Citizen Suit Watch: Buyer Beware: Purchasing Property That Has Once Been Mined Could Cost You A Clean Water Act Citizen Suit

The U.S. District Court for the Southern District of West Virginia has sanctioned a novel legal theory of Clean Water Act liability, holding that a landowner who has never operated or owned a mine nevertheless may be responsible for discharges from old mining operations on his property. In Ohio Valley Environmental Coalition Inc. v. Hernshaw Partners, LLC, No. 2:13-cv-14951, -- F. Supp. 2d --, 2013 WL 6225130 (S.D. W. Va. Dec. 2, 2013), the court ruled that the owner could be held liable for ongoing unpermitted discharges from an inactive valley fill, despite the fact that the owner had not owned, operated, or profited from mining and had only purchased the surface rights to the property after the state regulatory agency had released the surface mining bond, which certified that the property had been reclaimed in accordance with the Surface Mining Control and Reclamation Act.

December 2, 2013

In a case involving a novel theory of Clean Water Act liability, several environmental citizen groups sued a corporation that owned land in the southern West Virginia coalfields that had previously been used for coal mining and contained an old valley fill. The plaintiffs alleged that, although mining had not taken place for 14 years, the inactive valley fill still discharges selenium without a permit in violation of the Act. The owner moved to dismiss the case for failure to state a claim under Rule 12(b)(6), arguing that the Clean Water Act did not authorize citizen suits in cases where the activity that caused the discharge had long since stopped. 

The owner also argued that it also should not be held liable for equitable reasons—it had never owned or operated the mine and had not profited from mining. The U.S. District Court for the Southern District of West Virginia denied that motion, holding, inter alia, that even though the coal mine was not operating, the owner could still violate the Clean Water Act if "'a reasonable trier of fact could find a continuing likelihood of a recurrence in intermittent or sporadic violations [of the Act].'" Ohio Valley Envtl. Coal, Inc. v. Hernshaw Partners, LLC, No. 2:13-cv-14951, -- F. Supp. 2d --, 2013 WL 6225130 (S.D. W. Va. Dec. 2, 2013) (quoting Chesapeake Bay Found., Inc. v. Gwaltney of Smithfield, Ltd., 890 F.2d 690, 693 (4th Cir. 1989)).

Background

In one of a series of cases filed in West Virginia federal court in 2013, several environmental citizen groups filed suit against the corporate owner of land in southern West Virginia that was once used for coal mining and that contained an old valley fill in an unnamed tributary of Laurel Fork of Ben Creek of Tug Fork. The defendant landowner had purchased the surface rights to that land 14 years after mining had ceased and almost nine years after the West Virginia Department of Environmental Protection had released the mining reclamation bond pursuant to the Surface Mining Control and Reclamation Act (SMCRA). The owner had never owned or operated the mine, or profited from it in any way. In fact, it had not even used the land prior to suit. 

Plaintiffs alleged that the inactive valley fill discharges pollutants into an unnamed tributary of Laurel Fork, including selenium, at levels that violate the Clean Water Act. Plaintiffs based that allegation on a water sample taken in February 2013 that detected elevated levels of selenium less than one mile downstream of the defendant's valley fill. Plaintiffs also alleged that there are no other sources of selenium in the stream. Plaintiffs seek a declaratory judgment, injunctive relief, and civil penalties up to $37,500 per day for each Clean Water Act violation.

The District Court's Decision

The landowner filed a motion to dismiss under Rule 12(b)(6), arguing, inter alia, that the Clean Water Act did not authorize citizen suits in cases where the activity that caused the discharge had long since stopped. The owner also argued that it should not be held liable for equitable reasons—it had never owned or operated the mine and had not profited from mining. The court denied the motion, holding that plaintiffs had sufficiently alleged that the defendant had: (1) discharged (2) a pollutant (3) into navigable waters (4) from a point source (5) without a permit and (6) that the alleged violations are ongoing and not wholly in the past.¹ 

