Court Holds that NPDES Shield Applies to Quarry Operator Discharging under Mine Permit

Wisconsin Resources Protection Council v. Flambeau Mining Company

727 F.3d 700

The Seventh Circuit Court of Appeal recently held that a mining operation did not violate the Clean Water Act when it discharged pollutants without a NPDES permit, based on the operator's reasonable, but mistaken belief that its mining permit also served as a discharge permit.

The Wisconsin Department of Natural Resources ("WNDR") is the administrator of the state's NPDES program. Under the state law, discharges could be regulated by either a NPDES permit or another permit. The EPA concurred with WNDR's approach to storm water regulations, but the state and the EPA never concluded the formal process necessary to authorize this approach under the Clean Water Act. Applying this approach, the state elected to cancel the mine operator's NPDES permit and instead regulate the storm water discharges under the quarry's mining permit. In the ensuing citizen-suit, Petitioners contended that although the operation's storm water discharges were in compliance with their mining permit, they were not shielded from CWA violations because they did not hold a valid NPDES permit. In petitioners' view, absent official authorization from the EPA, the new regulations were not part of the state's approved NPDES program.

Relying on established administrative case law that a regulated party must be given fair warning of what conduct is prohibited or required (Rollins Envtl. Servs. (NJ), Inc. v. United States EPA, (1991) 937 F.2d 649), the Court held that even if the mine operator's permit was flawed, imposing a penalty would constitute a departure from the requirements of due process. The operator did not have notice that their permit was potentially defective. To the contrary, the WNDR repeatedly informed the operator that their mining permit would serve as a NPDES permit. The operator had no reason to believe otherwise, and functioned under the assumption that the operation was shielded from CWA violations as it would be under a NPDES permit. Under these circumstances, the Court held that the requirements of due process prevented the imposition of Clean Water Act penalties.

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