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United States v. CSX Transportation, Inc.

United States District Court, S.D. West Virginia, Charleston Division

January 3, 2019

UNITED STATES OF AMERICA, et al., Plaintiffs,
v.
CSX TRANSPORTATION, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          JOSEPH R. GOODWIN, UNITED STATES DISTRICT JUDGE.

         I. Introduction

         Pending before the court is Plaintiffs' Unopposed Motion to Enter Consent Decree [ECF No. 4]. For the reasons that follow, the Motion is GRANTED, and the parties' proposed Consent Decree [ECF No. 3-1] is ENTERED.

         II. Background

         On February 16, 2015, the defendant's train carrying Bakken crude oil derailed near Mount Carbon, West Virginia, causing twenty-seven railcars to leave the tracks. Many of the railcars erupted in explosions and fires while damage to the remaining railcars caused oil to spill into the Kanawha River and Armstrong Creek. The derailment caused a widespread power outage, shut down a water intake system serving 2, 000 people, forced a four-day evacuation of nearby communities, and destroyed a neighboring house. Further, an oily sheen appeared in the Kanawha River near its confluence with Armstrong Creek for at least two months after the derailment.

         Plaintiffs, the United States of America, on behalf of the United States Environmental Protection Agency (“EPA”), and the State of West Virginia (“the State”), on behalf of the West Virginia Department of Environmental Protection (“WVDEP”), filed their Complaint [ECF No. 1] against Defendant CSX Transportation, Inc. (“CSXT”) on July 23, 2018. The Complaint alleges that CSXT violated Section 311 of the Clean Water Act (“CWA”), 33 U.S.C. § 1321(b)(3); Sections 6 and 8 of the West Virginia Water Pollution Control Act (“WPCA”), W.Va. Code §§ 22-11-6 and 8; and Section 4 of the West Virginia Groundwater Protection Act (“WGPA”), W.Va. Code § 22-12-4. Plaintiffs filed the proposed Consent Decree [ECF No. 3-1] on July 24, 2018. The United States subsequently published a notice of the filing of the Consent Decree in the Federal Register, informing the public that the Department of Justice would accept comments relating to the proposed Consent Decree for a period of thirty days. On November 19, 2018, Plaintiffs filed the instant Motion, requesting the court enter the proposed Consent Decree as a final order in this matter.

         III. Legal Standard

         A consent decree is a negotiated agreement that “‘has elements of both judgment and contract,' and is subject to ‘judicial approval and oversight' generally not present in other private settlements.” Szaller v. Am. Nat. Red Cross, 293 F.3d 148, 152 (4th Cir. 2002) (quoting Smyth v. Rivero, 282 F.3d 268, 279-80 (4th Cir. 2002)). “Because it is entered as an order of the court, the terms of a consent decree must also be examined by the court.” W.Va. Rivers Coal. v. Appalachian Power Co., No. 3:14-24237, 2014 WL 5450239, at *1 (S.D. W.Va. Oct. 23, 2014).

         The Fourth Circuit has explained that when considering whether to enter a proposed consent decree, the general principle to be followed is that settlements are encouraged. United States v. North Carolina, 180 F.3d 574, 581 (4th Cir. 1999). “The presumption in favor of settlement is particularly strong where a consent decree has been negotiated by the Department of Justice on behalf of a federal administrative agency specially equipped, trained, or oriented in the field . . . EPA is such an agency.” United States v. Cannons Eng'g Corp., 720 F.Supp. 1027, 1035 (D. Mass. 1989), aff'd, 899 F.2d 79 (1st Cir. 1990) (internal citation omitted).

         Nonetheless, district courts should not blindly accept the terms of a proposed settlement. See Flinn v. FMC Corp., 528 F.2d 1169, 1173 (4th Cir. 1975). Instead, “before entering a consent decree the court must satisfy itself that the agreement is ‘fair, adequate, and reasonable' and ‘is not illegal, a product of collusion, or against the public interest.'” North Carolina, 180 F.3d at 581 (quoting United States v. Colorado, 937 F.2d 505, 509 (10th Cir. 1991)). The court must assess the strength of the plaintiffs' case in considering the fairness and adequacy of a proposed settlement. Id. Specifically, the court should consider the stage of the proceedings, the extent of discovery that has taken place, the experience of the plaintiffs' counsel who negotiated the settlement, and the want of collusion in the settlement. Id.

         IV. Discussion

         Plaintiffs submit that the parties negotiated the proposed Consent Decree at arm's length. Plaintiffs also state that the proposed Consent Decree addresses the allegations in the Complaint and advances the purposes of the CWA. Accordingly, Plaintiffs contend that the proposed Consent Decree is fair, adequate, reasonable, and not contrary to the public interest.

         The proposed Consent Decree, which resolves only the claims alleged in the Complaint, requires CSXT to: (1) pay a federal civil penalty of $1, 200, 000; (2) pay a $1, 000, 000 civil penalty to the State; and (3) perform a State Supplemental Environmental Project (“SEP”) worth $500, 000. Proposed Consent Decree [ECF No. 3-1] 3-4. The SEP will allow the State to assist the Kanawha Falls Public Service District in carrying out necessary upgrades to its water treatment facilities. Id. at 4. The proposed Consent Decree explicitly reserves the resolution of any outstanding claims by the United States or the State for response costs, natural resource damages, and injunctive relief. Id. at 11.

         a. Fairness, ...


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