The goal of the “permit shield” established under the Clean Water Act (CWA) is to allow permit holders to conduct their operations without concern that an unanticipated discharge might result in significant environmental liability.
However, several recent federal court decisions are understandably causing concern for permit shield holders.
Background of the Permit Shield
The CWA provides that “the discharge of any pollutant by any person shall be unlawful,” unless it falls within certain narrowly prescribed exceptions. The primary exception to the environmental law is the National Pollutant Discharge Elimination System (NPDES), which provides for the issuance of permits allowing the discharge of pollutants within prescribed limits.
Section 402(k) of the CWA contains a “permit shield” provision for dischargers that obtain NPDES permits. It states that “[c]ompliance with a permit issued pursuant to this section shall be deemed compliance” with various sections of the statute that detail effluent limitations and their enforcement.
In E.I. Du Pont De Nemours & Co. v. Train, the Supreme Court confirmed that the intent of the permit shield is to “insulate permit holders from changes in various regulations during the period of a permit and to relieve them of having to litigate in an enforcement action the question of whether their permits are sufficiently strict. In short, Section 402(k) serves the purpose of giving permits finality.”
The Fourth Circuit Court of Appeals provided further guidance in Piney Run Pres. Ass’n v. City Comm’rs. It held that a permit holder is exempted from liability for the discharge of pollutants not expressly mentioned in the permit, provided the discharges meet two prongs. The permit holder must comply with the CWA’s reporting and disclosure requirements and the discharges must be within the permitting authority’s “reasonable contemplation.” As further explained by the appeals court, if the discharger “has not adequately disclosed the nature of its discharges to permit authorities, and as a result thereof the permitting authorities are unaware that unlisted pollutants are being discharged, the discharge of unlisted pollutants has been held to be outside the scope of the permit.”
Most recently, the Sixth Circuit (Sierra Club v. ICG Hazard) upheld the permit shield’s application in the context of a general permit. The appeals court concluded that ICG satisfied the first prong of Piney by disclosing a selenium discharge. With regard to the second prong, the court held that ICG’s discharge of selenium was within the permit issuer’s “reasonable contemplation” because it knew at the time it issued the general permit that the mines in the area could produce selenium.
Recent Legal Developments
The test established in Piney had been systematically applied for over a decade. However, private litigants and the Department of Justice have recently begun to challenge the scope of the permit shield.
However, the Sixth Circuit’s stance on the permit shield is not universal. In 2014, the Ninth Circuit (Alaska Community Action v. Aurora Energy Serv.) and the Fourth Circuit (Southern Appalachian Mtn. Stewards v. A & G Coal Corp.) issued decisions that narrowed the scope of the permit shield. The Ninth Circuit held that the plain terms of a general permit prohibited the defendants’ discharge of coal because it was not included in a list of non-stormwater discharges authorized by the permit. Similarly, the Fourth Circuit found that A & G Coal Corp. failed to satisfy the Piney test because it failed to adequately disclose that selenium would be discharged.
Together, the inconsistent appeals court rulings have generated more questions than answers. Aurora Energy recently appealed the Ninth Circuit’s ruling to the U.S. Supreme Court, arguing that the “Ninth Circuit’s decision… overrides the permitting agency’s decision, and nullifies the permit shield.” The justices have not yet considered the petition.
Given the uncertainty, current and future permit holders are advised to consult with experienced counsel to determine the best way to navigate the current legal landscape and minimize their liability.
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Is the CWA’s Permit Shield Losing Its Power?
Author: Scarinci Hollenbeck, LLC
The goal of the “permit shield” established under the Clean Water Act (CWA) is to allow permit holders to conduct their operations without concern that an unanticipated discharge might result in significant environmental liability.
However, several recent federal court decisions are understandably causing concern for permit shield holders.
Background of the Permit Shield
The CWA provides that “the discharge of any pollutant by any person shall be unlawful,” unless it falls within certain narrowly prescribed exceptions. The primary exception to the environmental law is the National Pollutant Discharge Elimination System (NPDES), which provides for the issuance of permits allowing the discharge of pollutants within prescribed limits.
Section 402(k) of the CWA contains a “permit shield” provision for dischargers that obtain NPDES permits. It states that “[c]ompliance with a permit issued pursuant to this section shall be deemed compliance” with various sections of the statute that detail effluent limitations and their enforcement.
In E.I. Du Pont De Nemours & Co. v. Train, the Supreme Court confirmed that the intent of the permit shield is to “insulate permit holders from changes in various regulations during the period of a permit and to relieve them of having to litigate in an enforcement action the question of whether their permits are sufficiently strict. In short, Section 402(k) serves the purpose of giving permits finality.”
The Fourth Circuit Court of Appeals provided further guidance in Piney Run Pres. Ass’n v. City Comm’rs. It held that a permit holder is exempted from liability for the discharge of pollutants not expressly mentioned in the permit, provided the discharges meet two prongs. The permit holder must comply with the CWA’s reporting and disclosure requirements and the discharges must be within the permitting authority’s “reasonable contemplation.” As further explained by the appeals court, if the discharger “has not adequately disclosed the nature of its discharges to permit authorities, and as a result thereof the permitting authorities are unaware that unlisted pollutants are being discharged, the discharge of unlisted pollutants has been held to be outside the scope of the permit.”
Most recently, the Sixth Circuit (Sierra Club v. ICG Hazard) upheld the permit shield’s application in the context of a general permit. The appeals court concluded that ICG satisfied the first prong of Piney by disclosing a selenium discharge. With regard to the second prong, the court held that ICG’s discharge of selenium was within the permit issuer’s “reasonable contemplation” because it knew at the time it issued the general permit that the mines in the area could produce selenium.
Recent Legal Developments
The test established in Piney had been systematically applied for over a decade. However, private litigants and the Department of Justice have recently begun to challenge the scope of the permit shield.
However, the Sixth Circuit’s stance on the permit shield is not universal. In 2014, the Ninth Circuit (Alaska Community Action v. Aurora Energy Serv.) and the Fourth Circuit (Southern Appalachian Mtn. Stewards v. A & G Coal Corp.) issued decisions that narrowed the scope of the permit shield. The Ninth Circuit held that the plain terms of a general permit prohibited the defendants’ discharge of coal because it was not included in a list of non-stormwater discharges authorized by the permit. Similarly, the Fourth Circuit found that A & G Coal Corp. failed to satisfy the Piney test because it failed to adequately disclose that selenium would be discharged.
Together, the inconsistent appeals court rulings have generated more questions than answers. Aurora Energy recently appealed the Ninth Circuit’s ruling to the U.S. Supreme Court, arguing that the “Ninth Circuit’s decision… overrides the permitting agency’s decision, and nullifies the permit shield.” The justices have not yet considered the petition.
Given the uncertainty, current and future permit holders are advised to consult with experienced counsel to determine the best way to navigate the current legal landscape and minimize their liability.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
