Opinion
Civil No. 00-507-AS
August 30, 2002
FINDINGS AND RECOMMENDATION
Plaintiff, the United States of America ("Plaintiff"), filed this action against defendant, The New Portland Meadows, Inc. ("Defendant"), for violation of sections 309(b) and (d) of the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1997 and the Water Quality Act of 1987 (the "Act"), based on allegedly unauthorized and illegal discharge of pollutants into waters of the United States. Plaintiff filed a motion for partial summary judgment asking the court to find Defendant liable under the Act. Defendant responded with its own motion for summary judgment. The cross-motions for summary judgment are currently before the court.
All of Defendant's assets were transferred to TNPM, LLC, in December 2001, for tax purposes. On May 23, 2002, the court granted the joint motion for the addition of TNPM, LLC, as a party defendant. All references to Defendant will, for liability purposes, include TNPM, LLC.
BACKGROUND
Defendant leased and operated the Portland Meadows racetrack complex located in Multnomah County, Oregon (the "Complex"), from 1991 to 2001. The Complex consists of a stadium, a competition racetrack surrounding a golf course, a practice racetrack and stabling facilities large enough to house 900 horses. The stabling facilities include stalls, hot-walking areas and horse-washing facilities. The used bedding from the stalls is removed daily and stored within the 27 three-sided bunkers located throughout the stabling facilities. The bunkers are not covered or otherwise protected from the rain. Once a day, the bunkers are emptied and the contents are hauled offsite by a third party. The hot-walking areas are cleaned once a year.
The Complex was built in the mid-1940's on the Columbia River flood plain which, until the mid-1920's, was predominantly marshland directly connected with the Columbia Slough. In 1921, construction of the existing levee system began. The levee was intended to provide arable land within the Columbia River flood plain for soldiers returning from the World War I. Prior to the construction of the levee, the land upon which the Complex stands was known as Mud Lake.
Peninsula Drainage Districts No. 1 and 2 and Multnomah Drainage District No. 1 were organized to monitor and manage the completed levee and related improvements. The Districts operate the ditches and pump stations to prevent flooding that would likely otherwise result because of surface waters generated by various watershed sources within the area.
The Complex is located within the boundaries of Peninsula Drainage District No. 2 (the "District"). The District has dikes, canals and pump stations, and is able to maintain a water surface elevation of 5.0 above mean sea level. Ground elevations within the Complex range from 5.0 to 20.0 feet above mean sea level. Water pumped from the District enters the Columbia Slough, which empties into the Willamette River near its confluence with the Columbia River.
Defendant uses a system of ditches and pipes to move all the surface water through the Complex to a District pumping station. Specifically, wastewater and stormwater generated in the stable area of the Complex is collected in a system of surface ditches and drainage pipes which discharge through two outfalls at a headwall in the northwest corner of the stable area. Storm water from the practice track area of the Complex is collected in an underground storm sewer system, which discharges through a third outfall at the headwall in the northwest corner of the stable area. All three of the outfalls discharge into an unnamed drainage ditch originating at the headwall and managed by the District. Wastewater and rainfall contaminated with animal waste from the Complex is mixed with clean rainfall and storm water as it is discharged in to the unnamed ditch.
The water in the unnamed ditch flows in a northerly direction along the east side of the Complex. Approximately 1,100 feet from the headwall, the unnamed ditch intersects with another District drainage ditch and then flows west and south through a series of open channels and pipes approximately one mile to a pond at the Schmeer Road Pump Station (the "Pump"). The water in the pond activates the Pump as it reaches a particular level and the Pump forces the water through a flood control levee and into the Lower Columbia Slough.
On October 8, 1990, the State of Oregon's Department of Environmental Quality ("DEQ") issued a General Water Pollution Control Facilities Permit (the "Permit") pursuant to O.R.S. 468.740. The permit authorized Defendant to operate a confined animal feeding operation (CAFO) at the Complex in conformance with certain requirements set forth in the Permit. The Permit prohibited Defendant from allowing a "direct discharge or potentially harmful indirect discharge to state waters." The Permit required that "all manure, silage pit drainage, washdown waters, contaminated precipitation, and other contaminated wastewater shall be distributed on land for dissipation by evapotranspiration at agronomic application rates." Additionally, the Permit required Defendant ensure that any manure spread on land should not be "applied in a location, at a time, or in a manner whereby it is likely to contaminate waters of the state by runoff, seepage, or any other means." The Permit specifically provided that:
it does not relieve the permittee from responsibility for compliance with any other applicable federal, state or local law, rule, standard, ordinance, order, judgment or decree.
