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Environmental Blog

  • 28
  • July
  • 2014

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Clean Water Act Permit Shield "Believed Absent" in the Fourth Circuit Case

The Clean Water Act’s permit shield provision states that compliance with a valid National Pollutant Discharge Elimination System (“NPDES”) permit shall be deemed compliance with certain sections of the statute dealing with effluent limitations.1 The Fourth Circuit has said that this provision “is meant to prevent permit holders from being forced to change their procedures due to changes in regulations, or to face enforcement actions over whether their permits are sufficiently strict. . . . By rendering permits final, the shield allows permit holders to conduct their operations without concern that an unexpected discharge might lead to substantial liability.”2

In 2001, the Fourth Circuit considered when pollutants not specifically listed in an NPDES permit are nonetheless covered by the permit shield.3 The court articulated a two-prong test to determine whether the Clean Water Act’s permit shield applies. In particular, in order for the provision to shield a permit holder from liability, the permit holder must have: (1) complied with the express terms of the permit and the Clean Water Act’s disclosure requirements; and (2) not discharged a pollutant that was outside the reasonable contemplation of the permitting authority when the permit was issued.

In the more recent Fourth Circuit case decided this month, the court held that A&G Coal Corporation (“A&G”) could not assert a permit shield defense for discharges of selenium from the Company’s Kelly Branch surface coal mine in Wise County, Virginia when it had failed to disclose the presence of this pollutant during the permit application process.4 A coalition of environmental groups, including Southern Appalachian Mountain Stewards, Appalachian Voices, and the Sierra Club, sued A&G in May 2012, claiming that selenium discharges from the Kelly Branch mine violated the Clean Water Act and the Surface Mining Control and Reclamation Act. A&G’s NPDES permit did not list selenium as a permitted discharge.

A&G had not disclosed the possibility of selenium discharges during the permit application process, but A&G argued that the permit shield nonetheless applied because the Company had no reason to anticipate such a discharge. Moreover, the Agency reasonably contemplated the discharge because other mines in the area discharged selenium. The lower court rejected A&G’s arguments, finding that A&G had not met its Clean Water Act disclosure requirements and, as such, could not assert a permit shield defense.5

In affirming the lower court’s decision, the Fourth Circuit determined that under federal regulations, A&G was required, at minimum, to report in its permit application whether it believed selenium to be present or absent. A&G argued that it only needed to mention selenium during the permitting process “if it knew or had reason to believe that selenium would be present in its discharges.” The court rejected that construction of the federal regulations, noting that “EPA application instructions indicate that, consistent with the regulatory language, an applicant must affirmatively note on the application whether selenium is “Believed Present” or “Believed Absent.”6 Moreover, the Virginia Department of Mines, Minerals, and Energy permit application instructions required A&G to test for the presence of selenium, which they did not do.

The court also pointed out an inherent conflict in A&G’s argument. On the one hand, A&G argues that it had no reason to believe selenium was present in its discharge. On the other hand, the Company argues that the discharge was within the reasonable contemplation of the permitting authority when the permit was issued. However, if the Agency should have been aware of the possible discharge, then arguably, A&G should also have been aware of the possibility.

Accordingly, the Fourth Circuit found that A&G failed to comply with federal and state reporting requirements with regard to discharges of selenium during the NPDES permit application process and held that the permit shield did not apply.

1 33 U.S.C. § 1342(k).
2Southern Appalachian Mountain Stewards v. A & G Coal Corp., 13-2050, 2014 WL 3377687 (4th Cir. July 11, 2014).
3Piney Run Pres. Ass'n v. Cnty. Comm'rs of Carroll Cnty., MD, 268 F.3d 255, 259 (4th Cir. 2001).
4Southern Appalachian Mountain Stewards v. A & G Coal Corp., 13-2050, 2014 WL 3377687 (4th Cir. July 11, 2014).
5Southern Appalachian Mountain Stewards, et al v. A&G Coal Corp., 2013 WL 3814340 (W.D. Va. 2013).
6Southern Appalachian Mountain Stewards v. A & G Coal Corp., 13-2050, 2014 WL 3377687, at *1 (4th Cir. July 11, 2014).

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