CITIZEN SUIT WATCH: State Enforcement Does Not Bar RCRA Citizen Suit, As Seventh Circuit Narrowly Construes Federal Abstention
The U.S. Court of Appeals for the Seventh Circuit issued its decision in Adkins v. VIM Recycling, Inc. on May 3, 2011, which reversed and remanded a district court decision dismissing a citizen suit filed by several plaintiffs under the Resource Conservation and Recovery Act (RCRA).1 The U.S. District Court for the Northern District of Indiana dismissed the plaintiffs' suit after finding that it lacked subject matter jurisdiction and that it should abstain from exercising its jurisdiction in light of the Supreme Court's holdings in Burford v. Sun Oil Co.2 and Colorado River Water Conservation District v. United States.3 The Seventh Circuit disagreed with both of those findings and held that dismissal of the plaintiffs' citizen suit at this stage was improper.
The three defendants in the citizen suit, which the Court collectively refers to as VIM, operate a solid waste dump in Elkhart, Indiana. For several years, the Indiana Department of Environmental Management (IDEM) found ongoing air pollution and solid waste violations at VIM's Elkhart facility. In early 2007, VIM entered into an agreed order with IDEM to obtain permits for its activities and to take certain actions and cease others with respect to a certain category of solid waste known as "C" grade waste.4 After VIM failed to abide by the requirements of the agreed order, IDEM filed an action in the Elkhart Circuit Court on October 3, 2008 to enforce the agreed order. Importantly, the same plaintiffs who filed the citizen suit tried to intervene in that enforcement action and expand the claims in that action to cover not just "C" grade waste, but also "A" and "B" grade waste. The plaintiffs/would-be intervenors also sought to raise a number of state law claims. VIM successfully blocked the plaintiffs' attempts to intervene and expand the IDEM enforcement action.
As a result of being denied intervention in the first IDEM enforcement action, the plaintiffs filed their citizen suit in the Northern District of Indiana on October 27, 2009. The plaintiffs alleged both violation5 and endangerment6 claims under RCRA. The plaintiffs' claims related to "A," "B," and "C" grade solid waste at VIM's Elkhart facility. The plaintiffs also alleged a number of state law claims in their complaint. Less than two months after the filing of the citizen suit, IDEM brought a second enforcement action in Elkhart Circuit Court. In that action, IDEM alleged that VIM's activities involving "B" grade waste violated state law.
Faced with the prospect of defending three separate lawsuits, VIM moved to dismiss the citizen suit. VIM argued that the district court lacked jurisdiction over the citizen suit because the plaintiffs' claims were the same as those that IDEM was pursuing in state court. VIM also argued that the district court should abstain from exercising its jurisdiction. The district court granted VIM's motion to dismiss on both grounds, and then it declined to exercise supplemental jurisdiction over the plaintiffs' state law claims. Plaintiffs appealed the dismissal to the Seventh Circuit.
Decision on Appeal
The Seventh Circuit reversed the district court's dismissal, finding that the district court both had subject matter jurisdiction over the plaintiffs' claims and abused its discretion in abstaining from exercising jurisdiction over those claims. First, the Court found that RCRA's prohibition on bringing a citizen suit (i.e., where EPA or a state agency "has commenced and is diligently prosecuting" an action) is not jurisdictional in nature, but rather, is a "claims-processing rule." Quoting a recent Supreme Court decision,7 the Seventh Circuit explained that when Congress does not expressly make a statutory prohibition "jurisdictional," courts should treat the prohibition as "nonjurisdictional." The Court further emphasized that RCRA's prohibition on citizen suits "ebb[s] and flow[s]" depending on whether a governmental entity is diligently prosecuting an enforcement action. Subject matter jurisdiction, by contrast, either exists or it does not.
After finding that the district court had subject matter jurisdiction, the Court analyzed VIM's motion to dismiss as one for failure to state a claim. The Court held that neither of IDEM's enforcement actions bars the citizen suit. The plain language of the statute bars citizen suits only if the government "has commenced and is diligently prosecuting" an enforcement action. Because the second IDEM action post-dated the filing of the plaintiffs' citizen suit, RCRA's statutory prohibition did not apply. As for the first IDEM action, the Court found that most of the plaintiffs' claims were not barred by IDEM's commencement and diligent prosecution of that action either. The Court interpreted RCRA's statutory prohibition to bar only citizen suits that seek to compel compliance "with the same requirements" as the state agency seeks to enforce. Consequently, it agreed with the district court's dismissal of the plaintiffs' claims that overlapped with the claims in the first IDEM action pertaining to "C" grade waste. The Court found that the plaintiffs should be allowed to pursue the remainder of their claims because those claims relate to "A" and "B" grade waste and hence, do not seek to require compliance with the same requirements as those that IDEM sought to enforce in the first action.
