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Environmental & Toxic Tort Law Bulletin - Spring 2015



Sixth Circuit Extends Clean Water Act Permit Shield to Discharges Under General Permit

In January, the United States Court of Appeals for the Sixth Circuit held that the Clean Water Act "Permit Shield," 33 U.S.C.A. ยง 1342(k), protected a coal mine from liability based on discharges of selenium despite the fact that selenium was not included as a pollutant in the general permit authorizing discharges from the mine. See Sierra Club v. ICG Hazard, LLC, 2015 WL 643382 (6th Cir. Jan. 27, 2015). The Sixth Circuit was the first circuit to consider the scope of the Permit Shield when the operations are governed by a general, rather than individual, NPDES permit. The court found that under the test articulated in Piney Run Preservation Association v. County Commissioners of Carroll County., 268 F. 3d 255 (4th Cir. 2001), used by Courts to determine applicability of the Permit Shield to discharges of pollutants not specifically addressed in an individual NPDES permit, the company had complied with its disclosure requirements by disclosing the selenium discharge when it requested modification of its permit and the discharges were within the "reasonable contemplation" of the permitting agency when the permit was issued thereby exempting the permittee from liability. ICG Hazard, 2015 WL 643382 at *7.

In so holding, the Sixth Circuit relied upon case law addressing the scope of the Permit Shield under individual permits noting that "the only significant difference between an individual permit and a general permit is that a larger share of the responsibility for the information gathering process leading up to the development of a general permit falls on the permitting authority rather than on the permit applicants." Id. at *8 (internal punctuation and citations omitted). Therefore, according to the Court, "It follows that an individual polluter should not be liable when it meets the disclosure requirements for a particular pollutant and the discharge of the pollutant at issue was within the authority's reasonable contemplation at the time the general permit was issued." Id. The Sixth Circuit thereby affirmed the district court's grant of summary judgment in favor of the coal mining company.


Additional Items of Interest

Civil Enforcement

Continental Carbon Company Settles Clean Air Act Violations at Facilities in Alabama, Oklahoma, and Texas

On March 23, EPA announced a settlement with Continental Carbon Company to resolve violations of the Clean Air Act at carbon black manufacturing facilities in Alabama, Oklahoma, and Texas based on modifications that resulted in excess sulfur dioxide and nitrogen oxide emissions. As part of the settlement, the company will pay a civil penalty of $650,000, spend $550,000 on environmental projects, and install pollution control technology to cut plant emissions. Continental Carbon's Alabama facility is located in Phenix City. Information on the settlement may be found on the EPA website at http://www2.epa.gov/enforcement/continental-carbon-company-clean-air-act-settlement.

Criminal Enforcement

Co-Conspirators Sentenced to Prison and Ordered to Pay $10.3 Million in Restitution for Illegal Asbestos Removal

Defendants Mark Sawyer, Newell Lynn Smith, Eric Gruenberg, and Milo DiSanti, all of A&E Salvage, pled guilty in federal court in Tennessee to one felony count of conspiracy to violate the Clean Air Act work practice standards for removal and disposal of asbestos as a result of a multi-year scheme in which asbestos was removed and disposed of improperly without providing workers with the necessary protective equipment. In January, they were sentenced to prison terms of up to five years and ordered to pay $10.3 million in restitution to the EPA Superfund, which was used to clean up the contamination at the former Liberty Fibers Plant in Hamblen County, Tennessee. The sentence was based on testimony that the exposures of workers to asbestos resulted in a substantial likelihood of death or serious bodily injury.


South Carolina Business Owner to Serve 73 Months for Bank Fraud and RCRA Violations

South Carolina Business Owner, Nancy Marie Stein, was sentenced to concurrent sentences of 73 months for bank fraud and 60 months for Resource Conservation and Recovery Act (RCRA) violations as a result of her involvement in a scheme to defraud financial institutions into issuing loans to her company, American Screw and Rivet Corporation, and improper storage of thousands of gallons manufacturing wastes. Stein was also ordered to pay $17,692,974 in restitution. American Screw and Rivet Corporation was also placed on probation for 5 years and ordered to pay restitution.


