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1 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA CHARLESTON DIVISION UNITED STATES OF AMERICA, STATE OF WEST VIRGINIA by and through the WEST VIRGINIA DEPARTMENT OF ENVIRONMENTAL PROTECTION, and COMMONWEALTH OF KENTUCKY by and through the ENERGY AND ENVIRONMENT CABINET V Plaintiffs, ARCH COAL, INC.; COAL MAC, INC.; LONE MOUNTAIN PROCESSING, INC.; CUMBERLAND RIVER COAL COMPANY; and MINGO LOGAN COAL COMPANY Defendants. Civil Action No. COMPLAINT The United States of America ("United States", by authority of the Attorney General of the United States and through the undersigned attorneys on behalf of the Administrator of the United States Environmental Protection Agency ("EPA"; the State of West Virginia by and through the West Virginia Department of Environmental Protection ("WVDEP"; and the Commonwealth of Kentucky by and through the Kentucky Energy and Environment Cabinet (collectively, "Plaintiffs", file this Complaint and allege as follows: INTRODUCTION 1. This is a civil action brought pursuant to Section 309(b and (d of the Federal Water Pollution Control Act ("Clean Water Act" or the "CWA", 33 U.S.C. 1319(b and (d, Section

2 22 of the West Virginia Water Pollution Control Act ("WPCA", W.Va. Code , and Kentucky Revised Statutes ("KRS" Chapter 224, Ky. Rev. Stat. Ann Plaintiffs allege that Defendants discharged and will continue to discharge pollutants into waters of the United States, of the State, or Commonwealth in violation of Section 301 of the CWA, 33 U.S.C. 1311, Section 8 of the WPCA, W.Va. Code , and KRS Chapter 224, Ky. Rev. Stat. Ann , respectively. Plaintiffs also allege that Defendants are in violation of the conditions and limitations of National Pollutant Discharge Elimination System ("NPDES" permits issued by West Virginia, Kentucky, and Virginia pursuant to Section 402 of the CWA, 33 U.S.C. 1342, Section 8 of the WPCA, W.Va. Code , and KRS Chapter 224, Ky. Rev. Stat. Ann Plaintiffs seek permanent injunctive relief and civil penalties against Defendants to halt their illegal discharges of pollutants into waters of the United States and of the State or Commonwealth, as authorized by Sections 309(b and (d of the CWA, 33 U.SIC. 1319(b and (d, Section 22 of the WPCA, W.Va. Code , and KRS Chapter 224, Ky. Rev. Stat. Ann , respectively. JURISDICTION AND VENUE 3. This Court has jurisdiction over the subject matter of this action under Section 309(b of the Clean Water Act, 33 U.S.C. 1319(b, and under 28 U.S.C. 1331, 1345, 1355, and Venue is proper in the Southern District of West Virginia pursuant to 28 U.S.C (b and (c and 1395 (a, as well as Section 309(b of the Clean Water Act, 33 U.S.C. 1319(b, because it is the judicial district in which Defendants are located, reside, and/or are doing business, and/or in which the majority of the violations alleged in the Complaint occurred.

3 5. Notice of commencement of this action has been given to the State of West Virginia and the Commonwealths of Virginia and Kentucky in accordance with Section 309(b of the CWA, 33 U.S.C. 1319(b. DEFENDANTS 6. Arch Coal, Inc. ("Arch" is a Delaware corporation with its principal place of business at City Place One, Suite 300, St. Louis, Missouri. 7. Coal Mac, Inc. is a Kentucky corporation with its principal place of business at City Place One, Suite 300, St. Louis, Missouri. 8. Lone Mountain Processing, Inc. is a Delaware corporation with its principal place of business at City Place One, Suite 300, St. Louis, Missouri. 9. Cumberland River Coal Company, Inc. is a Delaware corporation with its principal place of business at City Place One, Suite 300, St. Louis, Missouri. 10. Mingo Logan Coal Company, is a Delaware corporation with its principal place of business at City Place One, Suite 300, St. Louis, Missouri. STATUTORY AND REGULATORY REQUIREMENTS 11. Section 301(a of the CWA, 33 U.S.C. 131 l(a, prohibits the "discharge of any pollutant by any person" to waters of the United States, except, inter alia, in compliance with an NPDES permit issued by EPA or an authorized state pursuant to Section 402 of the CWA, 33 U.S.C Section 402(a of the CWA, 33 U.S.C. 1342(a, provides that the permit-issuing authority may issue an NPDES permit that authorizes the discharge of any pollutant to waters of the

