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Red River Coal Company, Inc. v. The Sierra Club

United States District Court, W.D. Virginia, Big Stone Gap Division

January 19, 2018


          Brooks M. Smith, Troutman Sanders LLP, Richmond, Virginia, for Red River Coal Company, Inc.; Peter M. Morgan, Denver, Colorado, Evan D. Johns, Appalachian Mountain Advocates, Charlottesville, Virginia, and J. Michael Becher, Appalachian Mountain Advocates, Lewisburg, West Virginia, for Southern Appalachian Mountain Stewards, Appalachian Voices, and Sierra Club.


          James P. Jones, United States District Judge

         These two related cases involve the Clean Water Act (“the CWA”) and the Surface Mining Control and Reclamation Act (“SMCRA”). Southern Appalachian Mountain Stewards, Appalachian Voices, and The Sierra Club (collectively, “SAMS”) notified Red River Coal Company, Inc. (“Red River”) that SAMS intended to file a citizen suit against Red River alleging violations of the CWA and SMCRA. Red River then filed a declaratory judgment action, Case No. 2:17CV00021, seeking a declaration that it was not violating the CWA and SMCRA, as well as injunctive relief against SAMS. After the expiration of the 60-day statutory notice period, SAMS filed its citizen suit, Case No. 2:17CV00028.

         Each party has moved to dismiss the other's lawsuit. Red River contends that this court lacks subject-matter jurisdiction over SAMS's citizen suit and that SAMS has failed to state a claim upon which relief can be granted. SAMS argues that this court lacks subject-matter jurisdiction over the declaratory judgment action and alternatively urges the court to decline to exercise its jurisdiction. Both motions have been fully briefed and are ripe for decision.[1] For the reasons that follow, I will deny Red River's Motion to Dismiss the citizen suit for lack of subject matter jurisdiction and also deny Red River's Motion to Dismiss the citizen suit for failure to state a claim, except as to one aspect of SAMS's Complaint that I conclude is barred by res judicata. I find that this court does have subject-matter jurisdiction over the declaratory judgment action, and in my discretion, I will exercise the court's jurisdiction and deny SAMS's Motion to Dismiss that action.

         I. SAMS's Citizen Suit.

         A. Facts.

         The following facts are drawn from the Complaint in Case No. 2:17CV00028 and the exhibits filed by Red River in support of its motion to dismiss for lack of subject-matter jurisdiction.

         SAMS alleges that Red River, which operates a surface coal mine called the North Fox Gap Surface Mine (“Mine”), is discharging pollutants without permit authorization in violation of the CWA. SAMS also alleges that these discharges violate performance standards under SMCRA and the terms and conditions of the Mine's Virginia SMCRA permit.

         The Mine discharges pollutants into the South Fork Pound River, Rat Creek, Stillhouse Branch, and unnamed tributaries. Some of the discharges are governed by effluent limits in the Mine's National Pollution Discharge Elimination System (“NPDES”) permit. The discharges include “the ions that contribute to total dissolved solids and conductivity.” Compl. ¶ 15, ECF No. 1.

         The SMCRA and NPDES permits for the Mine have been in effect since 1992. Red River deposited mine spoil into eight hollow fills, each of which has an underdrain. According to SAMS, these underdrains “channelize and direct the flow of water through the fill and out through the toe of the fill.” Id. at ¶ 37. Until June 2014, Fill 1 and Underdrain 1 discharged into Pond 1 and through Outfall 001 into a tributary of the South Fork Pound River. Fill 2 and Underdrain 2, as well as Fill 3 and Underdrain 3, discharged into Pond 2 and through Outfall 002 into a different tributary of the South Fork Pound River. Fill 4 and Underdrain 4, as well as Fill 5 and Underdrain 5, discharged into Pond 5 and through Outfall 003 into another tributary of the South Fork Pound River. Fill 6 and Underdrain 6 discharged into Pond 9 and through Outfall 006 into a tributary of Rat Creek, which flows into the South Fork Pound River downstream from the other discharges. Until March 2007, Fill 8 and Underdrain 8 discharged into a sediment pond that was part of the Ambrose Branch Coal Company, Inc.'s Mine #6 (“Ambrose Mine 6”) SMCRA permit, which was downslope from the Mine, and then into Stillhouse Branch, a tributary of the South Fork Pound River.

         On April 29, 2014, Virginia's Division of Mined Land Reclamation (“DMLR”) authorized Red River to remove Ponds 3 and 4. On June 11, 2014, DMLR authorized Red River to remove Ponds 1, 2, 5, 6, and 9. In March 2007, DMLR had released the Ambrose Mine 6 permit. Since March 2007, Underdrain 8 discharges directly into Stillhouse Branch. Since the other ponds have been removed, Underdrains 1, 2, 3, 4, 5, 6, and 8 all discharge directly into tributaries or streams without passing through any pond or treatment system.

