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Mingo Logan Coal Company Inc v. U.S. Environmental Protection Agency

March 23, 2012


The opinion of the court was delivered by: Amy Berman Jackson United States District Judge


On January 22, 2007, the Army Corps of Engineers ("Corps") issued a permit to plaintiff Mingo Logan Coal Company Inc. ("Mingo Logan") pursuant to section 404 of the Clean Water Act, which authorized Mingo Logan to discharge fill material from its Spruce No. 1 coal mine into nearby streams, including the Pigeonroost and Oldhouse Branches and their tributaries. Nearly three years later, defendant U.S. Environmental Protection Agency ("EPA") published a Final Determination purporting to withdraw the specification of those two streams as disposal sites and thereby invalidate the permit for those sites. This attempt to withdraw the specification of discharge sites after a permit has been issued is unprecedented in the history of the Clean Water Act.

Mingo Logan brought this suit seeking the Court's declaration that EPA lacks the authority to modify or revoke Mingo Logan's section 404 permit, that its attempt to modify the permit was unlawful, and that the permit is still operative. Am. Compl. [Dkt. # 16] at Count I. In addition, Mingo Logan asks the Court to vacate EPA's Final Determination on the grounds that it exceeded the agency's statutory authority under section 404(c) of the Clean Water Act, and that it was arbitrary, capricious, and not in accordance with law for a number of reasons. Id. at Counts II--XIV. The parties have cross-moved for summary judgment.

The Court concludes that 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). Based upon a consideration of the provision in question, the language and structure of the entire statutory scheme, and the legislative history, the Court concludes that the statute does not give EPA the power to render a permit invalid once it has been issued by the Corps. EPA's view of its authority is inconsistent with clear provisions in the statute, which deem compliance with a permit to be compliance with the Act, and with the legislative history of section 404. Indeed, it is the Court's view that it could deem EPA's action to be unlawful without venturing beyond the first step of the analysis called for by Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). But it is undeniable that the provision in question is awkwardly written and extremely unclear. So, the Court will go on to rule as well that even if the absence of a clear grant of authority to EPA to invalidate a permit is seen as a gap or ambiguity in the statute, and even if the Court accords the agency some deference, EPA's interpretation of the statute to confer this power on itself is not reasonable. Neither the statute nor the Memorandum of Agreement between EPA and the Corps makes any provision for a post-permit veto, and the agency was completely unable to articulate what the practical consequence of its action would be. Therefore, the Court will grant plaintiff Mingo Logan's motion for summary judgment [Dkt. # 26] and deny defendant's cross-motion [Dkt. # 46].


A. Factual Background

a. The Spruce No. 1 Mine permit process Mingo Logan owns and operates the Spruce No. 1 mountaintop coal mine in Logan County, West Virginia. Administrative Record ("AR") 10117, 10120--24. Mountaintop mining involves removing the top of a mountain to recover the coal within it. AR 10118. This process generates excess rock, topsoil, and debris ("spoil") that cannot be returned to the mined area. Id. Typically, these materials are deposited in adjacent valleys, creating valley fills. Id.

In accordance with the Surface Mining Control and Reclamation Act ("SMCRA"), 30 U.S.C. § 1201, et seq., Mingo Logan obtained an SMCRA permit from the State of West Virginia for the Spruce No. 1 mine in 1998.*fn1 AR 8277. The original design called for the discharge of spoil in portions of Seng Camp Creek, Pigeonroost Branch and White Oak Branch of Spruce Fork. AR 8277.021.

Mingo Logan also applied for and obtained a National Pollutant Discharge Elimination System ("NPDES") permit under section 402 of the Clean Water Act ("CWA") from the State of West Virginia. AR 8062, 43101. EPA initially opposed the proposed permit, but ultimately withdrew its objections, noting that it would "allow limited mining and discharging during the five-year permit period, averting pending economic hardships from layoffs while requiring mitigation compensation for the limited stream portions filled." AR 8414--17. In withdrawing its objections, EPA also stated that:

During the first two years of [Mingo Logan]'s five-year NPDES permit, EPA will join with other federal and state agencies to undertake a comprehensive environmental evaluation of impacts and possible alternatives associated with mountaintop mining and associated valley filling in West Virginia and other mountaintop mining states. EPA will use the findings from this evaluation in review of any draft NPDES permit which may be applied for by the company for extending its valley fills and associated discharge points.

Id. The NPDES permit was subsequently modified twice. AR 8081. As contemplated, EPA conducted a Programmatic Environmental Impact Statement ("PEIS") on Mountaintop Mining, which it finalized in October 2005.

Mingo Logan also applied to the Corps for a CWA section 404 permit, the subject of this action. AR 2634--66. Originally, the permit application was submitted under Nationwide Permit 21 and approved by the Army Corps without preparing an Environmental Impact Statement ("EIS").*fn2 See Bragg v. Robertson, 54 F. Supp. 2d 635, 639--40 (S.D.W.V. 1999). But, before any mining could take place, a federal court in West Virginia preliminarily enjoined the approval, and the Corps withdrew its nationwide permit authorization. Bragg, 54 F. Supp. 2d 635; Mingo Logan Response to EPA Statement of Undisputed Material Facts ("ML SMF") ¶ 38(e).

