In March 2023, Kilpatrick Townsend reported on a number of Clean Water Act (CWA) citizen suit actions including Dakota Finance LLC d/b/a Arabella Farm v. Naturaland Trust (Arabella Farms).[1] Arabella Farms addressed the issue of what constitutes “comparability” of the state action to a federal proceeding such that it constitutes “diligent prosecution” and bars a CWA citizen suit. A divided en banc panel of the Fourth Circuit Court of Appeals found that a state agency’s Notice of Violation was not enough to commence an action comparable to one brought under federal law. Rather, applying what has been described as an “exact comparability” test, the Court found that the state action would only trigger the diligent prosecution bar when it imposed the fine and order against the defendant and allowed public notice and judicial review. At the time of our previous blog posting, the Petition for Certiorari was pending before the United States Supreme Court, challenging this narrow view of what constitutes “comparability” of the state action for “diligent prosecution” to bar the citizen suit. Despite significant interest in the case, as demonstrated by several amicus petitions, on May 15, 2023, the Supreme Court declined the Certiorari petition, returning the case to the District Court, leaving the divided Fourth Circuit opinion and a potential circuit court split in place.
The Clean Water Act, like many environmental laws, provides a supplementary enforcement mechanism, allowing citizens to sue any person who is alleged to be in violation of an effluent standard or limitation and seek civil penalties, injunctive and declaratory relief, as well as recover related attorneys’ fees.[2] However, there are statutory procedural hurdles a citizen plaintiff must meet prior to filing a citizen suit. First, a citizen plaintiff is required to give “notice of the alleged violation” to the alleged violator, the EPA, and the State at least sixty days prior to commencing the suit (referred to as a “60-day notice letter”). Second, a citizen suit is barred where EPA or the State (under a comparable regulatory provision) has commenced and is diligently prosecuting an enforcement action for the same violations.[3] Both of these requirements are intended to limit citizen suits when the state or EPA cannot or will not compel compliance. The Arabella Farm case addresses this second component – when has a State “commenced” and is “diligently prosecuting an action under a State law comparable to” the federal program to bar the citizen suit.
The Arabella Farm case involved a South Carolina couple who wanted to develop their property – Arabella Farm – into a wedding venue, complete with a private vineyard, orchard, and wedding barn. In 2017, the defendants started clearing 20 acres of land, including changing the grade of the land and exposing soils. Under the belief that an agricultural exemption applied, the couple did not obtain a stormwater permit or install sediment control measures, allegedly causing sediment to be discharged into a nearby stream. In 2018, the South Carolina Department of Health and Environment (SCDHEC) started investigating the farm’s CWA compliance status and, in September 2019, issued a Notice of Violation related to failure to have a stormwater permit and invited the owners to a voluntary meeting to discuss the alleged violations. Prior to the resolution of the case by SCDHEC, Naturaland Trust and Trout Unlimited (Citizen Plaintiffs) sent a 60-day notice letter to EPA and SCDHEC in November 2019, indicating their intent to file an action regarding the alleged CWA violations. In April 2020, the Citizen Plaintiffs filed a CWA complaint against Arabella Farm. Shortly thereafter, SCDHEC and Arabella Farm finalized Consent Order, imposing a $6,000 penalty and requiring the farm to obtain an NPDES permit, submit a stormwater and site stabilization plan, conduct a stream assessment, and implement any recommended remediation.
The South Carolina District Court dismissed the case, finding that SCDHEC was pursuing a comparable state law action against Arabella Farm. The Fourth Circuit disagreed and reinstated the case, allowing it to proceed against Arabella Farm. In what has been deemed an “exact comparability” standard, the Court focused on the language of CWA Section 1319(g) for determining the “comparability” of state action for purposes of the diligent prosecution bar. The Court stated that a 1319(g) action “is commenced” by filing a complaint or the simultaneous issuance of a consent agreement and final order, citing 40 C.F.R. §§ 22.13, 22.38. The Court also noted that Section 1319(g)(4) provides for certain “rights of interested persons,” including rights to public notice and judicial review, and highlighted Section 22.45, which requires the State, before assessing a civil penalty, “notify the public” either “within 30 days following proof of service of the complaint on the respondent,” or “no less than 40 days before the issuance of ” a consent agreement and final order assessing a civil penalty.