         On February 26, 2015, in a document titled Monitoring Point Detail Supplement, DMLR authorized the deletion of Outfall 003 from Red River's NPDES permit. In the same document, DMLR authorized the relocation of the NPDES monitoring locations for Outfalls 001, 002, and 006. The monitoring points were previously below the fills but were moved to new locations up slope of the fills at mine bench Ponds 1B, 3B, and 7B. Red River has not reported any discharges from these mine bench ponds. Since the ponds were removed and outfalls deleted or relocated, Red River has not reported monitoring data from Ponds 1, 2, 3, 4, 5, 6, and 9, or from the original locations of Outfalls 001, 002, 003, or 006.

         According to SAMS, “Underdrains 1, 2, 3, 4, 5, 6, and 8 continue to produce discharges high in total dissolved solids and with high conductivity.” Id. at ¶ 50. These discharges have resulted in elevated levels of total dissolved solids and conductivity in the streams into which the underdrains discharge. Red River has acknowledged that surface mining activities at the Mine are the cause of the elevated levels in the streams. These elevated levels have harmed aquatic life in the streams, which the Virginia Department of Environmental Quality has designated as impaired based on macroinvertebrate bioassessments.

         SAMS alleges that the underdrains are point sources and that their discharges into the streams are unpermitted now that the ponds have been removed and the permits have been revised. SAMS specifically alleges that the underdrains are discharging calcium, magnesium, sulfate, and bicarbonate, thereby violating the CWA. Its claim focuses on discharges occurring after April 14, 2015.

         SAMS also asserts a claim under SMCRA. The theory of this claim is that Red River's SMCRA permit requires it to comply with Virginia's SMCRA performance standards, which in turn require compliance with all applicable state and federal water quality laws, standards, and regulations. A state regulation provides that Virginia waters must be free from substances or waste that “are inimical or harmful to human, animal, plant, or aquatic life.” 9 Va. Admin. Code § 25-260-20. Another regulation states that surface mining and reclamation activities must be conducted in a way that will “prevent material damage to the hydrologic balance outside the permit area.” 4 Va. Admin. Code § 25-130-816.41(a). SAMS alleges that by causing violations of these standards, Red River is violating its SMCRA permit. The regulation also requires that if typical reclamation and remedial practices are inadequate to meet water quality standards, “the permittee shall use and maintain the necessary water treatment facilities or water quality controls.” 4 Va. Admin. Code § 25-130-816.41(d)(1). SAMS contends that because the reclamation methods employed are inadequate to ensure compliance with the applicable standards, Red River is violating its SMCRA permit by failing to construct an appropriate treatment system. SAMS's SMCRA claim, like its CWA claim, is based on alleged violations occurring after April 14, 2015.

         SAMS seeks injunctive relief for these alleged violations. It asks the court to enjoin Red River from committing further violations, order Red River to apply for modification of its NPDES permit to add effluent limitations for these discharges from the underdrains, and order Red River to conduct monitoring and sampling and repair the streams to their pre-mining condition. SAMS also seeks to recover its attorneys' fees and costs.

         Red River alleges that the discharges at issue are discharges into groundwater rather than surface water. It contends that the valley fills and underdrains do not channel the water, but merely follow the natural slope of the land, and thus they are not point sources. Red River notes that Virginia regulations require the eventual removal of sedimentation ponds as part of the reclamation process. See 4 Va. Admin. Code § 25-130-816.84 (“Such structures may not be retained permanently as part of the approved postmining land use.”).

         Red River submitted a declaration of George Joey O'Quinn of DMLR. O'Quinn stated,

DMLR has never required underdrains and the associated fills to be permitted as NPDES outfalls. Consequently, it does not require NPDES outfalls for the underdrains and the associated fills at North Fox Gap Surface Mine. Additionally, DMLR does not have a program that could issue NPDES outfalls for underdrains and the associated fills; consequently, any application for such a permit would have to be denied.

O'Quinn Decl. ¶ 14, ECF No. 12-2.

         SAMS submitted a 2001 letter from the United States Environmental Protection Agency (“EPA”) to the Pennsylvania Bureau of Mining and Reclamation stating that EPA does not take the position that drainage from abandoned mine sites is non-point-source pollution. Rather, according to the letter, EPA has not determined whether there are unpermitted point source discharges associated with certain abandoned mine sites, nor has EPA determined that the discharges are exempt from NPDES permitting requirements. But Red River notes that EPA's website refers to abandoned mine drainage as a type of non-point-source pollution.

