Mountain Coal Co. v. Water Quality Control Division of the Colorado Department of Public Health and Environment.
2025 COA 65. No. 24CA0907. Public Health and Environment—Colorado Water Quality Control Act—Colorado Discharge Permit System—Stormwater Discharge Permits—Overburden Contamination—Uncontaminated Stormwater Runoff—Burden of Proof at Administrative Hearing.
July 10, 2025
The Colorado Department of Public Health and Environment’s (CDPHE) Water Quality Control Division (the division) administers the National Pollutant Discharge Elimination System (NPDES) permitting program. As relevant here, CDPHE’s Water Quality Control Commission promulgated 5 Code Colo. Regs. 1002-61 (Regulation 61), which governs the permitting process for point source stormwater discharges in Colorado. When a permit is required for discharging stormwater from a point source, permittees must apply to renew their permits every five years. Mountain Coal Company, LLC (the company) operates West Elk Mine, an underground coal mine in Gunnison County, for which it has received permits from the division since the 1980s. Most recently, the division renewed the company’s permit in 2019. The 2019 permit included discharge limits on seven new outfalls (stormwater discharge flows from the mine into the Gunnison River at distinct point sources): the Sylvester Gulch Outfalls 25, 26, 27, 30, 32, 33, and 34; and one outfall near a train loading area. The division regulated these discharges because it determined that the stormwater contacts overburden—material that overlies a mineral deposit—at the mine. The company challenged the 2019 permit on the basis that the permit improperly included and regulated the Sylvester Gulch outfalls and the train loading area outfall. An administrative law judge (ALJ) upheld the renewal permit’s terms and conditions, and CDPHE’s executive director subsequently issued a final agency order affirming the ALJ’s decision. The company appealed to the district court, which affirmed the executive director’s final agency order.
On appeal, the company argued that the Sylvester Gulch outfalls were wrongly included in the 2019 renewal permit because they are exempt under Regulation 61 and thus don’t require a stormwater discharge permit. Regulation 61 requires a person to obtain a permit before discharging stormwater from a point source associated with industrial activity. However, a permit isn’t required for stormwater runoff from mining operations consisting of flows that are not contaminated by contact with overburden at the mining site. Here, uncontested record evidence shows that the stormwater from the Sylvester Gulch outfalls isn’t contaminated by contact with overburden. Accordingly, the district court erred by affirming the division’s inclusion of the Sylvester Gulch outfalls.
The company also argued that the renewal permit’s terms and conditions on the train loading area outfall must be set aside because the ALJ improperly allocated the burden of proof at the adjudicatory hearing to the company instead of the division. Generally, the person affected or aggrieved by the division’s determination bears the burden of proof at the hearing. But the company maintained that the division had the burden of proof under Dep’t of Pub. Health & Env’t Reg. 61.7(a), (d), 5 Code Colo. Regs. 1002-61, because it changed the terms of the renewal permit and the change was not based on “significant changes in the facts relevant to water quality considerations or upon changes in the applicable statutes or regulations.” However, even if the train loading area outfall existed before the division renewed the company’s permit in 2004, substantial record evidence supports the ALJ’s determination that the division based its decision to include the train loading area outfall in the 2019 renewal permit on significant changes in facts it didn’t learn about until the most recent renewal permitting process. Therefore, the ALJ properly allocated the burden of proof at the adjudicatory hearing to the company.
The judgment was reversed in part and affirmed in part. The case was remanded to the district court to order the division to remove the stormwater discharge regulations for Outfalls 25, 26, 27, 30, 32, 33, and 34 from the company’s 2019 renewal permit.