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

829 F.3d 710

Mingo Logan Coal Company, Appellant

v.Environmental Protection Agency, Appellee.

No. 14-5305

United States Court of Appeals, District of Columbia Circuit.

Argued April 11, 2016

Decided July 19, 2016

Paul D. Clement, Washington, DC, argued the cause for the appellant. Jeffrey M. Harris, Nathan A. Sales, Robert M. Rolfe, George P. Sibley III, Richmond, VA, Virginia S. Albrecht and Deidre G. Duncan, Washington, DC, were with him on brief.

Matthew Littleton, Attorney, United States Department of Justice, argued the cause for the appellee. John C. Cruden, Assistant Attorney General, Aaron P. Avila, Mark R. Haag, Cynthia J. Morris, Kenneth C. Amaditz, Attorneys, Stefania D. Shamet, Counsel, United States Environmental Protection Agency, and Ann D. Navaro, Assistant Chief Counsel for Litigation, were with him on brief.

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

Before: Henderson, Kavanaugh and Srinivasan, Circuit Judges.

Dissenting opinion filed by Circuit Judge Kavanaugh.

Karen LeCraft Henderson, Circuit Judge:

In 2007, the United States Army Corps of Engineers (Corps) issued Mingo Logan Coal Co. (Mingo Logan) a permit to excavate the tops of several West Virginia mountains, extract exposed coal and dispose of the excess soil and rock in three surrounding valleys containing streams. Four years later, after additional study, the United States Environmental Protection Agency (EPA) decided that the project would result in “unacceptable adverse effect[s]” to the environment. See 33 U.S.C. § 1344(c). The EPA therefore withdrew approval from two of the disposal sites, which together “make up roughly eighty eight percent of the total discharge area authorized by the permit.” Mingo Logan Coal Co. v. EPA (Mingo Logan I ), 850 F.Supp.2d 133, 137 (D.D.C. 2012). In 2013, Mingo Logan challenged the EPA's statutory authority to withdraw the two sites from the Corps permit after it had been issued but we determined that the Clean Water Act (CWA) authorized the EPA to do so. See Mingo Logan Coal Co. v. EPA (Mingo Logan II ), 714 F.3d 608, 616 (D.C. Cir. 2013). We then remanded the case to the district court to consider Mingo Logan's remaining Administrative Procedure Act (APA) challenges. See id. The district court thereafter rejected them. See Mingo Logan Coal Co. v. EPA (Mingo Logan III ), 70 F.Supp.3d 151, 183 (D.D.C. 2014).

Mingo Logan now appeals the district court's resolution of its APA claims. Specifically, the company argues that the EPA failed to engage in reasoned decisionmaking by ignoring Mingo Logan's reliance on the initial permit, impermissibly considering the effects of downstream water quality and failing to explain adequately why the project's environmental effects were so unacceptable as to justify withdrawal. We conclude that the EPA did not violate the APA in withdrawing specification of certain disposal areas from the permit; rather, it considered the relevant factors and adequately explained its decision. The EPA's ex post withdrawal is a product of its broad veto authority under the CWA, not a procedural defect. Accordingly, we affirm.

I.

A. Statutory and Regulatory Background

Under the CWA, 33 U.S.C. §§ 1251 et seq. , a party must generally obtain a permit from the relevant state and/or federal authority before discharging “any pollutant” into “navigable waters.”¹ See id. §§ 1311(a), 1341–45. Two categories of permits are involved in this case: a permit for the discharge of “dredged or fill material” under section 404 of the Act, see id. § 1344, and a permit for the discharge of all other pollutants under section 402, see id. § 1342.

1. Section 404

Under section 404, the Corps and qualified states are authorized to issue permits allowing “the discharge of dredged or fill material” into bodies of water “at specified disposal sites.” Id. § 1344(a), (g). The permit is required if, as here, a permit applicant plans to remove soil or rock from one location (i.e. , “fill material”² ) and dispose of it into “navigable waters.” See id. § 1344(a). The Corps specifies sites for disposal of dredge-and-fill material in accordance with so-called 404(b) Guidelines it has developed jointly with the EPA. See id. § 1344(b). Once the Corps has issued a 404 permit, it retains discretion to “modify, suspend, or revoke” it. 33 C.F.R. § 325.7(a). “Among the factors to be considered” by the Corps in making a revocation decision are:

the extent of the permittee's compliance with the terms and conditions of the permit; whether or not circumstances relating to the authorized activity have changed since the permit was issued or extended, and the continuing adequacy of or need for the permit conditions; any significant objections to the authorized activity which were not earlier considered; revisions to applicable statutory and/or regulatory authorities; and the extent to which modification, suspension, or other action would adversely affect plans, investments and actions the permittee has reasonably made or taken in reliance on the permit.

