The Future of the Citizen Suit After Steel Co. and Laidlaw

The Future of the Citizen Suit After Steel Co. and Laidlaw

Order Code RS20012
January 5, 1999
CRS Report for Congress
Received through the CRS Web
The Future of the Citizen Suit
After Steel Co. and Laidlaw
(name redacted)
Legislative Attorney
American Law Division
Summary
Two recent court decisions have called into question the viability of environmental
citizen suits. In Steel Co., the Supreme Court denied plaintiff standing in a citizen suit
where the defendant came into compliance after plaintiff sent its notice of intent to sue,
but before it filed the complaint. Subsequently, the Fourth Circuit in Laidlaw invoked
mootness doctrine to extend Steel Co. to where the citizen-suit defendant achieves
compliance after the complaint is filed, but before entry of final judgment. To be sure,
both suits resulted in compliance. But they also allow defendants to foreclose civil
penalties by coming into compliance, eliminating much of the incentive citizen suits
create for advance compliance. In addition, the possibility of case dismissal and denial
of litigation costs when the defendant cures its transgression in time may make citizen
suits unattractive to the many citizen enforcers who depend on such cost awards. Should
Congress find it appropriate to address this situation (the citizen suit concept has its
detractors as well as supporters), Steel Co. and Laidlaw arguably could be negated by
various amendments to current citizen suit provisions.
Background/history
In enacting the Clean Air Act (CAA) of 1970, Congress created the first "citizen suit"
provision in federal law. The CAA provision1 allows persons to file suit on their own
behalf to compel compliance with the Act, if neither federal nor state enforcers do so. As
well, citizen-plaintiffs are invited to use the courts to compel EPA performance of its
nondiscretionary duties under the Act.
142 U.S.C. § 7604.
Congressional Research Service ˜ The Library of Congress

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In the years that followed, Congress added citizen-suit language to roughly twenty
statutes, including most all federal environmental statutes of regulatory bent.2 These
provisions generally track the CAA prototype. For example, suit typically can only be
brought for regulatory violations 60 days or more after plaintiff has given notice of the
violation to the relevant federal agency, the state, and the alleged violator, and only if
neither the United States nor the state is diligently prosecuting a civil or criminal action in
a court to require compliance. One key addition to the CAA model -- in the CAA, Clean
Water Act, and elsewhere -- was a new remedy: citizen-suit plaintiffs could ask courts to
impose on violators not just injunctive orders, but civil money penalties as well.
Insertion of the citizen suit provision in the 1970 CAA was vigorously debated, and
even later enactments adopted the device with expressions of congressional caution that
it be properly limited. More pertinent here, some observers questioned whether citizen
suits, by incorporating broad grants of standing to sue, might be on a collision course with
increasingly restrictive Supreme Court notions as to what the Constitution demands for
standing.
Standing doctrine seeks to limit who can invoke the jurisdiction of the federal Article
III courts (district courts, courts of appeals, and the Supreme Court). By insisting that
plaintiffs have a concrete stake in the outcome of the suit, the doctrine seeks to ensure that
such courts will have the benefit of vigorous case preparation and argument by all parties.
Standing prerequisites are textually rooted in Article III's statement that courts created
under that constitutional provision may only hear "Cases" and "Controversies."
Today, the Article III-derived standing test has three components: injury in fact,
causation, and redressability. First, plaintiff must allege (and ultimately prove) an "injury
in fact" -- a concrete harm that has been or imminently will be suffered by him or her.
Second, there must be causation -- that is, a connection between the plaintiff's injury and
the complained-of conduct of the defendant. And third, there must be redressability -- a
likelihood that the requested relief will redress the injury. Because these conditions are
constitutionally based, Congress may not eliminate them by statute.
A
2
1991 compilation of citizen suit provisions lists the following: Act to Prevent Pollution from
Ships, 33 U.S.C. § 1910; Clean Air Act, 42 U.S.C. § 7604; Clean Water Act, 33 U.S.C. § 1365;
Superfund Act, 42 U.S.C. § 9659; Deep Water Port Act, 33 U.S.C. § 1515; Deep Seabed Hard
Mineral Resources Act, 30 U.S.C. § 1427; Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. § 11046; Endangered Species Act, 16 U.S.C. § 1540(g); Energy Conservation
Program for Consumer Products, 42 U.S.C. § 6305; Marine Protection, Research and Sanctuary
Act, 33 U.S.C. § 1415(g); National Forests, Columbia River Gorge National Scenic Area, 16
U.S.C. § 544m(b); Natural Gas Pipeline Safety Act, 49 U.S.C. § 1686; Noise Control Act, 42
U.S.C. § 4911; Ocean Thermal Energy Conservation Act, 42 U.S.C. § 9124; Outer Continental
Shelf Lands Act, 43 U.S.C. § 1349(a); Powerplant and Industrial Fuel Use Act, 42 U.S.C. § 8435;
Resource Conservation and Revovery Act, 42 U.S.C. § 6972; Safe Drinking Water Act, 42 U.S.C.
§ 300j-8; Surface Mining Control and Reclamation Act, 30 U.S.C. § 1270; Toxic Substances
Control Act, 15 U.S.C. § 2619. Michael D. Axline, ENVIRONMENTAL CITIZEN SUITS App. A
(1991).
The only regulatory-type federal environmental law that lacks a citizen suit provision is the
Federal Insecticide, Fungicide and Rodenticide Act.

