Type: Law Bulletins
Date: 03/16/2015

Sixth Circuit Rules Clean Water Act's Permit Shield Can Protect General Permit Holders From Liability

The 6th Circuit recently ruled that facilities holding a Clean Water Act (“CWA”) Section 402 general permit — one of two types of National Pollutant Discharge Elimination System (“NPDES”) permits — can use the CWA’s “permit shield” provision (33 U.S.C. § 1342(k)) to protect themselves from liability for certain discharges of pollutants that the general permit does not mention. See Sierra Club v. ICG Hazard, LLC, App. No. 13-5086 (6th Cir. Jan. 27, 2015). The ICG Hazard decision is important because it is the first circuit court decision that applies the permit shield provision to NPDES general permits. While ICG Hazard provides clarity regarding the applicability of the permit shield to general permits, decisions from some courts outside of the 6th Circuit indicate that there is still some disagreement regarding the scope of the permit shield provision.

Background on NPDES Permits

Under the NPDES, a permitting authority may issue a permit allowing a permit holder to discharge specific pollutants that are specified in the permit, subject to certain limitations delineated within the permit. A permitting authority can issue either individual permits or general permits. While an individual permit applies to one specific discharger, a general permit covers entire categories of dischargers within a geographic area. The general permit allows permit holders to operate under the general terms and conditions of the general permit, which allows permit holders to discharge substances within certain limitations if those substances are specified in the general permit. Since a general permit has predetermined conditions, it is a faster and easier permit for dischargers to obtain because it allows permit holders to avoid the sampling and analysis associated with individual permit applications.

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). Courts have interpreted the permit shield to protect permit holders from liability for discharges of substances not listed in their permit in certain circumstances. In ICG Hazard, the court stated that the “purpose of the shield is to insulate permit holders from changes in various regulations during the period of a permit and to relieve them of having to litigate in an enforcement action the question whether their permits are sufficiently strict.”

The ICG Hazard Case

In ICG Hazard, Sierra Club sued ICG Hazard, the operator of a Kentucky coal mine, for discharging selenium at concentrations that exceeded Kentucky’s water quality standards. ICG Hazard held a general permit issued by the Kentucky Division of Water (“KDOW”). The general permit allowed ICG Hazard to discharge certain listed pollutants into Kentucky’s waters and included effluent limitations for several specific pollutants. The general permit did not contain a limitation on selenium. However, the KDOW was aware of the potential for selenium discharges from mines in the area. ICG Hazard provided KDOW a “one-time” selenium sample as required by the general permit, but the permit did not limit selenium discharges.

Sierra Club argued that the permit shield should not apply in the context of general permits because the “discharge of selenium was neither expressly authorized by the general permit nor reasonable contemplated by KDOW when it issued the permit.” The 6th Circuit rejected Sierra Club’s argument. First, the court determined that the permit shield applies in the context of general permits. Looking to the EPA’s previous interpretations of the CWA and the NPDES permitting scheme, the court stated that there is no indication that the EPA intended to eliminate the permit shield in the context of a general permit. Next, the court considered the scope of the permit shield that applied to ICG Hazard’s permit. The court applied the two-prong test from Piney Run Pres. Ass’n v. Cnty. Comm’rs, 268 F.3d 255 (4th Cir. 2001)(“Piney Run”) to determine the scope of the permit shield. The two-pronged Piney Run test considered by the court is (1) whether the polluter complied with the CWA’s reporting and disclosure requirements and (2) whether the discharges were within the permitting authority’s “reasonable contemplation.” The court determined that the first prong was easily met because ICG Hazard disclosed the selenium discharge to KDOW. The court also determined that the second prong of the Piney Run test was satisfied. The court determined that the discharge of selenium was within KDOW’s reasonable contemplation because KDOW knew that mines in the area could produce selenium when it issued the general permit. The court stated that “KDOW considered the possibility” of selenium discharge and “included a one-time monitoring requirement as a condition of coverage under the general permit.” The court found that ICG Hazard met the monitoring requirement of the permit and concluded that the permit shield covered ICG Hazard’s discharge of selenium.

Differing Opinions Regarding the Scope of the Permit Shield

Although the ICG Hazard court extended the permit shield to general permits, some courts have refused to do the same. The 9th Circuit recently held that the permit shield could not be applied to protect the holder of a general permit from liability. Alaska Community Action on Toxics (ACAT) v. Aurora Energy Services, LLC, 765 F.3d 1169 (9th Cir. 2014) (“Aurora Energy”). In Aurora Energy, a citizens group sued Aurora Energy, the holder of a general permit, for allegedly discharging coal into a bay in Alaska. Aurora Energy claimed that it was protected under the permit shield provision because the general permit did not specifically prohibit the discharge of coal and the discharges were adequately disclosed to the permitting authority. The 9th Circuit court held that the permit shield provision did not apply. In reaching this conclusion, the 9th Circuit relied on a blanket prohibition in the general permit that prohibited “non-stormwater” discharges. The court considered coal a “non-stormwater discharge” and concluded that the permit shield did not apply because the express terms of the general permit prohibited the discharge of coal. On March 2, 2015, Aurora Energy appealed the 9th Circuit’s decision to the United States Supreme Court, arguing that the “Ninth Circuit’s decision… overrides the permitting agency’s decision, and nullifies the permit shield.” It remains to be seen whether the Supreme Court will consider Aurora Energy’s appeal.

On the same day the ICG Hazard decision was issued, the U.S. District Court for the Southern District of West Virginia held that the permit shield did not apply for a holder of a general permit. In Ohio Valley Environmental Coalition, Inc. v. Fola Coal Co., LLC, No. 2:13-5006 (S.D.W.V. Jan. 27, 2015) (“Fola Coal”), a coal company was sued under the CWA for discharging excessive amounts of conductivity and sulfates. The coal company claimed that it should be protected from liability under the permit shield because its general permit did not contain a specific limit on the concentration of conductivity or sulfates. The Fola Coal court held that the absence of a specific effluent limitation for conductivity or sulfates in the general permit did not shield the coal company from liability. The court determined that the coal company was required to comply with West Virginia’s numeric and narrative water quality standards (which were incorporated into the general permit by reference) even though the general permit did not contain a specific limit on the concentration of conductivity or sulfates. Fola Coal plans to appeal the trial court’s decision to the 4th Circuit Court of Appeals.


ICG Hazard is important because it is the first circuit court decision that extends the permit shield defense to general permits. However, the court’s conclusion was based largely on the facts of the case and the particular language of the KDOW’s general permit. The Aurora Energy and Fola Coal cases show that some courts may find that generic language within a general permit can make the permit holder liable for discharges of certain pollutants even though these pollutants are not specifically delineated in the general permit. While the ICG Hazard decision should provide some comfort to general permit holders that the permit shield may be applied, it is important for permit holders to strictly comply with all requirements of the permitting authority and conditions of their general permits.

For more information on this decision, please contact any member of Taft’s Environmental practice group.

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