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Natural Resources Defense Council, Inc v. TEXACO Refining and Marketing Inc.

argued: June 17, 1993.



Before: Scirica, Cowen and Garth, Circuit Judges

Author: Cowen


COWEN, Circuit Judge.

Plaintiffs, Natural Resources Defense Council, Inc. and Delaware Audubon Society (collectively "NRDC"), brought this citizen suit pursuant to section 505 of the Federal Water Pollution Control Act, 33 U.S.C. § 1365 ("Clean Water Act" or "Act"). The complaint alleges that Texaco Refining and Marketing, Inc. ("Texaco") repeatedly violated National Pollution Discharge Elimination System ("NPDES") permits limiting effluent discharges from its Delaware City oil refinery. Following a bench trial, the district court held Texaco liable for 365 permit violations corresponding to 3,360 days of violation, and imposed civil penalties totalling $1,680,000. The district court also issued a permanent injunction prohibiting further permit violations and ordering Texaco to comply with the permit's investigatory, reporting and monitoring provisions. Texaco claims that the district court erred by: (1) exercising jurisdiction over certain wholly past permit violations; (2) failing to dismiss some of the NRDC's claims for penalties as moot; (3) failing to dismiss the NRDC's complaint for lack of standing; (4) ordering injunctive relief; and (5) overcounting the days of violation. The NRDC cross-appeals, claiming that the district court erred by exercising jurisdiction over too few permit violations.

We will affirm in part and reverse in part, and remand for further proceedings consistent with this opinion.


The NRDC brought this action in May 1988. At that time, Texaco was discharging pollutants into the Delaware River pursuant to an NPDES permit issued by the Delaware Department of Natural Resources and Environmental Control ("DNREC"). The permit was originally issued in 1977 to a prior owner of the refinery. Texaco acquired the refinery in 1984.

Texaco's permit established seven monitoring points, or outfalls, through which pollutants were discharged. The outfalls were labelled 001, 002, 101, 201, 301, 401, and 501. The permit also designated parameters for each outfall. A parameter is a particular attribute of a discharge. Parameters under the permit included specific types of pollutants, as well as other discharge characteristics, such as temperature and flow rate. Most parameters were subject to strict effluent limits, of which there were two types. Maximum daily limits specified the maximum amount of a pollutant that could be discharged from an outfall during any calendar day. Daily average limits, which were lower than maximum daily limits, specified the maximum average amount that could be discharged over the course of the days in a calendar month that the facility operated.

The permit provided that "the discharge of any pollutant identified in this permit . . . at a level in excess of that authorized shall constitute a violation of the permit." App. at 157. To assure compliance, the permit required Texaco to sample every parameter at every outfall at prescribed intervals, using specified methods, and to report the test results in monthly Discharge Monitoring Reports ("DMRs") to DNREC. The permit also required Texaco to "take all reasonable steps to minimize any adverse impact to waters of the State resulting from this permit, including such accelerated or additional monitoring as necessary to determine the nature and impact of the noncomplying discharge." Id.

On December 31, 1988 Texaco transferred ownership of the refinery to Star Enterprise ("Star"), a partnership between a wholly-owned subsidiary of Texaco and a subsidiary of the Saudi Arabian Oil Company. In January 1989, DNREC issued a new NPDES permit to Star. The 1989 permit modified the 1977 permit by, among other things, eliminating outfall 501 and altering numerous effluent limits.

Prior to trial, Texaco filed two motions for summary judgment. Relying on the Supreme Court's holding in Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Foundation, 484 U.S. 49, 108 S. Ct. 376, 98 L. Ed. 2d 306 (1987) ("Gwaltney I "), Texaco claimed that the district court lacked jurisdiction to hear the NRDC's claims relating to wholly past violations. Texaco also argued, among other things, that the relaxation or elimination of certain effluent limitations in the 1989 permit rendered several other of the NRDC's claims moot. The NRDC filed a cross-motion for summary judgment on the issue of liability, arguing that Texaco's DMRs contained dispositive proof of the alleged violations. The district court denied Texaco's motions, rejecting Texaco's contention that the court lacked jurisdiction over certain wholly past violations. Natural Resources Defense Council v. Texaco Refining and Marketing, Inc., 719 F. Supp. 281, 287 (D. Del. 1989) (Texaco I). The court granted the NRDC's motion and found Texaco liable for all alleged permit violations. Id. at 287, 289. Determining that the NRDC had shown probable cause that the Clean Water Act was being violated, the district court also enjoined Texaco from future violations of the 1989 permit. Id. at 292. After Texaco filed an interlocutory appeal, we vacated the injunction, holding that the district court erred by failing to apply traditional equitable principles in determining whether injunctive relief was appropriate. Natural Resources Defense Council, Inc. v. Texaco Refining and Marketing, Inc., 906 F.2d 934, 937 (3d Cir. 1990) ("Texaco II ").

