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Latest court ruling further underscores circuit split on groundwater conduit theory.

By Joel C. Beauvais and Stacey L. VanBelleghem

The US District Court for the Central District of Illinois has held that power plant owners are not liable under the Clean Water Act (CWA) for discharges of pollutants from coal ash disposal facilities through groundwater to waters of the US. The November 14 ruling is the latest in a series of recent defeats of CWA citizen suits premised on the so-called “groundwater conduit” theory.

Plaintiffs in Prairie Rivers Network v. Dynegy Midwest Generation, LLC initiated a CWA citizen suit against the owners of the Vermilion Power Station, a retired coal-fired power plant in Illinois. Plaintiffs alleged that defendants unlawfully discharged pollutants into groundwater from unpermitted seeps in their coal ash disposal facility and this groundwater was hydrologically connected to the Middle Fork of the Vermillion River. The district court relied on prior US Court of Appeals for the Seventh Circuit precedent (outside the coal ash context), holding that the CWA does not govern discharges of pollutants into groundwater, even if there is a hydrologic connection between the groundwater and waters of the US. Unlike other recent cases evaluating CWA liability from coal ash facility seepage into groundwater, this court did not address whether the coal ash facility was a “point source” under the CWA, given the existing circuit court precedent on the groundwater conduit theory.

The report supports the efforts of the EU’s Seventh Environment Action Programme.

By Alexander Wilhelm

According to a report prepared by the Joint Research Centre (JRC) — the European Commission’s science and knowledge service — countries across Europe are making progress on tackling soil contamination. The report[i] states that the management of contaminated sites in Europe has improved substantially. The survey prepared by the JCR scientists included 39 countries, of which 25 are EU Member States. Within the EU there are an estimated 2.8 million sites where artificial surface indicates that polluting activities have occurred in the past. According to national and regional inventories of countries that replied to the report’s questionnaire, more than 650,000 sites are registered where polluting activities took or are taking place. The number of remediated sites or sites under aftercare measures has increased from 57,000 to 65,500 in the last five years. Although these inventories are more accurate than ever before, investigations of more than 170,000 sites are still pending.

Soil contamination means reduced soil quality because harmful substances resulting from human activity are present. In general, such contamination violates private or public interests, and can even harm human health or the environment. According to the report, mineral oils and heavy metals are the most frequent contaminants. The excavation and the off-site disposal of contaminated plots are the most frequently used remediation techniques — also known as “dig-and-dump.” With the help of the provided data, JCR scientists have revealed that an average of €4.3 billion is spent to tackle soil contamination in the surveyed countries, of which more than 42% is taken from public funds. According to the report, this is due to the divergent application of the “polluter-pays” principle, which is applicable to historical contamination only in a few countries. Those differences in the legal treatment of historical contamination should be assessed carefully not only by the current owner, but also by any prospective buyer.

Fourth and Sixth Circuit decisions give power plant operators additional defenses to citizen suits pending potential Supreme Court review of “groundwater conduit” theory.

By Joel C. Beauvais and Stacey L. VanBelleghem

Over the past month, two US Courts of Appeals have rejected Clean Water Act (CWA) citizen suits seeking to hold power companies liable for discharges of pollutants from coal ash disposal facilities “through” groundwater to waters of the US. Although the Fourth Circuit accepted that discharges through groundwater could be the basis for liability, it held that the relevant ash piles and impoundments were not “point sources” for purposes of the CWA. The Sixth Circuit likewise held that the ash disposal facilities at issue were not point sources, but — contrary to the Fourth Circuit — also held that discharges through groundwater were not actionable under the Act. Collectively, these recent decisions stand as a significant new obstacle to citizen suits against owner/operators of coal ash impoundments. At the same time, the decisions deepen a circuit split on the so-called “groundwater conduit” theory of CWA liability, helping to tee the issue up for possible Supreme Court resolution. If the Court does take this question up, the outcome will be critically important for many industry sectors, including electric power, oil and gas, manufacturing, and mining companies, among others. The CWA imposes strict liability, and citizen suits based on groundwater conduit claims can result in extremely costly remedies — including large civil penalties and injunctive relief.

Decision may significantly impact active and inactive unlined and clay-lined coal ash impoundments, likely requiring closure or retrofit.

