Natural Resources Defense Council et al v. Metropolitan Water Reclamation

Filing 176

MEMORANDUM Opinion and Order. Signed by the Honorable John J. Tharp, Jr on 12/27/2016. Mailed notice(air, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NATURAL RESOURCES DEFENSE COUNCIL,
et al.,
Plaintiffs,
No. 11 C 02937
v.
Judge John J. Tharp, Jr.
METROPOLITAN WATER RECLAMATION
DISTRICT OF GREATER CHICAGO,
Defendant.
MEMORANDUM OPINION AND ORDER
As previously recounted, the plaintiffs, Natural Resources Defense Council, Inc., Sierra
Club, Inc., and Prairie Rivers Network are non-profit environmental groups who have brought
this case pursuant to the citizen-suit provision of the federal Clean Water Act. In Count Two, the
plaintiffs claim that the Metropolitan Water Reclamation District of Greater Chicago (“MWRD”
or “District”) violated the terms of its National Pollution Discharge Elimination System
(“NPDES”) permits, and thus the Act itself, at three area water reclamation plants (“WRPs”) that
it operates. Specifically, the plaintiffs claim that the effluent from the WRPs contains levels of
phosphorus that have caused conditions in the receiving waters that violate Illinois water quality
standards with respect to levels of algal and plant growth and dissolved oxygen (“DO”). The
plaintiffs maintain that the water quality standards are enforceable against the District because
Special Condition 5 of the three NPDES permits for the WRPs incorporates those standards.
This Court has already ruled on both parties’ motions for summary judgment, first
rejecting the District’s primary-jurisidction defense and also holding that the so-called “permit
shield” did not protect it to the extent it was not in compliance with Special Condition 5, which

the court held incorporates the Illinois water quality standards as substantive terms of the permit,
compliance with which is required in order for the permit shield to apply. The court held that the
permit shield defense can apply only if the three WRPs’ effluent does not cause violations of the
Illinois WQS, and therefore the defendant’s motion for summary judgment was denied. So too
was the plaintiffs’s motion. The court concluded that the plaintiffs failed to establish as a matter
of law that the phosphorus content of the WRPs’ effluent caused violations of the unnaturalgrowth and DO water quality standards, and that, accordingly, they did not establish any
violations of Special Condition 5 of the NPDES permits and the Clean Water Act.
While summary judgment proceedings were pending, another of the plaintiffs’ cases,
which challenged the most recent permits granted to the District, made its way through the
Illinois courts. 1 The plaintiffs lost in the admistrative appeal but won in the Illinois Appellate
Court. In particular, the appellate court concluded that the permit terms merely incorporating the
Illinois WQS were not enforceable as a practical matter and therefore placed no substantive
restrictions on the District’s phosphorus discharges. The new permits will require reconsideration
by the ICPB in light of the ruling. So, the District now comes back to this Court to raise the
argument that the plaintiffs are judicially estopped from arguing that the District violated permit
terms that the plaintiffs successfully argued elsewhere could not meaningfully restrict
phosphorus discharges.
1

The plaintiffs here are among the group of petitioners who appealed to the Illinois
Pollution Control Board the provisional 1.0 mg/L phosphorus limit in the 2013 permits. The
Board granted summary judgment in favor of the District and the IEPA, upholding the
phosphorus limitations as sufficient and finding no issue with the state agencies’ procedures for
developing and imposing it.. Recently, however, the Illinois Appellate Court reversed the IPCB,
holding that there is a genuine issue of material fact regarding whether, to prevent unnatural
plant or algal growth, the phosphorus limit should be lower than 1.0 mg/L and whether Special
Condition 5 is a sufficient limitation. See Prairie Rivers Network v. Illinois Pollution Control
Bd., 2016 IL App (1st) 150971, ¶ 35.

