United States: Discharging EPA's Clean Water Act Veto: Federal Court Upholds Validity Of Dredge/Fill Permit

On Friday, the United States District Court for the District of Columbia reversed the retroactive veto by the U.S. Environmental Protection Agency ("EPA") of a Clean Water Act section 404 permit, which the Army Corps of Engineers ("Corps") previously issued in 2007 for the Mingo Logan Spruce No. 1 mountaintop coal mine in Logan County, West Virginia. EPA's move was a rare exercise of its veto authority under section 404(c) and marked the first time that EPA had used its authority to invalidate a previously issued permit. The court's reversal is significant because it soundly rejected, in a case of first impression, EPA's interpretation that the agency's veto authority survives indefinitely after a permit has been issued by the Corps.

Section 404 Permit History at Spruce No. 1 Mine

In January 2007, after nearly six years of consultation with EPA and various modifications to Mingo Logan's draft permit to address potential adverse impacts to the local watershed, the Corps issued a section 404 permit for the Spruce No. 1 mine. The permit authorized Mingo Logan to discharge fill material from its mining operations into certain waterways specified in the permit. Nearly two years after the permit was issued, EPA sent a letter to the Corps expressing concerns with the project and asking the Corps to use its discretionary authority to suspend, revoke or modify the permit. When the Corps rejected EPA's request, EPA unilaterally withdrew the specification for more than 80 percent of the total discharge area authorized by the permit, effectively invalidating the permit.

Mingo Logan Challenges EPA's Decision

Joined by various amici parties from the construction, aggregate and mining industries, Mingo Logan brought suit seeking the district court's declaration that EPA lacks the authority to modify or revoke Mingo Logan's section 404 permit, that EPA's attempt to modify the permit was unlawful and that the permit is still operative. The district court agreed, holding in a March 23, 2012 opinion that, based on consideration of the provision in question, the entire statutory scheme, and the legislative history, EPA exceeded its authority when it attempted to invalidate an existing permit by withdrawing the specification of certain areas as disposal sites after the permit already had been issued. In short, the court ruled that EPA lacked the power to render a permit invalid once it had been approved by the Corps and issued to the developer.

Court: EPA Overstepped Its Authority

The district court rejected EPA's position that section 404(c) gives EPA plenary authority to modify or revoke unilaterally—at any time—a permit that has been duly issued by the Corps. "This is a stunning power for an agency to arrogate to itself when there is absolutely no mention of it in the statute. It is not conferred by section 404(c), and it is contrary to the language, structure, and legislative history of section 404 as a whole." Noting the Corps' role as primary permitting authority under section 404, the court stated that "while EPA is correct that Congress expected it to fulfill its unique role as the steward of the environment when carrying out its function under section 404, it is also clear from the forward looking language in the legislative history that Congress anticipated that EPA would act before a permit was issued, and indeed, that it would not unnecessarily slow down the process while doing so." And while EPA's interpretation of the statute was entitled to "some, non-trivial quantum of respect," the court determined that EPA's interpretation, which was based on "a scenario involving the automatic self-destruction of a written permit issued by an entirely separate federal agency after years of study and consideration," was "illogical and impractical" and "sow[ed] a lack of certainty into a system that was expressly intended to provide finality."

Recent Judicial Trends

The Mingo Logan decision follows on the heels of another recent D.C. federal court opinion that also limited EPA's attempt to expand its own role under section 404. In National Mining Association v. Jackson, 816 F. Supp. 2d 37 (D.D.C. 2011), the district court held that EPA exceeded its statutory authority in the 404 permitting process when EPA, rather than the Corps, attempted to apply section 404(b)(1) permitting guidelines to permit applications and then inform the Corps which applications would be subjected to an enhanced EPA review. EPA argued that, because the statute did not expressly prohibit EPA from expanding its role in the 404 permitting process, Congress simply intended to prescribe a "statutory minimum" with regard to EPA. The court rejected EPA's position, noting that the Corps has sole authority to issue section 404 permits and that the Clean Water Act only accords EPA the authority to prevent the Corps from authorizing certain disposal sites. "The statute is therefore not ambiguous . . . as the statute plainly reads, Congress established a permitting scheme in which the Corps is to be the principal player, and the EPA is to play a lesser, clearly defined supporting role. With the adoption of the [EPA rules at issue], the EPA has expanded its role in the issuance of Section 404 permits and has thus exceeded the statutory authority afforded to it by the Clean Water Act."

EPA's Section 404 Role Is Limited

Although these holdings are based on distinct issues arising under section 404, both the Mingo Logan decision and the National Mining Association decision call into question EPA's own interpretation of its continuously broadening role under the Clean Water Act's dredge/fill permitting scheme. We have yet to see whether EPA will choose to appeal these cases. In the meantime, both opinions help clarify the Corps' role as the primary permitting authority in contrast to the EPA's more limited, "clearly defined role," reinforcing the need for certainty and finality in the 404 permitting process.

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