In Mingo Logan Coal Company v. EPA, the D.C. Circuit recently upheld EPA’s use of its “veto” authority over an Army Corps of Engineers permit to fill jurisdictional waters for the Spruce Mine in West Virginia. Section 404(c) of the Clean Water Act provides EPA authority to “deny or restrict the use of any defined area for specification (including the withdrawal of specification).” This authority was described by the court in Mingo Logan as “a mighty power and its exercise will perhaps inevitably leave a permittee feeling as if the rug has been pulled out from under it.”
The salient facts in Mingo Logan involved a Section 404 permit for a “mountaintop removal” coal mine. After a 7-year EIS, the Corps issued the permit in 2006. EPA expressed reservations with the permit, but communicated to the Corps that it “had no intention of taking [its] Spruce Mine concerns any further from a Section 404 standpoint.” But times change – and so do administrations – and in 2009 EPA asked the Corps to suspend, revoke, or modify the permit. After the Corps refused to do so, EPA began the 404(c) process, which led to a final decision in January 2011 to withdraw the specification for two (of three) disposal sites covered under the permit.
On appeal, Mingo Logan argued that EPA did not consider the company’s sunk reliance costs (a point EPA conceded). Even though 404(c) does not explicitly denote costs as a factor in EPA’s decision-making, the court stated that an agency “should generally weigh the costs of its action against its benefits.” Unfortunately for Mingo Logan, the court found that the company had not appropriately raised the issue of reliance costs before EPA or the district court.
The Mingo Logan decision is a bitter pill for developers, interjecting an additional element of uncertainty into a Section 404 regulatory process that is already challenging and subject to shifting political winds. As noted at this site, the agencies and courts have struggled with the jurisdictional reach of Section 404 and when a party can challenge the government’s actions. Key take-aways from Mingo Logan include:
First, 404(c) battles are not for the faint of heart. EPA has successfully used the authority twelve times since the passage of the CWA. Every attempt to stop EPA through litigation has ultimately failed.
Second, Mingo Logan clarifies that a Section 404 permit can be withdrawn years after its issuance. The decision will serve to undermine confidence in the integrity of the permitting process in the United States.
Last, Mingo Logan highlights the inherent problems of shared EPA/Corps responsibility. Defenders of 404(c) will note that this “mighty authority” is rarely used. Although true, it misses the point that the effects of 404(c) are, in fact, regularly felt by the regulated community. The ability to say “no” gives EPA significant leverage – behind the scenes -- in the permitting process.
Query whether we would have a better, and more effective, Section 404 permitting process if all of the authority and responsibility for permitting were vested in a single agency – either the Corps or EPA.