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The Fourth Circuit Limits the Clean Water Act’s Permit Shield Defense

The Fourth Circuit ruled last week that applicants for new or reissued Clean Water Act (“CWA”) Section 402 individual permits – known as National Pollutant Discharge Elimination System (“NPDES”) permits – must consider the absence or presence of some 135 substances before the applicants can be shielded from liability for the presence of these substances in the permitted discharges. See Southern Appalachian Mtn. Stewards, et al. v. A & G Coal Corp. (“SAMS”), App. No. 13-2050, slip op. at 10 (4th Cir. July 11, 2014). The Fourth Circuit’s decision has ramifications for all CWA individual permit applicants. 

The SAMS decision clarifies that a discharger must declare its belief that each pollutant listed in the application form is either present or absent, and may not rely on a lack of relevant knowledge and remain silent. In the past, some dischargers have declared ignorance and declined to opine whether a pollutant is present or absent. Under SAMS, those dischargers can no longer invoke the permit shield protection in agency enforcement or citizen suits if those pollutants are in fact present in discharge.


The CWA “permit shield” provision states that “[c]ompliance with a permit issued pursuant to this section shall be deemed compliance” with CWA provisions addressing effluent limitations and their enforcement. 33 U.S.C. § 1342(k). In practice, courts have interpreted the 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” and those pollutants were within the “reasonable contemplation” of the permitting authority.

This interpretation developed out of a 1998 determination by the U.S. Environmental Protection Agency’s (“EPA”) Environmental Appeals Board (“EAB”) in which the EAB held that “when the permittee has made adequate disclosures during the application process regarding the nature of its discharges, unlisted pollutants may be considered to be within the scope of the NPDES permit, even though the permit does not expressly mention those pollutants.” Ketchikan Pulp Co., 7 E.A.D. 605, 621 (EAB 1998) (emphasis added). The Fourth Circuit incorporated that holding into its 2001 decision in Piney Run Pres. Ass’n v. Cnty. Comm’rs (“Piney Run”), the guiding case for permit shield matters. 268 F.3d 255 (4th Cir. 2001). The Piney Run court established a two-part test that, if met, would shield a permit holder from liability: “(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.” Id. at 259. In SAMS, the Fourth Circuit’s reliance on the language of EPA’s permit application form as opposed to the language of the Agency’s regulations redefines this seminal test.

The Fourth Circuit’s Ruling in SAMS

In SAMS, several environmental organizations sued A&G Coal Corp. (“A&G”) for discharging selenium from its surface runoff holding ponds. Selenium is one of the pollutants for which EPA’s regulations require an NPDES applicant to “indicate whether it knows or has reason to believe . . .” is present in its discharge. 40 C.F.R. § 122.21(g)(7)(vi) & (vii). The EPA permit application form, however, goes further, requiring that an applicant state either that it believes the pollutant to be present or absent from its discharge. A&G’s application left both of those questions blank, and the permit issued by the State of Virginia neither discussed selenium nor identified it as a regulated (or unregulated) parameter.

A&G argued that because it had no reason to believe selenium would be in its effluent, it had met its disclosure duty despite its failure to specifically flag selenium. The Fourth Circuit disagreed and held that not mentioning selenium, even where A&G had no reason to expect its presence, was an inadequate disclosure. Instead, the court said that A&G needed to state affirmatively whether selenium was “believed present” or “believed absent” in its permit application to invoke the permit shield. “Silence as to the existence of a referenced pollutant is not adequate.” SAMS, slip op. at 14-15.

What This Case Means For CWA Permittees

The Fourth Circuit recognized that its holding places a burden on applicants to declare the presence or absence of some 135 substances, but concluded that it was not “too high a price to pay for the significant protections of the permit shield.” SAMS, slip op. at 18. That price consists of quantitative or qualitative analysis of one’s effluent that is sufficient to support a belief about the presence or absence of each of the 135 listed substances for which data are not already available. While this might or might not be an unreasonable obligation if imposed by regulation, it is troubling that the court imposes it solely on the basis of EPA’s permit application form, a sub-regulatory interpretation – some might say “expansion” – of the operative regulatory requirements that appear at 40 C.F.R. § 122.21(g)(7)(vi) & (vii). In addition, the court’s rationale may extend beyond the 135 substances discussed in SAMS to other substances listed in the different parts of EPA’s permit application regulations, because those regulations use the identical “must indicate whether it knows or has reason to believe” language that underpins the Fourth Circuit’s holding. See 40 C.F.R. Part 122, App. D, Tables IV and V.

While the SAMS decision deals only with facility-specific individual permits for the discharge of wastewater, environmental organizations are already attempting to expand these strictures into the stormwater context, where general permitting prevails. (EPA’s amicus brief in SAMS has been filed by Sierra Club in a pending stormwater permit appeal in the Sixth Circuit as supplemental authority (Sierra Club v. ICG Hazard, LLC, Case No. 13-5086).) This attempted extension of the SAMS ruling is particularly noteworthy because, unlike the process of applying for individual permits, dischargers do not have the same opportunity or obligation to specifically list potential pollutants when applying for the general permits. Losing permit shield protection for the discharge of incidental pollutants in stormwater could expose permittees to untold liability and largely vitiate the CWA’s permit shield protection for the majority of NPDES permit holders.

© 2021 Beveridge & Diamond PC National Law Review, Volume IV, Number 197

About this Author

Richard S. Davis Clean Water Act Attorney Beveridge & Diamond Washington, DC

Richard uses his 40 years of Clean Water Act experience to find cost-effective solutions for the complex regulatory challenges that his business clients face.

Since joining Beveridge & Diamond in 1981, Richard has practiced almost exclusively under the federal Clean Water Act and its state analogues, chairing or co-chairing the firm’s Clean Water Practice Group for more than 15 years, and helping direct one of the nation’s most innovative and dynamic clean water practices.

Richard has represented individual industrial dischargers and industry groups, as well as local...

Mackenzie S. Schoonmaker Environmental Litigation Attorney Beveridge & Diamond New York, NY

Mackenzie’s practice includes both litigation and regulatory matters arising under FIFRA, the Clean Water Act, and related environmental laws.

She is passionate about conserving air, water, wildlife, and land for future generations, and enjoys helping clients navigate and enforce the detailed framework of environmental law because she believes compliance is key to preventing adverse impacts to the environment.

Mackenzie is a co-chair of Beveridge & Diamond’s Industrial Hemp & Cannabis industry team. She advises clients, and regularly writes and presents, on federal...