Red River Coal Company Inc v. The Sierra Club et al

Filing 28

ORDER denying 13 Motion to Dismiss for Lack of Jurisdiction; the stay of discovery is lifted as of the date of entry of this opinion and order. Signed by Judge James P. Jones on 1/19/18. (flc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
BIG STONE GAP DIVISION
RED RIVER COAL COMPANY, INC.,
Plaintiff,
v.
THE SIERRA CLUB, ET AL.,
Defendants.

)
)
)
)
) Case No. 2:17CV00021
)
)
)
)

SOUTHERN APPALACHIAN MOUNTAIN )
)
STEWARDS, ET AL.,
)
Plaintiffs,
)
)
v.
) Case No. 2:17CV00028
)
)
RED RIVER COAL COMPANY, INC.,
)
Defendant.
)
OPINION AND ORDER
Brooks M. Smith, Troutman Sanders LLP, Richmond, Virginia, for Red
River Coal Company, Inc.; Peter M. Morgan, Denver, Colorado, Evan D. Johns,
Appalachian Mountain Advocates, Charlottesville, Virginia, and J. Michael
Becher, Appalachian Mountain Advocates, Lewisburg, West Virginia, for Southern
Appalachian Mountain Stewards, Appalachian Voices, and Sierra Club.
These two related cases involve the Clean Water Act (“the CWA”) and the
Surface Mining Control and Reclamation Act (“SMCRA”). Southern Appalachian
Mountain Stewards, Appalachian Voices, and The Sierra Club (collectively,

“SAMS”) notified Red River Coal Company, Inc. (“Red River”) that SAMS
intended to file a citizen suit against Red River alleging violations of the CWA and
SMCRA.

Red River then filed a declaratory judgment action, Case No.

2:17CV00021, seeking a declaration that it was not violating the CWA and
SMCRA, as well as injunctive relief against SAMS. After the expiration of the 60day statutory notice period, SAMS filed its citizen suit, Case No. 2:17CV00028.
Each party has moved to dismiss the other’s lawsuit. Red River contends
that this court lacks subject-matter jurisdiction over SAMS’s citizen suit and that
SAMS has failed to state a claim upon which relief can be granted. SAMS argues
that this court lacks subject-matter jurisdiction over the declaratory judgment
action and alternatively urges the court to decline to exercise its jurisdiction. Both
motions have been fully briefed and are ripe for decision. 1 For the reasons that
follow, I will deny Red River’s Motion to Dismiss the citizen suit for lack of
subject matter jurisdiction and also deny Red River’s Motion to Dismiss the citizen
suit for failure to state a claim, except as to one aspect of SAMS’s Complaint that I
conclude is barred by res judicata. I find that this court does have subject-matter
jurisdiction over the declaratory judgment action, and in my discretion, I will
exercise the court’s jurisdiction and deny SAMS’s Motion to Dismiss that action.
1

I will dispense with oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument would not
significantly aid the decisional process.
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I. SAMS’S CITIZEN SUIT.
A. Facts.
The following facts are drawn from the Complaint in Case No.
2:17CV00028 and the exhibits filed by Red River in support of its motion to
dismiss for lack of subject-matter jurisdiction.
SAMS alleges that Red River, which operates a surface coal mine called the
North Fox Gap Surface Mine (“Mine”), is discharging pollutants without permit
authorization in violation of the CWA. SAMS also alleges that these discharges
violate performance standards under SMCRA and the terms and conditions of the
Mine’s Virginia SMCRA permit.
The Mine discharges pollutants into the South Fork Pound River, Rat Creek,
Stillhouse Branch, and unnamed tributaries. Some of the discharges are governed
by effluent limits in the Mine’s National Pollution Discharge Elimination System
(“NPDES”) permit.

The discharges include “the ions that contribute to total

dissolved solids and conductivity.” Compl. ¶ 15, ECF No. 1.
The SMCRA and NPDES permits for the Mine have been in effect since
1992. Red River deposited mine spoil into eight hollow fills, each of which has an
underdrain. According to SAMS, these underdrains “channelize and direct the
flow of water through the fill and out through the toe of the fill.” Id. at ¶ 37. Until
June 2014, Fill 1 and Underdrain 1 discharged into Pond 1 and through Outfall 001
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into a tributary of the South Fork Pound River. Fill 2 and Underdrain 2, as well as
Fill 3 and Underdrain 3, discharged into Pond 2 and through Outfall 002 into a
different tributary of the South Fork Pound River. Fill 4 and Underdrain 4, as well
as Fill 5 and Underdrain 5, discharged into Pond 5 and through Outfall 003 into
another tributary of the South Fork Pound River.

Fill 6 and Underdrain 6

discharged into Pond 9 and through Outfall 006 into a tributary of Rat Creek,
which flows into the South Fork Pound River downstream from the other
discharges. Until March 2007, Fill 8 and Underdrain 8 discharged into a sediment
pond that was part of the Ambrose Branch Coal Company, Inc.’s Mine #6
(“Ambrose Mine 6”) SMCRA permit, which was downslope from the Mine, and
then into Stillhouse Branch, a tributary of the South Fork Pound River.
On April 29, 2014, Virginia’s Division of Mined Land Reclamation
(“DMLR”) authorized Red River to remove Ponds 3 and 4. On June 11, 2014,
DMLR authorized Red River to remove Ponds 1, 2, 5, 6, and 9. In March 2007,
DMLR had released the Ambrose Mine 6 permit. Since March 2007, Underdrain 8
discharges directly into Stillhouse Branch.

