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Polluter failed to adhere to clean-up promises

Where a corporate polluter previously agreed in a consent decree to comply with “all applicable federal law,” but it then allowed required permits covering facilities in Alabama and Tennessee to lapse, the district court did not err in awarding stipulated penalties pursuant to the decree and compelling compliance.


Southern Coal Corporation discharges pollutants into the waters of the United States, and, as such, should maintain — and adhere to — National Pollutant Discharge Elimination System, or NPDES, permits for all relevant sites and facilities. But, according to the government, it oft falls short of this aspiration of authorization and compliance.

In 2016, the government sued Southern Coal and more than 30 affiliated and unaffiliated mining and mining-adjacent companies under the Clean Water Act, or CWA, for violations of NPDES permits issued for operations in Alabama, Kentucky, Tennessee Virginia, and West Virginia. The same day that the government filed the complaint, it filed notice of a proposed consent decree that it negotiated with Southern Coal—and other entities not party to this appeal—to resolve the complaint’s allegations without proceeding to litigation.

In 2020, the government sent a notice of default and demand for stipulated penalties to Southern Coal, alleging failures to comply with the decree based on Southern Coal’s allowing NPDES permits covering particular facilities in Alabama and Tennessee to lapse. In 2021, the government filed a motion in the district court to compel Southern Coal’s compliance with the decree. The district court granted the government’s motion, awarding stipulated penalties pursuant to the decree and compelling compliance.


Southern Coal argues that the district court improperly considered the purpose of the decree and other extrinsic evidence — rather than only the plain language of the decree itself — when concluding that the decree required maintenance of requiring permits.

Southern Coal contends that paragraphs 22 and 29 do not contain any explicit references to NPDES permits or the CWA, and that, if considered in a vacuum, neither paragraph contains standalone substantive requirements that obligate NPDES or CWA compliance. But explicit invocations of NPDES permitting or the CWA are hardly necessary to the extent that the decree speaks in straightforward, sweeping terms mandating compliance with “all applicable federal law” and acquisition of “all” necessary “permits or approvals.”

Furthermore, Southern Coal offers no justification for evaluating portions of the decree in a vacuum, and doing so makes little sense. When considered together, and in harmony with the plain language of other provisions of the decree, the mandates that Southern Coal comply with federal law and acquire permits where necessary plainly impose NPDES-permitting obligations and prohibit unpermitted discharges that run afoul of the CWA.

The plain language of many other paragraphs implies compliance with the CWA and NPDES-permitting obligations as conditions precedent to decree performance. Taken together, these paragraphs — and others — plainly require Southern Coal to possess and maintain NPDES permits, as well as comply with the CWA, as conditions precedent to the ability perform under the decree.

The absence of NPDES permits would render compliance with many obligations under the decree impossible, given that such obligations trace directly to baselines that NPDES permits provide. Thus, even if the plain language of the decree does not employ excruciating detail in stating something to the effect of “Southern Coal must maintain NPDES permits and comply with the CWA,” such obligations are clearly and plainly presumed by the numerous other obligations the performance of which relies on CWA and NPDES compliance.


Concurring/dissenting opinion

Rushing, J., concurring in part and dissenting in part:

The government claims that Southern Coal violated the consent decree in two ways: first, by failing to maintain its NPDES permits and, second, by discharging pollutants after those NPDES permits had expired. The majority agrees that both actions violated the consent decree and so affirms.

But I read the decree a little differently. While I agree that the consent decree required Southern Coal to maintain NPDES permits, I disagree that it prohibited unpermitted discharges. So I respectfully dissent in part.

United States of America v. Southern Coal Corporation, Case No. 22-1110, April 4, 2023. 4th Cir. (Floyd), from WDVA at Roanoke (Urbanski). Robert Philip Fowler for Appellants. David Seth Frankel for Appellees. VLW 023-2-092. 17 pp.