Under the Clean Water Act (“CWA”), it is well established that any entity discharging pollutants into the surface waters of the United States from a “point source” must obtain a permit. But courts have disagreed on whether the CWA also encompasses groundwater that is hydrologically connected to surface water.  Last week, a federal district court in Virginia followed a line of cases in holding that the CWA does cover the discharge of pollutants to groundwater that is hydrologically connected to surface water. Sierra Club v. Va. Elec. & Power Co., Civil Action No. 2:15-CV-112 (E.D. Va. Mar. 23, 2017).

In the case, the Sierra Club alleged that Virginia Electric and Power Company, doing business as Dominion Virginia Power (“Dominion”), violated the CWA and its state permits by discharging arsenic from several coal ash piles into groundwater which had a direct hydrological connection to surrounding surface waters. Dominion argued that the CWA did not regulate groundwater and that the coal ash piles were not “point sources” under the CWA.  The Court found that there was a “direct hydrological connection” between the groundwater at the Dominion site and the surface waters adjacent to the site.  In addition, water sampling demonstrated that the coal ash piles leaked arsenic into the groundwater that reached these surface waters.

In finding that the CWA did regulate discharges into groundwater in this instance, the Court noted that the CWA’s purpose to protect surface waters would be defeated if hydrologically-connected groundwater was excluded from its purview. The Court also cited the U.S. Environmental Protection Agency’s “longstanding view” that the CWA covered groundwater with a direct hydrological connection to surface waters.  Next, the Court determined that the coal ash piles constituted point sources under the CWA because they channeled and conveyed arsenic into groundwater that eventually discharged into surrounding surface waters.  Because Dominion did not have a discharge permit for conveyance of the pollutant, the Court found it had violated the CWA.  While the Court also briefly considered whether Dominion violated its state discharge permits issued by the Virginia Department of Environmental Quality (“DEQ”), it deferred to the DEQ’s determination that those permits did not apply to groundwater and that Dominion was therefore in compliance with the permits.   

Finally, the Court declined to issue any civil penalties authorized under the CWA, finding that the Sierra Club had offered a “novel interpretation” of the law and that Dominion thought it was in compliance with state and federal law. The Court also rejected the Sierra Club’s request Dominion be required to move the three million tons of coal ash to a landfill, finding the proposed injunction could entail years of effort costing hundreds of millions of dollars.  The Court also found that the Sierra Club failed to demonstrate any harm as necessary for an injunction since tests for arsenic in the surface waters were well below the water quality criteria for the pollutant.  Instead, the Court required Dominion to conduct sampling of sediments at the site and of the surface waters around the site.  Dominion must report the results of the tests to DEQ and the Sierra Club and, if the tests show a significant change in arsenic levels, the parties may motion the Court for further relief.  Thus, while the Court extended the reach of the CWA in the case, it took into consideration Dominion’s good faith efforts to comply with federal and state law in deciding not to issue a monetary penalty or injunctive relief that would unfairly burden the company.