DIANA GRIBBON MOTZ, Circuit Judge:
Several environmental groups brought this action against a coal company, alleging that the company had violated the Clean Water Act and seeking appropriate injunctive relief. After a bench trial, the district court found that the company had indeed violated the Act and ordered it to take corrective measures. The company appeals, principally asserting that its National Pollution Discharge Elimination System ("NPDES") permit shields it from liability. Because the company did not comply with the conditions of its permit, the permit does not shield it from liability under the Clean Water Act, and the district court properly ordered appropriate remedial measures. Accordingly, we affirm the judgment of the district court.
The Clean Water Act forbids all discharges of pollutants into waters of the United States, unless the discharger holds a permit. 33 U.S.C. §§ 1311(a), 1342, 1362 (2012). The Act shields NPDES permit holders from liability if their discharges comply with their permits. 33 U.S.C. § 1342(k). A typical NPDES permit lists numerical limitations on specific types of effluents and includes other conditions required
Under the Act, if a state receives approval from the Environmental Protection Agency ("EPA"), it can administer its own NPDES permitting program.
West Virginia has promulgated a number of regulations necessary to comply with the national NPDES program. All West Virginia NPDES permits incorporate (either expressly or by reference) numerous provisions of the West Virginia Code of State Rules. These include a series of regulations governing NPDES permits in general, as well as a separate series of regulations governing NPDES permits for coal mining.
In 1996, Fola Coal Company, LLC obtained a West Virginia NPDES coal mine permit to discharge into Stillhouse Branch, a tributary of Twentymile Creek and a waterway adjacent to Fola's surface mining facility in central West Virginia. Fola applied for and received a renewed NPDES permit in 2009. The provisions of that permit lie at the heart of this case.
On March 13, 2013, three environmental groups — Ohio Valley Environmental Coalition, West Virginia Highlands Conservancy, and Sierra Club (collectively "the Coalition") — filed this action under the Clean Water Act's citizen suit provision, 33 U.S.C. § 1365. The Coalition alleged that Fola violated 5.1.f, a West Virginia regulation incorporated in Fola's permit. At the time Fola's renewal permit was issued in 2009, 5.1.f provided:
W. Va. Code R. § 47-30-5.1.f (2009). The Coalition alleged that Fola violated 5.1.f by discharging ions and sulfates in sufficient quantities to cause increased conductivity in Stillhouse Branch, which resulted in a violation of water quality standards. Specifically, the Coalition asserted that Fola's discharges violated two narrative water quality standards contained in Fola's permit.
In response to the Coalition's allegations, Fola pointed out that it disclosed the nature of its discharges when it applied for the 2009 renewal permit. At that time, Fola had stated that its discharges would include ions and therefore be highly conductive. Despite this disclosure, the West Virginia Department of Environmental Protection ("WVDEP") set no specific limitations on conductivity in Fola's permit. By declining to do so, Fola asserted, WVDEP made an affirmative choice not to impose any limit on conductivity. According to Fola, it followed that 5.1.f did not obligate Fola to limit the conductivity of its discharges even if that conductivity resulted in a violation of water quality standards. Fola reasoned that, because it complied with the effluent limits expressly set out in
To gain support for its view that 5.1.f imposed no obligation on it, in 2013 Fola sought clarification from WVDEP regarding a new West Virginia law enacted a year earlier, involving the permit shield. The new law provided that "Notwithstanding any rule or permit condition to the contrary, ... compliance with a permit issued pursuant to this article shall be deemed compliance for purposes of" the Clean Water Act's permit shield. 2012 W. Va. SB 615 (formerly codified at W. Va. Code § 22-11-6(2) (2013)). WVDEP responded that, in its view, this legislation did not substantively change existing law but simply clarified West Virginia's consistent interpretation of the permit shield. Under this assertedly consistent view, a permit holder need only disclose its discharges of effluents to WVDEP and comply with the effluent limits in the permit. If the permit holder did this, according to WVDEP, the permit would shield the permit holder from all liability under the Clean Water Act.
