The U.S. District Court for the District of Columbia struck down policies and procedures adopted by the U. S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) regarding dredge and fill permits required under the Clean Water Act. According to many commentators, the October 6, 2011, opinion, in National Mining Association v. Lisa Jackson and the Sierra Club, was a victory for the Appalachian coal industry because the permits at issue in the case involved surface coal mining operations, particularly “mountaintop removal mines.” The court ruled that the EPA had “exceeded the statutory authority conferred upon it by the Clean Water Act” and that the agencies had ignored the proper “notice and comment rulemaking requirements” of the Administrative Procedures Act. It was a procedural victory, but the mining industry’s celebration may be short-lived. The court did not determine that the policies and procedures were not warranted by the facts related to the environmental impacts of filling hollows with mine spoil, and the court did not suggest that similar policies and procedures, if adopted according to statutes and procedural rules, would not be upheld. The importance of the decision is the court’s reaffirmation that agencies may not adopt policies that are actually regulations without first going through the formal regulation development process.

The opinion focused on the agencies’ policies and procedures related to Section 404 of the Clean Water Act that requires permits “for the discharge of dredged or fill material into the navigable waters at specified disposal sites.” 33 U.S.C. § 1344 (a). In some mining operations the rock and soil overburden is moved from atop the coal seams and placed in drainage channels such as the head of a hollow or in valleys. A Section 404 dredge and fill permit may be required if the rock overburden is to be placed in a drainage channel in the headwaters or further down the water course or stream.

Surface coal mining has come under increasing scrutiny both because of its direct environmental impact and because of the impact of its product, coal, when burned to generate electricity. Coal mining is regulated by a host of environmental and safety-related federal statutes and their state counterparts that include the Surface Mining Control and Reclamation Act (SMCRA), the Clean Water Act, the Clean Air Act, and the Endangered Species Act. Despite these existing protections, the agencies justified their actions because of their stated concerns about the environment, human health and welfare, the need to better coordinate existing efforts, and to help develop green jobs.

In 2009 the EPA, Corps, and the U.S. Department of Interior entered into a memorandum of understanding “Implementing the Interagency Action Plan on Appalachian Surface Coal Mining” (the MOU). This MOU included, among other elements, a commitment by the Corps and EPA to an “Enhanced Coordination Process” to review applications for specific Section 404 permits singled out because of EPA’s environmental concerns. The policies focused on the direct impact of surface coal mining on water quality that is regulated, in part, by sections of the Clean Water Act, including Section 404 (dredge and fill permits), Section 402 (water discharge permits), Section 401 (water quality certifications), and Section 303 (water quality standards). The MOU also addressed related requirements of the permitting and oversight processes of SMCRA.

The National Mining Association filed suit to challenge the EPA’s and the Corps’ adoption and implementation of the policies, processes, and procedures outlined in the MOU, the Enhanced Coordination Process, and other, related guidance documents. Other organizations, individuals, and even states also filed similar suits in Kentucky and West Virginia. Those cases were consolidated into one case in the federal District Court for the District of Columbia. Some states such as Tennessee do not allow overburden to be placed in a stream or within 100 feet of a stream, so the policies related to the Section 404 permits should not have been applied to Tennessee surface coal mining operations. The agencies have applied the policies in Tennessee anyway, but Tennessee did not join in these legal actions.

The MOU and the Enhanced Coordination Process established a screening procedure used by EPA to decide which mining-related Section 404 permits would receive greater scrutiny. The court described this first step, the screening process, as a Multi-Criteria Integrated Resource Assessment (MCIR Assessment). If invoked after the initial assessment of the application, the Enhanced Coordination Process involved close cooperation between the EPA and the Corps with sharing of information, visiting the sites of the proposed permits, and imposing time limits and procedures for the agencies’ review and decisions.

The court determined that in the Clean Water Act, Congress had assigned to the Corps the primary responsibility for the Section 404 dredge and fill permits. The opinion discribed how the Clean Water Act assigned to the EPA a very specific, limited, and supporting role with regard to those permits. EPA’s role includes the authority to veto a Section 404 permit if EPA determines, after notice and an opportunity for a public hearing, that the permit will have an “unacceptable adverse effect.” 33 U.S.C. § 1344 (c). The MOU and Enhanced Coordination Process provided a broader role for EPA that was inconsistent with Congress’s statements in the Clean Water Act. Thus, the court determined that EPA had exceeded its statutory authority.

The second major aspect of the court’s decision related to how agencies develop their policies, rules, and regulations. The agencies’ process of making rules and regulations is governed by statutory and constitutional limitations. One of the most fundamental principles is the process of “notice and comment rulemaking” that is required by yet another federal statute, the Administrative Procedures Act. In this process the regulatory agency informs or gives notice about a proposed regulation to the public, including the regulated community and the public at large. The public then is allowed to comment on the proposed regulation. After review of the comments, the agency then can issue a final regulation.

The court determined that the Multi Criteria Integrated Resources Assessment and the Enhanced Coordination Process were rules that required notice and comment rulemaking. Because the EPA and Corps did not comply with those requirements, the resulting policies and procedures were not valid.

In conclusion, EPA and Corps adopted a system of cooperation and collaboration to address applications for Section 404 dredge and fill permits related to surface coal mining. According to the court, the EPA and Corps did not heed the individual statutory roles that Congress had given them with regard to these permits, and they did not follow the minimum requirements for issuing new rules and regulations. This is only the first chapter in this conflict. The case involves at least one more major decision regarding EPA’s guidelines for review and requirements for water discharge permits for coal mining operations. A decision is expected on this issue in 2012.