Mingo Logan Coal Co. v. U.S. Envtl. Prot. Agency

• Decision Date: 25 July 2013
• Docket Number: No. 12–5150.,12–5150.
• Citation: 714 F.3d 608
• Parties: MINGO LOGAN COAL COMPANY, Appellee v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

714 F.3d 608

MINGO LOGAN COAL COMPANY, Appellee

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Appellant.

No. 12–5150.

United States Court of Appeals,District of Columbia Circuit.

Argued March 14, 2013.

Decided April 23, 2013.

Rehearing En Banc Denied July 25, 2013.

Appeal from the United States District Court for the District of Columbia (No. 1:10–cv–00541).

Matthew Littleton, Attorney, United States Department of Justice, argued the cause for the appellant. Aaron P. Avila, Mark R. Haag, Cynthia J. Morris and Kenneth C. Amaditz, Attorneys, United States Department of Justice, and Stefania D. Shamet, Attorney, United States Environmental Protection Agency, were on brief.

Emma C. Cheuse, Jennifer C. Chavez and Benjamin A. Luckett were on brief for amici curiae West Virginia Highland Conservancy et al. in support of the appellant.

Robert M. Rolfe argued the cause for the appellee. George P. Sibley III, Virginia S. Albrecht and Deidre G. Duncan were on brief.

Kathryn Kusske Floyd and Jay C. Johnson were on brief for amici curiae Chamber of Commerce of the United States of America et al. in support of the appellee.

Michael A. Carvin and Kevin P. Holewinski were on brief for amicus curiae United Company in support of the appellee.

Benjamin L. Bailey and Michael B. Hissam were on brief for amicus curiae Randy Huffman in support of the appellee. Thanos Basdekis entered an appearance.

Before: HENDERSON, GRIFFITH and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LeCRAFT HENDERSON, Circuit Judge:

The Mingo Logan Coal Company (Mingo Logan) applied to the United States Army Corps of Engineers (Corps) for a permit under section 404 of the Clean Water Act (CWA), 33 U.S.C. § 1344, to discharge dredged or fill material from a mountain-top coal mine in West Virginia into three streams and their tributaries. The Corps—acting on behalf of the Secretary of the Army (Secretary) and without objection from the Administrator of the United States Environmental Protection Agency (Administrator, EPA), who has “veto” authority over discharge site selection under CWA subsection 404(c), 33 U.S.C. § 1344(c)—issued the permit to Mingo Logan, approving the requested disposal sites for the discharged material. Four years later, EPA invoked its subsection 404(c) authority to “withdraw” the specifications of two of the streams as disposal sites, thereby prohibiting Mingo Logan from discharging into them. Mingo Logan filed this action challenging EPA's withdrawal of the specified sites on the grounds that (1) EPA lacks statutory authority to withdraw site specification after a permit has issued and (2) EPA's decision to do so was arbitrary and capricious in violation of the Administrative Procedure Act (APA), 5 U.S.C. § 701 et seq. The district court granted summary judgment to Mingo Logan on the first ground without reaching the second. We reverse the district court, concluding that EPA has post-permit withdrawal authority, and remand for further proceedings.

I.

The CWA provides that “the discharge of any pollutant by any person shall be unlawful” except as in compliance with specifically enumerated CWA provisions, including section 404.¹33 U.S.C. § 1311(a). Subsection 404(a) authorizes the Secretary to issue permits allowing discharge of dredged or fill material “at specified disposal sites,” which are to be “ specified for each such permit by the Secretary ... through the application of guidelines developed by the Administrator, in conjunction with the Secretary.” Id. § 1344(a), (b). The Secretary's authority to specify a disposal site is expressly made “[s]ubject to subsection (c) of [section 404].” Id. § 1344(b). Subsection 404(c) authorizes the Administrator, after consultation with the Corps, to veto the Corps's disposal site specification—that is, the Administrator “is authorized to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and ... to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site”—“whenever he determines” the discharge will have an “unacceptable adverse effect” on identified environmental resources. Id. § 1344(c).

In June 1999, Hobet Mining, Inc., Mingo Logan's predecessor, applied for a section 404 permit to discharge material from the Spruce No. 1 Mine into four West Virginia streams and their tributaries. In 2002, after the Corps prepared a draft Environmental Impact Statement, EPA expressed its concern that “even with the best practices, mountaintop mining yields significant and unavoidable environmental impacts that had not been adequately described in the document.” Letter from EPA, Region III to Corps, Huntington Dist., at 1 (June 16, 2006) (JA 617). In the end, however, EPA declined to pursue a subsection 404(c) objection. Email from EPA to Corps (Nov. 2, 2006) (JA 982) (“[W]e have no intention of taking our Spruce Mine concerns any further from a Section 404 standpoint....”). On January 22, 2007, the Corps issued Mingo Logan a section 404 permit, effective through December 31, 2031, which authorized Mingo Logan to dispose of material into three streams—Pigeonroost Branch, Oldhouse Branch and Seng Camp Creek—and certain tributaries thereto. Dep't of the Army Permit No. 199800436–3 (JA 984) (Spruce Mine Permit). The permit expressly advised that the Corps “may reevaluate its decision on the permit at any time the circumstances warrant” and that “[s]uch a reevaluation may result in a determination that it is appropriate to use the suspension, modification, and revocation procedures contained in 33 CFR 325.7.” Id. at 3 (JA 986). The permit made no mention of any future EPA action.