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In addition to the constitutionally based elements of standing, the Supreme Court
holds that plaintiffs must satisfy certain prudential conditions, imposed by the courts to
insure the efficient administration of justice. In particular, the Court has refrained from
adjudicating "generalized grievances" -- i.e., injuries shared by a broad segment of the
public -- and has required that the plaintiff's injury fall within the "zone of interests" to be
protected by the statute in question. Because they are not constitutionally based, Congress
may legislate away these standing prerequisites.3
We now turn to our focus here: two recent environmental court decisions that denied
standing to citizen-suit plaintiffs seeking to compel regulatory compliance with federal
environmental laws, or punish past noncompliance.
Two Recent Environmental Decisions
Steel Company: compliance achieved before complaint filed
In Steel Company v. Citizens for a Better Environment,4 the Supreme Court sought
to resolve a circuit split as to whether the citizen-suit provision of the Emergency Planning
and Community Right-to-Know Act (EPCRA) a
5
uthorizes suit for wholly past violations.
Following the environmental group's mailing of the requisite 60-day notice, the defendant
company had corrected the noncompliance -- failure to file EPCRA-required chemical
inventory and release forms -- before the actual complaint was filed.
The Court failed to reach the merits, however, because the environmental group was
found to lack standing. Assuming that failure to file the forms was an "injury in fact" for
standing purposes, the Court held that the relief requested in the complaint failed to meet
the redressability prong of standing. First, the civil penalties sought by plaintiff were not
payable to it, but rather went to the U.S. Treasury. Thus they could not redress any injury
incurred by the plaintiff. Nor, said the Court, does plaintiff's possible satisfaction in seeing
defendant get its just desserts and the rule of law vindicated constitute an Article III injury.
Second, plaintiff sought recovery of its "investigation and prosecution" costs. To
the extent that these costs were the result of the litigation, however, they failed to support
standing. "Obviously," said the Court, "a plaintiff cannot achieve standing to litigate a
substantive issue by bringing suit for the cost of bringing suit."6 In contrast, investigation
costs incurred prior to the litigation -- i.e., "unrelated" to the litigation -- "assuredly [did]
support Article III standing." Problem was, the E
7
PCRA citizen suit provision authorized
the recovery of only "costs of litigation."
3And indeed has. See, e.g., Bennett v. Spear, 520 U.S. 1154 (1997) (citizen suit provision in
Endangered Species Act negated zone of interests test by allowing parties asserting purely
economic interests to sue).
4118 S. Ct. 1003 (1998).
542 U.S.C. § 11046(a)(1).
6118 S. Ct. at 1019.
7118 S. Ct. at 1019.

