So You Though You Had Standing Brown Bag Addresses Citizen Suits: So You Thought You Had Standing

By Karen M. Wardzinski and Andrew M. Kenefick
Looking Ahead, September/October 1998

With its March 4, 1998, decision in Steel Company v. Citizens for a Better Environment (CBE), 118 S. Ct. 1003, the U.S. Supreme Court has changed the landscape for lawyers bringing and defending citizen suits under many enyironmental statutes. In this far-reaching opinion, the Court held that citizen groups have no standing to enforce reporting requirements of the Emergency Flanning and Community Right to Know Act (EPCRA) for wholly past violations.

Given its importance, three of the Section's environmental committees (Toxic Torts and Environmental Litigation, Water Quality & Wetlands, and Superund & Hazardous Waste) jointy sponsored a multi-site brown bag teleconference program in June to discuss the Supreme Court's decision and its potential impact on the future of citizen suits under environmental statutes. The program was held live in Chicago and teleconferenced nationally to sites in nine other cities, from Maine to California and Washington State to Washington, D.C. The teleconference format enabled the Section to provide timely and useful information to members on a significant new environmental decision. By all accounts, it was a very successful program.

Speaking at the program were attorneys who represented the parties in the Steel Company case before the Supreme Court: Sanford M. Stein (Wildman, Harrold, Allen & Dixon, Chicago) for the Steel Company and James D. Brusslan, attorney for CBE. Also speaking was Percy Angelo (Mayer, Brown & Platt, Chicago), a private practitioner with extensive experience defending companies against citizen suits. The speakers provided excellent insight into the impact this case is likely to have on future citizen suits.

The Steel Company case was a private enforcement action brought by CBE for the Steel Company's failure, for years, to file annual toxic release inventory (TRI) and hazardous chemical inventory forms under EPCRA. CBE first filed the requisite 60-day notice letter, notifying the Steel Company, EPA, and the State of Illinois of the alleged violations. The Steel Company responded by promptly filing all overdue reports. When CBE nevertheless filed suit against the company in district court, the Steel Company moved to dismiss, arguing that the court lacked jurisdiction to hear a citizen suit for wholly past violations. The district court dismissed the action, but the Seventh Circuit Court of Appeals reversed. 90 F.3d 1237 (7th Cir. 1996). The Seventh Circuit's decision conflicted with that of the Sixth Circuit, which had previously held in Atlantic States Legal Foundation, Inc. v. United Musical Instruments, 61 F.3d 473 (1995), that suits under EPCRA for wholly past violations were not authorized. This conflict in the circuits led to the Supreme Court's review.

Delivering the opinion of the Court, Justice Anton Scalia stated that the plaintiff lacked Article III constitutional standing to maintain the suit. Justice Scalia reasoned that there are three "irreducible constitutional minimum" requirements for constitutional standing. First, there must be an "injury in fact" - that is, the plaintiff must have suffered some concrete or actual and imminent injury beyond that suffered by the public in general. Second, there must be causation, i.e., the plaintiff's injury must be fairly traceable to the complained-of actions of the defendant. And third, there must be "redressability" i.e., the requested relief must actually redress the alleged injury to the plaintiff. It was this last requirement that the Justices found lacking in the Steel Company case.

The Court held that none of the relief requested by the plaintiffs - a declaratory judgment that defendants were in violation, civil penalties, litigation costs, authority to inspect defendant's facility, and an order requiring defendant to provide copies of EPA compliance reports to the plaintiff - would remedy the past harms to the plaintiff. The Courrt stated that the latter two items of requested relief were injunctive in nature and aimed at deterring future violations, not remedying past harm. On the issue of "litigation costs," the Court held that reimbursement for the costs of prosecution could not support Article III standing and that reimbursement of investigative costs - which would certainly benefit plaintiff and support Artile III standing - was not authorized by EPCRA. Finally, since civil penalties are not paid to the plaintiff, the Court held that they could provide nothing other then "psychic satisfaction" to the plaintiff, not a redress cognizable under Article III.

In a sharply worded concurring opinion(in which several Justices joined and to which Justice Scalia painstakingly responded at the very beginning of his opinion), Justice John Paul Stevens strongly disagreed with the majority decision to reach the constitutional issue of standing. Justice Stevens maintained that the statutory question of whether EPCPA itself authorizes citizen suits for wholly past violations should have been determined first (and in the negative), thus obviating the need to address the constitutional standing issue.

The Section-sponsored brown bag program focused on the effect of the Supreme Court's decision. One speaker noted how significant it was for the Court to reach the issue of standing when it did not need to, as pointed out in Justice Stevens' concurring opinion. She explained that for years most litigants and EPA have taken standing for granted, especially where environmental statutes purported to grant broad standing through language authorizing "any person" to bring an action. The Steel Company case clearly reverses this trend, making it clear that parties must now look beyond the statute involved to address the constitutional requirements for standing. She emphasized that this was true not just for the issue of "redressability" but for all three prongs of the standing test, pointing to the recent Third Circuit decision in Public Interest Research Group v. Magnesium Elektron, 123 F.3d 111 3rd Cir. 1997), which dismissed a citizen suit on constitutional standing grounds for plaintiff's failure to prove "injury in fact." There, the Third Circuit dismissed the action, after a full trial and findings of National Pollutant Discharge Elimination System (NPDES) permit violations under the Clean Water Act, because the plaintiffs did not prove an actual water quality impact caused by the violations.

