Per Discharge, Not Per Permitless Day: Fourth Circuit Affirms CWA Penalties Framework and Causation Limits on CERCLA Cost Recovery in Courtland Co. v. Union Carbide

Introduction

This unpublished per curiam decision from the U.S. Court of Appeals for the Fourth Circuit affirms, in toto, a suite of district court rulings arising out of four consolidated environmental cases between neighboring industrial landowners in South Charleston, West Virginia. The plaintiff, The Courtland Company, Inc. (Courtland), owns a 13.8-acre triangular parcel historically used for industrial storage, staging, and waste. The defendant, Union Carbide Corporation (UCC), owns two nearby sites: (1) the 574-acre “Tech Park” situated up-gradient (to the south) of Courtland’s parcel, and (2) the “Filmont/Massey” property to the northeast that includes the Filmont dump and Massey Railyard. Ground and surface waters generally flow northward toward the Kanawha River.

Courtland alleged that UCC’s historic disposal practices released hazardous substances and pollutants that migrated onto and contaminated its property and adjacent waters, asserting claims under CERCLA (cost recovery and declaratory relief), RCRA (citizen-suit relief for open dumping), the Clean Water Act (CWA) for unpermitted discharges, and related state-law theories. The district court consolidated four cases (Courtland I through IV) and bifurcated trial into:

Phase I (liability), tried over 18 days; and
Phase II (remedies), tried over 3 days.

Across 495 pages of findings and conclusions, the district court found both parties partly right and partly wrong. On appeal, the Fourth Circuit affirmed on all issues, “substantially for the reasons given by the district court.” The opinion is noteworthy for three practical holdings:

Under CERCLA, “necessary” response costs must be causally connected to a defendant’s release; defendants can defeat cost recovery by proving the defendant’s site was not the source, even where the plaintiff’s costs were otherwise NCP-consistent.
Under the CWA, civil penalties in a citizen suit accrue per unpermitted discharge event, not per calendar day the discharger lacked a permit absent proof of a discharge on that day.
RCRA injunctive relief can be denied even where a violation (open dumping) is found, if the plaintiff fails to demonstrate irreparable harm on the record.

Summary of the Opinion

The Fourth Circuit affirmed four district court judgments arising from consolidated actions:

Courtland I (Tech Park; CERCLA and RCRA): Denial of Courtland’s CERCLA cost recovery ($36,916.25 for preliminary groundwater investigation) and RCRA relief. The court credited expert testimony and hydrogeologic evidence that Tech Park was not the source of contaminants in Courtland’s groundwater. UCC prevailed on a causation-based defense under CERCLA § 107(b) (42 U.S.C. § 9607(b)), supported by Westfarm. State claims were dismissed or voluntarily withdrawn.
Courtland II (Filmont/Massey; CERCLA, RCRA, state law): UCC was found liable under CERCLA, and Courtland recovered $27,142.50 for a preliminary groundwater investigation as “necessary” response costs. The court denied $7,802.50 for a kayak-based sampling trip as too attenuated from the CERCLA claim. On UCC’s contribution counterclaim (42 U.S.C. § 9613(f)(1)), the court equitably allocated 25% of Courtland’s response costs to Courtland due to its own property’s contribution to contamination. The court also found a RCRA “open dump” but denied injunctive relief for lack of irreparable harm; public nuisance claims failed.
Courtland III (CWA—northern ditches): Dismissed for lack of standing because the alleged discharges occurred downstream of Courtland’s parcel, and Courtland failed to show a concrete environmental or recreational interest impacted by those discharges, per Friends of the Earth v. Laidlaw and Gaston Copper.
Courtland IV (CWA—southern boundary ditch): The district court rejected groundwater and surface water discharge theories but found three stormwater discharges without a permit. It imposed the maximum penalty for those three days totaling $200,136. It rejected Courtland’s attempt at Phase II to expand the number of discharge days using rainfall records and declined to assess penalties on days without proof of an actual discharge, affirming that penalties attach per unpermitted discharge, not per day without a permit.