Since the other ponds have been

removed, Underdrains 1, 2, 3, 4, 5, 6, and 8 all discharge directly into tributaries or
streams without passing through any pond or treatment system.
On February 26, 2015, in a document titled Monitoring Point Detail
Supplement, DMLR authorized the deletion of Outfall 003 from Red River’s
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NPDES permit. In the same document, DMLR authorized the relocation of the
NPDES monitoring locations for Outfalls 001, 002, and 006. The monitoring
points were previously below the fills but were moved to new locations up slope of
the fills at mine bench Ponds 1B, 3B, and 7B. Red River has not reported any
discharges from these mine bench ponds. Since the ponds were removed and
outfalls deleted or relocated, Red River has not reported monitoring data from
Ponds 1, 2, 3, 4, 5, 6, and 9, or from the original locations of Outfalls 001, 002,
003, or 006.
According to SAMS, “Underdrains 1, 2, 3, 4, 5, 6, and 8 continue to produce
discharges high in total dissolved solids and with high conductivity.” Id. at ¶ 50.
These discharges have resulted in elevated levels of total dissolved solids and
conductivity in the streams into which the underdrains discharge. Red River has
acknowledged that surface mining activities at the Mine are the cause of the
elevated levels in the streams. These elevated levels have harmed aquatic life in
the streams, which the Virginia Department of Environmental Quality has
designated as impaired based on macroinvertebrate bioassessments.
SAMS alleges that the underdrains are point sources and that their
discharges into the streams are unpermitted now that the ponds have been removed
and the permits have been revised. SAMS specifically alleges that the underdrains

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are discharging calcium, magnesium, sulfate, and bicarbonate, thereby violating
the CWA. Its claim focuses on discharges occurring after April 14, 2015.
SAMS also asserts a claim under SMCRA. The theory of this claim is that
Red River’s SMCRA permit requires it to comply with Virginia’s SMCRA
performance standards, which in turn require compliance with all applicable state
and federal water quality laws, standards, and regulations. A state regulation
provides that Virginia waters must be free from substances or waste that “are
inimical or harmful to human, animal, plant, or aquatic life.” 9 Va. Admin. Code
§ 25-260-20.

Another regulation states that surface mining and reclamation

activities must be conducted in a way that will “prevent material damage to the
hydrologic balance outside the permit area.”

4 Va. Admin. Code § 25-130-

816.41(a). SAMS alleges that by causing violations of these standards, Red River
is violating its SMCRA permit.

The regulation also requires that if typical

reclamation and remedial practices are inadequate to meet water quality standards,
“the permittee shall use and maintain the necessary water treatment facilities or
water quality controls.”

4 Va. Admin. Code § 25-130-816.41(d)(1).

SAMS

contends that because the reclamation methods employed are inadequate to ensure
compliance with the applicable standards, Red River is violating its SMCRA
permit by failing to construct an appropriate treatment system. SAMS’s SMCRA

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claim, like its CWA claim, is based on alleged violations occurring after April 14,
2015.
SAMS seeks injunctive relief for these alleged violations. It asks the court
to enjoin Red River from committing further violations, order Red River to apply
for modification of its NPDES permit to add effluent limitations for these
discharges from the underdrains, and order Red River to conduct monitoring and
sampling and repair the streams to their pre-mining condition. SAMS also seeks to
recover its attorneys’ fees and costs.
Red River alleges that the discharges at issue are discharges into
groundwater rather than surface water.

It contends that the valley fills and

underdrains do not channel the water, but merely follow the natural slope of the
land, and thus they are not point sources. Red River notes that Virginia regulations
require the eventual removal of sedimentation ponds as part of the reclamation
process. See 4 Va. Admin. Code § 25-130-816.84 (“Such structures may not be
retained permanently as part of the approved postmining land use.”).
Red River submitted a declaration of George Joey O’Quinn of DMLR.
O’Quinn stated,
DMLR has never required underdrains and the associated fills
to be permitted as NPDES outfalls. Consequently, it does not require
NPDES outfalls for the underdrains and the associated fills at North
Fox Gap Surface Mine. Additionally, DMLR does not have a
program that could issue NPDES outfalls for underdrains and the
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associated fills; consequently, any application for such a permit would
have to be denied.
O’Quinn Decl. ¶ 14, ECF No. 12-2.
SAMS submitted a 2001 letter from the United States Environmental
Protection Agency (“EPA”) to the Pennsylvania Bureau of Mining and
Reclamation stating that EPA does not take the position that drainage from
abandoned mine sites is non-point-source pollution. Rather, according to the letter,
EPA has not determined whether there are unpermitted point source discharges
associated with certain abandoned mine sites, nor has EPA determined that the
discharges are exempt from NPDES permitting requirements. But Red River notes
that EPA’s website refers to abandoned mine drainage as a type of non-pointsource pollution.
SAMS also submitted a letter from EPA to Red River dated September 20,
2016, that contained a request to show cause (“Show Cause Letter”). The Show
Cause Letter stated that “Red River has discharged and continues to discharge
pollutants to waters of the United States without a properly issued NPDES permit”
from the Mine. Pls.’ Resp. in Opp’n to Def.’s Mot. to Dismiss Ex. 3, 2, ECF No.
20-3. A table of violations included with the letter references the deleted outfalls
and refers to ongoing violations after the dates on which the outfalls were deleted.
Although the Show Cause Letter indicates that EPA intended to initiate
enforcement action against Red River, it has not done so. Red River alleges that it
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sat down with EPA officials and implies that it assuaged EPA’s concerns or
otherwise convinced EPA that no action was necessary.
B. Subject Matter Jurisdiction.
Red River has moved to dismiss SAMS’s Complaint for lack of subjectmatter jurisdiction. A motion to dismiss pursuant to Rule 12(b)(1) of the Federal
Rules of Civil Procedure raises the fundamental question of whether the court is
competent to hear and adjudicate the claims brought before it. Challenges to
jurisdiction under Rule 12(b)(1) may be raised in two distinct ways — facial
attacks and factual attacks. See Thigpen v. United States, 800 F.2d 393, 401 n.15
(4th Cir. 1986). When a defendant challenges the factual basis for subject-matter
jurisdiction, “the district court is to regard the pleadings’ allegations as mere
evidence on the issue, and may consider evidence outside the pleadings without
converting the proceeding to one for summary judgment.”

