United States v. Municipal Authority of Union Township

Fairmont Products (Fairmont), a dairy plant, exceeded its limit under an industrial user (IU) discharge permit issued by the Municipal Authority of Union Township (Union Township) (defendant). The permit limited the discharge of several pollutants into Union Township’s treatment works. The United States sued Fairmont under the Clean Water Act for permit violations under § 1319(d). Section 1319(d) provides that the violator of a permit issued under the act will be subject to a civil penalty not to exceed $25,000. The district court ruled that Fairmont was liable for over 2,000 IU permit violations over several years. During continued violations, Fairmont could have reduced its production volume but instead continued discharging pollutants at a level exceeding its IU permit. Fairmont failed to address its Clean Water Act violations by installing a pretreatment facility for over two years. Fairmont did not realize any economic benefit from delaying the capital investments necessary to achieve compliance with its IU permits. However, Fairmont did realize economic benefits during its violations by producing at a higher level than it could within its IU permit. Dean Foods eventually acquired Fairmont. Dean Foods’ assets were examined to determine the economic impact of the penalty on the violator because Dean Foods’ assets were so closely connected with Fairmont’s for the suit.