Ohio Valley Environmental Coalition et al v. Fola Coal Company, LLC

Filing 167

MEMORANDUM OPINION AND ORDER directing that injunctive relief is appropriate and necessary to remedy Defendants violations; the Court is inclined to appoint a Special Master to further assist it in determining an appropriate remedy; objections to thi s notice of appointment are due 10/19/2015; directing Defendant to submit a memorandum of law by 10/21/2015 addressing the authority and regulatory scheme under the Federal Water Pollution Control Act on which Defendant relies in arguing that water m anagement strategies are in compliance with the Act and, if successful, can bring Defendant into compliance with narrative water quality standards; Plaintiffs' response due 10/28/2015. Signed by Judge Robert C. Chambers on 10/14/2015. (cc: counsel of record; any unrepresented parties) (tmh)

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION

OHIO VALLEY ENVIRONMENTAL
COALITION, INC., WEST VIRGINIA
HIGHLANDS CONSERVANCY, INC.,
and SIERRA CLUB,
Plaintiffs,
v.

CIVIL ACTION NO. 2:13-5006

FOLA COAL COMPANY, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
On October 6, 2015, the Court held a trial in this case to resolve issues of appropriate
injunctive relief and/or civil penalties.1 The Court FINDS that injunctive relief is appropriate and
necessary to remedy Defendant’s violations. As explained below, the Court is inclined to appoint
a Special Master to further assist it in determining an appropriate remedy. The Court also orders
Defendant to submit a memorandum of law by October 21, 2015 addressing the authority and
regulatory scheme under the Federal Water Pollution Control Act (“Clean Water Act” or “CWA”)
on which Defendant relies in arguing that water management strategies are in compliance with the
Act and, if successful, can bring Defendant into compliance with narrative water quality standards.
I.

BACKGROUND

Pursuant to this Court’s June 21, 2013, Scheduling Order, ECF No. 16, the trial of this
case proceeded in two phases. Phase 1 resolved issues of jurisdiction and liability, where the Court
ultimately found the Defendant liable for at least one violation of its permits as discussed infra.
This phase of the trial, Phase II, will resolve issues of appropriate injunctive relief and/or civil
penalties.
1

