Mickelson Writing Sample

To: WhyChang? Management
From: Michael Mickelson, Assistant General Counsel
RE: Friends of Willamette Complaint
Date: November 10, 2014
Introduction
On October 22, WhyChang? (“WC”) was served with a law suit initiated by Friends of the
Willamette (“Friends”). The complaint alleges that WC has violated its NPDES permit, the
Endangered Species Act, the Clean Water Act, and several Oregon Administrative Rules and
requests civil penalties, revocation of WC’s NPDES permit, imposition of updated treatment
facilities, and attorney’s fees. This could result in severe and crippling money damages, loss of
profits, and negative publicity.
The purpose of this brief is to analyze, and, more importantly, offer solutions to the following
problems: first, what is WC’s current NPDES permit status; second, if the permit is valid, what, if
any, alleged discharges fall outside of the permit shield; third, what are the enforcement
consequences of any illegal discharges that may have occurred; fourth, what implications does the
Talking Garden Wetlands project have on the lawsuit; and finally, how should WC respond to the
citizen suit and the plant’s wastewater discharges?
Analysis
What is the Current Validity of WC’s NPDES Permit?
The first question is the validity of WC’s NPDES permit. Under the Oregon Administrative
Rules, if a timely application for renewal of a permit is filed with DEQ pursuant to OAR 340-045-
0030, the permit will not expire until final action has been taken on the renewal application. OAR
340-045-0040. As plaintiff itself points out, WC made timely application for renewal of its NPDES
permit on May 19, 1993. Plaintiff’s Brief paragraph 63. Therefore, WC’s permit is still valid under
the OAR until final action is taken by DEQ, even though WC did not actually complete the permit
until 2006. The Ninth Circuit affirmed this principle in ONRC Action v. Columbia, where Columbia
had been operating its plant for thirteen years while waiting for DEQ to accept its permit renewal
application. ONRC Action v. Columbia, 286 F.3rd 1137, 1140 (9th Cir 2002). The Ninth Circuit
affirmed the district court’s ruling in favor of Columbia, adding that the original permit would be
valid until DEQ took final action. Id. The Court did not address whether this shield could continue
for an “indefinite” amount of time. It did, however, approve of the Oregon Supreme Court’s holding
that DEQ may, in essence, turn an untimely permit renewal application into a timely one by merely
accepting it and processing it. Id, ONRC Action v. Columbia Plywoods, Inc., 332 Or. 216, 225, 26
P.3d 142, 147 (2001). In Columbia, the delay was of defendant’s own making (failure to sign the
permit renewal application). In this case, WC made a timely and complete application for permit
renewal. Even if originally made in an untimely fashion, the fact that DEQ accepted and processed
the application effectively makes it a timely request.
What is the Scope of the Resulting Permit Shield Protections?

It goes without saying that compliance with a permit is necessary in order to qualify, but,
assuming compliance, then a permittee is protected by the Permit Shield provisions of the CWA and
OAR and will be deemed to be in compliance with the relevant sections of the CWA and with OAR.
OAR 340-045-0080(4). Furthermore, even if the permittee has difficulty in meeting water quality
standards, then DEQ, in compliance with 40 C.F.R. § 127.47, may establish compliance schedules
which give a permittee time to meet the water quality standards. Oregon Department of
Environmental Quality, DEQ10-WQ-0040-IMD.
There are exceptions, however, and CWA section 307(a) is a notable exception to the Permit
Shield provisions of section 402(k) and OAR 340-045-0080(4). All of the compounds listed in the
introduction of plaintiff’s brief (nickel, chromium, copper, cyanide, lead, nickel, and zinc) are among
the toxic substances listed by the EPA as exempt from the Permit Shield. 40 C.F.R. § 401.15.
These toxic substances are subject to BAT limitations and effluent requirements promulgated by the
EPA and updated from time to time as needed. FWPCA § 307(a)(2).
Mixing zones are permitted by the CWA, and have been adopted and widely used in Oregon.
40 C.F.R. § 131.13 and OAR 340-041-0053, respectively. Mixing zones are designated portions of a
receiving water (stream, river, etc.) that serve as a zone in which waste waters and receiving waters
mix and the effluent is diluted. OAR 340-041-0053(2)(c). However, there are conditions placed
upon DEQ in establishing such mixing zones, such as they shall be “as small as feasible” and “shall
be less than the total stream width as necessary to allow passage of fish and other aquatic
organisms.”(Emphasis added). OAR 340-041-0053 (2)(c)(A)(B).
An NPDES permit need not contain every pollutant produced by the permittee. Once
someone has a permit, he can discharge pollutants not covered in the permit as long as he complies
with reporting requirements and abides by new pollutant limitations. Atlantic States Legal
Foundation v. Eastman Kodak Co., 12 F.3d 353 (2d Cir. 1994).
Friends may be precluded from bringing suit against WC for its on-site sludge and
contaminated soils and groundwater due to WC’s negotiations with EPA and subsequent
classification as a Superfund Site. FWPCA § 505(b)(1)(B). (In 2012, EPA issued its fourth five-year
review of the Teledyne Wah Chang Superfund Site, in which it addressed, among other things, WC’s
sludge ponds, groundwater and sediment conditions, and surface and subsurface soil conditions).
U.S. EPA Contract No. 68-57-03-04, Task Order No. (011) (December 28, 2012).
Although the purpose of the preclusion provision is to prevent citizens from encroaching on
government enforcement authority and the statutory language “diligently prosecuting” is quite clear,
there is a split of authority among the circuit courts as to what government action will actually
preclude a section 505 citizen suit. The Second Circuit stated that “as long as the settlement
reasonably assures that the violations alleged in the citizen suit have ceased and will not recur, then
the citizen suit cannot proceed even though the state did not initiate enforcement proceedings during
the 60-day notice period.” Atlantic States Legal Foundation v. Eastman Kodak Co., 933 F.2d 124
(2d Cir. 1991).
The facts of this case are a little different, however, as this was not a one-time settlement.
EPA continues to work with and give support to WC. A citizen suit might be held to significantly
interfere with EPA’s efforts to bring WC into compliance with some of these issues. WC may have
an additional defense as well. Any condition that would be covered by a section 404 permit may not
be enforced through a section 505 citizen suit. Atchafalaya Basinkeeper v. Chustz, 682 F3d 356 (5th

