The Permit Shield Defense: What The Fourth Circuit Did Not Address In Ohio Valley

Deborah Barnard is a Professional Growth & Development Partner for Holland & Knight's Boston office.

Jessica Early is a Partner for Holland & Knight's Boston office.

Dianne Phillips is a Partner for Holland & Knight's Boston office.

The Fourth Circuit recently held that the permit shield defense did not protect a National Pollutant Discharge Elimination System (NPDES) permit holder from enforcement of a general narrative effluent limit prohibiting discharges that cause a state water quality standard (WQS) violation, even though the permit holder disclosed the pollutants in question during the permitting process and the permitting agency decided not to impose specific numeric effluent limits. See Ohio Valley Environmental Coalition v. Fola Coal Co., LLC, No. 16-1024, 2017 WL 35726 (4th Cir. Jan. 4, 2017).

The permit shield defense is derived from 33 U.S.C. § 1342(k). In a prior opinion, Piney Run Preservation Association v. County Commissioners of Carroll County, Maryland, 268 F.3d 255 (4th Cir. 2001), the Fourth Circuit held that the permit shield protects NPDES permit holders from liability for discharging a pollutant not expressly allowed by the permit—even though the discharges caused WQS violations—so long as the permit holder disclosed the pollutant to the permitting agency and otherwise complied with the terms of its NPDES permit.

In Piney Run, the county disclosed its discharges of heat to the Maryland permitting agency, which decided not to include any express heat limitation in the county's permit. Nevertheless, the District Court rejected the county's permit shield defense and held it liable for all discharges of heat that resulted in a WQS violation. The Fourth Circuit reversed, holding that because the county disclosed its discharges of heat and such discharges were within the reasonable contemplation of the Maryland permitting agency when issuing the permit, the permit shield protected the county from liability for the WQS violations.

In Ohio Valley, Fola disclosed to the West Virginia permitting agency that its discharges would include ions and be highly conductive. Nevertheless, the permitting agency issued Fola a permit without any specific numeric effluent limits for ions or conductivity. The permit, howeverlike all permits issued in West Virginia, and unlike the county's permit in Piney Runincluded a general narrative effluent limit (incorporating West Virginia law) prohibiting Fola's discharges from causing a violation...