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

United States District Court, D. Columbia.

September 30, 2014

MINGO LOGAN COAL COMPANY INC., Plaintiff,
v.
U.S. ENVIRONMENTAL PROTECTION AGENCY, Defendant

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[Copyrighted Material Omitted]

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For MINGO LOGAN COAL COMPANY, INC., Plaintiff: Deidre G. Duncan, Virginia S. Albrecht, LEAD ATTORNEYS, HUNTON & WILLIAMS LLP, Washington, DC; Robert M. Rolfe, LEAD ATTORNEY, HUNTON & WILLIAMS LLP, Richmond, VA; George P. Sibley, III , PRO HAC VICE, HUNTON & WILLIAMS LLP, Richmond, VA.

For UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Defendant: Cynthia J. Morris, Kenneth C. Amaditz, LEAD ATTORNEYS, U.S. DEPARTMENT OF JUSTICE, Environment and Natural Resources Division, Washington, DC.

For WEST VIRGINIA HIGHLANDS CONSERVANCY, COAL RIVER MOUNTAIN WATCH, OHIO VALLEY ENVIRONMENTAL COALITION, SIERRA CLUB, Amici: Emma C. Cheuse, Jennifer C. Chavez, LEAD ATTORNEYS, EARTHJUSTICE, Washington, DC; Benjamin Alan Luckett, PRO HAC VICE, APPALACHIAN MOUNTAIN ADVOCATES, Lewisburg, WV.

For CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA, NATIONAL ASSOCIATION OF MANUFACTURERS, AMERICAN ROAD AND TRANSPORATION BUILDERS ASSOCIATION, ASSOCIATION OF AMERICAN RAILROADS, NATIONAL ASSOCIATION OF HOME BUILDERS, AMERICAN FARM BUREAU FEDERATION, FERTILIZER INSTITUTE, NATIONAL COUNCIL OF COAL LESSORS, INC., INDUSTRIAL MINERALS ASSOCIATION - NORTH AMERICA, UTILITY WATER ACT GROUP, FOUNDATION FOR ENVIRONMENTAL AND ECONOMIC PROGRESS, WESTERN BUSINESS ROUNDTABLE, Amici: Jay Christopher Johnson, LEAD ATTORNEY, VENABLE LLP, Washington, DC.

For NATIONAL STONE, SAND AND GRAVEL ASSOCIATION, Amicus: Lawrence R. Liebesman, LEAD ATTORNEY, HOLLAND & KNIGHT LLP, Washington, DC.

For NATIONAL MINING ASSOCIATION, ALABAMA MINING ASSOCIATION, ALASKA MINERS ASSOCIATION, ARIZONA MINING ASSOCIATION, COAL OPERATORS & ASSOCIATES, INC., COLORADO MINING ASSOCIATION, IDAHO MINING ASSOCIATION, ILLINOIS COAL ASSOCIATION, INDIANA COAL COUNCIL, INC., KENTUCKY COAL ASSOCIATION, MONTANA COAL COUNCIL, NEW MEXICO MINING ASSOCIATION, NORTHWEST MINING ASSOCIATION, OHIO COAL ASSOCIATION, PENNSYLVANIA COAL ASSOCIATION, TENNESSEE MINING ASSOCIATION, UTAH MINING ASSOCIATION, VIRGINIA COAL ASSOCIATION, WEST VIRGINIA COAL ASSOCIATION, WYOMING MINING ASSOCIATION, Amici: Harold Patrick Quinn, Jr., LEAD ATTORNEY, NATIONAL MINING ASSOCIATION, Washington, DC.

For UNITED COMPANY, Amicus: David J. Strandness, LEAD ATTORNEY, Wilson Sonsini Goodrich & Rosati, Palo Alto, CA; Kevin Patrick Holewinski, Michael A. Carvin, LEAD ATTORNEYS, JONES DAY, Washington, DC.

For RANDY C. HUFFMAN, acting in his official capacity as Cabinet Secretary for WVDEP and the State of W.V., Amicus: Benjamin L. Bailey, LEAD ATTORNEY, BAILEY & GLASSER LLP, Charleston, WV; Michael L. Murphy, LEAD ATTORNEY, BAILEY & GLASSER, LLP, Washington, DC.

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MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge.

