On Mach 24, 2014 the Supreme Court denied certiorari in an important Clean Water Act (CWA) decision from the DC Circuit, Mingo Logan Coal Co. v. EPA, 714 F.3d 608 (D.C. Cir. 2013).

In January 2007, the US Army Corps of Engineers (Corps) issued a permit under §404 of the CWA authorizing the Mingo Logan Coal Company to construct “six valley fills, associated sedimentation structures, and other discharges of fill material” to waters in West Virginia in connection with construction of the Spruce No. 1 Surface Mine.  EPA Region III, Recommended Determination at 6 (Sept. 24, 2010).  Four years later, the US Environmental Protection Agency (EPA) invoked its “veto” authority under §404(c) of CWA to withdraw the permit.  EPA Notice of Final Determination, 76 Fed. Reg. 3126 (Jan. 19, 2011).  EPA recognized that “this action represents one of the few times EPA has initiated a Section 404(c) action to withdraw specification after a permit has been issued . . . .”  EPA Region III, Proposed Determination at 6(Apr. 2, 2012).  EPA concluded that the permitted activities would have “unacceptable adverse effects on wildlife downstream of the project site as a result of increased pollution that the project will contribute to downstream waters.”  EPA Notice of Final Determination, 76 Fed. Reg. at 3127-3128.

Mingo Logan challenged EPA’s post-permit veto action in the US District Court for the District of Columbia.  Mingo Logan Coal Co. v. EPA, 850 F. Supp. 2d 133 (D. D.C. 2012). The district court granted summary judgment to Mingo Logan, holding that EPA lacks statutory authority under CWA to withdraw a §404 permit after it has been issued.  On April 23, 2013, the DC Circuit reversed, holding that EPA has post-permit withdrawal authority and remanding for further proceedings.  Mingo Logan, 714 F.3d 608.  Specifically, the court found that “the unambiguous language of subsection 404(c) manifests the Congress's intent to confer on EPA a broad veto power extending beyond the permit issuance.”  Id. at 613.  Mingo Logan filed a petition for certiorari with the Supreme Court in November 2013, and numerous parties filed amici briefs in support of the petition.  Now that the Supreme Court has denied cert on the issue of EPA’s statutory authority, the case will proceed in the district court to resolve the issue of whether EPA’s veto action was arbitrary and capricious under the Administrative Procedure Act.

The DC Circuit decision upholding EPA’s post-permit veto authority could have significant implications for a range of industries.  Although EPA has used its Section 404(c) veto authority only sparingly in the past, initiating the veto process in only about 15 cases to date, recent actions indicate EPA may be seeking to expand its Section 404(c) role.  First, the decision in Mingo to retroactively nullify a Corps permit several years after it was issued represents a significant expansion of that authority.  Second, EPA recently issued a decision that it intends to initiate the 404(c) veto process for the Pebble Mine project in Alaska, even before a 404 permit application has been filed for that project.  See Letter of EPA Regional Administrator to Thomas Collier, et. al. (Feb. 28, 2014).  Together, these actions indicate that EPA is looking to expand its veto authority under the CWA to allow it to act both preemptively before an application is filed, and retroactively, after a final permit has been issued.  EPA’s assertion of the power to preempt or undo Corps action has the potential to disrupt the finality and certainty of the CWA Section 404 permit process, a process that is critical to a wide range of industries and projects.  This lack of certainty could chill future investments in vital infrastructure and other development projects that require 404 permits.