Richmond,

Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir.
1991). “The moving party should prevail only if the material jurisdictional facts
are not in dispute and the moving party is entitled to prevail as a matter of law.”
Id.
Red River contends that because SAMS does not allege a viable CWA
claim, this court does not have subject-matter jurisdiction over this case. Red

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River characterizes all of its arguments except its res judicata argument as factual
challenges to subject-matter jurisdiction.
The CWA authorizes a citizen suit against a person “alleged to be in
violation of” the CWA. 33 U.S.C. § 1365(a)(1). The Supreme Court has held that
this provision does not confer federal jurisdiction over suits based on wholly past
violations. Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S.
49, 58-59 (1987). The Fourth Circuit has stated that “a district court has subject
matter jurisdiction over claims in a citizen suit filed under the Clean Water Act that
are based on good-faith allegations of a defendant’s ongoing violation of the Act.”
Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 629 F.3d 387, 402
(4th Cir. 2011).
In the context of the CWA, the line between jurisdictional issues and merits
issues is at times blurry. For instance, some courts have held that the CWA does
not confer federal jurisdiction over claims regarding non-point-source pollution or
discharges into groundwater. See, e.g., Upstate Forever v. Kinder Morgan Energy
Partners, L.P., 252 F. Supp. 3d 488, 493, 498 (D.S.C. 2017). Some have found a
lack of federal jurisdiction to review a state permitting decision when the plaintiff
failed to appeal the permit determination within the state administrative process.
See, e.g., Potter v. Asarco, Inc., No. 8:96CV555, 1999 WL 33537055, at *5 (D.
Neb. April 23, 1999).

Other courts have held that a citizen suit alleging
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unpermitted discharges or exceedence of effluent limits is not a collateral attack on
the underlying permitting decisions, and federal jurisdiction is therefore proper.
See, e.g., Sierra Club v. Va. Elec. & Power Co., 145 F. Supp. 3d 601, 605-06 (E.D.
Va. 2015). The Ninth Circuit has held that an agency’s decision “that an NPDES
permit is not needed warrants consideration but does not divest the federal courts
of jurisdiction. The State may choose to sit on the sidelines, but state inaction is
not a barrier to a citizen’s otherwise proper federal suit to enforce the Clean Water
Act.” Ass’n to Protect Hammersley, Eld, & Totten Inlets v. Taylor Res., Inc., 299
F.3d 1007, 1012 (9th Cir. 2002).
In San Francisco Baykeeper v. Cargill Salt Division, the Ninth Circuit
addressed the confusing CWA jurisdictional analysis as follows:
[T]he “jurisdiction” of the CWA has nothing to do with the
jurisdiction of this court. Baykeeper’s complaint alleged that Cargill
had violated the CWA by discharging pollutants into the waters of the
United States. That colorable allegation clearly gave the district court
jurisdiction over the case, see 33 U.S.C. § 1365(a), 28 U.S.C. § 1331,
and we have jurisdiction over this appeal pursuant to 28 U.S.C.
§ 1291. Baykeeper’s failure to establish that Cargill’s Pond was a
water of the United States is a failure to make out a case, not a failure
to establish the jurisdiction of the court. See Arbaugh v. Y & H Corp.,
546 U.S. 500, 126 S.Ct. 1235, 1242–45, 163 L.Ed.2d 1097 (2006)
(discussing loose use of term “jurisdiction” and holding that failure to
establish that defendant is covered by the governing statute is failure
to make out a claim, not a failure to establish jurisdiction).
481 F.3d 700, 709 n.9 (9th Cir. 2007).

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Based on the limited record before the court, I find that the court has subjectmatter jurisdiction over SAMS’s claims and will deny Red River’s Rule 12(b)(1)
motion.

Like the Ninth Circuit, I find that the issues raised by Red River

essentially go to whether SAMS has stated claims under the CWA and SMCRA
rather than to whether the court has jurisdiction over those claims. Applying the
standard set forth by the Fourth Circuit in Gaston Copper Recycling, I find that
SAMS has alleged in good faith that Red River is violating the CWA by
discharging pollutants from alleged point sources into surface waters without
permit authorization to do so. I conclude that these good-faith allegations are
sufficient to invoke the court’s subject-matter jurisdiction over SAMS’s citizen
suit.
C. Res Judicata.
Red River contends that a related case filed in this court in 2014 precludes
SAMS’s claims asserted in this case under the doctrine of res judicata. See S.
Appalachian Mountain Stewards v. Red River Coal Co., No. 2:14CV00024, 2015
WL 1647965 (W.D. Va. Apr. 14, 2015) (hereinafter “SAMS v. Red River I”)
(granting summary judgment in favor of Red River based on deference to DMLR’s
interpretation of applicable permits).
In SAMS v. Red River I, SAMS alleged that Red River was violating its
permits at four mines (including the Mine) by exceeding allowable discharges into
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the South Fork Pound River, which is subject to a Total Maximum Daily Load
(“TMDL”). The key issue in the case was whether the TMDL was incorporated
into the permits through certain permit language. The TMDL in question had been
adopted after the permits were issued. I found that the permit language was
ambiguous.