Plaintiffs bring this action pursuant to the citizen suit provisions of the Clean Water Act
and the Surface Mining Control and Reclamation Act (“SMCRA”). Plaintiffs allege that Defendant
Fola Coal Company, LLC (“Fola”) violated these statutes by discharging excessive amounts of
ionic pollution, measured as conductivity and sulfates, into the waters of West Virginia in violation
of their National Pollutant Discharge Elimination System (“NPDES”) permits and their West
Virginia Surface Mining Permits. The Court will first discuss the relevant regulatory framework.
The primary goal of the CWA is “to restore and maintain the chemical, physical, and
biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). To further this goal, the Act
prohibits the “discharge of any pollutant by any person” unless a statutory exception applies; the
primary exception is the procurement of an NPDES permit. 33 U.S.C. §§ 1311(a), 1342. Under
the NPDES, the U.S. Environmental Protection Agency (“EPA”) or an authorized state agency can
issue a permit for the discharge of any pollutant, provided that the discharge complies with the
conditions of the CWA. 33 U.S.C. § 1342. A state may receive approval to administer a state-run
NPDES program under the authority of 33 U.S.C. § 1342(b). West Virginia received such
approval, and its NPDES program is administered through the West Virginia Department of
Environmental Protection (“WVDEP”). 47 Fed. Reg. 22363-01 (May 24, 1982). All West Virginia
NPDES permits incorporate by reference West Virginia Code of State Rules § 47-30-5.1.f, which
states that “discharges covered by a WV/NPDES permit are to be of such quality so as not to cause
violation of applicable water quality standards promulgated by [West Virginia Code of State Rules
§ 47-2].” This is an enforceable permit condition. Ohio Valley Envtl. Coal. V. Elk Run Coal Co.,
Inc., 24 F.Supp.3d 532, 537 (S.D.W.Va. 2014) (“Elk Run”).
Coal mines are also subject to regulation under the SMCRA, which prohibits any person
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from engaging in or carrying out surface coal mining operations without first obtaining a permit
from the Office of Surface Mining Reclamation and Enforcement (“OSMRE”) or an authorized
state agency. 30 U.S.C. §§ 1211, 1256, 1257. A state may receive approval to administer a staterun surface mining permit program under the authority of 30 U.S.C. § 1253. In 1981, West Virginia
received conditional approval of its state-run program, which is administered through the WVDEP
pursuant to the West Virginia Surface Coal Mining and Reclamation Act (“WVSCMRA”). W. Va.
Code §§ 22-3-1 to -33; 46 Fed. Reg. 5915-01 (Jan. 21, 1981). Regulations passed pursuant to the
WVSCMRA require permittees to comply with the terms and conditions of their permits and all
applicable performance standards. W. Va. Code R. § 38-2-3.33.c. One of these performance
standards requires that mining discharges “shall not violate effluent limitations or cause a violation
of applicable water quality standards.” Id. § 38-2-14.5.b. Another performance standard mandates
that “[a]dequate facilities shall be installed, operated and maintained using the best technology
currently available . . . to treat any water discharged from the permit area so that it complies with
the requirements of subdivision 14.5.b of this subsection.” Id. § 38-2-14.5.c.
West Virginia’s water quality standards are violated if wastes discharged from a surface
mining operation “cause . . . or materially contribute to” 1) “[m]aterials in concentrations which
are harmful, hazardous or toxic to man, animal or aquatic life” or 2) “[a]ny other condition . . .
which adversely alters the integrity of the waters of the State.” Id. § 47-2-3.2.e, -3.2.i. Additionally,
“no significant adverse impact to the chemical, physical, hydrologic, or biological components of
aquatic ecosystems shall be allowed.” Id. § 47-2-3.2.i.
This Court has previously determined that a West Virginia Stream Condition Index
(“WVSCI”) score below the EPA-approved impairment threshold of 68 indicates a violation of
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West Virginia’s biological narrative water quality standards, as embodied in § 47-2-3.2.e and 3.2.i. Elk Run, 24 F.Supp.3d at 556. In Elk Run, Defendants argued that liability based on
conductivity levels would effectively create a water qualify effluent limit, which according to a
federal district court in Nat’l Mining Ass’n v. Jackson, 880 F.Supp.2d 119, 137–42 (D.D.C. 2012),
exceeded EPA authority. Though already recognized as inapposite to the issues presented in Elk
Run—as well as the case at hand—the Court now also notes that Jackson has since been reversed.
Nat’l Mining Ass’n v. McCarthy, 758 F.3d 243 (D.C.Cir. 2014) (concluding that EPA’s Final
Guidance amounted to a general statement of policy explaining how the agency would enforce
existing rules and was not a final agency action subject to pre-enforcement judicial review).
This Court has also previously determined Plaintiffs’ substantive burden in the case at hand
upon Defendant’s oral motion for a judgment on partial findings at the close of Plaintiff’s evidence.
See Memorandum Opinion and Order, ECF No. 114. After reviewing all the evidence then before
the Court and legal arguments briefed by the parties, the Court denied Fola’s motion, finding
instead that Plaintiffs had provided some evidence that a pollutant had caused or materially
contributed to biological impairment at Stillhouse Branch in violation of Fola’s permits. Id.
Specifically, the Court determined that Plaintiffs’ burden is to show that the high conductivity
measured at Stillhouse Branch is composed of a particular mixture of ions that is known to cause
or materially contribute to impairment. Id. at 7. Upon reviewing Plaintiffs’ evidence, the Court
then concluded that Plaintiff had produced sufficient evidence that high conductivity in central
Appalachian waterways receiving alkaline mine drainage, e.g., Stillhouse Branch, is dominated by
a unique mixture of ions and that particular variety of ionic pollution is known to cause or
materially contribute to biological impairment. Id. at 21.
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The case then moved to Phase I of trial where the Court considered whether Plaintiffs met
their ultimate persuasive burden of showing that one or more violations occurred by a
preponderance of the evidence. At the conclusion of Phase I, the Court found that Plaintiffs did
meet their burden and that Defendant has committed at least one violation of its permits by
discharging high levels of ionic pollution, as measured by conductivity, into Stillhouse Branch.
ECF No. 123. This Court found that this violation caused or materially contributed to a significant
adverse impact to the chemical and biological components of the applicable stream’s aquatic
ecosystem, in violation of the narrative water quality standards that are incorporated into those
permits. Id. As such, the Court now considers the appropriate remedies for these violations.
II.

