NPDES Permit Enforcement Premised on DMRs


On August 27, 2015, the U.S. Court of Appeals for the Eighth Circuit issued a Clean Water Act (CWA)  ruling affirming the decision of the lower court that STABL, Inc. the former owner and operator of a rendering plant in Lexington, Nebraska, violated the CWA and the Nebraska Environmental Protection Act.  The case is U.S., et al., v. v. STABL, Inc., formerly known as Nebraska By-Products, Inc.  This decision points out the heavy burden confronting defendants who argue that their discharge monitoring reports (DMRs) are unreliable, a burden the defendant was unable to overcome.

STABL was determined to have committed hundreds of violations of its National Pollutant Discharge Elimination System (NPDES) permit as measured by its DMRs and also failing to comply with the permit’s sampling requirements.  This was deemed to have caused the city’s municipal wastewater treatment plant to exceed its own effluent limitations by generating wastewater that did not meet pretreatment standards.

The District Court imposed a $2,288,874 civil penalty, based on the results of a bench trial finding that the defendant’s DMR reports disclosed 1666 “daily-equivalent effluent-limitation violations” and 63 failure- to- monitor violations.  The civil penalty reflected the District Court’s decision that this penalty should be an amount that was twice as much as the defendant’s perceived economic benefit from noncompliance.

STABL’s DMRs and monitoring records were the primary evidence on which the government relied to establish the effluent-limitation violations. STABL argued that the DMRs were not admissible because they were hearsay and lacked foundation.  The District Court disagreed on the basis that Statements that an opposing party “manifested that it adopted or believed to be true” are not hearsay under Federal Rule of Evidence 801(d)(2)(B).  It concluded that, because the regulations and STABL’s permit required STABL to certify their truth and accuracy, the DMRs were non-hearsay adoptive admissions.  It further found that when STABL failed to respond to the government’s requests for admission regarding the authenticity of the DMRs, it thus admitted their authenticity and that they were what they purported to be, i.e., STABL’s DMRs, signed by its general manager. This was sufficient to establish foundation for the DMRs as Rule 801(d)(2)(B) admissions.   The District Court otherwise noted that “[w]hen a defendant’s own DMRs demonstrate permit exceedances, they constitute sufficient evidence to meet a Clean Water Act plaintiff’s burden of production on liability and in some circumstances may be sufficient to entitle the plaintiff to summary judgment.”