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Federal Regulations Advisor Insight and Commentary on U.S. Government Regulatory Affairs

EPA Exceeds Authority in Clean Water Act “Guidance” for Surface Mining

Posted in Agency Authority, Judicial Review & Remedies

The United States District Court for the District of Columbia struck down the Environmental Protection Agency (EPA) Final Guidance Improving EPA Review of Appalachian Surface Coal Mining Operations Under the Clean Water Act, National Environmental Policy Act, and the Environmental Justice Executive Order on July 31st.  The complicated decision in National Mining Association v. Jackson found that EPA’s guidance precluded discretion in the actual decision maker – the state regulatory authority – over whether to permit surface mining based on a presumption of likelihood of water pollution.  The “mountaintop removal / valley fill mining in Appalachia” (read: coal) guidance exceeded EPA’s statutory consulting role.

Many may evaluate the complex statutory interplay between the Clean Water Act (CWA), the Surface Mining Control and Reclamation Act (SMCRA), the authority of the EPA, Department of Interior (DOI), the Army Corps of Engineers (USACE), and state agencies administering the statutes, the regulations, and the permitting schemes.  The administrative law issue is clearer:  EPA’s guidance effected a final agency action and a de facto rule that exceeded EPA’s authority.

Moving Target:  In an earlier chapter of this litigation, plaintiffs attacked EPA “interim” guidance and the district court concluded that the EPA exceeded its statutory authority under the CWA in adopting its Multi-Criteria Integrated Resource Assessment (“MCIRA”) and Enhanced Coordination Process (“ECP”) through interim guidance memoranda. Undaunted, EPA issued a Final Guidance on July 21, 2011, mooting the issue of whether the interim guidance violated the Administrative Procedure Act (APA), but resetting the stage.

EPA urged that the Final Guidance reflected public input on the interim guidance and responding to key concerns raised in the litigation.  Plaintiffs necessarily amended their complaint and argued that the Final Guidance violated the SMCRA and the APA.

Further regulatory action during litigation is hardly uncommon, but creates also a moving target for the court.  In this case, the court needed to decide issues based on the Final Guidance.

Issue:  The only question before the court was whether the Final Guidance was legal – whether EPA exceeded its statutory authority.  The court concluded that EPA overstepped its statutory authority under the CWA and the SMCRA, and infringed on the authority afforded state regulators by those statutes by issuing mandatory guidance that effectively removed critical discretion from the state regulators authority.

Judicial Review of Guidance:  To reach the issue presented by the litigants, the court must determine first that the agency action is a final agency action subject to judicial review:  whether the court had authority to review the “guidance.”  The substance here determines the form:  that which is a final agency action is subject to review; that which is not final is not subject to review.  In this case, the Final Guidance fit the hallmark of final agency action as it “marks the consummation of the agency’s decision making” “by which rights and obligations have been determined, or from which legal consequences will flow.”  Reviewing the extensive caselaw (much of it involving the EPA) the court found that the “guidance” documents were final agency actions susceptible to judicial review.

Binding:  The court must second determine whether the an agency document is binding.  Here the court applied the classic test enunciated in another EPA case:  Appalachian Power Co. v. EPA:

[i]f an agency acts as if a document issued at headquarters is controlling in the field, if it treats the document in the same manner as it treats a legislative rule, if it bases enforcement actions on the policies or interpretations formulated in the document, if it leads private parties or State permitting authorities to believe that it will declare permits invalid unless they comply with the terms of the document, then the agency’s document is for all practical purposes binding.

Intent:  A second element plays large in the court’s analysis – whether the agency intended the guidance to be a binding action, finding Appalachian Power again controlling:

[W]hatever [the] EPA may think of its Guidance generally, the elements of the Guidance petitioners challenge consist of the agency’s settled position, a position it plans to follow in reviewing State-issued permits, a position it will insist State and local authorities comply with in setting the terms and conditions of permits issued to petitioners, a position EPA officials in the field are bound to apply.

Here, the court could not have agreed more:

The Final Guidance constitutes final agency action because it is both the consummation of the EPA’s decision making process, and, even if facially nonbinding, it has been applied by the regional field offices in their review of draft permits in a manner that has had the practical effect of changing the obligations of the state permitting authorities.  Therefore, the Final Guidance is a de facto legislative rule.

Authority:  The crux of the matter was whether EPA had any authority at all, for Congress complexly vested permitting authority in others.  The Final Guidance effectively created a presumption that infringed on those decision makers’ authority, which requires the complicated statutory exegesis in the opinion.  It is worth the read, difficult as it may be.

Forward:  EPA has shown a strong and established tendency to usurp authority, to flout process, to decide on dubious or incomplete facts.  Part of the problem is inherent to EPA’s mission of regulating inputs to dynamic systems that are highly sensitive to both initial conditions and complex, rapidly changing and illusory mechanics.  The larger part of the problem is a lack of legal discipline and an overabundance of precautionary result orientation.  EPA needs to learn some basic administrative law and then follow the law.