JOHN T. COPENHAVER, JR., Senior District Judge.
In accordance with the court's Memorandum Opinion and Order and Findings of Fact and Conclusions of Law this day entered, the court considers the remedies that should be imposed. The issue has been briefed by both parties, each having recommended a remedy.
The EPA, the prevailing party, seeks both a civil penalty pursuant to 33 U.S.C. § 1319(d), and injunctive relief pursuant to 33 U.S.C. § 1319(b). Foster does not dispute that both a civil penalty and injunctive relief is an appropriate form of remedy, but, in particular, disagrees with the EPA as to the amount of the civil penalty.
Turning first to the issue of injunctive relief, the EPA suggests that Foster perform remediation in the form of "compensatory mitigation at least at the rate they would have had to perform had they complied with the permit process." United States' Remedy Brief, "ECF # 251," at 1. Specifically, the EPA proposes:
The Clean Water Act, ("CWA"), authorizes the EPA to seek "appropriate relief" for any violations, "including a permanent or temporary injunction." 33 U.S.C. § 1319(b). The district court "ha[s] authority to issue such restorative orders so as to effectuate the stated goals of the Clean Water Act `to maintain the chemical, physical, and biological integrity of the Nation's waters,' 33 U.S.C. § 1251 (1983)."
In evaluating remedial proposals for CWA violations, "courts have considered three factors: (1) whether the proposal `would confer maximum environmental benefits,' (2) whether it is `achievable as a practical matter,' and (3) whether it bears `an equitable relationship to the degree and kind of wrong it is intended to remedy.'"
Here, the court finds that the off-site compensatory mitigation proposed by the EPA, to be completed by Foster through purchasing the credits owed — as determined by a qualified consultant to be retained by Foster and verified by the EPA — from a mitigation bank, would confer maximum environmental benefit, is achievable as a practical matter, and bears an equitable relationship to the environmental harm sought to be remedied. Indeed, the court notes that Foster does not oppose this form of remediation, but requests that the plaintiffs be given the choice of the following:
Plaintiffs' Remedy Brief, "ECF # 253," at 3. However, inasmuch as off-site mitigation through purchasing credits from a mitigation bank is the preferred method of the EPA in this case as well as in general,
As for civil penalties, the counterclaim defendants assert that only a nominal penalty of $1 is warranted, whereas the counterclaim plaintiffs assert that $840,000 is appropriate.
The Clean Water Act provides that violators "shall be subject to a civil penalty not to exceed $25,000 per day for each violation." 33 U.S.C. § 1319(d). The Fourth Circuit has interpreted this language to mandate a civil penalty: "This language leaves little doubt that, under the circumstances of this case, a penalty in some form is mandated."
To determine the appropriate civil penalty, "the court may begin either with the violator's estimated economic benefit from noncompliance (known as the `bottom-up' method) or with the statutory maximum allowable penalty (known as the `top-down' method)."
Here, the court employs the bottom-up approach, which is also used by the EPA in its remedy brief. ECF # 251 at 10-20. Specifically, the EPA proposes that the penalty must be at least $84,438, which it calculates as Foster's economic benefit reaped from the CWA violations.
Turning, then, to the six factors set forth in the Clean Water Act, the court first considers the seriousness of the violation. In determining the seriousness of defendants' violations, "the court will consider the frequency and severity of the violations, and the effect of the violations on the environment and the public."
Second, as for the economic benefit to Foster from the violations, the court notes that although the property value may have increased in the amount calculated by the EPA, in sum Foster has sustained a substantial loss by virtue of this dispute. As noted in the Findings of Fact and Conclusions of Law at page 39, Foster has been precluded from developing the land from November 2010 to date, thereby suffering a substantial financial setback. Because Foster has already lost considerably more than any economic benefit he received from the violation, this factor weighs against imposing a substantial penalty.
Third, as for any history of violations, no such history by Foster has been presented to the court. This appears to be a first time environmental offense by plaintiffs.
Fourth, as for any good faith efforts to comply with the CWA, the court notes that although Foster was alerted to the potential need to obtain a permit by comments to his contractor made by EPA inspectors who were inspecting a nearby property, he did not seek a permit or contact the EPA to determine whether a permit was required. Foster did, however, promptly engage Fox Engineering Company and Dan Metheny, an engineer therewith, to inquire about the need for a permit; Mr. Metheny informed Foster that no permit was needed. Findings of Fact and Conclusions of Law at 9. There is no indication that Foster was aware that Mr. Metheny was not qualified to make that determination. On balance, this factor does not significantly aid the court in determining an appropriate penalty.
Fifth, as for the economic impact of the penalty on the violator, Foster is of sufficient wealth that a penalty at the EPA starting point of $84,438 would not be unduly onerous.
Sixth, when considering such other matters as justice may require, the court notes that the compensatory mitigation required of Foster will likely have a severe economic impact on him.
Taking all of these factors into account, the court finds that a civil penalty that is sufficient but not greater than necessary to effectuate the goals of the CWA and to adequately punish the counterclaim defendants for their violations and deter future violators is one that exceeds the economic benefit the counterclaim defendants are deemed to have received from the violation, and fixes the civil penalty at $100,000.
Accordingly, based on the foregoing discussion, it is ORDERED that, within 120 days of the date of this order, the counterclaim defendants submit to the EPA an evaluation, performed in conformity with the West Virginia Stream and Wetland Valuation Metric, of the number of credits necessary to compensate for impacts to waters of the United States resulting from the loss of the stream segments that this court in its Memorandum Opinion and Order and Findings of Fact and Conclusions of Law found that counterclaim defendants filled in violation of the Clean Water Act. The EPA shall thereafter promptly notify the counterclaim defendants and the court whether it agrees that the West Virginia Stream Wetland and Valuation Metric has been correctly calculated. Upon receiving such notification that the EPA agrees with the calculation, the counterclaim defendants shall, within 90 days therefrom, purchase those credits from a stream mitigation bank pursuant to the procedures set out in 40 C.F.R. § 230.90-98, unless within 30 days after receipt of the EPA's agreement with the calculation, the counterclaim defendants file a motion seeking review thereof. Alternatively, if the EPA does not agree with the calculation and the parties are unable to resolve the issue by agreement within 60 days after the EPA's rejection, the counterclaim defendants shall within another 30 days file a motion seeking review thereof.
Once the court has been notified that the credits have been purchased or has ruled on a review thereof as the case may be, a final judgment order carrying into effect the foregoing will be entered.
If, within the initial 120-day period noted on page 11, the counterclaim defendants fail to submit to the EPA the evaluation described above, any party to this action may seek entry of a final judgment order herein.
The Clerk is directed to transmit copies of this order to counsel of record and any unrepresented parties.