Friends of the Earth v. Laidlaw Environmental Services: A resounding victory for environmentalists, its implications on future justiciability decisions, and resolution...

Georgetown Law Journal, Apr 2001 by Shults, Kristen M

Based on the findings that Laidlaw had come into substantial compliance during the lawsuit and due to the lack of evidence demonstrating significant harm to the environment, the district court denied FOE's request for an injunction.16 The court, however, ordered Laidlaw to pay $405,800 in civil penalties.17 Though this amount was considerably less than the economic benefit, the court reasoned that it was adequate because the "penalty, potential fee awards, and Laidlaw's own direct and indirect litigation expenses provide adequate deterrence" against future violations.18 The district court also stayed the time for a petition for attorney's fees until resolution of any possible appeal.19

Both parties appealed the district court's holding: FOE argued that the district court abused its discretion by imposing an inadequate penalty, while Laidlaw argued that the suit should have been barred due to DHEC's diligent prosecution against Laidlaw and because FOE lacked standing.20 The Fourth Circuit, relying on Steel Co. v. Citizens for a Better Environment,21 held on appeal that the action was moot because FOE's claim was no longer redressable.22 FOE had not appealed the denial of injunctive relief, leaving only civil penalties as a possible form of relief. The court explained that civil penalties could not redress

any injury suffered by FOE because such penalties are paid to the United States Treasury.23 The Fourth Circuit also directed in a footnote that "[p]laintiffs' failure to obtain relief on the merits of their claims precludes any recovery of attorneys' fees or other litigation costs because such an award is available only to a `prevailing or substantially prevailing party.'"24

The Supreme Court overturned the Fourth Circuit opinion and held that FOE's decision to appeal only the civil penalties award did not moot the case. Explaining that the Fourth Circuit had confused mootness with the standing doctrine, the Court held that the issue of whether civil penalties could redress FOE's injury was a question of standing, not mootness.26 Thus, the Court addressed whether FOE had sufficient standing initially to bring the enforcement action. The Court held that the plaintiffs demonstrated sufficient injury in fact-even though there was no demonstrated harm to the environment-- because the relevant injury was the injury to the plaintiffs.27 FOE established injury in fact through affidavits alleging that Laidlaw's ongoing violations and illegal discharges of mercury into the Tyger River reasonably caused FOE's members to curtail their recreational use of the water and caused them economic and aesthetic harm.28 The Court also held that an award of civil penalties paid to the United States Treasury for an ongoing violation of an NPDES permit would redress FOE's injury because of the deterrent effect civil penalties have against future violations.29 The Court conceded that there might be "a point at which the deterrent effect of a claim for civil penalties becomes so insubstantial or so remote that it cannot support citizen standing," but that in this case, the redressability prong was clearly met.30