Environmental – Dominion Energy prevails in Clean Water Act appeal

The Sierra Club sued Dominion Energy under the citizen-suit provision of the Clean Water Act.  Following a bench trial, the district court found that rainwater and groundwater were leaching arsenic from the coal ash in the landfill and settling ponds, polluting the groundwater, which carried the arsenic into navigable waters. And because the court determined that the landfill and settling ponds constituted “point sources” as defined by the Act, it found Dominion liable under the Act. The court affirmed in part, and reversed in part.

Background

For over 60 years, Dominion Energy Virginia operated a coal-fired power plant in Chesapeake, Virginia, that produced coal ash as a by-product of the coal combustion. Through groundwater monitoring that was required by the VDEQ permits, Dominion began in 2002 to detect arsenic in the groundwater at levels that exceeded Virginia’s groundwater quality standards. As required, Dominion notified the VDEQ and began developing and implementing a corrective action plan with the VDEQ to mitigate the pollution.

In March 2015, Sierra Club commenced this action against Dominion under the citizen-suit provision of the Clean Water Act.  Following a bench trial, the district court found that rainwater and groundwater were leaching arsenic from the coal ash in the landfill and settling ponds, polluting the groundwater, which carried the arsenic into navigable waters. And because the court determined that the landfill and settling ponds constituted “point sources” as defined by the Act, it found Dominion liable for ongoing violations of § 1311(a). The court, however, deferred to the VDEQ’s understanding that the two conditions in Dominion’s discharge permit identified in Sierra Club’s complaint did not cover the groundwater contamination at issue and ruled against Sierra Club on the claims alleging breach of those conditions. Dominion appealed, and Sierra Club cross-appealed.

Discharges into groundwater connected to navigable waters

Dominion contends first that the district court erred in concluding that the discharge of pollutants into groundwater that is hydrologically connected to navigable waters is regulated by the Clean Water Act, 33 U.S.C. §§ 1311(a), 1362(12) (prohibiting the “discharge of any pollutant” and defining discharge of a pollutant as the addition of a pollutant “to navigable waters from any point source”). It argues that § 1311(a) only regulates discharges directly into navigable waters, not discharges into groundwater that is connected to navigable waters.

That issue was recently addressed by the court in Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637 (4th Cir. 2018), where we held that the addition of a pollutant into navigable waters via groundwater can violate § 1311(a) if the plaintiff can show “a direct hydrological connection between [the] ground water and navigable waters.” In this case, the district court found as fact that the arsenic from the coal ash was seeping “directly into the groundwater and, from there, directly into the surface water.” As Dominion does not challenge the district court’s factual findings on appeal, we apply Upstate Forever and thus reject Dominion’s argument, affirming the district court on this point.

Point source claim

Dominion also contends that the district court erred in concluding that the landfill and each of the settling ponds constituted a “point source,” as required to find it liable under § 1311(a) of the Clean Water Act.

In addressing the “point source” requirement of the Clean Water Act, the district court was satisfied that the landfill and ponds were point sources because the rainwater and groundwater seeped through the coal ash, leaching arsenic into groundwater and ultimately into navigable waters.

We conclude that while arsenic from the coal ash stored on Dominion’s site was found to have reached navigable waters — having been leached from the coal ash by rainwater and groundwater and ultimately carried by groundwater into navigable waters — that simple causal link does not fulfill the Clean Water Act’s requirement that the discharge be from a point source. Accordingly, we conclude that the court erred in finding that the landfill and ponds were point sources as defined in the Clean Water Act. We thus reverse the district court’s ruling that Dominion violated § 1311(a) of the Clean Water Act.

Sierra Club’s cross appeal

On its cross-appeal, Sierra Club contends that the district court erred in ruling that Dominion did not violate general Conditions II.F and II.R to the Clean Water Act discharge permit issued by the VDEQ.

The district court stated that because the VDEQ “believes that [Dominion’s] permits do not apply to groundwater, and therefore has found no violations,” it was “defer[ring] to the [VDEQ’s] decision finding Dominion in compliance.” While we might have wished for more explanation from the district court in support of its decision to defer, especially since Sierra Club argued that the VDEQ’s position was not supported by the plain language of the permits, we agree with both the VDEQ and Dominion that the subject Conditions must be read in context to give them their appropriate meaning and scope.

Reversed in part, affirmed in part.

Sierra Club v. Va. Elec. & Power Co. (Lawyers Weekly No.  Case No. 001-146-18, 24 pp.) (Niemeyer, J.) No. 17-1895; Sept. 12, 2018; from EDVA at Norfolk (Gibney, J.) Jeffrey A. Lamken for Appellant; Frank S. Holleman III for Appellee. 4th Cir.