KRAVITCH, Circuit Judge:
This case arises out of violations by Tyson Foods, Inc. ("Tyson"), between May of 1986 and February of 1988, of the limitations on discharges of pollutants from its poultry processing plant in Blountsville, Alabama, as set out in its National Pollution Discharge Elimination System ("NPDES") permits. Plaintiff-appellant, the Atlantic States Legal Foundation, Inc. ("ASLF"), appeals from the district court's entry of summary judgment in favor of Tyson on the grounds that the court erred in dismissing the suit as moot and in refusing to award penalties. The district court held that the Supreme Court's decision in Gwaltney of Smithfield v. Chesapeake Bay Foundation, Inc., 484 U.S. 49, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987) required it to dismiss as moot a citizen suit seeking relief for violations which, although occurring before and after filing of suit, had ceased at the time of defendant's motion for summary judgment. Alternatively, the court held that its equitable powers allowed it to deny relief in the form of civil penalties where the defendants had made a good faith effort at compliance. Because we find that the district court erred in dismissing the suit and refusing to award penalties, we reverse and remand.
In May of 1986, Tyson acquired several poultry processing plants in Alabama when it bought Lane Processing, Inc. out of bankruptcy. Lane owned Spring Valley Foods ("Spring Valley"), which operated a processing plant in Blountsville, Alabama. Spring Valley discharged various pollutants into the Locust Fork of the Warrior River in Alabama by way of Posey Creek and Graves Creek. These discharges were regulated by section 402 of the Federal Water Pollution Control Act (hereinafter "the Clean Water Act"), 33 U.S.C. § 1342, which authorizes the administrator of the EPA ("Administrator") to issue NPDES permits allowing the discharge of pollutants into navigable waters in accordance with specified conditions. Under section 402(b) of the Act, a state may establish and administer its own permit program. If that program conforms to federal guidelines and is approved by the Administrator, the issuance of federal permits is suspended. In the instant case, Spring Valley's discharge of pollutants was regulated by a permit issued by the Alabama Department of Environmental Management ("ADEM") in accordance with the state's federally approved NPDES program.
Section 308 of the Clean Water Act also requires plant operators to maintain and file Discharge Monitoring Reports ("DMRs") with appropriate authorities which reflect the terms of their NPDES permits and the amount of actual discharges. The DMRs for the Blountsville plant were filed with the ADEM.
The DMRs filed by Spring Valley prior to Tyson's acquisition of the plant demonstrate that Spring Valley had committed continuous and daily violations of its NPDES permit. John Reid, an employee of Tyson, stated in an affidavit that at the time Tyson acquired Spring Valley, the water treatment system was "both inadequate and in a poor state of repair."
In April of 1987, ASLF, a membership organization devoted to environmental and clean water issues, sent to Tyson and appropriate government agencies, a sixty-day notice letter as required by section 505(b) of the Clean Water Act, 33 U.S.C. § 1365(b), stating its intention to commence a citizen suit under the Clean Water Act.
On September 2, 1987, Tyson responded with a motion to dismiss for lack of standing and a motion to stay discovery on the merits until the standing issue was resolved. Before ASLF responded to the motion, the district court granted Tyson's motion to stay discovery and excused Tyson from answering ASLF's complaint or responding to its discovery requests. Tyson was allowed to conduct discovery of ASLF and its members.
In December of 1987, the Supreme Court decided Gwaltney of Smithfield v. Chesapeake Bay Foundation, 484 U.S. 49, 108 S.Ct. 376, 98 L.Ed.2d 306 (1987), in which it interpreted the jurisdictional requirements of the Clean Water Act's citizen suit provisions. ASLF filed an amended complaint to conform to the Gwaltney requirements for invoking the jurisdiction of the court.
In the same order, the court, citing to Gwaltney, decided sua sponte to stay the proceedings "until such time as the effectiveness of the upgraded wastewater facility
In May of 1988, Tyson filed a "Suggestion of Mootness" as to ASLF's complaint, stating that its wastewater treatment facility, which had been placed in initial operation on December 17, 1987, had become fully operational in mid-February of 1988 and that it had not exceeded its NPDES permit limitations for any pollutant since that time. On July 29, 1988, pursuant to ASLF's request, the district court lifted the stay of proceedings entered March 4, 1988 and the stay of discovery entered in September of 1987.
