(CN) - A $425,000 fine against a Kentucky county should not unravel its"otherwise proper" settlement with the government over the county's alleged neglect of its sewer systems, the 6th Circuit ruled.
The United States, joined by Kentucky, sued the Lexington-Fayette County Urban Government, claiming it violated the Clean Water Act by failing to properly maintain its sewer system and a separate storm sewer system.
The county settled the suit by promising to bring its sewer systems into compliance with federal law - an upgrade that would cost between $250 million and $300 million, according to the government. The county also agreed to spend $2.5 million on additional environmental projects and pay a $425,000 fine.
In public comments, residents complained that the civil penalty was too high, and that the money would be better spent toward updating the sewer systems.
"[T]he 425,000 fee is excessive and repressive," one citizen remarked. "Property owners are going to bear the brunt of the increased fees. To further punish them for sins they did not commit seems unfair."
The district court agreed and refused to approve the settlement, saying "the penalty money could be better applied."
The 6th Circuit in Cincinnati reversed, ruling that the lower court can't reject the settlement based on the fine without further explanation.
"In most Clean Water Act cases, the more serious the violation, the more that penalty money could be used for remediation," Judge John Rogers wrote. "If Congress thought a violator's money would be better spent that way, Congress would hardly have provided for civil penalties."
The district court did not provide good reasons for why the penalty was too high, the appeals court ruled. It pointed out that had the case gone to trial, the county's civil penalty could have been in the tens of millions of dollars. The judges also noted that Lexington has a history of Clean Water Act violations.
The court remanded with instructions for the lower court to either approve the settlement or better explain why the fine is unfair.
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