On March 3, 2015, Aurora Energy Services, LLC and the Alaska Railroad Corp. filed a petition for writ of certiorari asking the United States Supreme Court to resolve a circuit split regarding the scope of the Clean Water Act’s Section 402(k) permit shield defense. Under Section 402(k), “[c]ompliance with a permit issued pursuant to this section [is] deemed compliance” with CWA provisions addressing effluent limitations and their enforcement. 33 U.S.C. § 1342(k). This important provision provides some measure of certainty to CWA permittees by limiting the scope of activities that may subject them to CWA liability.
In September 2014, the Ninth Circuit reversed a district court decision and found the petitioners liable for violating the Clean Water Act (“CWA”) based on coal dust falling from a shore-to-ship conveyor belt at a coastal coal loading facility in Alaska. Alaska Cmty. Action on Toxics v. Aurora Energy Servs., LLC (“ACAT”), 765 F.3d 1169 (9th Cir. 2014). The district court had held that the CWA’s Section 402(k) permit shield protected the petitioners from liability because the coal dust discharges were properly disclosed to the permitting authority and were not strictly prohibited by the Multi-Sector General Permit for industrial stormwater (“MSGP”) under which the coal loading facility operated. 940 F. Supp. 2d 1005 (D. Alaska 2013).
The Ninth Circuit reversed that decision and held that the MSGP did not “shield” the defendants from CWA liability because the falling coal dust was not an authorized “non-stormwater” discharge according to the terms of the permit. While the Ninth Circuit’s 8-page opinion focuses on the particular language of U.S. Environmental Protection Agency’s (“EPA”) 2008 MSGP, similar language appears in most other states’ stormwater general permits (as well as EPA’s new 2013 MSGP). The court’s holding represents a departure from the permit shield doctrine developed by all other circuit courts and has the potential to affect all stormwater permittees. Consequently, the petitioners have asked the Supreme Court to reverse the Ninth Circuit’s decision.
Background
In practice, courts have interpreted the CWA permit shield to protect permittees from enforcement actions based on discharges of substances not listed in their permit, provided the permittee made “adequate disclosures during the application process” of pollutants within the “reasonable contemplation” of the permitting authority.
In Piney Run Pres. Ass’n v. Cnty. Comm’rs (“Piney Run”), 268 F.3d 255 (4th Cir. 2001), the Fourth Circuit established a two-part test for applying the permit shield: “(1) the permit holder complies with the express terms of the permit and with the CWA’s disclosure requirements and (2) the permit holder does not make a discharge of pollutants that was not within the reasonable contemplation of the permitting authority at the time the permit was issued.”
The Sixth Circuit recently extended the CWA’s permit shield defense to general permit holders...
