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Ohio Valley Environmental Coalition et al. v. Fola Coal CompanyIn a unanimous decision The appeal arose from a ruling Because the court agreed with the plaintiffs in Fola that the permittee’s discharges caused or materially contributed to a significant adverse impact to the chemical and biological components of the stream's aquatic ecosystem, the court concluded that the permittee violated the permit and was properly subject to citizen suit enforcement. The district court judge effectively ruled that the “cause or materially contribute” provision could be used to convert the state’s narrative water quality criteria into enforceable effluent limits in the permit, even though the West Virginia Department of Environmental Protection (WVDEP) did not include a specific numeric limit. While states can impose water quality criteria as end-of-pipe limits, they must expressly take action to do so; it is NACWA’s position that water quality standards cannot, by themselves, be considered effluent standards or limitations and, therefore, should not be independently or directly enforced or implemented. The district court judge rejected defendant’s “permit shield” defense even though there was no dispute that the pollutants at issue had been disclosed in the permit application to be present, and the Fourth Circuit affirmed this ruling. Background West Virginia water quality standards are violated if wastes “cause ... or materially contribute to” 1) “[m]aterials in concentrations which are harmful, hazardous or toxic to man, animal or aquatic life” or 2) “[a]ny other condition ... which adversely alters the integrity of the waters of the State.” WV CSR § 47–2–3.2.e, –3.2.i. Additionally, “no significant adverse impact to the chemical, physical, hydrologic, or biological components of aquatic ecosystems shall be allowed.” WV CSR§ 47–2–3.2.i. Environmental groups filed a citizen suit against Fola Coal Company in August 2013 asserting NPDES permit violations for conductivity relying on the state regulation prohibiting discharges from causing or materially contributing to a significant adverse impact to the chemical and biological components of the stream's aquatic ecosystem. Plaintiffs in the case failed to raise concerns during the permitting period and waited until several years later to file a citizen suit collaterally attacking the permit. EPA likewise did not object to the permit. District Court Decision In determining what the “applicable” narrative criteria require, the court made no effort to determine how the permitting authority interpreted the narrative criteria at the time of permit issuance. Instead, based on its independent, after-the-fact interpretation of the narrative criteria, the court read Permit Condition C as unambiguously requiring the permittee to control sulfates and conductivity to levels set by the court post hoc. The court ignored the fact that both the state permitting authority and EPA were obligated to determine at the time of permit renewal whether the level of conductivity and sulfates – the pollutants at issue - disclosed by the permittee would cause or materially contribute to a violation of the applicable narrative criteria, and to include ensure limits on those pollutants that they deemed necessary to ensure that the discharge would not cause exceedance of the criteria.
The court also clarified that its holding in Piney Run Pres. Ass’n v. Cnty. Comm’rs of Carroll Cnty The court also rejected the defendant’s assertion that it did not have fair notice that the water quality standards were enforceable limits of the permit, noting that throughout the history of the permit, Fola had numerous individual opportunities to be put on notice. In doing so, the court ignored the larger picture of what constitutes fair notice in the context of the permitting process, and overlooked the fact that a blanket prohibition on violating water quality standards does not provide clear guidance on what a permittee must do to comply nor what targets it must meet to avoid enforcement.
The Fourth Circuit’s decision essentially upends the NPDES permitting process, usurps the State’s authority to set and interpret water quality standards, undermines the public’s right to comment on such standards before they are implemented and enforced, and deprives NPDES permittees of fair notice, creating serious Due Process concerns. Moreover, the decision eviscerates the essence of the permit shield defense by allowing citizens who disagree with the terms and conditions of an issued NPDES permit to challenge the permit after issuance and provides an opportunity for courts to retroactively change the limits of a permit. In the past, CWA permittees have been able to rely on compliance with their permit as a shield against enforcement and citizen suit litigation. CWA § 402(k) provides that “[c]ompliance with a [NPDES] permit” is considered “compliance, for purposes of sections 309 and 505 [enforcement, including citizen suits], with sections 301, 302, 306, 307, and 403 [discharge prohibitions and effluent limits], except any standard imposed under section 307 for a toxic pollutant injurious to human health.” Courts and regulatory agencies have interpreted this language to mean that entities who complied with the substantive terms of their NPDES permits were shielded from enforcement and citizen suit litigation for the permitted discharges. The Fourth Circuit had also previously held in Piney Run Pres. Ass’n v. Cnty. Comm’rs of Carroll Cnty The Fourth Circuit’s Fola decision undermines this certainty and ties compliance, and eligibility for the permit shield, to targets that are often undefined and difficult to quantify.
Rulings/Pleadings (All in
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issued Wednesday, January 4, 2017, the United States Court of Appeals for the Fourth Circuit held that narrative water quality standards incorporated by reference into a National Pollution Discharge Elimination System (NPDES) permit are substantive permit terms, and that permittees must comply with these terms to receive the benefit of the Clean Water Act (CWA) permit shield under section 402(k). The decision threatens to severely erode the protection afforded by the permit shield and provides a clear path for environmental groups and courts to translate narrative water quality standards into enforceable permit terms.