United States v. Telluride Co., named: The Telluride Co., 146 F.3d 1241 (10th Cir. 1998)

BRORBY, Circuit Judge.

The United States appeals the district court’s grant of partial summary judgment to the appellees, Telluride Co., Mountain Village Inc., and Telluride Ski Area, Inc. (collectively “Telco”), dismissing the Government’s claims for violations of the Clean Water Act, 33 U.S.C. § 1251 et. seq, that occurred prior to October 15, 1988. See United States v. Telluride Co., 884 F.Supp. 404 (D.Colo.1995), The issues on appeal are whether the five-year statute of limitations provided in 28 U.S.C. § 2462 applies to the Government’s claims for injunctive relief, where § 2462 by its terms applies only to the “enforcement of any civil fine, penalty, or forfeiture,” and whether the district court erred in applying the concurrent remedy rule to bar those claims. Our jurisdiction is exercised under 28 U.S.C. § 1291. For the reasons below, we reverse the district court’s judgment.

BACKGROUND

On October 15, 1993, the United States filed a civil action against Telco in the United States District Court for the District of Colorado under § 309 of the Clean Water Act, 33 U.S.C. § 1319.1 As authorized by 33 U.S.C. § 1319, the Government sought civil monetary penalties and injunctive relief for Telco’s illegal filling of approximately forty-five acres of wetlands between 1981 and 1989, in violation of 33 U.S.C. § 1311(a). In its request for injunctive relief, the Government sought to enjoin Telco from discharging additional material, and to require Telco to restore damaged wetlands to their prior condition or create new wetlands to replace those that could not be restored.

Telco subsequently filed a motion for partial summary judgment on all of the Government’s claims for violations that occurred before October 15, 1988, contending these claims were barred by the five-year statute of limitations in 28 U.S.C. § 2462. Section 2462 states in relevant part: “[ejxcept as otherwise provided by Act of Congress, an. action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued.” 28 U.S.C. § 2462. The Government conceded § 2462 applied to its claim for civil penalties, but argued the statute did not bar its claims for injunctive relief. The district court disagreed, applying the concurrent remedy rule to hold § 2462 barred the Government’s claims for injunctive relief. The court interpreted the concurrent remedy rule as providing when legal and equitable relief are available concurrently, and a statute of limitations bars the concurrent legal remedy, the court must withhold the equitable relief. Consequently, because § 2462 barred the Government’s claims for legal relief, civil

monetary penalties, the court held § 2462 barred its claim for injunctive relief. On May 2, 1995, the court granted Telco’s motion for partial summary judgment, dismissing all of the Government’s claims for relief for wetlands illegally filled prior to October 15, 1988.2 The Government appeals the district court’s judgment, claiming § 2462 does not apply to its claims for injunctive relief, and the district court erred in applying the concurrent remedy rule to bar those claims.

ANALYSIS

We review the district court’s grant of summary judgment de novo, applying the same legal standard used by the district court. Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir.1996). Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). In applying this standard, we draw all justifiable inferences in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The construction and applicability of a federal statute of limitation is a question of law we review de novo. Wolfgang v. Mid-America Motorsports, Inc., 111 F.3d 1515, 1524 (10th Cir.1997) (stating this court reviews questions of law de novo)', Foutz v. United States, 72 F.3d 802, 804 (10th Cir.1995) (stating the construction of federal statues is a question of law); Industrial Constructors Corp. v. United States Bureau of Reclamation, 15 F.3d 963, 967 (10th Cir.1994).

Congress adopted the Clean Water Act (the “Act”) “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). To accomplish this purpose, the Act prohibits the discharge of any pollutants, including dredged or fill material, into waters of the United States without a permit. See 33 U.S.C. §§ 1311(a), 1344. Certain wetlands enumerated under 33 C.F.R. § 328.3(a) qualify, as waters of the United States. Unper-mitted dredging and filling of these wetlands, as in Telco’s ease, are subject to the Act’s enforcement sections. A violator may be subject to a “civil action for appropriate relief, including a permanent or temporary injunction,” 33 U.S.C. § 1319(b), and a civil penalty not to exceed $25,000 per day for each violation of 33 U.S.C. §§ 1311 and 1319(d). It is under these sections that the Government sought relief for Telco’s violations of 33 U.S.C. § 1311 that occurred prior to October 15,1988.

The parties do not dispute 28 U.S.C. § 2462 is the applicable federal statute of limitations to the Government’s actions for civil penalties under the Act. See also United States v. Banks, 115 F.3d 916, 918 (11th Cir.1997) (applying § 2462 as the default limitation provision for actions under the Act), cert. denied, — U.S. -, 118 S.Ct. 852, 139 L.Ed.2d 752 (1998). However, the Government claims the district court erred in applying § 2462 to bar its claims for equitable relief, because the ruling is contrary to the well-settled principles restricting the application of time limitations against the government, and is contrary to the plain language of the statute.