Most significantly, although the defendant argued that the selenium discharges are not ongoing because the valley fill construction stopped 14 years ago, the court held that the defendant could be in violation of the Clean Water Act even though the activities that caused the violations have totally ceased. In deciding that unsettled issue,² the court relied upon the Fourth's Circuit's declaration that "'[e]ach day the pollutant remains in the wetlands without a permit constitutes an additional day of violation.'" Ohio Valley Envtl. Coal, Inc. v. Hernshaw Partners, LLC, 2013 WL 6225130, at *6-7 (quoting Sasser v. Adm'r U.S.E.P.A., 990 F.2d 127, 129 (4th Cir. 1993)).³ The court also was persuaded by Justice Scalia's concurrence in Gwaltney, in which he argued that the statute's language, which uses the phrase "to be in violation" rather than "to be violating" or "to have committed a violation," suggests a state rather than an act and therefore means that a company that has violated a standard remains in violation until it eliminates the root cause of that violation. Id. at *6 (citing Gwaltney, 484 U.S. at 69 (Scalia, J., concurring)). Moreover, the court was persuaded by the public policy rationale adopted in an unpublished Middle District of North Carolina case, which reasoned that violators whose conduct had ceased, but whose damage remained, would have a powerful incentive to conceal their activities from the public if past activities could be shielded from liability under the Act. Id. at *7 (citing N.C. Wildlife Fed'n v. Woodbury, No. 87-584-CIV-5, 1989 WL 106517, at *1-2 (E.D.N.C. Apr. 25, 1989)).

The court then went on to address the other elements necessary for a Clean Water Act violation, holding that the old valley fill constituted a point source, even though the defendants argued that any discharge from the valley fill constituted groundwater runoff from a nonpoint source. The court concluded that a valley fill was a point source based on a Fifth Circuit decision holding that mining overburden may qualify as a point source so long as pollutants were discharged from a "'discernible, confined, and discrete conveyance'" — like the toe of the valley fill in this case where water percolates and discharges into the unnamed tributary. Id. at *8 (citing Sierra Club v. Abston Constr. Co., Inc., 620 F.2d 41, 45 (5th Cir. 1980)). "Unlike collected rainfall runoff," the court explained, "water discharged from the toe of a valley fill is easily ascribed to a single source: the valley fill." Id. The court further determined that that tributary was a navigable water as defined by the Act. Id. at *9.

Finally, the court was unmoved by the landowner's "clean hands" or "innocent landowner" defense. The defendant contended that it should not be liable under the Clean Water Act because it was not responsible for and received no benefits from the valley fill or mining activities; instead, it was merely a passive landowner that had purchased the property many years after it had been mined and the reclamation bond released. But the court held that landowners are always liable for discharges, even in the case of inactive mines, citing the Fourth Circuit's decision in the State of West Virginia's recent bond forfeiture appeal. In that case, the court of appeals held that the West Virginia Department of Environmental Protection had to obtain discharge permits for discharges that it did not cause, but which emanated from lands which the state was attempting to reclaim (and for which the mining operator had forfeited its reclamation bond). Id. at * 9 (discussing W. Va. Highlands Conservancy, Inc. v. Huffman, 625 F.3d 159, 167-68 (4th Cir. 2010)). The Fourth Circuit held that there was no causation requirement in the Act and so "water is indifferent about who initially polluted it so long as pollution continues to occur." W. Va. Highlands Conservancy, 625 F.3d at 167. Therefore, the district court found the defendant's arguments about its lack of responsibility for the discharges irrelevant. The court denied the motion to dismiss, and granted plaintiffs' motion to amend the complaint.

Implications

This case signals the advent of a new strategy by plaintiff environmental groups, which they describe as targeting the "full life cycle" of mining.  This strategy, if ultimately successful, may have numerous consequences for mine operators and landowners. State regulatory agencies may be increasingly reluctant to release surface mining bonds before all water discharges have been remediated to avoid passing that liability to the landowner. Real estate in the coalfields may become harder to sell, as buyers are more reluctant to purchase lands upon which mining was once conducted. Although this strategy has to date been pursued in West Virginia only against corporate land owners, it also could have costly consequences for private individuals and public land agencies. 

Finally, this case highlights a very real conflict between the concept of reclamation under SMCRA and continuing liability under the Clean Water Act, raising the question of what release of a surface mining reclamation bond really means for landowners and mine operators alike.

To read a copy of the court's decision, click here.

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¹ The defendant did not dispute that selenium is a pollutant and that it does not have a discharge permit.

² As the district court noted, the lower courts disagree as to whether citizen suits may challenge ongoing or intermittent discharges arising solely from past activities. See Ohio Valley Envtl. Coal, Inc. v. Hernshaw Partners, LLC, 2013 WL 6225130, at *6 (citing cases). The Supreme Court also has not provided any guidance on this issue. In Gwaltney of Smithfield v. Chesapeake Bay Foundation, 484 U.S. 49, 60-61 (1987), the Court held that citizen suits under the Clean Water Act must be based on conduct that is ongoing or intermittent, not "wholly past," but did not address whether discharges from past activities are "ongoing" when, although the activities that caused the violation have ceased, the effects remain.

³ District courts in Georgia, Florida, Indiana, North Carolina, and Texas have reached similar conclusions. See Ohio Valley Envtl. Coal, Inc. v. Hernshaw Partners, LLC, 2013 WL 6225130, at *7 (citing cases).

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