Case 1:19-cv-00576 Document 92 Filed 09/15/20 Page 1 of 16 PageID #: 1278

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BLUEFIELD DIVISION
OHIO VALLEY ENVIRONMENTAL
COALITION, WEST VIRGINIA
HIGHLANDS CONSERVANCY,
APPALACHIAN VOICES, and
THE SIERRA CLUB,
Plaintiffs,
v.

Civil Action. No. 1:19-cv-00576
Judge David A. Faber

BLUESTONE COAL CORPORATION,
Defendant.
DEFENDANT’S REPLY TO PLAINTIFFS’ OPPOSITION TO DEFENDANT’S
MOTION FOR STAY PENDING RESOLUTION OF PROPOSED
CONSENT ORDER WITH WVDEP
NOW COMES the Defendant, Bluestone Coal Corporation, by its counsel, Michael W.
Carey, S. Benjamin Bryant, and the law firm of Carey, Douglas, Kessler & Ruby, PLLC, and files
this reply to Plaintiffs’ Opposition to Defendant’s Motion for Stay Pending Resolution of Proposed
Consent Order With WVDEP.
The Plaintiffs’ opposition fails for the following reasons: 1) it is based on an unfounded ad
hominem attack on the Defendant’s owners; 2) it attempts to rebut grounds for a stay that are not
relied upon by Defendants; and 3) it fails to properly recognize the mandatory requirements of the
draft consent order and its elimination of any ongoing claims by Plaintiffs.
ARGUMENT
I.

Plaintiffs’ Ad Hominem Attack On Defendant’s Owners Are Groundless And Should
Be Stricken From The Record.
After claiming Defendant’s motion for a stay is baseless, Plaintiffs state: “A self-dealing

administrative order from Governor Justice’s environmental agency to one of his family’s coal

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companies can neither preclude nor moot this action.” [ECF 90 at 1]. This ad hominem attack is
simply untrue. As set forth in the draft Consent Order, Bluestone has agreed to take corrective action
to eliminate violations at the specified outlets, pay further stipulated penalties if it fails to do so, and
pay the maximum penalty allowed under state law for past violations. There is no place in the courts
for this type of baseless allegation; the Court should order it to be stricken.
II.

The Plaintiffs’ Arguments Concerning Preclusion Are Irrelevant.
Pages 4 through 10 of Plaintiffs’ memorandum are spent addressing what they characterize

as Defendant’s “insinuation” that the draft Consent Order precludes Plaintiffs’ claims. However,
as clearly stated in its motion and accompanying memorandum, Defendant is seeking a stay solely
on the ground that the draft Consent Order “upon its anticipated final approval, will render this
action moot.” [ECF 83 at 1; ECF 84 at 4]. Nowhere does Defendant assert that a stay is appropriate
because the draft Consent Order “precludes” this action. The only purpose in referencing 33 U.S.C.
§ 1365(b)(1)(B) in footnote 2 was to set forth that Plaintiffs’ statement in its Motion for Summary
Judgment that the WVDEP had not filed the type of administrative penalty proceeding that would
preclude Plaintiffs’ citizen suit was an open question in the Fourth Circuit.1 Thus, because
Defendant is not relying on preclusion as a basis for its stay, it will not further address Plaintiffs’

1

The Plaintiffs go to great lengths to justify that the assertions made in their Complaint,
their motion for summary judgment and supporting declaration relating to their contention that
the DEP had not taken any action to redress the violations at issue in this case were true and
legally supported. In doing so, however, they ignore the fact that by failing to disclose the
Administrative Civil Penalty Assessment Notice issued by the DEP on July 11, 2019 and
September 2, 2020, they denied the Court the opportunity to determine whether, in fact, said
Notice served to preclude their case under 1365(b)(1)(b), or whether it was the type of
“administrative penalty action . . . under comparable state law to adequately redress the
violations.” Finally, it strains credulity to assert that simply because Steve Ball and others at
Bluestone were unaware of the status of the assessment Notice, means that DEP had “not taken
any action to redress the violations listed in the notice letters.”

