Third Circuit Rejects Challenges to Decades-Old Consent Decree

On January 6, 2023, the U.S. Court of Appeals for the Third Circuit rejected several challenges to a consent decree (CD) originally entered in 1996. United States v. Brace et al. involved conduct on defendant’s farm that allegedly violated the 1996 consent decree. Defendant argued that the CD was unenforceable because it was ambiguous and that a government official had approved of the allegedly violative actions. The Third Circuit rejected these arguments and upheld the district court’s ruling that defendant had violated the CD.

The decision provides a couple of important reminders for those entering into settlements with the Environmental Protection Agency (EPA). First, settlements with EPA may impose conditions that do not terminate and may leave a landowner’s ability to use their land permanently encumbered. Second, it is critical to get any changes to the CD in writing.

Brace arises out of a 1990 Clean Water Act enforcement action. In 1996, defendant entered into a CD that (1) prohibited discharging pollutants (including dredged or fill material) into a 30-acre wetland site on a farm; (2) required defendant to “restore the hydrologic regime” at the site; and (3) as part of the restoration project, required the defendant to remove a drainage tile system, fill in two surface ditches, and construct a check dam in a specific location. The CD failed to define the term “hydrologic regime” and included a hand-drawn map delineating the wetlands area and the location of the check dam. The CD also required that any changes be made in writing.

In 2016, the government notified defendant of alleged violations stemming from the discharging of dredged and fill material into 18 acres of the wetlands site, installing of drainage tile in the wetlands site, and removing of the check dam. The United States ultimately filed suit in the Western District of Pennsylvania, and the district court concluded that defendant had violated the CD. On appeal, defendant argued that the CD was ambiguous on its face because of the hand-drawn map and failure to define “hydrologic regime” and that the CD should therefore have been construed in defendant’s favor. Defendant also argued that the United States’ claim should be estopped because defendant claimed a government official had approved of all of the work defendant had done on his property.

The Third Circuit rejected these challenges. First, while it agreed that there was some ambiguity, the court concluded that defendant’s actions had clearly violated the terms of the CD. For example, the fact that the map was hand drawn did not explain why defendant had deposited dredged and fill material in 18 of the 30 acres of wetlands where such depositing was prohibited. As another example, the fact that the term “hydrologic regime” was undefined did not explain why defendant had installed more drainage tiles instead of removing them or why defendant had removed a check dam that he was required to install. Second, the Third Circuit rejected defendant’s estoppel claim because (1) defendant could not reasonably rely on an oral agreement to completely change the content of the CD, and (2) defendant failed to establish affirmative misconduct by the government. While estoppel among private parties can apply where one party reasonably relies to its detriment on another party’s misrepresentation, when the government is involved, the party seeking estoppel must demonstrate that the government agent engaged in affirmative misconduct.