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Federal Court Rejects EPA Attempts to Regulate Eastern U.S. Coal Mining and Sets Aside EPA Final Guidance

July 31, 2012

On July 31, 2012, Judge Reggie B. Walton of the U.S. District Court for the District of Columbia granted partial summary judgment in favor of the Plaintiffs National Mining Association (NMA), the State of West Virginia, the Commonwealth of Kentucky, the Kentucky Coal Association, and the City of Pikeville, Kentucky in National Mining Association v. Jackson, Case No. 10-cv-1220. Judge Walton previously vacated the "Enhanced Coordination Process" for Clean Water Act (CWA) permits for mining operations in an October 2011 decision. Today's opinion, which sets aside EPA's July 21, 2011 Final Guidance on Appalachian surface coal mining (Final Guidance) as contrary to sections 303 and 402 of the CWA and the Surface Mining Control and Reclamation Act (SMCRA), resolves just over two years of litigation and delivers a complete victory to plaintiffs. Crowell & Moring served as counsel to NMA in the case.

EPA's Final Guidance ostensibly provided non-binding suggestions to EPA Regions III, IV, and V in commenting on and objecting to CWA permits for surface coal mining operations in six Appalachian states. As a threshold matter, the court looked to evidence of EPA's implementation of the Final Guidance presented by the states and regulated industry and ultimately rejected EPA's "bevy of arguments targeting the court's ability to review the Final Guidance." The court held that the Final Guidance was final agency action that was ripe for review, characterizing the disclaimers in the Final Guidance regarding the non-binding nature of the document as "boilerplate." Despite those lengthy disclaimers, the court determined that, in practice, EPA regional offices and state permitting authorities believed that the Final Guidance was binding. The court went on to reject EPA's contention that the courts of appeals have exclusive jurisdiction to review challenges to the Final Guidance, concluding instead that the CWA's judicial review provision, 33 U.S.C. § 1369(b)(1), provided for jurisdiction in such courts only in six very specific categories of agency action, none of which applied in this case.

On the merits, the court agreed with the plaintiffs that EPA had overstepped the authority given to it by Congress under SMCRA and the CWA. First, the court recognized SMCRA's unique regulatory structure, under which the Secretary of the Interior shares regulatory authority with the states.  According to the court, SMCRA clearly grants EPA only limited authority to comment on and provide its written concurrence prior to the Secretary of the Interior's approval of a state SMCRA permitting program. Nothing in SMCRA expressly or implicitly contemplates that EPA can "work with" SMCRA permitting authorities to incorporate Best Management Practices or otherwise influence SMCRA permit terms. Accordingly, the court found that EPA exceeded its statutory authority by intruding into the SMCRA permitting scheme. 

The court also agreed with the plaintiffs that EPA overstepped the limitations that Congress placed on its CWA authority by "impermissibly set[ting] a conductivity criterion for water quality" in violation of Section 303 and by improperly removing the analysis of whether a discharge has a reasonable potential to cause or contribute to an excursion of state water quality standards from the state permitting authority in violation of Section 402 and its implementing regulation, 40 C.F.R. § 122.44(d)(1). 

Today's opinion concludes the district court phase of the case and provides precedent on various administrative law and environmental regulatory issues that reach beyond the Final Guidance itself. The opinion answers the questions plaintiffs raised throughout the case on the scope of EPA regulatory authority over surface coal mining operations. The court validated the positions of the state government parties and the regulated community that EPA cannot disrupt the regulatory balance Congress created for the complex permitting scheme governing mining, which has no direct role for EPA. Further, the court's analysis on the justiciability of guidance documents and a party's standing to challenge such documents will resonate in future litigation challenging informal agency actions that have formal and binding impacts on the regulated community. 

To read a complete copy of the decision, click here.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Kirsten L. Nathanson
Partner – Washington, D.C.
Phone: +1.202.624.2887
David Chung
Partner – Washington, D.C.
Phone: +1.202.624.2587