Allegheny Ludlum Settles Clean Water Act Violations

Allegheny Ludlum Corp. has agreed to pay a $2.375 million penalty as part of a settlement over alleged Clean Water Act violations at the company’s Pittsburgh-area steel mills and finishing plants.

The settlement, subject to final court approval, will conclude more than nine years of litigation over water pollution from the Allegheny Ludlum plants. The government’s lawsuit, filed in 1995 by the Justice Department on behalf of EPA, cited the company for unlawful discharges of oil and toxic pollutants.

In early 2001, the federal district court imposed a $8.24 million penalty against Allegheny Ludlum for more than 1,100 days of Clean Water Act permit violations from July 1990 through February 1997. In a February 19, 2002 ruling, the district court noted the substantial number, magnitude, and environmental and public health threat of these violations, which included 893 violations of toxic pollutant limits, 180 days when the company exceeded permit limits by at least 1,000 percent and a “notorious” July 1994 oil spill from West Leechburg, which spread 30 miles downstream.

The court recognized that Allegheny Ludlum had improved its environmental compliance during the litigation, but observed that “this form of good faith sprung not from internal willingness to comply with its statutory obligations,” but from “more intense government enforcement.” The court noted that Allegheny Ludlum paid fines totaling $200,000 to Pennsylvania in 1992 and 1993 for 990 prior water pollution violations.

Following an appeal by Allegheny Ludlum, the U.S. Court of Appeals for the Third Circuit in April 28, 2004 affirmed the district court’s finding that Allegheny Ludlum had violated the Clean Water Act. However, the appellate court sent the case back to the district court to consider the company’s claim that it had overstated pollution discharges in water monitoring reports due to its own “laboratory error.” The Court of Appeals also directed the district court to reassess the penalty, in light of the appropriate interest rate and “economic benefit of non-compliance” and to further evaluate supporting evidence of violations of monthly average limits.