On January 29, 2016, The United State District Court for the Middle District of North Carolina denied Duke Energy Carolinas, LLC’s (“Duke”) interlocutory appeal of its order denying Duke’s motion to dismiss a Clean Water Act (“CWA”) citizen suit. Duke argued that, before the law suit proceeded further, the Fourth Circuit should weigh in on two issues regarding claims of unpermitted discharges emanating from its power plant. The District Court held that Duke failed to carry its burden of demonstrating extraordinary circumstances to warrant such relief and declined to certify its October 20, 2015 ruling for interlocutory appeal. See Yadkin Riverkeeper, Inc., et al., v. Duke Energy Carolinas, LLC, 1:14-cv-753 (M.D.N.C. Jan. 29, 2016).
From 1926 to 2013, Duke operated a coal-fired power plant (the Buck Steam Station) on the banks of the Yadkin River in central North Carolina, approximately 40 miles northeast of Charlotte. Duke holds a National Pollutant Discharge Elimination System (“NPDES”) permit for discharges from the Buck Steam Station to the Yadkin River and its tributaries. The Buck Steam Station NPDES permit primarily regulated the discharge of treated wastewater from coal ash lagoons to a tributary of the Yadkin River.
In 2014, two environmental groups brought a suit against Duke under the CWA’s citizen suit provision, claiming that certain of the plant’s discharges were not authorized by its NPDES permit. According to the plaintiffs, the unlined coal ash lagoons were leaking polluted water into the groundwater system, which was, in turn, hydrologically connected to surface waters of the United States (the Yadkin River). Plaintiffs argued that the coal ash lagoons were point sources and that the groundwater beneath the lagoons served as a conduit between the point source lagoons and the Yadkin River.
Duke’s Motion to Dismiss
Duke moved to dismiss the Plaintiffs’ hydrological connection claims, arguing that neither the coal ash lagoons nor the groundwater beneath the lagoons fell within the definition of a “point source” under the CWA. If the lagoons were not point sources, then the District Court lacked subject matter jurisdiction over the hydrological connection claims and should dismiss them pursuant to Fed. R. Civ. Proc. 12(b)(1).
The District Court’s October 20, 2015 Order
The first step in the Court’s analysis was whether the lagoons qualified as “point sources” under the CWA. Full opinion available here. The CWA defines “point source” as any discernible, confined and discrete conveyance. 33 U.S.C. § 1362(14). The District Court found that Duke was confining water discretely in its coal ash lagoons, which then conveyed pollutants to waters of the U.S. Accordingly, the Court found the lagoons to be “point sources” within the meaning of the CWA.
The full definition of “point source” is as follows:
[T]he term ‘‘point source’’ means any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.
33 U.S.C. § 1362(14) (emphasis added). The District Court cited a number of cases for the proposition that a settling pond or lagoon could qualify as a point source but skipped a key aspect of the definition of a “point source” in concluding its analysis on the issue. The simple fact that water is confined does not qualify every pond as a point source. Rather, the gathered water must then convey pollutants to navigable waters in a discrete manner. Case law is clear that the finding of a “point source” requires not just the initial collection of water, but also that it then be channeled in a distinct way to waters of the U.S. See Trustees for Alaska v. EPA, 749 F.2d 549, 558 (9th Cir. 1984)(“point and nonpoint sources are not distinguished by the kind of pollution they create or by the activity causing the pollution, but rather by whether the pollution reaches the water through a confined, discrete conveyance.”).
Having found the lagoons to be point sources, the Court next considered whether the CWA regulated the discharge of pollutants from a point source to surface waters when the “discharge” is transmitted via ground water. The Eastern District of North Carolina considered this precise issue in 2014, as applied to coal ash lagoons at Duke’s Sutton Steam Electric Plant along the Cape Fear River. See Cape Fear River Watch, Inc. v. Duke Energy Progress, Inc., 25 F. Supp. 3d 798 (E.D.N.C. 2014). Relying on the plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006), the Eastern District held “that Congress did not intend for the CWA to extend federal regulatory authority over groundwater, regardless of whether that groundwater is eventually or somehow ‘hydrologically connected’ to navigable surface waters.” Id. at 810.
Rather than deferring to its sister court’s recent ruling, the Central District Court instead elected to adopt the reasoning of several district courts in the Ninth Circuit. The Court cited district court opinions out of California and Hawaii, which ultimately found groundwater to be sufficiently “confined and discrete” to constitute point source discharges under the CWA.
The Court also cited a statement by the Environmental Protection Agency that the CWA “requires NPDES permits for discharges to groundwater where there is a direct hydrological connection between groundwater and surface water.” See p. 21, citing 56 Fed. Reg. 64876, 64892 (Dec. 12, 1991) (emphasis added). The Central District did not, however, attach any significance to EPA’s statement that a direct hydrological connection between groundwater and surface water is required for CWA jurisdiction, nor did it provide the basis for a finding that such a direct connection existed between Duke’s lagoons and the Yadkin River.
Without providing guidance on how direct the hydrological connection must be for a groundwater seep to constitute a point source discharge subject to the CWA, the Central District’s opinion simply muddies the waters (no pun intended) for everyone—NPDES permit holders and non-permit holders alike—as to the CWA’s scope. Generally speaking, groundwater systems are hydrologically connected to surface water; however, not all groundwater makes its way to nearby surface waters. But if any seep or spill on the ground is now potentially a point source conveyance by virtue of some vague notion of a hydrological connection to nearby surface waters, then the ground has effectively become “waters of the United States,” subject to regulation under the CWA. Most states have laws already governing groundwater pollution, so hydrological connection claims such as those brought against Duke threaten to create conflicts between state groundwater pollution control programs and the CWA. For this and other reasons, Courts have generally held that the discharge of pollutants into navigable waters through migration of groundwater and uncontrolled runoff is “nonpoint source” pollution, which is not subject to CWA regulation. See e.g. Tri-Realty Co. v. Ursinus, 2015 WL 5013729 (E.D. Pa. 2015). The District Court of Oregon acknowledged the practical implications raised by regulating groundwater pollution through the CWA:
Finally, I am mindful of the practical consequences to water quality regulation if I were to include hydrologically-connected groundwater within the NPDES permit program. Both DEQ and its WPCF permittees have relied on the surface water/groundwater permitting distinction to assess compliance with both Oregon and federal law for over two decades. In addition, although in some cases, such as this one, the fact that groundwater connects to surface water is relatively easy to discern, such connections are often not obvious. The rule that the Eastern District of Washington and Magistrate Judge Coffin would follow would add a new level of uncertainty and expense to NPDES permitting and would expose potentially hundreds of WPCF permittees to current or future litigation and legal liability if they or DEQ has happened to make the “wrong” choice about which kind of permit discharges to groundwater require.
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I therefore hold that discharges of pollutants into groundwater are not subject to the CWA's NPDES permit requirement even if that groundwater is hydrologically connected to surface water.
Umatilla Waterquality Protective Ass'n, Inc. v. Smith Frozen Foods, Inc., 962 F. Supp. 1312, 1320 (D. Or. 1997). Thus, the line of cases holding that the ground can be a conduit for point source discharges threatens the interplay between ground and surface water regulation.
Now that the District Court has denied Duke’s motion for interlocutory appeal, the parties will proceed with discovery.
This article was authored by Christopher M. Hunter, Jackson Kelly, PLLC.
 Duke stored coal ash produced as a byproduct of the combustion cycle in three coal ash lagoons at the Buck Steam Station site.