In 1991, shortly after Defendant began managing the Complex, DEQ issued a Stipulated Final Order (the "Order") granting Defendant until April 1996 to meet all requirements of the Permit. The primary concern was the infiltration of storm water into the three-sided bunkers and resulting contaminated runoff. In December 1994, the Oregon Department of Agriculture (the "ODA") extended the deadline for completion of most of the new waste management plan to June 1, 1997, with full compliance due at an undetermined date thereafter. For a number of reasons, Defendant did not meet this deadline.
The Oregon Legislature passed a bill transferring responsibility for administering the CAFO program from the DEQ to the ODA in April 1993.
On July 28, 1999, Region 10 of the United States Environmental Protection Agency ("EPA") issued an administrative compliance order (the "EPA Order") to Defendant. In the EPA Order, the EPA acknowledged that DEQ is authorized to issue National Pollutant Discharge Elimination System ("NPDES") permits pursuant to an NPDES program approved by EPA and that DEQ issued the Permit on October 8, 1990. The EPA further recognized that the Permit prohibits any direct of potentially harmful indirect discharge into state waters. The EPA Order recited that during February 1999, the EPA conducted inspections of the Complex and discovered manure-laden wastewater originating from the Complex being discharged into the unnamed ditch managed by the District. Consequently, the EPA found that Defendant was in "violation of a condition in a permit issued by the state of Oregon under Section 402 of the Act."
The EPA required Defendants to immediately cease "all discharge of pollutants from the [Complex] to navigable waters or state waters" and "to conduct daily visual monitoring of all potential sources of pollutant discharges from the [Complex] to navigable waters or state waters" for a period of not less than one year. Where discharge is seen, Defendants were required to sample the discharge within two hours and file a monthly written report to the EPA summarizing the results of the sampling and steps taken to prevent a reoccurrence. By August 31, 1999, Defendants were to submit to EPA a plan to permanently eliminate the discharge and achieve compliance with the Permit and the Act.
The EPA Order specifically provided that:
In the event that Respondents are unable to comply with any requirement of this ORDER, Respondents shall, within ten (10) days of becoming aware of such inability, provide the following:
a. A summary of the specific reasons why Respondents are unable to comply with the requirement;
b. A summary of all actions taken by Respondents or others that Respondents allege demonstrates good faith efforts to comply with the requirement; and
c. The date by which Respondents expect to comply with the requirement.
The EPA Order did not relieve Defendant of its obligation to comply with "other applicable requirements of federal, state, or local law" and EPA retained the right to "take enforcement action as authorized by law for any violation of this ORDER, and for any future or past violation of any permit or other applicable legal requirement."
By letter dated August 5, 1999, Defendants advised EPA that "discharges from the facility have been ongoing and continuous since the race track began operating in 1947" and that immediate elimination of those discharges, which were necessary to ongoing operations, was impossible. Defendants agreed to daily visual monitoring of wastewater discharges but requested only weekly sampling requirements in light of the fact that discharges from the facility were continuous. Defendants then described the management practices that had been instituted to minimize wastewater contamination and agreed to provide a plan for eliminating discharges by August 31, 1999.
Defendants submitted a stormwater management plan to EPA and DEQ on August 27, 1999. The plan involved the construction of a retention pond and diversion of runoff into the City of Portland's sanitary system by September 2000. Plaintiff filed this action on April 14, 2000.
By May, 2000, Defendants consultants had determined that because of poor soils and shallow groundwater within the Complex, the anticipated cost of the plan was more than $2 million. In September 2000, Defendant proposed an alternative plan of creating a dry-transfer system whereby all waste would be handled inside a large pole barn, thereby eliminating contact with stormwater. ODA approved the plan and the dry-transfer barn became operation in March 2001. During the 2000-2001 race season, which commenced October 2000, Defendant covered the three-sided bunkers in an attempt to minimize contamination of storm and wastewater. Defendant relinquished its operation agreement and ceased activities at the Complex in May 2001.
LEGAL STANDARD
Rule 56 of the Federal Rules of Civil Procedure allows the granting of summary judgment:
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). "[T]he requirement is that there be no genuine issue of material fact." Anthes v. Transworld Systems, Inc., 765 F. Supp. 162, 165 (Del. 1991) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)) (emphasis in original).
