There were several decisions of import recently applying both Sections 404 (regulating discharges of “fill material”) and 402 (regulating NPDES permits for discharges of non-fill material) of the Clean Water Act:
1. Section 404 Cases: Pebble Challenge is Premature; EPA’s Veto of Spruce Permit Uphel
- Pebble Limited Partnership, et al. v. U.S. Environmental Protection Agency, et al., Civil Action No. 3:14-cv-0097 (D. Alaska):
By order dated September 26, 2014, a federal district court in Alaska dismissed as premature a challenge by Pebble Limited Partnership to EPA’s announced initiation of “veto” proceedings under Section 404(c) of the Clean Water Act.
Pebble holds the rights to a large copper, molybdenum and gold deposit in Alaska. It has spent $150 million studying the environmental impacts of opening a mine and recently announced plans to submit applications for the necessary permits—including an application to the Corps for a Section 404 permit to discharge fill material. Before it submitted the application, however, EPA announced plans to initiate proceedings under Section 404(c) to “prohibit the specification” of defined areas for the disposal of fill material.
Section 404 gives the Corps of Engineers the right to issue 404 permits, but that right is subject to EPA’s so-called “veto” authority under 404(c). Section 404(c) provides that EPA may “prohibit the specification of any defined area as a disposal site whenever it determines . . . that the discharge will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas, wildlife or recreational areas.” In 1979, EPA issued rules stating that EPA could use its authority to “prohibit the specification” of a water for the disposal of fill material even before the Corps had considered or approved an application for a fill permit. 40 C.F.R. 231.1(a). While Pebble wanted to argue that EPA could not act in advance of a permit application to the Corps, this rule presented a significant problem—the rule had not been challenged when issued in 1979, and any direct claim that EPA lacked authority to act in advance of a 404 permit application would be viewed as an untimely facial challenge to the rule.
To avoid a claim that it was making an untimely challenge to EPA’s 1979 rule, Pebble argued that EPA’s decision to initiate the 404(c) action was a final agency action that was subject to immediate judicial review. They argued that the decision to start “veto” proceedings was a final agency decision on the scope of EPA’s authority under its “veto” rules. The Court rejected this contention as a thinly disguised attack on the rule itself and continued by noting that EPA’s decision to initiate 404(c) proceedings was NOT a final action. Instead, because a 404(c) action is not final until it undergoes a lengthy public notice, comment and hearing process, the Court found that EPA had only initiated the proceedings, but had not reached a final decision that could yet be challenged in federal court.
The decision should not surprise anyone, but is evidence of the extent to which EPA is now willing to use its considerable but infrequently used § 404(c) authority. This will be 14th time EPA has used this authority since passage of the modern Clean Water Act in 1972, and the second time for the Obama administration. The 13th time was in vetoing the permit issued by the Corps for Mingo Logan Coal Company’s “Spruce Mine” in West Virginia. Ironically, there the initial challenge was the EPA could not exercise its 404 “veto” authority AFTER the Corps had issued a 404 permit. There, the EPA waited over two years after the Corps had issued the 404 permit (and after a change in administration) to initiate its action.
- Mingo Logan Coal Company, Inc. v. U.S. Environmental Protection Agency, Civil Action No. 10-0541 (D.D.C.).
By order entered September 30, 2014, the federal District Court for the District of Columbia, a court that had once “smacked down” EPA’s post-permit “veto” of Mingo Logan’s Spruce Mine § 404 permit, changed course and upheld EPA’s decision to prevent further filling at the mine.
The Corps issued a 404 permit to Mingo Logan in early 2007 after the permit underwent the most detailed environmental review by the Corps (and EPA) of any coal permit in the east. In mid to late 2009, after the Obama administration took office, EPA took several steps to prohibit new mines. First, in the spring of 2009, it issued its later discredited “enhanced coordination” procedures by which EPA re-inserted itself into the review of pending Corps applications. It did so because it had allowed its time to comment on the applications to lapse under the procedures devised by the Corps and EPA. And then in the late summer of 2009, it asked the Corps to suspend or rescind the previously-issued Spruce permit, claiming that new or evolving information previously unavailable had led it to conclude that the permit would have unacceptable adverse effects. When the Corps declined, EPA struck out on its own and started a 404(c) veto. In January 2011, EPA completed its proceedings and announced that it was prohibiting Mingo Logan from discharging fill material in several of the streams it was authorized to fill.
