Arch Coal, Inc. and International Coal Group Subsidiaries Settlement

75 Pages·2015·22.67 MB·English

by  Tracy Hannah

Case 2:15-cv-11838 Document 3 Filed 08/06/15 Page 1 of 70 PageID #: 64
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
UNITED STATES OF AMERICA, the STATE OF WEST )
VIRGINIA, by and through the WEST VIRGINIA )
DEPARTMENT OF ENVIRONMENTAL PROTECTION, the )
COMMONWEALTH OF VIRGINIA, and the PENNSYLVANIA )
DEPARTMENT OF ENVIRONMENTAL PROTECTION, )
)
Plaintiffs, )
)
v. )
)
)
ARCH COAL, INC.; HAWTHORNE COAL CO., INC.; ICG ) CONSENT DECREE
BECKLEY, LLC; ICG EAST KENTUCKY, LLC; ICG )
EASTERN, LLC; ICG KNOTT COUNTY, LLC; ICG TYGART )
VALLEY, LLC; JULIANA MINING COMPANY, INC.; KING )
KNOB COAL COMPANY, INC.; PATRIOT MINING )
COMPANY, INC.; POWELL MOUNTAIN ENERGY, LLC; )
THE SYCAMORE GROUP, LLC; VINDEX ENERGY CORP.; )
WHITE WOLF ENERGY, INC.; and WOLF RUN MINING )
co., )
)
Defendants. )
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TABLE OF CONTENTS
I. BACKGROUND ............................................................................................................... 1
II. JURISDICTION AND VENUE ....................................................................................... 5
III. APPLICABILITY ............................................................................................................. 6
IV. DEFINITIONS ................................................................................................................ 10
V. CIVIL PENALTY ........................................................................................................... 15
VI. COMPLIANCE REQUIREMENTS ............................................................................. 17
VII. INJUNCTIVE RELIEF .................................................................................................. 21
VIII. REPORTING REQUIREMENTS ................................................................................ 34
IX. STIPULATED PENALTIES ......................................................................................... 37
X. FORCE MAJEURE ........................................................................................................ 42
XI. DISPUTE RESOLUTION ............................................................................................. 44
XII. INFORMATION COLLECTION AND RETENTION .............................................. 46
XIII. EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS .................................. 49
XIV. COSTS ............................................................................................................................. 51
XV. NOTICES ........................................................................................................................ 51
XVI. RETENTION OF JURISDICTION .............................................................................. 53
XVII. MODIFICATION ........................................................................................................... 54
XVIII. TERMINATION ............................................................................................................. 54
XIX. PUBLIC PARTICIPATION .......................................................................................... 55
XX. SIGNATORIES/SERVICE ............................................................................................ 55
XXI. INTEGRATION .............................................................................................................. 56
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XXII. FINAL JUDGMENT ...................................................................................................... 56
XXIII. APPENDICES ................................................................................................................. 57
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I. BACKGROUND
A. On March 1, 2011, the United States, West Virginia, and Kentucky concurrently filed
a complaint and lodged a Consent Decree against Arch Coal, Inc. ("Arch") and its subsidiaries with
operations in West Virginia, Virginia, and Kentucky resolving alleged violations of the Clean Water
Act and related state statutes (the "Arch Consent Decree"). The Arch Consent Decree imposes
ongoing injunctive relief requirements on Arch and its subsidiaries to bring them into compliance
with the Clean Water Act.
B. After a public notice and comment period, the United States moved to enter the
decree on May 2, 20 11.
C. On June 15, 2011, Arch acquired through merger International Coal Group, Inc.
("ICG"), including its subsidiaries Hawthorne Coal Co., Inc.; ICG Beckley, LLC; ICG East
Kentucky, LLC; ICG Eastern, LLC; ICG Hazard, LLC; ICG Knott County, LLC; ICG Tygart Valley,
LLC; Juliana Mining Company, Inc.; King Knob Coal Company, Inc.; Patriot Mining Company,
Inc.; Powell Mountain Energy, LLC; The Sycamore Group, LLC; Vindex Energy Corp.; White Wolf
Energy, Inc.; and Wolf Run Mining Co. (collectively, "the ICG Defendants").