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LITIGATION BACKGROUND
Familiarity with the facts of this case is assumed, and they are not set forth again here.
The litigation history, however, governs the resolution of this motion.
This case was filed in May 2011 (and assigned to two judges before this one). It sought
enforcement of the District’s 2002 NPDES permits as to the phosphorus content of effluent from
three WRPs. Briefing on the parties’ summary-judgment motions was completed in November
2014. In the meantime, the IEPA had issued renewed permits to the District, effective January 1,
2014 (the “2013 permits”). After the parties engaged in prolonged settlement negotiations, this
Court ultimately denied both summary-judgment motions on March 31, 2016 (and amended its
opinion slightly on April 20); both parties’ motions were denied. Thereafter, the case was set for
a bench trial on January 17, 2017.
Meanwhile, the plaintiffs, among others, appealed the 2013 permits to the Illinois
Pollution Control Board. They argued that the permits, which newly imposed a numeric
restriction on phosphorus levels of 1.0 mg/L on a monthly average, did not go far enough to limit
phosphorus and that the new numerical standards were too high to ensure compliance with
applicable water quality standards. The ICPB granted summary judgment for the District on
December 18, 2014, upholding the 2013 permits. The plaintiffs appealed to the Illinois Appellate
Court. See Prairie Rivers Network, et al. v. Illnois Pollution Control Board, Appeal No. 150971, 50 N.E.3d 680 (Ill. App. Ct. 2016) (Mot. Ex. A, ECF No. 165-3.) The plaintiffs-appellants
filed their opening brief on June 7, 2015, the District responded on November 6, 2015, and the
plaintiffs replied on November 20, 2015. On February 26, 2016, the appellate court ruled in
favor of the plaintiffs and remanded the case to the IPCB for further proceedings on the 2013
permits. A month later, this Court ruled on the pending summary-judgment motions in this case,

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which is directed at remedying alleged past and ongoing violations the 2002 permits. (Neither
party suggests that it matters for purposes of this judicial-estoppel motion that the state court
appeal addressed the 2013 permits, while this lawsuit pertains to the 2002 permits; Special
Condition 5 appears, in identical form, in both.) Neither party supplemented its briefs based on
the state appellate court’s decision before this Court ruled. 2
In the state appeal, the plaintiffs-appellants argued that in granting the District’s 2013
NPDES permits, the IEPA violated the Clean Water Act’s implementing regulations, and in
particular, the water quality standards for offensive conditions, unnatural plant and algal growth,
and the minimum dissolved oxygen standards, because the permits insufficiently restricted the
amount of phosphorus in the effluent. 3 Appellants’ Br. at 1. They contended that the numeric
limitation was arbitrary, not supported by the scientific record, not designed to ensure that water
quality standards would not be violated, and was imposed just because the District agreed to
accept that limitation. Appellants’ Br. at 19. The appellants requestion a remand to the IPCB to
require IEPA to create “science based numeric phosphorus limits that comply with the law.” Id.
at 20. They argued that both Illinois and federal regulations require the development of numeric
phosphorus limits to prevent phosphorus pollution, id. at 24, but also that NPDES must contain
limitations that also prevent the violation of the various narrative standards---i.e., the narrative
standards that are the subject of this lawsuit. They expressly argued that in developing an
2

In that sense, the District’s present motion could be ruled untimely; it knew before this
Court even issued the summary-judgment ruling that the plaintiff had prevailed in state court
and, in the District’s view, was taking an inconsistent position in this Court. It waited seven
months from the state court’s decision to raise judicial estoppel.
3

