## Facts

- Smithfield Foods, Inc. operated two swine-processing plants in Isle of Wight County, Virginia, discharging treated wastewater into the Pagan River under state-issued NPDES permits pursuant to delegated Clean Water Act (CWA) authority.
- Over multiple years, Smithfield repeatedly exceeded permit limits and violated reporting requirements, including exceedances involving biochemical oxygen demand (BOD), total suspended solids (TSS), fecal coliform, and other pollutants.
- Smithfield adopted a long-term plan to connect its facilities to a regional sewage system operated by the Hampton Roads Sanitation District (HRSD), but the connection took about six years.
- During the period before the connection, Smithfield did not bring its own treatment system into compliance and did not accelerate either compliance measures or the connection timeline.
- The United States brought a CWA enforcement action seeking civil penalties for thousands of days of permit and reporting violations and injunctive relief to ensure future compliance.
- The district court found Smithfield liable for 6,982 days of effluent-limit and reporting violations, imposed a civil penalty of approximately $12.6 million, and entered injunctive relief addressing monitoring, reporting, and compliance obligations.

## Issues

1. Whether exceedances of a monthly-average effluent limitation may be treated as violations for each day of the month, rather than as a single monthly violation, when assessing CWA civil penalties.
2. Whether the district court improperly “trebled” Smithfield’s economic benefit of noncompliance instead of applying the CWA § 309(d) penalty factors.
3. Whether the district court clearly erred in calculating economic benefit and in declining to offset that benefit with costs associated with the HRSD connection.
4. Whether the district court abused its discretion by giving insufficient mitigating weight to Smithfield’s asserted good-faith efforts and eventual HRSD connection.
5. What degree of appellate deference applies to the district court’s factual findings and discretionary penalty determination under CWA § 309(d).

## Decision

- The Fourth Circuit affirmed the judgment in all material respects, including liability, the violation-counting method, the civil penalty, and the injunctive relief.
- The court held that a violation of a monthly-average effluent limit is treated as a violation for every day in the month for penalty purposes.
- The court held that the district court applied the statutory penalty factors under CWA § 309(d) and did not mechanically treble economic benefit.
- The court upheld the economic-benefit calculation and the limited credit given for HRSD-connection expenditures, concluding the findings were not clearly erroneous.
- The court held the district court adequately considered good faith and post-violation conduct but permissibly discounted them given years of persistent noncompliance and delayed interim measures.

## Legal Principles

- Under the CWA civil-penalty scheme, exceedances of a monthly-average NPDES effluent limit may be counted as violations for each day of the month when calculating per-day penalty exposure.
- CWA § 309(d) requires consideration of multiple factors, including seriousness, economic benefit of noncompliance, history of violations, good-faith efforts to comply, economic impact of the penalty on the violator, and other justice-related considerations.
- Economic benefit focuses on the financial advantage from delayed or avoided compliance; expenditures on later infrastructure choices do not automatically eliminate the benefit gained during extended periods of unlawful discharge.
- Eventual compliance or later remedial measures may be considered as mitigation but do not erase past violations, and courts may limit mitigation to preserve deterrence.
- Appellate review is deferential to district-court factfinding and penalty determinations; reversal requires clear error or abuse of discretion.

## Conclusion

The Fourth Circuit affirmed substantial CWA penalties and remedial orders against Smithfield for chronic NPDES permit violations, holding that monthly-average exceedances may be penalized as daily violations and that a district court may impose a large deterrent penalty after applying the full § 309(d) factor analysis, even when the violator later undertakes major corrective measures.


United States v. Smithfield Foods, Inc., 191 F.3d 516 (4th Cir. 1999)