Consent decrees take center stage in two high profile environmental cases

Consent decrees are settlement agreements among litigating parties that are sanctioned by and entered as orders of the court.  By any measure, last week was an important week for consent decrees in environmental litigation.  On Monday, over the objections of several intervening environmental organizations, the U.S. District Court for the Northern District of Illinois entered a consent decree between the United States and the State of Illinois, on the one side, and the Metropolitan Water Reclamation District of Greater Chicago (MWRD), on the other, resolving alleged violations of the terms of MWRD’s National Pollutant Discharge Elimination System (NPDES) permits governing combined sewer overflows (CSOs).  Then on Tuesday, the U.S. District Court for the Northern District of Florida granted a motion by the U.S. Environmental Protection Agency (EPA) to modify its consent decree with several environmental organizations who opposed the proposed modification and moved to enforce the consent decree as originally entered, which required EPA to adopt numeric nutrient criteria for Florida’s waters unless the state did so first.  The opinions in these two closely watched cases provide a useful reminder of the standards that govern the entry and modification of consent decrees and how those standards are applied in practice.

United States v. Metro. Water Reclamation Dist. of Greater Chi., No. 11 C 8859 (N.D. Ill. Op. filed Jan. 6, 2014)

MWRD operates several wastewater treatment plants and a sewer system that serve Chicago and the surrounding areas.  Like the sewer systems in many older cities, MWRD’s sewer system is a combined sewer system, meaning that wastewater and stormwater are conveyed together through one system to sewage treatment plants that treat and discharge the combined flows to nearby surface waters.  During large storm events, stormwater can overwhelm the system.  In order to avoid flooding streets and sidewalks and backing up into basements, the system is designed to overflow when capacity is exceeded, discharging untreated wastewater to local waterways.

MWRD’s NPDES permit authorizes these CSOs provided that MWRD meets certain terms and conditions.  The United States and Illinois filed a lawsuit against MWRD alleging violations of some of these terms and conditions and, on the same day, filed a proposed consent decree to resolve the lawsuit.  The proposed consent decree outlined a number of obligations and projects MWRD agreed to undertake.  These included:  payment of civil penalties; completion on a predetermined schedule of MWRD’s Tunnel and Reservoir Plan (TARP), a major system of tunnels and reservoirs designed to capture and store excess flow until the plants have the renewed capacity to treat it; post-construction monitoring and performance standards relating to TARP; implementation of an enhanced floatables control program to capture larger materials released during CSOs; and a green infrastructure program designed to reduce the amount of stormwater that flows into the sewer system after a precipitation event.

The environmental organizations on behalf of their members who use the receiving waterways for recreation objected to entry of the consent decree on several grounds.  Among other objections, they asserted:  that the consent decree allows MWRD too much time to complete TARP; that it should require MWRD to build treatment plants at CSO outfalls while TARP is being completed; that it may allow CSOs to continue to occur even after TARP is completed; that it establishes a schedule for completing a monitoring plan rather than establishing the plan itself; and that it contains inadequate programs to address floatables and implement green infrastructure.

The court observed that the appropriate standard for deciding whether to enter a proposed consent decree is not whether it represents “the right choice or even a good choice” but whether it is “fair, reasonable and adequate.”  The court noted that its role is to consider whether the consent decree “is in the public’s best interest” and that, in addition to the intervenors who have a greater interest in keeping waterways clean, the public also includes people who have an interest in keeping wastewater off of sidewalks and streets and out of basements, as well as taxpayers who have an interest in completing the project at a reasonable cost.

Applying this standard, the court found that the consent decree was reasonable, rejecting arguments by intervenors to the contrary that would seek to hold the consent decree to a higher standard.  “[A] consent decree,” the court stated, “in order to be entered, need not be perfect.  It must be reasonable.”  Finding that the consent decree proposed here readily cleared that unexacting standard, the court entered it.

Fla. Wildlife Fed’n, Inc. v. McCarthy, No. 4:08cv324 (N.D. Fla. Order dated Jan. 7, 2014)

As we previously discussed here, in 2009 EPA exercised its authority under the Clean Water Act (CWA) to determine that a new standard using numeric nutrient criteria was necessary for Florida to meet the requirements of the CWA and entered into a consent decree with several environmental organizations to settle their lawsuit alleging that EPA had a nondiscretionary duty to adopt such a standard after determining that Florida’s narrative nutrient criterion was inadequate.  The consent decree required EPA to adopt numeric nutrient criteria for Florida’s waters according to an established schedule unless the state did so first.

Pursuant to the schedule, EPA adopted a rule establishing numeric nutrient criteria for certain of Florida’s waters.  When the rule was challenged, the court upheld it except with regards to its stream criteria and downstream-protection criteria for unimpaired lakes, which it remanded to EPA.  However, before the deadline for EPA to adopt a rule for the invalidated criteria (and for other criteria that EPA was required to establish under the consent decree), the Florida Department of Environmental Protection (FDEP) submitted to EPA for approval a set of nutrient criteria for all Florida waters but which only included numeric criteria for some of those waters.  Upon concluding nevertheless that all of these criteria met the requirements of the CWA, EPA reviewed and approved them and amended its 2009 determination accordingly.  EPA then moved to modify the consent decree to conform with these amendments.  The environmental organizations opposed the modification and moved to enforce the consent decree as originally entered.

Federal Rule of Civil Procedure 60(b) permits modification of a judgment or order, which includes a consent decree, for several enumerated reasons, including, in relevant part, that “applying [the judgment] prospectively is no longer equitable” and “any other reason that justifies relief.”  The court in this case found that the U.S. Supreme Court employed a “flexible standard for modification of consent decrees” and observed that, at least in the Eleventh Circuit, a party seeking to modify a consent decree must demonstrate “a significant change either in factual conditions or in law” and that “the proposed modification is suitably tailored to the changed circumstance.”  Although recognizing a “strong public policy against judicial rewriting of consent decrees” and observing that a party seeking to modify a consent decree “has a high hurdle to clear and the wind in its face,” the court found that modification was appropriate here.

Applying the applicable standards, the court first found that FDEP’s adoption of comprehensive new nutrient criteria based on its studies and analysis represented significant changes in factual conditions and in law.  The court found further that the proposed modification of the consent decree is “suitably tailored to–indeed, a perfect match with–the changed circumstances.”  Concluding that applying the affected provisions of the consent decree prospectively would no longer be equitable, the court granted EPA’s motion to modify the consent decree and denied the motion by the environmental groups to enforce the consent decree as originally entered.

One final observation:  In reaching its decision, the court did not really explain — other than to state that “appropriate numeric nutrient criteria for streams had proven elusive, as shown by the invalidation of the EPA’s initial rule adopting such criteria” — why it agreed with EPA (and FDEP) that numeric nutrient criteria were no longer necessary for certain waters and that an approach that relies at least in part on narrative nutrient criteria meets the requirements of the CWA.  One may expect this particular issue to receive additional attention in any appeal that is likely to follow.