After finding that the district court improperly dismissed the plaintiffs' claims under RCRA's citizen suit provision, the Seventh Circuit also held that the district court abused its discretion in abstaining from the exercise of its jurisdiction under Colorado River and Burford. Under Colorado River, a federal court may abstain from exercising its jurisdiction if there are parallel concurrent state and federal actions and "exceptional circumstances" justify abstention. The Court held that neither of those requirements were satisfied in this case. As a threshold matter, it emphasized that RCRA plainly allows citizen suits to proceed in federal court even if a state or federal agency files a later parallel action. Next, the Court explained that the IDEM actions are not actually parallel to the plaintiffs' citizen suit because: (i) the plaintiffs in the citizen suit are different from the plaintiff (IDEM) in the state actions; (ii) the claims in the citizen suit are broader than the claims in the IDEM actions because only the plaintiffs' suit alleges "A" grade waste claims; and (iii) federal courts have exclusive jurisdiction over RCRA endangerment claims, which VIM even conceded. Last, the Court did not find there to be "exceptional circumstances" justifying abstention under Colorado River.8
Similarly, the Seventh Circuit found that abstention was improper under Burford. Under that doctrine, a federal court may abstain from exercising its jurisdiction if it faces "difficult questions of state law that implicate significant state policies" or when the federal court's exercise of jurisdiction "would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern." The Seventh Circuit found that neither of those bases applied. Among other things, the Court noted that the IDEM actions are being litigated in courts of general jurisdiction, as opposed to state courts with "highly specialized expertise [which] is a prerequisite to Burford abstention." The Court again emphasized that Congress allows for citizen plaintiffs to sue in federal court under RCRA and that such plaintiffs need not rely exclusively on state enforcement actions to achieve RCRA's goals.
Implications and Lessons Learned
The Seventh Circuit's holding in Adkins will affect regulated entities facing citizen suits under RCRA and other statutes with comparably broad citizen suit provisions, such as the Clean Water Act. Prospective citizen plaintiffs may be more willing to pursue their own claims apart from governmental enforcement actions so long as they can allege claims that are broader than or distinct from those at issue in the governmental action. Regulated entities can try to distinguish the Adkins decision because, among other things, the defendants in that case had successfully blocked the plaintiffs' intervention in the first state enforcement action.
Even so, the Adkins decision may invite district courts to broadly assert jurisdiction over citizen suits by, for example, erring on the side of finding that citizen suits seek to enforce different statutory requirements than those at issue in related governmental enforcement actions. Similarly, courts may readily decline to apply either of the judge-made abstention doctrines by finding some basis why a governmental enforcement action is not parallel to a citizen suit and by simply pointing to the fact that the governmental action is not being litigated before a highly specialized state court.
Entities facing government enforcement can proactively respond to Adkins through either managed inclusion of all stakeholders affected by the alleged liabilities and/or properly tailored government enforcement that addresses a more reasonable scope of the liability risk than that pursued in Adkins. Overly narrow enforcement does not always yield the desired result.
1 42 U.S.C. § 6901 et seq.
4 Three grades of waste are relevant to this case. As defined by IDEM, "A" grade waste includes trees, brush, recently live wood, and uncontaminated lumber that is ground up and used for mulch. "B" grade waste includes wood scraps containing laminated wood and plywood that is ground up for animal bedding. "C" grade waste includes formerly "B" grade waste that has degraded and is hence, no longer suitable for animal bedding.
5 42 U.S.C. § 6972(a)(1)(A) allows citizen plaintiffs to bring suit against a defendant that is "alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this chapter."
6 42 U.S.C. § 6972(a)(1)(B) allows citizen plaintiffs to bring suit against a defendant "who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment."
7 Arbaugh v. Y & H Corp., 546 U.S. 500, 516 (2006).
8 One of the judges issued a partial dissenting opinion with regard to the majority's discussion of abstention under Colorado River. In that judge's view, the state actions are parallel to the citizen suit and also appear adequate to address all of the plaintiffs' interests. But, the judge found that dismissal was improper; rather, the district court should have stayed its jurisdiction pending the outcome of the IDEM actions. The dissenting judge concurred with the majority opinion on the remaining issues in the case.
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