D.C. Circuit Upholds EPA Post-Permit Veto of Clean Water Act Section 404 Permit
Posted on May 9, 2013
Owners of mountain-top coal mining operations do not generally make for sympathetic litigants. But it is not hard to understand why the Mingo Logan Coal Company would be upset about a decision last month from the U.S. Court of Appeals for the District of Columbia holding that the U.S. Environmental Protection Agency (EPA) can prohibit a discharge site under section 404 of the Clean Water Act (CWA) “whenever” it finds an unacceptable effect on aquatic resources, even, as in Mingo’s case, over three years after the permit authorizing the discharge site was issued. Mingo Logan Coal Co. v. U.S. Environmental Protection Agency, slip op. No. 12-5150 (D.C. Cir. April 23, 2013). The controversial decision could have far-reaching effects: it will provide EPA a powerful tool to protect water quality, while creating regulatory uncertainty for businesses discharging materials into water bodies under properly-issued, perfectly valid 404 permits.
Legal Framework Underlying the Mingo Logan Case
The CWA prohibits “the discharge of any pollutant” into waters of the United States unless the discharge complies with specifically enumerated exceptions. One of these exceptions, section 404(a), 33 U.S.C. § 1344(a), authorizes the U.S. Army Corps of Engineers (the Corps) to issue permits allowing the permit holder to discharge “dredged or fill material”—which is considered a “pollutant”—at sites that have been “specified” by the Corps. However, the Corps’ authority to specify discharge sites for dredge-and-fill permits is expressly subject to EPA’s authority, under section 404(c), to:
prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site…whenever [EPA] determines, after notice and opportunity for public hearings, that the discharge of such materials into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas (including spawning and breeding areas), wildlife, or recreational areas.
EPA’s ability to prohibit discharge sites under section 404(c) effectively gives it a veto power over the Corps’ dredge-and-fill permits. However, EPA has rarely exercised this power; the Corps processes approximately 60,000 permit applications each year but EPA has only issued 13 final veto actions since 1972. (EPA “Clean Water Act Section 404(c) Veto Authority.”) (See also, 40 C.F.R. part 231, setting forth procedures for EPA to follow when it decides to exercise its 404 veto authority.) And when it has vetoed dredge-and-fill permits, EPA has almost always done so during the Corps’ permitting process; that is, after a permit application has been submitted but before the Corps has granted the permit. What makes the Mingo case so interesting, and controversial, is that EPA did not veto Mingo’s dredge-and-fill permit until three years after the Corps had issued Mingo’s final permit. (The fact that EPA acted shortly after the Obama administration came to office did nothing to lessen the controversy.)
Background to the Mingo Logan Spruce No. 1 Mine
The mining project at issue in the case is Mingo Logan’s Spruce No. 1 Mine, a mountaintop mining project targeting bituminous coal seams near the town of Blair in Logan County, West Virginia, one of the most intensely mined regions in the state. As proposed, the Spruce No. 1 Mine is one of the largest mountaintop mining projects ever authorized in West Virginia, anticipated to produce 41 million tons of coal over its 15-year lifespan.
However, this coal would not come without an environmental cost: the project would destroy 3.6 square miles of temperate rainforest, remove 400-450 vertical feet of mountain, and require six valley fills, permanently burying 7.5 miles of streams in the Spruce Fork Watershed with 110 million cubic yards of mining spoil. (See EPA’s January 13, 2011, Final Determination on the Spruce No. 1 Mine Veto.) For some perspective, consider that all of downtown Minneapolis would easily fit within 3.6 square miles (see This Map) and 110 million cubic yards of mining waste is enough to fill 33,600 Olympic-sized swimming pools. Id.
Hobet Mining, Inc.–Mingo Logan’s predecessor and, like Mingo Logan, a subsidiary of Arch Coal–applied to the Corps in June 1999 for a section 404 permit allowing the discharge of material from the Spruce No. 1 Mine into nearby streams and their tributaries. At various points in the ensuing permitting process, EPA expressed concern about the environmental impacts of mountaintop mining in general and specifically the failure of the Corps’ draft environmental impact statement (“EIS”) to adequately describe the impacts from the proposed mine. However, EPA ultimately declined to exercise its 404(c) veto authority during the permitting process, and on January 22, 2007, the Corps issued Mingo Logan a section 404 permit, effective through December 31, 2031. The permit authorized Mingo Logan to dispose of material into three streams and certain tributaries—Pigeonroost Branch, Oldhouse Branch and Seng Camp Creek. The nonprofit group OVEC has some very good photographs of the Spruce No. 1 Mine project area, including photos to Pigeonroost Hollow.
EPA’s Belated Veto
In September 2009, two and a half years after the Corps issued Mingo Logan’s section 404 permit for the Spruce No. 1 Mine, EPA wrote a letter to the Corps asking it to suspend, revoke, or modify the permit on the basis of “new information and circumstances” regarding the project and its potential to degrade downstream water quality. When the Corps declined to take action, EPA commenced formal 404(c) proceedings, publishing notice, in April 2010, of its proposed determination to restrict or prohibit the discharges authorized by the Spruce No. 1 Mine 404 permit. Nine months later, in January 2011, EPA published its Final Determination, which withdrew the specification of Pigeonroost Branch and Oldhouse Branch and their tributaries (but not Seng Camp Creek) as authorized disposal sites for the Spruce No. 1 Mine.