D. On November 7, 2011, the United States District Court for the Southern District of
West Virginia entered the Arch Consent Decree. (Dkt. #35-36 in Civ. No. 2:11-cv-00133, S.D.
W.Va.). This Consent Decree is intended to operate in conjunction with the Arch Consent Decree in
order to provide consistent, company-wide injunctive relief. However, each document speaks for
itself and: (i) nothing in this Consent Decree shall alter or amend the provisions of the Arch Consent
Decree, (ii) nothing in the Arch Consent Decree shall alter or amend the provisions of this Consent
Decree, and (iii) the provisions of the Arch Consent Decree are not incorporated herein except where
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specifically referenced.
E. Concurrent with the lodging of this Consent Decree, Plaintiffs, the United States of
America on behalf of the United States Environmental Protection Agency ("EPA"), the State of West
Virginia, by and through the West Virginia Department of Environmental Protection ("WVDEP"),
the Commonwealth of Virginia, by and through the Virginia Department of Mines, Minerals, and
Energy ("VA DMME"), and the Pennsylvania Department of Environmental Protection ("PADEP")
have filed a Complaint in this action against Arch and the ICG Defendants (collectively,
"Defendants"). The Complaint alleges that Defendants violated Sections 301 and 402 oft he Federal
Water Pollution Control Act as amended by the Clean Water Act of 1977 and the Water Quality Act
of 1987 ("CWA" or the "Act"), 33 U.S.C. §§ 1311 and 1342; the West Virginia Water Pollution
Control Act ("WPCA"), W. Va. Code § 22-11-8; the Virginia State Water Control Law, Va. Code §
62.1-44.2, et seq.; and the Pennsylvania Clean Streams Law ("PCSL") 35 P.S. §§ 691.301,691.307,
691.315 and 691.601. Specifically, the Complaint alleges that Defendants violated Section 301 of
the Act, W.Va. Code§ 22-11-8, Va. Code§ 62.1-44.5, and the PCSL, 35 P.S.§§ 691.301, 691.307,
691.315, by discharging, and continuing to discharge, pollutants in violation ofthe conditions and
limitations of National Pollutant Discharge Elimination System ("NPDES") permits issued to
Defendants pursuant to Section 402 ofthe Act, 33 U.S.C. § 1342, Section 8 ofthe WPCA, W.Va.
Code§ 22-11-8, Va. Code§ 45.1-254, and Section 301 ofthe PCSL, 35 P.S. § 691.301.
F. Defendants do not admit any liability to the United States or the States arising out of
the transactions or occurrences alleged in the Complaint nor do Defendants admit any fact or legal
conclusion alleged in the Complaint.
G. Arch has developed an integrated Compliance Management System ("Arch CMS") to
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standardize and formalize practices and programs used to maintain, track, and improve
environmental performance at all of its eastern operations. Under the terms of this Consent Decree,
the Arch CMS will be implemented at all ICG Facilities. In addition, Defendants will implement the
Arch CMS at all of the ICG Future Facilities. When complete and fully implemented, the Arch CMS
will encompass Legal Requirements beyond the Applicable Law.
H. Defendants Hawthorne Coal Co., Inc.; ICG Eastern, LLC; Juliana Mining Company,
Inc.; King Knob Coal Company, Inc.; Patriot Mining Company, Inc.; Vindex Energy Corp.; and
Wolf Run Mining Company have entered into the state settlements identified in Subparagraphs (i)
through (ix) below, which resolve alleged NPDES permit violations other than those alleged in the
Complaint in this action:
I. Consent Order M-08-012 between WVDEP and Hawthorne Coal Co.,
Inc., issued on May 19, 2008.