         SAMS also submitted a letter from EPA to Red River dated September 20, 2016, that contained a request to show cause (“Show Cause Letter”). The Show Cause Letter stated that “Red River has discharged and continues to discharge pollutants to waters of the United States without a properly issued NPDES permit” from the Mine. Pls.' Resp. in Opp'n to Def.'s Mot. to Dismiss Ex. 3, 2, ECF No. 20-3. A table of violations included with the letter references the deleted outfalls and refers to ongoing violations after the dates on which the outfalls were deleted. Although the Show Cause Letter indicates that EPA intended to initiate enforcement action against Red River, it has not done so. Red River alleges that it sat down with EPA officials and implies that it assuaged EPA's concerns or otherwise convinced EPA that no action was necessary.

         B. Subject Matter Jurisdiction.

         Red River has moved to dismiss SAMS's Complaint for lack of subject-matter jurisdiction. A motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure raises the fundamental question of whether the court is competent to hear and adjudicate the claims brought before it. Challenges to jurisdiction under Rule 12(b)(1) may be raised in two distinct ways - facial attacks and factual attacks. See Thigpen v. United States, 800 F.2d 393, 401 n.15 (4th Cir. 1986). When a defendant challenges the factual basis for subject-matter jurisdiction, “the district court is to regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Richmond, Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). “The moving party should prevail only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Id.

         Red River contends that because SAMS does not allege a viable CWA claim, this court does not have subject-matter jurisdiction over this case. Red River characterizes all of its arguments except its res judicata argument as factual challenges to subject-matter jurisdiction.

         The CWA authorizes a citizen suit against a person “alleged to be in violation of” the CWA. 33 U.S.C. § 1365(a)(1). The Supreme Court has held that this provision does not confer federal jurisdiction over suits based on wholly past violations. Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49, 58-59 (1987). The Fourth Circuit has stated that “a district court has subject matter jurisdiction over claims in a citizen suit filed under the Clean Water Act that are based on good-faith allegations of a defendant's ongoing violation of the Act.” Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 629 F.3d 387, 402 (4th Cir. 2011).

         In the context of the CWA, the line between jurisdictional issues and merits issues is at times blurry. For instance, some courts have held that the CWA does not confer federal jurisdiction over claims regarding non-point-source pollution or discharges into groundwater. See, e.g., Upstate Forever v. Kinder Morgan Energy Partners, L.P., 252 F.Supp.3d 488, 493, 498 (D.S.C. 2017). Some have found a lack of federal jurisdiction to review a state permitting decision when the plaintiff failed to appeal the permit determination within the state administrative process. See, e.g., Potter v. Asarco, Inc., No. 8:96CV555, 1999 WL 33537055, at *5 (D. Neb. April 23, 1999). Other courts have held that a citizen suit alleging unpermitted discharges or exceedence of effluent limits is not a collateral attack on the underlying permitting decisions, and federal jurisdiction is therefore proper. See, e.g., Sierra Club v. Va. Elec. & Power Co., 145 F.Supp.3d 601, 605-06 (E.D. Va. 2015). The Ninth Circuit has held that an agency's decision “that an NPDES permit is not needed warrants consideration but does not divest the federal courts of jurisdiction. The State may choose to sit on the sidelines, but state inaction is not a barrier to a citizen's otherwise proper federal suit to enforce the Clean Water Act.” Ass'n to Protect Hammersley, Eld, & Totten Inlets v. Taylor Res., Inc., 299 F.3d 1007, 1012 (9th Cir. 2002).

         In San Francisco Baykeeper v. Cargill Salt Division, the Ninth Circuit addressed the confusing CWA jurisdictional analysis as follows:

[T]he “jurisdiction” of the CWA has nothing to do with the jurisdiction of this court. Baykeeper's complaint alleged that Cargill had violated the CWA by discharging pollutants into the waters of the United States. That colorable allegation clearly gave the district court jurisdiction over the case, see 33 U.S.C. § 1365(a), 28 U.S.C. § 1331, and we have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. Baykeeper's failure to establish that Cargill's Pond was a water of the United States is a failure to make out a case, not a failure to establish the jurisdiction of the court. See Arbaugh v. Y & H Corp., 546 U.S. 500, 126 S.Ct. 1235, 1242-45, 163 L.Ed.2d 1097 (2006) (discussing loose use of term “jurisdiction” and holding that failure to establish that defendant is covered by the governing statute is failure to make out a claim, not a failure to establish jurisdiction).

481 F.3d 700, 709 n.9 (9th Cir. 2007).

         Based on the limited record before the court, I find that the court has subject-matter jurisdiction over SAMS's claims and will deny Red River's Rule 12(b)(1) motion. Like the Ninth Circuit, I find that the issues raised by Red River essentially go to whether SAMS has stated claims under the CWA and SMCRA rather than to whether the court has jurisdiction over those claims. Applying the standard set forth by the Fourth Circuit in Gaston Copper Recycling, I find that SAMS has alleged in good faith that Red River is violating the CWA by discharging pollutants from alleged point sources into surface waters without permit authorization to do so. I conclude that these good-faith allegations are sufficient to invoke the court's subject-matter jurisdiction over SAMS's citizen suit.

         C. ...

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