The plaintiffs-appellants’ arguments can be found in their opening and reply briefs at
Exhibits B and E to the District’s motion, respectively; see Appellant’s Brief, Ex. B, ECF
No.165-4; Appellant’s Reply, Ex. E, ECF No. 165-7. The District’s brief as appellee is filed at
Ex. C, ECF No. 165-5. The docket citiations will not be further replicated, for ease of reading.
The briefs will simply be referred to by name and page number.
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numeric limitation,“[t]he applicable water quality standards are the offensive condition /
unnatural growth standards and the dissolved oxygen standards.” Id. at 27. The appellants agreed
with IEPA that Special Condition 5 of the permits addresses phosphorus discharges and “at least
affords citizens an opportunity to enforce violations . . . through citizen suits” (such as this one),
but that relying on Special Condition 5 alone to not meet the federal requirement for “chemicalspecific limits,” and is insufficient to ensure compliance with the WQS. Id. at 27-28. The
appellants further argued that the Special Condition, which essentially just directs compliance
with the law, suffered problems beyond illegality:
First, this approach turns what is required to be a forward-thinking
permit limit designed to prevent violations of water quality
standards into a “catch me if you can”enforcement issue. Further,
the condition does not provide guidance as to what monitorying
should be required or otherwise lend itself to efficient enforcement.
Finally, it leaves up to the discharger to decide what is necessary to
meet water quality standards until corrected through an
enforcement action.
Id. at 28. The appellants’ many other arguments challenging the procedure and substance of the
permits did not pertain to the effect of Special Condition 5.
The District and its co-defendants countered that the permits were perfectly adequate and
that the IEPA had fulfilled its obligations impose limitations to ensure compliance with water
quality standards. The District argued that its concession to follow the 1.0 mg/L interim
limitation---which techinically applies just to “new or explaning plants” went well beyond any
legal obligations it has. Dist. Appellee Br. at 25. The District argued that “there is no basis under
Illinois law for a more stringent phosphorus requirement in the “ 2013 permits. Id. at 27. The
District also faulted the appellants, as it has in this case, for trying to use litigation to
“circumvent” Illinois’ ongoing nutrient study and administrative process for “methodically
developing science-based nutrient standards.” Distr. Appellee Br. at 24. The IPCB, said the
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District, “correctly determined that [IEPA] was reasonable in imposing the 1.0 mg/L interim
phosphorus limit on the District in the Permits white the State works on developing a long-range,
statewide standard for that nutrient.” Id. at 28.
Regarding Special Condition 5 and the narrative water quality standards (which the
District did not argue were inapplicable or unenforceable, as it does in this case), the District first
argued that there was no correlation or causation between its phosphorus discharges and
“upstream” algal growth or growth in far-away downstream lakes. The District next argued that
the appellants relied on the wrong standards for D.O. content and that, again, there was no
evidence of a “connection” between the D.O. levels in the waterways receiving the phosphorus
from the District’s effluent. Id. at 34. The District further argued that IEPA would have been
within its rights not to impose any phosphorus limits at all, because phosphorus does not have, in
the language of the Clean Water Act regulations, the “reasonable potential” to cause or
contribute to violation of water-quality standards. Id. at 36. But, instead of stopping with the
numeric standard, the IEPA “also included a ‘special condition’ expressly mandating that the
District’s effluent cannot cause or contribute to a water quality violation.” Id. (emphasis added).
Thus the District contended not only that phosphorus limitations, including the narrative water
quality standards, were part of its permit, but that those limits went above and beyond what the
law required the agencies to impose.
In reply, the appellees returned to the insufficiency of Special Condition 5 to comply with
laws enforcing water quality standards, arguing that Special Condition 5 “is not a substitute for
actually taking the steps necessary to ensure that the Permits do, in fact, ensure protection by
setting concrete numberic discharge limits established through scientific analysis.” Reply at 17
(emphasis in original). They cited the newly issued opinion in NRDC v. U.S. EPA, 808 F.3d 556

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(2d Cir. 2015), which held that an analogous condition in an NPDES permit for ocean-going
vessels, relying on narrative WQS, was “insufficient” to give shipowner guidance as to what is
expected or tp allow any permitted authority to determin whether a shipowner is violating water
quality standards.” The appellants’ argument appeared to be primarily a rebuttal to the District’s
and State agencies’ arguments to the effect that Special Condition 5 ensures “that no discharge,
whether by itself or in combination with any other substance, will cause a violation of applicable
[WQS]” and that the appellants therefore “cannot maintain that phosphorus discharges will cause
impairments to the receiving waters.” State Appellee Brief 21, Ex.D, ECF No. 165-6. The State,
therefore, like the District, took the position that the narrative water quality standards
incorporated into Special Condition 5 impose substantive limitations.
The Illinois Appellate Court ruled in the plaintiffs’ favor and remanded the case to the
ICPB to reevaluate the phosphorus limits in the 2013 permits. The appellate court first described
the 2013 permits’ limits on “total phosphorus, including the numeric limit and “a ‘special
condition,’ expressly mandating that the District's effluent cannot cause or contribute to water
quality violations.” Prairie Rivers Network, 50 N.E.3d at 683. Given the numerous federal and
state standards for NPDES permits, the court concluded ultimately that “genuine issues of
material fact exist as to whether the IEPA complied with the Act and the corresponding federal
and Board regulations when issuing final permits for the Stickney, Calumet, and O'Brien plants.”
In particular, the Court noted the IEPA’s obligation to convert narrative standards into chemicalspecific limitations because of the difficulty with understanding and applying narrative standards
to particular pollutants. Id. at 685. The Court also noted that although a numeric limit was
established, “there is no evidence that such a limit was derived from any state or federal
standards” and was in fact contrary to the developed record before the IPCB. Id. at 686-687. The