In November of 1988, both sides filed motions for summary judgment. At the time the motions were filed, it was clear that Tyson had violated its permit limits for twenty-one months: from May of 1986, when it took over plant operations from Spring Valley, until mid-February of 1988, when its newly constructed wastewater treatment facility became fully operational.
ASLF filed its complaint in August of 1987. Thus, the violations occurred for fifteen months preceding ASLF's filing of the complaint and for six months afterwards. According to ASLF, Tyson had 57 daily and 16 monthly pre-complaint violations and 34 daily and 8 monthly post-complaint violations.
The district court ruled on the cross motions for summary judgment in March of 1989, approximately 19 months after ASLF had filed its complaint. At that time, Tyson had been in compliance for a little over one year. The court granted summary judgment in favor of Tyson and denied ASLF's motion for summary judgment.
The question before us is whether the district court erred as a matter of law in holding that ASLF's claim for civil penalties became moot once Tyson came into compliance and injunctive relief was no longer appropriate. In addition, we must rule on the district court's alternative holding that even if the suit was not moot, the court, based on its equitable powers, would refuse to award penalties because of the efforts of the defendant to comply and the plaintiff's lack of due diligence in investigation. We address this alternative holding in Part III below.
The district court's holding that ASLF's suit was rendered moot by Tyson's compliance was based largely on its reading of the Supreme Court's holding in Gwaltney. It is important to note, however, that Gwaltney dealt primarily with the question of jurisdiction and not mootness. Indeed,
In Gwaltney, the Supreme Court faced the question of whether section 505 of the Clean Water Act "confers federal jurisdiction over citizen suits for wholly past violations." 484 U.S. at 52, 108 S.Ct. at 378. That section states that in the absence of federal or state enforcement, private citizens may commence civil actions against any person "alleged to be in violation of" the conditions of their NPDES permit.
Gwaltney, like the present case, involved a citizen suit filed in response to a company's repeated violations of its NPDES permit when discharging pollutants from its meat-packing plant into a river. Two environmental groups sent notice to Gwaltney in February of 1984 and filed a complaint against Gwaltney in June of 1984 seeking injunctive relief as well as civil penalties. Records indicated that Gwaltney's last recorded violation had occurred in May of 1984, one month before the complaint was filed.
The district court did not grant injunctive relief, but imposed civil penalties on Gwaltney. 611 F.Supp. 1542 (E.D.Va.1985). The court of appeals affirmed. 791 F.2d 304 (4th Cir.1986). In imposing penalties, the courts held that the citizen suit provision of the Clean Water Act authorized civil penalties for wholly past violations.
The Supreme Court, after examining the language and structure of the statute and comparing citizen suits with enforcement actions brought by the Administrator, reversed the lower courts. It held that for purposes of federal court jurisdiction, citizen plaintiffs must "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. The Court noted that section 505 of the Clean Water Act authorizes citizens to seek both injunctive relief and the imposition of civil penalties under section 309 of the Act, 33 U.S.C. § 1319(d). It held, however, that "citizens, unlike the Administrator, may seek civil penalties only in a suit brought to enjoin or otherwise abate an ongoing violation." Id. at 59, 108 S.Ct. at 382.
The Supreme Court stressed that citizen-plaintiffs need not prove their allegations of ongoing noncompliance before jurisdiction attaches under section 505. Instead, a good faith allegation of violations that continued at the time suit was filed is sufficient for jurisdictional purposes. Id. at 64, 108 S.Ct. at 385. It thus remanded the case in order for the lower courts to determine whether the citizens groups' allegations of continuing violations were made in good faith.
In Gwaltney, the discussion of mootness occurs in the context of the Supreme Court's reassurance that its construction of the threshold requirements for jurisdiction would not affect principles of mootness. We quote the passage in full:
484 U.S. at 66, 108 S.Ct. at 386 (footnote omitted).
The meaning of this passage is ambiguous. Its apparent purpose is to assuage the petitioner's fears regarding the ramifications of the Court's holding that a mere allegation of ongoing violations will suffice to invoke a district court's jurisdiction over a section 505 suit. Thus, the Court may simply be saying that if jurisdiction is granted on the basis of the plaintiff's allegations of an ongoing violation, the suit may be dismissed as moot if it turns out later that there was no basis for jurisdiction — i.e., that violations were not in fact ongoing at the time of suit.
On the other hand, the wording of the passage suggests that the Court may be referring to post-complaint compliance. Even assuming that this is the case, however, the Court appears to be only addressing the mooting of injunctive relief.