2

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opposition on that issue.2
III.

Plaintiffs Misconstrue The Mandatory Requirements Of The Draft Consent Order
In analyzing whether the draft Consent Order between the WVDEP and Bluestone could

render Plaintiffs’ claims moot, it is important to set forth the nature of and the process by which the
order is initiated and finalized. On May 10, 1982, the EPA delegated primary enforcement authority
of the Clean Water Act to the WVDEP. See 33 U.S.C. § 1342(a)(2) and 47 Fed. Reg. 22363. West
Virginia Code 22-11-22a(b) authorizes the Secretary to assess a civil administrative penalty against
a permittee that violates NPDES permits, as was done by the WVDEP against Bluestone on July 11,
2019, and revised on October 2, 2019. Consistent with the practice of the WVDEP, the assessment
was accompanied by a draft Consent Order made up of three main components: 1) civil penalties for
past violations; 2) stipulated penalties for future violations; and 3) a requirement that Bluestone
submit and obtain DEP approval for corrective action plans to address recurrent violations at certain
outlets. Each of those three components applied to the permit violations at issue in this case. [ECF
83-1].
Next, pursuant to statute, an informal hearing was held between representatives of Bluestone
and an assessment officer appointed by the Secretary on August 27, 2020. During the course of the
hearing and thereafter, the parties negotiated and agreed to the terms of the draft Consent Order [ECF
83-2], signed by Bluestone on September 4, 2020. Ex. 1.
Pursuant to statute, the DEP will publish the draft agreement in each county where the

2

Plaintiffs also complain about the timing of Defendant’s motion claiming it is too late in
the proceedings. However, mootness is a jurisdictional matter, and if and when a case becomes
moot, the court loses jurisdiction. E.g., Summers v. Earth Island Institute, 555 U.S. 488 (2009).
The mootness doctrine applies at all stages of federal litigation, including trial and appeal. Lewis
v. Continental Bank Corp., 494 U.S. 472, 477 (1990). Therefore, the timing of Bluestone’s
motion has no bearing on mootness.
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violations occurred, soliciting comments from the public. At that point, the Plaintiffs here, and any
other interested parties, can submit comments to DEP. Moreover, anyone who submits comments
may request a public hearing regarding the draft Consent Order which may be granted or denied at
the Secretary’s discretion. Thereafter, the Secretary “shall consider” any comments received in
fashioning a final order. Within 30 days of the close of the comment period, the Secretary shall issue
a final order or make a determination not to issue a final order. Upon the issuance of a final order,
any person who submitted written comments shall have the right to appeal such order to the
Environmental Quality Board. W. Va. Code § 22-11-22a(b)(1-6). Finally, any decision by the
Environmental Quality Board is subject to judicial review. W. Va. Code § 22B-1-9(a); see also §
22B-3-3.
Thus, as set forth above, the Plaintiffs here will have the right to provide input, object, and
ultimately appeal any decision made by DEP concerning the draft Consent Order. As such, they are
permitted to participate in the process with the WVDEP, the agency which has primary authority for
enforcing the federal Clean Water Act in West Virginia, in finalizing the enforcement action.
Moreover, if the draft Consent Order is finalized in its current form, the requirements thereof
are mandatory. In this regard, Bluestone will have to pay the maximum penalty allowed under West
Virginia law for past violations, pay stipulated penalties for future violations, and develop a
Corrective Action Plan for violations at certain outlets under certain permits, including the outlets
at issue here.3 [ECF 83-2, pp. 5-7, Order of Compliance, ¶¶ 3-8, Other Provisions, ¶ 1]. Importantly,
the DEP can seek enforcement of the terms and conditions of the final order in the Circuit Court of

