Full disclosure and strict compliance with the National Pollutant Discharge Elimination System (NPDES) permitting process under the Clean Water Act (CWA) has its benefits. That was the message delivered in a recent decision by the Federal District Court of Alaska in Alaska Community Action on Toxics v. Aurora Energy Services.

In this case, certain environmental groups sued the operator of a coal-loading facility – one that transferred coal from railcars onto seagoing vessels – alleging violations of the CWA. The plaintiffs claimed that coal dust entered Resurrection Bay, near Seward, Alaska, when it fell into the bay during transfer from the land to ships via conveyor belts and where coal-contaminated snow was intentionally plowed into the bay. According to the district court, the so-called “permit shield” provided by the defendant’s NPDES permit stopped any claims targeting discharges into the bay so long as those discharges were in “compliance with a permit.” The court found the permit shield extended to not only those substances specifically identified in the permit, but also to those substances disclosed during the permitting process. In doing so, the court followed a line of precedent dating to the 2001 decision of the 4th Circuit Court of Appeals in Piney Run Preservation Association v. County Commissioners of Carroll County.

The CWA permit shield is codified in 33 U.S.C. §1342(k), which provides that “[c]ompliance with a permit issued pursuant to this section shall be deemed compliance” with various sections of the CWA. In other words, the shield is a defense to allegations that the permittee violated the CWA. The Aurora Energy opinion highlights the importance of interpreting the language of the permit and discusses the parameters of the permit shield defense, drawing a contrast between those discharges, which are adequately disclosed and those that are not.

The terms and conditions of a permit are critical in determining the scope of potential liability, because the permit shield protects only those discharges that comply with the permit’s requirements. The district court analyzed the permit as it would a contract or other legal document, scrutinizing each provision to see if the defendant complied. The Aurora Energy court analysis emphasizes the importance of taking proactive measures during the permitting process to ensure that the permit terms accurately reflect the understanding between the EPA and the permittee.

The permitting process is also important because those pollutants not specifically addressed by the permit but that are “adequately disclosed to, and reasonably anticipated by, the permitting authority,” are also covered by the shield. Applying this approach, the district court found that coal, which fell into the bay from conveyor belts, was not an unlawful discharge in violation of the CWA because such releases had been specifically disclosed to and contemplated by the permitting authority. That is, the company had specifically listed the conveyor belt system and steps taken to minimize coal spillage from it in documentation submitted to the EPA. On the other hand, coal that may have been plowed into the bay during snow removal had not been disclosed and, accordingly, it was a material question whether such actions violated the CWA.

The court’s opinion underlines what all NPDES permittees should know – that the steps leading to issuance of a permit and compliance with the permit itself are critical to defending allegations of CWA violations.