There are many lessons that one could take from the outcome of the seven year (and counting) litigation involving environmental groups and the operators of the Los Angeles County stormwater system. Certainly one lesson is to be careful what you ask for when you are drafting your stormwater permit – the Los Angeles County Flood Control District had drafted the language and proposed the monitoring points that the Los Angeles Regional Water Quality Control Board approved and that the Ninth Circuit Court of Appeals relied on to hold the District liable for permit exceedances. But another point that should not be lost is that clichés about the costs and risks of litigation are clichés because they are true.
Clean Water Act litigation is always risky for a defendant. In addition to the application of strict liability standards to hold parties liable for violations established by their own monitoring reports, there is the fee-shifting provision that makes most litigation self-defeating. I don’t know why pre-suit negotiations didn’t resolve this particular matter. The permit in question is held by the Flood Control District, the County and 84 cities; the internal politics alone, at a time when public agencies were seriously strapped for funding, may have made any voluntary resolution impossible. Maybe the environmental plaintiffs overreached. Maybe all of those factors combined to make litigation necessary.
But in this case, the Flood Control District was able to prevail in the district court. It lost in the Ninth Circuit, but it was able to convince the US Supreme Court to take certiorari on a limited issue, and prevailed. Unfortunately, on remand to the Ninth Circuit, that court reversed itself on a position it had taken in its first opinion (and which the Supreme Court had expressly ducked), and held that the District was in fact liable for exceedances of permit limits even where plaintiffs could not establish which individual outfalls were responsible. Yesterday the Supreme Court denied the District’s petition for certiorari.
One could hardly ask for a better illustration of the old saw that parties need to consider the wisdom of leaving decisions that could significantly impact their business in the hands of a disinterested third party. Here, after the District obtained a Supreme Court decision in its favor, it still lost its case when the appellate court on remand changed its mind completely on an issue on which the District had earlier prevailed.
A lot of ups and downs for the parties, and it isn’t over yet. The Ninth Circuit in its decision simply found that exceedances of the limits in the permit established liability; for a remedy, the parties must return again to the district court that had originally dismissed plaintiffs’ case.
It is not a pyrrhic victory for the plaintiffs. They have established the right to attorneys fees, and they will have an opportunity to either negotiate or convince a court to impose remedial steps to address the exceedances. But this has been a long, long battle for the parties to only end up not much further than they were when the first notice of intent to file suit was mailed.
The take-home message here is pretty straightforward. Even with what appears to be a solid case – or a Supreme Court win in your pocket – litigation is never a slam-dunk. Before you go to war, consider all your options and the benefits of certainty over what can too often be a decade of uncertainty and litigation costs.