## Facts

- Roll Coater, Inc. operated a coil-coating manufacturing facility that generated industrial wastewater containing regulated pollutants.
- The United States, through EPA, alleged Roll Coater repeatedly discharged wastewater to a publicly owned treatment works (POTW) in violation of national categorical pretreatment standards under the Clean Water Act.
- The record reflected numerous pretreatment violations, but the government did not prove specific, quantifiable environmental damages attributable to the discharges.
- During the relevant period, Roll Coater made interim improvements to its pretreatment system and later constructed a new treatment facility using advanced technology that achieved compliance.
- The case proceeded in federal district court to determine an appropriate civil penalty after liability for pretreatment violations was established.

## Issues

1. How should a court set a civil penalty under Clean Water Act § 309(d) for repeated pretreatment violations when specific environmental harm is not quantified and the violator later undertakes good-faith corrective measures?
2. Whether a Clean Water Act civil penalty may be earmarked for specific environmental projects or must be deposited into the United States Treasury under the Miscellaneous Receipts Act.

## Decision

- The court assessed a civil penalty of $2,093,750 against Roll Coater for violations of Clean Water Act pretreatment standards.
- The court treated the assessment as a statutory civil penalty imposed in a federal enforcement action.
- The court concluded that civil penalty funds constitute public money and, absent statutory authorization to the contrary, must be paid into the United States Treasury rather than directed to specific remediation projects.

## Legal Principles

- Clean Water Act civil penalties may be substantial for repeated pretreatment violations even without proof of discrete, monetized environmental damages; penalties serve punitive and deterrent purposes and address any economic advantage from delayed compliance.
- In setting a Clean Water Act civil penalty, courts apply § 309(d) factors, including seriousness, economic benefit, history of violations, good-faith compliance efforts, economic impact, and other justice-related considerations.
- Good-faith remediation and eventual compliance can mitigate the penalty amount but do not preclude significant penalties for prior noncompliance.
- Under the Miscellaneous Receipts Act, civil penalties obtained by the United States are public money that must be deposited in the U.S. Treasury unless Congress expressly authorizes another disposition; a court may not earmark such penalties for particular environmental projects once imposed as a civil penalty.

## Conclusion

The district court imposed a $2,093,750 Clean Water Act civil penalty for repeated pretreatment violations, holding that substantial penalties are permissible without quantified environmental damages and that any civil penalty collected by the United States must be deposited into the U.S. Treasury under the Miscellaneous Receipts Act.


United States v. Roll Coater, Inc., 21 Envtl. L. Rep. 21073 (S.D. Ind. 1991)