3

As discussed infra, the requirement to submit a Corrective Action Plan for Permit WV
1006304 will be satisfied upon reissuance of the permit by DEP allowing fish tissue monitoring
for selenium concentration.
4

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Kanawha County.4
Finally, under the draft Consent Order the DEP reserves the right to take further action if
compliance with the order “does not adequately address the violations.” [ECF 83-2, p. 8, ¶ 2]. Thus,
in the final analysis, the draft Consent Order will be issued with input from the public, subject to
appeal to the Environmental Quality Board and judicial review, mandatory upon becoming final and
subject to enforcement in the Circuit Court. Thereafter, even if Bluestone complies fully with the
terms of the order, the DEP is empowered to take further corrective actions if necessary.
IV.

The Realistic Prospect Test Is The Correct Legal Analysis To Be Applied In This Case.
In Ohio Valley Environmental Coalition, Inc. v. Hobet Mining, LLC (“Hobet I”), Civ. No.

3:08-cv-00088, 2008 WL 5377799, 69 ERC 1345 (S.D. W. Va. Dec. 18, 2008), the court analyzed
the appropriate standard to apply in considering whether a Consent Decree entered by the Circuit
Court of Boone County rendered a citizens suit addressing the same violations moot. In doing so,
the court noted that there are different standards depending on whether compliance is mandatory or
voluntary. If compliance is voluntary, then “the defendant must demonstrate that it is absolutely
clear the alleged wrong behavior could not reasonably be expected to recur.” Id., *6. On the other
hand, where compliance is mandatory, the test is whether there is a realistic prospect that violations
will continue notwithstanding the Consent Decree. According to the court, this more deferential
standard is appropriate because “[t]he primary function of a citizen suit is to spur agency
enforcement of law.” Id., *7. “Creating a high standard of mootness ‘would discourage defendants
in a citizen [suit] from entering a consent decree with federal or state enforcement agencies . . .
shift[ing] primary enforcement responsibility from the expert agencies to the necessarily generalist

4

Notably, Bluestone agreed to waive its right to challenge the required Civil Penalty
Assessment or any future demanded stipulated penalties. [ECF 83-2, p. 7, Other Provisions, ¶ 1].
5

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courts.’” Id. (citations omitted)
As discussed above, the draft Consent Order agreed to by WVDEP and Bluestone imposes
mandatory obligations to pay the maximum civil penalty for past violations and stipulated penalties
going forward.5 Once final, Bluestone must submit a Corrective Action Plan for the permit at issue
here, WV1006304, within 45 days, “outlining how and when Bluestone will achieve compliance
with” selenium effluent limits for Permit WV1006304. [ECF 83-2, p. 5, Order For Compliance ¶3].
The DEP may enforce the terms of the agreement in the Circuit Court of Kanawha County. [ECF 832, p. 7, Other Provisions ¶1]. Because the terms of the draft Consent Order are mandatory and
enforceable in the circuit court, the realistic prospect test is the appropriate analysis to be applied in
the case at bar.6
In their opposition, Plaintiffs rely on one sentence out of Hobet I to suggest that the draft
Consent Order should be treated as voluntary and therefore subject to the more stringent requirement
that Defendant demonstrate that it is absolutely clear violations will not recur. [ECF 90, pp. 10-11]
However, analysis of Hobet I belies Plaintiffs’ contention.
After concluding that the realistic prospect test applied to the Consent Decree entered in
Boone County, the court turned to determining whether the violations will continue “‘in the sense
that the violations will not be cured even after the remedial plan implemented by the consent decree

5

According to the terms of the draft Consent Order, the stipulated penalties begin
immediately upon signature of the agreement by Bluestone, which was September 4, 2020. [ECF
83-2, p. 6, Order For Compliance, ¶ 8] and Ex. 1.
6