Cir 2012); Nw. Envtl. Def. Ctr. v. U.S. Army Corps of Engineers, 118 F Supp2d 1115, 1118 (Dist.
Or. 2000).
What are the Enforcement Consequences of any Illegal Discharges that may have Occurred?
The two primary remedies for a 505 citizen suit are injunctive relief (both to enforce effluent
limitations and to prevent a discharger from violating those limits) and civil penalties. FWPCA §
505(a). Attorney’s fees and expert witness fees are also recoverable. FWPCA § 505(a)(d). Under
the CWA’s enforcement section, civil penalties may be severe and can rise to the amount of more
than $37,000 per day for each violation. FWPCA § 309(d). Illegal discharges are discharges which
violate an NPDES permit and/or of pollutants which fall outside the Permit Shield (a civil penalty for
an NPDES violation cannot be more than $10,000). In WC’s case, the civil penalties alone could
amount to hundreds of thousands of dollars per day. Even assuming Friends can only recover those
damages for the last five years, such a penalty would most likely be fatal to WC’s business
operations.
Friends is also seeking injunctive relief pursuant to section 505. It is asking the court to
enforce the conditions contained in WC’s permit and to enjoin WC from further operation until it can
comply with those conditions. Not only would this be costly in terms of bringing WC’s operations
into permit compliance, but it would also result in potentially hundreds of thousands of dollars in lost
profits and lost jobs while the factory is undergoing renovation.
Although Constitutional standing is generally not an enormous obstacle for environmental
groups to establish (and we have assumed standing for present purposes), there are some important
limitations of which to be aware. For example, in Gwaltney v. Chesapeake Bay, the Supreme Court
held that there is no standing to seek civil penalties for violations which are “wholly past” which
have been abated by the time of the suit. Gwaltney of Smithfield, Ltd. V. Chesapeake Bay
Foundation, 484 U.S. 49 (1987).
While the CWA does not explicitly mention a statute of limitations for bringing citizen suits,
courts have typically give a five-year window within which to initiate a section 505 suit. Sierra Club
v. Chevron U.S.A. Inc., 834 F.2d 1517 (9th Cir. 1987), 28 U.S.C. 2462 (1982). Coupled with
Gwaltney, this would prevent Friends from suing at least for violations more than five years in the
past.
Two potentially significant defenses are provided in section 505(b)(1)(A)’s notice
requirement. This provision requires that anyone initiating a section 505 citizen suit file notice with
the alleged violator, EPA, and the enforcement agency of the state in which the alleged violator
resides or does business. There is no indication that Friends gave timely notice to EPA or DEQ. In
fact, in its complaint, Friends makes no mention of giving notice to either agency nor did it join
either as parties to the suit. The U.S. Supreme Court has held that such a failure to follow the notice
requirements of section 505 is sufficient to warrant dismissal of the suit. Hallstrom v. Tillamook
County, 47, 493 U.S. 20 (1989). WC’s second defense was outlined in ONRC Action v. Columbia.
In that case, the Ninth Circuit held that although ONRC Action might have a valid claim as to the
validity of Columbia’s NPDES permit renewal application, it was barred from raising that claim
because it was not mentioned in ONRC’s 60-day notice to Columbia because of due process
concerns. ONRC Action v. Columbia, 286 F.3rd 1137, 1140 (9th Cir 2002). This holding seems to
bar a plaintiff from asserting in court any claim not included in its 60-day notice as required under