The movant has the initial burden of establishing that no genuine issue of material fact exists or that a material fact essential to the nonmovant's claim is absent. Celotex v. Catrett, 477 U.S. 317, 322-24 (1986). Once the movant has met its burden, the onus is on the nonmovant to establish that there is a genuine issue of material fact. Id. at 324. In order to meet this burden, the nonmovant "may not rest upon the mere allegations or denials of [its] pleadings," but must instead "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see Celotex, 477 U.S. at 324.
An issue of fact is material if, under the substantive law of the case, resolution of the factual dispute could affect the outcome of the case. Anderson, 477 U.S. at 248. Factual disputes are genuine if they "properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250. On the other hand, if after the court has drawn all reasonable inferences in favor of the nonmoving party, "the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (citations omitted).
DISCUSSION
First Claim for Relief
In it First Claim for Relief, Plaintiff alleges that Defendant discharged wastewater and other pollutants from the Complex on a daily basis since February 1, 1995, without authorization by an NPDES permit. Section 301(a) of the Act prohibits the discharge of pollutants from a point source into navigable waters of the United States, unless in compliance with various enumerated sections of the Act. Committee to Save Mokelumne River v. East Bay Util., 13 F.3d 305, 307 (9th Cir. 1993), cert. denied, 513 U.S. 873 (1994). "Discharge of any pollutant" is defined as "any addition of any pollutant to navigable waters from a point source." 33 U.S.C. § 1362(12)(A). Section 301(a) prohibits such discharges unless pursuant to the terms of a NPDES permit issued pursuant to § 402 of the Act
To establish that a defendant has violated the Act by failing to acquire a NPDES permit, a plaintiff must prove that (1) defendant is a "person," (2) who "discharged" or "added," (3) a "pollutant," (4) from a "point source," (5) into "waters of the United States," (6) and the discharge was not authorized by an NPDES permit. 33 U.S.C. § 1311(a);see 33 U.S.C. § 1342; Committee to Save Mokelumne River, supra, 13 F.3d at 308. Defendant contends that Plaintiff is unable to establish that the unnamed drainage ditch is not a water of the United States, that the discharges was not authorized by an NPDES permit or that the pollutants originated with Defendant.
Waters of the United States 33 U.S.C. § 1362(7) defines navigable waters as all waters of the United States including the territorial seas. 40 C.F.R. § 122.2 defines waters of the United States as:
(a) All waters which are currently used, were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide;
(b) All interstate waters, including interstate "wetlands;"
(c) All other waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, "wet lands," sloughs, prairies, potholes, wet meadows, playa lakes, or natural ponds, the use, degradation, or destruction of which would affect or could affect interstate or foreign commerce including any such waters:
(1) Which are or could be used by interstate or foreign travelers for recreation or other purposes;
(2) From which fish or shellfish are or could be taken or sold in interstate or foreign commerce; or
(3) Which are used or could be used for industrial purposes by industries in interstate commerce;
(d) All impoundments of waters otherwise defined as waters of the United States under this definition;
(e) Tributaries of waters identified in paragraphs (a) through (d) of this definition;
(f) The territorial sea; and
(g) "Wetlands" adjacent to waters (other than waters that are themselves wetlands) identified in paragraphs (a) through (f) of this definition.
Several courts have recognized that Congress intended the Act to control discharges into any waters which might reasonably end up in waters related to interstate public commerce. See United States v. St. Bernard Parish, 589 F. Supp. 617, 620-21 (E.D.La. 1984) (if tributaries and waters leading to navigable waters were unregulated, the whole purpose of the Act would be defeated); Weiszmann v. District Engineer, 545 F. Supp. 721, 727 (S.D.Fla. 1982) (canal which connects with waters of the United States is itself waters of the United States); United States v. Eidson, 108 F.3d 1336, 1342-43 (11th Cir. 1997) (non-navigable, man-made, intermittently flowing drainage ditch fell within definition of "waters of the United States" for purposes of the Act). Along these same lines, the Ninth Circuit has held that term "navigable waters" within the meaning of the Act is to be given the broadest possible interpretation under the Commerce Clause of the United States Constitution. Leslie Salt Co. v. Froehlke, 578 F.2d 742, 754-55 (9th Cir. 1978). See Leslie Salt Co. v. United States, 896 F.2d 354, 360 (9th Cir. 1990) (interpreting "other waters" in the Army Corps of Engineers' regulations defining "waters of the U.S." to include intermittent artificial waters).
