Federal judge allows coal ash lawsuit against Duke to move forward

A federal judge on Oct. 20 refused to stay a lawsuit filed against Duke Energy Carolinas LLC over coal waste issues at the Buck power plant, in the process rejecting a Duke argument that a state court lawsuit filed against it by North Carolina regulators should take priority.

Judge Loretta C. Biggs is out of the U.S. District Court for the Middle District of North Carolina. Plaintiffs Yadkin Riverkeeper and Waterkeeper Alliance last year brought this citizen enforcement action against Duke Energy Carolinas alleging violations of the Clean Water Act at the Buck Steam Station power plant. Before the court were Duke Energy’s motion to dismiss plaintiffs’ complaint with prejudice, or to put a hold on the case. The judge rejected Duke on both ends of that motion.

The Buck Steam Station is located on the banks of the Yadkin River. From 1926 to 2013, Duke Energy generated electricity at Buck by burning coal, a process that produces substantial amounts of coal combustion residuals, or coal ash. For nearly 90 years, Duke Energy disposed of this coal ash in three coal ash lagoons at the Buck site. The lagoons are unlined, span approximately 170 acres, and contain 1.5 billion gallons of coal ash and contaminated wastewater.

In 1976, Duke Energy obtained a NPDES water permit to discharge pollutants at Buck, and it has continuously renewed the permit since that time. Such permits are handled by the North Carolina Department of Environment and Natural Resources (DENR), which was recently renamed the Department of Environmental Quality, but with the old DENR acronym used in the legal opinion.

The current Buck Permit is effective from January 2012 to August 2016. The permit authorizes Duke Energy to “discharge wastewater” from Buck into the Yadkin River “in accordance with effluent limitations, monitoring requirements, and other conditions” set forth in the permit. Specifically, the permit authorizes Duke Energy to discharge “once-through non-contact cooling water through outfall 001, treated wastewater from the ash basin through outfall 002, and yard sump overflows through outfall 002A.”

In September 2014, the plaintiffs filed this federal lawsuit, seeking “to enforce Permit requirements and Clean Water Act violations that DENR’s Complaint does not seek to enforce.” The plaintiffs assert four claims for relief: the Seep Claim, Hydrological Connection Claim, Removed Substances Claim, and Dam Safety Claim.

Duke Energy, among other things, argued that the Seep Claim and Hydrological Connection Claim are barred by DENR’s diligent prosecution in state court of related matters. Wrote the judge in rejecting that argument out of hand: “Duke Energy’s diligent prosecution argument fails at the first step of the inquiry, as DENR has not sought to require compliance with the same standard or limitation as the Riverkeepers.” The judge added: “To interpret the removed substances provision as a requirement that Duke Energy comply with groundwater quality standards would be to misread the removed substances provision of the Buck Permit, which does not mention groundwater.”

The Riverkeepers’ citizen suit does not present any issue requiring agency resolution, the judge wrote. It calls on the federal court to decide whether Duke Energy has violated its existing NPDES permit, a task entirely within the competence of this federal court.

Duke Energy insists the court should stay proceedings pending resolution of DENR’s enforcement action in state court. The judge wrote: “Duke Energy has cited no case where a court has applied the primary jurisdiction doctrine to stay a case so that a different court could resolve the matter instead, and the Court finds no such case. Moreover, Duke Energy has not explained why the state court would be more competent than this Court to decide issues purportedly requiring DENR’s expertise. The Court thus declines to stay proceedings pending resolution of the state court suit under the primary jurisdiction doctrine.”

The judge also noted that after two years of litigation in state court, DENR has yet to conduct any depositions, has agreed to stay its discovery of the defendant, and has moved to stay its own case. “DENR’s prosecution does not inspire confidence that its state court action will move expeditiously to a final resolution,” the federal judge wrote. “Nor does DENR’s action encompass each of the Riverkeepers’ claims. Even if the Court were to stay proceedings, resolution of DENR’s state court suit would not entirely dispose of the Riverkeepers’ citizen suit.” 

Judge Biggs added: “Duke Energy has failed to carry its burden of justifying a stay by clear and convincing circumstances. Accordingly, the Court denies Duke Energy’s Motion to Stay.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.