We interpret § 2462 narrowly because “an action on behalf of the United States in, its governmental capacity ... is subject to no time limitation, in the absence of congressional enactment clearly imposing it.” E.I. Dupont De Nemours & Co. v. Davis, 264 U.S. 456, 462, 44 S.Ct. 364, 68 L.Ed. 788 (1924).3 In addition, “[sjtatutes of limitation sought to be applied to bar rights

of the government, must receive a strict construction in favor of the government.” Id.

Section § 2462 clearly applies to “aetion[s], suit[s] or proceeding^] for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise.” 28 U.S.C. § 2462. The express language of a statute is controlling, absent a clearly expressed legislative intention to the contrary. Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 64 L.Ed.2d 766 (1980). The Government claims the statute is inapplicable to non-monetary penalties because the phrase “pecuniary or otherwise” only modifies “forfeiture” not “penalty.” Although we might agree based on a common-sense reading of the statute as the commas are now located, and in light of the last antecedent rule that applies modifying words or phrases to the immediately preceding word or phrase, the history of § 2462 does not support such a reading. See Nobelman v. American Sav. Bank, 508 U.S. 324, 330, 113 S.Ct. 2106, 124 L.Ed.2d 228 (1993) (stating the rule of the last antecedent is not compelled). Prior versions of § 2462 read “penalty or forfeiture, pecuniary or otherwise.” See SM Co. v. Broumer, 17 F.3d 1453, 1458 n. 7 (D.C.Cir.1994). Based on this construction, we view “pecuniary or otherwise” as modifying both the terms penalty and forfeiture. See Bing-ham, Ltd. v. United States, 724 F.2d 921, 926 n. 3 (11th Cir.1984) (applying a supplementary “rule of punctuation,” that provides when a “modifier is set off from two or more antecedents by a comma, ... the modifier relate[s] to more than the last antecedent”). In addition, according to the Reviser’s Notes on revisions made to the statute in 1947, when the phrase “civil fine” was placed before “penalty,” the purpose of the revisions was for a change in phraseology. See 28 U.S.C. § 2462 (Historical and Statutory Notes); Johnson v. SEC, 87 F.3d 484, 488 n. 5 (D.C.Cir.1996); *3M, 17 F.3d at 1458. Because a change in phraseology does not render the new statute substantively different from its predecessor, unless such intent is clearly expressed, see, e.g., Keene Corp. v. United States,* 508 U.S. 200, 208, 113 S.Ct. 2035, 124 L.Ed.2d 118 (1993), we construe § 2462 as applying to non-monetary penalties.

The Government also maintains the plain language of § 2462 does not apply to claims for equitable relief. We agree that actions for equitable relief typically are not actions for penalties or fines. See Hartford-Empire Co. v. United States, 323 U.S. 386, 435, 65 S.Ct. 373, 89 L.Ed. 322 (1945) (“relief in equity is remedial, not penal”). We also do not ignore that, historically, “statutes of limitation are not controlling measures of equitable relief.” Holmberg v. Armbrecht, 327 U.S. 392, 396, 66 S.Ct. 582, 90 L.Ed. 743 (1946).

However, Telco makes several claims why the restorative injunction in this ease is “a civil fine, penalty, or forfeiture, pecuniary or otherwise,” barred by § 2462.4 Telco contends the restorative injunction is a penalty under § 2462 since it imposes a sanction for violating a public law which is not determined or predicated on actual damages to the Government. Because the term “penalty” is not defined in the statute, we must construe the term in accordance with its ordinary meaning. See Sutton v. United Air Lines, Inc., 130 F.3d 893, 898 (10th Cir.1997), petition for cert filed (U.S. June 1,1998) (No. 97-1943). Dictionaries generally define “penalty” as relating to punishment. See, e.g., Black’s Law Dictionary 1020 (5th ed.1979) (defining penalty as “involv[ing] idea of punishment”); Webster’s Third New International Dictionary 1668 (1981) (defining penalty as “punishment for [a] crime or offense”). Telco relies on the United States Supreme Court’s definition of a penalty in Meeker v. Lehigh Valley R.R. Co., 236 U.S. 412, 423, 35 S.Ct. 328, 59 L.Ed. 644 (1915), as “something imposed in a punitive way for an infraction of a public law.”5 Similarly, in