At the summary judgment stage, Red River offered evidence of

DMLR’s interpretation of the permit language, and I deferred to that interpretation.
In my opinion granting summary judgment, I wrote:
In short, although Plaintiffs frame their claims as based on a
permit violation, they implicitly seek to challenge DMLR’s
interpretation of the permits at issue. An agency’s interpretation of, or
finding of facts under, a regulation that it has the authority to enforce
is entitled to deference because “[a]dministrative agencies are simply
better suited than courts to engage in such a process.” Ford Motor
Credit Co. v. Milhollin, 444 U.S. 555, 569 (1980). Moreover, courts
afford special deference in reviewing an agency’s findings where the
agency’s particular technical expertise is involved. Ohio Valley Envtl.
Coal. v. U.S. Army Corps of Eng’rs, 674 F.Supp.2d 783, 801 (S.D.W.
Va. 2009). Finally, because the DMLR is a state agency empowered
to develop TMDLs for waterways within Virginia, the court must
adhere to the “strong public policy against a federal court’s
interference in state agency determinations absent some finding that
the agency has violated federal law.” United States v. Alcoa, Inc., No.
A–03–CA–222–SS, 2007 WL 5272187, at *7 (W.D. Tex. Mar[.] 14,
2007); see also Palumbo v. Waste Techs. Indus., 989 F.2d 156, 160
(4th Cir.1993) (refusing to permit “collateral attack” on permitting
decisions of state environmental agency and federal EPA).
Plaintiffs have made no attempt to argue that DMLR’s findings
and conclusions regarding the South Fork TMDL are inadequate or
that they do not comply with federal law. Rather, they allege that Red
River has violated its permits — a conclusion that DMLR disagrees
with. Absent a reason to disregard DMLR’s findings, which Plaintiffs
do not present, I find that I must defer to DMLR’s determination.
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SAMS v. Red River I, 2015 WL 1647965, at *4–5.
I noted that after the Complaint in that case was filed, “Red River provided
Plaintiffs with evidence that the discharge points supporting Plaintiffs’ allegations
as to three of the permits have been removed. Therefore, Plaintiffs move for
summary judgment solely for ongoing violations in relation to the one remaining
permit.” Id. at *1 n.1. Red River moved for summary judgment on the entire case,
which I ultimately granted.
Red River contends that because the ponds were removed and the outfalls
were deleted from the permits prior to the filing of the complaint in SAMS v. Red
River I, my decision in that case precludes SAMS from making any claims
regarding unpermitted discharges from those outfalls. SAMS counters that (1) the
outfalls were not truly deleted, and its unpermitted discharge claims thus were not
available, until February 26, 2015, well after the complaint was filed in SAMS v.
Red River I; and (2) in the earlier case, SAMS alleged violation of permits, but in
this case, it alleges unpermitted discharges, so there is no identity of claims as
would be required for res judicata to apply.
Res judicata is an affirmative defense. Fed. R. Civ. P. 8(c)(1). It should be
decided on a motion to dismiss only when its applicability is clear from the face of
the complaint. Andrews v. Daw, 201 F.3d 521, 524 n.1 (4th Cir. 2000).

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Res judicata applies where there was a final judgment on the merits in a
prior suit resolving claims by the same parties or their privies, and a subsequent
suit based on the same cause of action. Providence Hall Assocs. Ltd. P’ship v.
Wells Fargo Bank, N.A., 816 F.3d 273, 276 (4th Cir. 2016). In addition, the Fourth
Circuit has directed courts to consider whether the plaintiff “knew or should have
known of its claims at the time of the first action” and “whether the court that ruled
in the first suit was an effective forum to litigate the relevant claims.” Id. In this
case, the pertinent inquiries are whether the two cases are based on the same cause
of action (often called identity of claims) and whether SAMS could have asserted
its current claims when it filed SAMS v. Red River I.
The Fourth Circuit follows a “transactional approach” in determining
whether there is an identity of claims. Id. at 282. This approach asks whether the
new claim is based on the same underlying transaction as the claim in the first suit
and whether it could have been asserted in the first suit. Id. “[T]o avoid res
judicata, a plaintiff need not ‘expand its suit in order to add a claim that it could
not have asserted at the time suit was commenced.’” Bethel World Outreach
Ministries v. Montgomery Cty. Council, 706 F.3d 548, 554 n.2 (4th Cir. 2013)
(quoting NBN Broad., Inc. v. Sheridan Broad. Networks, Inc., 105 F.3d 72, 78 (2d
Cir. 1997)). “In finding that the second suit involves the same cause of action, the
court need not find that the plaintiff in the second suit is proceeding on the same
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legal theory he or his privies advanced in the first suit.” Ohio Valley Envtl. Coal.
v. Aracoma Coal Co., 556 F.3d 177, 210 (4th Cir. 2009). “Even claims that were
not raised in the original suit may be precluded if they arose from the same
transaction or occurrence as those raised in the first suit and were available to the
plaintiff at the time of the first suit.” Id. at 210–11.
The Fourth Circuit has stated that res judicata is rarely applicable in a case
involving a continuing series of acts, as each new act gives rise to a new cause of
action. Meekins v. United Transp. Union, 946 F.2d 1054, 1058 (4th Cir. 1991).
The Supreme Court has also noted that the same course of conduct can give rise to
more than a single cause of action, and where the allegedly wrongful conduct
occurred after the earlier case, the new claims are not barred by res judicata.
Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 327-28 (1955). But in the
environmental context, the Seventh Circuit has held that ongoing releases are not
new wrongs where they “were known at the time of the initial suit” and “were the
principal basis of the claim.” Supporters to Oppose Pollution, Inc. v. Heritage
Grp., 973 F.2d 1320, 1326 (7th Cir. 1992) (noting there was “no new wrongful
conduct” by the defendant after the conclusion of the earlier case).
Both the instant case and SAMS v. Red River I involve discharges of the
same pollutants from the same mine. From the record currently before the court, it
appears that Red River has taken no new action to further contribute to the alleged
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discharges. The key factual difference is that at the time the first case was filed,
those discharges were governed by a permit, and now they are unpermitted. The
fact that the outfalls have been deleted from the permit changes SAMS’s legal
theory. SAMS argues that it could not have alleged unpermitted discharges in
2014. At that time, it could only have alleged discharges in excess of what the
permit allowed.
“[R]es judicata does not bar claims that did not exist at the time of the prior
litigation.” Meekins, 946 F.2d at 1057, 1058 (holding that plaintiff’s claims “did
not exist at the time of the first suit . . . because plaintiffs could not then have
obtained the prospective relief that they now seek”). There is a dispute about when
SAMS’s instant claims became available. SAMS says it could not have asserted a
claim for unpermitted discharges until DMLR officially authorized deletion of the
outfalls from the permit on February 26, 2015. Red River asserts that SAMS could
have brought all of these claims as early as June 11, 2014, when DMLR authorized
removal of the sedimentation ponds. It notes that DMLR authorized removal of
some of the ponds in April 2014, and the pond into which Fill 8 and Underdrain 8
discharged was removed from the Ambrose Mine #6 permit back in 2007. SAMS
filed its earlier suit on June 5, 2014.
A West Virginia district court decision supports SAMS’s position that even
after a sediment pond has been physically removed, the outfall remains part of the
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permit until the state agency takes formal action to delete it from the permit. Ohio
Valley Envtl. Coal., Inc. v. Alex Energy, Inc., 12 F. Supp. 3d 844, 867 (S.D.W. Va.
2014).

