Sixth Circuit Upholds Permit Shield Defense Under CWA General Permits

A Sixth Circuit Court of Appeals panel has ruled for the first time that the Clean Water Act’s (CWA) permit shield defense protects a permittee covered under a General Permit from a citizen suit alleging discharges of toxins not specifically authorized by the permit. The 2-1 ruling issued January 27 in Sierra Club v. ICG Hazard, No. 13-5086 (6th Cir. Jan. 27, 2015) is the first federal appellate decision extending the two-part permit shield test adopted by the Fourth Circuit in Piney Run Preservation Association v. County Commissioners of Carroll County, MD, 268 F. 3d 255 (4th Cir. 2001) to permittees covered by general, as opposed to individual, CWA permits. General permits are issued to cover classes of activities, and permittees obtain coverage under the general permit terms by submitting a notice of intent to be covered for specific locations and operations. In the only previous federal appellate court case involving whether a permit shield defense is applicable to general permits, the Ninth Circuit in Alaska Community Action on Toxics v. Aurora Energy Services, found that the discharges at issue, in that case, were explicitly prohibited by the general permit, and did not reach the issue of the permit shield defense.

In the Sixth Circuit case, the Sierra Club had urged the court to hold that only discharges explicitly authorized by a general permit were shielded from suit by the permit shield defense.  The majority opinion rejected that position, giving deference to an EPA interpretation that general permits can allow some pollutants to be discharged even if they were not specifically authorized by the permit’s terms. The court went on to apply the two prongs of the Piney Run test. It found that the first prong—whether the polluter complied with its reporting requirements—was satisfied because ICG Hazard disclosed the selenium discharges at issue to the Kentucky Department of Water (KDOW). The second prong—whether the discharge of selenium was within the “reasonable contemplation” of KDOW when it issued the general permit—was also satisfied.

Although the KDOW could not contemplate whether specific facilities would discharge selenium when it issued the general permit, because it could not know which specific facilities would seek to obtain coverage, it could contemplate that mines covered by the general permit may discharge selenium. “ICG’s discharge of selenium was within KDOW’s reasonable contemplation because KDOW knew at the time it issued the general permit that mines in the area could produce selenium,” according to the majority opinion. Also, one of the permit’s provisions recognized the possibility of a discharge of selenium,  because it required a one-time monitoring for selenium. Finally, KDOW’s actions requiring continued monitoring of selenium after being notified by ICG of the selenium discharges, but without enforcing a permit violation or seeking to impose selenium discharge limits, indicated by negative inference that KDOW contemplated that mines covered by the general permit could discharge selenium. The majority opinion, therefore, held that the permit shield defense prevented a citizen suit regarding the selenium discharges, affirming the District Court’s opinion to that effect.

Senior Judge Gilbert S. Merritt, Jr., wrote a strong dissenting opinion. In his view, the majority opinion allowed “the silence of local Kentucky environmental regulators” to “turn the Clean Water Act on its head” and assume that the general permit “tacitly authorizes toxic discharges of selenium.” Because KDOW lacked authority to authorize a discharge of selenium in violation of the CWA, Judge Merritt would not infer an ultra vires authorization for that illegal discharge from the agency’s silence on that issue in the general permit.

To read the Sixth Circuit opinion, click here.

For more information on Clean Water Act citizen suits generally, and the permit shield specifically, contact Steve O’Day or Andy Thompson.

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