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Finally, the environmental group sought injunctive relief -- e.g., enabling it to inspect
the company's facility and records. Injunctive relief is only warranted, however, to deter
the real possibility of future injury, and the environmental group had not alleged any such
threat. The Court further rejected the argument of amicus United States that there is a
presumption of future injury when the defendant voluntarily ceases an illegal activity as the
result of litigation. An allegation of injury sufficient to support standing, said the Court,
must be "particular and concrete." Thus, it
8
concluded, injunctive relief would not redress
the group's injury.
One effect of Steel Co. is to "constitutionalize" the Court's earlier ruling in Gwaltney
of Smithfield, Ltd. v. Chesapeake Bay Foundation, Inc.
9
Gwaltney held on purely
statutory grounds that the Clean Water Act did not allow citizen suits for wholly past
violations.
Laidlaw: compliance achieved after complaint filed
In Friends of the Earth v. Laidlaw Environmental Services, Inc., environmenta
10
l
groups filed a citizen suit that, unlike Steel Co., alleged regulatory infractions ongoing at
the time of filing -- in this case, violations of a Clean Water Act permit. The district court
imposed a $405,800 civil penalty, but, noting that Laidlaw had achieved substantial
compliance during the suit, ruled that injunctive relief was unnecessary.
On appeal, the Fourth Circuit dismissed the entire case as moot. Mootness arises, the
court began, when the Article III standing components do not "continue to exist at every
stage of review, not merely at the time of the filing." Here, as in
11
Steel Co., the
"redressability" component was held not to "continue to exist." The court's argument was
that because plaintiffs did not appeal the denial of injunctive relief, the only possible
redress for their claimed injuries was the civil penalties. However, the Steel Co. decision
instructed that because such penalties are paid to the U.S. Treasury, they cannot redress
any injury suffered by a citizen plaintiff. Nor did any satisfaction plaintiff might derive
12
from seeing a wrongdoer punished constitute an Article III "injury in fact."
8Id. at 1020.
9484 U.S. 49 (1987).
149
10
F.3d 303 (4th Cir. 1998), petition for cert. filed, 67 U.S.L.W. 3364 (Nov. 9, 1998) (No. 98-
82).
149 F.3d at 306.
11
A
12
pre-Steel Co. decision of the Fourth Circuit had held to the contrary. In Sierra Club v. Simkins
Industries, Inc., 847 F.2d 1109, 1113 (4th Cir. 1988), the court concluded that because "penalties
can be an important deterren[t] against future violations," they could redress a private plaintiff's
injury from regulatory violations even though the penalties are not paid to the plaintiff. Of course,
Steel Co. required the Fourth Circuit to abandon this position in Laidlaw.
The pre-Steel Co. Fourth Circuit view appears to have been the dominant view at the time.
Writing in 1993, one commentator noted that "[t]he majority rule is that in cases where a defendant
achieves compliance only after a citizen suit complaint has been filed, civil penalties claims survive
the mooting of injunctive relief." Timothy A. Wilkins, Mootness Doctrine and the Post-
Compliance Pursuit of Civil Penalties in Environmental Citizen Suits, 17 Harv. Envtl. L. Rev.
389, 390 (1993).