In contending that the realistic prospect test should not apply, the Plaintiffs once again
impugn the integrity of the regulators claiming the DEP lacks coercive authority because it is
“ultimately under the control of West Virginia’s top executive official who has a financial
interest in the polluter and a clear conflict of interest.” [ECF 90, p. 11] It is the experience of
undersigned counsel that when a party engages in baseless personal attacks of this nature, it is a
sign of desperation. Again, the Court should strike the passage from the record.
6

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has been fully implemented in accordance with reasonable timetables.’” Id., *7. In performing that
analysis, the court examined the schedule for compliance set forth in the Consent Decree. The court
noted that while it may not be as rapid as the plaintiffs would like, it was reasonable. Id. *7. The
court then examined whether Hobet would succeed in achieving compliance. Id. *7-8 Under the
Consent Decree, Hobet was required to test various treatment systems to address selenium effluent
violations. Regardless, Hobet was required to have some form of treatment program in place by a
date certain. Id., *8. The court then noted that while Hobet had failed to meet permit limits and state
compliance orders in the past, the consent decree was in a different category. Id. First, it was more
comprehensive and detailed than past limits and compliance orders. “It establishes . . . limits with
defined penalties.’” No prior order contained a schedule for compliance or “mandatory penalties for
noncompliance.” Moreover, it was not simply an agency issued permit or compliance order. Rather,
it was a settlement approved by the court and had the force of a court order which the court
concluded would not be taken lightly. Id.
While the court did not identify the compliance orders it referred to, they probably were not
unlike the reissuance of permit WV1006304 in 2015 whereby the DEP set a compliance schedule
for selenium at Outlets 004, 005, 006, 007 and 008. While the new permit did establish a
compliance schedule, it did not contain mandatory penalties for future noncompliance. Here, the
draft Consent Order requires Bluestone to submit a corrective action plan by a date certain to ensure
compliance with the selenium effluent limits at the outlets at issue here. It also contains mandatory
penalties for future violations. Furthermore, the DEP can seek enforcement of the terms of the
agreement in the Circuit Court of Kanawha County. Finally, even if Bluestone is in full compliance
with the Consent Order, the WVDEP reserves the right to seek other remedies should Bluestone fail
to achieve compliance. Thus, the draft Consent Order is truly mandatory and the Plaintiffs’
7

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comparison of it to the compliance orders referenced in Hobet I is misplaced.
The Plaintiffs further argue that if the draft Consent Order is finalized, it should be analyzed
under the test for voluntary compliance (i.e., absolutely clear that violations could not reasonably be
expected to recur) because Bluestone had the right to terminate the proceedings at any time. [ECF
90, p. 11]. The logic of this argument is dubious. While Bluestone may have the right to withdraw,
once the Consent Order becomes final, compliance with its terms is mandatory – Bluestone cannot
back out at that point. This is exactly why a stay is appropriate; a determination whether this case
is moot is wholly dependent on the terms of the final Consent Order, not the draft.
V.

Application Of The Realistic Prospect Test To The Draft Consent Order In Its Current
Form Would Render This Action Moot.
A.

There is no realistic prospect that violations of the selenium effluent limits will recur
upon implementation of the final Consent Order.

Plaintiffs contend that because the draft Consent Order does not require Bluestone to take
any corrective action, it cannot moot Plaintiffs’ claim for injunctive relief. [ECF 90, p. 11].
Plaintiffs’ argument is misleading and inaccurate.
If the draft Consent Order is finalized in its current form, Bluestone will be required to
submit a Corrective Action Plan to address selenium effluent limits at Outlets 005, 006, 007 and 008
under permit WV1006304 within 45 days of the final entry of the Consent Order. [ECF 83-2, p. 5,
Order For Compliance, ¶ 3]. However, the DEP further recognized that Bluestone has sought a
renewal and modification of the permit that would allow Bluestone to demonstrate compliance at
Outlets 005, 007 and 008 through monitoring fish tissue selenium concentrations, and that Bluestone
has otherwise demonstrated compliance at Outlet 006. As such, the DEP agreed that if the permit
is reissued prior to the final entry of the Consent Order, then Bluestone will not have to submit a
Corrective Action Plan for Permit WV1006304. Id., pp. 5-6.
8