Huntington v. Attrill, 146 U.S. 657, 673-74, 13 S.Ct. 224, 36 L.Ed. 1123 (1892), the Court concluded whether a law is penal depended on “whether its purpose is to punish an offense against the public justice of the state, or to afford a private remedy to a person injured by the wrongful act.” In an analogous case to the present one, the D.C. Circuit defined penalty for purposes of § 2462 as “a form of punishment imposed by the government for unlawful or proscribed conduct, which goes beyond remedying the damage caused to the harmed parties by the defendant’s action.” See Johnson, 87 F.3d at 488. Based on these definitions, we interpret a penalty for purposes of § 2462 as a sanction or punishment imposed for violating a public law which goes beyond compensation6 for the injury caused by the defendant.

Telco also claims a penalty is any sanction that is imposed for a violation of a public law and which fails to redress a private injury. Telco relies on the Supreme Court’s discussion in Huntington, 146 U.S. at 668, 13 S.Ct. 224, on whether a law was “penal” as “whether the wrong sought to be redressed is a wrong to the public or a wrong to the individual.” However, the Huntington Court defined “penal” for the purpose of determining whether the United States Constitution’s Full Faith and Credit Clause permitted a specific state judgment to be enforced in another state. 146 U.S. at 666-68, 13 S.Ct. 224. Unlike the concerns of state sovereignty and comity prevalent to defining “penal” in Huntington, 146 U.S. at 668-69, 13 S.Ct. 224, our concern in defining “penalty” in § 2462 is to protect the Government’s sovereign enforcement powers in conformity with traditional principles limiting the application of time limitations against the government when it acts in its sovereign capacity, and to construe statutes of limitation strictly in the government’s favor.7 See E.I. Dupont De Nemours & Co., 264 U.S. at 462, 44 S.Ct. 364. Therefore, we see no reason to include all wrongs to the public as penalties for purposes of applying § 2462, irrespective of the remedy sought.

Our focus in defining a penalty for § 2462 is whether the sanction seeks compensation unrelated to, or in excess, of the damages caused by the defendant, rather than restricting the term by the type of injury, public or private. The injury to the public’s resources in this case does not alter the remedial nature of the injunction in restoring the damaged wetlands, or in other words, making the injured party whole. We find the present case indistinguishable from other situations where courts have ruled a sanction that only remedies damage caused by the defendant is not a penalty for purposes of § 2462 even though it is imposed by the government. See, e.g., Chattanooga Foundry & Pipe Works v. Atlanta, 203 U.S. 390, 397, 27 S.Ct. 65, 51 L.Ed. 241 (1906) (refusing to apply predecessor to § 2462 to bar Atlanta’s action against defendants for recovery of damages for injury to property); United States v. Perry, 431 F.2d 1020, 1025 (9th Cir.1970) (ruling Government’s action to recover sums allegedly paid in violation of the Anti-Kickback Act was not barred by § 2462 because the sanctions were designed to make the Government whole by recovering extra costs incurred when kickbacks were paid); United States v. Doman, 255 F.2d 865, 869 (3d. Cir.1958) (holding Government’s action under Surplus Property Act not barred by § 2462 since the recovery was compensatory to the Government, not a penalty), aff'd, 359 U.S. 309, 79 S.Ct. 755, 3 L.Ed.2d *828* (1959).

Consistent with our definition, the restorative injunction in this case is not a penalty because it seeks to restore only the wetlands damaged by Telco’s acts to the status .quo or to create new wetlands for those that cannot be restored. The injunction does not seek compensation unrelated to or in excess of the damages caused by Telco’s acts. Under the

Government’s complaint and the parties’ consent decree, the Government seeks mitigation of damaged wetlands caused by Telco’s acts. According to the decree, “mitigation” is defined as “actual restoration, creation, or enhancement of wetlands to compensate for wetland losses.” “Restoration” is defined as to “return from a disturbed or altered condition to a previously existing natural condition.” From this language, we conclude the compensation sought is related to and consistent with the damages caused by Telco’s acts.

