12.15.2022 4th Circuit Narrows Protections from CWA Citizen Suits
By majority decision in Naturaland Trust v. Dakota Finance, LLC, the United States Court of Appeals for the Fourth Circuit struck a blow against one of the affirmative defenses a company may use to defend against citizen suits brought under the Clean Water Act (“CWA”).
The CWA allows affected private parties, including citizens groups, to file civil actions in federal court (“citizen suits”) against violators of the law (i.e. polluters of jurisdictional waters) if certain procedural requirements are met. Chief among these procedural requirements, the affected person must give 60-days’ notice to agencies and the alleged violator of its intent to sue. The affected person may file the citizen suit against the alleged polluter after the 60-day notice period elapses; however, the citizen suit is barred if, by the end of the 60 days, either (1) “a State has commenced and is diligently prosecuting an action” through an administrative process for penalties for that same alleged violation; or (2) a State or the EPA is diligently prosecuting a civil or criminal case in court.
The Fourth Circuit in Naturaland Trust—by a 2-1 majority—held the preliminary and early enforcement processes and procedures of the South Carolina Department of Health and Environmental Control (“DHEC”), as many understand them, do not constitute the ‘commencing of an action’ for purposes of barring a citizen suit. Specifically, the Fourth Circuit held a “Notice of Alleged Violation/Notice of Enforcement Conference” (“NOV”) issued by DHEC did not sufficiently ‘commence the action,’ thus overturning the decision of the South Carolina District Court dismissing the citizen suit as barred. The Court’s primary analysis centered around the perceived informality of the NOV, focusing on the lack of public notice and other differences between DHEC’s NOV procedure and actions “brought under federal law.”
Of course, some facts will help here. The Defendants conduct business as Arabella Farm (“Arabella”), and, in 2017, Arabella began clearing around 20 acres of land on its property bordering three bodies of water in South Carolina’s Jocassee Gorges area. Arabella did not obtain any CWA stormwater permits for the land disturbance activity, or install sediment or stormwater control measures, because it believed it fell within an agricultural exemption. The land disturbance activity allegedly resulted in significant stormwater discharges from the property resulting in both erosion and sedimentation for nearby waters and property. Following DHEC National Pollutant Discharge Elimination System (“NPDES”) compliance inspections in April 2019, DHEC notified Arabella it was required to cease and desist all activities on the site and obtain an NPDES Permit. DHEC issued an NOV to Arabella in September 2019, and the Plaintiffs, Naturaland Trust and SC Trout Unlimited, as affected conservation citizens groups, sent their Notice of Intent to Sue under the CWA to Arabella in November 2019. Subsequently the groups filed their citizen suit after the 60-day notice period elapsed, seeking an injunction and civil penalties to be paid to the United States under federal law and injunctive relief and damages under state law. DHEC and Arabella entered into a consent order a month later which imposed $6,000 in civil penalties and required Arabella to obtain an NPDES Permit, prepare various plans, conduct an assessment study, and implement recommended remedial activities following the conclusion of the study.
The implications are significant. In effect, those with potential administrative enforcement actions looming or pending, be it from DHEC or any other state agency with similar enforcement procedures, may not be protected from a citizen suit until issuance of a consent order or unilateral administrative order—which is generally one of the last stages in the enforcement process from a defendant’s perspective. At a minimum, the issuance of an NOV or comparable notification from a state agency may not be sufficient to constitute the commencement of an action, as defined in the CWA, to bar a citizen suit. Compounding the potential implications, the Clean Air Act, the Safe Drinking Water Act, the Endangered Species Act, the Surface Mining Control and Reclamation Act, and the Resource Conservation and Recovery Act all have similar citizen suit provisions to the CWA. While the Court’s decision is only binding law in courts within the Fourth Circuit, there is a similar trend among other circuits toward being more permissive of citizen suits, and, in fact, the Fourth Circuit cites similar holdings in both the Seventh and Eighth Circuits.