Court Decisions

New Jersey Supreme Court Holds No Statute of Limitations for Contribution Actions

On January 26, 2015, the New Jersey Supreme Court held that contribution actions under the state equivalent of CERCLA are not subject to any statute of limitations defense. The decision was based on the plain language of the statute which includes no provision regarding statute of limitations and restricts defenses available to acts of war, sabotage, or God. See Morristown Associates v. Grant Oil Co., No. A-38-13, 2015 WL 303629 (N.J. Jan. 26, 2015).


Alaska Companies Seek Supreme Court Review of Scope of CWA Permit Shield

Following the Ninth Circuit's decision in August 2014 holding that non-stormwater discharges of coal were not governed by the general permit and, therefore, the discharges were prohibited, two Alaska companies - Aurora Energy Services, LLC and Alaska Railroad Corp. filed a petition for writ of certiorari to the U.S. Supreme Court. The question submitted to the Court in the March 2, 2015 petition for review is, "Does the statutory permit shield protect a permittee from liability under the Clean Water Act for a discharge where the permitting authority was aware of the discharge at the time it approved the permit, and did not include any specific prohibition or limitation on the discharge in the permit?" According to the petitioners, the Ninth Circuit's holding is in conflict with decisions from the Second, Fourth, Sixth, and Seventh Circuits, which have held that the permit shield protects a compliant permittee from liability from any discharge known to the permitting authority at the time the permit issued. See Alaska Community Action on Toxics v. Aurora Energy Services, LLC, 765 F.3d 1169 (9th Cir. 2014); Aurora Energy Services, LLC v. Alaska Community Action on Toxics, Petition for a Writ of Certiorari, 2015 WL 883020 (March 2, 2015).


Agency News

EPA Proposes Amendments to National Contingency Plan

In January, EPA announced proposed amendments to Subpart J of the National Oil and Hazardous Substances Pollution Contingency Plan "to incorporate scientific advances and lessons learned from the Deepwater Horizon Oil Spill." The amendments seek to ensure that dispersants and other chemical and biological agents used to respond to oil spills meet efficacy and toxicity requirements and manufacturers provide key use and safety information. A copy of the proposed rule is available at https://www.federalregister.gov.


Alabama Communities Receive EPA Technical Assistance Grants

On January 27, EPA announced that Mobile, Alabama and Prichard, Alabama will receive technical assistance through the Building Blocks for Sustainable Communities program. EPA staff and other national experts will conduct one to two-day workshops in each city focusing on flood resilience and improving economic conditions and quality of life. More information regarding the Building Blocks for Sustainable Communities Program is available at http://www.epa.gov/smartgrowth/buildingblocks.htm.


Department of the Interior Announces Fracking Rules

In March, the U.S. Department of the Interior Bureau of Land Management announced final rules for the regulation of hydraulic fracturing on federal lands. The rules, which require disclosure of the chemicals used in the hydraulic fracturing process, will cover approximately 100,000 wells. A copy of the regulations is available at http://www.blm.gov.


EPA Issues Final Regulations for Coal Combustion Residuals

On December 19, 2014, EPA issued a final rule titled "The Disposal of Coal Combustion Residuals from Electric Utilities" which regulates coal combustion residuals (CCRs), which are byproducts of the combustion of coal at power plants, as nonhazardous waste under Subtitle D of the Resource Conservation and Recovery Act (RCRA). The rule, which was published in the Federal Register on April 17, 2015, provides technical requirements for disposal of CCRs including restrictions on locations, structural integrity, groundwater monitoring, and closure requirements. A copy of the final rule is available at http://www.gpo.gov/fdsys/pkg/FR-2015-04-17/pdf/2015-00257.pdf.