Defendant concedes that the Columbia Slough is a water of the United States and is protected under the Act. Defendant argues that because the water from the District ditches does not move naturally but is pumped into the Columbia Slough, the District ditches can not be viewed as tributaries of the Columbia Slough. Additionally, Defendant contends that, in the absence of the levee, the natural flow of the water is from the Columbia Slough into the lower land of the Complex.
The mere fact that the water from the District ditches is forced into the Columbia Slough by pumps is irrelevant. All of the water that enters the District ditches eventually ends up in the Columbia Slough, whether it flows naturally or not. Defendants were well aware of the ultimate destination of their wastewater and created their ditch system with the intent that the wastewater be transported to the Columbia Slough.
In the absence of the pump station and the levee system, the waters from the Columbia Slough would flood into the marshland upon which the Complex is built. The contaminated waters of the Complex would join with and become a part of the Columbia Slough, which Defendant concedes is protected by the Act. The United States Supreme Court adopted the Corp of Engineers conclusion that "wetlands may affect the water quality of adjacent lakes, rivers and streams even when the waters of those bodies do not actually inundate the wetlands" and held that such wetlands were subject to the Act. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 134, (1985). Clearly, if the property at issue here was in its original state, the marshlands upon which the Complex is located would be a wetland that affects the water quality of the adjacent rivers and would be subject to the Act.
The unnamed ditch at issue is a tributary to waters of the United States and is, therefore, a water of the United States under the Act. "To hold otherwise and to allow polluters to contaminate this drainage system would defeat the intent of Congress and would jeopardize the health of our nation's waters." United States v. Eidson, supra, 108 F.3d at 1343.
Existence of NPDES Permit
Defendant argues that DEQ had the authority to issue NPDES permits in 1990 and that the Permit should be considered an NPDES permit. Based on this argument, Defendant contends that it was acting in accordance with an NPDES permit. Defendant's logic fails for two reasons.
First, even assuming the Permit was an NPDES permit, the Permit prohibited Defendant from allowing a "direct discharge or potentially harmful indirect discharge to state waters." Defendant allowed water contaminated with manure to enter the unnamed drainage ditch, thereby violating the provisions of the Permit. Accordingly, Defendant discharged contaminants without authorization by an NPDES permit.
Second, assuming the Permit was issued pursuant to state law only, Defendant did not have an NPDES permit. Any discharge of contaminants under this scenario would be without authorization by an NPDES permit. The court finds that Defendant discharged contaminants without authorization during the relevant period, which is from February 1, 1995, to May 1, 2001.
Origin of Contaminants
During the summer of 2000, Defendant did not board any horses at the Complex. Even so, the report generated by Defendant's consultant showed measurable amounts of E. coli and Fecal Colif. present in the water discharged from the 15-inch and 24-inch drain pipes from May through September of that year. Defendant argues that this creates a genuine issue of fact regarding the source of the contamination. Defendant assert that the contamination may have come from another source or may have resulted from groundwater seeping into the pipes within the Complex.
Initially, the court questions whether Plaintiff is required to prove that Defendant was the source of the initial contamination to establish a prima facie claim. In Defendant's own words, "to establish a prima facie case, EPA must demonstrate that TNPM is a person that discharged pollutants to navigable waters from a point source without an NPDES permit." It is clear that Defendant had control over the drainage system operating within the Complex. Arguably, any contaminated water that entered the drainage system, whether originating with Defendant or not, was discharged by Defendant, through its drainage system, into the unnamed ditch. Consequently, Defendant would be responsible for the contaminants discharged from the Complex from May through September 2000 even though Defendant did not have any horses at the Complex during that period.
The evidence clearly shows that Defendant discharged contaminants from the Complex continually during the relevant time period. Defendant's counsel admitted that the drainage pipes were active continuously and the testing done by the DEQ, EPA and Defendant's own consultants show that the drainage was contaminated during the period the horses were absent from the Complex. However, this is not sufficient to raise a genuine issue of material fact on who is responsible for the contaminants.
The Complex has been used to board horses since 1947. The fact that horses were not present for a five-month period of time in 2000 does not eliminate the existence of contaminants generated by over 50 years of horses stabled within the Complex. It is unreasonable to assume that removing the horses would immediately remove any and all signs of their previous occupancy. The possibility that groundwater may have entered the pipes also does not save Defendant. The likelihood that Defendant's activities were responsible for any contamination of such groundwater is great.