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Therefore, further discussion of the proposed compliance monitoring by fish tissue analysis
is in order. Because selenium is potentially toxic to and can accumulate in the aquatic life in
receiving streams, the WVDEP has developed a hierarchy for testing designed to best protect the fish
and other organisms. Ex. 2. Selenium concentration in the fish egg/ovary tissue is considered the
best indicator of potential harm to fish reproduction and, thus, takes precedence over any other test.
After that, whole body fish tissue concentration is preferred over water column concentration. Id.,
p. 1. In other words, fish tissue analysis is superior to water column sampling to insure the aquatic
life is protected. Currently, compliance with selenium effluent limits at the four outlets at issue in
this case is monitored by sampling and analyzing the selenium content in the water at the outfalls.
In September 2019, Bluestone submitted a plan to the DEP to conduct fish tissue sampling
and analysis at each of the outlets involved in this case. Ex. 3. It was approved on September 20,
2019. Id. On September 23, 2019, consultants obtained fish samples from Outlets 005, 006 and 007.
On December 16, 2019, the consultants obtained fish samples from 006 and 008. Ex. 4, Bates No.
BCC006073. Because the size of the fish are relatively small, analysis of the selenium concentration
had to be conducted on the whole body rather than on the eggs/ovaries. Id., p. 6, fn 7. Under the
DEP requirements, a permittee is in compliance with selenium standards as long as the whole body
concentration of selenium does not exceed 8.0 parts per million. Id., p. 5; Ex. 2, p. 2. The results of
the analysis of the sampled fish are as follows:
OUTLET

DATE

RESULT

005

September 2019

1.629 ppm Se

006

September 2019

6.415 ppm Se

006

December 2019

7.172 ppm Se

007

September 2019

3.662 ppm Se

9

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008

December 2019

4.072 ppm Se

Ex. 4, Bates No. BCC006073. All of the results fall well within the permissible limit, particularly
for Outlets 005, 007 and 008. Thus, under DEP’s fish tissue protocol, Bluestone was in compliance
with the selenium water quality standards for all four outlets as of September and December of 2019.
As such, Bluestone requested that, as part of the ongoing renewal process for Permit WV1006304,
Bluestone be allowed to utilize whole body fish tissue selenium concentration analysis for Outlets
005, 007 and 008. The DEP approved the request and the reissuance of the modified permit is
pending.7 Because Outlet 006 has been in substantial compliance over the last several months, no
request was made to utilize fish tissue analysis at Outlet 006.
The draft Consent Order sets forth that, going forward, provided the permit is reissued
allowing fish tissue monitoring, and because Bluestone has demonstrated compliance at Outlet 006
to the satisfaction of DEP, no further Corrective Action Plan will be required by Bluestone for
Permit WV1006304. [ECF 83-2, p. 6, ¶3].

Obviously, the DEP concurs that upon the

implementation of fish tissue monitoring, Bluestone will be in compliance with selenium water
quality limits at the four outlets.8 Thus, if the draft Consent Order is approved in its current form,
there is no realistic prospect that the violations will continue upon implementation thereof and

7

Both the request for inclusion of the fish tissue monitoring and DEP’s inclusion thereof
in the proposed renewed permit are lengthy documents and are not filed here as exhibits, but will
be provided if the Court requests. However, the reissuance of the permit allowing for fish tissue
monitoring was sent to the EPA for comment. Notably, the EPA had “no comment”, Ex. 5, and
so has no objection.
8

The facts now before the Court also establish that Bluestone has met the “absolutely
clear” standard for a finding of mootness. The fact is that Bluestone has, as a factual matter,
come into compliance with selenium limits, and will be in full legal compliance once the draft
permit is issued.
10

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Plaintiffs’ request for injunctive relief is moot.9
B.