Across the four appeals, the Fourth Circuit found no clear error in factual findings and no legal error, affirming “across the board.”

Analysis

Precedents Cited and Their Influence

Westfarm Associates Ltd. Partnership v. Washington Suburban Sanitary Commission, 66 F.3d 669, 681–82 (4th Cir. 1995): The district court and Fourth Circuit relied on Westfarm’s articulation of causation principles in CERCLA actions. Although CERCLA imposes strict liability, a plaintiff must still show that a release or threatened release “caused” the incurrence of necessary response costs. Conversely, a defendant may defeat liability by proving under § 107(b)(3) that the release was caused solely by a third party or, as functionally occurred here, by demonstrating the defendant’s site was not the source of the plaintiff’s contamination. The court here credited hydrogeologic evidence that Tech Park was not the source of the constituents detected in Courtland’s groundwater, invoking Westfarm to confirm that showing.
Friends of the Earth v. Laidlaw Environmental Services, Inc., 528 U.S. 167, 183–84 (2000): Laidlaw stands for the proposition that environmental plaintiffs can establish Article III standing through concrete aesthetic, recreational, or economic interests adversely affected by illegal discharges. The Fourth Circuit used Laidlaw’s framework to assess Courtland’s lack of evidence of a concrete interest in the downstream water bodies implicated by the Filmont/Massey northern ditches.
Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 156–61 (4th Cir. 2000): Gaston Copper elaborates that plaintiffs must show specific, use-related injuries (e.g., curtailed fishing, swimming, or property use) linked to the defendant’s discharges. The Fourth Circuit applied this requirement in affirming the dismissal of Courtland III for lack of standing; Courtland did not offer proof that the downstream discharges impaired any concrete use or activity.

Legal Reasoning by Proceeding

Courtland I (Tech Park; CERCLA § 107(a), § 107(b), RCRA)

Courtland sought $36,916.25 in CERCLA response costs for a preliminary groundwater investigation and additional declaratory and injunctive relief under federal and state law. The district court accepted that the investigation, on its face, was a “necessary” response cost and NCP-consistent as contemplated by § 107(a) (42 U.S.C. § 9607(a)) and § 113(g). However, UCC prevailed on a causation defense framed under § 107(b)(3), which permits a potentially responsible party (PRP) to avoid liability if a release was caused solely by an act or omission of a third party. The court, crediting UCC’s expert and the site’s hydrogeology and bedrock structure, found that Tech Park was not the source of Courtland’s groundwater contamination. The Fourth Circuit held that finding was supported by the record and was dispositive of CERCLA recovery. The same factual premise defeated RCRA and parallel state law theories.

Key takeaways:

Even “necessary” and NCP-consistent investigative costs cannot be shifted to a defendant unless the plaintiff proves (and the defendant fails to disprove) a causal connection to the defendant’s release or threatened release.
Where the evidence shows that contamination on the plaintiff’s property originated from sources other than the defendant’s facility, § 107(a) cost recovery fails and § 107(b) provides a complete defense.

Courtland II (Filmont/Massey; CERCLA § 107(a), § 113(f)(1); RCRA open dumping; state law)

Here, the causal picture differed. The district court found UCC liable under CERCLA for contamination attributable to the Filmont/Massey property and awarded Courtland $27,142.50 in response costs for a preliminary groundwater investigation. That investigation bore a sufficient nexus to the asserted release and was consistent with the NCP.

However, the court denied recovery of $7,802.50 for an expert’s kayak-based sampling trip taken “significantly downstream” from Courtland’s parcel, finding those sampling activities were too attenuated from the groundwater migration concerns animating the CERCLA claim. The Fourth Circuit affirmed the district court’s line-drawing: “necessary” costs are those tied to addressing the particular release pathways and threats at issue; sampling in non-adjacent waterways, far downstream, did not qualify.

On UCC’s counterclaims, the district court rejected UCC’s attempt to recover $199,942.52 for its own investigatory borings on Courtland’s property, but granted UCC contribution under § 113(f)(1) (42 U.S.C. § 9613(f)(1)), equitably allocating 25% of Courtland’s recoverable response costs back to Courtland. The court found that Courtland’s own historical and ongoing uses were contributing sources to its property’s groundwater contamination. The Fourth Circuit found no abuse of discretion in that equitable allocation.