On September 3, 2009, EPA wrote the Corps requesting it “use its discretionary authority provided by 33 CFR 325.7 to suspend, revoke or modify the permit issued authorizing Mingo Logan Coal Company to discharge dredged and/or fill material into waters of the United States in conjunction with the construction, operation, and reclamation of the Spruce Fork No. 1 Surface Mine,” based on “new information and circumstances ... which justifreconsideration of the permit.” Letter from EPA, Region III to Corps, Huntington Dist., at 1 (Sept. 3, 2009) (JA 941). EPA noted in particular its “concern[ ] about the project's potential to degrade downstream water quality.” Id. The Corps responded that there were “no factors that currently compell[ed it] to consider permit suspension, modification or revocation.” Letter from Corps, Huntington Dist. to EPA, Region III, at 2 (Sept. 30, 2009) (JA 950). EPA wrote back: “We intend to issue a public notice of a proposed determination to restrict or prohibit the discharge of dredged and/or fill material at the Spruce No. 1 Mine project site consistent with our authority under Section 404(c) of the Clean Water Act and our regulations at 40 C.F.R. Part 231.” Letter from EPA, Region III to Corps, Huntington Dist., at 1 (October 16, 2009) (Supp. JA 1).

EPA's Regional Director published the promised notice of proposed determination on April 2, 2010, requesting public comments “[p]ursuant to Section 404(c) ... on its proposal to withdraw or restrict use of Seng Camp Creek, Pigeonroost Branch, Oldhouse Branch, and certain tributaries to those waters in Logan County, West Virginia to receive dredged and/or fill material in connection with construction of the Spruce No. 1 Surface Mine.” Proposed Determination, 75 Fed.Reg. 16,788, 16,788 (Apr. 2, 2010). The Regional Director followed up with a Recommended Determination on September 24, 2010, limited to withdrawal of the specification of Pigeonroost Branch and Oldhouse Branch and their tributaries. On January 13, 2011, EPA published its Final Determination, which, adopting the Regional Director's recommendation, formally “withdraws the specification of Pigeonroost Branch, Oldhouse Branch, and their tributaries, as described in [the Spruce Mine Permit] ... as a disposal site for the discharge of dredged or fill material for the purpose of construction, operation, and reclamation of the Spruce No. 1 Surface Mine” and “prohibits the specification of the defined area ... for use as a disposal site associated with future surface coal mining that would be expected to result in a nature and scale of adverse chemical, physical, and biological effects similar to the Spruce No. 1 mine.” Final Determination of the Assistant Administrator for Water Pursuant to Section 404(c) of the Clean Water Act Concerning the Spruce No. 1 Mine, Logan County, WV, 76 Fed.Reg. 3126, 3128 (Jan. 19, 2011).

Mingo Logan filed this action in district court immediately following the Proposed Determination, challenging EPA's authority to “revoke” the three-year-old permit, Compl., ¶ 75, Mingo Logan Coal Co. v. U.S. EPA, C.A. No. 10–00541 (D.D.C. Apr. 2, 2010), and amended its complaint in February 2011 to challenge the Final Determination, asserting it is both ultra vires and arbitrary and capricious. Am. Compl., Mingo Logan Coal (Feb. 28, 2011).

On cross-motions for summary judgment, the district court granted judgment to Mingo Logan on March 23, 2012. Mingo Logan Coal Co. v. U.S. EPA, 850 F.Supp.2d 133 (D.D.C.2012). The court concluded EPA “exceeded its authority under section 404(c) of the Clean Water Act when it attempted to invalidate an existing permit by withdrawing the specification of certain areas as disposal sites after a permit had been issued by the Corps under section 404(a).” Id. at 134. The United States filed a timely notice of appeal on behalf of EPA. The Corps joined EPA on brief. See Appellant Br. & Reply Br.

II.

In granting summary judgment, the district court agreed with Mingo Logan's interpretationof subsection 404 to preclude EPA from withdrawing a site specification once the Corps has issued a permit. “We review a grant of summary judgment de novo applying the same standards as those that govern the...