section 505(b)(1)(a). We do not know what was specifically mentioned in Friends’ notice of intent to
sue, but its failure to bring up claims which it now asserts could provide WC a substantial defense.
What Implications does the Talking Garden Wetlands Project have on the Lawsuit?
The Talking Garden Wetlands Project (“Wetlands”) has significant implications on Friends’
lawsuit against WC. The CWA’s effluent limitations apply to discharges from point sources and to
POTWs. No effluent limitations are placed, however, on industrial sources which discharge into
POTWs. The implication, therefore, is that indirect dischargers are exempt from the NPDES
permitting system. 40 C.F.R. § 122.3(c). The Wetlands is not wholly publicly-owned, WC owns
some of it. Whether or not discharges to a privately-owned POTW require an NPDES permit is left
up to EPA or DEQ, whoever is the permitting agency. 40 C.F.R. §§ 122.3(g), 122.44(m). This
would bring back into consideration the concepts of standing, mootness, and the Gwaltney problem
of “wholly past” violations. If a discharger is no longer subject to the NPDES system, than surely its
violations of that system would be “wholly past.” The injunctive relief sought by Friends would be
particularly suspect. A court would not enjoin WC from operation of its plant until it can assure
compliance with an NPDES permit when it is no longer subject to the NPDES permitting system!
However, WC is still subject to certain limitations imposed by EPA. Under section 307(b),
EPA periodically publishes regulations detailing pretreatment standards for any pollutant not
susceptible to POTW treatment or that would interfere with the operation of the POTW. EPA has
held that indirect dischargers can only be penalized when their discharges actually cause the POTW
to violate its permit. The Eight Circuit validated this definition of “interference” and “pass through”
in Arkansas Poultry Fed’n v. EPA, 852 F.2d 324 (8th
Cir. 1988), see also 40 C.F.R. § 403.5(a)(1).
EPA has set up national pretreatment standards that provide certain affirmative defenses to an
indirect discharger and apply general as well as specific prohibitions. 40 C.F.R. § 403.5(a)(1), (a)(2),
and (b). For example, a discharger can assert an affirmative defense against alleged violations of
general or specific prohibitions if it can show that it did not know that its discharge constituted a
violation. § 403.5(a)(2)(i). Examples of specific prohibitions include pollutants which cause a fire or
explosion hazard in the POTW, pollutants which cause corrosive structural damage, solid or viscous
pollutants which cause obstruction to the flow in the POTW resulting in interference, and pollutants
which result in the presence of toxic gases, vapors, or fumes within the POTW in a quantity that may
cause acute worker health and safety problems. § 403.5(b)(1-3)(7).
Section 307(b) also states that if a POTW can effectively treat any toxic pollutant to the point
where it would not violate effluent limitations if discharged directly by the non-point source, and still
be in compliance with section 405’s requirements, then the pretreatment requirements may be held
fulfilled. This essentially allows local POTWs to set up their own pretreatment programs and
requirements. This is especially important in the context of constructed wetland projects, which are
fundamentally different form typical sewage treatment plants and often are custom-fitted to the local
environmental needs.
How should WC respond to the Citizen Suit and to the Plant’s Wastewater Discharges?
There is more than one solution, but WC must make an increased effort to be proactive and
not reactive in regards to environmental concerns. Following is a list of possible actions. There are,
of course, other concerns besides strict legality or illegality. Factors such as community image,