4 United States, upon the condition that such discharge will meet all applicable requirements of the CWA and such other conditions as the permitting authority determines necessary to carry out the provisions of the CWA. 13. Section 402 of the CWA, 33 U.S.C. 1342, directs the Administrator to prescribe conditions for NPDES permits to assure compliance with the requirements of the CWA, including conditions on data and information collection, reporting, and such other requirements as the Administrator deems appropriate. 14. Effluent limitations, as defined in Section 502(11 of the CWA, 33 U.S.C. 1362(11, are restrictions on quantity, rate, and concentration of chemical, physical, biological, and other constituents which are discharged from point sources. Effluent limitations are among the conditions and limitations prescribed in NPDES permits issued under Section 402(a of the CWA, 33 U.S.C. 1342(a. 15. In 1985, EPA set effluent limitations guidelines ("ELGs" for discharges from coal mining point sources. See 40 C.F.R. Part 434, 50 Fed. Reg The ELGs prescribe "maximum for any 1 day" and "average of daily values for 30 consecutive days" numeric effluent limits for, inter alia, iron, total suspended solids, ph, and manganese. Discharges with a ph above or below the range set forth in the applicable ELGs (generally within the range of 6.0 to 9.0 at all times are violations of the daily minimum or daily maximum limits in Defendants NPDES permits. 16. Section 303(a of the CWA, 33 U.S.C. 1313(a, requires that states adopt ambient water quality standards and establish water quality criteria for particular water bodies that will protect the designated uses of the water. When technology-based ELGs are insufficient to keep

5 receiving waters within those levels, the permit must include stricter water quality based effluent limits that reflect water quality standards and criteria. Section 301 (b(1(c of the CWA, 33 U.S.C (b(1(c. See 47 C.S.R. 2-1, et seq. (West Virginia water quality standards; see also 401 Ky. Admin. Regs. 10:1001, et seq. (Kentucky water quality standards. 17. Section 309(b of the CWA, 33 U.S.C. 1319(b, authorizes the Administrator to commence a civil action for appropriate relief, including a permanent or temporary injunction, against any person who violates Section 301 of the CWA, 33 U.S.C. 1311, or violates any permit condition or limitation in a permit issued pursuant to Section 402 of the CWA, 33 U.S.C Section 309(d of the CWA, 33 U.S.C. 1319(d, provides that any person who violates Section 301 of the CWA, 33 U.S.C. 1311, or violates any permit condition or limitation in a permit issued pursuant to Section 402 ofthe CWA, 33 U.S.C. 1342, shall be subject to a civil penalty payable to the United States of up to $25,000 per day for each violation. 19. Pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C note, as amended by the Debt Collection Improvement Act of 1996, 31 U.S.C note, 69 Fed. Reg (February 13, 2004, and 74 Fed. Reg. 626 (January 7, 2009, 40 C.F.R. 19, EPA may seek civil penalties of up to $32,500 per day for each violation occurring between March 15, 2004 and January 12, 2009, and up to $37,500 per day for each violation occurring after January 12, At all relevant times, the State of West Virginia has been authorized by EPA to administer an NPDES program for regulating the discharges of pollutants to navigable waters within the state s jurisdiction. 47 Fed. Reg Pursuant to W.Va. Code , , and 22-

6 11-4, the WVDEP, through the Director of the Division of Water and Waste Management, is the state regulatory agency that administers the NPDES permit program in West Virginia. 21. Section 8 of the WPCA, W.Va. Code , prohibits the discharge of any pollutant by any person into waters of the State of West Virginia, except, inter alia, in compliance with applicable water quality standards and a West Virginia NPDES permit issued pursuant to the WPCA. 22. Section 22 of the WPCA, W.Va. Code , authorizes WVDEP to commence a civil action for injunctive relief to compel compliance with and enjoin violations of any provision of the WPCA or any term or condition of an NPDES permit issued under the WPCA. Section 22 of the WPCA also provides that any person who violates any provision of an NPDES permit issued pursuant to Section 8 of the WPCA, W.Va. Code , is subject to a civil penalty of up to $25,000 per day for each violation. 23. At all relevant times, the Commonwealth of Kentucky has been authorized by EPA to administer an NPDES program for regulating the discharges of pollutants to navigable waters within the jurisdiction of the Commonwealth. 48 Fed. Reg Pursuant to KRS Chapter 224, Ky. Rev. Stat. Ann (19, the Kentucky Energy and Environment Cabinet s Division of Water is the agency that administers the NPDES permit program in Kentucky. 24. KRS Chapter 224, Ky. Rev Stat. Ann , prohibits discharge of any pollutant by any person into waters of the Commonwealth if such discharge violates a permit issued pursuant to KRS Chapter 224, Ky. Rev. Stat. Ann KRS Chapter 224, Ky. Rev Stat. Ann , authorizes the Energy and

