Colorado Mining Co. Wins 10th Cir. Appeal in Pollution Case

A federal court in Colorado didn’t have enough evidence to determine that High Mountain Mining Co. polluted federal waters without the appropriate permit, the Tenth Circuit said Wednesday.
“The court failed to consider all the relevant geophysical factors relevant to the particular circumstances here,” a three-judge panel on the US Court of Appeals for the Tenth Circuit said.

A group of Colorado residents and nonprofits claimed in their suit that High Mountain unlawfully discharged wastewater from its gold mine—Alma Placer Mine—into settling ponds that seeped into groundwater and migrated to the Middle Fork of the South Platte River. The mining company should have had a Clean Water Act permit to discharge pollution into a federal stream, they said.

After a four-day bench trial in 2022, the US District Court for the District of Colorado agreed with the plaintiffs that High Mountain violated the Clean Water Act, and penalized the company $500,000—about equal to the costs of installing liners in their settling ponds. The court had determined that the settling ponds were a point source of pollution.

But the Tenth Circuit reversed the decision, holding that the lower court made a legal error in its ruling. Evidence showing High Mountain’s settling ponds discharged into groundwater isn’t sufficient to show the equivalent of a direct discharge into the South Platte River, the panel said.

The US Supreme Court established a legal framework—in the 2020 case County of Maui v. Hawaii Wildlife Fund—to determine whether groundwater discharge is the functional equivalent of a direct discharge into a stream or river, thus requiring a CWA permit. But the lower court didn’t fully apply the Maui test—which includes factors like transit time, distance traveled, nature of the material through which the pollutant travels, and more.

The district court considered geophysics surveys and design inspection of the ponds, expert testimony, and water-quality testing. But it failed to consider the extent of dilution, the chemical change of the pollutants as they traveled, and the actual amount of pollutants entering the river compared to what left the settling ponds—as required under the test—the panel said.

“Though transit time, distance traveled, and the materials passed through favored plaintiffs, the district court erred by effectively ending the analysis there,” Judge Timothy M. Tymkovich wrote for the panel.

The judges also expressed concern that the lower court’s broad interpretation of the CWA in applying the test could extend federal regulatory authority in a way that disrupts the state’s existing regulatory regime over the same discharges. In Maui, the Supreme Court cautioned courts against decisions that could risk undermining state regulation of groundwater.

“Yet that is precisely what the district court did on too thin of a record an analysis,” Tymkovich said.

The panel remanded the case for further proceedings.

Tymkovich was joined by Judges Harris L. Hartz and Gregory A. Phillips.

The plaintiffs were represented by Weiner & Cording. High Mountain was represented by Anderson Notarianni McMahon LLC.

The case is Stone v. High Mountain Mining Co., 10th Cir., No. 22-1340, 1/3/24.