In the instant case, the district court's holding that the case was moot within the meaning of Gwaltney was based on two premises. First, in deciding whether there were ongoing violations, the district court focused on the presence or absence of violations at the time that it ruled on the parties' motions for summary judgment and not at the time the complaint was filed. Second, the district court held that once the injunctive portion of the case becomes moot, the civil penalties portion of the case must be dismissed as well. Given these two premises, the district court held that ASLF's complaint was moot because the pollution had ceased and there was no danger of future or intermittent pollution; therefore, neither injunctive relief nor civil penalties were available to the plaintiffs. Under the district court's reading of Gwaltney, the civil penalties provisions of a citizen suit becomes moot whenever a defendant begins to comply with the Clean Water Act.
We disagree with the district court's reading of Gwaltney. Specifically, we find that for purposes of assessing a plaintiff's allegations of ongoing violations, the court must always look to the date the complaint was filed. If on and after that date, the defendants continued to violate their NPDES permit, then the plaintiffs may request both injunctive relief and civil penalties.
At the time ASLF initially brought this suit, it requested an injunction and civil penalties based on good faith allegations of ongoing violations. Its complaint thus fulfilled the jurisdictional requirements of the Supreme Court's decision in Gwaltney. ASLF's claim for injunctive relief has since been mooted by Tyson's compliance, beginning in February of 1988, with the requirements of its permit. As this compliance is directly related to Tyson's new facility for wastewater treatment, and as this facility can be expected to operate in the future, we find that "the allegedly wrongful behavior could not reasonably be expected to recur." United States v. Phosphate Export Assn., 393 U.S. 199, 203, 89 S.Ct. 361, 364, 21 L.Ed.2d 344 (1968).
As we have stated, if the parties are able to make a valid request for injunctive relief at the time the complaint is filed, then they may continue to maintain a suit for civil penalties, even when injunctive relief is no longer appropriate. However, the showing necessary to maintain a suit for civil penalties must go beyond mere allegations. Plaintiffs must be able to prove that non-compliance was ongoing at the time they filed suit in order to be able to later maintain an action for civil penalties. The DMRs filed by Tyson for the months of May 1986 to February 1988 conclusively establish the existence of ongoing violations. Thus, ASLF has established liability under the Clean Water Act and is entitled to seek civil penalties for Tyson's non-compliance with its NPDES permit.
The Fourth Circuit's recent holding on remand in Gwaltney supports our reading of the Supreme Court's discussion of mootness. Following the Supreme Court's remand, the Fourth Circuit discussed the question of mootness for the first time after the district court had awarded civil penalties and defendant Gwaltney again appealed to the Fourth Circuit. In examining the question of mootness, the Fourth Circuit wrote that:
Chesapeake Bay Foundation v. Gwaltney of Smithfield, 890 F.2d 690, 696 (4th Cir. 1989). The court further held that:
Id. at 696-97. Although the Gwaltney court did not state so explicitly, it is clear from the opinion that the term "ongoing violations" refers to the time the suit was filed and not the time of trial.
Our holding finds further support in Public Interest Research Group v. Carter-Wallace, Inc., 684 F.Supp. 115 (D.N.J. 1988). In Carter-Wallace, the district court, in discussing the relationship between injunctive relief and civil penalties, stated that:
Id. at 119. The court opined that because the question of injunctive relief was no longer at issue in Gwaltney, the Supreme Court would have remanded only if pre-complaint violations could properly be the subject of civil penalties in a civil suit. Id.
Our holding is further bolstered by the policies underlying the citizen suit provision of the Clean Water Act and the difficulties that would result if we were to decide the question of mootness of civil penalties by focusing on a date other than the date the complaint was filed.
As the United States points out in its amicus curiae brief, citizen suits are an important supplement to government enforcement of the Clean Water Act, given that the government has only limited resources to bring its own enforcement actions. Courts have noted that "the judicial relief of civil penalties, even if payable only to the United States Department of the Treasury, is causally connected to a citizen-plaintiff's injury. Such penalties can be an important deterrence against future violations." Sierra Club v. Simkins Industries, Inc., 847 F.2d 1109, 1113 (4th Cir. 1988). If post-suit compliance results in a mooting of the suit for civil penalties, then
Perhaps the most dangerous result of the district court's holding is that it encourages violators to delay litigation as long as possible, knowing that they will thereby escape liability even for post-complaint violations, so long as violations have ceased at the time the suit comes to trial or is decided on summary judgment. Under such a holding, dischargers could intentionally violate the Clean Water Act until they are sued and then obtain a stay while continuing their violations until they eventually are in compliance with the law. At this point, the case would be dismissed and they would have escaped all penalties. The district court's understanding of mootness reads the civil penalties provision out of the Clean Water Act. Further, under the district court's opinion, whether or not a suit is mooted may depend on when the district court happens to set the case down for trial or rule on summary judgment motions.
