Energy and Environment Monitor

EPA Proposes to Surrender Clean Water Act Veto Authority

June 28, 2018

By: Blair M. Gardner

EPA Administrator Scott Pruitt announced on June 26 that the agency will revise its regulations to limit EPA’s use of the §404(c) veto. This is the section of the Clean Water Act (CWA) that authorizes EPA to rescind dredge and fill permits issued by the Army Corps of Engineers. Although infrequently utilized since §404(c) was adopted in 1972, its use in January 2011 effectively curtailed the Spruce No. 1 mine complex in Logan County, West Virginia four years after the Corps had issued an individual §404 permit authorizing the operation.

Authority under the CWA is divided between EPA which broadly regulates activities that effect water quality, and the Corps of Engineers which regulates activities that occur within water bodies (“waters of the United States”).  Specifically, the Corps is authorized to issue permits to allow the placement of “dredged and fill” materials into those waters. The Corps does so after applying the criteria found at §404(b) to verify that the placement of the fill material has no more than minimal adverse environmental effects on the site.

Reliance on §404 permitting has become significantly more complicated over the course of the last two decades. The Spruce No. 1 permit is an instructive and disturbing example. In 2002, the Corps issued a draft Environmental Impact Statement (“EIS”), evaluating the Spruce No. 1 Mine project and the requested section 404 permit. EPA found fault with the EIS. Four years later, the Corps issued a revised draft EIS for public comment, and EPA once again expressed its concerns about the impacts of the project in a comment letter. When the Corps issued a final EIS in September 2006, EPA again submitted a comment letter that expressed concerns about the adverse impacts. On January 22, 2007—after over ten years of study—the Corps issued Mingo Logan a section 404 permit, despite EPA's lingering concerns.

Then, on September 3, 2009, approximately two and half years after the Corps issued Mingo Logan a section 404 permit, (and nine months after a change in administrations) EPA asked the Corps to use its discretion under 33 C.F.R. § 325.7 to suspend, revoke, or modify Mingo Logan's section 404 permit. The Corps rejected EPA's request. In response, the Regional Administrator of EPA Region III proposed to invoke the agency's authority under section 404(c), on September 24, 2010, EPA Region III published a Recommended Determination to withdraw the specification of the permitted site. The decision was made final the following January 2011.

Judicial review commenced in the federal district court in Washington. The initial decision in 2012 was favorable for the company, but EPA appealed to the District of Columbia Circuit. In July 2013, the court of appeals reversed and found that

Section 404 imposes no temporal limit on the Administrator's authority to withdraw the Corps' specification but instead expressly empowers him to prohibit, restrict or withdraw the specification “whenever ” he makes a determination that the statutory “unacceptable adverse effect” will result. 33 U.S.C. § 1344(c) (emphasis added). Using the expansive conjunction “whenever,” the Congress made plain its intent to grant the Administrator authority to prohibit/deny/restrict/withdraw a specification at any time.

Mingo Logan Coal Company v.US EPA, 704 F.3d 608, 613 (DC Cir. 2013)

One need not be an advocate either for or against mining to instinctively understand how arbitrary EPA’s decision was. This is particularly true in that the dozen other §404(c) veto actions undertaken by EPA since 1980 had occurred over fill activities that affected wetlands or water supply impoundments. No comparable water features were affected by the Spruce Mine.

Administrator Pruitt justifies the reexamination of the use of §404(c) based on the changes in permitting procedures by EPA and other agencies since the 1970’s. “The EPA’s regulations should reflect today’s permitting process and modern-day methods and protections, including the robust existing processes under the National Environmental Policy Act (NEPA) that already require federal agencies to consider the environmental and related social and economic effects of their proposed actions while providing opportunities for public review and comment on those evaluations.” Given the duration of the NEPA review in the Mingo Logan case, the numerous comments that EPA submitted to the EIS prepared by the Corps, and the fact that EPA identified no new information in issuing its §404(c) veto strongly suggests that the decision was made for political and not environmental considerations.

The interesting legal question is how EPA will propose to limit a legal power that the D.C. Circuit has effectively described as limitless. The language interpreted by the court in the Mingo Logan case is from the CWA, not a regulation. Presumably, EPA will develop new guidance about how it will exercise its discretion. Administrator Pruitt, however, has already stated that the proposal should eliminate both EPA’s “preemptive veto” before the Corps issues a §404 permit as well as a “retroactive veto” that EPA utilized in the Mingo Logan case after a permit is issued.  He has directed the EPA Office of Water to develop its proposal within the next six months. Whatever guidance is ultimately issued, it will represent a rare instance of an administrative agency voluntarily ceding its legal authority. This alone will make the process one worth watching.