EPA’s concerns as expressed in 2009 were solely with the downstream effects of conductivity—effects that were already considered and authorized by Mingo Logan’s NPDES permit. However, to address comments that it could not use effects regulated by the NPDES program to veto a 404 permit, EPA’s final decision also claimed that among the unacceptable effects were those within the fill area itself. The effects it identified were on non-endangered aquatic insects and bird species never previously identified in the area—none of which depended on new information or addressed impacts not fully realized before the 2007 permit issuance.
Mingo Logan challenged EPA’s action in federal court in Washington. It argued both that EPA could not act after the Corps had issued a permit and that EPA’s decision was otherwise unlawful and unreasonable. In 2012, the district court ruled that EPA’s action was untimely, and that the Clean Water Act prohibited EPA from using its 404(c) authority after the Corps had finally issued a permit. The D.C. Circuit Court, however, reversed that decision in 2013, ruling that the language granting EPA the right to act “whenever it determines” that a discharge will have an unacceptable impact is a grant of authority to act “at any time.” The appeals court sent the case back to the district court to review the remaining challenges by Mingo Logan.
The September 30 decision rejects the remaining challenges by Mingo Logan. Among the new rulings by the Court were: 1) despite comments in EPA’s regulatory preamble that it should not use its 404 authority after a permit is issued unless there is new information not previously considered, there is no express requirement that EPA rely on new information; 2) applying the high level of deference owed to EPA on factual issues, EPA’s conclusion that there would be unacceptable impacts within the fill area itself is supported by the record; and 3) the EPA can rely on downstream water quality impacts in the exercise of its 404 authority even though those water quality impacts are the subject of an NPDES permit issued under Section 402 of the permit.
2. Section 402 Citizen Suit
- Ohio Valley Environmental Coalition, et al. v. Elk Run Coal Company, et al., Civil Action No. 3:12-cv-00785 (S.D. W.Va.)
In June 2014, a federal court in West Virginia ruled that discharges of “conductivity” from two mines in West Virginia were liable under the Clean Water Act for violating the State’s “narrative” water quality standard. The NPDES permits at issue did not contain numeric limits on conductivity, but the Sierra Club alleged that the permittees were violating a requirement that they comply with all water quality standards. The case was bifurcated into liability and remedy phases. The June order only resolved the liability phase and is, therefore, not a final and appealable order absent approval from the courts. The district court has agreed that its ruling may be appealed immediately. On September 21, the mine operators applied to the Fourth Circuit for permission to advance an immediate appeal.
- Ohio Valley Environmental Coalition, et al. v. Fola Coal Company, LLC, Civil Action No. 2:13-cv-5006 (S.D. W.Va.)
By order of September 30, 2014, the Court denied Fola’s motion for a directed verdict. This is another Clean Water Act citizen suit alleging that discharges of conductivity by a mine operator are violating the State’s narrative water quality standard. In these cases, the Plaintiffs rely heavily on the EPA Conductivity “Benchmark” as evidence that conductivity can cause adverse effects to aquatic insects.
This case was tried in August. At the end of the Plaintiffs’ case, the mine operator moved for a directed verdict. It argued that Plaintiffs had not proven that the ionic mixture of Defendant’s discharges was sufficiently like that studied in the Benchmark to warrant the use the Benchmark as evidence of causation. It also argued that Plaintiffs must prove that the violation of the narrative water quality standard is caused by the discharge of a “pollutant,” but that conductivity is only a characteristic of many pollutants and is not itself a pollutant that is causing impacts to aquatic life. The Court ruled that the waters are sufficiently like those used in the Benchmark to consider it as evidence. It also ruled that even though conductivity is not a “pollutant,” it is a reasonable proxy for specific ions known to cause violations of the narrative water quality standard.
This article was authored by Robert G. McLusky, Jackson Kelly PLLC. For more information on the author, click here.