In this regard, the history of the present litigation is instructive. The complaint was filed in August of 1987. One month later, the court stayed discovery. Meanwhile, Tyson continued to violate its permit limitations for the next five months, until early February. In March, the court stayed the proceedings again, this time in order to allow Tyson more time to upgrade its facilities. Finally, the court lifted the stay in July of 1988, approximately one year after the suit was filed. In March of 1989, nine months later, the court granted summary judgment in favor of Tyson. Given the stays imposed by the court, it was impossible for the plaintiffs to have the merits of their suit decided while the violations were ongoing. Indeed, the second stay was imposed for the precise purpose of giving Tyson time to come into full compliance. We cannot believe that Gwaltney allows a district court to determine the outcome of citizen suit litigation by staying the proceedings. Here, the district court's actions served to assist the defendant in having the case dismissed as moot.
Having decided that Tyson's claim for civil penalties is not moot, we must now rule on the district court's alternate holding that even if the case is not moot, the court nevertheless would abstain from imposing any penalties pursuant to its equitable powers. To rule on this holding, we turn to the penalty provisions of the Clean Water Act.
A. Determination of Penalties Under the Clean Water Act
In deciding upon the penalty to be assessed against a defendant who has violated its NPDES permit, the point of departure for the district court should be the maximum fines for such violations permitted by the Clean Water Act. Although the amount of the maximum fine is stated at 33 U.S.C. § 1319(d), the language of that section as originally written and as amended is not a model of clarity. Indeed, it leaves several questions regarding the calculation of fines unresolved.
Although it would be possible for the district court to resolve these questions on remand, we note that the questions, which involve statutory interpretation, are legal and not factual in nature. Thus, given the lack of Eleventh Circuit law in the area, we set forth our interpretation of the controlling statute in order to provide the court with guidance on remand.
Until February 4, 1987, 33 U.S.C. § 1319(d) stated that:
(emphasis added). The Clean Water Act was amended by the passage of the Water Quality Act of 1987, Pub.L. No. 100-4, 101 Stat. 7 (1987). The amendment to section 1319(d), effective February 4, 1987, changed the italicized language to state that a violator "shall be subject to a civil penalty not to exceed $25,000 per day for each violation." As Tyson's permit violations occurred both before and after the amendment, maximum penalties must be assessed in accordance with both the pre-and post-amendment language of the statute.
1. Maximum penalty per day where multiple violations occur on a single day
In interpreting the language of section 1319(d), courts have come to different conclusions as to whether the pre-amendment Clean Water Act limits a permittee's liability to $10,000 per day even if a permittee has violated discharge limitations for several pollutants on the same day. The district court's initial decision in Gwaltney includes a lengthy discussion of this question. That court, following the decision in United States v. Detrex Chemical Industries, Inc., 393 F.Supp. 735 (N.D.Ohio 1975) held that "Section 1319(d) authorizes a maximum of $10,000 per day in civil penalties for violations that are enumerated therein, even where the defendant has violated discharge limitations for several substances during the same day." 611 F.Supp. 1542, 1555 (E.D.Va.1985). The Gwaltney court noted that the statute is ambiguous, but felt that a construction that capped liability at $10,000 per day "accurately reflect[ed] the intent of Congress" and would provide "a substantial deterrent against violations by even the largest corporations where more than a few days of violation are involved." Id. In United States v. Amoco Oil Co., 580 F.Supp. 1042, 1047 n. 1 (W.D. Mo.1984), the district judge, in dicta, construed the language of section 1319(d) to allow for separate penalties for violations of the daily limit for two or more different pollutants, and in Student P.I.R.G. of New Jersey, Inc. v. Monsanto Co., CIV.A. No. 83-2040 (D.N.J. March 24, 1988) (1988 WL 156691), the court reached the same conclusion.
