On July 11, in National Mining Association v. McCarthy - a case very important to the surface coal mining industry in the Appalachians - the D.C. Circuit Court of Appeals rejected industry arguments that US EPA had improperly adopted policies that made it harder for such mines to obtain two kinds of Clean Water Act (CWA) permits: permits under Section 404 to discharge mining waste in wetlands and permits under Section 402 to discharge waste water from their operations. The Court rejected industry attacks on procedural grounds, making clear that the substantive arguments might be advanced if permits were actually denied or illegal conditions imposed. At present, however, such challenges are an attack on agency action that is not yet final, and thus not yet legally ripe to be heard.
Industry first attacked the Enhanced Coordination Process (ECP), adopted in 2009 to address how US EPA was to work with the US Corps of Engineers in reviewing dredge-fill permits for mines under CWA Section 404. Potentially surprising to some, D.C. Circuit Judge Kavanaugh, who is known for his conservative associations, is a strong supporter of the “Unitary Executive” theory: that the President is constitutionally empowered to manage Executive agencies and that courts should be reluctant to impose judicial restrictions as to how the President coordinates complicated policy issues among agencies implementing intricate and overlapping laws. As a result, Judge Kavanaugh rejected industry’s attack, expressly citing Article II of the Constitution: “Given the backdrop of Executive Branch tradition, sound government practice, and constitutional principle, we will not, as plaintiffs [NMA] request, read into this statute an implicit congressional intent to restrict consultation and coordination between two executive agencies.” Ironically, Judge Kavanaugh relied on a major D.C. Circuit Clean Air Act case from 1981 – Sierra Club v. Costle, 657 F.2d 298 – which had rejected a similar line of arguments from environmental groups seeking to prevent coordination by the White House, energy agencies and US EPA over emission limits for coal-fired power plants. He wrote that “we do not lightly impose a rule ‘that would deter one executive agency from consulting another about matters of shared concern.’” The National Mining Association decision is a sharp reminder that elections matter. The President has considerable leeway to direct how agencies will implement Administration policies, especially where intricate laws and complex issues are involved.
The industry plaintiffs also attacked US EPA guidance as to how US EPA would review discharge permits proposed by states for water pollutants from surface mines. In relevant part, the guidance explains how US EPA would approach the issue of conductivity measurements – a quick proxy measurement for some pollutants. The industry plaintiffs attacked US EPA’s guidance in advance of and instead of litigating conditions in specific discharge permits to which US EPA had formally objected. The District Court held that there was little difference in practice between US EPA writing critical comments on a draft state permit and US EPA making a formal objection to the permit, so that US EPA’s guidance was in fact a formal rule, and contrary to the CWA.
The D.C. Circuit, disagreeing with the District Court, held that US EPA’s guidance was not a “final” agency action, and thus not reviewable in federal court. The industry plaintiffs, however, retain the right to challenge the denial of a discharge permit or an onerous permit condition on the grounds that US EPA (or the state) has acted contrary to the CWA. If a mine operator believes a condition imposed in a permit is illegal, in any such challenge, US EPA and the state have the burden of showing why the challenged condition in fact conforms to the CWA and US EPA regulations. US EPA’s policy statement is irrelevant in such a permit appeal.
In practice, there is a significant difference between US EPA making comments on a draft permit – even unhappy comments – and US EPA formally objecting to a draft state permit, and thereby triggering a formal review. The District Court’s claim to the contrary notwithstanding, formal US EPA objections to draft state permits are uncommon. US EPA’s adoption of guidance as to how it would approach one important water quality parameter – conductivity – still leaves discretion to address site-specific factors when translating the results into a permit limitation. Given these uncertainties, and given the relative infrequency with which US EPA actually makes a formal objection to a permit, the D.C. Circuit was wise to decline review of the guidance in the absence of dispute over a specific permit condition.