7 Environment Cabinet to commence an action for injunctive relief or penalties as provided in Chapter 224. KRS Chapter 224, KY. Rev. Stat. Ann , provides that any person who discharges without a permit under or violates a Kentucky NPDES permit under is subject to a civil penalty up to $25,000 per day for each violation. GENERAL ALLEGATIONS 26. The Defendants named herein are "persons" within the meaning of Section 502(5 of the CWA, 33 U.S.C. 1362(5, Section 3(15 of the WPCA, W.Va. Code (15, and KRS Chapter 224, Ky. Rev. Stat. Ann ( At all relevant times, Arch managed, directed, or controlled environmental compliance at the facilities owned/operated by Coal Mac, Inc., Lone Mountain Processing, Inc., Cumberland River Coal Company, and Mingo Logan Coal Company (collectively, "Subsidiaries". 28. Arch s management, direction, and control over environmental compliance at the Subsidiaries includes development of a company-wide compliance management system, issuance of a corporate mission statement and environmental policy to all employees, corporate-level review of environmental compliance records, and issuance of weekly summaries of environmental noncompliance to all corporate and operations managers. 29. At all relevant times, Arch and its Subsidiaries (collectively, "Defendants" did business in West Virginia, Kentucky, and/or Virginia. 30. Defendants own and/or operate coal mining, processing, and/or shipping operations, and/or facilities. As a result of their coal mining and processing operations, Defendants generate coal slurry, wastewater, and other excess materials that are, or contain, various "pollutants" as that

8 term is defined in Section 3(17 of the WPCA, W.Va. Code (17, KRS Chapter 224, Ky. Rev. Stat. Ann (35, and Section 502(6 of the CWA, 33 U.S.C. 1362(6, and 40 C.F.R , including iron, aluminum, and manganese ("nonconventional" pollutants under Section 301 (g of the CWA, 33 U.S.C (g, ph and total suspended solids ("conventional" pollutants as listed in 40 C.F.R , and selenium (a "toxic" pollutant under 40 C.F.R Arch s Subsidiaries obtained NPDES permits from West Virginia, Kentucky, and Virginia. The respective NPDES permits contain effluent limitations prohibiting discharges of specified pollutants in excess of numeric monthly average, daily maximum, and/or daily minimum limits. These limitations reflect ELGs and stricter water quality based effluent limits. 32. At all relevant times, Defendants have discharged pollutants from various impoundment and settlement ponds, outlets, ditches, and other conveyances that are "point sources" within the meaning of Section 3 (16 of the WPCA, W.Va. Code (16, and Section 502(14 of the Clean Water Act, 33 U.S.C. 1362(14, into streams, rivers, and other waters of the United States, within the meaning of Section 502(7 of the CWA, 33 U.S.C. 1362(7, and the federal regulations implementing the CWA at 40 C.F.R , as well as waters of the State or Commonwealth within the meaning of W.Va. Code (23 and Ky. Rev. Stat (33, respectively. 33. The receiving waters into which Defendants have discharged pollutants are identified by NPDES permit number and outlet location in Appendix A to this Complaint. Each of these receiving waters is either a tributary or unnamed tributary that (a is a perennial tributary to the Ohio

9 River, a traditionally navigable water, or (b flows into perennial tributaries to the Ohio River, a traditionally navigable water. See Appendix B. 34. On December 20, 2007, EPA sent an information request to Arch pursuant to Section 308 of the CWA, requesting that Arch create a spreadsheet for each permit reflecting all effluent limitation exceedances from January 1,2003 through January 1,2008. The exceedance spreadsheet attached as Appendix A to this Complaint represents information provided by Arch in response to the December 20, 2007 information request, updated through December 30, The information provided by Arch, as supplemented for exceedances through December 30, 2010, reflects a total of at least 808 violations between January 1, 2003 through December 30, This includes at least 343 violations of daily minimum and daily maximum effluent limitations, and at least 465 violations of monthly average limitations. See Appendix A. 36. West Virginia and Virginia inspectors issue Notices of Violation ("NOVs" pursuant to the West Virginia Coal Surface Mining Reclamation Act ("WVSCMRA", W.Va. Code , or Virginia Coal Surface Mining Control Reclamation Act ("VSMCRA", Va. Code. Ann , respectively, and Kentucky inspectors issue Notices of Noncompliance ("NONs" pursuant to the Kentucky Surface Mining Act ("KSMA", Ky. Rev. Stat. Ann , (NOVs and NONs collectively referred to herein as NOVs, to persons engaging in mining operations who violate any rules promulgated or permits issued under these mining acts. Mining permits issued under WVSCMRA, VSMCRA, and KSMA require compliance with NPDES effluent limitations and incorporate such limitations by reference. NOVs document NPDES permit violations and/or unpermitted discharges such as visible spills of slurry, blackwater, and other pollutants into waters