In 2010, plaintiff Mingo Logan Coal Company, Inc. filed this lawsuit, challenging the Environmental Protection Agency's (" EPA" ) decision to withdraw its specification of two locations designated in Mingo Logan's Clean Water Act permit as disposal sites for the fill material generated by the operation of the Spruce No. 1 Mine in West Virginia. See Am. Compl. [Dkt. # 16]. Mingo Logan claimed that EPA exceeded its statutory authority under section 404(c) of the Clean Water Act (" CWA" ), 33 U.S.C. § 1344(c) (2012), because it rescinded the specification of the disposal sites after the section 404 permit had already been issued by the Army Corps of Engineers (" the Corps" ) (Count I). It also alleged that EPA's decision to veto the specifications was arbitrary and capricious and therefore in violation of the Administrative Procedure Act (" APA" ), 5 U.S.C. § 702 et seq. (2012) (Counts II-XIV).[1] Am. Compl. ¶ ¶ 225-343.

On March 23, 2013, the Court granted summary judgment in favor of Mingo Logan, finding that EPA did not have the authority under section 404(c) to act after a permit had been issued, and that under the CWA, only the Corps had the power to revoke or modify a valid permit. Mingo Logan Coal Co. v. EPA, 850 F.Supp.2d 133 (D.D.C. 2012). EPA appealed, and the D.C. Circuit held that EPA did have the authority to rescind a specification even after the permit to discharge was in hand. Mingo Logan Coal Co. v. EPA, 714 F.3d 608, 404 U.S.App.D.C. 375 (D.C. Cir. 2013), cert. denied, 134 S.Ct. 1540, 188 L.Ed.2d 557 (2014). The Court of Appeals then remanded the case for consideration of Mingo Logan's remaining APA counts, id. at 616, and the parties' cross-motions for summary judgment on those issues are now ripe for determination. Pl.'s Mot. for Summ. J. [Dkt. # 26]; Pl.'s Statement of P. & A. in Supp. of Pl.'s Mot. for Summ. J. (" Pl.'s Mot." ) [Dkt. # 26]; Def.'s Mot. for Summ. J. [Dkt. # 46]; Def.'s Mem. in Supp. of Def.'s Mot. for Summ. J. & in Opp. to Pl.'s Mot. for Summ. J. (" Def.'s Mot." ) [Dkt. # 46].

Because the Court finds that the decision set forth and explained in the Final Determination of the U.S. Environmental Protection Agency Pursuant to § 404(c) of the Clean Water Act Concerning the Spruce No. 1 Mine, Logan County, West Virginia (" Final Determination" ), AR010103-201, was reasonable, supported by the record, and based on considerations within the agency's purview, it will grant EPA's motion for summary judgment and

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deny Mingo Logan's motion for summary judgment.

BACKGROUND

I. Statutory Background

The Clean Water Act (" CWA" ), is the primary federal statute that seeks to regulate water pollution. 33 U.S.C. § 1251 et seq. It provides for the creation and enforcement of water quality standards and establishes an extensive permit and licensing scheme to regulate the discharge of pollutants into the nation's waterways. Id. § 1251(a)-(b). Most pertinent to this case are sections 401, 402, and 404, which together govern the issuance of permits for the discharge of pollutants.

A. Section 401.

Under section 401 of the CWA, a permit applicant that seeks to " conduct any activity including, but not limited to, the construction or operation of facilities, which may result in any discharge into the navigable waters," must " provide the . . . permitting agency a certification from the [s]tate in which the discharge originates or will originate" that certifies that the discharge under the applied-for permit is consistent with the state's water quality standards. Id. § 1341(a). States may either issue the certification, or they may waive the requirement by failing or refusing to act within a reasonable period of time after receipt of a request. Id. Section 303 of the CWA gives the states the authority to establish the water quality standards on which they base the section 401 certifications. Id. § 1313(c).

B. Section 402.

Section 402 authorizes the Administrator of EPA (" Administrator" ) to issue a permit for the discharge of any pollutant, except for the dredged and fill material covered by section 404. Coeur Alaska, Inc. v. Se. Alaska Conservation Council, 557 U.S. 261, 266, 129 S.Ct. 2458, 174 L.Ed.2d 193 (2009), quoting 33 U.S.C. § 1342(a). It also provides that if a state seeks to " administer its own permit program for discharges into navigable waters within its jurisdiction," the state " may submit to the Administrator a full and complete description of the program it proposes to establish and administer under [s]tate law." 33 U.S.C. § 1342(b). If the Administrator approves the proposed program, the state assumes the responsibility for issuing section 402 permits that comply with the CWA. Id. § 1342(c)(1). West Virginia applied for and was approved to administer the section 402 permit regime within its territory. See 47 Fed.Reg. 22,363 (May 24, 1982).

