U.S. District Court in West Virginia holds coal mining company liable for selenium discharges, despite “permit shield” in company’s NPDES Permit [US]

In Ohio Valley Environmental Coalition, Inc. v. Fola Coal Company, C.A. No. 2:12-3750 (S.D. W. Va. December 19, 2013), the U.S. District Court for the Southern District of West Virginia held Fola liable for selenium discharges related to its mining operations. Environmental groups, including the Sierra Club, alleged that Fola’s mining activities caused significant water contamination to a headwater stream in West Virginia. The citizen’s suit cited violations of West Virginia water quality standards in certain streams and rivers that Fola discharged into, specifically elevated levels of selenium.  While selenium was not a pollutant listed in Fola’s NPDES permit, the statewide water quality standards were incorporated by reference into the permit.

Fola argued that it was absolved of liability for the selenium discharges based on the “permit shield” in its NPDES Permit as selenium was not a listed pollutant.  Fola also argued that the legislature intended for water quality standards to be enforceable only upon their explicit inclusion in a permit.  Section 402(k) of the Clean Water Act (CWA) provides a permit shield, essentially making compliance with a NPDES permit equivalent to compliance with the CWA and associated water quality standards.  EPA has interpreted the permit shield provision to protect permittees from CWA liability where they discharge pollutants not specifically identified in their permit, so long as the pollutants themselves or the waste streams were identified during the permit application process.  Because federal agencies are given deference by the courts for reasonable interpretations of their regulations, Courts considering the permit shield provision in Section 402(k) have held that the provision shields a permittee from liability under the CWA for discharging pollutants not identified in the permit so long as (1) they disclosed the nature of the discharges during the application process and (2) the pollutants were within the reasonable contemplation of the permitting authority at the time the permit was issued.

The court, relying on the recent decision Ohio Valley Environmental Coalition, Inc. v. Marfork Coal Company, Inc., 2013 WL 4506175 (S.D. W. Va., Aug 22, 2013), found that the permit shield did not apply because the permit incorporated by reference the state water quality standards.  When Fola violated the state water quality standard for selenium discharges they were in turn violating their NPDES permit as those standards were incorporated.  The Court also rejected Fola’s argument that the standards could not be incorporated by reference, relying on the language of the CWA allowing permitting authorities to incorporate water quality standards into permits.

The ruling, in addition to the Marfolk ruling, significantly reduces the strength of the “permit shield,” as companies will be required to comply with limits for the listed pollutants, as well as water quality standards for unlisted pollutants where those are incorporated by reference.

Philip Pulitzer, EHS Legal Counsel at Red-on-line

Source:

Summary Judgment Decision, Ohio Valley Environmental Coalition, Inc. v. Fola Coal Company, C.A. No. 2:12-3750 (S.D. W. Va. December 19, 2013)

Philip Pulitzer, Coal Company to appeal District Court decision holding it liable for pollutant discharges, despite permit shield, Red-on-line, August 23, 2013

Clean Water Act

40 CFR Part 122.41

40 CFR Part 122.42