II. Consent Order M-08-013 between WVDEP and ICG Eastern, LLC,
issued on May 19, 2008.
m. Consent Order M-08-014 between WVDEP and Juliana Mining
Company, Inc., issued on May 19, 2008.
IV. Consent Order M-08-015 between WVDEP and King Knob Coal
Company, Inc., issued on May 19, 2008.
v. Consent Order M-08-016 between WVDEP and Patriot Mining
Company, Inc., issued on May 19, 2008.
VI. Consent Order M-08-017 between WVDEP and Vindex Energy Corp.,
issued on May 19, 2008.
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vu. Consent Order M-08-018 between WVDEP and Wolf Run Mining
Company, issued on May 19, 2008.
vm. Consent Decree between WVDEP and ICG Eastern, LLC, Civil Action
No. 10 -C-20, entered by the Circuit Court of Webster County, West Virginia on April18, 2011, and
Supplemental Consent Decree, entered on November 4, 2011.
1x. Consent Decree between WVDEP and Hawthorne Coal Co., Inc., Civil
Action No. 10 -C-57, entered by the Circuit Court of Upshur County, West Virginia, on August 5,
2011.
Notwithstanding these settlements, all provisions of this Consent Decree shall apply to
Hawthorne Coal Co., Inc.; ICG Eastern, LLC; Juliana Mining Company, Inc.; King Knob Coal
Company, Inc.; Patriot Mining Company, Inc.; Vindex Energy Corp.; and Wolf Run Mining
Company except as otherwise provided in Paragraph 77.
I. On October 10, 2012, the Circuit Court of Franklin County, Kentucky entered a
settlement between ICG East Kentucky, LLC; ICG Knott County, LLC; and Powell Mountain
Energy, LLC (collectively referred to as the "ICG Kentucky Defendants"); ICG Hazard LLC; the
Energy and Environment Cabinet of the Commonwealth of Kentucky; and certain Plaintiff
Intervenors, which resolved the ICG Kentucky Defendant's and ICG Hazard LLC's NPDES alleged
permit violations between January 1, 2008 and June 6, 2012. The ICG Kentucky Defendants are not
subject to the requirements of Paragraphs 42-45 (Audits and Inspections), 50 (Audit Information), or
52 (Effluent Limit Violation Response), at Facilities located in Kentucky, except as otherwise
provided by Paragraph 8. Notwithstanding, the United States reserves all rights and claims with
respect to NPDES permit violations at the ICG Kentucky Defendants' operations in accordance with
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Paragraphs 101 and 102.
J. On July 2, 20 14, the Circuit Court of Upshur County, West Virginia entered a
Consent Decree between WVDEP and Upshur Property, Inc. in Civil Action No. 13-C-13, which
resolved alleged violations of NPDES Permit Nos. WV0050717, WV0067881, and WV009490 1
from January 1, 2007 through December 31, 2013. To avoid inconsistent injunctive relief, the
provisions of this Consent Decree do not apply to Facilities associated with NPDES Permit Nos.
WV0050717, WV0067881, and WV009490 1 (the "Upshur Facilities"), except that Effluent Limit
Violations at the Upshur Facilities must be reported under Paragraph 56( a) of the Consent Decree.
Notwithstanding, the United States reserves all rights and claims with respect to NPDES permit
violations at the Upshur Facilities in accordance with Paragraphs 101 and 102.
K. The Parties recognize, and the Court by entering this Consent Decree finds, that this
Consent Decree has been negotiated by the Parties in good faith and will avoid litigation among the
Parties, and that this Consent Decree is fair, reasonable, and in the public interest.
NOW, THEREFORE, with the consent of the Parties, IT IS HEREBY ADJUDGED,
ORDERED, AND DECREED as follows:
II. JURISDICTION AND VENUE
1. This Court has jurisdiction over the Parties and over the subject matter ofthis action,
pursuant to 28 U.S.C. §§ 1331, 1345, 1355, and 1367, and Section 309(b) of the Clean Water Act, 33
u.s.c.