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Important here, the court also barred recovery of plaintiffs' attorney's fees and other
litigation costs. Under the terms of the Clean Water Act's citizen suit provision, it noted,
such recovery is available only to a "prevailing or substantially prevailing party." Th
13
e
court acknowledged Gwaltney's citation of Clean Water Act legislative history for the
proposition that costs could be awarded when a case becomes moot because a defendant
voluntarily comes into compliance. It disregarded
14
Gwaltney, however, on the ground
that the Court there did not discuss the 1987 Clean Water Act amendment adding the
"prevailing party" language. To disregard a Supreme Court opinion because of assumed
(or actual) defects in its logic is questionable judicial practice.
Analysis
The impact of Steel Co. alone is unclear. Prospective citizen-suit plaintiffs could
search for instances of noncompliance that are unlikely to be remedied within the 60-day
period following notice of intent to sue. Compliance within 60 days may be difficult, for
example, where it involves great expense and extensive changes in plant operations. Even
if defendant cures the noncompliance before the complaint is filed, plaintiff's costs at this
early stage may be manageable, so nonrecovery of such costs from defendant may be an
acceptable risk. And, after all, compliance was achieved. Thus the possibility of pre-
complaint compliance may not deter the sending of 60-day notice letters.
If the Laidlaw holding is widely adopted, however, a reduction in the number of
citizen suits seems very likely. The strategy suggested by
15
Steel Co. will be foreclosed,
since coming into compliance after the filing of the citizen suit, but before final judgment,
will be sufficient to defeat the claim and bar any award of costs. And at this later stage in
the proceedings, possibly after years of effort and expense, denial of costs takes a bigger
bite.
Arguably, Steel Co. and particularly Laidlaw may have a second impact. The civil
penalties imposed under citizen suits supplement the threat of government enforcement as
an incentive for regulated entities to conform to the law in advance of enforcement efforts.
If citizen enforcers are unable to secure civil penalties, and only bring about voluntary
compliance, there is no economic benefit to a company's coming into compliance until a
citizen suit is filed -- at least not based on citizen suits. Only the possibility of government
pursuit of civil penalties (and perhaps tort liability) makes compliance a rational pre-
enforcement strategy.
Of course, the citizen suit concept has its detractors as well as supporters. "For [its
supporters], citizen suits were instrumental in ensuring facility compliance. For [its
detractors], however, citizen suits bordered on extortion and allowed environmentalists
33 U.S.C. § 1365(d).
13
Gwaltney
14
, 484 U.S. at 67 n.6.
See
15
generally James D. Brusslan, "Steeling" Environmental Suits from Citizens: The Steel Co.
Decision and How Congress Can Restore Citizens' Rights, 29 Env't Rptr. (BNA) No. 22, at 1126
(Oct. 2, 1998); Richard Lazarus, Rise and Demise of the Citizen Suit, 15 Envtl. Forum no. 5, at
8 (Sept.-Oct. 1998).

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to maintain suits for technical violations so trivial that they had not warranted
governmental enforcement."16 Thus, it is by no means clear that Congress, even should
it conclude that the above-described impacts will occur, will choose to respond. If
Congress determines that such results are undesirable, however, it has at least three
options for negating Steel Co. and Laidlaw.
1. Bounties or damages. Congress might authorize recovery by a successful citizen
plaintiff of a monetary sum -- e.g., a percentage of the civil penalties imposed, or damages
for personal or property injury. The first, bounty-like solution resembles the "qui tam"
provision in the False Claims Act, under which citizens may bring suit for violations of the
False Claims Act and receive 15 to 30 percent of the civil penalty awarded (or settlement
amount). Commentators have written approvingly of
17
the bounty option. However,
18
there may be a constitutional complication where there remains no injury in fact whose
abatement may be aided by the bounty payment -- as when plaintiff's only claimed injury
is an agency's failure to disclose information and that failure has already been rectified.
2. Mitigation payments. Congress might authorize the earmarking of civil penalties
for mitigating the environmental problem that prompted the citizen suit. Less clearly
sufficient from a constitutional standpoint is placing the recovered civil penalty in a state
or local fund that supports remediation of environmental problems over a broad area,
including the problem that gave rise to the citizen suit in question. As above with
bounties, these solutions assume a lingering injury.
3. Expenses unrelated to litigation. Steel Co., recall, noted that recovery of expenses
unrelated to the litigation -- there, the pre-litigation cost of digging up the information
defendant should have filed -- would support standing. Hence, Congress might consider
an expansion of the plaintiff costs recoverable through citizen suits to embrace this
category.
If Steel Co. and Laidlaw (widely adopted) ultimately do reduce the number of citizen
suits and their value as incentives for advance compliance, one should not assume that
rampant flouting of environmental and other regulations will result. Nothing in these
decisions impairs the enforcement ability of federal agencies, or state agencies under
delegated federal programs. The key issue is whether government enforcement, less
frequently assisted by citizen watchdogs as the possible result of these decisions, can
achieve a level of compliance by the regulated community that Congress and the public still
regard as acceptable.
16Lazarus, supra note 15.
31 U.S.C. § 3730(d).
17
See
18
references, supra note 15.

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