The court also found a RCRA “open dump” on the Filmont site, but denied Courtland’s request for injunctive relief after finding no irreparable harm on these facts: no groundwater wells within a mile; no evidence that contaminated groundwater could reach residential areas; a local ordinance prohibits use of untreated groundwater; and no one (on either property) was using or planning to use groundwater. Public nuisance claims failed (no nuisance per se and no proof of public harm).

Courtland III (CWA—discharges to northern ditches; standing)

Courtland alleged unpermitted pollutant discharges from the Filmont/Massey property into drainage ditches at the north end of that property, which ultimately reach navigable waters. The district court dismissed for lack of standing: the alleged discharges were downstream from Courtland’s parcel, and Courtland identified no concrete environmental or recreational interest affected by those discharges. Applying Laidlaw and Gaston Copper, the Fourth Circuit agreed that Courtland offered no evidence of a specific, use-related injury in the affected area (e.g., curtailed recreation, observable degradation impacting Courtland’s activities). The dismissal was affirmed.

Courtland IV (CWA—discharges to southern boundary ditch; stormwater)

Courtland alleged unpermitted discharges from Filmont/Massey into the drainage ditch along the south edge of that property (contiguous with Courtland’s northern boundary) by way of groundwater, surface water, and stormwater. The district court found that Courtland likely polluted its own groundwater and was at least as likely a source of the surface-water pollutants, defeating those theories of liability. However, the court found three discrete stormwater discharges without an NPDES permit and imposed the maximum civil penalty for those violations, totaling $200,136.

Two appellate points matter:

Penalty clock: The Fourth Circuit affirmed that CWA civil penalties in this citizen suit attach to each day on which an actual unpermitted discharge occurred, not for each day the facility lacked a permit irrespective of discharge. See 33 U.S.C. §§ 1311(a), 1342(a)(1). Courtland’s theory that every permitless day is independently penalizable failed because it would impose penalties in the absence of a discharge, contrary to the Act’s text.
Phase management: The district court properly confined Phase II (remedies) to remedies evidence only, rejecting Courtland’s attempt to add liability proof (rainfall records to show more discharges) after Phase I. With a clearly announced bifurcation plan to try liability before remedies, and no contemporaneous objection by either party, the court acted within its discretion to manage the trial and evidentiary sequence.

Impact and Practical Consequences

CERCLA “necessary costs” must be causally tethered to the defendant’s release: Plaintiffs should align investigations with plausible migration pathways and the specific release alleged. Sampling that is geographically or hydrologically remote from the threat at issue risks being excluded as “not necessary,” even if methodologically sound.
Causation and the § 107(b)(3) defense remain potent: Even when a plaintiff’s costs are otherwise NCP-consistent, defendants can defeat cost recovery by showing their site was not the source (or that a third party was the sole cause). Detailed hydrogeologic evidence, flow gradients, and expert testimony proved decisive here. Plaintiffs must be prepared to meet not only the prima facie elements under § 107(a) but also anticipated § 107(b)(3) defenses.
Contribution offsets under § 113(f)(1) can reduce a plaintiff’s recovery: When a plaintiff’s own property activities contribute to contamination, courts may equitably allocate a share of response costs back to the plaintiff. This decision confirms the vitality of counterclaims for contribution in response to § 107(a) suits, aligning with broader CERCLA jurisprudence permitting allocation to reflect equitable fault.
RCRA injunctive relief is not automatic upon proving a violation: Courts will still require a demonstration of irreparable harm to justify equitable relief, particularly where exposure pathways are controlled by ordinances, lack of groundwater use, and distance from receptors.
CWA standing demands concrete, use-related injury: Geographic proximity without affected use is insufficient. Plaintiffs must document how alleged discharges impair recreational, aesthetic, or economic interests in the specific waterbody.
CWA penalties accrue per unpermitted discharge event, not per permitless day absent discharge: This clarifies penalty methodology and affects exposure calculations and settlement postures in citizen suits. Plaintiffs should build a day-by-day discharge record rather than rely on the absence of a permit alone.
Case management and bifurcation matter: Litigants must put on their full liability case during the liability phase; attempts to backfill with new liability evidence at a remedies phase will likely be rejected.
Unpublished but instructive: Although not binding precedent in the Fourth Circuit, the opinion offers persuasive guidance on causation proof in CERCLA cases, penalty calculation in CWA suits, and equitable considerations in RCRA and CERCLA remedies.