Id.

Although the EPA does not issue the 404 permit directly, it has “a broad environmental ‘backstop’ authority over the [Corps's] discharge site selection.” Mingo Logan II , 714 F.3d at 612. Specifically, under section 404(c), the EPA may “deny,” “restrict” or “withdraw[ ]” specification of a site for disposal of dredge-and-fill material. 33 U.S.C. § 1344(c). The EPA is authorized to exercise this authority “whenever [the EPA Administrator] determines, after notice and opportunity for public hearings, that the discharge of such materials into such area [specified for disposal] will have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas (including spawning and breeding areas), wildlife, or recreational areas.” Id. (emphasis added). In Mingo Logan II, we held that the EPA could exercise this “backstop” authority both pre-permit and post-permit; that is, the EPA may prevent the Corps from issuing a 404 permit specifying a disposal site or it may withdraw specification of a disposal site after the Corps has issued a permit. Mingo Logan II , 714 F.3d at 612–14, 616.

EPA regulations further define the adverse environmental effects the Administrator must identify before stepping in to deny, restrict or withdraw a 404 permit. Specifically, the EPA has interpreted “unacceptable adverse effect” to mean an “impact on an aquatic or wetland ecosystem which is likely to result in significant degradation of municipal water supplies (including surface or ground water) or significant loss of or damage to fisheries, shellfishing, or wildlife habitat or recreation areas.” 40 C.F.R. § 231.2(e) (emphases added). When the EPA restricts or withdraws areas specified for disposal in a validly issued permit, the entire permit is not necessarily invalidated; rather, the permit is “in effect amended so that discharges at the previously specified disposal sites are no longer in ‘[c]ompliance with’ the permit.” Mingo Logan II , 714 F.3d at 615 (alteration in original) (quoting 33 U.S.C. § 1344(p) ). Thus, to the extent a site passes EPA muster, the permittee may continue to dispose of dredge-and-fill material thereat. See id. at 615 & n. 5.

2. Section 402

Section 402 of the CWA establishes a separate permitting scheme, called the National Pollutant Discharge Elimination System (NPDES), under which the EPA is authorized to issue a permit for the discharge of all pollutants other than dredge-and-fill material. See 33 U.S.C. § 1342(a) ; see also Coeur Alaska, Inc. v. Se. Alaska Conservation Council , 557 U.S. 261, 273, 129 S.Ct. 2458, 174 L.Ed.2d 193 (2009). Alternatively, a state may assume authority for issuing a NPDES permit “for discharges into navigable waters within its jurisdiction.” 33 U.S.C. § 1342(b). If a state submits a description of its planned permitting program to the EPA and its plan meets the relevant CWA criteria, the EPA “shall approve” the program. Id. The state then becomes responsible for issuing a NPDES permit for pollutant discharge, see id. and the federal NPDES permitting program is suspended for qualified waters within that state's jurisdiction, see id. § 1342(c)(1).

The EPA, however, maintains an oversight role. It may “withdraw approval of [the state] program” if it determines that the program is not being administered in accordance with the CWA and the state takes no corrective action. See id. § 1342(c)(3). Further, a state must submit to the EPA a copy of each permit application it receives and must keep the EPA informed of the state's consideration of the application. Id. § 1342(d)(1). The EPA, acting through its Administrator, may object to the issuance of a state NPDES permit within ninety days of receipt thereof and, if it does so, the state may not issue the permit. See id. § 1342(d)(2). If the state fails to revise the permit to comply with CWA guidelines and requirements, the EPA may issue a revised permit that complies with the CWA. See id. § 1342(d)(4). Importantly, “[o]nce a section 402 permit has been issued, it may only be modified by the entity that issued the permit.” Mingo Logan III , 70 F.Supp.3d at 155 (citing 40 C.F.R. §§ 122.2, 122.62, 124.5(c) ).

B. Factual Background

In 1997, Hobet Mining, Inc., Mingo Logan's predecessor, began the process of securing the various permits required for operation of the Spruce No. 1 Mine, a proposed large-scale surface mining operation in West Virginia. Mingo Logan planned to use a surface-mining technique known as mountaintop mining at Spruce No. 1, whereby large swathes of land are removed from the surface, exposing coal deposits underneath. See generally Ohio Valley Envtl. Coal. v. Aracoma Coal Co. , 556 F.3d 177, 186 (4th Cir. 2009). The excess soil and rock (“spoil” or “overburden”) is then relocated to adjacent valleys, “creating a ‘valley fill’ that buries...