A state administering its own section 402 permit program must send the Administrator " a copy of each permit application received . . . and provide notice to the Administrator of every action related to the consideration of such permit application, including each permit proposed to be issued by such [s]tate." 33 U.S.C. § 1342(d)(1). The Administrator then has ninety days to object to permits that do not meet CWA standards, and if that occurs, the state must submit a revised permit within thirty days. Id. § 1342(d)(2), (d)(4). If EPA's objections are not resolved, the Administrator assumes responsibility of the permitting process. Id. § 1342(d)(4). Once a section 402 permit has been issued, it may only be modified by the entity that issued the permit. 40 C.F.R. § § 122.2, 122.62, 124.5(c). West Virginia issued Mingo Logan's section 402 permit in this case.

C. Section 404.

Section 404 of the CWA deals specifically with the discharge of dredged or fill

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material, and under that section, it is the Army Corps of Engineers (" Corps" ) that is authorized to issue permits for the discharge of that material. 33 U.S.C. § 1344(a) (" The Secretary [of the Army] may issue permits, after notice and opportunity for public hearings for the discharge of dredged or fill material into the navigable waters at specified disposal sites." ).

But Congress assigned EPA a significant role to play in the section 404 permitting process as well. First, while a " disposal site shall be specified for each such permit" by the Corps, id. § 1344(b), that decision must be made after assessing the environmental consequences by applying the guidelines developed by EPA in conjunction with the Corps pursuant to section 404(b)(1) (" section 404(b)(1) Guidelines" ). Id.; see also Coeur Alaska, 557 U.S. at 269. Those guidelines are published at 40 C.F.R. § 230.1 et seq., and they are based upon the criteria for determining the degradation of waters set forth in section 403(c) of the CWA.[2] See 33 U.S.C. § 1343(c).

After the Corps conducts its analysis under the section 404(b)(1) Guidelines, it publishes its written determination of the anticipated " effects of a proposed discharge of dredged or fill material on the physical, chemical, and biological components of the aquatic environment." 40 C.F.R. § 230.11. Depending on the comments received and whether additional study is deemed to be necessary, the Corps may publish a series of these determinations. Ultimately, the decision to issue or deny a section 404 permit rests with the Corps, see 33 U.S.C. § 1344(a); it is only the Corps that exercises the authority to modify or revoke a permit, see id. § 1344(e)(2); and compliance with a section 404 permit is deemed to be compliance with the CWA. Id. § 1344(p).

But the statute also assigns EPA a second role that gives rise to this case. Section 404(c) grants EPA the authority to " veto" a decision made by the Corps to specify a particular disposal site in a permit. Id. § 1344(c); see also 40 C.F.R. § 1504.1(b). Specifically, section 404(c) provides that:

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

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spawning and breeding areas), wildlife, or recreational areas.

33 U.S.C. § 1344(c). Accordingly, " whenever [the Administrator] determines that the discharge of [dredged and/or fill] materials . . . will have an unacceptable adverse effect," the Administrator must take the following steps to exercise its veto authority:

(1) The Regional Administrator publishes a " proposed determination[] to prohibit or withdraw the specification of a defined area as a disposal site, or to deny, restrict or withdraw the use of any defined area for the discharge of any particular dredged or fill material; "
(2) The Regional Administrator issues " recommendation to the Administrator for determination as the specification of a defined area as a disposal site; " and
(3) The Administrator publishes its " final determination to affirm, modify or rescind the recommended determination after consultation with the Chief of Engineers or with the [s]tate."

40 C.F.R. § 231.1(a)-(b).

This veto authority may be exercised before or after the Corps issues a permit. Mingo Logan, 714 F.3d at 616. EPA's regulations outline the procedures to be followed for the publication of a proposed determination, a comment period, and an opportunity for public hearings. See 40 C.F.R. § § 231.3-231.6. The Administrator then makes the final decision regarding the specification, and the decision is published in the Federal Register. Id. § 231.6. The Final Determination constitutes final agency action for purposes of judicial review. Id.

II. Factual Background[3]

Plaintiff Mingo Logan " operates a coal mine in West Virginia known as the Spruce No. 1 Mine." Am. Compl. ¶ 1. The Spruce No. 1 Mine is " among the largest individual surface mines ever authorized in West Virginia," and if " fully constructed, the project [would] disturb approximately 2,278 acres (about 3.5 square miles) and bury approximately 7.48 miles of streams beneath 110 million cubic yards of excess spoil." [4] AR010108.

In order to operate the Spruce No. 1 Mine, Mingo Logan was required to obtain several permits.[5] Mingo Logan's predecessor[6] initiated the application process in 1998. Ultimately, the company ...


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