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appellate court was also persuaded by the Second Circuit’s NRDC decision, explaining:
“Similarly, here, the special condition did not ensure compliance with water quality standards as
it gave no guidance as to what was expected from the District, nor did it allow the IEPA to
determine whether the District was violating water quality standards.” Id. at 688. Special
Condition 5, therefore, did not go far enough to ensure that water quality standards could be
understood, followed, and enforced.
DISCUSSION
The District’s motion turns on the application of judicial estoppel. That equitable doctrine
prevents a party who successfully litigates one position from later arguing the opposite position
in another proceeding. Adkins v. VIM Recycling, Inc., 644 F.3d 483, 495 (7th Cir. 2011); Jarrard
v. CDI Telecommunications, Inc., 408 F.3d 905, 914 (7th Cir. 2005) (explaining, “the doctrine
aims to prevent a party that prevails in one lawsuit on one ground from repudiating that same
ground in another lawsuit”); United States v. Newell, 239 F.3d 917, 921 (7th Cir. 2001) (for
judicial estoppel to apply, prior inconsistent argument must have been accepted by the court in
some manner). Judicial estoppel is “invoked at the court's discretion,” but three general
principles guide the inquiry: “(1) whether the party's later position was ‘clearly inconsistent’ with
its earlier position; (2) whether the party against whom estoppel is asserted in a later proceeding
has succeeded in persuading the court in the earlier proceeding; and (3) whether the party
‘seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair
detriment on the opposing party if not estopped.’” In re Airadigm Communications, Inc., 616
F.3d 642, 661 (7th Cir. 2010) (citations omitted); see In re Knight–Celotex, LLC, 695 F.3d 714,
721-22 (7th Cir. 2012) (citing New Hampshire v. Maine, 532 U.S. 742 (2001)). “Additional
considerations may inform the doctrine's application in specific factual contexts.” New

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Hampshire, 532 U.S. at 751. At bottom, a litigant is not entitled to assail the integrity of the
judiciary by prevailing twice on opposite theories. See Airadigm Communications, 616 F.3d at
66; In re Hovis, 356 F.3d 820, 823 (7th Cir. 2004) (“One who argues a position in court, and
prevails, rarely is entitled to switch ground and argue an inconsistent position later, even within
the scope of a single proceeding.”).
The doctrine of law of the case also comes into play here. This Court previously ruled
that Special Condition 5 imposes a substantive limitation on the District’s phosphorus discharges
under its 2002 NPDES permits. The law of the case doctrine teaches that, unless it becomes
evident that a ruling was clearly erroneous, a court’s decision on a rule of law should continue to
govern the same issue in the same case. See Sharp Elecs. Corp. v. Metro. Life Ins. Co., 578 F.3d
505, 510 (7th Cir. 2009) (“The doctrine reflects the idea that a single court should not revisit its
earlier rulings unless there is a compelling reason to do so. It is designed to further consistency,
to avoid constantly revisiting rulings, and to conserve judicial resources.”); Jarrard, 408 F.3d at
911-912. The law of the case “blocks new theories as well as old ones” on a decided issue.
Peoples v. United States, 403 F.3d 844, 846 (7th Cir. 2005). The parties did not move for
reconsideration of the prior ruling in light of a change in precedent or some other intervening
event, or because the court made some manifest error. Although it is entitled to revisit any
interlocutory ruling “whicle there is still time to prevent error.” Runyon v. Applied Extrusion
Techs., Inc., 619 F.3d 735, 739 (7th Cir. 2010), the court sees no reason to spontaneously
reverse its prior decision on this point. Therefore the parties and the court are bound by the
previous ruling that the Illinois WQS apply to the District by their incorporation into Special
Condition 5 and that the narrative WQS impose a substantive limititation. That is rule that would
govern at trial—if there is to be one.

