In a decision much anticipated by both the business and environmental communities, the Supreme Court confirmed that the two permitting programs created under §402 and §404 of the Clean Water Act (CWA) operate independently of each other. Accordingly, a mine operator who has secured a dredge-and-fill §404 permit has no duty to receive a §402 NPDES permit for the same discharge. In its June 22 decision in Coeur Alaska, Inc. v. Southeast Alaska Conservation Council,1 the Court upheld the U.S. Army Corps of Engineers in its issuance of a CWA §404 permit issued to a gold mining company to dispose of mill tailings into a lake in the Tongass National Forest. Justice Anthony Kennedy wrote the opinion of the Court that split in a 6-3 vote.
A subsidiary of Coeur d’Alene Mines proposed to re-open a gold mining operation that had been abandoned since 1928. Gold would be captured using froth flotation. It is a recovery system of chemical and mechanical separation by which the gold ore is crushed, the mixture liquefied in a heavy media bath, and the gold particles float to the top of a tank where they are captured in the froth and removed. The tailings are then piped to a location – normally a tailings pond – where the heavy material sinks to the bottom and the water re-captured in a closed loop system for reuse in the mill.
The particular problem for the mine is its location in an area inundated by wetlands. In its CWA §404 permitting, the company presented two options for evaluation by the Corps. One option would have constructed a tailings pond in wetlands with a “resulting pile [that] would rise twice as high as the Pentagon and cover three times as many acres.”2 The placement of fill in the wetlands would have resulted in the permanent loss of that aquatic feature. The other option, and the one chosen by the Corps, allows Coeur Alaska to use a 23 acre lake to dispose the tailings, raises the lake bottom by almost 50 feet over the life of the mine, and then allows a more shallow lake to emerge as a wetlands feature upon the conclusion of the mining. Water from the tailings disposal would be treated by reverse osmosis to remove “all” pollutants before flowing into the stream that receives water from the lake where the tailings will be placed.
The environmentalists who attacked the Corps’ permitting decision argued, as they have in prior CWA litigation decided by the Fourth Circuit, that the Corps could not issue a permit for the disposal of waste.3 Instead, they argued that the mining operation’s discharge could have been permitted – if at all – by the EPA using the device of the CWA §402 NPDES permit. Unlike the litigation that has arisen in the Southern District of West Virginia, the Coeur Alaska permit involved a “new source performance standard” under Section 306(b) of the CWA. This section gives the EPA authority to regulate the amount of pollutants that certain categories of new sources may discharge into navigable waters. The challenge proposed that the existence of the NSPS standard for gold recovery using froth flotation under Section 306, which is a zero discharge standard, foreclosed the use of a §404 permit that would fill the lake with tailings.
The analysis of the statute is a difficult one. “Rather than address the tension between §§306 and 404, the regulations instead implement the statutory framework without elaboration on this point. Each of the two principal regulations . . . seems to stand on its own without reference to the other.”4 To frame its analysis the Court posed two questions. “The question of which agency has authority to consider whether to permit the slurry discharge is our beginning inquiry.”5 Second, “[i]n issuing the permit did the Corps act in violation of a statutory mandate so that the issuance was ‘not in accordance with law’?”6
In addressing the first question, the Court began with the text of the CWA. The Court began with EPA’s permitting authority under §402 and found that EPA possessed authority under the section except as provided by §404. “Section 402 thus forbids the EPA from exercising permitting authority that is ‘provided [to the Corps] in’ §404.”7 The Court found that “if the Corps has authority to issue a permit for a discharge under §404, then the EPA lacks authority to do so under §402.”8 Not only did the Court find that the text of the CWA supported its interpretation, it found the joint EPA-Corps “fill rule” promulgated following the litigation of the Bragg case in 20009, and upheld by the Fourth Circuit in Rivenburgh, expressed the agencies’ understanding about how the Act is intended to work.
The Court also observed how EPA and the Corps had interpreted the CWA in a more or less consistent fashion for three decades. This division of responsibility between the agencies reflects the fundamental distinction between the Corps 404 permit and the 402 permit issued by EPA or delegated to the states. The former permit has historically been employed to dispose of solid material with the intent of displacing the body of water into which it is placed. The latter permit is imposed on a waste stream that is intended to be assimilated into a body of water.
The second question – whether the Corps acted in accordance with law – was a more extended discussion in which the Court examined the agencies regulations at issue, as well as an interpretative memorandum that both had relied upon. As a fallback position, the environmentalists had urged the Court to consider whether both permits might apply to the type of discharge at issue. The Court had ordered briefing on the topic. “The parties agree, however, that a two-permit regime is contrary to the statute and the regulations. We conclude that this is correct. A two-permit regime would cause confusion, delay, expense, and uncertainty in the permitting process.”10
Although the opinion reinforces similar conclusions that the Fourth Circuit has reached in CWA cases involving fills, the Court offered additional conclusions that are supportive of the historical division of permitting responsibilities between the agencies. For example, it found that the Corps is required in the first instance to determine its jurisdiction over the discharge of fill, not EPA. It also found that the “EPA’s function is different, in regulating fill, from its function in regulating other pollutants . . . Section 404 assigns the EPA two tasks in regard to fill material. First, the EPA must write guidelines for the Corps to follow in determining whether to permit a discharge of fill material. CWA §404(b); 33 U. S. C. §1344(b). Second, the Act gives the EPA authority to “prohibit” any decision by the Corps to issue a permit for a particular disposal site.”11 This last observation may impose some restraint on EPA in its “review” of Corps permitting decisions.
As reassuring as the decision is, it must be observed that the Court’s decision now shifts the debate back to Congress. Nothing in the opinion restrains Congress from changing the CWA to impose the restrictions on fill that the environmental challengers sought. At least one bill now before Congress would define fill in a way to preclude excess spoil from coal mining to be included within the definition.12 Until Congress so acts, however, the ability of courts to interpret the CWA to preclude mining related fills in jurisdictional waters has been restricted decisively.
For additional information about Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, contact Bob McLusky at 304 340-1381 or Blair Gardner at 304 340-1146.
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1 _ U.S. _, No. 07-984, together with No. 07-990, Alaska v. Southeast Alaska Conservation Council, et al.
2 Opinion at 5.
3 Kentuckians for the Commonwealth v. Rivenburgh, 317 F.3d 425 (4th Cir. 2003).
4 Opinion at 18.
5 Opinion at 9.
6 Opinion at 13.
7 Opinion at 10.
8 Id.
9 WVCA v. Bragg, 248 F.3d 275 (4th Cir. 2001).
10 Opinion at 23.
11 Opinion at 10.
12 S. 696.
This article was authored by Blair M. Gardner, Jackson Kelly PLLC. For more information on the author see here.
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