In reviewing SCDHEC’s Notice of Violation, the Court found it was not comparable to a federal action because it only invited Arabella Farm to an “informal, voluntary private conference to discuss the alleged violations” and there was no mention of penalties or sanctions for failure to attend the conference. Further, this informal process did not entail public notice or participation. While the Court acknowledged that SCDHEC’s process could, at some point, become a comparable state law action with the issuance of an administrative order or Consent Order (which it did in this case), this did not occur until after the Citizen Plaintiffs had filed their case.
Arabella Farms challenged the Fourth Circuit’s decision by filing a Petition for Certiorari with the United States Supreme Court, with numerous amicus petitions filed in support of Arabella Farms. On May 15, 2023, the Court declined to accept the Petition, leaving the Fourth Circuit’s test in place for Maryland, North Carolina, South Carolina, Virginia, and West Virginia. As a result, the applicable standard for diligent prosecution and comparable state enforcement actions remains scattered, with a range of standards applied by federal courts. The First and Eighth Circuits apply a deferential “overall compatibility” standard,[4] which is broadly deferential to the State’s primary enforcement authority, to the slightly stricter “rough comparability” standard used by the Tenth and Eleventh Circuits,[5] to the very strict “exact comparability” of the subject case out of the Fourth Circuit.[6] .
Some Observations:
- As stated above, the applicable test regarding “diligent prosecution” and “comparable” state action remains murky and unclear. This is especially notable as most state enforcement actions do not follow the “exact” CWA § 1319(g) process, allowing many opportunities for sharing of evidence, discussions, and opportunities to come into compliance. The common assumption is that an agreed administrative order is preferable to court action, providing more room for negotiation and creative solutions. The absence of protection from duplicative citizen suits and lack of finality may compel a different conclusion. Further, state governmental agencies may prefer to follow the judicial route if they find that their administrative orders can be undermined by a citizen suit.
- This decision fails to recognize State primacy in the enforcement of violations of the Clean Water Act. The Supreme Court has held that citizen suits are intended to supplement, to supplant, federal or state enforcement actions.[7] This decision, along with a 2022 First Circuit decision that diligent prosecution only forecloses a citizen suit for penalties but not injunctive relief, raises questions about whether additional courts will follow this expansion of the availability of citizen suits.
[1] 41 F. 4th 342 (4th Cir. 2022), petition for cert., Feb. 6, 2023.
[2] 33 U.S.C. § 1365(a)(1).
[3] A violation of the CWA “shall not be the subject of a civil penalty action under . . . section 1365” if a State “has commenced and is diligently prosecuting an action under a State law comparable to” the federal scheme for assessing civil penalties. § 1319(g)(6)(A)(ii).
[4] See N. & S. Rivers Watershed Ass’n, Inc. v. Town of Scituate, 949 F.2d 552, 556 (1st Cir. 1991); Ark. Wildlife Fed’n v. ICI Americas, Inc., 29 F.3d 376 (8th Cir. 1994).
[5] See McAbee v. City of Fort Payne, 318 F.3d 1248, 1249, 1256 (11th Cir. 2003); Paper, Allied-Indus., Chem. & Energy Workers Int’l Union v. Cont’l Carbon Co., 428 F.3d 1285, 1293–94 (10th Cir. 2005).
[6] Other circuits apply a hodge podge of analysis but most focus on the cooperative federalism regime and the focus on State primacy.
[7] Gwaltney of Smithfield v. Chesapeake Bay Found., 484 U.S. 49, 60 (1987).
