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State v. Genon Ash Management, LLC

United States District Court, Fourth Circuit

June 10, 2013

STATE OF MARYLAND, DEPARTMENT OF THE ENVIRONMENT, Plaintiff
v.
GENON ASH MANAGEMENT, LLC, et al., Defendants.

MEMORANDUM OPINION

PETER J. MESSITTE, District Judge.

The State of Maryland Department of the Environment ("MDE") filed three separate complaints against GenOn Maryland Ash Management, LLC, GenOn Mid-Atlantic, LLC, and their predecessor companies, Mirant Maryland Ash Management, LLC and Mirant Mid-Atlantic, LLC (collectively "GenOn"), alleging violations of the federal Clean Water Act, 33 U.S.C. § 1311, as well as violations of Md. Code Ann., Envir. §§ 9-322 and 9-323 (unauthorized discharge of pollutants to state surface waters and groundwaters). The alleged violations occurred at three sites where GenOn operates facilities that dispose of coal combustion byproducts in landfills: the Brandywine Ash Management Facility (Case No. 10-0826), the Faulkner Ash Management Facility (Case No. 11-1209), and the Westland Ash Management Facility (Case No. 12-3755). In the Brandywine case, a group of environmental organizations, Sierra Club, EarthReports, Inc. d/b/a/Patuxent Riverkeeper, and Chesapeake Climate Action Network (collectively "Intervenors") intervened. In the Faulkner case, Potomac Riverkeeper, Inc. ("Amicus") appeared as amicus curiae. MDE and GenOn reached a settlement and moved for entry of a consent decree resolving all cases. Intervenors and Amicus partially opposed the settlement. The Court received briefs from the parties, Intervenors, and Amicus, and held a hearing on March 19, 2013. Following the hearing, the parties submitted a revised proposed consent decree on April 23, 2013. The Court signed the revised consent decree on May 1, 2013 (see, e.g., Dkt. 28 in Case No. 11-1209). This Opinion explains the basis of the Court's approval of the revised consent decree.

I. Legal Standard

In considering whether to enter a proposed consent decree, the court is guided by the overarching principle that settlements are to be encouraged. U.S. v. North Carolina, 180 F.3d 574, 581 (4th Cir. 1999). Moreover, when a settlement has been negotiated by a specially equipped agency, the presumption in favor of settlement is particularly strong. See U.S. v. City of Welch, W.Va., Civ. No. 1:11-00647, 2012 WL 385489, at *2 (S.D. W.Va. Feb. 6, 2012) (noting presumption in favor of settlement for federal administrative agencies specially oriented in the field). A settlement hearing, it may be noted, is not a trial or a trial rehearsal and the court need not "reach any dispositive conclusions" about "admittedly unsettled legal issues" in the case. Flinn v. FMC Corp., 528 F.2d 1168, 1172-73 (4th Cir. 1975) (citations omitted). Nonetheless, the court is not expected to give mere boilerplate approval of the proposed decree, without consideration of the facts or analysis of the law, and leave to be heard should be extended to anyone objecting to it. Flinn, 528 F.2d at 1172-73.

The basic standard is this:

The court must satisfy itself that the consent decree "is fair, adequate, and reasonable" and "is not illegal, a production of collusion, or against the public interest." North Carolina, 180 F.3d at 581 (citations omitted). In considering the fairness and adequacy of the proposed decree, the court must assess the strength of the plaintiff's case. See North Carolina, 180 F.3d at 581 (citing Flinn, 528 F.2d at 1172-73). The court considers the extent of discovery, the stage of the proceedings, the want of collusion and the experience of plaintiff's counsel who negotiated the settlement. North Carolina, 180 F.3d at 581; Carson v. American Brands, Inc., 606 F.2d 420, 430 (4th Cir. 1979); Flinn, 528 F.2d at 1173. The opinion of competent counsel, absent any showing of collusion or bad faith, is to be afforded great weight. Carson, 606 F.2d at 430. The court also considers the views of those who would be affected by the settlement and the extent of participation of opponents of the plan in terms of the development of the settlement. See Flinn, 528 F.2d at 1173.

In order to reach an informed, just and reasoned decision regarding a consent decree, the court reviews testimony at the hearing and other evidence in the record, and considers the above factors in an oral or written opinion. See Flinn, 528 F.2d at 1175.

II. Background

A. History

Brandywine, Faulkner, and Westland are coal combustion byproducts disposal facilities. These disposal facilities contain active and closed disposal areas for combustion byproducts, including fly ash pits. When liquid such as rain water passes through the disposal areas, it can then flow out as leachate containing pollutants, and enter nearby surface and groundwater. Concerns about water pollution at these sites date back at least 15 years.

In 2007, MDE and GenOn began to address pollution at these three sites. Intervenors, or some of them, filed a notice of intent to sue for alleged Faulkner violations. MDE filed an action as to Faulkner in state court. Then, Intervenors, or some of them, filed notice to sue regarding Brandywine. MDE subsequently withdrew its state court case against Faulkner and re-filed in this Court (Case No. 10-0826). GenOn's counterclaims remained pending in state court. Following this Court's denial of Defendants' Motion to Dismiss, discovery materials were exchanged and depositions were taken. In mid-2011, MDE filed the Brandywine case (11-1209). Shortly thereafter a stay was entered in both cases and 18 months of settlement discussions ensued. In late 2012, MDE filed the Westland case (12-3755). The motions to enter the initial proposed consent decree were filed in all the actions in late 2012 and early 2013.

All the Complaints alleged that GenOn discharged pollutants into state and federal waterways because it did not properly capture leachate. According to MDE, GenOn possessed state and federal permits for the outfalls, but the discharges from the sites exceeded the ambient water quality standards for certain pollutants.

Settlement discussions were protracted. MDE has asserted that during the discovery and settlement negotiations, the strength of its case was apparent to all. On the other hand, MDE's counsel stated that there was quite a bit of haggling, and that both parties fought very hard for 18 months. GenOn asserted that much of the discussion was about the proposed penalty, since GenOn was not disputing that there had been pollution, but, rather, took issue with MDE dealing with them from an "enforcement" standpoint. (Hr'g Tr. 36-37.) It had been GenOn's belief that the pollution was nothing other than the result of complying with previous settlement agreements, and did not amount to a legal violation. ...


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