EPA acknowledged the seriousness of initiating a Section 404(c) action after the Corps has issued a permit, stating that it will only do so when, as in this case, EPA concludes the “unacceptable impacts from the project are of commensurate seriousness.” (See EPA’s Proposed Determination.) Moreover, EPA limited its final veto to those portions of the project that had not yet been constructed–the 6.6 miles of fill authorized in Pigeonroost Branch, Oldhouse Branch, and their tributaries–specifically excluding locations in the Seng Camp Creek subwatershed where Mingo Logan had already commenced construction and largely completed one valley fill.
Mingo’s Lawsuit Against EPA
Following EPA’s Proposed Determination, Mingo Logan filed an action in federal district court for the District of Columbia, seeking the Court’s declaration that EPA lacked statutory authority under the CWA to modify or revoke Mingo Logan’s section 404 permit, and that EPA’s actions were arbitrary, capricious, and not in accordance with law. Mingo Logan Coal Co. Inc. v. U.S. E.P.A., 850 F.Supp.2d 133 (D.D.C. 2012). Ruling on cross-motions for summary judgment, the district court agreed, concluding that EPA may not withdraw the specification of disposal sites after the Corps has issued a section 404 permit. In reaching its conclusion, the court relied upon the specific language and legislative history of section 404 as well as the overall statutory scheme of the CWA, noting in particular that EPA’s interpretation of its 404 power is “inconsistent with clear provisions in the statute, which deem compliance with a permit to be compliance with the Act.” Id. at 134.
In reversing the district court, the U.S. Court of Appeals for the District of Columbia did not look beyond the plain language of section 404(c), which the Court believed “unambiguously expresses the intent of Congress.” Mingo Logan Coal Co. v. U.S. Environmental Protection Agency, slip op. No. 12-5150, 7 (D.C. Cir. April 23, 2013). Although Congress gave the Corps authority to issue dredge-and-fill permits, Congress, in section 404(c), granted EPA “broad environmental ‘backstop’ authority” over the Corps’ discharge site selection. Moreover, the Court was unequivocal that section 404 “imposes no temporal limit” on EPA’s authority to withdraw the Corps’ site specification:
[Section 404(c)] expressly empowers [the EPA administrator] to prohibit, restrict or withdraw the specification “whenever” he makes a determination that the statutory “unacceptable adverse effect” will result. 33 U.S.C. § 1344(c). Using the expansive conjunction “whenever,” the Congress made plain its intent to grant the Administrator authority to prohibit/deny/restrict/withdraw a specification at any time.
The Court stated that its construction was buttressed by the inclusion in section 404(c) of the parenthetical “including the withdrawal of specification.” “Withdrawal” is a term of retrospective application, the Court reasoned, such that EPA’s power to withdraw a specification “can only be exercised post permit.” Id. at 19 (emphasis in original). Interpreting section 404(c) as requiring EPA to exercise its veto authority before a permit issues would thus “render subsection 404(c)’s parenthetical ‘withdrawal’ language superfluous—a result to be avoided.” Id.
The Court thus reversed the district court’s holding that EPA lacked statutory authority under CWA section 404(c) to withdraw a disposal site specification post-permit. Additionally, because the district court had not addressed the merits of Mingo Logan’s claim that EPA’s actions were arbitrary and capricious, the Court remanded this issue to the district court.
What It All Means
While the Court of Appeals’ decision was a significant victory for EPA, we have likely not heard the final word on this issue. Industry groups such as the North American Mining Association (NMA) reacted swiftly and strongly to the decision, signaling a possible petition to the U.S. Supreme Court. (UPDATE, 8-14-2013: On July 25, 2013, the D.C. Circuit denied Mingo Logan’s request for a rehearing en banc. UPDATE, 1-12-2014: Mingo Logan did submit a petition for a writ of certiorari to the Supreme Court on November 13, 2013. Since that time, numerous organizations have submitted amicus curiae briefs, including the Chamber of Commerce, the National Mining Association, and the American Petroleum Institute.UPDATE 3-24-2014: The Supreme Court denied to take the case.) In a press release issued the day of the Court’s decision, NMA President and CEO Hal Quinn stated:
[T]he U.S. Court of Appeals for the District of Columbia has pulled the regulatory rug out from under the feet of U.S. companies, eliminating the certainty of permits and upending an already complicated permitting process. As a result, a cloud of uncertainty now hangs over any project and companies will no longer have the assurance required to encourage investments, grow our economy and create U.S. jobs.
The Court’s broadly worded holding on the scope of EPA’s section 404(c) veto power—that EPA can “prohibit/deny/restrict/withdraw a specification at any time” it finds there will be an adverse effect—also raises the prospect of EPA prohibiting discharges into specified waters not only after permits have been granted but also before a project proponent has submitted a permit application.
Indeed, the Court’s decision will be a shot in the arm to environmentalists and local tribes who have been urging EPA to use its 404(c) authority to “preemptively veto” the controversial Pebble Mine in Bristol Bay, AK. The Pebbles Mine Corporation has yet to apply for a 404 permit for the project. However, the company’s plans for an enormous open-pit copper mine in the pristine and largely uninhabited Bristol Bay watershed—the pit would be two miles wide, several thousand feet deep, and generate up to 10 billion tons of waste rock—has drawn considerable attention. So much so that EPA has taken the unusual step of independently preparing a detailed assessment of the potential impacts of large-scale mining development on Bristol Bay fisheries and wildlife, and on Alaska Native cultures of the region. (UPDATE, 8-11-2013: EPA has since published a revised draft of the Assessment.)
Keep an eye on this one.