• Coming to a Stream Near You? Fourth Circuit Imposes Water Quality Standard Based on Conductivity
  • March 1, 2017 | Author: Christopher "Kip" B. Power
  • Law Firm: Babst Calland - Charleston Office
  • Administrative Watch

    On January 4, 2017, the U.S. Court of Appeals for the Fourth Circuit issued a significant decision addressing the scope of obligations owed by a permittee under the Clean Water Act’s National Pollutant Discharge Elimination System (NPDES) program. Ohio Valley Environ. Coalition v. Fola Coal Company, LLC (Appeal No. 16-1024). The case involves discharges from a surface coal mine in West Virginia, governed by a NPDES permit issued by the West Virginia Department of Environmental Protection (WVDEP) pursuant to its authority under an EPA-approved state permitting program. Although some aspects of the ruling are based upon a regulatory provision that was formerly a part of coal-specific NPDES regulations, the principles approved by the court could be applied to virtually any NPDES permit held by any industrial discharger.

    In upholding the district court’s January 27, 2015 decision, the Fourth Circuit panel agreed that a NPDES permittee may be required to meet limits on the conductivity of its effluent (i.e., the ability of water to transmit electricity, based on the number and types of ions) even when no specific conductivity limits are set forth in its permit. It based this conclusion on general language in Fola’s permit, incorporating by reference a WVDEP regulation specifying that the discharges covered by a NPDES permit “are to be of such quality as not to cause a violation of applicable water quality standards.” Included among West Virginia water quality standards is a narrative standard that prohibits any discharge of pollutants that “materially contributes” to “a significant adverse impact to the chemical, physical, hydrologic, or biologic components of aquatic ecosystems....” Though conductivity is a property rather than a pollutant, the court held that Fola’s high-conductivity discharges led to conditions that violate this narrative water quality standard and therefore violate its permit.

    The district court based its ruling on an EPA-published study finding a strong connection between high conductivity in coal mine discharges in Central Appalachia and impaired aquatic life in receiving streams, referred to as the “Benchmark” report. (The EPA Benchmark indicates that at conductivity levels of 300 microSiemens per centimeter or greater, a Central Appalachia stream will be biologically impaired.) The court also relied on numerous experts presented by the plaintiff groups who testified about site-specific studies that showed a loss of sensitive species in streams near the Fola mine. Citing the “testimony, reports, charts, studies and exhibits from experienced scientists” presented by the plaintiffs, the appeals court commended the district court’s “long, remarkably thorough opinion” conveying its factual findings.

    After taking the unusual step of asking both EPA and the WVDEP to weigh in on the issue through amicus briefs, the Fourth Circuit also summarily dismissed the argument that Fola was entitled to immunity from suit under the Clean Water Act’s so-called “permit shield” provision and a state law version of it. Assuming a NPDES permittee accurately discloses the characteristics of its effluent in its permit application, the permit generally protects a permittee from an enforcement action if it has acted in compliance with the express terms of its permit. Here, Fola was in compliance with the stated effluent limits set forth in its permit, which did not include a limit on conductivity. Nevertheless, interpreting the NPDES permit terms “as it would a contract,” the appeals court determined that the plain language of the regulatory prohibition against violating water quality standards applies to NPDES permittees independent of any express effluent limitation. Since a permittee may only avail itself of the permit shie
    ld when it is in compliance with all terms of its permit, and Fola had contributed to a violation of the narrative water quality standards, the court agreed that Fola could not invoke the permit shield provisions.

    Notably, EPA has never developed recommended water quality standards for conductivity, and the WVDEP has specifically declined to use conductivity as the primary or sole determinant of compliance with its narrative water quality standards. Indeed, the WVDEP has published guidance showing that conductivity levels do not correlate to violations of its narrative water quality standards, using the same biological stream index relied upon by the district court. Despite that, the Fourth Circuit had no reluctance in affirming the district court’s opinion, concluding that the lower court made detailed factual findings “based on the evidence presented in this particular case” and had not impermissibly delved into the role of administrative rule-making.

    Unless it is modified following en banc reconsideration or on appeal, the Fola opinion highlights the need for all NPDES permittees - even those merely seeking renewal or reissuance of existing permits - to review the terms and conditions of draft permits carefully so that inappropriate ‘incorporation by reference’ and other boilerplate provisions can be removed. For existing permits, environmental managers must fully comprehend the implications of all cited regulations, including any water quality standard compliance requirements or other general duty provisions. At least in the Fourth Circuit, avoiding a Clean Water Act citizen suit may now be a more difficult feat unless NPDES permittees more closely scrutinize the terms of their permits.