In 2015, WVDEP attempted to remove from 5.1.f the language at issue in this case, which requires permit holders to comply with water quality standards. In doing so, WVDEP admitted that when the agency had issued Fola a renewal permit in 2009, 5.1.f "require[d] coal NPDES permittees to meet water quality standards, whether or not such standards are delineated in the permit or contained in the administrative record of the permitting process." WVDEP, Response to Comments, 47 CSR 30, WV/NPDES Rule for Coal Mining Facilities, at 1 (2014), http://apps.sos.wv.gov/adlaw/csr/readfile.aspx?DocId=26342&Format=PDF. Nonetheless, WVDEP opined that its removal of the relevant language from 5.1.f "does nothing more than make [state law] consistent with" the Clean Water Act, which, according to WVDEP, did not require compliance with water quality standards.
Notwithstanding WVDEP's views, EPA did not approve WVDEP's attempted changes to 5.1.f. Instead, in a series of letters to WVDEP, EPA explained its concerns that the elimination of the water quality standards language in 5.1.f could cause state law to conflict with federal law and weaken the state's NPDES program. WVDEP's explanations did not assuage EPA's concerns, and EPA did not approve any changes to 5.1.f or to any other language incorporated in Fola's permit. In 2015, the West Virginia Legislature enacted another provision similar to SB 615 that explicitly prohibited enforcing water quality standard violations against permit holders. But again, EPA did not approve the removal of the relevant portion of 5.1.f or any similar changes to the state's NPDES permit program that might affect Fola's permit.
Nevertheless, armed with WVDEP's interpretation of SB 615 and the legislative actions outlined above, Fola urged the district court to hold that permit provision 5.1.f did not prohibit Fola from violating West Virginia water quality standards. Fola further contended that it could not be held accountable for increased conductivity and resulting water quality violations because the effluents it discharged fell within the numerical levels allowed in its permit or were disclosed during the permitting process.
After a bench trial, at which the district court considered mountains of expert testimony, reports, and charts, the court issued a thorough written opinion. The court found that 5.1.f constituted an enforceable permit provision that required Fola to refrain
The court found that mine drainage like that which Fola discharged into Stillhouse Branch deposited significant amounts of ions into the receiving water.
As conductivity in Stillhouse Branch increased, the experts explained and the court found, sensitive insect species, which could not adapt to the sudden and dramatic change, died.
The district court concluded that "when conductivity reaches 300 [μS/cm], it is more likely than not that" the Index score will drop below 68 and "the subject stream will be biologically impaired."
With respect to remedy, the district court, at Fola's urging, rejected the Coalition's proposed remedy as too burdensome. Instead, the court appointed a Special Master of Engineering to monitor Fola's implementation of less burdensome methods Fola proposed. Fola timely noted this appeal.
A court must interpret an NPDES permit as it would a contract.
Fola principally contends that the district court misinterpreted its permit.
In doing so, Fola presents a narrow argument. The company expressly acknowledges that its permit "incorporates" 5.1.f. Reply Br. at 3. Fola admits that "permit holders are not shielded from violations of permit conditions."
Fola offers three points assertedly supporting this argument. First, the company maintains that 5.1.f is ambiguous but is best interpreted as a regulation of the permitting authority, not the permit holder. Second, Fola contends that the district court failed to examine "extrinsic evidence," which it argues eliminates any ambiguity and demonstrates that, in the "contemplation of the parties," 5.1.f clearly imposed no obligation on the permit holder. Finally, Fola claims that our holding and analysis in
We initially examine the language of Fola's permit to determine if it is indeed ambiguous. As we recognized in
Contrary to Fola's assertions, the text of 5.1.f of the permit seems straightforward and unambiguous. The provision prohibits "discharges covered by" the permit from violating water quality standards. Of course, it is the permit holder that generates "discharges covered by" the permit. Thus, the provision controls the activities of the permit holder — here Fola. The state agency simply drafts the permit. That agency, WVDEP, has no control over the permit holder's discharges.