Telco also claims the Government’s restorative injunction is a penalty since it requires Telco to spend a significant amount of money to refill or create fifteen acres of on-site and off-site wetlands without showing the actual amount of damages suffered. We recognize it is difficult to place a precise dollar amount on damages caused by environmental injuries. See United States v. Sexton Cove Estates, Inc., 526 F.2d 1298, 1301 (5th Cir.1976) (noting “[t]he full effects of any environmental disturbance are difficult to measure”). However, in other contexts, the lack of precise symmetry between actual damages sustained by the Government and the costs of mitigation or the costs of the sanction, does not change the nature of the remedy. See, e.g., United States v. Halper, 490 U.S. 435, 446, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989) (stating in the Court’s analysis of whether a section was punishment for double jeopardy purposes “the Government is entitled to rough remedial justice, ... it may demand compensation according to somewhat imprecise formulas” without necessarily changing the nature of the remedy); Rex Trailer Co. v. United States, 350 U.S. 148, 153-54, 76 S.Ct. 219, 100 L.Ed. 149 (1956) (ruling with respect to a liquidated damages “type” provision, that the uncertainty as to the exact amount of damages did not transform the sanction’s remedial character). Furthermore, Telco’s belief the sanction is costly or painful does not make it punitive. Johnson, 87 F.3d at 488. If the determination of whether a sanction is a penalty was made from the defendant’s perspective, then virtually every sanction would be considered a penalty since “‘even remedial sanctions carry the sting of punishment.’ ” Id. (quoting Halper, 490 U.S. at 447 n. 7, 109 S.Ct. 1892).

Telco contends a restorative injunction is a penalty because some courts have used factors unrelated to actual damages in determining the scope of the injunction. In particular, Telco claims courts have used factors similar to those used by courts in determining the amount of civil monetary penalties under 33 U.S.C. § 1319(d).8 However, this argument is inapplicable to this case since the Government’s scope of injunctive relief appears to be limited to restoration or replacement of damaged wetlands. While such factors, including the “seriousness” of the defendant’s culpability, see, e.g., United States v. Cumberland Farms of Connecticut, Inc., 826 F.2d 1151, 1165 (1st Cir.1987), cert. denied, 484 U.S. 1061, 108 S.Ct. 1016, 98 L.Ed.2d 981 (1988), have been considered in determining whether an injunction is equitable, this does not change the remedial character of the injunction. These factors have only been considered in ensuring the restoration injunction was equitable in light of the defendant’s culpability or economic situation, not whether the restoration required in the order was related to the harm caused by the defendant. Id. at 1164; see also United States v. Weisman, 489 F.Supp. 1331, 1349 (M.D.Fla.1980). If Telco contends the injunction is inequitable based on Telco’s financial position or lack of culpability, then it should have opposed the consent decree and made this claim later to the district court when it would have to determine whether the injunction was equitable.

Telco further argues the imposition of the restorative injunction for wholly past violations makes the nature of the injunction punitive. We disagree because other equitable remedies, such as disgorgement, which sanction past conduct, are remedial. See, e.g., SEC v. Bilzerian, 29 F.3d 689, 696 (D.C.Cir.1994). Similar to the purpose of a disgorgement action to restore only “ill-gotten gains” earned by the defendant while in violation of securities laws, id., the restorative injunction in this ease restores wetlands

to. their prior condition before Telco’s violations, or replaces damaged wetlands which cannot be restored. In both instances, the amount “restored” relates to actual harm caused by the defendants’ prior actions. We are convinced the request for injunctive relief based on Telco’s past conduct does not change its remedial nature.9

Based on the considerations addressed above, and in light of the traditional notions statute of limitations should be strictly construed in favor of the Government, we do not consider the Government’s request for in-junctive relief an action for a “civil penalty” barred by § 2462.10

The Government disputes the district court’s application of the concurrent remedy rule to bar its equitable claims.11 In its order, the district court relied on United States v. Windward Properties, Inc., 821 F.Supp. 690, 693 (N.D.Ga.1993), which applied the concurrent remedy rule12 in a similar context, holding § 2462 barred the Government’s claims for legal and equitable relief. However, the Windwarddecision was expressly abrogated by the Eleventh Circuit in United States v. Banks, 115 F.3d 916, 919 (11th Cir.1997), cert. denied, — U.S. -, 118 S.Ct. 852, 139 L.Ed.2d 752 (1998). In a case that involved the identical issue, the Banks Court rejected the concurrent remedy rule’s application to the Government when it seeks equitable relief in its enforcement capacity under the traditional principles of construction discussed above. Id. Specifically, the Banks Court refused to apply the concurrent remedy rule based on the principles that a suit by the United States in its governmental capacity is not subject to a time limitation unless Congress explicitly imposes one and “ ‘any statute of limitations sought to be applied against the United States “must receive a strict construction in favor of the Government.” ’ ”13 Id. (quoting

United States v. Alvarado, 5 F.3d 1425, 1428 (11th Cir.1993)). For the same reasons applied in Banks, we conclude the concurrent remedy rule does not bar the Government’s claims for equitable relief.14

Based on our conclusions that the Government’s claims for injunctive relief are not actions for a penalty within the meaning of § 2462, and the concurrent remedy rule cannot apply, we REVERSE.