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So have the plaintiffs taken a position in federal court that is clearly inconsistent with the
position they presented in state court on the issue of whether the Illinois WQS imposed
substantive and enforceable limitations on phosphorus discharges by the District? The plaintiffs
contend that the District has misconstrued its state-court arguments to make it appear so, but they
say that they “never argued” in state court that the narrative standards incorporated into the
NPDES permits through Special Condition 5 are “unenforceable,” but only that they were
difficult to enforce and should be replaced or augmented with numeric, chemical-specific
standards for phosphorus. Resp. Br. 1, ECF No. 166. The defendant says this is double-speak.
The District argues that the Illinois Appellate Court came to its decision only by accepting the
plaintiffs’ argument that the narrative critieria did not limit phosphorus discharges.
In what this court considers a fair summary, the plaintiffs argued in state court that
Special Condition 5 is inadequate and insufficient to protect water quality standards, and
therefore that the permit needed to be remanded to the IPCB to implement workable limits for
phosphorus discharges. The plaintiffs did not argue that the Condition and the WQS were
entirely unforceable or could not be applied, though they noted the difficulty of doing so and the
inefficiency of ex post facto enforcement through litigation after violations occurred; in other
words, the existing standards were insufficient. Indeed, they expressly noted that Special
Condition 5 allowed “at least” some ability to create and enforce phosphorus limitations through
citizen suits, but that Special Condition 5 was a “poor substitute” for a forward-looking
limitation. The District’s characterizations of the plaintiffs’ state-court arguments, therefore, and
especially the suggestion that the plaintiffs argued that the narrative criteria were unenforceable
are inaccurate and without any grounding in the plaintiffs’ words before the state appellate court.
Therefore, there is no inconsistency, let alone a “clear” one, between the plaintiffs’ arguments in

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that court and their arguments here. There is simply nothing wrong with trying to enforce
existing limits while pushing for the imposition of more and stringent regulations going forward.
It is not necessary to go further, but the court notes as well that the plaintiffs did not
“prevail” in state court on the issue of the enforceability of Special Condition 5, first because
they did not argue that it was unenforceable and second because the appellate court did not so
hold. It simply agreed with the Second Circuit and the plaintiffs that the special condition did not
relieve the IEPA of its oblibation to substantively, and proactively, address water quality
standards with workable criteria in the permits themselves. Indeed, this Court’s many readings of
the Prairie Rivers Network opinion leave it baffled as to how the District can argue that “there
can be no doubt that Plaintiffs succeeded with their argument to th appellate court to reverse
IPCB’s approval of the District’s permits on the ground that Special Condition 5 was
unenforceable.” Dist. Br. 10, ECF No. 165-1 (emphasis added). Not only was nothing said about
enforceability (other than the inherent difficulty), but the appellate court had many grounds for
its decision that the responsible agenicies had wholly failed to follow applicable regulations in
issuing the 2013 permits.
Finally, as an equitable matter, this court would not apply judicial estoppel here because
the plaintiffs are not the only ones who have flirted with inconsistency. In its summary judgment
opinion, this court noted its surprise about the District’s arguments as summarized by the Illinois
Appellate Court, as they diverged from the ones presented here. See Am Op. & Order16 n.5,
ECF No. 156. The District argued in state court that Special Condition 5 “mandate[s] that the
effluent cannot contribution to WQS violations.” Here, on summary judgment, it contended that
Special Condition 5 had no effect because its phosphorus discharges were disclosed before the
permit issued and that the narrative standards did not impose effluent limits on phosphorus. The

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tension between these arguments, if not a “clear” inconsistency, is at least as pronounced as that
afflicting the plaintiffs’arguments about the enforceability of Special Condition 5. Accordingly,
barring the plaintiffs’ argument here would be inequitable, although of course as a formal matter
the District’s loss in state court precludes the application of judicial estoppel against it.
Nevertheless, he who comes to equity must come with clean hands. Gutierrez v. Gonzales, 458
F.3d 688, 693 (7th Cir. 2006) (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co.,
324 U.S. 806, 814, (1945)). This is not to denigrate the District or suggest any wrongful action;
the “unclean hands” doctrine is not at issue, but a similar principle of fair play is. In the Court’s
view, both parties have strategically emphasized different points in different contexts, but the
line of clear inconsistency has not been crossed, especially not by the plaintiffs, and it would not
be fair to hold this sort of tactic—some might say “strategery” 4—against only one side.
Moreover, the court has already adverted to the lateness of this motion, which was filed only as
the parties are gearing up for trial in earnest. It would cause substantial prejudice to toss out this
case based upon a legal argument that was available to the District seven months before this
motion was made.
The criteria for judicial estoppel do not apply. The defendant’s motion is denied.

John J. Tharp, Jr.
United States District Judge

Date: December 27, 2016

4

See, e.g., Dan Simon, “5 Differences Between Strategy and Strategery,” Forbes.com
Sep. 11, 2012 @ 11:55 a.m., available at http://www.forbes.com/sites/dansimon/2012/09/11/5differences-between-strategy-and-strategery/#16ab74822af8 (last visited 12/27/2016) (defining
“strategery” as “a flimsy veneer of forethought [placed] over a largely reactive and often
ineffective game-plan”).
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