The Penalties Imposed For Past Violations And The Stipulated Penalties Required
For Future Violations Is Sufficient To Have A Deterrent Effect And Renders This
Action Moot.

Plaintiffs contend that the $125,000 penalty imposed under the draft Consent Order is too
modest to deter future violations.10 However, as recognized by the court in Hobet I, the courts
should give deference to the state regulators as the primary enforcers of the Clean Water Act.
Otherwise, citizens suits would usurp the primary enforcer role and undermine the state’s discretion.
Id. *9. In this regard, it is important to note that the $125,000 imposed under the draft Consent
Order is the maximum permitted under state law. [ECF 83-2, p. 6, ¶5], W. Va. Code § 22-11-

9

Notwithstanding the fact that Plaintiffs did not allege it in their Complaint, they contend
that the draft Consent Order does not address violations of the compliance schedule issued by
DEP relating to the design, construction and installation of a selenium treatment system.
However, as it turns out, and as reflected in the draft Consent Order, there was no need for the
“design, construction and installation” of a treatment system. To the contrary, compliance has
been achieved by the DEP agreed-to proposal to monitor compliance through fish tissue analysis.
Moreover the ultimate requirement of the DEP schedule was “Permittee shall achieve
compliance with the final selenium effluent limitations.” As noted in the draft Consent Order,
the:
Order for Compliance of this Order satisfies any claim WVDEP has or may have
for penalties under the West Virginia Water Pollution Control Act for violations
of the effluent limits for outlets which occurred January 2016 through June 2016
in relation to the specified Permits. Any violations that occur between the last day
of June 2020 and the date of the Draft Order shall be considered part of the Civil
Administrative Penalty.
[ECF 83-2, p. 6, ¶ 7] (emphasis added). Accordingly, any claim for penalties for violation of the
DEP Compliance Schedule is also moot.
10

Plaintiffs rely on Ohio Valley Environmental Coalition v. Hobet Mining LLC, 723 F.
Supp 2d 886 (S.D.W.Va., July 12, 2010)(Hobet II) to support their argument that the assessed
penalties under the draft Consent Order are too di minimis to deter future conduct. [ECF 90, pp.
16-17]. However, what Hobet II simply makes clear is that said question is heavily fact
dependent. As set forth infra, the penalties assessed for past violations along with the stipulated
penalties, of both the state and federal consent decrees, are more than adequate to deter future
violations, particularly when taking into consideration that upon renewal of the permit allowing
fish tissue analysis, Bluestone will be in compliance with selenium water quality standards.
11

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22a(b)(1). Thus, Plaintiffs’ belief that the amount of the penalty is insufficient not only usurps
DEP’s decision making authority, but the judgment of the West Virginia Legislature as well.
Moreover, the penalty imposed for past violations under the draft Consent Order cannot be
considered in isolation. The draft Consent Order also requires Bluestone to pay substantial stipulated
penalties for future violations. This includes $1,000 for daily maximum violations, and $3,000 for
monthly average violations, both subject to a 10% discount for penalties paid under the federal
Consent Decree for the same violations. Thus, when combined with the stipulated penalties of the
draft Consent Order, Bluestone is facing total possible stipulated penalties of $6,400 for each daily
maximum violations and $9,200 for each monthly average violation.11 [ECF 84, pp. 6-7]. Moreover,
if fish tissue analysis is approved for Outlets 005, 007 and 008, Bluestone will be subject to a
$10,000 penalty for any violations under that method. [ECF 83-2, p. 6, ¶ 8i]. Combined with the
payment of $125,000, the stringent penalties going forward of the draft Consent Order certainly will
deter future violations.12

11

By way of example, if in any month Bluestone violated daily maximum limits for both
samples as well as the resulting average monthly limit at Outlet 006, it could face a total penalty
of $21,600 under both the federal and state agreements.
12

