The Sixth Circuit Extends the Clean Water Act’s Permit Shield Defense to General Permit Holders

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The Sixth 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 – may avail themselves of the CWA’s permit shield provision, 33 U.S.C. § 1342(k), which “insulates permit holders from liability for certain discharges of pollutants that the permit does not explicitly mention.”  See Sierra Club v. ICG Hazard, LLC, App. No. 13-5086, Slip Op. at 6 (6th Cir. Jan. 27, 2015).  This is the first circuit court decision to address “the applicability and scope of the permit shield when the discharger’s operations are governed by a general permit.”  By extending the permit shield defense to general permit holders, the Sixth Circuit has closed the back door to plaintiffs wishing to litigate the propriety of government-authorized discharge limitations applicable to large classes of industrial and municipal operators nationwide.


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.” 

In recent decisions, courts have limited the application of the permit shield doctrine in the context of individual NPDES permits.  As noted in our earlier article regarding a 2014 decision by the Fourth Circuit, Sierra Club attempted to use those decisions in the ICG Hazard case to eviscerate the permit shield defense for general permit holders.  This attempt raised concerns 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,” which would make meeting the disclosure requirement in the Piney Run test nearly impossible.

The Sixth Circuit’s Ruling in ICG Hazard

The plaintiff, Sierra Club, sued ICG Hazard, the operator of a Kentucky coal mine, for discharging selenium at concentrations that exceeded the state’s water quality standards.  ICG Hazard held a valid five-year Coal General Permit issued by the Kentucky Division of Water.  ICG Hazard had provided a “one-time” selenium sample as required by the general permit, but the permit did not limit selenium discharges.  Agreeing with the district court, the Sixth Circuit rejected Sierra Club’s argument that the Piney Run permit shield test should not apply in the context of general permits and held that the EAB’s reasoning in Ketchikan applies “with even more force when dealing with general permits” where “the permitting authority would not only need to identify the many pollutants that a single polluter could discharge, but all of the pollutants and combinations of pollutants that could be discharged by all polluters that may later fall under the general permit.” 

In applying the Piney Run test, the Sixth Circuit focused on the “reasonable contemplation” prong and acknowledged that permitting authorities cannot contemplate “each specific facility’s discharges” under a general permit because the agency cannot know “which specific facilities will seek coverage.”  Nevertheless, the Court held that “the authority can contemplate the pollutants that may be discharged generally from polluters that may later be covered” and “can then set effluent limitations” as necessary (emphasis added).  This is where the distinction between individual and general permits is critical.  The Court observed: “a larger share of the responsibility for the information gathering process leading up to the development of a general permit falls on the permitting authority rather than on the permit applicants.”  Thus, “by virtue of being deemed eligible for a general permit,” Kentucky has determined “that it can properly regulate a class of dischargers without detailed information about individual discharges” and “if a general permit is insufficient in some respect, the complaint should be directed at the permitting authority.”  Id. (quoting the district court opinion, Sierra Club v. ICG Hazard, LLC, Civ. No. 11-148 (E.D. Ky. Sept. 28, 2012)).

Implications for CWA Permittees

Though it marks the first Circuit Court decision on the issue, the Sixth Circuit relied heavily on established case law and EPA’s own enduring policy statements in concluding that the CWA “impos[es] the same requirements on polluters under general permits as under individual permits” for purposes of the permit shield analysis.  Those requirements include the duty to make disclosures to the agency according to the permit application, the permit itself, or agency monitoring requests.  In ICG Hazard, the Sixth Circuit placed particular emphasis on the fact that Kentucky’s general permit contained a provision that “recognized the possibility that any of the mines under its purview may discharge selenium” and required applicants to provide a one-time sample of their discharge during the life of the permit.  Relying on applicant monitoring, according to the Sixth Circuit, is consistent with EPA’s determination with respect to all NPDES permits that “the goals of the CWA may be more effectively achieved by focusing on the chief pollutants . . . disclosed by permittees in their permit applications, rather than by attempting to identify the hundreds or thousands of pollutants potentially present in permittees’ wastestreams.”  Id. at 9 (quoting Ketchikan, 7 E.A.D. at 618-19).

The Sixth Circuit’s conclusion is the result of applying Chevron deference, Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984), to EPA’s regulatory interpretation of the CWA.  But agency interpretation can change and, as pointed out in the dissenting opinion in ICG Hazard, the agency interpretation in this case is now over three decades old.  Still, EPA has shown no recent appetite for revising its position and general permit holders should instead remain focused on complying strictly with the application and disclosure requirements imposed by their respective permitting authorities.

Beveridge & Diamond develops creative, strategically tailored solutions to challenges posed by the nation’s clean water laws.  For more information regarding the impact of the Sixth Circuit case, the applicability of the permit shield defense or CWA issues more broadly, please contact Richard Davis (202.789.6025, [email protected]), Mackenzie Schoonmaker (212.702.5415, [email protected]), Steve Sarno (415.262.4015, [email protected]), or any member of our Water Quality & Infrastructure Practice.