## Facts

- Sierra Club brought a Clean Water Act (CWA) citizen suit alleging Electronic Controls Design, Inc. (ECD) discharged pollutants into Milk Creek and the Molalla River in violation of its NPDES permit.
- The parties submitted a proposed consent judgment requiring ECD to:
  - comply with its NPDES permit and terminate discharges if it violated the permit after a specified date;
  - pay $45,000 to identified private environmental organizations for water-quality protection efforts;
  - make additional payments to those organizations if violations occurred during a defined interim period; and
  - pay $5,000 to Sierra Club for attorney and expert fees.
- The consent judgment stated ECD did not admit liability and that none was established.
- The United States, as amicus, objected that the payments were unlawful because CWA civil penalties must be paid to the U.S. Treasury.
- The district court treated the third-party payments as “civil penalties” under the CWA and refused to enter the consent judgment.
- Sierra Club appealed.

## Issues

1. Whether an interlocutory order denying entry of a consent judgment containing injunctive relief is appealable under 28 U.S.C. § 1292(a)(1).
2. Whether payments to private environmental organizations required by a CWA citizen-suit consent judgment are “civil penalties” that must be paid to the U.S. Treasury.
3. Whether the district court erred in refusing to enter the proposed consent judgment on the ground that the CWA bars such third-party payments.

## Decision

- The Ninth Circuit held it had appellate jurisdiction under 28 U.S.C. § 1292(a)(1) because denying entry of the consent judgment had the practical effect of refusing an injunction and satisfied the requirements for immediate review.
- The court reversed the district court, holding the proposed payments to private environmental organizations were not CWA “civil penalties.”
- The court remanded with instructions to proceed consistently with its opinion, permitting entry of the consent judgment.

## Legal Principles

- An order denying entry of a consent judgment that provides injunctive relief may be immediately appealable under 28 U.S.C. § 1292(a)(1) when it effectively denies injunctive relief and the harm from delay cannot be adequately remedied by later appeal.
- In a CWA citizen suit, statutory civil penalties (as authorized by the Act) are payable to the United States, and citizens may not collect such penalties for themselves.
- The CWA does not bar settlements that require a defendant to fund environmental work through payments to private environmental organizations when those payments are part of a negotiated resolution and are not imposed or collected as statutory civil penalties.
- A settlement’s inclusion of injunctive obligations and third-party environmental payments may be consistent with the CWA’s remedial objectives even where liability is not admitted and no civil penalty is adjudicated.

## Conclusion

The Ninth Circuit ruled that a district court may not reject a CWA citizen-suit consent judgment solely because it directs settlement payments to private environmental organizations, where the payments are not statutory civil penalties owed to the Treasury, and it confirmed that denial of such an injunctive consent judgment can be immediately appealed under § 1292(a)(1).


Sierra Club, Inc. v. Elec. Controls Design, Inc., 909 F.2d 1350 (9th Cir. 1990)