public Int. Research Group of N.J. v. Powell Duffryn, 913 F.2d 64, 75 (3d Cir.1990) (holding that claim against NPDES permit holder did not begin to run until report listing the violation is filed), cert. denied, 498 U.S. 1109, 111 S.Ct. 1018, 112 L.Ed.2d 1100 (1991).

Several subsequent CWA cases that dealt with the time of accrual for statute of limitations purposes addressed actions which, like the present proceeding, involved alleged violations due to the discharge of dredge or fill material without a permit. In North Carolina Wildlife Fed'n v. Woodbury ("NCWF"), 29 Env't Rep.Cas. (BNA) 1941, 1944, 1989 WL 106517 (E.D.N.C.1989), the United States District Court for the Eastern District of North Carolina extended, in dicta, the Atlantic States rationale to dredge/fill violations, observing that the discovery rule "recognizes that it is virtually impossible for the public to discover violations until reports have been filed...