Plaintiffs contend that the penalties imposed must be reviewed against their claim that
the economic benefit to Bluestone for noncompliance is $3.3 million, based on Plaintiffs’
assertion that the solution to the selenium problem was the installation of wildly expensive
bioreactor systems. However, Bluestone has satisfied the DEP that fish tissue monitoring has
demonstrated compliance and the Plaintiffs’ claim that a bioreactor system should have been
installed is a fallacy. In this regard, Bluestone’s expert has concluded that the cost of
implementing fish tissue monitoring for two years would have been $46,000. Ex. 4, p. 9.
Therefore, the economic benefit of Bluestone failing to meet selenium effluent limits is
significantly lower than the total penalties paid under the federal Consent Decree of $414,500.
Of that total, Bluestone paid $35,000 on September 4, 2020, so that payment is not yet reflected
on the website http://www.southerncoalcorporation.droppages.com/.
.
12

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VI.

A Stay Of This Matter Is Appropriate.
Bluestone concurs that there are three factors to consider in determining whether a stay is

appropriate are: 1) the interests of judicial economy; 2) hardship and equity to the moving party if
the action is not stayed; and 3) potential prejudice to the non-moving party. White v. Ally Financial,
969 F. Supp. 2d 451 (S.D.W.Va. 2013).
Notwithstanding Plaintiffs’ blanket assertion that the draft Consent Order does not moot this
action, the opposite conclusion is clear from its terms. As discussed above, the DEP (the primary
regulatory authority) has recognized that based on the baseline data obtained under the fish tissue
sampling plan, Bluestone will be in compliance with selenium water quality standards upon
reissuance of its permit allowing monitoring by fish tissue analysis. Thus, if the draft Consent Order
becomes final in its current form, the need for injunctive relief from this Court is eliminated.
Similarly, the civil penalties, both for past and future violations, will deter future violations thus
mooting Plaintiffs’ claim for additional penalties.13 Accordingly, in the interest of judicial economy,
the Court should stay this case and allow the administrative process to run its course so that the
Court can evaluate the resulting Consent Order in its final form. In this regard, if the Court were to
determine that the final Consent Order rendered some but not all of Plaintiffs’ claims moot, it would
narrow the issues to be tried. Therefore, judicial economy weighs in favor of a stay.
A stay would also eliminate the need for Bluestone, as well as the Plaintiffs, to expend
further funds defending this action if the Court would ultimately determine the case should be

13

Even if the Court would ultimately determine that this matter is not moot and that an
award of civil penalties is appropriate, Bluestone would be entitled to an offset for any penalties
paid by Bluestone to DEP and to the EPA. The Court should know what that amount is before
issuing an order.
13

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dismissed as moot. Such is not an inconsequential concern. The draft Consent Order, should it
become final, will not only require the payment of $125,000 to the DEP, but will require the payment
of additional funds implementing various corrective action plans under the Consent Order.
Finally, as to the issue of potential prejudice to the Plaintiffs should a stay be granted,
Plaintiffs assert that “Defendant’s continued violations of its selenium limits will therefore cause
irreparable harm to Plaintiffs’ environmental interests during the pendency of the requested stay.”
[ECF 90, p. 19]. Two responses are in order. First, as reflected in the draft Consent Order, the DEP
has recognized that Bluestone has achieved compliance with selenium limits at the four outlets upon
reissuance of the permit allowing fish tissue monitoring.
Secondly, Plaintiffs’ contention of ongoing irreparable harm is belied by their settlement
demand in this case. In this regard, Federal Rule of Evidence 408(b) provides that settlement
discussions may be revealed to “negat[e] a contention of undue delay,” and courts have ruled such
discussions admissible to rebut an argument that a party will suffer irreparable harm in the absence
of a preliminary injunction.14 In this case, the Plaintiffs proposed settling this matter by the payment
by Bluestone of $600,000 to the West Virginia Land Trust, transfer of approximately 850 acres of
property near the New River Gorge15 to the West Virginia Land Trust, and the payment of attorney
fees, in exchange for Plaintiffs’ agreement to allow Bluestone up to three years to correct the