Mingo Logan subsequently applied to the Corps for an individual permit, under section 404(a) of the CWA, to discharge material from the Spruce No. 1 Mine into the Right Fork of Seng Camp Creek, Pigeonroost Branch, Oldhouse Branch, and White Oak Branch. AR 3052--70. The Corps began the process of developing an EIS for the project. EPA commented on a preliminary draft EIS in August 2001 and a draft EIS in August 2002, expressing its concerns about each version, and also noting "the absence of information necessary to fully assess potential adverse environmental impact associated with this project." AR 19487; see also AR 19486--90, 45054--734, 42912--16. In the letter commenting on the draft EIS, EPA concluded that it "remains committed to working with the Corps, the state, and the applicant to identify and develop an environmentally acceptable project" and "would encourage additional discussions in an effort to clarify and resolve the issues raised in this letter." AR 19489. It also stated that "this matter is . . . subject to review under our authorities at CWA [s]section 404(q) and [s]section 404(c)." AR 19489--90.

In December 2005, the West Virginia Department of Environmental Protection granted state certification for the individual permit based on its determination that the project would not violate state water quality standards or anti-degradation regulations.*fn3 AR 20924--28.

In 2006, the Corps published for public comment a revised Draft EIS for the Spruce No. 1 Mine. ML SMF ¶ 52. AR 12991--13388. EPA commented on the draft in June of that year. AR 8312--29. The comment letter expressed concern about the impacts of the project, particularly to the Little Coal River watershed. AR 8313. However, the letter also noted in several places that the agency was encouraged by the progress that Mingo Logan had made to date, and it voiced optimism that EPA could work with the Corps, federal and state agencies, and Mingo Logan to address its concerns and develop appropriate mitigation plans, as well as a Little Coal River cumulative impact assessment and restoration plan. Id. at 8314--15.

The Corps released the final EIS in September 2006, and EPA again submitted comments by letter. AR 8330--34, 34962--35342. The comment letter again included concerns about potential adverse impacts to the Little Coal watershed and gaps in the mitigation plan, but also acknowledged Mingo Logan's progress in reducing impacts and EPA's willingness to work with the responsible agencies to resolve its concerns prior to a section 404 permit decision. AR 8331--32.

The Corps responded to the concerns expressed in EPA's comments to the final EIS. AR 23657--62, 24637--43. And through December 2006, representatives from EPA, including William J. Hoffman, Director of the Office of Environmental Programs Environmental Assessment and Innovation Division of the EPA, and from the Corps continued to communicate with one another about the Spruce No. 1 Mine proposal. AR 23084--109, 23657--62, 24424, 24619--25, 24637--43. Although the communications establish that EPA had some lingering technical concerns, they also establish that EPA intended to "work together" with the Corps to address them. AR 23085. In a November 2, 2006 email to Teresa Spagna of the Corps, Mr. Hoffman expressed that "we have no intention of taking our Spruce Mine concerns any further from a Section 404 standpoint . . . ." Id.

On January 22, 2007, the Corps issued Mingo Logan a section 404 permit for the Spruce project. AR 25763--77. The permit authorized Mingo Logan to discharge dredged or fill material into stream segments, including Pigeonroost and Oldhouse Branches, until December 31, 2031. AR 25763--68. It also bound Mingo Logan to carry out certain post-project stream restoration and compensatory mitigation efforts. AR 25763, 25769--77. The permit contained an express notification that "This office [(The Huntington District office of the Army Corps of Engineers)] may reevaluate its decision on this permit at any time the circumstances warrant." AR 25765. It says nothing about the EPA's authority to withdraw the specification of a discharge site or to modify or revoke the permit.

b. EPA's "withdrawal" of the Pigeonroost and Oldhouse Branch discharge specifications

On September 3, 2009 -- almost two years after the Corps issued the section 404 permit -- EPA sent a letter to the Huntington District Office of the Corps, requesting that 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 the waters of the United States in conjunction with the construction, operation, and reclamation of the Spruce Fork No. 1 Surface Mine . . . ."*fn4 AR 12754. The letter described what EPA considered to be new information and circumstances that had arisen since the issuance of the permit and that justified its reconsideration. Id. Specifically, the letter asserted that recent data and analyses had revealed downstream water quality impacts that were not adequately addressed by the permit. AR 12754--58.

The Corps rejected EPA's request, finding no grounds to suspend, revoke, or modify the permit. AR 12781--88.

Six months later, on March 26, 2010, EPA published a notice of its proposed determination to withdraw or restrict the specification of Seng Camp Creek, Oldhouse Branch, Pigeonroost Branch, and certain of their tributaries, as disposal sites for fill material. AR 4. On September 24, 2010 it published a "Recommended Determination" to withdraw the specification of Oldhouse Branch, Pigeonroost Branch, and certain of its tributaries. AR 9888--970. And on January 13, 2011, EPA issued its Final Determination to "withdraw the specification of Pigeonroost Branch, Oldhouse Branch and their tributaries . . . as a disposal site for dredged or fill material in connection with the construction of the Spruce No. 1 Surface Mine . . . ." These branches make up roughly eighty eight percent of the total discharge area authorized by the permit. EPA Response to Mingo Logan's Statement of Undisputed Material Facts ("EPA SMF") at ¶ 65.

