In April of 2021, the Willamette Riverkeeper and Columbia Riverkeeper, two environmental activist groups (“NGO”) filed a citizen suit in federal court against Zenith Energy Terminal Holdings, LLC (“Zenith”). The complaint alleges ongoing violations of the federal Clean Water Act (“CWA”) for pollutant discharges into waters of the United States, without a valid National Pollutant Discharge Elimination System (“NPDES”) permit. (Bloomberg News Story HERE.)

Zenith Energy owns and operates a heavy and light petroleum products storage terminal in Portland, Oregon (“Portland Terminal), where petroleum products—including aviation fuel, biodiesel fuel, crude oil, distillates, and renewable fuels—are received, stored, and delivered. 

In accordance with the federal NPDES stormwater program, a NPDES permit is required before construction activity pollutant discharges to Waters of the United States (“WOTUS”) may occur. Depending upon where the perspective discharge occurs, responsibility for administering the permit will fall to either the U.S. Environmental Protection Agency (“U.S. EPA”) or the state. The CWA allows U.S. EPA to delegate NPDES permit oversight to individual states, provided that those states comply with certain requirements. Oregon has established a federally-approved NPDES program, administered by the Oregon Department of Environmental Quality (“DEQ”). As a result, DEQ has delegated authority to issue NPDES permits authorizing construction activity stormwater discharges under the CWA. 

According to the complaint, while Zenith has applied for NPDES coverage, they engaged in construction activities at the Portland Terminal prior to the issuance of a NPDES permit.

Unfortunately, these types of federal “bounty hunter” lawsuits are rather common, and they often follow a predictable path: 1) The business/discharger self-reports a violation of its permit; 2) The NGO see the self-report and files a federal lawsuit, alleging violations of state or federal NPDS General permits; 3) the NGO enters into settlement negotiations with the business/discharger–because the business/discharger essentially has no defense because of the federal requirement that it self-report its violation; 4) a lop-sided settlement is reached—memorialized within either a Consent Decree or Confidential Settlement Agreement—and the named defendant agrees to implement certain environmental safeguards to ensure pollutant discharges are either prevented or minimized. In almost every instance, the NGO receives a cash payment for their efforts, which are used, in turn, to file new lawsuits. NPDES permit holders should be aware that similar lawsuits are routinely filed throughout the country. Only time will tell if this suit follows a similar path.

J.R. Parker contributed to this article.