Complex Concepts Simplified

Upgradient vs. downgradient: In hydrogeology, contamination tends to migrate with groundwater flow. A site “upgradient” of another tends to send groundwater toward the downgradient site. Here, Tech Park lay upgradient of Courtland’s parcel; Filmont/Massey was to the northeast; water generally flowed north toward the Kanawha River.
CERCLA § 107(a) vs. § 113(f)(1):
- Section 107(a) (42 U.S.C. § 9607(a)) allows recovery of “necessary costs of response” consistent with the National Contingency Plan (NCP), but the plaintiff must show that the defendant’s release or threatened release caused the incurrence of those costs.
- Section 113(f)(1) (42 U.S.C. § 9613(f)(1)) allows equitable contribution among PRPs so courts can allocate costs according to relative responsibility, even when a plaintiff sues for cost recovery under § 107(a).
CERCLA § 107(b)(3) “third-party” defense: A defendant may avoid liability by proving that the release was caused solely by a third party’s act or omission (not an employee/agent) and that the defendant exercised due care and took precautions. In practice, showing the defendant’s site was not the source can functionally defeat causation.
“Necessary costs” and the NCP: “Necessary” costs are those incurred to address an actual or threatened release. They must be tied to plausible pathways and the threat to be addressed. The NCP is EPA’s playbook for response actions; while private-party compliance is less formal than for governments, courts still look for reasonableness and nexus to the release.
RCRA open dumping (42 U.S.C. § 6972(a)(1)(A)): Prohibits maintaining an “open dump” under federal criteria. Proving a violation does not automatically entitle a plaintiff to an injunction; courts still weigh equitable factors, including irreparable harm.
CWA NPDES permitting and penalties: The CWA (33 U.S.C. §§ 1311, 1342) prohibits discharges of pollutants from point sources to navigable waters without an NPDES permit. Civil penalties (33 U.S.C. § 1319(d), enforceable through citizen suits) typically accrue per day of violation, which, for unpermitted discharges, means each day on which a discharge actually occurred without authorization.
Article III standing in environmental cases: Plaintiffs must show injury-in-fact (concrete, particularized, actual or imminent), causation, and redressability. In the environmental context, curtailed recreation or aesthetic enjoyment can suffice, but plaintiffs must link the injury to the specific discharges and location at issue.

Conclusion

The Fourth Circuit’s affirmance in The Courtland Company, Inc. v. Union Carbide Corporation underscores bedrock, fact-intensive principles that often decide environmental cases:

Hydrogeologic facts drive CERCLA causation; even “necessary” investigative costs are not recoverable if the defendant’s site is not the source.
Contribution can and will reduce a plaintiff’s recovery when the plaintiff’s own operations contribute to the contamination.
RCRA injunctive relief turns on irreparable harm, not mere regulatory noncompliance.
CWA standing requires specific, use-based injuries in the affected waters.
CWA civil penalties are assessed per unpermitted discharge event, not per day of being permitless absent proof of discharges on those days.

Although unpublished and nonbinding, the decision provides clear, practical guidance for litigants and courts: tie your evidence to the actual migration pathways and uses at issue; present your liability case fully in the liability phase; and expect courts to scrutinize both the necessity of response actions and the equitable distribution of costs. For regulated entities, the opinion offers a disciplined approach to penalty exposure and reinforces the value of robust technical evidence to contest causation. For plaintiffs, it is a strategic roadmap on how not only to prove liability, but also to preserve and maximize recoverable costs within the statutory frameworks of CERCLA, RCRA, and the CWA.