INJUNCTIVE RELIEF

Plaintiffs are not seeking civil penalties. Therefore, this Court will only consider remedies
by injunctive relief.
An injunction is an equitable remedy a court should issue only where such intervention “is
essential in order effectually to protect property rights against injuries otherwise irremediable.”
Weinberger v. Romero–Barcelo, 456 U.S. 305, 312 (1982) (quoting Cavanaugh v. Looney, 248
U.S. 453, 456 (1919)). “[T]he basis for injunctive relief in the federal courts has always been
irreparable injury and the inadequacy of legal remedies.” Id. (citations omitted). Thus, a plaintiff
is entitled to a permanent injunction only if it can demonstrate:
(1) [I]t has suffered an irreparable injury; (2) that remedies available at law, such
as monetary damages, are inadequate to compensate for that injury; (3) that,
considering the balance of hardships between the plaintiff and defendant, a remedy
in equity is warranted; and (4) that the public interest would not be disserved by a
permanent injunction. Christopher Phelps & Assocs., LLC v. Galloway, 492 F.3d
532, 543 (4th Cir.2007) (citing eBay Inc. v. MercExchange, LLC, 547 U.S. 388,
391 (2006)).
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First, Plaintiffs have established an irreparable injury. As concluded in the liability phase
of this trial, Defendant has committed at least one violation of its permits by discharging high
levels of ionic pollution into Stillhouse Branch. This has caused or materially contributed to a
significant adverse impact to the chemical and biological components of the stream’s aquatic
ecosystem, in violation of the narrative water quality standards incorporated into those permits.
This is sufficient to establish irreparable harm, as well as the inadequacy of monetary damages.
See Amoco Prod. Co. v. Village of Gambell, A.K., 480 U.S. 531, 545 (1987) (“Environmental
injury, by its nature, can seldom be adequately remedied by monetary damages and is often
permanent or at least of long duration, i.e., irreparable.”); Nat'l Audubon Soc'y v. Dep't of Navy,
422 F.3d 174, 201 (4th Cir. 2005) (same).
The balance of hardships also weighs in favor of the issuance on an injunction. To begin,
“[i]f [environmental] injury is sufficiently likely ... the balance of harms will usually favor issuance
of an injunction to protect the environment.” Amoco Prod., 480 U.S. at 545. Furthermore, “[h]arm
to [the] environment outweighs a defendant’s financial interests, particularly where the violations
are of a longstanding and continual nature.” Idaho Conservation League v. Atlanta Gold Corp.,
879 F.Supp.2d 1148, 1161 (D. Idaho 2012). The Supreme Court has also held that when fashioning
an equitable remedy under an environmental statute, a district court should focus on “the
underlying substantive policy the [statute] was designed to effect.” Amoco Prod., 480 U.S. at 544.
Here, achievement of water quality standards is “one of the Act’s central objectives.” Arkansas v.
Oklahoma, 503 U.S. 91, 106 (1992). Additionally this Court has previously found that protecting
water uses “is the overriding purpose of West Virginia’s water quality standards and the goal of
the state’s permit requirements.” Elk Run, 24 F.3d at 579. As such, the equities favor an injunction
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to ensure compliance with West Virginia water quality standards and to protect the State’s aquatic
resources.
Finally, the public interest will not be disserved by injunctive relief. There is a clear public
interest in environmental protection, including the protection of aquatic resources. Protecting water
quality is “a critical public interest that profoundly outweighs a company’s bottom line.” Atlanta
Gold, 879 F.Supp.2d at 1162. Furthermore, this interest is served by the citizen-suit and will be
achieved through the issuance of an injunction. See Nat. Res. Def. Council v. Train, 510 F.2d 696,
699–700 (D.C.Cir. 1974). (“[The citizen suit] reflects Congress's recognition that citizens can be
a useful instrument for detecting violations and bringing them to the attention of the enforcement
agencies and courts alike.”). See also Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., 484
U.S. 49, 62 (1987); Piney Run Pres. Ass’n v. County Comm’rs of Carroll County, Md, 523 F.3d
453, 456 (4th Cir. 2008).
As such, all four factors support the issuance of permanent injunctive relief, requiring
Defendant to comply with water quality standards to protect the biological and chemical integrity
of Stillhouse Branch.
III.
A.

