A recent criminal prosecution should have corporate management, in-house counsel, and environmental managers evaluating their coal ash and coal slurry impoundments and employee responsibilities.  On July 5, 2012, The Ohio Valley Coal Company (“Ohio Valley”) pled guilty to two misdemeanor counts of having negligently violated the Clean Water Act for allowing coal slurry releases into a tributary of the Ohio River in separate incidents in 2008 and 2010.  This came on the heels of the criminal prosecutions against both a plant manager and environmental manager as a result of the 2008 incident.  The 2008 incident resulted from the negligent discharge of wastewater from a coal slurry impoundment, whereas the 2010 incident resulted from a ruptured pipeline that caused a discharge that bypassed the treatment system.                   

According to court records, heavy rains in the winter of 2008 caused the water level in Ohio Valley’s coal slurry pond to be unusually high.  A permit was not yet in place to allow Ohio Valley to raise the dam level.  Slurry at the bottom of the pond gave way, resulting in slurry wastewater exiting a decant pipe and entering into the tributary.  The discharge was not monitored because it occurred before a new monitoring system had been installed and was functional.  This discharge violated Ohio Valley’s National Pollutant Discharge Elimination System (“NPDES”) permit, which required the monitoring and testing of such discharges for pollutants.  The release blackened the creek for 22 miles downstream. 

After this release, the plant manager, Donald Meadows, and an environmental manager, David Bartsch, were charged with, and eventually pled guilty to misdemeanor, Clean Water Act crimes.  And, Ohio Valley and its related companies spent in excess of $6,000,000 to install an automatic shut down feature on the pipeline system and to retrain employees on the automatic shutdown feature and related pipeline integrity procedures. 

Mr. Bartsch and Mr. Meadows were in their fifties and each had worked for Ohio Valley for more than two decades.  Neither had ever previously been in trouble.  Mr. Bartsch held a bachelor and a masters of science degree in engineering.  He claimed that he was overwhelmed with the tasks assigned to him at work and caring for his ill wife.  He noted in his sentencing memorandum that he did not authorize the discharge, nor did he have the power to stop it.  U.S. v. Bartsch, 2:11-cr-00018, Sentencing Memo., Dkt. Entry 14.  Mr. Meadows wanted to keep the pond running and disposed of collected slurries in a manner to permit discharges without sampling or monitoring.  U.S. v. Meadows, 2:11-cr-00049, Sentencing Memo., Dkt. Entry 17.  Both men were well respected in their community and by their peers, but appeared to suggest that they hadn’t been given appropriate resources to perform the tasks required of them.

The 2010 incident resulted from a pipeline rupture in the slurry pipeline that conveyed coal slurry from American Energy Corporation (“American Energy”) to Ohio Valley’s impoundment.  This resulted in the direct discharge of untreated slurry wastewater, negligently bypassing Ohio Valley’s treatment works.  This discharge was also in violation of Ohio Valley’s NPDES permit. 

Ohio Valley’s plea agreement with federal prosecutors requires, in part, that it:

  • pay a criminal fine of $500,000;
  • pay $87,000 in restitution to Ohio EPA for the cost of a creek study undertaken in 2009 to analyze and protect the creek at issue;
  • serve 12 months probation;
  • install a HDPE pipeline system with double-walled features between American Energy and Ohio Valley’s impoundment to improve pipeline integrity and to maintain and properly operate the pipeline;
  • implement and install such equipment and training for personnel as necessary to force a shutdown of the flow of slurry in the pipeline in the event of a pipeline failure; and
  • develop a compliance program to effectively prevent, detect, and timely report any such NPDES permit violations, including a Slurry Release Prevention and Emergency Response Plan to protect public health and the environment.

The plea agreement recognizes that Ohio Valley spent more than $6,000,000 in 2010 (as a result of the 2008 incident) to properly operate and maintain the existing automatic shut down feature and retrain employees on the automatic shut down feature and related pipeline integrity features.  The plea agreement also recognizes Ohio Valley’s other obligations entered into as part of a global settlement, including, in part, to pay Ohio DNR a $91,000 penalty and $4,000 for natural resource damages, including damages to fish, amphibians, wildlife, and pending or unasserted claims for the 2010 slurry discharge, and to pay a fine of $184,000 to Ohio EPA for each of the incidents ($368,000 total).  In exchange for pleading guilty, the United States Attorney for the Southern District of Ohio agreed “not to file additional criminal charges against [Ohio Valley], Murray Energy Corporation or any of its related affiliates and subsidiaries, including [American Energy], or other individuals, employees, officers, directors, agents, or attorneys, based on the activities charged in the Information or known to the Government at this time.”  U.S. v. The Ohio Valley Coal Co., 2:12-cr-00137 (S.D. OhioJuly 5, 2012), pp. 4-5.

Coal ash impoundments were in the news recently as a result of US EPA’s data release concerning the high number of impoundments used for the management of power plant coal ash.  The June 27, 2012 data indicated that there were at least 1,161 ponds storing coal ash, 451 more than previously known.  Of these, 535 ponds (or 46%) lacked liners, and the types of liners used on the other 562 ponds were unknown.  EPA is concerned that unlined ponds have the potential to leach heavy metals into groundwater.  Also, there were 393 disclosed coal ash landfills, 56 more than previously known.  43% of the active and retired landfills lacked liners, and 52% of the active and retired landfills lacked leachate collection systems.  It is significant that these statistics do not include coal ash ponds and landfills from private industry and public institutions.

Corporate management, in-house counsel, and environmental managers should evaluate their coal ash and coal slurry impoundments and employee responsibilities.  They should also make sure their in-house or privately-retained lawyers are involved in those discussions to attempt to keep those discussions confidential under the attorney-client and attorney work product privileges.