Stormwater Litigation

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1 Stormwater Litigation 6 th Annual Georgia Environmental Conference August 25, 2011 Jennifer G. Cooper, Esq. Baker Donelson Atlanta, Georgia

2 Agenda Federal Claims Clean Water Act Citizen Suits State Claims Nuisance, Trespass, Negligence, Negligence Per Se, Riparian Rights, Punitive Damages Lessons Learned: The Mountain Park Case 2

3 Liability for Storm Water Management Governed by a web of applicable laws, regulations, and standards: Clean Water Act ( CWA ) Georgia Erosion and Sedimentation Act Common Law 3

4 CWA - Liability Discharge Of a pollutant From a point source Into waters of the United States Without or in violation of a permit 4

5 CWA Citizen-Suits Standing Injury-in-Fact Actual and concrete Causation Damage traced to actions of the accused Redressibility Fixed by remedy offered by law Zone-of-Interests Interests to be protected must be consistent with policies underlying the statute 5

6 Clean Water Act - Remedies Civil Penalties Not to exceed $37,500 a day for every day a violation occurs payable to the U.S. Treasury Remediation And/or Environmental Protection Projects Attorney s Fees - To Citizens Suit Plaintiff s who substantially prevail 6

7 State Law Claims Nuisance Any unreasonable interference with a property owners right to use and enjoyment of his property Trespass A trespass is an unauthorized entry on another s property Negligence A legal duty owed to another, that if breached and is the proximate cause of injury to another, creates legal liability. 7

8 State Law Claims, Con t. Negligence Per Se Violation of law applicable to your conduct may constitute negligence per se or violation = negligence. Riparian Rights O.C.G.A : [r]unning water belongs to the owner of the land on which it runs; but the landowner has no right to divert the water from its usual channel nor may he so use or adulterate it as to interfere with the enjoyment of it by the next. O.C.G.A

9 State Law Claims, Con t. Punitive Damages Georgia law allows punitive damages when there is a finding of willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of a conscious indifference to consequences. Roboserve, Ltd. v. Tom s Foods Inc., 940 F.2d 1441, 1456 (11th Cir. 1991) 9

10 Georgia Common Law / Erosion and Sedimentation Act State law requires: land disturbing activities be conducted in accordance with Best Management Practices (BMPs) to reduce erosion and prevent sediment runoff from a construction site; all waters shall be free from material related to municipal, industrial or other discharges which produce turbidity, color, odor or other objectionable conditions which interfere with legitimate water uses; and all pollutants shall receive such treatment or corrective action so as to ensure compliance with BMPs and effluent limitations established by the EPA pursuant to the CWA. 10

11 Case Study - Mountain Park The Lawsuit City of Mt. Park sues 3 residential developments, in Federal Court (N. District Georgia, Atlanta) Promise clients they will not have to pay attorney fees and costs, that defendants will pay Claims - CWA, Nuisance, Trespass, Negligence, Negligence Per Se and Riparian Rights Relief - Damages, Injunctive Relief, Punitive Damages, Civil Penalties and Attorney s Fees and Costs. Really, it is a NUISANCE case, but they are using CWA to get fees 11

12 Mt. Park Ansley Huntington Mt. Park Enclave 12

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22 Case Study - Mountain Park The Litigation Motion to Dismiss for Lack of Subject Matter Jurisdiction Bad case law re: continuing violation Daubert Motions Excellent rulings for defendants, particularly relating to multi-party storm water litigation Summary Judgment Motions Mixed bag. Very good rulings for Defendants on State Law claims, not so good on CWA 22

23 Case Study - Mountain Park Efforts to Resolve City was completely unreasonable, attorneys fee claim became the tail wagging the dog. Defendants made repeated efforts to resolve case, offered more than enough to fully restore the lakes. We decided to go to trial because we knew we were being fair, they were being unreasonable and we believed the judge and the jury would see that. 23

24 Case Study - Mountain Park The Trial Mt. Park attorney fee claim is now in excess of $2 million no intention of resolving claims pre-suit over reaching is obvious to the jury seek 3,514 days of violations, refuse to acknowledge problems with lakes, unrealistic claim re: amount of sediment, permit claims contrary to regulatory agencies Clear, undisputed evidence that the lakes are in their present condition due to age, lack of maintenance Defendants acknowledge the problems they had Huntington violations, but no sediment in excess of naturally occurring, all wholly in the past, none left our property Lakeside/Chatham - 17 days of violations, admitted 24

25 Case Study - Mountain Park The Verdict Defense Victory Only Lakeside found responsible for CWA violations-17 days, not 3,514. Mt. Park prevails on only one state law claim riparian rights, and jury awards virtually no damages. Jury finds Mt. Park is 80.5% responsible for the condition of its lakes. Judge Pannell to decide CWA penalties as to Lakeside and enter final judgment as to all defendants. 25

26 Case Study - Mountain Park Final Judgment NO remediation Nominal civil penalties for Lakeside/Chatham (payable to U.S. Treasury, NOT Mt. Park) NO Attorneys Fees and Costs NO State law damages can be recovered by Mt. Park, as their fault exceeds the fault of the defendants Mt. Park must pay Chatham over $10, in attorneys fees for discovery violations 26

27 Case Study - Mountain Park Lessons Learned Do The Right Thing! Defendants did everything they were supposed to do and it paid off huge with judge and jury, especially in penalty phase The best defense is a good offense! BMP S fail it is your conduct in what you do about them that matters Scary photos LIABILITY Plaintiff s conduct and credibility matters to a jury Courts will not tolerate Citizens Suits that are really disputes for damages between property owners 27

28 Case Study - Mountain Park Lessons Learned - Highlights from the Court s Final Order The injunctive relief proposed by the plaintiff does not serve the purpose identified by the Supreme Court, which is to secure prompt compliance with the CWA Placing the responsibility on the defendants for removing all the sediment is inequitable Chatham s good faith efforts to comply with the CWA weighs heavily in favor of reduced penalties Rather than cooperate with these clean up efforts, the plaintiff filed suit the plaintiff s actions actually thwarted the underlying goals of the CWA The plaintiff s goal in this lawsuit was in great part for monetary profit rather than the advancement of goals of the CWA 28

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