Energy and Environment MonitorThe appeal involves two orders issued by the U.S. District Court in a case that challenged the Corps’ issuance of individual Clean Water Act § 404 permits to operating subsidiaries of Massey Energy. Following a trial in November 2006, the district court issued two decisions. The first order on Good Friday 2007 concluded that the Corps had failed to perform an analysis of all issues required to be examined under both the CWA and NEPA, and that the criteria by which the Corps analyzed the claims were insufficient. The second order concerned the use of in-stream ponds, the structures routinely constructed in what may be jurisdictional waters for the purpose of collecting surface water run-off from a valley fill to contain sediment before it enters the remaining stream channel. The court’s June 2007 order held that the Corps’s § 404 permit did not encompass the stream segment between the toe of the valley fill and the sediment pond, and that a § 402 NPDES permit was needed for the discharge before it entered the sedimentation pond.
A three judge panel of the U.S. Court of Appeals for the Fourth Circuit heard the appeal of Judge Robert Chambers’ 2007 decisions in OVEC v. US Army Corps of Engineers yesterday in Richmond. Jackson Kelly attorney Bob McLusky argued the appeal on behalf of coal industry intervenors and in support of the Corps.
The oral argument lasted far longer than the allotted one hour. Although not raised in questioning, at issue was the appropriate standard of review. The Corps and the coal industry intervenors urged a de novo review of the district court’s order on appeal because of the variety of statutory claims as well as the fact the district court had taken testimony at trial in aid of its review of the Corps’s administrative record. Toward the end of questioning counsel for the environmental plaintiffs appeared to concede that the district court was required to review the Corps’s decision on each permit on the record.
The panel posed challenging questions to the Corps’ counsel regarding the criteria that the Corps used in making a functional assessment of the stream channels that are lost as a result of valley fills. Historically, those functional values have been thought to be those identified in the EPA 404(b) (1) Guidelines. This position was maintained consistently by the coal industry intervenors. The Corps acknowledged that those functions in the Guidelines were followed in the evaluation of the permits at issue, but admitted that the Corps went beyond those criteria in its evaluations. Nevertheless, Corps also conceded that it did not yet have a functional assessment method in place by which those functions could be measured.
The scope of the review performed under NEPA, and how it compares with the Corps’s review under the CWA, consumed much of the argument. The Corps took the position that the scope of its mandated review extends only to the ordinary high-water mark of the stream. It relied on the extensive regulation of all else at a mine under a state SMCRA program to contend that the “federal” part of the project is very narrow. Plaintiffs had argued that the NEPA analysis had to extend to the entire mine. The panel spent considerable time trying to figure exactly what activities the Corps permits (just to the ordinary high-water mark or something more) and where the line should be drawn for NEPA purposes.
The Corps analysis of cumulative impacts was also reviewed at length. The district court ruled that while the Corps recited facts under the heading “cumulative impacts,” it conducted precious little analysis. The district court ruled that while the Corps recited facts under the heading “cumulative impacts,” it conducted little analysis. Industry counsel tried to re-focus the discussion on appeal to the individual permits. As an example in one permit the proposed fills would cap and extend a number of old valley fills that are currently discharging acid mine drainage. The “new” portions of the fill will neutralize the acidity and improve downstream water chemistry, thereby creating a “cumulative” positive impact. The Court seemed inclined, however, to view the issue on a more programmatic basis.
On the ability of coal operators to build in-stream ponds, the industry intervenors argued that this issue had been resolved by the 2001 decision of the Fourth Circuit in West Virginia Coal Association v. Bragg. In that case some of the same environmental plaintiffs, represented by the same counsel, had agreed to settle that claim pursuant to the comprehensive settlement entered with the Corps and the West Virginia DEP. Therefore, re-litigation of that claim under the doctrine of claim preclusion should be barred. Industry counsel also pointed out that the plaintiffs had not been challenged the location of sedimentation ponds in relation to valley fills before the district court. Because the DEP requires that sedimentation ponds be as close as practicable to fills, the Corps relies on this determination in issuing its § 404 permits. Few questions were asked by the panel on this topic.
The Fourth Circuit panel was comprised of three active members of the Court, H. Blane Michael, Roger Gregory and Dennis Shedd. The case was the first time that Judge Paul Niemeyer, who had previously participated in the three previous appeals of § 404 CWA issues involving the coal industry, did not participate. Based on the prior cases, a written opinion in the case is likely in early 2009.
For more information about OVEC v. US Army Corps of Engineers, C.A. No. 07-1355, contact Bob McLusky at (304) 340-1381.
This article was authored by Blair M. Gardner, Jackson Kelly PLLC. For more information on the author see here.