However, SAMS does not address the issue surrounding Fill 8 and

Underdrain 8. Any claim regarding Fill 8 and Underdrain 8 would have been
available at the time SAMS filed its earlier lawsuit in 2014, because that pond was
removed from its respective permit in 2007.

I conclude that SAMS’s claim

regarding Fill 8 and Underdrain 8 is barred by res judicata. I find that SAMS’s
other claims are not barred by res judicata because they were not legally available
at the time SAMS filed its earlier suit.
D. Agency Deference.
Red River urges the court to defer to DMLR’s conclusion that Red River is
not violating its permit or the applicable laws. DMLR allegedly has never required
reclaimed fills or associated underdrains to be permitted as outfalls or point
sources. According to Red River, DMLR exercised its technical expertise in
determining that discharges from reclaimed fills do not need to be permitted.
SAMS contends that DMLR’s interpretation is not entitled to deference
because it is inconsistent with an EPA regulation requiring permits for discharges
from inactive mining operations. SAMS further argues that EPA’s Show Cause
Letter is entitled to greater deference than DMLR’s decision.
The Fourth Circuit has adopted “a two-step analysis for reviewing state
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agency interpretations of federal laws.” Clark v. Alexander, 85 F.3d 146, 152 (4th
Cir. 1996). “First, the court should determine whether the state agency action is
inconsistent with the federal” regulations. Id. “If there is no inconsistency, the
court should afford the state agency’s action reasonable deference, meaning that
the action should be upheld unless it is found to be arbitrary or capricious.” Id.
“In determining whether agency action was arbitrary or capricious, the court must
consider whether the agency considered the relevant factors and whether a clear
error of judgment was made.” Aracoma Coal Co., 556 F.3d at 192. “Deference is
due where the agency has examined the relevant data and provided an explanation
of its decision that includes a rational connection between the facts found and the
choice made.” Id. (internal quotation marks and citations omitted). 2
The Ninth Circuit has spoken to the tension between agency deference and
the CWA’s citizen suit provision. “The purpose of the citizen suit provision of the
CWA, 33 U.S.C. § 1365, is to permit citizens to enforce the Clean Water Act when
the responsible agencies fail or refuse to do so.” S.F. Baykeeper, 481 F.3d at 706.
On occasion . . . a citizen sues because of a discharge that the EPA has
elected not to regulate. If the decision of the EPA is given conclusive
deference, the citizen suit would be defeated. Suit is therefore
allowed despite the EPA’s inaction, and a court may decide whether
the offending substance is a pollutant even when the EPA has not
2

The Fourth Circuit has noted that state agencies are afforded greater deference
under SMCRA than under the CWA. In a SMCRA primacy state, the state’s regulation
of surface mining is “exclusive.” Bragg v. W. Va. Coal Ass’n, 248 F.3d 275, 294 (4th
Cir. 2001).
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decided that question. Thus, we have held that a court may, in
entertaining a citizen suit, decide whether a discharge of particular
matter into navigable waters violates the CWA even though the
regulating agency determined that the discharge was not subject to the
requirement of a permit.
Id. (internal quotation marks and citations omitted). In another case, the Ninth
Circuit held that a state “has no authority to create a permit exemption from the
CWA for discharges that would otherwise be subject to the NPDES permitting
process.” N. Plains Res. Council v. Fid. Expl. & Dev. Co., 325 F.3d 1155, 1164
(9th Cir. 2003). Other courts have ruled similarly. For instance, a judge of the
Eastern District of Tennessee held that “[w]hether several locations at [a plant] are
point sources for pollution is a question within the competence of courts.
Accordingly, deferal [sic] to EPA would not be appropriate in this case.” Legal
Envtl. Assistance Found., Inc. v. Hodel, 586 F. Supp. 1163, 1169 (E.D. Tenn.
1984) (internal citation omitted).
The EPA regulation that SAMS contends is inconsistent with DMLR’s
decision requires permits for storm water discharges associated with industrial
activities. 40 C.F.R. 122.26. Inactive mining operations are expressly included,
subject to an exception for “areas of coal mining operations no longer meeting the
definition of a reclamation area under 40 CFR 434.11(1) because the performance
bond issued to the facility by the appropriate SMCRA authority has been released.”