Further, there is no mention in 5.1.f of "regulating," "drafting a permit," or "determining effluent limits," all core activities of the state regulator. Rather, the language of 5.1.f focuses on the discharges themselves. One would have to rewrite 5.1.f substantially to read it as imposing obligations on WVDEP.
Review of the provisions surrounding 5.1.f further supports this conclusion. 5.1.f is contained in a section of the permit entitled "Conditions Applicable to All Permits," and in a subsection entitled "Duty to Comply; Penalties." The first mandate of the subsection states, "The
This subsection then lists several ways a permit holder can violate the permit separate and apart from violations of the permit's effluent limits. For example, under this subsection, a permit holder violates the permit when it "falsifies, tampers with, or knowingly renders inaccurate any monitoring device or method required to be maintained under a WV/NPDES permit."
It seems unlikely that immediately following these clear restrictions on permit holders, in a subsection specifically addressed to permit holders, the drafters inserted in 5.1.f a directive
Accordingly, the district court's conclusion that 5.1.f unambiguously regulates permit holders seems entirely warranted.
Furthermore, rather than supporting Fola's interpretation, all relevant extrinsic evidence points to the conclusion that 5.1.f imposes obligations on the permit holder, not the state permitting agency.
Fola's argument to the contrary relies almost entirely on statements from WVDEP and the West Virginia Legislature. Fola contends that these statements prove that neither body intended 5.1.f to create an obligation on permit holders to meet water quality standards beyond the numerical effluent limits in the permit. The Legislature's 2013 and 2015 amendments and WVDEP's statements certainly evince West Virginia's
And Fola is simply wrong in contending that "[t]here is no evidence that West Virginia
In 2011, two years after the issuance of Fola's current permit, WVDEP pursued an enforcement action against Fola's parent company based on violations of the exact water quality standards at issue here as incorporated into the NPDES permit through 5.1.f.
Fola nonetheless insists that 5.1.f cannot subject it to any substantive obligations because, during the formal rulemaking in which 5.1.f was added to West Virginia's NPDES program, EPA stated that the new rules would not alter any "substantive rights or obligations." Revision of West Virginia's NPDES Program Transferring Authority over Coal Mines and Coal Preparation Plants from the West Virginia Department of Natural Resources; Division of Water Resources to Its Division of Reclamation, 50 Fed. Reg. 2996, 2997 (Jan. 23, 1985). That argument both misreads the history of 5.1.f and ignores important record evidence.
5.1.f's prohibition against violating water quality standards originated in pre-1984 West Virginia surface coal mining regulations.
The origin of 5.1.f renders untenable Fola's reliance on EPA's determination that the consolidated new regulations did not alter "substantive rights or obligations." EPA was correct. The new regulations did
Moreover, although ignored by Fola, EPA's view as to the reach of 5.1.f has been consistent, as has the acceptance by courts of EPA's view when interpreting similar water quality provisions. In contrast to WVDEP's recent change of heart, EPA has remained clear through the years that 5.1.f imposes obligations on permit holders. Before us, EPA has filed an authoritative amicus brief pointing this out and reiterating its position. As EPA notes in its brief, some of the NPDES permits that EPA itself has issued impose narrative water quality standards like those in Fola's permit.
In sum, both the plain language of the provision and the extraneous evidence support the district court's holding that 5.1.f constitutes, as it has for decades, a regulation enforceable against NPDES permit holders, not the state permitting agency.
Finally, Fola argues that our holding in
First, and most fundamentally, Fola misstates our holding in
Fola attempts to bolster its misunderstanding of
In
But this conclusion in
Nothing in
Having rejected Fola's principal contention that 5.1.f imposes no obligations on it, we turn to Fola's remaining argument — that the district court erred in finding that Fola violated 5.1.f.
Through 5.1.f., Fola's permit incorporates narrative water quality standards prohibiting discharges into Stillhouse Branch that are "harmful" or have a "significant adverse impact" on aquatic ecosystems.
In doing so, the experts used the West Virginia Stream Condition Index to determine whether Fola's discharges biologically compromised Stillhouse Branch. Both EPA and WVDEP have long used the Index to measure water quality. When a stream's Index score falls below 68, EPA considers the stream impaired under 33 U.S.C. § 1313(d).