We agree with the district court in Gwaltney that the statutory language of section 1319(d) as originally written is ambiguous and find the varying interpretations given to that language equally plausible. In amending the statute, however, Congress specified that the penalties were not to exceed "$25,000 per day for each violation" (emphasis added). This language, applicable to violations occurring after February 4, 1987, is, we find, capable of only a single reasonable interpretation: the daily maximum penalty applies separately to each violation of an express limitation.
We further find that the slight change in wording in the 1987 amendment points to the proper interpretation of the statute as originally written. The Conference Report accompanying the amendment makes clear that under the Senate bill, section 309 of the Act 33 U.S.C. § 1319 was amended in part "to increase the civil judicial penalty limit from $10,000 to $25,000 per violation, [and] to clarify that each distinct violation is subject to a separate daily penalty assessment of up to $25,000...." H.R. Rep. No. 99-1004, 99th Cong., 2d Sess. 132 (emphasis added).
Congress' indication that it intended by its amendment simply to "clarify" the language in the statute as previously written convinces us to follow the Amoco and Monsanto courts' reading of the pre-amendment language and to find that Congress intended the fines to attach to each violation of an effluent limitation separately.
2. Calculation of the penalty for violation of a monthly average
Another difficulty that courts have faced is the proper way to calculate the penalty for a violation of a monthly average. For each "effluent characteristic" the NPDES permit lists both a "daily maximum discharge limitation" and a "daily average discharge limitation." The "daily maximum" is defined by the permit as the highest value of a sample result obtained during a single day. The "daily average" is defined as the arithmetic mean value of all sample results for a particular pollutant obtained during a calendar month. Typically, the daily average discharge limitation for the month is much lower than the daily maximum, reflecting the fact that harm may be done in the aggregate even when the defendant stays within the maximum limitations for each day.
The language of the statute does not make clear whether the penalty for a monthly violation
Id. at 314 (emphasis in original). Thus, under the Gwaltney court's reading of the pre-amendment statute, violating a monthly limitation in a month with thirty days would subject a polluter to a maximum penalty of $300,000 per pollutant. Under the statute as amended, a polluter would be subject to a maximum penalty of $750,000 for that month. The EPA agrees in its Penalty Policy that "violation of a monthly average effluent limitation should be counted as 30 violations." But see, Monsanto, CIV.A. No. 83-2040, 1988 WL 156691 (holding that a violation of the daily average should not be applied to every day that month, but should only be counted as a single violation).
We find the reasoning of the Fourth Circuit persuasive and consistent with the language of section 1319(d). Although the maximum penalty for a monthly violation may seem high, we note, as did the Gwaltney court, that section 1319(d) only serves to set a maximum penalty. In choosing the correct penalty to be awarded, the district court may take into account the reasons why the daily average limitation was violated
3. The interaction of daily and monthly violations
A final question that must be resolved is whether the imposition of penalties for a monthly violation forecloses penalties for daily violations within that month. Based on its holding that $10,000 was an absolute maximum per day regardless of the number of violations, the district court in Gwaltney held that no penalties for violations of the daily maximum should be imposed for months in which the polluter violated the monthly average. 611 F.Supp. at 1555.
As noted above, we do not read the pre- or post-amendment language to impose an absolute ceiling on the amount of penalties that may be imposed on a single day. However, we find that because discharge of a single pollutant may be the cause of both daily and monthly violations, fining the violator twice may result in imposing two fines for the same illegal act. We decline to interpret the statute to create this result. Thus, if a polluter is guilty of violating the daily average discharge limitation of pollutant A, and also violates the daily maximum limitation of only pollutant A, then the maximum fine for discharge of pollutant A would be $10,000 (or $25,000) times the number of days in the month. If, however, the polluter also violates the daily maximum of pollutant B, one would add each of those daily violations to the fine for the monthly violation of pollutant A.
B. The District Court's Refusal to Award Penalties
The district court, after noting that it sits as a court of equity that may exercise judicial discretion in all cases, held that "it would hardly be fair and just to impose civil penalties upon Tyson when in fact it has at all times herein acted in good faith." Slip op. at 9.
Tyson argues that the Supreme Court has approved the exercise of discretion by district courts to balance the equities in deciding penalties under the Clean Air Act. See Weinberger v. Romero-Barcelo, 456 U.S. 305, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982). In Romero-Barcelo, plaintiffs brought suit against the Navy for discharge of ordnance in alongshore waters. The Supreme Court affirmed the district court's use of discretion in declining to enjoin naval operations pending compliance with the Clean Water Act where the Court found great harm to the Navy and little harm to the environment. We find that the holding of Romero-Barcelo has little bearing in the instant case, as it speaks to the district court's discretion to refuse to issue an injunction and not to the question of penalties.