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40 C.F.R. 122.26(b)(14)(iii). 3
Red River asks the court to defer to the position of DMLR based on a
declaration executed by one of its representatives, George Joey O’Quinn, a
Reclamation Program Manager. O’Quinn Decl., ECF No. 12-2. Red River has not
indicated that DMLR’s position is the result of any formal regulatory or
adjudicatory process. DMLR’s position may conflict with EPA’s position as stated
in its Show Cause Letter to Red River, but I cannot say for sure based on the
record before me, particularly in light of the fact that EPA has not taken any action
after issuing the letter and subsequently conferring with Red River.
I find that there are unresolved factual questions bearing upon whether it is
appropriate to defer to DMLR under these circumstances. Therefore, I will deny
the motion to dismiss on the ground of agency deference because further
development of the record is necessary.
E. Point Source.
“To establish a CWA violation, the plaintiffs must prove that (1) there has
been a discharge; (2) of a pollutant; (3) into waters of the United States; (4) from a
point source; (5) without a NPDES permit.” Parker v. Scrap Metal Processors,
Inc., 386 F.3d 993, 1008 (11th Cir. 2004). The statute contains no causation

3

Red River does not mention this exception, and from the record currently before
the court, it is unclear whether the reclamation bond for the Mine has been released.
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requirement and “takes the water’s point of view: water is indifferent about who
initially polluted it so long as pollution continues to occur.” W. Va. Highlands
Conservancy, Inc. v. Huffman, 625 F.3d 159, 167 (4th Cir. 2010).
Red River contends that underdrains are not point sources and thus are not
subject to the CWA’s permit requirement. 4 SAMS disagrees, arguing that at a
minimum, there is a factual dispute as to whether the underdrains at issue here are
point sources.
The CWA’s definition of “point source” is “any discernible, confined and
discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel,
conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding
operation, or vessel or other floating craft, from which pollutants are or may be
discharged.”

33 U.S.C. § 1362(14). “[A]gricultural stormwater discharges and

return flows from irrigated agriculture” are excluded from the definition of point
source. Id.
A regulation promulgated under the CWA defines “discharge of a pollutant”
as “[a]ny addition of any ‘pollutant’ or combination of pollutants to ‘waters of the
United States’ from any ‘point source.’”

40 C.F.R. 122.2.

“This definition

includes additions of pollutants into waters of the United States from: surface
runoff which is collected or channelled by man . . . .” Id. As noted above, another
4

Red River asserts that SAMS conflates underdrains and hollow fills, but that the
Complaint alleges only that the underdrains are point sources, not the hollow fills.
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regulation requires a permit for any storm water “discharge associated with
industrial activity,” which includes inactive mining operations except where the
SMCRA performance bond has been released.

40 C.F.R. 122.26(a)(1)(ii),

(b)(14)(iii).
In 1990, explaining a final rule regarding storm water discharges, EPA
wrote,
One industry argued that the definition of “point source” should
be modified for storm water discharges so as to exclude discharges
from land that is not artificially graded and which has a propensity to
form channels where precipitation runs off. EPA intends to embrace
the broadest possible definition of point source consistent with the
legislative intent of the CWA and court interpretations to include any
identifiable conveyance from which pollutants might enter the waters
of the United States.
National Pollutant Discharge Elimination System Permit Application Regulations
for Storm Water Discharges, 55 Fed. Reg. 47990-01 (Nov. 16, 1990). EPA went
on to state,
Gravity flow, resulting in a discharge into a navigable body of water,
may be part of a point source discharge if the (discharger) at least
initially collected or channeled the water and other materials. A point
source of pollution may also be present where (dischargers) design
spoil piles from discarded overburden such that, during periods of
precipitation, erosion of spoil pile walls results in discharges into a
navigable body of water by means of ditches, gullies and similar
conveyances, even if the (dischargers) have done nothing beyond the
mere collection of rock and other materials.
Id.; see also Sierra Club v. Abston Constr. Co., 620 F.2d 41, 45 (5th Cir. 1980)
(stating same).
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Regarding reclaimed inactive mining operations, EPA wrote:
EPA’s definition of active and inactive mining operations also
excludes those areas which have been reclaimed under SMCRA . . . . EPA
believes that, as a general matter, areas which have undergone reclamation
pursuant to such laws have concluded all industrial activity in such a way as
to minimize contact with overburden, mine products, etc. EPA and NPDES
States, of course, retain the authority to designate particular reclaimed areas
for permit coverage under section 402(p)(2)(E).
Id.
In a different rule issued in 1985, EPA
reemphasize[d] that post-bond release discharges are subject to
regulation under the Clean Water Act. If a point source discharge
occurs after bond release, then it must be regulated through an
NPDES permit under sections 301(a) and 402 of the Clean Water Act.
If the responsible party does not obtain a permit, then it is subject to
enforcement action by EPA under section 309 of the Act and by
citizens under section 505(a)(1) of the Act.”
Coal Mining Point Source Category; Effluent Limitations Guidelines and New
Source Performance Standards, 50 Fed. Reg. 41296-01 (Oct. 9, 1985); see also W.
Va. Highlands Conservancy, 625 F.3d at 166 (finding, based on this rule, that point
source discharges after bond release must be permitted). But five years earlier,
EPA had written that “once OSM authorizes removal of the sedimentation pond or
treatment facility, and the performance bond is fully released, there generally will
be no basis to apply EPA effluent limitations because there will generally be no
point source.”