Following remand, the district court conducted a three-week bench trial in February 1991. In June 1991, the court reopened the trial and allowed the NRDC to introduce additional evidence of their standing. After all the evidence in the case had been presented, the district court held that the NRDC had shown sufficient evidence of standing and concluded that Texaco had exceeded NPDES permit effluent limits 414 times between March 1983 and February 1991. Natural Resources Defense Council v. Texaco Refining and Marketing, Inc., 800 F. Supp. 1 (D. Del. 1992). While the case before the district court was pending on remand, the Court of Appeals for the Fourth Circuit decided Chesapeake Bay Foundation v. Gwaltney of Smithfield, Ltd., 890 F.2d 690 (4th Cir. 1989) ("Gwaltney III "). Relying in part on this decision, the district court reconsidered its earlier holding in Texaco I and concluded that it had jurisdiction only over continuous or intermittent violations, and not over wholly past violations. Of Texaco's 414 violations, the district court found that 365 were continuous or intermittent at the time the complaint was filed, while 49 were wholly past.

To calculate the number of days of violations, the district court counted each excess of a daily maximum limitation as the equivalent of one day of violation and each excess of a daily average limitation as a violation of each day of the month during which the excess occurred. The court thereby arrived at a total of 3,360 days of violation. After considering the relevant statutory factors, see 33 U.S.C. § 1319(d), the court imposed a civil penalty of $500 per day of violation, for a total penalty of $1,680,000. The district court also enjoined further violations of the 1989 permit issued to Star and directed Texaco to comply with the permit's investigatory, reporting, and monitoring provisions.


In its cross-appeal, the NRDC claims that the district court erred by failing to exercise jurisdiction over forty-nine violations that occurred prior to the filing of the complaint. We will address the NRDC's cross-appeal first because it raises an important threshold issue as to the proper standard for determining the scope of the district court's subject matter jurisdiction.

The district court exercised subject matter jurisdiction pursuant to section 505(a) of the Clean Water Act, which provides that

any citizen may commence a civil action on his own behalf --

(1) against any person . . . who is alleged to be in violation of (A) an effluent standard or limitation . . . .

33 U.S.C. § 1365(a) (emphasis added). In Gwaltney I, the Supreme Court interpreted the phrase "alleged to be in violation" in section 505 as imposing a jurisdictional requirement "that citizen-plaintiffs allege a state of either continuous or intermittent violation -- that is, a reasonable likelihood that a past polluter will continue to pollute in the future." 484 U.S. at 57, 108 S. Ct. at 381. Consistent with this requirement, the Court held that jurisdiction will not lie where a plaintiff alleges claims for "wholly past" violations. Id. at 57-58, 108 S. Ct. at 381-82.

The Court explained that the jurisdictional rule announced in Gwaltney I is suggested by the repeated use of the present tense throughout section 505. For example, in addition to requiring a citizen to allege that a polluter is "in violation" of an effluent standard or limitation, the Act states that a citizen suit may be brought for violation of a permit limitation "which is in effect." 33 U.S.C. § 1365(f); Gwaltney I, 484 U.S. at 59, 108 S. Ct. at 382. Citizen-plaintiffs also must provide notice of an action to, among others, the State in which the alleged violation "occurs." 33 U.S.C. § 1365(b)(1)(A). According to the Court, the most salient use of the present tense is in the Act's definition of "citizen" as "a person . . . having an interest which is or may be adversely affected" by the alleged violations. Gwaltney I, 484 U.S. at 59, 108 S. Ct. at 382; 33 U.S.C. § 1365(g). "This definition makes plain what the undeviating use of the present tense strongly suggests: the harm sought to be addressed by the citizen suit lies in the present or the future, not in the past." Gwaltney I, 484 U.S. at 59, 108 S. Ct. at 382.

At issue in this cross-appeal is the proper standard for determining the extent of a court's subject matter jurisdiction over cases in which a plaintiff alleges a series of permit violations involving multiple parameters. The NRDC argues that courts should determine the scope of their jurisdiction using a "permit-based" standard. Under a permit-based standard, jurisdiction attaches to entire cases, not to individual violations alleged within a case. See Sierra Club v. Port Townsend Paper Corp., 19 ELR 20,532, 20,533 (W.D. Wash 1988). If the plaintiff alleges in good faith that violations of the permit as a whole or of any particular parameter within the permit are occurring on a continuous or intermittent basis, the court may automatically exercise jurisdiction over all alleged past, present, and potential future violations. See Texaco I, 719 F. Supp. at 287. Texaco, on the other hand, advocates a "parameter-based," or "by-parameter" standard. Under the by-parameter standard, a court looks separately at each violation or set of violations of a parameter and exercises jurisdiction only over those which the plaintiff alleges to be continuous or intermittent as of the time of the complaint. See id. at 286.

Although the district court initially adopted the permit-based standard advocated by the NRDC, see id. at 287, the court later reconsidered its position after the standard was rejected by the Court of Appeals for the Fourth Circuit in Gwaltney III. In that case, the district court imposed over $1,000,000 in penalties for violations of the defendant's total Kjeldahl nitrogen ("TKN") and chlorine NPDES permit limits. The court of appeals reversed the judgment as it related to the chlorine violations, finding that although the TKN violations were ongoing at the time the suit was filed, it was "'absolutely clear' that there were no ongoing chlorine violations at the time this suit was brought." Gwaltney III, 890 F.2d at 697. The court expressly rejected the argument that, having found "an ongoing violation of the permit," it could order penalties "for any past violation of any permit parameter :"

If Congress wished to permit citizen suits only when a discharger fails to abate a problem and the government fails to take enforcement action . . . then it would make little sense to permit penalties for wholly past violations of one parameter ...

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