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Ohio Valley Environmental Coalition v. Fola Coal Company, LLC

United States District Court, S.D. West Virginia, Charleston Division

April 17, 2018

OHIO VALLEY ENVIRONMENTAL COALITION, WEST VIRGINIA HICHLANDS CONSERVANCY, WEST VIRGINIA RIVERS COALITION and SIERRA CLUB, Plaintiffs,
v.
FOLA COAL COMPANY, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. CHAMBERS UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Fola Coal Company, LLC's (“Fola”) Motion to Dismiss. ECF No. 9. Fola argues that Plaintiffs' claims should be dismissed because the doctrine of res judicata precludes them.[1] As explained below, the Court believes that Plaintiffs' claims present sufficient differences from prior claims to prevent the application of either claim preclusion or issue preclusion. Consistent with that finding, the Court DENIES Fola's Motion to Dismiss.

         I. BACKGROUND

         This case is but one in a series of actions filed in this Court by Plaintiffs.[2] With an interest in Appalachian ecosystems, Plaintiffs have brought various suits alleging violations of environmental laws and regulations. See e.g. Compl., OVEC v. Fola Coal Co., LLC, No. 2:13-5006, ECF No.1; Compl., OVEC v. Fola Coal Co., LLC, No. 2:13-21588, ECF No. 1 (consolidated with Case No. 2:13-16044); Compl., OVEC v. Pocahontas Land Corp., No. 3:14-11333, ECF No. 1; Compl., OVEC v. Fola Coal Co., LLC, No. 2:15-1371, ECF No. 1; Compl., OVEC v. Southeastern Land, LLC, No. 3:18-77, ECF No. 1. Indeed, Plaintiffs have filed a fair portion of these actions against Fola. See Id. These parties are neither strangers to each other, nor this Court.

         In these actions, Plaintiffs have alleged violations of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (the “Clean Water Act”) and the Surface Mining Control and Reclamation Act, 30 U.S.C. § 1201 et seq. (“SMCRA”). See Id. Plaintiffs have claimed that companies, including Fola, have discharged pollutants into waters adjacent to current or former mining sites. This release of polluting substances, claims Plaintiffs, has violated permits issued to these companies under the Clean Water Act and SMCRA.

         Although generally describable as environmental pollution lawsuits, the precise environmental focus of Plaintiffs' actions has changed over the years. In years past, Plaintiffs alleged violations of the relevant permits and law because of the release of an excess amount of selenium, a pollutant that affects the water quality of streams and waterways. See Compl., OVEC v. Fola Coal Co., LLC, No. 2:12-3750; see generally OVEC v. Fola Coal Co., LLC, No. 2:12-3750, 2013 WL 6709957 (S.D. W.Va. Dec. 19, 2013). However, since that time, Plaintiffs' concern has shifted from selenium discharge to the release of ionic pollutants that lead to increased conductivity of the waters. See Compl, ECF No. 1; Compl., OVEC v. Fola Coal Co., LLC, No. 2:13-21588; OVEC v. Fola Coal Co., LLC, 120 F.Supp.3d 509, 511, 513-16 (S.D. W.Va. 2015) (adjudicating case No. 2:13-21588); OVEC v. Fola Coal Co., LLC, No. 2:15-1371, 2017 WL 1276059, *8 (S.D. W.Va. Apr. 4, 2017).

         This case echoes the theme of these more recent cases. Plaintiffs allege that Fola has discharged, and continues to discharge, ionic pollutants in violation the Clean Water Act (“CWA”) and Fola's permits issued under both the CWA and the SMCRA. Specifically, Plaintiffs allege these discharges emanate from two mines owned by Fola: Surface Mine No. 4A and Bullpen Surface Mine. Compl, ¶ 3. These discharges, according to Plaintiffs, have impaired waters adjacent to these mines. Pollutants from the Surface Mine No. 4A have allegedly flowed into Right Fork, a tributary of Leatherwood Creek; pollutants from the Bullpen Surface Mine have allegedly flowed into Bullpen Fork, a tributary of Right Fork. Id. at ¶¶ 41-66.