Coal Mining Point Source Category; Effluent Limitations

Guidelines for Existing Sources, Standards of Performance for New Sources and
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Pretreatment Standards, 46 Fed. Reg. 3136-01 (Jan. 13, 1981). However, EPA
went on to “emphasize[] that, in the rare instance where such a point source
discharge occurs [following reclamation], the appropriate permitting authority may
require treatment under section 402(a)(1) of the Clean Water Act.” Id.
A judge of the Southern District of West Virginia considered a case with
similar facts to this one, where the “central issue” was whether “valley fills are
‘point sources,’ therefore requiring NPDES permits.” Ohio Valley Envtl. Coal.
Inc. v. Pocahontas Land Corp., Civil Action No. 3:14-11333, 2015 WL 2144905,
at *7 (S.D.W. Va. May 7, 2015). In that case, the court denied a motion for
summary judgment because there were issues of material fact bearing on whether
the fills were point sources. Id. The court expressly found that “[w]hether a
discharge from a point source exists is a question of fact.” Id. at *8 (citing Abston,
620 F.2d 41). The court also held that a permit may be required for discharges
occurring after bond release. Id. at *9.
I find that SAMS has adequately pleaded that the underdrains in question are
point sources. I will deny Defendant’s Motion to Dismiss on this ground, as the
record currently before me does not contain sufficient facts for me to rule as a
matter of law that the underdrains in question are not point sources.

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F. Groundwater.
Under the CWA, “discharge of a pollutant” means “any addition of any
pollutant to navigable waters from any point source.” 33 U.S.C. § 1362(12).
“Navigable waters” is defined as “the waters of the United States.” 33 U.S.C. §
1362(7).
Red River argues that the discharges at issue here are discharges into
groundwater rather than surface water, and groundwater is not included in the
definition of navigable waters under the CWA.

SAMS disputes Red River’s

factual predicate and alleges that the discharges at issue are occurring at the
surface. SAMS also argues that groundwater hydrologically connected to surface
water does meet the statutory definition of navigable waters.
EPA has taken the position, and a number of courts have found, that the
CWA regulates discharges of pollutants into groundwater that is directly
hydrologically connected to surface water. See, e.g., Sierra Club v. Va. Elec. &
Power Co., 247 F. Supp. 3d 753, 761-62 (E.D. Va. 2017); Ohio Valley Envtl.
Coal., 2015 WL 2144905 at *8. But see Upstate Forever, 252 F. Supp. 3d at 496
(noting that “the two circuit courts to address this issue have concluded that
navigable waters does not include groundwater that is hydrologically connected to
surface waters”) (citing Village of Oconomowoc Lake v. Dayton Hudson Corp., 24
F.3d 962 (7th Cir. 1994); Rice v. Harken Expl. Co., 250 F.3d 264 (5th Cir. 2001)).
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At this procedural juncture, I need not decide whether the CWA covers
discharges into hydrologically connected groundwater because SAMS has alleged
that the discharges in question occur at the surface. The parties do not dispute that
the sediment ponds were point sources that discharged pollutants into various
tributaries, creeks, and other bodies of surface water. Now that the ponds have
been removed, the underdrains allegedly discharge the same pollutants directly into
those bodies of water. At this stage of the proceedings, I find that SAMS has
alleged sufficient facts to overcome the Motion to Dismiss as to Red River’s
groundwater argument.
G. Burford Abstention.
Red River argues that I should decline to hear SAMS’s citizen suit under
Burford v. Sun Oil Co., 319 U.S. 315 (1943), because the case presents difficult
questions of state law. Burford abstention is appropriate where a case presents
“difficult questions of state law bearing on policy problems of substantial public
import whose importance transcends the result in the case then at bar, or if its
adjudication in a federal forum would be disruptive of state efforts to establish a
coherent policy with respect to a matter of substantial public concern.”
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 726-27 (1996) (internal quotation
marks and citations omitted).

The abstention decision is a discretionary one.

MLC Auto., LLC v. Town of S. Pines, 532 F.3d 269, 280 (4th Cir. 2008).
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Nevertheless, “although the standard is a deferential one, the discretion to abstain
is tempered by the truism that the federal courts have a virtually unflagging
obligation to exercise their jurisdiction” and “[t]here is little or no discretion to
abstain in a case which does not meet traditional abstention requirements.” Id. at
280 (internal quotation marks and citations omitted).
Red River largely bases its Burford argument on the predicate that Congress
opted to leave groundwater regulation to the states.

This argument is not

particularly persuasive at this stage because, as indicated above, SAMS has alleged
discharges into surface water rather than groundwater. Red River also argues that
SAMS’s suit is really an impermissible collateral attack on the state permitting
process. That would be the case if DMLR had issued a permit for the alleged
discharges and SAMS was challenging the propriety of the permit or technical
deficiencies in the permitting process. See Palumbo, 989 F.2d at 158 (finding
Burford barred federal court from ruling on claim challenging validity of permits
issued under Resource Conservation and Recovery Act where plaintiffs’ appeal of
state agency’s permitting decision was pending before state administrative review
board). But a CWA citizen suit is proper where a state agency fails to enforce the
CWA or attempts to create an exception where a CWA permit would otherwise be
required. See S.F. Baykeeper, 481 F.3d at 706.