In the case of civil penalties, a district court's discretion is constrained by Congress' enumeration of factors to be considered when assessing such a penalty. Under the 1987 amendments to the Clean Water Act, Congress stated that:
33 U.S.C. § 1319(d) (emphasis added). Congress' use of the words "shall consider" suggests that in arriving at a dollar figure for penalties, the court is to take each listed factor into account as well as any additional factors the court feels have bearing on the question of penalties. The legislative history also notes that Congress intended to "expressly require the courts to consider [these factors]." H.R.Rep. No. 99-1004 at 132. See also, Tull v. United States, 481 U.S. 412, 422 n. 8, 107 S.Ct. 1831, 1838 n. 8, 95 L.Ed.2d 365 (1987).
From a reading of the district court's opinion in the instant case, it appears that the court focused solely on the good faith of the defendant in determining that the plaintiffs were entitled to no award of civil penalties. The court concluded that "[i]t would simply be inequitable and unconscionable to impose civil penalties against Tyson when it has displayed the utmost good faith." In support of its finding of good faith, the court noted that upon acquiring the plant from Spring Valley, Tyson immediately began building a state-of-the-art wastewater treatment system. It also noted that Tyson expended over $2.5 million to correct the past violations of its predecessor and that it did so without having been ordered to comply by any court or administrative agency.
There is no evidence that in determining penalty amounts the court examined the economic benefit to the violator or the seriousness of the violations. Insuring that violators do not reap economic benefit by failing to comply with the statutory mandate is of key importance if the penalties are successfully to deter violations. Although there is little evidence in the record on the question of economic benefit, testimony from the deposition of Mark Waller, the former plant manager at the Blountsville facility, indicates that Tyson may have saved over $400,000 in operation and maintenance expenses by operating without utilizing the technology and employees necessary to comply with its permit.
In Tull v. United States, 481 U.S. 412, 422-25, 107 S.Ct. 1831, 1838-39, the Supreme Court made clear that economic gain and restoration of the status quo is not the only basis on which penalties should be awarded under the Clean Water Act. In addition, the penalties are designed to punish violators for their non-compliance and to serve the goal of retribution. The Tull Court, citing the EPA Penalty Policy, stated that retribution can be based on "the seriousness of the violations, the number of prior violations, and the lack of good-faith efforts to comply with the relevant requirements." Id. at 423, 107 S.Ct. at 1838. Here, there is ample evidence that Tyson engaged in repeated violations which continued well after the complaint was filed.
In its order, the district court also stressed that ASLF filed suit against Tyson well after construction of the facility had begun and without investigating the status of the facility. It found that ASLF's attempts to gather information on which it based its complaint indicated a lack of diligence. While the statute allows the court to consider "other matters as justice may require," we have difficulty understanding how the due diligence of the citizen-plaintiffs fits into the calculus of penalties. Inclusion of this factor is particularly troubling when the court prevented the plaintiffs from gathering information by imposing a stay of discovery on the merits for nearly two years after the complaint was filed. On remand, therefore, the district court's perception of the efforts of ASLF to secure information should play no role in its calculation of the appropriate fine.
The district court concluded that "Congress could not have intended for the Clean Water Act to be used as an instrument to generate fines from parties which have made a bona fide effort to bring their operations into compliance with the Act, especially if they did so before a complaint was filed." We disagree. There was one simple and straightforward way for Tyson to avoid paying civil penalties for violations of the Clean Water Act: After purchasing the plant, Tyson could have ceased operations
ASLF claims that under the statute, precomplaint violations in this case involve a maximum penalty of over $14 million and post-complaint penalties involve maximum penalties in excess of $9 million. Without passing judgment on the correctness of these assessments, we note that section 309(d) of the Clean Water Act states that "[a]ny person who violates ... any permit condition or limitation ... shall be subject to a civil penalty...." This language makes clear that once a violation has been established, some form of penalty is required. In Stoddard v. Western Carolina Regional Sewer Authority, 784 F.2d 1200, 1208 (4th Cir.1986) the court stated that "[c]learly, a fine must be imposed when the violations have been as pervasive as those perpetrated by the [defendant] during the extended period from 1978 to 1983. We hold that the district court committed an error of law by failing to assess civil penalties in some amount." We agree with the Stoddard court. Civil penalties are to be assessed against Tyson as a matter of law. While the amount of penalty to be levied is discretionary with the district court, its determination, based solely on the good faith efforts of Tyson to comply with the law, that no penalty was appropriate was and would be an abuse of discretion.
