Last year, we reported on Mingo Logan Coal Co. v. EPA, 714 F.3d 608 (D.C. Cir. 2013). In that case, a coal mining company argued that the U.S. Environmental Protection Agency (EPA) had exceeded its statutory authority when it invoked Section 404(c) of the Clean Water Act (CWA) to withdraw the specifications of certain streams as disposal sites for discharges of dredged or fill material from a mountaintop coal mine in West Virginia. After the district court ruled in favor of the company on summary judgment, the U.S. Court of Appeals for the D.C. Circuit reversed, concluding that EPA has the authority to withdraw disposal site specifications “whenever,” even if “whenever” meant four years after the U.S. Army Corps of Engineers (Corps) issued a permit approving the requested disposal sites.
Late last week, the D.C. Circuit dealt another major blow to the industry.
In Nat’l Mining Ass’n v. McCarthy, No. 12-5310 (D.C. Cir. July 11, 2014), various coal mining trade associations and companies, together with the states of West Virginia and Kentucky, challenged two EPA policies relating to coal mining. The first was a 2009 Enhanced Coordination Process memorandum issued by EPA and the Corps intended to expedite consideration of more than a hundred backlogged applications submitted by coal mining companies for permits under CWA Section 404. Pursuant to the Enhanced Coordination Process, EPA would screen these applications using a database to identify those that raised particular concerns, which it would discuss with the Corps and interested parties before the Corps took final action on them.
The second policy was a 2011 Final Guidance document that recommended more stringent conditions for NPDES permits issued to coal mining companies under CWA Section 402. Based on studies finding that coal mining increases the salinity of local water bodies, which can negatively impact aquatic life, the Final Guidance made certain recommendations relating to conductivity, a salinity indicator. The Final Guidance recommended that water conductivity levels in the Appalachian region not exceed 300-500 microSiemens per centimeter and advised EPA staff to ask state permitting authorities to assess the potential for elevated conductivity in the NPDES permits that they proposed to issue.
The district court invalidated both the Enhanced Coordination Process and the Final Guidance on motions for summary judgment, but the D.C. Circuit reversed.
In their challenge to the Enhanced Coordination Process, plaintiffs first argued that by expressly requiring EPA participation at certain stages of the Section 404 permitting process, Congress intended to restrict EPA participation at any other stages. The court flatly rejected that argument, refusing to “read into [the] statutory silence an implicit ban on inter-agency consultation and coordination” that “would raise significant constitutional concerns.” The plaintiffs then argued that the Enhanced Coordination Process was a legislative rule that had been promulgated without the public notice and comment required under the Administrative Procedure Act (APA). The court quickly dispensed with this argument as well, finding instead that the memorandum established a rule of procedure that did not require notice and comment.
The court then turned its attention to the Final Guidance, which the plaintiffs argued exceeded EPA’s authority under the CWA and the Surface Mining Control and Reclamation Act by “impermissibly interject[ing] extra-statutory roadblocks into States’ Section 402 permitting process.” The court never reached the merits of that argument, however, because it concluded that the Final Guidance is not a final agency action. Observing that the Final Guidance “imposes no obligations or prohibitions on regulated entities” and in fact “disclaims any intent to require anyone to do anything or to prohibit anyone from doing anything,” the court ultimately concluded that the Final Guidance is a general statement of policy not subject to pre-enforcement judicial review. The court noted that its decision would not foreclose a challenge to a future agency action denying a permit based on the Final Guidance.
One final observation: In the course of its discussion, the court lamented that it is often difficult to determine whether an agency action qualifies as a legislative rule, interpretive rule or general statement of policy, a distinction that can have significant consequences under the APA. The court challenged the executive branch and others to bring more “clarity and predictability” to this issue. I wouldn’t hold my breath. The fact is, ambiguity and uncertainty often work to an agency’s advantage, allowing it to disguise a legislative or interpretative rule as a general statement of policy in order to avoid public notice and comment requirements and pre-enforcement judicial review. If courts really want agencies to more clearly delineate their actions, they should resolve close calls in favor of reviewing those actions as legislative rules. Short of that, I fear that any challenge to bring “clarity and predictability” to this issue is likely to go unmet.