Commonwealth v. U.S. Army Corps of Eng'rs

• Decision Date: 30 May 2014
• Docket Number: No. 13–6153.,13–6153.
• Citation: 746 F.3d 698
• Parties: KENTUCKIANS FOR THE COMMONWEALTH and Sierra Club, Plaintiffs–Appellants, v. UNITED STATES ARMY CORPS OF ENGINEERS, Thomas P. Bostick, and Luke T. Leonard, Defendants–Appellees, Leeco, Inc., Intervenor–Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

746 F.3d 698

KENTUCKIANS FOR THE COMMONWEALTH and Sierra Club, Plaintiffs–Appellants,

v. UNITED STATES ARMY CORPS OF ENGINEERS, Thomas P. Bostick, and Luke T. Leonard, Defendants–Appellees,Leeco, Inc., Intervenor–Appellee.

No. 13–6153.

United States Court of Appeals, Sixth Circuit.

Argued: Feb. 11, 2014.

Decided and Filed: March 7, 2014.

Rehearing En Banc Denied May 30, 2014.

ARGUED: Neil Gormley, Earthjustice, Washington, D.C., for Appellants. J. David Gunter II, United States Department of Justice, Washington, D.C., for Federal Appellees. Robert G. McLusky, Jackson Kelly PLLC, Charleston, West Virginia, for Appellee Lecco. ON BRIEF: Neil Gormley, Jennifer C. Chavez, Earthjustice, Washington, D.C., Joseph M. Lovett, J. Michael Becher, Appalachian Mountain Advocates, Lewisburg, West Virginia, Mary Cromer, Appalachian Citizens Law Center, Whitesburg, Kentucky, for Appellants. J. David Gunter II, United States Department of Justice, Washington, D.C., for Federal Appellees. Robert G. McLusky, Jackson Kelly PLLC, Charleston, West Virginia, Kevin M. McGuire, Jackson Kelly PLLC, Lexington, Kentucky, for Appellee Leeco.

Before: KEITH, SILER, and ROGERS, Circuit Judges.

OPINION

ROGERS, Circuit Judge.

More than six years after the Commonwealth of Kentucky authorized a surface mining operation in Perry County, this appeal raises the issue of the proper scope of environmental analysis a federal agency must use in issuing a permit related to a small but necessary part of the operation. The Surface Mining Control and Reclamation Act grants Kentucky “exclusive jurisdiction” over the regulation of surface mining within the state, subject to minimum federal standards. In order to conduct surface mining in Kentucky, a mine operator must obtain a permit for the overall operation from Kentucky's Division of Mine Permits, as well as subsidiary permits related to water and stream quality, as required by the Clean Water Act. One of these permits is a § 404 permit, which is issued by the U.S. Army Corps of Engineers and is required for the discharge of dredged or fill material into waters of the United States. After obtaining a permit from the Division of Mine Permits, intervenor Leeco, Inc. applied for and received a § 404 permit from the Corps. The permit authorizes Leeco to “mine through” and fill certain surface stream beds, which are already in a degraded state, and requires Leeco to offset the limited environmental effect of the filling by improving other streams in the watershed.

The plaintiffs challenge the Corps's issuance of the § 404 permit, arguing that the National Environmental Policy Act (“NEPA”) requires the Corps to have considered in its environmental assessment the public health impacts related to surface mining in general, and that the Corps violated the Clean Water Act by using a flawed analysis of the associated compensatory mitigation plan. In a comprehensive and thoughtful opinion, the district court rejected the plaintiffs' arguments. This appeal followed. Because the Corps did not abuse its discretion in limiting the scope of its environmental analysis only to health effects closely related to the discharge of dredged or fill material into jurisdictional waters, the Corps did not violate NEPA. And because the Corps's acceptance of Leeco's compensatory mitigation plan was not an arbitrary and capricious exercise of its specialized expertise, the Corps did not violate its requirements under the Clean Water Act. Accordingly, we must uphold the Corps's decision to issue the § 404 permit.

We of course decide only the issues before us—whether the permit at issue in this case complies with the Clean Water Act and the National Environmental Policy Act. Our decision takes no position on the public policy questions of whether surface mining is in the larger public interest, or whether mountaintop removal should be allowed by the Commonwealth of Kentucky.

