MAYER, BROWN & PLATT
SUPREME COURT DOCKET REPORT
1998 Term, Number 9 / March 1, 1999
Today the Supreme Court granted certiorari in one case of
potential interest to the business community. Amicus briefs in support of the
petitioners are due on April 15, 1999, and amicus briefs in support of the
respondent are due on May 17 (because May 15 is a Saturday). Any questions about
this case should be directed to Alan Untereiner (202-778-0656) or Donald Falk
(202-778-0174) in our Washington office.
Clean Water Act — Mootness of Private Lawsuit Seeking Civil
Penalties for Discontinued Environmental Violations — Availability of Attorneys'
Fees Under "Catalyst" Theory. The Supreme Court granted certiorari in
Friends of the Earth v. Laidlaw Environmental Services (TOC),
Inc., No. 98-822, to determine whether a citizen suit seeking injunctive
relief and civil penalties under the Clean Water Act (CWA), 33 U.S.C. § 1365,
becomes moot because the defendant has come into compliance with the Act while
the action was pending. The Court also granted certiorari to decide whether, if
an action does become moot for that reason, a citizen plaintiff nonetheless may
be entitled to attorney's fees as "prevailing or substantially prevailing
party." Id. § 1365(d).
Laidlaw operates a hazardous waste incinerator that discharges
wastewater into the North Tyger River in South Carolina. In June 1992, the
plaintiffs filed a citizen suit under the CWA, alleging that the plant had
violated the terms of its discharge permits and committed various reporting and
monitoring violations. The district court conducted a hearing on liability in
1995 but deferred resolution of the case until a related state administrative
hearing was completed.
In January 1997, the district court found that Laidlaw had
violated the CWA. Although a small fraction of the violations took place after
the complaint was filed, the court found that Laidlaw had been in substantial
compliance with its permit since August 1992, shortly after the filing and more
than four years before the court's decision. As a result, the district court
denied plaintiffs' request for injunctive relief but imposed a civil penalty of
$405,800. 956 F. Supp. 568 (D.S.C. 1997).
The Fourth Circuit vacated and remanded with instructions to
dismiss the complaint. 149 F.3d 303 (1998). The day before the case was argued
on appeal, the Supreme Court decided Steel Co. v. Citizens for a
Better Environment, 118 S. Ct. 1003 (1998), holding held that a private
citizen lacked standing to sue for violations of the Emergency Planning and
Community Right-To-Know Act because, before the complaint was filed, the
defendant had brought up to date all filings required under that Act. In
particular, the Court held that the payment of civil penalties to the United
States Treasury did not "redress a cognizable Article III injury" to the private
plaintiff. Id. at 1019 n.4. The Fourth Circuit relied on Steel Co. to
conclude that the citizen suit against Laidlaw was moot "because the only remedy
currently available to Plaintiffs — civil penalties payable to the government —
would not redress any injury Plaintiffs have suffered." 149 F.3d at 307. The
court of appeals also held, in a footnote, that plaintiffs' "failure to obtain
relief on the merits of their claims precludes any recovery of attorneys' fees
or other litigation costs." Id. at 307 n.5.
The Fourth Circuit's holding on mootness appears to be in some
tension with Gwaltney of Smithfield, Ltd. v. Chesapeake Bay
Foundation, 484 U.S. 49, 64-67 (1987), in which the Court held that private
plaintiffs had standing to seek civil penalties under the CWA even after
injunctive relief had been denied (and the plaintiffs had not appealed the
denial). The court of appeals' conclusion that post-complaint compliance moots a
CWA citizen action also appears to conflict with decisions interpreting the CWA
after Gwaltney but before Steel Co. See, e.g., Comfort Lake Ass'n v.
Dresel Contracting, Inc., 138 F.3d 351 (8th Cir. 1998). And the Fourth
Circuit's holding that attorneys' fees are unavailable in these circumstances
arguably is in tension with Hewitt v. Helms, 482 U.S. 755, 761
(1987), a civil rights case in which the Court held that plaintiffs may be
deemed prevailing parties under private attorney general provisions where,
"under pressure of the lawsuit," the defendant "alters his conduct (or
threatened conduct) towards the plaintiff that was the basis for the suit." See
also Gwaltney, 484 U.S. at 67 n.6 (suggesting that a similar standard may apply
under the CWA). Several courts of appeals have held that private plaintiffs may
receive attorneys' fees as prevailing parties even if they obtain no relief, so
long as the litigation was a "catalyst" for the defendant to change its conduct.
See, e.g., Zinn by Blankenship v. Shalala, 35 F.3d 273, 274-76
(7th Cir. 1994).
This case is of obvious interest to businesses that are subject
to regulation under the Clean Water Act and other federal statutes that permit
private citizens to bring civil enforcement actions. The attorneys' fee issue is
of even broader importance, as courts have applied "catalyst" theories under a
wide range of environmental, civil rights, and consumer protection statutes.
This Mayer, Brown, Rowe & Maw Supreme Court Docket Report provides information and
comments on legal issues and developments of interest to our clients and
friends. The foregoing is not a comprehensive treatment of the subject matter
covered and is not intended to provide legal advice. Readers should seek
specific legal advice before taking any action with respect to the matters