         Plaintiffs focus upon certain sources of discharge within each of the mining sites. With regard to the Surface Mine No. 4A, Plaintiffs claim that Outlets 022 and 023 have discharged, and are discharging, pollutants into Right Fork, in violation of Fola's permits WV1013815 (permit under CWA provisions) and S200502 (Surface Mining Permit). Id. at ¶¶ 41-42, 51, 66, 87. Concerning the Bullpen Surface Mine, Plaintiffs assert that Outlets 001 and 009 have discharged, and are discharging, those same pollutants into Bullpen Fork, in violation of Fola's permits WV1017934 and S200798. Id. at ¶¶ 57-58, 66, 87.

         In its currently pending Motion to Dismiss in this matter, Fola does not directly challenge the substance of Plaintiffs' allegations. Instead, Fola claims that Plaintiffs' claims are barred because, in essence, Plaintiffs have already swung and missed during their previous at-bats to challenge Fola's discharges from both the Surface Mine No. 4A and the Bullpen Surface Mine.

         Fola correctly notes that Plaintiffs have alleged violations concerning discharges from both of those mines in two previous suits, Fola I and Fola II. In the first, filed on July 26, 2012, Plaintiffs sued Fola over selenium discharges from, among other sites, the Surface Mine No. 4A and the Bullpen Surface Mine. OVEC v. Fola Coal Co., LLC (“Fola I”), No. 2:12-3750, 2013 WL 6709957, at *2. At issue were the selenium discharges from Outlets 022, 023, and 027 at the Surface Mine No. 4A, and Outlet 009 at the Bullpen Surface Mine. The alleged violations took place from July 2008 through March 2012. Ex. 2 Def.'s Mem. in Supp. of Mot. to Dismiss, ECF No. 10-2, at App. A & B. After a finding of liability, the parties entered a Consent Decree that resolved the Plaintiffs' claims of violations contained within their complaint. Ex. 4 Def.'s Mem. in Supp. of Mot. to Dismiss, ECF No. 10-4, at ¶ 33. However, the Consent Decree expressly resolved only those claims of violations, “through the Effective Date of [the] Decree.” Id. The Court entered the Consent Decree on February 2, 2015, rendering the decree effective on that same day. Therefore, that suit, No. 2:12-3750, adjudicated only the selenium violations from July 2008 through February 2, 2015.

         By the time of the second suit, Plaintiffs had advanced beyond targeting selenium discharges, and had zeroed in on ionic pollutants and conductivity. This second suit, Fola II, concerned only the Surface Mine No. 4A. Filing the original complaint on August 8, 2013, Plaintiffs alleged that Fola had violated its permits during the period from September 2007 through the date of the Complaint, by discharging ionic pollutants from, among other sources, Outlets 022, 023, and 027 at the Surface Mine No. 4A. Ex. 3 Def.'s Mem. in Supp. of Mot. to Dismiss, ECF No. 10-3, at ¶ 47, 49; OVEC v. Fola Coal Co., LLC (“Fola II”), 120 F.Supp.3d at 539-41. However, the evidence adduced at trial covered the period until September 2014. Fola II, 120 F.Supp.3d at 540. After a bench trial on liability, the Court found that Plaintiffs failed to establish violations regarding Outlets 022, 023, and 027. Id. at 543-44. The Court found “that Plaintiffs had not met their burden of proving that discharges from Outlets 022, 023, and 027 cause or materially contribute to biological impairment of Right Fork.” Id.at 544. Because of this finding, the Court granted judgment as a matter of law in favor of Fola regarding the alleged violations of the permit governing the Surface Mine No. 4A, covering the period from September 2007 until September 2014. Id.

         Beyond the general finding, this Court's exact rationale in Fola II is relevant to the current motion pending before the Court in this case. In Fola II, the Court addressed Fola's argument that Plaintiffs had failed to isolate the effects of the discharges from Outlets 022, 023, and 027. Id. at 543. As noted by the Court, Outlets 022 and 023 discharge into Right Fork, while Outlet 027 discharges in Cannel Coal Hollow, another tributary of Leatherwood Creek. Id. But those were by no means the only outlets affecting Right Fork. This Court noted, “some twelve additional outlets discharge into Right Fork or Cannel Coal Hollow upstream of Plaintiffs' compliance sampling location.” Id. Citing the testimony of one of Plaintiffs' expert witnesses, Dr. Margret Palmer, the Court found that “Plaintiffs' sampling does not isolate the effect of discharges only from Outlets 022, 023, and 027.” Id. (citing to the trial transcript).

