Mining Industry on the Losing End of Two Clean Water Act Cases

by Michael C. Ford

The mining industry was on the losing end of two recent Clean Water Act cases. 

Stone v. High Mountain Mining Company, LLC,[1] was decided September 12, 2022, and involved a citizen suit challenge to a placer mine operating without a Clean Water Act (“CWA”) discharge (“NPDES”) permit.  High Mountain’s operations include four unlined settling ponds located adjacent to the Middle Fork of the South Platte River, a “navigable water” subject to CWA jurisdiction.  All of the ponds were found to be discharging pollutants to groundwater.  The citizens’ group argued the ponds required a NPDES permit under the Supreme Court’s recent decision in Cnty. of Maui, Hawaii v. Hawaii Wildlife Fund[2] finding that groundwater discharges that are the “functional equivalent” of a discharge to a navigable water require a NPDES permit. 

After a 4-day trial, the defendant moved for judgment in its favor, which the court denied.  The court reviewed the seven Maui factors[3]:  

The court found that the distance factor weighed heavily against the mine, as the ponds are all approximately 100 feet from the river.  The transit time for pollutants to reach the river from the ponds was approximately 2 days, which the court also found to weigh heavily against the mining company. Evidence was also presented showing that the nature of the materials around the ponds is porous and has a high percolation rate.  Limited evidence was presented on the other 4 Maui factors, but based on the first 3 factors, the court denied the mine’s motion, and found in favor of the citizen’s group.  The court imposed a $500,000 penalty against the mine for its unpermitted discharges.

San Carlos Apache Tribe v. State of Arizona[4] was decided November 15, 2022 by the Arizona Court of Appeals, Division 1, located in Phoenix, and also involves the NPDES permitting requirements applicable to the ongoing development of the Resolution Copper Project in Superior, Arizona.  Resolution’s site has a long history of underground mining by predecessor mining companies, and the discharges from the mining facilities, including shafts and tunnels, to Queen Creek have been covered by a CWA permit since 1975.  Resolution’s project involves the sinking of a new, much deeper shaft to access a new ore body (“Shaft 10”).  The Arizona Department of Environmental Quality (“ADEQ”) issued Resolution a renewal permit in 2017 that included Shaft 10 and other new discharge sources not previously permitted.  The Tribe sued the state, arguing the new facilities were “new sources” under the CWA, which triggered the application of more stringent “new source performance standards” (“NSPS”) and in turn also triggered additional permitting restrictions for “impaired” waters due to Queen Creek’s not meeting applicable water quality standards due to high copper levels.

The court’s discussion of the relevant definitions and guidance on the issue of whether new facilities at a site with an existing CWA permit trigger the NSPS is long and complex, and involves the application of several subjective factors set forth in the regulations.[5]  The upshot, however, is that the court overruled ADEQ, the Water Quality Appeals Board, and the lower court, which had all upheld the permit, and found that Shaft 10 and the other new facilities are new sources subject to the more stringent NSPS, rather than the discharge standards that apply to the existing facilities at the site.  

In perhaps the bigger blow to the project, the court then held the impaired waters provision of the CWA permitting regulations prohibited ADEQ from issuing the permit.  40 C.F.R. §122.4(i) provides:

Resolution argued ADEQ had determined the new discharges would not cause or contribute to the impairment of Queen Creek.[6]  The court, citing the 9^th Circuit’s decision in Friends of Pinto Creek v. U.S.E.P.A.[7] (ironically, involving another citizens’ suit challenge to a copper mine a few miles away from the Resolution Project), found this insufficient because the regulations require that ADEQ (1) complete a “total maximum daily load” (“TMDL”) analysis demonstrating Resolution’s discharge can be accommodated by Queen Creek; and (2) show that existing dischargers are subject to NPDES permit compliance schedules designed to bring Queen Creek into compliance with water quality standards for copper.  The court found ADEQ cannot renew the permit until it meets these requirements, vacated the permit, and remanded it to ADEQ.  It is not known at this time whether the decision will be appealed to the Arizona Supreme Court, or how long it may take ADEQ to complete the TMDL analysis and compliance schedules.  However, TMDLs are labor intensive, subject to public comment requirements, and typically take years to develop.  Therefore, the delay in issuing the permit could be significant.

This decision comes on the heels of the 9^th Circuit’s decision earlier this year involving another large copper project in Arizona – the Rosemont Project – which dealt another blow to the mining industry by restricting the use of unpatented mining claims for the disposal of waste rock and tailings.[8]  Pinto Creek, High Mountain, Center for Biological Diversity and San Carlos all confirm the risk of environmental groups and other third parties derailing mine permits and projects, despite the regulatory agency and permittee agreeing on the regulatory requirements.              

[1] 2022 WL 4129398 (D. Colo. 2022).

[2]  –U.S.–, 140 S. Ct. 1462 (2020).

[3]  2022 WL at *12 (citation omitted).

[4]  2022 WL 16938292 (Ariz. App. 2022).

[5] 2022 WL at *5 – *11.

[6] Id. at *13.

[7] 504 F.3d 1007 (9^th Cir 2007).

[8]  Center for Biological Diversity v. U.S. Fish and Wildlife Service, 33 F.4^th 1202 (9^th Cir. 2022).