incident history, practicality/feasibility of treatment facility upgrades, environment-friendly
positions, etc. also weigh towards reaching a speedy and effective solution. In an environment-
friendly state such as Oregon, it would be well for WC to take the “bull by the horns” in cleaning up
its act.
As a practical matter, WC must implement more effective and consistent reporting and
monitoring procedures. Whether to comply with the NPDES program’s requirement to regularly file
discharge monitoring reports and summaries of water quality sampling results or with the POTW
pretreatment reporting requirements found in 40 C.F.R. §§ 403.6 and 403.12, WC should be
proactive and “ahead of the curve” in regards to its reporting procedures in order to fully establish
regulatory compliance and public confidence. Also, if an NPDES permit is required, WC must be
willing and able to install BAT technology as currently required by the CWA.
Given its long history of cooperation with government enforcement agencies (it has been
working with EPA for years in regards to sludge contamination and soil conditions), WC could self-
report and initiate a DEQ investigation of its practices. If culminated in a consent order signed by a
judge, this would trigger section 505(b)(1)(B)’s “diligently prosecuting” bar to a citizen suit, which
states that diligent prosecution a civil or criminal action by EPA or DEQ acts as an effective bar to a
citizen suit. In order to overcome this bar, Friends would have the burden of showing that DEQ was
not “diligently” pursuing the action, or that it is merely an administrative action. While perhaps not
the most preferable solution, this course of action would be at least preferable to a citizen suit in that
it would minimize publicity for WC and DEQ and would provide each with a less adversarial
negotiating environment and ultimately more favorable settlement options. For example, DEQ
would be willing to waive all civil penalties because of WC’s efforts to construct the Wetlands. WC,
on the other hand, would be willing to work directly with DEQ in enforcing monitoring and reporting
schedules, compliance schedules, etc. instead of taking the matter to EPA, which could result in
unfavorable consequences for DEQ. Additionally, self-reporting would persuade DEQ to be more
lenient in its enforcement action against WC and would act as a semi-shield against negative
publicity should the press or public get wind of the violations.
Another solution is to negotiate a settlement with Friends. Friends will have a strong
incentive to settle because any civil penalties assessed against WC will be paid to the U.S. Treasury,
whereas Friends could claim any amount reached through settlement negotiations (as long as there
hasn’t been a judicial determination that the alleged violations did occur). Sierra Club, Inc. v. Elec.
Controls Design, Inc., 909 F2d 1350, 1355-56 (9th
Cir 1990). Given the potential penalties of
$37,500 per day per violation, factory shut-down, and attorney’s fees, it would be advantageous to
reach a settlement with Friends that would include the following: (1) specific actions and a schedule
for addressing the violations; (2) a contribution to a third party engaged in stream restoration work;
(3) payment of the attorney fees and costs of the person giving notice; and (4) an agreement by the
person giving notice not to bring an action for violations occurring before the date of the agreement.
OSB Legal Publications 3.2-12(a)(4).
However, in light of the Wetlands’ implications for Friends’ case against WC, Friends’
bargaining power is diminished significantly and WC must tailor its negotiation strategy accordingly.
Indeed, WC’s incentives to settle might be diminished to the point of making a settlement less
preferable to the other courses of action recommended here. As one last note on settlement, the
Supreme Court has held that a final settlement precludes the plaintiff from seeking legal recourse.
“We know of no precedent for the proposition that when a plaintiff has sued to challenge the

lawfulness of certain action or threatened action but has settled that suit, he retains standing to
challenge the basis for that action…” Summers v. Earth Island Institute, 555 U.S. 488 (2009).
Of course, there is the ever-present option of proceeding to trial, an option that looks more
favorable in light of the Wetlands impact on the lawsuit. If WC is now acting as an indirect
discharger, all of Friends’ claims regarding effluent limitations, violations of the NPDES permit,
mixing zones, etc. are moot and Friends’ suit would be dismissed for failure to make a claim of
action under section 505. Friends could allege that WC is violating the national or local pretreatment
standards for discharges into a POTW, but it has not made any of those claims. Its claim for relief
under the ESA is also dismissible because that is not a claim for relief under section 505. Any claim
regarding violations of the ESA must be brought under the provisions of that statute.
Apart from solutions to legal problems, WC must show an increased sensitivity to issues of
environmental significance. The Wetlands is a great start to showing the community, advocacy
groups, and regulatory agencies that WC is serious about working toward a healthier environment.
The project will restore wildlife and wetland habitat along the Willamette River, promote water
cooling (which is crucial for optimal salmon habitat) and improved water quality, recycle effluent to
be used for irrigation, create a public attraction which will in turn increase public awareness of
current environmental issues, and save money and energy by using only natural processes (no energy
or chemicals). http://www.cityofalbany.net/publicworks/twg/.
WC could also initiate more events to increase public awareness, such as volunteer clean-up
efforts along the Willamette River, and events to raise money for environmental groups and
restoration projects (such as a 5 or 10K).
Conclusion
Due to the potential negative and severe consequences, legal and otherwise, the Friends
lawsuit is an extremely serious matter that requires immediate attention. The first step to take is that
of hiring an expert environmental attorney to guide WC through the legal processes of settlement
negotiation and assuring compliance with pretreatment standards and monitoring and reporting
guidelines. The Talking Garden Wetlands Project was an important first step in creating a new
image for WC, but it is imperative that it be a first step and not a final one.

Mickelson Writing Sample

More Related Content

What's hot

Viewers also liked

Similar to Mickelson Writing Sample

Mickelson Writing Sample