Congress passed the Surface Mining Control and Reclamation Act of 1977 (“SMCRA”) in order to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” 30 U.S.C. § 1202(a). The Act set up a system of “cooperative federalism,” in which state governments could opt in to regulating coal surface mining in their states so long as they establish agencies to enact and administer their own regulatory programs consistent with federal minimum standards and subject to federal approval. See Hodel v. Va. Surface Mining & Reclamation Ass'n, 452 U.S. 264, 289, 101 S.Ct. 2352, 69 L.Ed.2d 1 (1981). Under the Act, a state that administers a federally approved program “assume[s] exclusive jurisdiction over the regulation of surface coal mining and reclamation operations” on non-federal lands, 30 U.S.C. § 1253(a), with limited federal oversight to ensure compliance with federal standards, id. § 1271. Kentucky's Department for Natural Resources has assumed legal responsibility for implementation of SMCRA through its Division of Mine Permits. SeeKy.Rev.Stat. §§ 350.028, .465(2). This program has been approved by the U.S. Department of the Interior since 1982. 30 C.F.R. § 917.10. Thus, any surface mining operation in the Commonwealth of Kentucky must be conducted with a permit from the Division of Mine Permits. See30 U.S.C. § 1256(a).

Although a SMCRA permit authorizes all of the activities related to a surface mining operation, it alone may not be sufficient to allow a mine operator to conduct surface mining operations. See Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177, 190–91 (4th Cir.2009). Other permits may be required to authorize portions of the operation, if those specific activities are regulated by an independent regulatory program. For example, if a surface mining operation will affect the navigable waters of the United States, the Clean Water Act, 33 U.S.C. § 1251 et seq., which aims to “restore and maintain the chemical, physical, and biological integrity of the Nation's waters” by eliminating “the discharge of pollutants into the navigable waters.” 33 U.S.C. § 1251(a)(1), requires a surface mine operator to obtain various other permits related to the quality of water and wetlands.

For the typical surface mining operation, three different Clean Water Act permits are required. First, a mine operator must obtain a § 401 permit from the proper permitting agency to ensure that “any discharge into the navigable waters” complies with regulations designed to limit the discharge of pollutants into navigable waters and to ensure the maintenance of federal water quality standards. Id. § 1341. Second, a mine operator must obtain a § 402 permit for “the discharge of any pollutant, or combination of pollutants.” Id. § 1342. Finally, and most relevant to the present litigation, a mine operator must also obtain a § 404 permit “for the discharge of dredged or fill material into the navigable waters at specified disposal sites.” Id. § 1344. This final permit must be obtained from the U.S. Army Corps of Engineers. See id. § 1344(d); 33 C.F.R. § 320.2(f).

In conducting its review for a § 404 permit, the Corps is required to comply with guidelines promulgated by the Environmental Protection Agency (“EPA”), which are called the § 404(b)(1) Guidelines. 33 U.S.C. § 1344(b)(1); see also33 C.F.R. § 320.2(f); 40 C.F.R. pt. 230. The review includes the consideration of the health and welfare of those that would be affected by the discharge into jurisdictional waters. For example, under the regulations, the Corps must not issue a permit if the discharge of dredged or fill material would “cause or contribute to significant degradation of the waters of the United States,” which may be constituted by certain effects considered individually and collectively, including “[s]ignificantly adverse effects of the discharge of pollutants on human health or welfare” and “[s]ignificantly adverse effects of discharge of pollutantson recreational, aesthetic, and economic values.” 40 C.F.R. § 230.10(c), (c)(1), (c)(4). The Corps additionally imposes some general policies that are to be considered in the evaluation of all permit applications, and not only § 404 permits. Under these policies, a decision must include “an evaluation of the probable impacts, including cumulative impacts, of the proposed activity and its intended use on the public interest,” and “reflect the national concern for both protection and utilization of important resources.” 33 C.F.R. § 320.4(a).

In addition to its responsibilities under the Clean Water Act, the Corps must also comply with the requirements of NEPA, 42 U.S.C. § 4321 et seq., which requires federal agencies to “take a ‘hard look’ at the potential environmental consequences of their actions.” Aracoma Coal, 556 F.3d at 191 (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989)). NEPA requires federal agencies to prepare a detailed statement, called an environmental impact statement, for every “major Federal action[ ] significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(2)(C); see also40 C.F.R. § 1502.3. When it is not clear whether an environmental impact statement is required, the agency will prepare an environmental assessment, “a concise public document ... that serves to ... [b]riefly provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact.” 40 C.F.R. §§ 1501.3, 1501.4(b), 1508.9; see also Save Our Cumberland Mountains v. Kempthorne, 453 F.3d 334, 339 (6th Cir.2006). If an environmental impact statement is not required, the agency must “[p]repare a finding of no significant impact,” 40 C.F.R. § 1501.4(e), that “briefly present[s] the reasons why an action ... will not have a significant effect on the human environment and for which an environmental impact statement therefore will not be prepared,” id. §...