On October 9, the Environmental Protection Agency (EPA) filed its opening brief before the DC Circuit in the protracted litigation stemming from its decision to revoke Mingo Logan Coal Company’s Clean Water Act (CWA) permit for the Spruce 1 Mine in West Virginia.

The litigation began in 2011 when EPA invoked its veto authority under §404(c) of CWA to withdraw Mingo Logan’s permit four years after it was originally issued by the US Army Corps of Engineers (Corps).  Mingo Logan brought a lawsuit claiming that the EPA did not have authority under CWA §404(c) to withdraw the permit after it had been issued, and alternatively that EPA’s action was in violation of the Administrative Procedure Act (APA).  In 2013, the DC Circuit Court held that EPA has post-permit withdrawal authority under §404(c) and remanded to the DC District Court to resolve the APA claim.  The Supreme Court denied certiorari.  On September 30, 2014, the DC District Court issued an order on remand upholding the EPA’s exercise of its §404(c) authority to revoke the permit. Mingo Logan appealed the order to the DC Circuit.

Mingo Logan filed its opening brief before the DC Circuit on June 12, 2015, arguing that EPA’s exercise of its §404(c) authority was arbitrary and capricious.  Mingo Logan asserted that EPA failed to take into account the millions of dollars Mingo Logan invested in reliance on the permit as well as its history of full compliance with the permit specifications.  Mingo Logan stressed that the permit had been issued after years of study from federal agencies and Mingo Logan’s agreement to undertake mitigation measures.  Mingo Logan claimed that EPA’s decision to curtail authorized operations at the mine by 88% effectively nullified the permit and rendered its investments worthless.

In addition, Mingo Logan argued that EPA did not provide a sufficient justification for finding that the permit would have an unacceptable adverse impact on the environment.  In particular, Mingo Logan claimed that by consenting to the Corps’ issuance of the permit in 2007, the EPA implicitly determined that the permit would not have an adverse impact on the environment.  Mingo Logan argued that EPA failed to point to any new information or substantially changed circumstances that overcame that prior determination.  Instead, Mingo Logan claimed that the impacts EPA cited to wildlife within the site of the discharges were thoroughly evaluated before the permit was issued and are not significant as they are routine consequences of any §404 discharge.

Finally, Mingo Logan argued that EPA infringed on authority the CWA reserved to the states in finding that the permitted fills would negatively impact water quality downstream from the mine.  Mingo Logan asserted that Congress delegated authority to adopt water quality standards and administer the National Pollutant Discharge Elimination System (NPDES) to the states under CWA §§ 303, 401 and 402 and EPA encroached on that authority by considering downstream water quality impacts as part of its decision.

In its response brief, EPA claims that it had no duty under CWA or the APA to consider Mingo Logan’s reliance interests or history of compliance with the permit.  In any event, EPA argues that Mingo Logan presented no evidence demonstrating that it had made substantial post-permit investments in reliance on the specific discharge activities curtailed by EPA’s decision.  EPA also raises a procedural argument that Mingo Logan forfeited its reliance claims by failing to present them to the district court.

In addition, EPA argues that its decision is supported by substantial evidence and can be upheld solely based on its finding that the discharge would have unacceptable environmental impacts on wildlife within the footprint of the fill.  EPA denies that it made an implicit finding that the discharges would not have unacceptable adverse effects in acquiescing to the permit’s issuance in 2007.  In any event, EPA argues that substantial new information came to light since 2007 that informed EPA’s decision to invoke its §404(c) authority.  For instance, EPA states that new research undermined the assumption that species populating certain of the disposal sites and tributaries would return after the fill activities destroyed their habitat.  EPA claims this and other considerations led it to determine that the fill discharge would destroy high quality stream habitat in a watershed where high quality stream habitat is scarce.

EPA also argues that it was entitled to consider downstream impacts under its §404(c) authority and that this did not interfere with state regulation of water quality standards.  In particular, EPA states that its decision did not amount to an assertion of general water quality standards, but instead rested in part on specific findings of changes in water chemistry that have an adverse effect on aquatic wildlife and water-dependent wildlife.