         Further, the Court proceeded to reason that the percentage of flow attributable to Outlets 022, 023, and 027 only accounted for one-eight of the total flow of Right Fork. Id. at 543-44. Relying upon the flow reports of both Plaintiffs and the West Virginia Department of Environmental Protection, the Court found that a one-eighth contribution to the total flow was insufficient to establish a material contribution to the impairment of Right Fork. Id. Without additional scientific evidence, the Court could only speculatively connect the outlet discharges to Plaintiffs' sampling locations. Id. at 544. Simply, the multitude of contributing flow sources prevented the Court from finding the causal link between those outlet discharges and Right Fork's impairment.

         Roughly two years after both the resolution of Fola I and the dismissal of the relevant claims in Fola II, Plaintiffs filed this action. Plaintiffs are now on their third challenge to discharges from outlets at the Surface Mine No. 4A. More specifically, including this action, Plaintiffs have challenged discharges from Outlets 022 and 023 three times, two of which allege violations due to the discharge of ionic pollutants leading to conductivity issues in Right Fork.

         This action constitutes Plaintiffs' second challenge to discharges from the Bullpen Surface Mine, but this is the first time Plaintiffs have alleged conductivity issues due to discharges from that mine's outlets. But, Plaintiffs have never before alleged violations due to discharges from Outlet 001 of Bullpen Surface Mine, even though Fola I concerned selenium output from Outlet 009.

         Having briefly chronicled the previous two rounds between these parties, and provided a basic description of this action, the Court will proceed to the heart of the question confronting it: Are Plaintiffs claims, or parts of their claims, barred because they have been, or could have been, argued and have already been decided? As explained below, the Court will allow Plaintiffs to continue with their claims due to the sufficient material differences.

         II. STANDARD OF REVIEW

         Typically, to overcome a motion to dismiss under Federal Rule 12(b)(6), a complaint must state plausible claims. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 546 (2007). This standard requires a plaintiff to set forth the “grounds” for an “entitle[ment] to relief” that is more than mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555 (internal quotations and citations omitted). A complaint must contain “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citation omitted). Facial plausibility exists when a claim contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted).

         Further, the Court accepts the factual allegations in the complaint as true. Those allegations, however, “must be enough to raise a right to relief above the speculative level . . . . ” Twombly, 550 U.S. at 555 (citations omitted). If the allegations in the complaint, assuming their truth, do “not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.” Id. at 558 (internal quotations and citations omitted). “Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678 (internal quotations and citation omitted). Finally, a court must also “draw[ ] all reasonable factual inferences from those facts [alleged] in the plaintiff's favor . . . .” Martin v. Duffy, 858 F.3d 239, 248 (4th Cir. 2017) (internal quotations omitted) (quoting Veney v. Wyche, 293 F.3d 726, 730 (4th Cir. 2002) (internal citations omitted)).

         Unlike the usual 12(b)(6) motion, Fola bases its Motion to Dismiss solely upon res judicata. Mot. to Dismiss, ECF No. 9. The Fourth Circuit has confirmed the appropriateness of resolving res judicata issues on a motion to dismiss. See Andrews v. Daw, 201 F.3d 521, 524 n.1 (4th Cir. 2000) (citing Thomas v. Consolidation Coal Co., 380 F.2d 69, 75 (4th Cir. 1967)). But, in considering whether res judicata precludes an action, the issue must “clearly appear[] on the face of the complaint.” Id. (quoting Richmond, Fredericksburg & Potomac R. Co. v. Frost, 4 F.3d 244, 250 (4th Cir. 1993)). Despite the facial clarity requirement, the Court “may take judicial notice of facts from a prior judicial proceeding when the res judicata defense raises no disputed issue of fact.” Id. (citations omitted).

         III. DISCUSSION

         Fola's res judicata arguments breaks down upon two lines of demarcation. First, there is the separation based upon the relevant mine: the Surface Mine No. 4A and the Bullpen Surface Mine. Second, Fola divides its reasoning between preclusion doctrines: claim preclusion and issue preclusion. Fola asserts that claim preclusion bars Plaintiffs' claims regarding both the Surface Mine No. 4A and the Bullpen Surface Mine. ...


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