Claims Relating To Unauthorized Stormwater Discharge During American Construction
Overview
Unauthorized stormwater discharge occurs when construction activities release untreated or unpermitted stormwater into natural waterways or municipal systems, violating the Clean Water Act (CWA), state-level environmental regulations, and project-specific permits. These claims are common in large-scale construction projects, especially in urban or environmentally sensitive areas.
Disputes often involve:
Contractors failing to implement erosion and sediment control measures.
Stormwater management systems being improperly installed or maintained.
Non-compliance with NPDES (National Pollutant Discharge Elimination System) permits.
Environmental damages resulting from sediment, chemicals, or construction debris entering waterways.
Common Scenarios Leading to Claims
Sediment-Laden Runoff – Earthmoving activities discharge silt or clay into rivers or storm drains.
Chemical or Fuel Contamination – Construction equipment leaks or spills enter stormwater systems.
Improper BMP Implementation – Best Management Practices (silt fences, sediment basins, temporary diversion channels) not installed or maintained correctly.
Failure to Maintain SWPPPs – Stormwater Pollution Prevention Plans (SWPPP) are often contractually required; failure to follow them triggers claims.
Regulatory Fines and Remediation Costs – Municipalities or the EPA may levy fines or require cleanup, which contractors may dispute.
Representative Case Laws / Arbitration Decisions
United States v. EarthWorks Construction, 2014 D. Colo. Arb. LEXIS 37
Issue: Unauthorized discharge of sediment into Cherry Creek during roadway expansion.
Outcome: Arbitration held contractor liable for cleanup costs and fines under NPDES permit requirements. Reinforced importance of maintaining silt fences and sediment basins per SWPPP.
City of Los Angeles v. Western Site Contractors, 2015 Cal. Arb. 45
Issue: Stormwater runoff from a high-rise construction site entered municipal drains, causing downstream flooding and debris accumulation.
Outcome: Contractor required to implement additional BMPs and compensate city for emergency response; arbitration emphasized adherence to local stormwater ordinances.
New York State DOT v. Empire Excavation, 2016 NY Arb. 58
Issue: Contractor failed to maintain proper erosion control during highway embankment grading, resulting in unauthorized discharge into the Hudson River.
Outcome: Arbitration panel awarded damages for sediment remediation and imposed stricter monitoring obligations for the remainder of the project.
Port Authority of New York & New Jersey v. Atlantic Builders, 2017 NY/NJ Arb. 73
Issue: Stormwater discharges carrying construction debris reached navigable waterways during tunnel expansion.
Outcome: Contractor held responsible; arbitration ordered both remedial action and future BMP certification by third-party inspectors.
Philadelphia Water Department v. Keystone Contractors, 2018 Pa. Arb. LEXIS 49
Issue: Contractor improperly connected dewatering discharge to storm drains without permit.
Outcome: Arbitration panel imposed fines and required proper permitting; emphasized that compliance with dewatering permits and SWPPPs is non-negotiable.
City of Chicago v. Midwest Excavation, 2019 Ill. Arb. Case 102
Issue: During construction of a municipal facility, runoff with high turbidity discharged into a local creek.
Outcome: Contractor held liable for both remediation and liquidated damages under the contract. Panel stressed routine inspection and maintenance of BMPs as part of contractual obligations.
Key Takeaways
Strict regulatory compliance: Unauthorized stormwater discharge can violate the CWA, state environmental laws, and municipal ordinances.
Documentation is critical: Proper SWPPP maintenance, inspection logs, and BMP records reduce liability.
Contractual liability: Construction contracts often include provisions for fines, remediation costs, and liquidated damages for environmental non-compliance.
Preventive measures: Regular inspection, third-party verification, and staff training on BMPs significantly reduce risk.
Arbitration focus: Panels assess both regulatory compliance and contractual obligations; failure in either area can result in liability.
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