January 9, 2019 Sweetnam and Schwartz

Years ago when I was an Assistant Regional Counsel at the Environmental Protection Agency (EPA), Region 4 and the lead attorney for wetlands matters, I debated whether to use EPA’s authority under the Clean Water Act (CWA) to veto permits issued by the US Army Corps of Engineers (Corps) that supported major development projects. Clearly, EPA’s authority to override the permits exists under Section 404(c) of the CWA, which states that EPA could withdraw authorization for disposal of dredged or fill material “whenever he determines after notice and opportunity for public hearings, that such discharge of such materials … will have an unacceptable adverse effect ….” on certain environmental resources. Further, this statutory provision had no temporal limitation, meaning that the veto power could be exercised long after the permits are issued. After thoroughly review, however, I determined that the equitable use of this power mandated that the veto be used only during the permit process, rather than years after issuance of the permits. This was the position that EPA had informally adopted, until recently. In a case before the U.S. Court of Appeals for the D.C. Circuit, the court agreed that EPA could veto a permit issued years before by the Corps. As a result of the decision in Mingo Logan Coal Company v. United States Environmental Protection Agency,, a wetlands discharge permit provides no safe harbor whatsoever if EPA, even years after the issuance of the permit by the Corps, chooses to veto the permit.

In 2007, the Corps had issued Mingo Logan’s predecessor in interest a Section 404 permit to fill areas associated with the company’s mining operations. EPA raised concerns during the permit process but decided that the concerns did not warrant veto of the permit. However, over 3 years later, EPA published a final determination to withdraw the fill areas that were specified in Mingo Logan’s wetlands permits. The Court of Appeals found that the plain language manifests the Congress’s intent to confer on EPA a broad veto power extending beyond the permit issuance, such that EPA “has, in effect, the final say on the specified disposal sites ‘whenever’ [it] makes the statutorily required [finding].”

While this decision may be legally correct, it ignores the practical reality that it allows section 404 permits to be revisited at any time the authorized activity may become controversial. Without permit finality, permit holders are at risk that activities, although authorized by the permit, may not be able to be conducted. This puts projects authorized by such permits, especially large scale and multi-phase construction projects, in jeopardy. The only defense to an EPA veto would be that the EPA action is arbitrary and capricious under the Administrative Procedures Act. It is certainly unfortunate that the regulated community can no longer consider a wetlands permit to be the word of the regulatory authorities.

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