REMEDIES

Plaintiffs’ Proposal

During the Phase II trial, Plaintiffs urged this court to require Defendant to install a water
treatment system at Stillhouse Branch; more particularly, Plaintiff’s propose a membrane filtration
system utilizing reverse osmosis. Plaintiffs argue that such a system could treat discharges from
Outlet 029 into Stillhouse Branch and achieve a conductivity level of 300 µS/cm within 3 years.2

2

In measurements relied on in this case, current conductivity levels in Stillhouse Branch
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Plaintiffs did not provide expert testimony regarding the size, location, sound issues, energy
requirements, etc., of a reverse osmosis system, and instead argued that those issues would be
better addressed during the design phase of such a system. It is estimated that a reverse osmosis
water treatment system would cost $136 million to build, install, operate, and maintain for 35
years.
Plaintiffs also recommend that this Court set a definite compliance date of three years and
direct Defendant to develop a plan that contains the specific steps to achieve compliance with
water quality standards by the end of that period. They propose appointing a Special Master to
oversee the Defendant’s activities in carrying out its compliance plan. The Special Master would
be in charge of setting interim milestones for completing the treatment plan, approving
modifications to such plan, and supervising Defendant’s compliance with the treatment plan. Any
disputes amongst the parties would be submitted to the Special Master for resolution, subject to
review by this Court.
B.

Defendant’s Proposal

On the other hand, Defendant proposes utilizing water management strategies to lower
conductivity levels at Stillhouse Branch. Defendant claims these strategies will reduce
conductivity more economically than reverse osmosis. The water management strategies proposed
by Defendant were presented in a four phase approach by Defendant’s expert witness, Mr. Meek.

range from 3,000-4,000 µS/cm. Motion for Summary Judgment, Ex. 5 at 23, 24, 31, and 33; ECF
No. 57-8. The EPA has found that in central Appalachian streams, when conductivity reach 300
µS/cm and above, it is more likely than not that the subject stream will be biologically impaired.
EPA’s Joint Benchmark, Joint Ex. 58 at JE464; Tr. at 63–64. As such, Plaintiffs would like the
conductivity in Stillhouse Branch to be reduced to 300 µS/cm.
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The first phase of these strategies involves isolating the high conductivity water from
Stillhouse Branch and pumping it directly into Twentymile Creek. Defendant claims this technique
would lower the conductivity in Stillhouse Branch below 300 µS/cm (some of the time) and would
also not affect the conductivity in Twentymile Creek (since the same water is already entering
Twentymile Creek through Stillhouse Branch).
If this phase is not successful in lowering conductivity levels to the extent required,
Defendant next proposes habitat restoration. If habitat improvement proves unsuccessful, phase
three of Defendant’s water management strategy involves supplementing the water flow in
Stillhouse Branch, as needed, with water from Twentymile Creek. Finally, Phase four involves
continuing to segregate the underflow from Stillhouse Branch, pumping it directly into
Twentymile Creek, and then supplementing the water flow in Stillhouse Branch with water from
the Gauley River.
Defendant believes that these water management strategies could lower the conductivity in
Stillhouse enough to achieve passing WVSCI scores, costing an estimated $164,000 to build,
install, operate, and maintain for 35 years.
IV.

DISCUSSION

The Court does not take lightly its decision in determining an appropriate remedy. The
remedies proposed by both Plaintiffs and Defendant are complex and costly. As such, although the
Court has determined that injunctive relief is appropriate and necessary here, the Court will not
order a specific remedy at this point. Rather, pursuant to Federal Rule of Civil Procedure 53(a)(1),
the Court is inclined to appoint a Special Master, with expertise in this particular field, to further
assist it in the determination of an appropriate remedy. Specifically, the Court is inclined to appoint
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James H. Kyles of O’Brien and Gere as Special Master in this action. If Plaintiffs or Defendant
objects or otherwise wishes to be heard regarding this appointment, either party must do so by
October 19, 2015. Fed. R. Civ. P. 53(b)(1).
Additionally, during the Phase II trial, Defendant requested an opportunity to brief the
Court regarding the authority and regulatory scheme under the CWA on which Defendant relies
in arguing that its water management strategies are in compliance with the Act and can, if
successful, bring Defendant into compliance with narrative water quality standards. Defendant has
until October 21, 2015 to provide the Court with a memorandum of law in support of its position.
Plaintiffs have until October 28, 2015, to respond to Defendant’s memorandum.
V.

CONCLUSION

As such, the Court FINDS that injunctive relief is appropriate and necessary to remedy
Defendant’s violations. The Court is inclined to appoint a Special Master to further assist it in
determining an appropriate remedy. Objections to this notice of appointment are due by October
19, 2015. The Court also orders Defendant to submit a memorandum of law by October 21, 2015
addressing the authority and regulatory scheme under the CWA on which Defendant relies in
arguing that water management strategies are in compliance with the Act and, if successful, can
bring Defendant into compliance with narrative water quality standards.
The Court DIRECTS the Clerk to send a copy of this written Opinion and Order to counsel
of record and any unrepresented parties.

ENTER:

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October 14, 2015