A three-judge panel at the U.S. Sixth Circuit Court of Appeals on Jan. 27 ruled in a Clean Water Act case brought by the Sierra Club against the ICG Hazard LLC subsidiary of Arch Coal (NYSE: ACI) that ICG Hazard was covered by a “permit shield.”
This case is a citizen enforcement action under the Clean Water Act and involves the Act’s “permit shield” in the context of a general discharge permit. ICG Hazard, operating under a general permit, conducted surface coal mining in eastern Kentucky. The company discharged selenium, a pollutant, into surrounding water.
Although the permit did not specify effluent limitations for selenium, the discharge resulted in levels exceeding the threshold in the state’s water quality standard. The district court, finding that the permit shield protected ICG from liability, had granted summary judgment in ICG’s favor. “Through our analysis of the permit shield’s application in the context of a general permit, we also conclude that the permit shield covers ICG’s discharges in this case,” said the Jan. 27 ruling. We therefore affirm.”
ICG Hazard operates the Thunder Ridge surface coal mine in Leslie County, Kentucky. During the relevant time period, ICG’s running of Thunder Ridge was governed by a five-year Coal General Permit issued by the Kentucky Division of Water (KDOW) pursuant to the National Pollutant Discharge Elimination System (NPDES) under the authority of the U.S. Environmental Protection Agency. The general permit allowed ICG and certain other coal mining operations to discharge certain listed pollutants into the state’s water, within the conditions set out in the permit. The conditions included effluent limitations for several specific pollutants, but not for selenium, a naturally occurring element that endangers aquatic life once it reaches a certain concentration.
But KDOW was aware of the potential for selenium discharges from the mines in the area. The general permit included a provision recognizing that possibility. KDOW used “one-time” monitoring—a single sampling during the five-year life of the permit— to determine whether selenium levels in surrounding bodies of water were within acceptable levels.
In December 2010, Sierra Club notified ICG of its intent to bring a citizen suit based on the selenium levels. Sierra Club also supported a private citizen’s request for further testing. These further tests took place at six locations around Thunder Ridge. None of the tests revealed selenium levels above the acute limit. However, at two of the six sites, the levels exceeded the “chronic” limit of five micrograms per liter. Consequently, the Kentucky Department for Natural Resources (KDNR) took a “preventive enforcement action,” requiring ICG to test for selenium in the second quarter of 2011 and submit the results to KDNR. The U.S. Office of Surface Mining deemed KDNR’s response appropriate and notified Sierra Club that it would therefore take no further action. The Sierra Club then filed this suit, originally at the U.S. District Court for the Eastern District of Kentucky.
Notable is that the Jan. 27 appeals court decision was a split one, with two judges voting for the coal company. The dissenting judge, Gilbert Merritt, wrote: “The majority allows the silence of local Kentucky environmental regulators to turn the Clean Water Act on its head. They do this, despite the undisputed fact that illegal toxic discharges of dirty selenium water occurred, because they believe we must assume that Kentucky’s ‘general permit’ tacitly authorizes toxic discharges of selenium. In so doing, they extend to the one-size-fits-all ‘general’ permit a presumption previously applicable only to custom-tailored, ‘individual permits.’ Because I find neither the authority nor the intention to allow these flagrant and unlimited violations of the Clean Water Act in the general permit at issue here, I dissent.”