Defendant does not offer any evidence about what was happening at the Complex during this period and fails to establish an alternative source for the contamination. The only plausible explanation for the continued discharge of contaminated water from the Complex is that contaminants remained on the Complex even after the horses were removed.
Defendant's drainage system serviced the Complex. Defendant is responsible for contamination generated by the Complex during the period it was in control of the Complex. The court finds that Defendant is liable for discharging wastewater and other pollutants from the Complex without authorization by an NPDES permit for those dates between February 1, 1995, and May 1, 2001, on which tests of the discharge from the Complex into the unnamed drainage ditch show the presence of E. coli or Fecal Colif.
Second Claim for Relief
In its Second Claim for Relief, the United States alleges that Defendant violated the EPA Order by failing to cease all discharges of pollutants from the Complex to navigable waters or state waters after July 28, 1999. Defendant argues that the United States lacks standing to enforce the Permit, which was issued pursuant to Oregon statutes and not the Act. Alternatively, Defendant argues that they complied with the EPA Order by providing the EPA with the reasons they were unable to meet the requirements set forth in the EPA Order.
Standing
Here, Defendant argues that the Permit is a state permit and that Plaintiff lacks standing to enforce a state permit. The question of whether the Permit was issued pursuant to Oregon law or the Act is once again at issue. And, once again, Defendant's argument fails under either scenario.
If the Permit is an NPDES permit, Plaintiff clearly had the authority to enforce it by issuing the EPA Order. If the Permit is a state permit, Plaintiff retained the authority to enforce the Act under both the Permit and the Act.
The EPA Order states that Defendant is in "violation of a condition in a permit issued by the state of Oregon under Section 402 of the Act." The court is not bound by EPA's characterization of the Permit in the Order. Additionally, both the state and Defendant have admitted that the Permit was issued by DEQ as a state permit and was never considered an NPDES permit.
The Permit specifically provides that:
it does not relieve the permittee from responsibility for compliance with any other applicable federal, state or local law, rule, standard, ordinance, order, judgment or decree.
Under the Permit, EPA retained the authority to enforce the provisions of the Act.
The EPA Order was issued pursuant to Section 309(a) of the Act. Section 309(a) allows the EPA Administrator to issue an order requiring compliance with the Act against any person in violation of the Act or in violation of a permit issued pursuant to the Act. Here, Defendant was in violation of the Act at the time the EPA Order was issued.
The court finds that EPA had the authority to issue the EPA Order. Similarly, the court finds that Plaintiff has standing to pursue this action to enforce the provisions of the Act.
Compliance with the EPA Order
Defendant argues that, under the terms of the EPA Order, they did not have to comply with the terms of the Act because they sent a letter to the EPA explaining why they were unable to comply. The EPA Order required Defendant to cease all discharges of contaminants, record all subsequent discharges and provide a plan to achieve continuous compliance with the Act. In the event Defendant was unable to comply with these requirements, Defendant was obligated to inform EPA within ten days of such inability. The requirement of writing a letter to EPA did not relieve Defendant of its obligation to comply with the Act. It created an additional obligation Defendant was to perform in addition to complying with the EPA Order and the Act. Any other construction of the Order would enable a polluter to continue polluting merely by informing EPA why it is unable to stop polluting at that time, which is clearly not contemplated by the Act.
Defendant's Affirmative Defenses
Plaintiff seeks summary judgment on Defendant's affirmative defenses of lack of standing, statute of limitations and failure to state a claim. Defendant's affirmative defense of lack of standing is discussed above and will not be addressed again here. Defendant presented no argument on the statute of limitations or failure to state a claim defenses. Accordingly, the court should grant Plaintiff's summary judgment on these affirmative defenses.
CONCLUSION
Plaintiff's motion (#55) for partial summary judgment with regard to Defendant's liability under the Act should be GRANTED. Defendant's motion (#59) for summary judgment should be DENIED.
SCHEDULING ORDER
The above Findings and Recommendation will be referred to a United States District Judge for review. Objections, if any, are due August 14, 2002. If no objections are filed, review of the Findings and Recommendation will go under advisement on that date. If objections are filed, a response to the objections is due August 28, 2002, and the review of the Findings and Recommendation will go under advisement on that date.