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Red River’s Burford argument is similar to its agency deference argument. I
do not believe that SAMS’s Complaint raises difficult issues of state law. Rather,
SAMS seeks to enforce federal law that it contends DMLR is failing to enforce.
Unlike in Palumbo, there is no pending state appeal in this case. As abstention is
the exception rather than the rule, I decline to abstain under Burford and will
exercise jurisdiction over this case.
H. Conclusion.
For the foregoing reasons, I will grant Red River’s Motion to Dismiss the
portion of SAMS’s Complaint regarding discharges from Underdrain 8 and Fill 8
on the ground that it is barred by res judicata. I will deny Red River’s Motion to
Dismiss on all other grounds.
II. RED RIVER’S DECLARATORY JUDGMENT ACTION.
In its declaratory judgment action, Red River raises essentially the same
issues as in its Motion to Dismiss SAMS’s citizen suit. It contends that SAMS’s
claims are barred by res judicata, that the CWA does not cover groundwater, that
the underdrains and hollow fills are not point sources, and that DMLR’s
determination that Red River is not violating its permit is entitled to deference.
Red River seeks a judicial declaration of each of these points, as well as an
injunction “enjoining Defendants from filing additional citizen suits against Red
River alleging CWA and SMCRA violations associated with discharges from
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underdrains and hollow or valley fills.” Case No. 2:17CV00021, Compl. 18, ECF
No. 1.
SAMS has moved to dismiss Red River’s Complaint pursuant to Rules
12(b)(1) and 12(b)(6), contending that the suit amounts to no more than an
assertion of defenses to the citizen suit and that neither the CWA nor SMCRA
allows for such a suit.
The Declaratory Judgment Act provides, “In a case of actual controversy
within its jurisdiction, . . . any court of the United States, upon the filing of an
appropriate pleading, may declare the rights and other legal relations of any
interested party seeking such declaration, whether or not further relief is or could
be sought.” 28 U.S.C. § 2201(a). Because the Declaratory Judgment Act does not
confer federal jurisdiction, the court must “possess[] an independent basis for
jurisdiction over the parties (e.g., federal question or diversity jurisdiction).” Volvo
Const. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 592 (4th Cir. 2004).
Federal district courts “have original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.
According to the well-pleaded complaint rule, federal question jurisdiction exists
only where “a federal question appears on the face of a plaintiff’s properly pleaded
complaint.” Columbia Gas Transmission Corp. v. Drain, 237 F.3d 366, 370 (4th
Cir. 2001). But the Fourth Circuit has clarified that
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in a declaratory judgment action, the federal right litigated may
belong to the declaratory judgment defendant rather than the
declaratory judgment plaintiff. Thus, if the declaratory judgment
plaintiff is not alleging an affirmative claim arising under federal law
against the declaratory judgment defendant, the proper jurisdictional
question is whether the complaint alleges a claim arising under federal
law that the declaratory judgment defendant could affirmatively bring
against the declaratory judgment plaintiff.
Id.; see also City Nat’l Bank v. Edmisten, 681 F.2d 942, 945 (4th Cir. 1982)
(explaining that “in an action for a declaratory judgment, if the plaintiff is seeking
a declaration that it has a good defense to a threatened action, it is the character of
the threatened action and not of the defense which determines whether there is
federal question jurisdiction”).
That is clearly the situation here, and SAMS’s citizen suit arises under the
CWA and SMCRA — both federal laws. I find that federal question subjectmatter jurisdiction exists over Red River’s declaratory judgment action, and I will
deny the Motion to Dismiss for lack of subject-matter jurisdiction.
SAMS contends that even if this court has subject-matter jurisdiction over
Red River’s declaratory judgment action, it should exercise its discretion and
decline to hear the case. “A federal court has the discretion to decline to entertain
a declaratory judgment action, but, under the law of this Circuit, the court must do
so only for good reason.” Cont’l Cas. Co. v. Fuscardo, 35 F.3d 963, 965 (4th Cir.
1994) (internal quotation marks and citation omitted).

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A district court should entertain a declaratory judgment action within its
jurisdiction when the declaratory relief will be useful in clarifying the legal issues
presented and will relieve the parties of the uncertainty surrounding the
controversy. Id. In deciding whether to hear a declaratory judgment action, the
court should consider whether the case primarily raises questions of state law,
whether claims are pending in state court, whether the federal court’s resolution of
the issues would result in unnecessary entanglement of the state and federal courts,
and whether the federal declaratory judgment action is a means of forum shopping.
Id. at 966-68. Additionally, “the declaratory remedy should not be invoked merely
to try issues or determine the validity of defenses in pending cases.” Aetna Cas. &
Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937).
Here, there are no concerns about forum shopping and no related cases
pending in state court. Both SAMS’s citizen suit and Red River’s declaratory
judgment action are pending in the same court. Although Red River filed its
Complaint before the expiration of the statutory notice period for SAMS’s citizen
suit, that notice period has now run, and these two cases have been consolidated
for purposes of discovery and trial. The issues in these two cases are almost
entirely parallel, and hearing both cases should not require any additional
expenditure of judicial resources. I see no good reason to decline to exercise

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jurisdiction over Red River’s declaratory judgment action. Therefore, I will deny
SAMS’s Motion to Dismiss.
III. CONCLUSION.
For the foregoing reasons, it is hereby ORDERED that:
1.

Defendant’s Motion to Dismiss in Case No. 2:17CV00028, ECF No.

11, is GRANTED IN PART and DENIED IN PART. The plaintiffs’ claims
regarding discharges from Underdrain 8 and Fill 8 are DISMISSED, and the
Motion to Dismiss is DENIED in all other respects;
2.

The Motion to Dismiss Plaintiff’s Complaint with Prejudice in Case

No. 2:17CV00021, ECF No. 13, is DENIED; and
3.

The stay of discovery in both cases is lifted as of the date of entry of

this Opinion and Order.
ENTER: January 19, 2018
/s/ James P. Jones
United States District Judge

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