United States v. STABL, Inc.

800 F.3d 476, 92 Fed. R. Serv. 3d 797, 80 ERC (BNA) 2205, 2015 U.S. App. LEXIS 15121, 2015 WL 5042198
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 27, 2015
Docket14-2050
StatusPublished
Cited by21 cases

This text of 800 F.3d 476 (United States v. STABL, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. STABL, Inc., 800 F.3d 476, 92 Fed. R. Serv. 3d 797, 80 ERC (BNA) 2205, 2015 U.S. App. LEXIS 15121, 2015 WL 5042198 (8th Cir. 2015).

Opinion

WOLLMAN, Circuit Judge.

The United States and the State of Nebraska (collectively, the government) brought an enforcement action against STABL, Inc., formerly Nebraska ByProducts, Inc., 1 for violations of the Clean Water Act and the Nebraska Environmental Protection Act. The district court 2 granted partial summary judgment in favor of the government. Following a bench trial of the remaining issues, the district *480 court imposed a civil penalty in the amount of $2,285,874 and denied STABL’s motion for a new trial. We affirm.

I. Background

Section 402 of the Clean Water Act, 33 U.S.C. § 1342, establishes the National Pollutant Discharge Elimination System (NPDES), a permit program that controls water pollution by regulating sources that discharge pollutants. States may seek authority from the Environmental Protection Agency (EPA) to operate a state permit program. Id. § 1342(b)-(c). States that do so must ensure that industrial users that discharge effluent into wastewater treatment plants comply with pretreatment requirements. See 40 C.F.R. § 403.10. Companies that discharge effluent into water and wastewater treatment plants can be liable for pass-through, which occurs when discharge exits a water or wastewater treatment plant and enters into waters of the United States, causing the plant to violate its NPDES permit, 40 C.F.R. §§ 403.3(p), 403.5(a)(1); for interference, which occurs when discharge inhibits or disrupts a- water or wastewater treatment plant, causing the plant to violate its NPDES permit, id. §§ 403.3(k), 403.5(a)(1); or for exceeding the effluent limitations 3 laid out in their pretreatment permits or otherwise failing to meet permit requirements, see 33 U.S.C. §§ 1311(a), 1317(d).

STABL owned and operated a rendering plant that processed dead cattle and offal in Lexington, Nebraska. As part of Nebraska’s EPA-approved permit program, the state issued a pretreatment permit to STABL, effective April 1, 2008, that contained effluent limitations for the wastewater that STABL discharged from its facility to the city of Lexington’s wastewater treatment plant (treatment plant). The permit contained discharge parameters for ammonia, oil and grease, biochemical oxygen demand, 4 and total suspended solids. 5 These parameters established daily-maximum limitations and weekly-average limitations for measurements of each of the regulated elements. The permit also required STABL to monitor its discharge to the treatment plant in accordance with the foregoing requirements, to maintain records of the monitoring, and to submit discharge monitoring reports (DMRs) reflecting the results. The permit required that STABL perform flow measurements using “appropriate flow measurement devices” that were “installed, calibrated and maintained to insure [sic] ... the accuracy of the measurements” and that STABL maintain calibration and maintenance records.

The city controlled the valve that allowed wastewater to flow from STABL’s facility to the treatment plant. STABL paid the city to perform effluent testing and monitoring and used the city’s monitoring records as the basis for the DMRs that it was required to submit to the government. Jason Fagot, STABL’s general manager, signed the DMRs and certified under penalty of law that they were pre *481 pared “in accordance with a system designed to assure that qualified personnel properly gathered] and evaluate[d] the information submitted” and that the “information submitted [was] true, accurate, and complete” to the best of his knowledge and belief. The DMRs reflect numerous “ex-ceedances” — instances when STABL exceeded the limitations set forth in its permit.

In late May 2010, STABL sold its facility to Darling International Inc. (Darling). The purchase price was reduced by $1 million to account for the costs of a pretreatment system needed to bring STABL’s facility into compliance.

The government commenced this action in August 2011, alleging, among other things, that beginning in April 2008, measurements of pollutants in and properties of STABL’s discharge consistently exceeded its permit limitations; that STABL failed to sample for oil and grease as its permit required; and that beginning in 2006, STABL caused or contributed to problems at the treatment plant, causing the plant to violate its own NPDES permit. 6

The government moved for summary judgment, offering in support declarations of Mark Klingenstein, an environmental engineer, and Paul Marshall, an EPA compliance officer who focuses on the Clean Water Act pretreatment program. Klingenstein’s original declaration contained tables setting forth the number of violations that he believed that STABL had committed, and he submitted a supplemental declaration stating, “I prepared and/or personally verified all of the information in my initial declaration.... All tables are accurate and supported by the evidence.” The government also attached as exhibits to its motion for summary judgment the DMRs that STABL had been required to submit under the permit program. There was a DMR for each month from April 2008 through May 2010. The DMRs listed for each month the highest daily-maximum and weekly-average measurements for each effluent parameter, with the exception of oil and grease during some months. STABL argued that the DMRs were inaccurate and pointed to deposition testimony suggesting that the city’s flow meter was not calibrated, that one of the flow meters was rusted off, and that the water was tested on Tuesday, which may not have been an ideal day for testing because the water had been sitting in the tanks for several days. The district court granted the government summary judgment on liability but indicated that it would rule on the number of violations at the penalty phase of the action. The district court later granted the government’s motion that the remainder of the proceedings be conducted as a bench trial.

Within the time for expert disclosures, the government had submitted an expert report by Joan Meyer, an economics and financial analyst who gave an opinion regarding the scope of the economic benefits STABL had derived from noncompliance with the effluent limitations in its permit. Subsequently, discovery revealed that STABL and Darling had negotiated the $1 million discount in the sale price of the facility to reflect the facility’s lack of compliance with its environmental obligations. Thereafter, approximately eleven weeks before trial and well after the deadline for disclosing expert reports had passed, the government served an updated report by Meyer that included an analysis of the economic benefits of noncompliance to

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800 F.3d 476, 92 Fed. R. Serv. 3d 797, 80 ERC (BNA) 2205, 2015 U.S. App. LEXIS 15121, 2015 WL 5042198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-stabl-inc-ca8-2015.