Right now, a number of lawsuits alleging coal ash contamination in violation of the Resource Conservation and Recovery Act (“RCRA”) and the Clean Water Act (“CWA”) remain pending in federal district courts across the country. These suits, typically brought by environmental groups against owners of coal-fired power plants, seek to expand avenues of liability for coal ash contamination under the two statutes. At the same time, the regulatory requirements of EPA’s recent rulemaking addressing coal combustion residuals1 are now being phased in, creating two new avenues for coal ash-related suits. First, the rule’s requirements are “self-enforcing,” meaning that they will be primarily enforced by citizen suit, although states also are free to (indeed, encouraged to) adopt and enforce their own regulations. Second, the rule mandates public disclosure of information related to coal ash units, including groundwater testing results, which may supply the factual basis for further suits under RCRA and the CWA—as well as for toxic tort suits.

I. Expanding Theories of Liability in Ongoing Coal Ash Citizen Suits

Duke Energy, Dominion Virginia Power, the Tennessee Valley Authority, and a number of other energy companies currently are defending against citizen suits alleging that their handling and disposal of coal ash violates the CWA and RCRA. Generally speaking, the CWA prohibits discharge of pollutants to “navigable waters” (defined as “waters of the United States” in the CWA) without a permit.2 RCRA prohibits the disposal or handling of solid or hazardous waste in a manner which may present an imminent and substantial endangerment to health or the environment.3

The complaints typically allege some or all of the following types of claims: (1) the defendant is violating one or more conditions in its National Pollutant Discharge Elimination System (“NPDES”) permit, for instance by allowing contaminants to enter surface waters from coal ash units; (2) the defendant is directly discharging into a surface water body without a permit, in violation of the CWA; (3) the defendant is discharging contaminants into groundwater with a hydrologic connection to a surface water body in violation of the CWA; and (4) the disposal of the coal ash may create an imminent and substantial endangerment in violation of RCRA. These arguments may apply to active coal ash disposal units as well as inactive impoundments that have been closed in place.

Importantly, however, the environmental groups are pushing to expand beyond traditional theories of liability and concepts of what constitutes an “illegal” discharge. For instance, environmental groups are alleging that discharges of contaminants from coal ash ponds or other disposal units into the surrounding groundwater can constitute a violation of the CWA, even though groundwater is not a navigable water. Indeed, EPA’s recent rule defining “Waters of the United States” specifically exempts groundwater from the definition.4 Nevertheless, environmental groups are alleging that discharges to groundwater fall within the scope of CWA jurisdiction if the groundwater provides a conduit for contaminants to reach navigable surface waters. Two district courts recently agreed with the environmental groups that CWA jurisdiction does extend to groundwater discharges in those circumstances, and both courts denied requests for interlocutory appeal to the U.S. Court of Appeals for the Fourth Circuit.5 This jurisdictional question currently is pending before the U.S. Court of Appeals for the Ninth Circuit, which may become the first federal appellate court in a decade to reach a decision on the viability of groundwater discharge claims.6

Relatedly, some environmental groups also are alleging that certain state laws define “state waters” to include groundwater, and that in those states, groundwater discharges from coal ash units are themselves a violation of the CWA even if there is no connection to a navigable surface water. For instance, Sierra Club is alleging in one suit that Dominion Virginia Power is violating its Virginia Pollutant Discharge Elimination System (“VPDES”) permit by allowing arsenic to seep into the groundwater (allegedly included in Virginia’s definition of “state waters”) from its coal ash units. Because Virginia is authorized to approve VPDES permits pursuant to authority delegated to it under the CWA, Sierra Club reasons, the alleged VPDES permit violations must themselves be violations of the CWA.

Finally, some suits seek to expand liability by alleging that decades-old man-made lagoons or ponds, used to store coal ash, are themselves navigable waters that were constructed through the placement of dredge and/or fill materials. According to environmental groups, the placement of dredge and/or fill materials in this manner may itself be a violation of the CWA if it was done without a permit, and any ongoing discharges into the lagoons or ponds may constitute additional violations of the CWA. These allegations also may have important implications for companies’ closure plans for their coal ash units as environmental groups are arguing that closing these units in place will involve additional placement of coal ash, fill, and/or dredged materials in navigable waters in violation of the CWA. As closure in place is likely to be considerably cheaper than closure by removal (i.e., removing and relocating the ash to a lined landfill), these allegations threaten to impose significant costs and liabilities.

II. Coal Ash Rule Brings Additional Pathways for Litigation

EPA’s April 2015 rulemaking addressing coal combustion residuals, which was promulgated under RCRA, likely will provide further legal bases for citizen suits. In addition to the RCRA provision providing for citizen suits alleging imminent and substantial endangerment, RCRA also authorizes citizens to sue for violations of any standard promulgated under RCRA—including the new standards in the rulemaking applicable to coal ash landfills and surface impoundments. Generally speaking, the rule sets forth requirements related to location of coal ash units, liner design criteria, structural integrity requirements, operating criteria, groundwater monitoring, corrective actions, and closure and post-closure care. The rule currently is being challenged in the D.C. Circuit by both environmental and industry groups.7

The rule not only requires groundwater monitoring for active coal ash impoundments (to be phased in beginning at the end of 2017), but also requires companies to publically post the results of their monitoring on a publically accessible website. Accordingly, environmental groups as well as neighbors and other interested citizens will have access to any evidence of groundwater contamination and may use this evidence—posted by the utility itself—to bring additional suits under RCRA and the CWA. Further, groundwater monitoring results also may engender toxic tort suits—as stand-alone suits or combined with RCRA or CWA citizen suits—especially where there is evidence of widespread contamination or where nearby landowners may be directly impacted.

III. Conclusion

Numerous suits currently are pending in federal (and also state) courts related to coal ash contamination, and these suits evince ongoing efforts by environmental groups to expand energy companies’ liability under the CWA and RCRA. In light of these suits—and EPA’s April 2015 coal ash rule—companies should be cognizant of their potential liability related to coal ash disposal and contamination, should be aware that they are increasingly going to be required to make information about their coal ash units and any related site contamination public, and therefore should take proactive steps to manage the litigation risks and minimize the potential for adverse legal and business outcomes.