05 May 2022

First Circuit Holds State Administrative Enforcement Does Not Bar a Subsequent Clean Water Act Citizen Suit for Injunctive Relief

On April 28, 2022, the U.S. Court of Appeals for the First Circuit, sitting en banc, considered in Blackstone Headwaters Coalition, Inc. v. Gallo Builders, Inc. et al. whether a state consent order settling claims under a state analogue to the federal Clean Water Act (CWA) barred a subsequent citizen suit brought under the CWA seeking injunctive and declaratory relief arising out of the same alleged discharges. Over 30 years before, in North and South Rivers Watershed Ass’n v. Town of Scituate, the First Circuit held that CWA enforcement barred subsequent citizen suits arising out of the same alleged violations, regardless of the type of relief sought. In Blackstone, the en banc First Circuit overruled Scituate and held that the prior state consent order bars only citizen suits seeking civil penalties. The decision in Blackstone opens the doors in the First Circuit to follow-on citizen suits that had been barred, but a circuit split on the issue might mean the issue will rise to the Supreme Court.

In Blackstone, Massachusetts brought an enforcement action against a property developer under the Massachusetts Clean Water Act (MCWA) for allegedly discharging silt-laden runoff into a stream near a construction site. The parties settled the action in a consent order that required the defendant to pay civil penalties. Three years later, the Blackstone Headwaters Coalition filed a citizen suit in federal court under Section 1365 of the CWA alleging that the same discharges violated the CWA, seeking declaratory and injunctive relief as well as civil penalties.

Defendants moved for summary judgment, arguing that Section 1319(g)(6)(A) of the federal CWA barred the citizen suit because the developer had already been subject to enforcement under the analogous state MCWA. In support, defendant relied on subsection (g)(6)(A)(ii), which states that where “a State has commenced and is diligently prosecuting an action under State law” that is comparable to the Environmental Protection Agency’s administrative penalty authority under Section 1319(g)(6), then a party “shall not be the subject of a civil penalty action under … section 1365 of this title.” 42 U.S.C. § 1319(g)(6)(A) (emphasis added). Defendant asserted that under Scituate, Section 1319(g)(6)(A) barred a citizen suit regardless of whether those suits were for civil penalties, injunctive relief, or declaratory relief. The district court granted summary judgment on these grounds, and a panel of the First Circuit agreed, citing Scituate.

The en banc First Circuit reversed, expressly overruling Scituate. In doing so, the court focused on the fact that the limitation on citizen suits applies only to a “civil penalty action,” and it reasoned that Congress used this phrasing to limit this bar to actions for civil penalties and not broader actions for injunctive or other declaratory relief. To support this holding, the court looked to the settled definition of “civil penalty,” and Supreme Court precedent distinguishing between civil penalties and equitable remedies, as well as how the CWA authorizes the government and citizens to bring a “civil action,” which the court reasoned is necessarily a broader authority than a “civil penalty action.” The court also examined the legislative history of the CWA and found that the use of the term “civil penalty action” in Section 1319(g)(6)(A) was intended to refer to civil penalty claims and not claims for injunctive and declaratory relief.

Blackstone thus opens the door in certain cases to citizen suits in the First Circuit after a party has settled with a state (or federal) government in an administrative consent order, if the citizen seeks relief beyond civil penalties. Parties that have already entered into those types of agreements should be aware of this new risk — and those considering an administrative resolution should take this into account.

Interestingly, the opinion does not address other possible defenses, such as the common law principles of res judicata and mootness, which some courts have invoked to forestall a subsequent citizen suit. Blackstone does not address and should not affect the separate CWA statutory bar on citizen suits in Section 1365(b)(1)(B) if the federal or state government is diligently prosecuting a judicial action in court to enforce the CWA, although a citizen may intervene in that action as of right. Blackstone does, however, reinforce a circuit split on the scope of the 1319(g)(6) limitation on citizen suits between the Eighth Circuit (which had followed Scituate) and the Tenth Circuit (which had reasoned the same as Blackstone). This circuit split increases the possibility of Supreme Court review.

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