On April 23, 2013, the United States Court of Appeal for the District of Columbia upheld EPA’s authority to retroactively veto Section 404 permits. The ruling comes as a disappointment to those in the coal industry seeking the certainty and finality in the CWA §404 permit context.
The permit in question was related to Mingo Logan Coal Company’s U.S. Army Corps of Engineers Permit for the Spruce No. 1 Surface Mine in Logan County, WV. The permit was originally issued in January of 2007. EPA waited until January 13, 2011 to exercise its “veto” power pursuant to Section 404(c) of the CWA, which provides EPA the authority to “prohibit the specification (including the withdrawal of specification)” of waters of the U.S. as a disposal site for fill material “whenever [it] determines…that the discharge…will have an unacceptable effect….” In exercising its “veto” power, EPA claimed valley fills associated with the mine will have adverse impacts on downstream water quality, which will in turn cause unacceptable impacts on aquatic life. However, all discharges of water from the fill area are regulated by an NPDES permit. That permit was issued by WVDEP after EPA withdrew objections to it years ago. The veto marked only the 13th time since 1972 that EPA had used its Clean Water Act veto authority, and the first time EPA had ever vetoed a previously permitted mine.
The D.C. District Court Opinion
Mingo Logan sued EPA in the U.S. District Court for the District of Columbia, arguing that EPA’s “veto” was improper. On March 23, 2012, Judge Jackson of the D.C. District Court overturned EPA’s retroactive veto. The Court applied the two-step analysis articulated in Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984). The Chevron two-step test applies where a court reviews an agency’s interpretation of the statute it administers. First, the court must determine whether Congress has spoken directly to the precise question at issue. If the intent of Congress is clear and unambiguous, then the court must give effect to the unambiguously expressed intent of Congress, and the inquiry is over. The second step applies where the language of the statute is found to be silent or ambiguous with respect to the specific question. If the statute is silent or ambiguous, the Court then determines whether the agency’s interpretation of the statute is a permissible construction of the statute.
EPA took the position that Section 404(c) authorized it to exercise its veto at any time—even after permit issuance. Although Judge Jackson found the language of 404(c) to be ambiguous in isolation, she found that the statutory text as a whole and the legislative history of the statute ran counter to EPA’s claim that it could “withdraw specification” after permit issuance. Thus, Judge Jackson ruled that EPA’s interpretation failed the first step of Chevron. The Court went on to determine that, even if there were ambiguity to the language, EPA’s position also failed under step two of the Chevron analysis. Here, the Court’s analysis was complicated by the fact that the Clean Water Act provides authority to both the Corps and EPA, and in such a case there is an argument that EPA is owed no deference. However, the Judge ruled that, even according EPA some deference, EPA’s interpretation of its authority to allow it to exercise its 404(c) authority after the Corps had issued a permit was unreasonable. The Court used a variety of strong language in discussing EPA’s interpretation, characterizing it as illogical and impractical, along with stating that EPA had resorted to “magical” thinking.
Of note, the Court pointed to the various amici briefs filed expressing concern with eliminating finality from the permitting process as additional grounds for finding EPA’s interpretation to be unreasonable. It thus relied on the primary argument made by industry—certainty of a permit is a foundation of the permitting process. The Court’s opinion is also notable for its strong language in places, making such statements as: EPA’s “reading does not exactly leap off the page” and “[t]his is a stunning power for an agency to arrogate to itself when there is absolutely no mention of it in the statute.”
The Circuit Court Opinion
On appeal, the Circuit Court of Appeals reversed the District Court, focusing on the plain language of the statute. The Appeals Court focused on the Oxford Dictionary definitions of two key statutory terms, “whenever” (“at whatever time, no matter when”) and “withdrawal” (“[t]o take back or away something that has been given, granted, allowed, possessed, enjoyed, or experienced”), in ruling that the CWA “imposes no temporal limit on the [EPA] Administrator’s authority to withdraw the Corps’ specification ‘whenever’ he makes a determination that the statutory ‘unacceptable adverse effect’ will occur.” The Court stated that the statute’s use of the expansive conjunction, “whenever,” demonstrated Congress’s “intent to grant the Administrator authority to prohibit/deny/restrict/withdraw a specification at any time.”
Additionally, the Court found that the Corps “specifies” areas for fill in the final permit itself. Thus, the Court reasoned EPA’s veto power can only be exercised post-issuance. The Court also noted that the Corps has consistently maintained its right to exercise a post-issuance veto for approximately thirty years. The Appeals Court rejected Mingo Logan’s arguments that EPA’s veto conflicted with: (1) the plain statutory language; (2) section 404 as a whole; and (3) the legislative history of section 404(c).
This article was authored by Chris M. Hunter, Jackson Kelly PLLC. For more information on the author see here.