B. Procedural Background

Mingo Logan challenged EPA's purported withdrawal in an amended complaint, [Dkt. # 16], filed in this Court on February 28, 2011. All fourteen Counts arise under the Administrative Procedure Act ("APA"). Before the Court heard oral argument in this matter, it issued a Minute Order explaining that since a ruling on the legality of the post-permit veto could be dispositive of the entire case, it would first hear argument on the question of whether the EPA had the authority under section 404(c) of the Clean Water Act to withdraw its specification of the disposal site after the Corps had already issued a permit under section 404(a) (Count I). See Minute Order, Nov. 28, 2011. Because the Court finds that EPA exceeded its section 404(c) authority, and it will therefore vacate the Final Determination, it need not reach the remaining Counts.*fn5


Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The party seeking summary judgment bears the "initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat summary judgment, the non-moving party must "designate specific facts showing there is a genuine issue for trial." Id. at 324 (internal quotation marks omitted). The existence of a factual dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is "genuine" only if a reasonable fact-finder could find for the non-moving party; a fact is only "material" if it is capable of affecting the outcome of the litigation. Id.; see also Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987).

"The rule governing cross-motions for summary judgment . . . is that neither party waives the right to a full trial on the merits by filing its own motion; each side concedes that no material facts are at issue only for the purposes of its own motion." Sherwood v. Washington Post, 871 F.2d 1144, 1148 n.4 (D.C. Cir. 1989), quoting McKenzie v. Sawyer, 684 F.2d 62, 68 n.3 (D.C. Cir. 1982), abrogated on other grounds by Berger v. Iron Workers Reinforced Rodmen, 170 F.3d 1111 (D.C. Cir. 1999). In assessing each party's motion, "[a]ll underlying facts and inferences are analyzed in the light most favorable to the non-moving party." N.S. ex rel. Stein v. District of Columbia, 709 F. Supp. 2d 57, 65 (D.D.C. 2010), citing Anderson, 477 U.S. at 247.


The question of whether the EPA exceeded its authority under section 404(c) of the CWA by withdrawing the specification of disposal sites after the Corps had issued a permit authorizing discharge of spoil at those sites is a question of law that the Court may properly decide on summary judgment. The Court is required to analyze an agency's interpretation of a statute by following the two-step procedure set forth in Chevron, USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). First, the Court must determine "whether Congress has directly spoken to the precise question at issue." Id. at 842. "If the intent of Congress is clear, that is the end of the matter, for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43. Courts "use 'traditional tools of statutory construction' to determine whether Congress has unambiguously expressed its intent," Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1319 (D.C. Cir. 1998), quoting Chevron, 467 U.S. at 843 n.9, including an examination of the statute's text, structure, purpose, and legislative history. Bell Atlantic Tel. Co. v. FCC, 131 F.3d 1044, 1047 (D.C. Cir. 1997).

If the Court concludes that the statute is either silent or ambiguous, the second step of the review process is to determine whether the interpretation proffered by the agency is "based on a permissible construction of the statute." Chevron, 467 U.S. at 843. Once a reviewing court reaches the second step, it must accord "considerable weight" to an executive agency's construction of a statutory scheme it has been "entrusted to administer." Id. at 844.

A. The first step of the Chevron analysis suggests that Congress did not grant EPA the authority it purports to exercise.

EPA's position is that section 404(c) grants it plenary authority to unilaterally modify or revoke a permit that has been duly issued by the Corps -- the only permitting agency identified in the statute -- and to do so at any time. This is a stunning power for an agency to arrogate to itself when there is absolutely no mention of it in the statute. It is not conferred by section 404(c), and it contrary to the language, structure, and legislative history of section 404 as a whole.

a. The statutory provision does not clearly grant EPA the authority to exercise a post-permit veto.

The statute vests the full authority to issue permits for discharges into navigable waters with the Corps. Section 404(a) provides that "[t]he Secretary may issue permits . . . at specified disposal sites." 33 U.S.C. §1344(a) (2006). And section 404(b) provides: "each such disposal site shall be specified for each such permit by the Secretary [of the Army]." 33 U.S.C. §1344(b). So, a permit can be issued only for a "specified" site, and it is up to the Corps to do the specifying, although that exercise must be undertaken through the application of guidelines developed by the EPA in conjunction with the Corps. Id. But the statute does give EPA the opportunity to derail the process and "prohibit" the specification of an area as a disposal site if it determines that the discharge would have certain "unacceptable" environmental consequences.

33 U.S.C. §1344(c).

The EPA rests its case on this section, which is entitled, "Denial or restriction of use of defined areas as disposal sites." The provision states:

The [EPA] Administrator is authorized to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and he is authorized to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site, whenever he determines, after notice and opportunity for public hearing, that the discharge of such materials into such area will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas . . ...

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