14

Ourbus, Inc. v. City of Ithica, NY, 2019 WL 2710111, at *13 (N.D. N.Y. June 28,
2019) (considering the “another purpose” provision of FRE 408(b), noting “. . . .several courts
have determined that when evidence [of settlement discussions] is offered to oppose the
contention that a party will suffer irreparable harm in the absence of a preliminary injunction, it
falls squarely within the “another purpose” exception. See also Katori Designs, LLC v. Living
Well Spending Less, Inc., 2016 WL 6833004 (M.D. FL. November 21, 2016), at *3, (the terms
of party’s settlement offer were “wholly inconsistent with - and therefore fatal to - a claim of
imminent irreparable harm absent an injunction.”
15

Neither Bluestone, nor its parent companies, own any interest in this acreage.
14

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selenium issues at Red Fox, subject to regulation by DEP, and no assessment of civil penalties in this
action.16 As such, if Bluestone were to pay Plaintiffs a significant amount of money and transfer
substantial property to them, then they have no concern about any potential harm due to selenium
at Red Fox for the next three years. Taken in the context of their settlement demand, Plaintiffs’
claim of irreparable harm during a stay of this matter rings hollow.
CONCLUSION
In the final analysis, a stay is warranted in this case to allow the ongoing process of finalizing
the draft Consent Order to reach its conclusion. The DEP, as the primary regulator of the Clean
Water Act, is best suited to determine the best way to insure compliance with selenium discharges
at Red Fox and to address past violations. Upon finalization, this Court can determine what, if any,
of Plaintiffs’ claims are rendered moot thereby.
Respectfully submitted,

BLUESTONE COAL CORPORATION,
By Counsel:
/s/ Michael W. Carey
Michael W. Carey, WVSB No. 635
S. Benjamin Bryant, WVSB No. 520
Carey, Scott, Douglas & Kessler, PLLC
707 Virginia Street, East, Suite 901
P.O. Box 913
Charleston, WV 25323
(304) 345-1234
mwcarey@csdlawfirm.com
sbbryant@cdkrlaw.com

16

Counsel is prepared to submit an affidavit so stating, if this point is disputed by
Plaintiffs.
15

 Case 1:19-cv-00576 Document 92 Filed 09/15/20 Page 16 of 16 PageID #: 1293
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BLUEFIELD DIVISION
OHIO VALLEY ENVIRONMENTAL
COALITION, WEST VIRGINIA
HIGHLANDS CONSERVANCY,
APPALACHIAN VOICES, and
THE SIERRA CLUB,
Plaintiffs,
v.

Civil Action. No. 1:19-cv-00576
Judge David A. Faber

BLUESTONE COAL CORPORATION,
Defendant.

CERTIFICATE OF SERVICE
I, Michael W. Carey, counsel for Bluestone Coal Corporation, do hereby certify that on
September 15, 2020, I electronically filed the foregoing “Defendant’s Reply to Plaintiff’s
Opposition to Defendant’s Motion for Stay Pending Resolution of Proposed Consent Order
With WVDEP,” with the Clerk of the Court using the CM/ECF system, which will send notification
of such filings to the following CM/ECF participants:

Derek O. Teaney, WVSB No. 10223
J. Michael Becher, WVSB No. 10588
Elizabeth A. Bower, WVSB No. 13583
Appalachian Mountain Advocates
P.O. Box 507
Lewisburg, WV 24901
(304) 382-4798
dteaney@appalmad.org
mbecher@appalmad.org
ebower@appalmad.org

James H. Hecker, DCSB No. 291740
Public Justice
1620 L Street, NW Suite 630
Washington, DC 20036
(202) 797-8600 EXT. 225
jhecker@publicjustice.net

/s/ Michael W. Carey
Michael W. Carey, WVSB No. 635