In the Western District of Pennsylvania, the U.S. Department of Justice ("DOJ") and Pennsylvania Department of the Environment ("DEP") last week filed a civil lawsuit against five coal companies alleging more than 1,500 separate violations of the companies' National Pollutant Discharge Elimination System ("NPDES") permits issued under the Clean Water Act and the Pennsylvania Clean Streams Law. United States v. PBS Coals Inc., No. 3:16-cv-00091 (W.D. Pa. filed Apr. 19, 2016). The complaint alleges that discharges into streams from mining operations in Somerset, Indiana, and Cambria Counties in Pennsylvania exceeded various permit limits for a variety of pollutants.

The complaint alleges permit exceedances from impoundments and settlement ponds, outfalls, and other conveyances for metals, suspended solids, and high and low pH. In addition to allegations against defendants Croner Inc., Elk Lick Energy Inc., Quecreek Mining Inc., and Roxcoal Inc. for individual permit violations, the complaint also alleges that PBS Coals Inc. "managed, directed and controlled environmental compliance" at the other defendants' mining operations. PBS Coals' activities allegedly include "corresponding with consultants and otherwise directing water treatment approaches at the mining operations," conducting environmental audits of the companies' mining operations, and "communicating directly with state and federal regulators regarding environmental compliance issues" at the mining operations. As a result, DOJ and DEP contend that PBS Coals is also liable for the violations at the facilities owned or operated by the other four defendant companies.

While the lawsuit may represent DEP's ordinary enforcement priorities, it is possible that this suit is among the first in a series of new "joint" environmental enforcement actions with DOJ under the administration of Governor Tom Wolf. According to EPA, Pennsylvania has the second largest number of major NPDES permits and the second largest number of minor permits tracked in the federal Permit Compliance System. In recent years, DEP has not joined DOJ to file lawsuits against coal companies for NPDES permit violations. Instead, DEP has used enforcement orders to address permit exceedances of a contaminant rather than seek civil penalties through lawsuits. 

Depending on the penalty amount sought by DEP and DOJ, this lawsuit may signal a shift toward litigation, especially in the case of chronic violations. According to the complaint, Clean Water Act violations occurring after January 12, 2009 are subject to penalties up to $37,500 per day of violation. The complaint also states that each violation of the Clean Streams Law is subject to penalties of up to $10,000 per day. 

While DOJ and DEP seek only civil penalties and injunctive relief in the action, they can also seek criminal charges for negligent or knowing violations of NPDES permit limits. 33 U.S.C. § 1319(c)(l)(A). Case law holds that a person acts "negligently" with regard to Clean Water Act violations "by failing to exercise the degree of care that someone of ordinary prudence would have exercised in the same circumstance." United States v. Ortiz, 427 F.3d 1278, 1283 (10th Cir. 2005). A person violates the Clean Water Act "knowingly" when he (i) knows the nature of his acts, (ii) performs the acts intentionally, and (iii) does not act out of a mistake or an accident; knowledge that the conduct was illegal is not necessary. Seee.g.United States v. Sinskey, 119 F.3d 712, 715 (8th Cir. 1997); but see United States v. Ahmad, 101 F.3d 386 (5th Cir. 1996) (reversing a conviction under Section 1319(c)(2)(A) of the Clean Water Act because defendant believed he was discharging water, not gasoline). Criminal violations carry not only economic consequences but also potential corporate and individual criminal liability. 

In light of this recent joint enforcement action, NPDES permit holders should consider reviewing their oversight and compliance systems to ensure compliance with permit discharge limits. Any issues should be corrected, and if necessary, companies should assess potential voluntary disclosure options.