Companies Learn Lesson About Meeting Water Permit Conditions

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By Amena H. Saiyid

A West Virginia coal company learned the hard way that it’s not enough to do everything it was required to do under its Clean Water Act permit. It also has to ensure that the water into which it discharges meets water quality standards.

Fola Coal Co., a subsidiary of Consol Energy, found that out in January when a federal appeals court in Richmond, Va., ruled that it violated the Clean Water Act by not complying with “boilerplate language” in its discharge permit about meeting the underlying water quality standards.

The U.S. Court of Appeals for the Fourth Circuit rejected Fola Coal’s arguments that a permit shield—provisions essentially saying that if a company meets all the requirements in its permit, then it is complying with the law—protected it from liability because it met the discharge limits in its Clean Water Act permit. The Fourth Circuit said the company didn’t comply with the conditions of the permit, which included making sure that the effluent limits didn’t cause a violation of the water quality standards ( Ohio Valley Envtl. Coal. v. Fola Coal Co. , 845 F.3d 133, 83 ERC 1885, 2017 BL 1114 (4th Cir. 2017)).

The permit shield, under Section 402(k) of the Clean Water Act, specifies that permit holders cannot face enforcement action for violating a requirement that is not spelled out in the permit.

The Fourth Circuit’s decision, which has been cited in other federal courts, has spurred lawyers for national groups representing municipal owned wastewater utilities and mining companies to warn their members about the potential pitfalls of ignoring boilerplate language.

Many National Pollutant Discharge Elimination System permits have descriptive language detailing requirements, as well as strict numeric limits, that prohibit discharges that can lead to violations of water quality standards, said Erica Spitzig, deputy general counsel for the National Association of Clean Water Water Agencies, at a American Law Institute-Continuing Legal Education seminar on Environmental Law.

With this ruling and related ones, Spitzig said, permit holders are vulnerable to “collateral attack.” She warned permit holders to be prepared for litigation based on the narrative water quality standards.

Reading Permit Language Carefully

Moreover, Spitzig urged attorneys, particularly those representing facilities requiring water discharge permits, to read the permit language very carefully.

Spitzig’s message was echoed by Amanda Aspatore, associate general counsel for the National Mining Association, which includes Consol Energy among its members. Aspatore said the Fourth Circuit and related decisions are causing uncertainty among the permit holders because they thought they were shielded from liability as a result of meeting their discharge limits.

Neil McAliley, a shareholder attorney with the Miami office of Carlton Fields Jorden Burt P.A., said the Fourth Circuit ruling doesn’t represent a major shift in law related to Clean Water Act liability, but it does show how the environmental groups have “exploited” of the “catchall provision” in the discharge permit.

Increase in Lawsuits

McAliley said he wouldn’t be surprised to find an increase in lawsuits rooted in this provision, but he said the burden is on the plaintiff to prove that the discharges do cause or contribute to a violation of water quality standards.

“And that won’t be possible in every case,” he added.

He said permit seekers must seek very precise language in their discharge permits going forward to guard against liability.

Larry Levine, staff attorney for the Natural Resources Defense Council, said Spitzig, Aspatore and other lawyers are making a “mountain out of a molehill.”

“This ruling reaffirms existing law,” Levine said. He said the companies have the premise wrong that a permit can be used as a defense to violate water quality standards.

“The language in the permit has meaning,” Levine said.

To contact the reporter on this story: Amena H. Saiyid in Washington at asaiyid@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

For More Information

The Fourth Circuit decision is at http://src.bna.com/mJ3

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