§ 1319(b).
2. The Parties agree that venue is proper in the Southern District of West Virginia
pursuant to 28 U.S.C. §§ 1391(b) and (c) and 1395(a), as well as Section 309(b) ofthe Clean Water
Act, 33 U.S.C. § 1319(b).
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3. For purposes of this Decree, or any action to enforce this Decree, Defendants consent
to the Court's jurisdiction over this Decree and consent to venue in this judicial district.
4. For purposes of this Decree, Defendants agree that the Complaint states claims upon
which relief may be granted pursuant to Sections 301 and 402 ofthe Act, 33 U.S.C. §§ 1311 and
1342, West Virginia Code§ 22-11-1, et seq., Virginia Code§§ 45.1-254 and§ 62.1-44.2, et seq., and
Sections 301,307,315 and 601 ofthe PCSL, 35 P.S. §§ 691.301,691.307,691.315 and 691.601.
III. APPLICABILITY
5. The provisions of this Consent Decree apply to and are binding upon the United
States, the States, Defendants, and Defendants' successors and/or assigns, except as otherwise set
forth herein.
6. The provisions of this Consent Decree shall not apply to any ICG Future Facility that
is otherwise required to comply with the Arch Decree. The provisions ofthis Consent Decree shall
apply to all other ICG Future Facilities as follows:
a. All provisions of the Decree shall apply to ICG Future Facilities that are
located either (i) within the boundaries of existing Surface Mining Control and Reclamation Act
("SMCRA") or NPDES permits for Facilities covered by this Decree or by the Arch Decree, or (ii)
adjacent to a Facility covered by this Decree or by the Arch Decree;
b. For all other ICG Future Facilities, the provisions of the Decree shall not
apply, except that Defendants shall conduct Initial Treatment Systems Audits pursuant to Paragraph
42 as follows: (i) within 90 Days from the initiation of operations by Defendant(s) for Outlets with
Persistent Noncompliance Issues; and (ii) within 120 Days from the initiation of operations by
Defendant(s) for all remaining Outlets.
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7. The requirements in Paragraphs 34 through 41 (Arch Compliance Management
System and CMS Audit), 33 (ICG Future Facilities), and 56(d) (Quarterly Reports) do not
incorporate or otherwise apply to any portion of the Arch CMS that relates solely to Legal
Requirements other than Applicable Law.
8. Facilities located in Kentucky that are owned by, permitted to, or otherwise controlled
by the ICG Kentucky Defendants are not subject to the requirements in Paragraphs 42-45 (Audits
and Inspections), 50 (Audit Information), and 52 (Effluent Limit Violation Response) except with
respect to Outlets that have Persistent Noncompliance Issues. Once such an Outlet is subject to the
requirements of Paragraphs 42-45, 50, and 52 due to Persistent Noncompliance Issues, that Outlet
will continue to be subject to those Paragraphs until it has demonstrated 12 consecutive months of
compliance with all applicable NPDES permit limits.
9. Defendants hereby agree that they shall be bound to perform duties scheduled to occur
by this Consent Decree prior to the Effective Date. In the event the United States withdraws or
withholds consent to this Consent Decree before entry, or the Court declines to enter this Consent
Decree, then the preceding requirement to perform duties scheduled to occur before the Effective
Date shall terminate.
10. No transfer of ownership or operation of any Facility shall relieve Defendants of their
obligations to ensure that the terms of the Decree are implemented, except as provided in Paragraphs
11-12 below. At least 60 Days prior to any transfer of ownership or operation of a Facility,
Defendants shall provide to the United States: (a) written notice of the prospective transfer; (b)
certification that the Facility is in compliance with applicable terms ofthe Consent Decree and that
the obligations under Paragraph 11(a) have been completed or will be completed regardless of
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