On March 3, 2017, BNSF Railway entered into a proposed consent decree with multiple environmental groups, led by the Sierra Club. BNSF agreed to clean up what it characterized as “coal pollution” along its tracks in Washington, fund $1 million in additional environmental work, and study the feasibility of covering its railcars. In exchange, the environmental groups agreed to drop their suit. The agreement allowed BNSF to avoid potentially billions of dollars in penalties, but an earlier ruling in the case set the stage for similar suits to be brought across the country. BNSF may have won its battle, but did it and other railroads lose the war?

Railways have faced lawsuits from environmental groups before. In 2011, the NRDC sued two railroads in Los Angeles alleging the trains were polluting and causing health problems. In January 2017, several environmental groups sued to stop a proposed railway expansion in Oregon.

But the BNSF ruling is unique because it could hurt profitability for railroads transporting coal. The coal industry relies heavily on railroads to transport its product. According to the Energy Information Administration, 70 percent of all coal used by power plants in the United States was shipped, at least in part, by rail. With power plants consuming 740 million tons of coal in 2015, there is a lot of coal traveling on railroads across the country—often in open-top railcars.

The open railcars sparked the environmental groups’ suit against BNSF. The environmental groups sued BNSF in 2013 claiming violations of the Clean Water Act (CWA). The groups alleged that coal dust was blowing out of BNSF railcars and into waterways. In the course of the case, the U.S. District Court for the Western District of Washington ruled on both parties’ motions for summary judgment. Judge John C. Coughenour found that railcars from which coal blew off into the nearby waterways constitute a “discrete conveyance” and thus would be a point source under the CWA.

Generally speaking, if a business activity is a point source, then it is subject to regulation and permitting requirements under the CWA. The ruling thus provides additional authority for the expansion of what traditionally has been characterized as a point source.