News

AGC Asks Supreme Court to Review EPA Wetlands Permit Veto

January 8, 2014

AGC has asked the U.S. Supreme Court to review the U.S. Environmental Protection Agency’s (EPA) veto of a Clean Water Act Section 404 (wetlands) permit issued several years earlier by the U.S. Army Corps of Engineers (Corps) to a mining company to discharge dredge and fill material.  AGC joined with the National Association of Manufacturers, the American Society of Civil Engineers, the American Council of Engineering Companies and several other trade associations in filing a friend-of-the-court (amicus) brief in support of Mingo Logan Coal Company’s lawsuit against EPA. The brief explains why upholding EPA’s authority to revoke or alter a federal permit after it has been issued threatens ongoing and future construction projects that require Section 404 coverage, not just coal mining. The central question that the case - Mingo Logan Coal Company v. U.S. EPA - presents is whether EPA has broad discretion to withdraw disposal sites from a Section 404 permit long after the Corps has issued it, or whether the Corp is the only federal agency with the authority to modify an existing permit. Mingo Logan’s attorneys indicated that the Supreme Court is likely to vote on their petition to review the case sometime in late January or early February. Mingo Logan Coal Company was granted a Section 404 permit from the Corps to expand its mountain-top coal mine in West Virginia.  Four years after the permit was issued, EPA vetoed two of the three disposal sites that the Corps had approved. Mingo Logan filed suit and the district court sided with the coal company, but on April 23, 2013, the D.C. Circuit unanimously reversed the ruling.  The D.C. Circuit court held that EPA has the power to withdraw disposal sites from such a permit “whenever” it determines that the discharge of material into such a site would have “an unacceptable adverse effect” on the environment.

Infrastructure Investment at Stake

AGC believes this broad discretionary authority – under the D.C. Circuit’s ruling – could have significant negative impacts on construction activities and hinder investment to meet the nation’s growing infrastructure needs. Every four years, amicus American Society of Civil Engineers (ASCE) publishes a Report Card for America’s Infrastructure that thoroughly documents the condition of the nation’s water, transportation, energy and public infrastructure.  The amicus brief cites the 2013 report, which gave the nation’s infrastructure a “D+” — signaling a serious need to increase public investment in a wide range of public infrastructure.  “Without additional investment in the nation’s infrastructure between now and 2020, the economy could lose $1 trillion in business sales, resulting in 3.5 million lost jobs” – according to ASCE’s 2013 report and as referenced in the joint industry brief. The amicus brief states—

Fixing these infrastructure deficiencies will not be easy. ASCE estimates that the infrastructure funding gap will exceed $1 trillion by 2020. The federal government should be doing everything it can to facilitate vital infrastructure improvements. Raising new obstacles to public infrastructure investment, as EPA has done by claiming the authority to nullify Section 404 permits years after they issue, will have the opposite effect, multiplying the difficulty of achieving the necessary spending level. Without this Court’s immediate attention, the cascade of harms described in ASCE’s infrastructure reports looks increasingly inevitable. See amicus brief p. 16.

Section 404 Permit Background

Under the CWA, the Corps has primary authority to issue Section 404 permits to allow dredge and fill material to be placed in waters of the U.S. at specified disposal sites. For example, a developer or a design-build company that wishes to build on a site that includes areas designated as jurisdictional wetlands, must first obtain a CWA Section 404 permit to fill those wetlands with dirt or other material. The penalties for violating this provision are high: up to $37,500 a day in civil penalties for unauthorized discharges. All parties associated with construction projects that impact (discharge dredge or fill into) U.S. waters could be held liable for filling in wetlands subject to federal jurisdiction without first obtaining a Section 404 permit from the Corps. However, CWA Section 404(c) of the Act gives EPA a lead role in determining environmental impacts from proposed Section 404 activities. As stated above, Section 404(c) authorizes EPA to “prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and . . . to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site whenever [it] determines” that the discharge will have an “unacceptable adverse effect” on identified environmental resources. This power has become known as the 404(c) “veto” authority because it operates to prevent the Corps from issuing a permit to fill within certain areas prohibited by EPA.  Again, Section 404(c) deals with disposal “specifications” that play a large role in the interagency review process that precedes the point at which the Corps issues a Section 404 permit but no obvious role in any subsequent activity.  Federal regulations expressly give the Corps, and only the Corps, the power to modify a permit.  The Mingo Logan case is particularly important because it’s the first time a federal court has determined that EPA may exercise CWA Section 404(c) “veto” authority long after a valid Corps permit has been issued in final form.

For more information, please contact Senior Environmental Advisor to AGC Leah Pilconis at pilconisl@agc.org.

Go to top