Upon remand, the district court should first determine the maximum fine for which Tyson may be held liable. If it chooses not to impose the maximum, it must reduce the fine in accordance with the factors spelled out in section 1319(d), clearly indicating the weight it gives to each of the factors in the statute and the factual findings that support its conclusions. While the court may find the EPA's Penalty Policy helpful in determining the appropriate fines, the court's primary focus should be on the statutory language of section 1319(d).
Section 1365(d) of 33 U.S.C., as amended on February 4, 1987, states that:
As the district court ruled against ASLF on the merits, it did not discuss whether ASLF would be entitled to an award of costs and attorney fees. However, in its earlier opinion on the question of standing, the court stated that it felt:
784 F.2d at 1209 (citations omitted). The award of fees is within the discretion of the district court; however, the sound exercise of that discretion will not allow the court to deny fees and costs absent good cause. In a case like the instant one, where a citizens group has succeeded on the merits, we cannot conceive of any grounds that would justify a denial of fees and costs.
In Norman v. Housing Authority of City of Montgomery, 836 F.2d 1292 (11th Cir.1988), this court stated that "[t]he court's order on attorney's fees must allow meaningful review — the district court must articulate the decisions it made, give principled reasons for those decisions, and show its calculation. If the court disallows hours, it must explain which hours are disallowed and show why an award of these hours would be improper." Id. at 1304. That same decision clearly spells out the Eleventh Circuit's understanding of the analysis required under recent Supreme Court decisions for determining proper attorney's fee awards. Id. at 1299-1304. We thus refer the district court to Norman as a guide to the proper analysis of attorney's fees in this case. In addition, the parties should be given full opportunity to brief questions relating to an appropriate fee award.
As the evidence of Tyson's violations of its NPDES permits is uncontroverted, and the court's ability to impose civil penalties survives the mooting of injunctive relief, we reverse the district court's entry of summary judgment in favor of Tyson and direct the court to enter summary judgment on the question of liability in favor of ASLF. We remand to the district court for the limited purpose of calculating penalties based on Tyson's violations of its NPDES permit from the time it began operating the plant until it came into compliance in February of 1988 and for the purpose of calculating reasonable attorney's fees.
In calculating penalties, the district court shall consider and explain its finding on each of the factors enumerated in 33 U.S.C. § 1319(d). The court shall receive additional evidence from both parties on all factors as necessary, including but not limited to the exact number of daily and monthly violations for which Tyson is responsible, the speediness with which Tyson complied with the Clean Water Act, expenditures undertaken by Tyson to comply with the Act, and Tyson's increased economic gain from non-compliance. We also direct the court to grant ASLF's request for attorney's fees and costs, keeping in mind that ASLF is to be considered a "prevailing party" within the meaning of the Clean Water Act. The court is directed to make the above determinations as set forth in this limited remand within 120 days from the issuance of this opinion.
REVERSED and REMANDED.
CIV. A. No. 83-2040, 1988 WL 156691.
"Upset" is a term of art referring to an exceptional incident and does not include noncompliance due to improperly designed or inadequate treatment facilities. 40 C.F.R. § 122.41(n)(1) (1988).
Before the February 1987 amendment, some courts relied on the methodology of the Penalty Policy in determining appropriate penalties. See, e.g. Gwaltney, 611 F.Supp. at 1556 (finding EPA penalty policy "a helpful analytical framework for arriving at a civil penalty, particularly given the lack of congressional guidance."). More recently, courts have either used the penalty policy as an additional resource in calculating penalties, see PIRG v. Powell Duffryn Terminals, Inc., 720 F.Supp. 1158, 1166 (D.N.J.1989) (in applying statutory penalty factors set forth in the Clean Water Act, court will consider the EPA's Penalty Policy) or have decided not to rely on the policy. See Monsanto, CIV.A. No. 83-2040, 1988 WL 156691 (finding EPA methodology for settlement of civil penalties inapplicable to judicial determination of penalties after trial); Proffitt v. Lower Bucks County Joint Municipal Authority, CIV.A. No. 86-7220 (E.D.Pa. May 12, 1988) (1988 WL 48552) (declining to base findings regarding penalty on EPA policy).