American Bar Association
Media Alerts
Media Alerts - Ohio Valley Environmental Coalition et al. v. Fola Coal Co., LLC -- Fourth Circuit
Decrease font size
Increase font size
February 2, 2017
  Ohio Valley Environmental Coalition et al. v. Fola Coal Co., LLC -- Fourth Circuit
Permit Shield Defense Fails to Protect Noncompliant Coal Company

Areas of Law: Environmental Law

Issues Presented: Whether a National Pollution Discharge Elimination System permit required its permit holder to comply with state water quality standards. Whether the trial court erred by finding that a National Pollution Discharge Elimination System permit holder violated the state water quality standards by discharging ions and sulfates in quantities sufficient to increase conductivity.

Brief Summary: In a published opinion, the United States Court of Appeals for the Fourth Circuit affirmed the District Court's judgment that the Fola Coal Company did not comply with the conditions of its permit and therefore was subject to liability under the Clean Water Act.

Extended Summary:
This case arose out of an action against appellant Fola Coal Company, LLC ("Fola") under the Clean Water Act ("Act"). Pursuant to the Act, National Pollution Discharge Elimination System ("NPDES") permits shield permit holders from liability when their pollution discharges comply with permit conditions. Acting under the approval of the Environmental Protection Agency ("EPA"), the West Virginia Department of Environmental Protection ("Department") is charged with the issuance of West Virginia NPDES permits, which incorporate state water quality regulations. Of particular significance to this case, a West Virginia regulation, titled 5.1.f, provided that permit-covered discharges may not violate applicable water quality standards, "whether or not such standards are delineated in the permit."

In 1996, Fola received a West Virginia NPDES permit, which allowed the facility to discharge into a local waterway. When Fola applied for permit renewal in 2009, it disclosed that its discharges would increase conductivity of the affected waterway in violation of state water quality standards. The Department granted the renewal but did not impose limitations on Fola's conductivity levels.

Appellees Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy, and Sierra Club (collectively "the Coalition") sued Fola under the Act's citizen-suit provision in 2013. The Coalition alleged that Fola discharged ions and sulfates in quantities sufficient to cause increased conductivity and therefore violated the NPDES permit's requirement to comply with state water quality standards. In response, Fola argued that its permit shielded the company from liability, because the Department declined to impose conductivity limits when it renewed the company's permit in 2009. To support its contention, Fola emphasized two points. First, the Department issued a regulatory interpretation that shielded a permit holder from liability upon disclosing its discharges to the Department in 2013. Second, the West Virginia legislature enacted a provision that explicitly prohibited the enforcement of water quality standards against NPDES permit holders in 2015. Rejecting Fola's argument, the District Court held that NPDES permits require compliance with state water quality standards, which Fola violated by depositing significant amounts of ions into the waterway.

On appeal, Fola contended that 5.1.f. regulated the permitting authority only and therefore did not impose obligations on the company to comply with water quality standards. Moreover, in response to the District Court's finding of a violation, Fola argued that (1) it was deprived of "fair notice" of its obligation to comply with water quality standards; (2) it relied on the Department's guidance that West Virginia would not pursue enforcement action; and (3) the District Court engaged in unlawful rulemaking.

Interpreting the NPDES permit as a contract, the Fourth Circuit rejected Fola's argument and held that the text of 5.1.f unambiguously imposed an obligation on the permit holder to comply with state water quality standards. The plain language of 5.1.f and extraneous evidence supported the District Court's determination that NPDES permit holders are obligated to comply with state water quality standards. In particular, the Fourth Circuit emphasized that the Department previously pursued an enforcement action against Fola's parent company for the exact water quality standards at issue in the instant case, removing any doubt that West Virginia intended to hold permit holders liable for violating state regulations. The Fourth Circuit's judgment is consistent with its precedent, which provides that permit holders must comply with all permit terms to be shielded from liability.

Affirming the District Court's finding of a violation, the Fourth Circuit again asserted that Fola's parent company's prior history with enforcement actions provided ample, personalized notice that the NPDES permit was enforceable. The Fourth Circuit also held that, even if Fola believed that West Virginia would not pursue enforcement that did not guarantee that third-party environmental agencies would not do so under the Act's citizen-suit provision. Finally, the Fourth Circuit concluded that the District Court engaged in findings of fact, not unlawful rulemaking.

To read the full opinion, click here.

Panel: Judges Motz, Diaz, and Lee

Argument Date: October 27, 2016

Date of Issued Opinion:
January 4, 2017

Docket Numbers:
No. 16-1024

Decided: Affirmed by published opinion

Case Alert Author: Linda Morris, Univ. of Maryland Carey School of Law

Counsel: ARGUED: Michael Shane Harvey, JACKSON KELLY PLLC, Charleston, West Virginia, for Appellant. Joseph Mark Lovett, APPALACHIAN MOUNTAIN ADVOCATES, Lewisburg, West Virginia, for Appellees. Thomas M. Johnson, Jr., OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia, for Amici The State of West Virginia and West Virginia Department of Environmental Protection. ON BRIEF: Robert G. McLusky, Jennifer L. Hughes, JACKSON KELLY PLLC, Charleston, West Virginia, for Appellant. J. Michael Becher, APPALACHIAN MOUNTAIN ADVOCATES, Lewisburg, West Virginia; James M. Hecker, PUBLIC JUSTICE, Washington, D.C., for Appellees. Karen C. Bennett, Samuel L. Brown, Brian R. Levey, Kristy Bulleit, HUNTON & WILLIAMS LLP, Washington, D.C.; Jan A. Poling, AMERICAN FOREST & PAPER ASSOCIATION, Washington, D.C.; Amanda Waters, Erica Spitzig, NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES, Washington, D.C.; Linda E. Kelly, Quentin Riegel, NATIONAL ASSOCIATION OF MANUFACTURERS, Washington, D.C.; Peter Tolsdorf, AMERICAN PETROLEUM INSTITUTE, Washington, D.C.; Tom Ward, NATIONAL ASSOCIATION OF HOME BUILDERS, Washington, D.C., for Amici American Forest & Paper Association, American Petroleum Institute, National Association of Clean Water Agencies, National Association of Home Builders, National Association of Manufacturers, National Mining Association and Utility Water Act Group. John C. Cruden, Assistant Attorney General, David S. Gualtieri, Jennifer Neumann, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus United States Environmental Protection Agency. Patrick Morrisey, Attorney General, Elbert Lin, Solicitor General, Erica N. Peterson, Assistant Attorney General, OFFICE OF THE ATTORNEY GENERAL OF WEST VIRGINIA, Charleston, West Virginia; Kristin Boggs, General Counsel, Thomas L. Clarke, Senior Policy Advisor and Counsel, WEST VIRGINIA DEPARTMENT OF ENVIRONMENTAL PROTECTION, Charleston, West Virginia, for Amici The State of West Virginia and West Virginia Department of Environmental Protection.

Author of Opinion: Judge Motz

Case Alert Supervisor:
Professor Renée Hutchins

    Posted By: Renee Hutchins @ 02/02/2017 08:45 AM     4th Circuit  

FuseTalk Enterprise Edition - © 1999-2018 FuseTalk Inc. All rights reserved.

Discussion Board Usage Agreement

Back to Top