10 of the United States, of the State, or Commonwealth. 37. In addition to the violations in the exceedance spreadsheet, from January 2003 through December 30, 2009, Arch s Subsidiaries were issued at least l 7 NOVs showing violations of NPDES permit conditions and/or unpermitted discharge-related violations in West Virginia, Kentucky, and Virginia. See Appendix C. 38. Watersheds in West Virginia, Kentucky, and Virginia contain important plant and animal life. These ecosystems exist in areas in which Defendants own and/or operate coal mining, processing, and/or shipping operations, and/or facilities. On information and belief, Defendants unpermitted discharges and discharges of pollutants in excess of permitted limits caused or have the potential to cause environmental harm and degradation to these rivers, streams, and associated aquatic ecosystems. CLAIM FOR RELIEF 39. Paragraphs 1-38 are realleged and incorporated by reference. 40. During the period relevant to this Complaint, Defendants have discharged and likely will continue to discharge pollutants from point sources in excess of effluent limitations or without a permit into waters of the United States, of the State, or Commonwealth located in West Virginia, Kentucky, or Virginia. 41. Defendants have exceeded effluent limitations contained in NPDES permits at least 343 times for daily effluent limitations and at least 465 times for monthly effluent limitations. 42. In addition, Arch s Subsidiaries have received at least 17NOVs for exceeding NPDES permit limitations in violation of the terms of its permits and/or for unpermitted discharges of 10

11 pollutants in West Virginia, Kentucky, and Virginia. 43. For each exceedance of an effluent limitation, Defendants are in violation of the terms of the applicable NPDES permit under Section 402 of the CWA. 44. Defendants unpermitted discharges constitute violations of Section 301 of the CWA, 33 U.S.C Defendants unpermitted discharges and discharges of pollutants in excess of effluent limitations contained in the applicable NPDES permits constitute violations of W.Va. Code and Ky, Rev. Stat , Unless enjoined, Defendants violations will continue. 47. Pursuant to Section 309(b of the CWA, 33 U.S.C. 1319(b, Section 22 of the WPCA, W.Va. Code , KRS Chapter 224, Ky. Rev. Stat. Ann , Defendants are liable for permanent injunctive relief. 48. Pursuant to Section 309(d of the CWA, 33 U.S.C. 1319(d, Defendants are liable for civil penalties of up to $32,500 per day of violation for all violations occurring between March 15, 2004 and January 12, 2009, and up to $37,500 per day of violation for all violations occurring after January 12, Under Section 22 of the WPCA, W.Va. Code , and KRS Chapter 224, Ky. Rev. Stat. Ann , Defendants are liable for civil penalties up to $25,000 per day for each violation. PRAYER FOR RELIEF WHEREFORE, Plaintiffs, the United States of America, the State of West Virginia, and the 11

12 Commonwealth of Kentucky respectfully pray that this Court: 1. Permanently enjoin Defendants from discharging pollutants except as expressly authorized by the CWA and the limitations and conditions of NPDES permits held by Arch s Subsidiaries. 2. Order Defendants to take all necessary steps to comply with the CWA, the WPCA, KRS Chapter 224, and the limitations and conditions of the applicable NPDES permits, 3. Assess civil penalties against Defendants up to $32,500 per day for each violation of the CWA or any applicable NPDES permit that occurred between March 15, 2004 and January 12, 2009, and up to $37,500 per day for each violation of the CWA or any applicable NPDES permit that occurred after January 12, Assess civil penalties against Defendants up to $25,000 per day for each violation under Section 22 ofthe WPCA, W.Va. Code , and/or KRS Chapter 224, Ky. Rev. Stat. Ann Grant such other relief as the Court may deem appropriate. Respectfully submitted, FOR THE UNITED STATES OF AMERICA Assistant Attorney General Environment & Natural Resources Division U.S. Department of Justice 12

13 LAURA A. THOMS BRITTA G, HINRICHSEN Trial Attorneys Environmental Enforcement Section Environment & Natural Resources Division United States Department of Justice P.O, Box 7611 Washington, D.C

14 Respectfully submitted, FOR THE UNITED STATES OF AMERICA R. BOOTH GOODWIN II United States Attorney GARY L. CALL Assistant United States Attorney WV State Bar No. 589 P.O. Box 1713 Charleston, WV Tel: Fax: v 14

15 Respectfully submitted, FOR THE STATE OF WEST VIRGINIA ~r~" POLLACK West Virginia Department of Environmental Protection th Street Charleston, WV

16 !~!!i i!i!~i i~!;

CITY OF FORTUNA, Defendant. /

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