By Claudia M. O’Brien and Stijn van Osch

The D.C. Circuit this week struck down parts of the Environmental Protection Agency (EPA) Coal Combustion Residuals (CCR) rule for not being sufficiently protective of the environment. The decision in Utility Solid Waste Activities Group (USWAG) et al. v. EPA, No. 15-1219 (D.C. Cir. Aug. 21, 2018) will have a major impact on both active and inactive coal ash impoundments used by coal-fired power plants. Although the timing is uncertain, the Court’s opinion will likely require closure or retrofitting of all unlined and clay impoundments, unless EPA is able to address the Court’s concerns on remand.

Approximately 1,000 manufacturing firms in Beijing will close by 2020.

By Paul A. Davies and R. Andrew Westgate

China’s anti-pollution efforts have intensified in the Beijing-Tianjin-Hebei region, which is known for its problems with smog. In fact, Premier Li Keqiang has identified Beijing and Hebei as key areas in the “war against pollution.”

The Beijing-Tianjin-Hebei region has been a priority area for the Chinese government for several years. In 2014, the government launched plans to improve coordination throughout the Beijing-Tianjin-Hebei region to streamline production capacity and reduce pollution.

Beijing has already shut down nearly 2,500 “ordinary” manufacturers and denied nearly 20,000 manufacturing firms’ registration applications. Most recently, the Beijing municipal government has announced that as part of its efforts to reduce air pollution, approximately 1,000 manufacturing firms in Beijing will shut down by 2020.

The Chinese government and legislature are increasing pressure on local government officials and companies to reduce pollution in China.

By Paul A. Davies and R. Andrew Westgate

China’s legislature is targeting companies responsible for pollution, and has ordered local judiciaries and lawmakers to implement revised rules and enforce penalties against those who break them.

Air pollution, in particular, has been of particular concern. Li Zhanshu, chairman of the National People’s Congress (NPC) Standing Committee, announced that “[e]very provincial-level people’s congress should release or amend regulations on the air pollution prevention law by the end of this year in line with pollution conditions in their areas.” He further urged increased cooperation between public bodies, such as courts and environmental bodies within government. He noted that this cooperation should include both expanded investigation and enforcement efforts, but also issuing regulatory guidance so regulated companies are clear on the standards they are required to meet.

Polluters of one of China’s most polluted waterways are increasingly facing prosecution through coordinated local and national efforts.

By Paul A. Davies and R. Andrew Westgate

Chinese authorities have been increasing their efforts to prosecute environmental offenders along the Yangtze River, the third-longest river in the world and the longest in Asia. The crackdown reflects China’s goal to make 70% of its surface water safe to consume by 2020.

Water Pollution: A Serious Problem for China

China’s government has good reason to take the problem of water pollution seriously. In 2012, a senior official from the water ministry acknowledged that 20% of China’s waterways were classified as toxic, while 40% were seriously polluted. The World Bank has further noted that water pollution could have “catastrophic consequences for future generations,” and that the problem is compounded by the fact that China does not have enough water for its population to safely consume. (For more information on China’s water supply, see Latham’s previous blog post).

The plan’s stricter and more targeted requirements will impact a broader range of provinces, including the Fen-Wei Plains.

By Paul A. Davies and R. Andrew Westgate

China has released a new three-year action plan for 2018 to 2020 to combat air pollution. The previous air pollution action plan, published in 2013, has played a significant role in improving air quality in major cities. China’s updated plan, which was released on July 3, draws on additional information and research to provide more targeted requirements.

Success of the 2013 plan

The former plan set a coal cap across China with varying limits in different provinces. For example, the plan required Beijing to reduce its coal consumption by half from 2015 to 2018. The plan’s success was due in part to the state’s ownership of a large number of China’s worst polluters, making them easier to control. Furthermore, because half of China’s pollution comes from coal-burning power stations, the country needs a less varied range of policies to order to target pollution compared with other countries.

Increased manufacturing offshoring and industrial activity may prevent China from reaching its commitments, despite a booming renewable energy sector.

By Paul A. Davies, Kimberly Leefatt, and R. Andrew Westgate

China’s carbon emissions increased by 4% in the first quarter of 2018 — marking the biggest hike in carbon emissions in the last seven years, according to an article published by China Economic Review. Increased industrial activity is due in large part to the government’s financial support of furnaces and kilns meant to stimulate the economy. However, industrial growth could prevent China from achieving its Paris Agreement targets, despite the country’s reduction in coal use and commitment to promoting renewable forms of energy.

Increasing Carbon Emissions

China is responsible for approximately 30% of global carbon emissions. In fact, China emits twice the amount of CO2 per dollar of gross domestic product compared with the United States, and more than in the European Union.