All speakers agreed that the current Supreme Court's approach to the issue of standing was far more limiting than historical precedents. One speaker stated that the decision reflects a fundamental change in the Court's view on access to the courts, noting that Justice Scalia in particular sees the role of the courts as limited, not expansive. The speaker explained that the days of SCRAP and Sierra Club v. Morton were days of judicial activism when the courts sought to swing the doors of access wide open and saw a need for strong enforcement of environmental regulations. He stated that there is no longer the same need for judicial activism since environmental regulation is now more established and a given part of the way one does business. As a result, he reasoned, the Court appears intent on making it more difficult to obtain court access.

Counsel for CBE stated that CBE obviously believes the decision was wrongly decided, in particular Justice Scalia's reasoning that litigation costs did not include investigative costs of uncovering EPCRA violations. He believed that the result would be little citizen enforcement in EPCRA and, thus, greater noncompliance because citizen groups do not have the resources to investigte EPCRA violations where there was no hope of reimbursement. Only where a plaintiff could demonstrate a continuing violation or imminent future violations might a citizen group choose to proceed with an action. He queried whether a history of six to eight years of violations did not demonstrate a propensity for future violations. He also stated that Congress could revise EPCRA to explicityly authorize investigative costs for plaintiffs, thereby providing for standing.

Counsel for CBE stated that CBE obviously believes the decision was wrongly decided, in particular Justice Scalia's reasonsing that litigation costs did not include investigative costs of uncovering EPCRA violations. He believed that the result would be little citizen enforcement in EPCRA and, thus, greater noncompliance because citizen groups do not have the resources to investigate EPCRA violations where there was no hope of reimbursement. Only where a plaintiff could demonstrate a continuing violation or imminent future violations might a citizen group choose to proceed with an action. He queried whether a history of six to eight years of violations did not deomonstrate a propensity for future violations. He also stated that Congress could revise EPCRA to explicitly authorize investigative costs for plaintiffs, thereby providing for standing.

Another speaker disagreed that the decision would lead to greater noncompliance under EPCRA. He noted that the system worked correctly in this case. CBE secured compliance with EPCRA within the 60-day notice period as envisionted by the statute and there should have been no need for litigation. He also disagreed that it made sense for Congress to amend EPCRA to specifically authorize reimbursement of investigative costs. He said a more logical legislative change might be to eliminate the 60-day notice period if Congress believed immediate citizen suit enforcement was needed.

Several attendees questioned whether Congress could legislate a fix that would restore broad standing, for example, by authorizing a citizen to "stand in the shoes of the government such as in federal false claim statutes, or by authorizing a citizen bounty for successful suits. The speakers stated that the Steel Company decision did not answer these questions. One reminded the audience that, in general, constitutional standing under Article III could not be legislated by Congress and that even under a statute that authorized certain remedies such as a bounty, a plaintiff still needed to demonstrate and "injury in fact."

The speakers also added the importance of compliance within the 60-day notice period. One stated that if a company came into compliance on day 61, it was arguable that a citizen suit could proceed. Another noted that there are numerous cases supporting the proposition that a party cannot defeat jurisdiction by coming into compliance after the filing of the suit. Yet another stated, however, that while the courts might have jurisdiction there would likely be a question of mootness at that point.

The speakers noted that the case would not affect the govemment's ability to enforce in anyway since the government has the right to enforce federal laws. Counsel for CBE said he hoped the decision would send a message to the government that it must do more in the way of enforcement given the new limits on citizen suits.

On the issue of the impact on other environmental statutes, the speakers noted that although the impact could be somewhat statute-specific, the three-prong test for standing would certainly be used generally. For example, the Supreme Court has already held in Gwaltney that the CWA requires an ongoing violation to maintain a citizen suit. Therefore, the opinion may be directly applicable. They noted the impact was more questionable under the Clean Air Act (CAA). The CAA authorizes citizen suits for past violations if they will likely be repeated. All speakers agreed that the meaning of this CAA provision is somewhat unclear. They pointed out, however, that there is less likelihood that a CAA violation could be remedied within the 60-day notice period since CAA requirements often require the installation of pollution control equipment, which takes much longer than 60 days to install. They also noted that the CAA's citizen suit provision authorizes a "beneficial mitigation program in lieu of penalties" that has been read to mean supplemental environmental projects. Such a provision could obviate the Steel Company holding that civil penalties do not support citizen suit standing because they go only to the government. In that case, the Steel Company opinion may not have substantial impact on CAA suits.

In a very recent development, the Fourth Circuit, relying on the Steel Company decision, dismissed as moot a CAA citizen suit in which the defendant came into compliance with its NPDES penmit after suit was filed against it. Friends of the Earth v. Laidlaw Environmental Services, No.97-1246, 1998 U.S. App Lexis 16298(4th Cir., July 16, 1998). This case and other recent citizen suit developments will be addressed in greater detail in several sessions at the Section's upcoming 6th Section Fall Meeting in Hilton Head, South Carolina.

For more information, please contact James D. Brusslan.
Telephone 312-362-0500;
envnlaw@ripco.com; Fax 312/ 362-0515