The opinion of the court was delivered by: RAMBO
On December 14, 1995, the court awarded summary judgment to the United States on the question of Fairmont Products' liability under the Federal Water Pollution Control Act ("the Clean Water Act" or "the Act"), 33 U.S.C. § 1251 et seq., for 1,754 violations of its Industrial User Wastewater Discharge permit ("IU permit"), and 79 instances of interference with the Municipal Authority of Union Township's Publicly Owned Treatment Works ("POTW"). The United States seeks the imposition of a civil penalty under 33 U.S.C. § 1319(d) for Fairmont's violations of the Act. Section 1319(d) provides that the violator of a permit issued pursuant to the Act shall be subject to a civil penalty not to exceed $ 25,000 per day for each violation. This penalty provision further states that in assessing the penalty, the court shall consider the following factors:
The seriousness of the violation or violations, the economic benefit (if any) resulting from the violation, and history of such violations, any good-faith efforts to comply with the applicable requirements, the economic impact of the penalty on the violator, and such other matters as justice may require.
The court conducted a trial on the penalty issue on January 29 to 31, 1996. The parties have submitted extensive post-trial proposed findings of fact, and the issue is now ripe for disposition. Also ripe for disposition are motions in limine filed by both Fairmont and the United States.
II. Factual Determinations
Dean Foods, Inc. ("Dean Foods") is a national corporation in the business of processing and distributing dairy and other food products, and is the largest fluid milk processor in the United States. On June 7, 1987, Dean Foods purchased Fairmont Products through a 100% stock purchase, and in so doing it acquired Fairmont's dairy plant located in Belleville, Pennsylvania. In April 1992, Dean Foods merged the Fairmont plant with Dean Foods of Pennsylvania. The newly formed entity, Dean Dairy Products, Inc. ("Dean Dairy"), is a wholly owned subsidiary of Dean Foods, and includes the Fairmont plant and another dairy plant located in Sharpsville, Pennsylvania.
Robert Horton, who was assistant plant manager at Fairmont prior to the stock purchase, was made plant manager shortly after Dean Foods acquired Fairmont. Horton was the Fairmont plant manager until approximately October 1991, when Dave Koontz, a Dean Foods employee since 1981, was made plant manager. Koontz remains Fairmont's plant manager.
In 1974, the predecessor company to Fairmont, Abbott's dairy, entered into an agreement with Union Township to construct a POTW to be used by the dairy plant for wastewater treatment. Pursuant to the agreement, the plant owner would pay a monthly user fee to the POTW based upon the level of flow, Biological Oxygen Demand ("BOD") and Total Suspended Solids ("TSS") discharged into the POTW. The wastewater stream from the plant discharged into the POTW resulted from equipment rinsing, product spills and sewage at the plant. Fairmont continued this use of the POTW after Dean Foods acquired it.
In 1983, the United States Environmental Protection Agency ("EPA") required Union Township to develop a pretreatment program to regulate the discharge of industrial users of the POTW, including the Fairmont plant. The EPA approved Union Township's pretreatment program in October 1984. In June 1989, pursuant to the pretreatment program, Union Township issued an IU permit to the Fairmont plant. The IU permit limits the BOD, TSS, pH and flow which Fairmont can discharge into the POTW; the permit has monthly average limits and daily maximum limits for TSS and BOD. The IU permit requires Fairmont to submit discharge monitoring reports to Union Township on a monthly basis.
B. History And Seriousness Of Violations
The court has ruled that Fairmont is liable for 1,754 violations of its IU permit and 79 instances of interference with Union Township's POTW between July 1989 and April 1994, when this suit was filed. Fairmont continued to violate its IU permit even after this action was commenced, however. When all of Fairmont's IU permit violations are aggregated between July 1989 and April 1995, at which point Fairmont brought its wastewater problems under control, Fairmont committed approximately 2,360 violations.
Between July 1989 and February 1995, Fairmont violated its IU permit with respect to either BOD or TSS monthly average limits in 54 of 68 months. And, in virtually all months in which there was no monthly average TSS or BOD violation, Fairmont still violated daily maximum limits. On average, the violations for which the court has found Fairmont liable exceeded its IU permit limit by roughly the following percentages: 30% over monthly average TSS limit; 34% over daily maximum TSS limit; 21% over monthly average BOD limit; 23% over daily maximum BOD limit. In eight months Fairmont exceeded its monthly average TSS limit by over 100%.
BOD and TSS are "conventional" and not "toxic" pollutants. While Union Township's POTW was designed to treat these pollutants, among others, excessive quantities of BOD and TSS can cause interference with a POTW and can damage waterways.
Union Township's POTW discharges into the Kishacoquillas Creek ("the Creek"). As of 1984, it was evident that the POTW was degrading the Creek, and by 1990, poor substrate conditions resulting from solids deposition and bacterial growths were directly affecting the benthic community, resulting in greater numbers of pollution-tolerant taxa. In 1992, the Creek was found to be further degraded by solids deposition, nutrient enrichment and organic overloading. The organic overloading and the substrate degradation was limiting the diversity of the benthic community and increasing the density of a few pollution-tolerant taxa. This degradation was caused by the discharge from Union Township's POTW. Because of this environmental damage to the Creek, the Pennsylvania Fish and Boat Commission ceased stocking the Creek in the vicinity of the POTW's discharge point. The cessation of the fish stocking program in 1993 removed 3,200 trout from 3.8 miles of the Creek.
When the court held Fairmont liable for 79 instances of interference with Union's POTW, that determination entailed a finding that in each instance Fairmont inhibited or disrupted Union Township's POTW and in so doing contributed to a violation of the POTW's National Pollutant Discharge Elimination System ("NPDES") permit. Because Union Township's NPDES permit violations resulted in the discharge of excess pollutants into the Creek, Fairmont contributed to the degradation of the Creek by contributing to the NPDES permit violations. However, neither party presented evidence which permits an approximation of the degree of Fairmont's responsibility for the degradation of the Creek.
C. Good Faith Efforts To Comply
Fairmont's first significant effort to address some of its permit exceedance problems was to install a flow equalization tank and reroute certain piping into the tank. In November 1991, almost immediately after Mr. Koontz was made plant manager, he asked Dean Foods officials to approve funds for the flow equalization tank in Fairmont's capital budget for the fiscal year beginning June 1992. Funding for the project was approved by Dean Foods in March 1992. Construction started in June 1992 and was competed in October 1992 at a cost of approximately $ 86,000. Thus, Fairmont's first serious response to its wastewater problems became effective approximately three years and three months after Fairmont learned of the problem.
It is clear that the flow equalization tank was intended principally to address Fairmont's flow violations, which were persistent prior to installation of the tank. While it was believed by certain individuals at Fairmont that the tank may cause reductions in BOD and TSS, there was not a serious expectation by Fairmont that the tank would resolve its BOD and TSS permit exceedances. This is not surprising with respect to BOD since Fairmont's violations of its monthly average BOD limit did not begin until February 1992, after Koontz had requested funding for the flow equalization tank. However, the TSS violations were a consistent problem beginning in June 1989, and, as of October 1992, when the flow equalization tank came on line, Fairmont still did not have a specific plan to ensure compliance with their ...