On appeal, Fola makes no contention that the district court erred in finding that Fola's discharges in fact caused or materially contributed to the biological impairment in Stillhouse Branch. And Fola does not argue that narrative water quality standards cannot be enforced; it could not do so given that the Supreme Court has held to the contrary.
Instead, Fola offers brief and largely derivative "process" arguments. A substantial portion of those arguments involve Fola's mischaracterization of the district court's careful and detailed fact-finding. Fola attempts to treat that fact-finding, which of course can only be reversed if clearly erroneous, as "rulemaking" subject to de novo review.
First, Fola maintains that it was deprived of "fair notice" that water quality standards were enforceable provisions of its permit. This assertion rests on Fola's own misinterpretation of the language in its 2009 permit and a studied refusal to acknowledge that language's history, all of which we detail above. Suffice it to say again that, when the Coalition filed this lawsuit in March 2013, Fola had been bound by the 2009 permit at issue here for four years. Moreover, in 2011, two years prior to the commencement of this action, WVDEP brought suit to enforce the water quality standards at issue here against Fola's parent company. And, prior to initiation of this case, Fola's parent company had in fact agreed to take measures to remedy its violations of those water quality standards. Fola thus had ample, personalized notice that the water quality standards in a West Virginia NPDES permit were enforceable, and would be enforced, against a permit holder.
Finally, Fola argues that the district court engaged in unlawful rulemaking. That argument is similarly unsound. Hornbook law defines "a rule" as "a generally applicable principle or standard developed by some authority including administrative authorities." 1 Admin. L. & Prac. § 1:20 (3d ed. 2016). The district court did not create any "generally applicable principle or standard." The court made factual findings based on the evidence presented in this particular case. The only rules for which the court found Fola liable are contained in its permit, specifically §§ 47-30.5.1.f and 47-2-3.2.e and -3.2.i. These rules have long been incorporated into Fola's permit, and EPA has never approved their removal. They remain unchanged and controlling.
We must reject Fola's attempts to transform the district court's detailed fact-finding into rulemaking. After carefully assessing the record before it, the district court found as a fact that that a failing Index score indicated an impaired stream and that Fola's mining caused the increased conductivity that resulted in that impairment. These findings are well supported by the record evidence. None are clearly erroneous.
Some even rest on undisputed facts. For example, EPA has identified, and Fola does not dispute, "mining" as the source of the impairment of Stillhouse Branch.
Despite this historic consensus, Fola argues that WVDEP has recently rejected the Index as a
The district court found that, until 2012, EPA and WVDEP had generally agreed to use an Index score of 68 to determine whether water quality standards were being met. If a stream scored below 68, the stream was to be listed as impaired.
Indeed, Fola concedes that EPA and WVDEP have long used the Index. Neither agency — nor anyone else before this case — suggested that this use required promulgation of a formal rule. Rather, the Index has been used, as the district court used it, as a method for assessing compliance with narrative water quality standards. Far from creating a rule for determining violations of water quality standards, the court simply made a factual determination using the Index as a well-established methodology. Employing this methodology, the district court came to the same conclusion as EPA had — Stillhouse Branch was impaired.
Similarly, contrary to Fola's assertions, the district court's determinations as to conductivity also constituted findings of fact, not rulemaking. The court heard extensive expert testimony on the causal relationship between increased conductivity in Appalachian streams and impairment as evidenced by declining Index scores.
The court noted that peer-reviewed scientific articles first recognized the relationship of mining, conductivity, and decreased Index scores in 2008, a year before
Finally, the relief the district court ordered belies any suggestion that it engaged in rulemaking. The court had the "discretion to determine" appropriate relief.
In sum, Fola's arguments as to why the district court erred in finding that Fola violated its permit, like Fola's arguments as to the permit's reach, uniformly fail.
Accordingly, for the reasons set forth above, the judgment of the district court is
W. Va. Code R. § 47-2-3 (2016).