Ninth Circuit Limits Scope of Corps’ Authority Over Discharge of Fill Material

The Ninth Circuit Court of Appeals recently held that the U.S. Army Corps of Engineers (“Corps”) violated the Clean Water Act (“CWA”) when it issued a Section 404 fill permit to allow a mining company to dispose of a slurry containing mine tailings into an Alaskan lake.[1] In Southeast Alaska Conservation Council v. United States Army Corps of Engineers, the Court analyzed the interplay between various sections of the CWA, and concluded that the Corps lacked authority to permit a discharge to waters of the United States that was subject to an Environmental Protection Agency (“EPA”) performance standard. The decision has application well beyond proposed mining operations in Alaska, and is relevant to operations that result in discharges that are regulated under CWA sections 301 and 306, even though those discharges would otherwise be considered “fill material” subject to the Corps’ permitting scheme.

Background

Southeast Alaska Conservation Council involves the Corps’ June 2005 issuance of a section 404 permit to Coeur Alaska, Inc. (“Coeur Alaska”) in connection with the company’s proposed Kensington Gold Mine project. The Coeur Alaska proposal involved the company’s plan to construct and operate a froth-flotation mill facility to separate gold from ore-bearing rock, and to dispose, over the life of the mine, of approximately 4.5 million tons of mine tailings contained in process wastewater.

As originally conceived, Coeur Alaska’s mine operations plan included constructing a facility to dispose of tailings on dry uplands. The original proposal also called for revegetating the disposal area following mine closure. In 2004, Coeur Alaska revised its operations plan and amended its disposal plan. In the revised plan, Coeur Alaska, proposed to directly discharge the mine tailings into nearby Lower Slate Lake, located in the Tongass National Forest. This discharge would raise the bottom of the lake 50 feet, and would kill all fish and nearly all aquatic life in the lake.[2] In order to use the lake as a disposal site, the company would create an impoundment by constructing a 90-foot high and 500-foot long dam at the lake’s outfall point, and would divert water around the lake by pipeline.[3]

The Forest Service approved the project in a Final Supplemental Environmental Impact Statement and Record of Decision (“ROD”) issued in December 2004. In June 2005, the Corps issued a section 404 permit to Coeur Alaska, reasoning that the CWA’s dredge and fill permit program, rather than the CWA’s effluent discharge permit program applied to Coeur Alaska’s planned discharges, because the proposed tailings discharge would have the effect of raising the lake’s bottom elevation.[4]

In September 2005, environmental groups[5] (collectively “SEACC”) brought suit to challenge the Corps’ authority to issue a permit for the discharge of the process wastewater into Lower Slate Lake. SEACC argued that EPA’s previously promulgated performance standard prohibited such discharges. After Plaintiffs filed their Complaint, the Corps suspended the section 404 permit and reconsidered its permitting decision.[6] Thereafter, the Corps reinstated the original permit, and Plaintiffs filed an Amended Complaint. Coeur Alaska, Goldbelt, Inc. and the State of Alaska intervened as defendants. On August 4, 2006, the district court granted summary judgment to defendants holding that the Corps had authority to issue the section 404 permit for slurry disposal into Lower Slate Lake.

Applicable Law

Southeast Alaska Conservation Council addresses the interplay between seemingly contradictory CWA provisions, those provisions dealing with effluent limitations and performance standards that the EPA has promulgated under CWA sections 301 and 306, and those provisions dealing with the discharge of dredge and fill material that the Corps regulates under section 404.

CWA Section 301(a) prohibits the discharge of any pollutant by any person into waters of the United States, except in compliance with specified provisions.[7] To further this objective, Section 301(b) of the Act requires the EPA to adopt technology-based effluent limitations[8] applicable to point source discharges of pollutants.[9] EPA’s effluent limitations must “be applied to all point sources of” pollutant discharges in accordance with the provisions of the statute.[10] In addition, CWA section 306 requires EPA to implement national performance standards[11] for certain categories of new construction, such as the Coeur Alaska mine project.[12] Section 306(e) further provides that, once EPA establishes a performance standard, “it shall be unlawful for the owner or operator of any new source to operate such source in violation of any standard of performance applicable to such source.”[13] Relevant to Coeur Alaska’s mine tailing disposal plan, EPA has promulgated a performance standard under CWA sections 301 and 306 which prohibits “the discharge of process wastewater to navigable waters from mills that use the froth-flotation process alone, or in conjunction with other processes, for the beneficiation of … gold, silver or molybdenum ores or any combination of these ores.”[14]

CWA section 404 has a different focus, giving the Corps primary permitting authority over discharges of dredge and fill material into waters of the United States. The CWA does not define “fill material.” Instead, Corps and EPA regulations define “fill material” as “material placed in waters of the United States where the material has the effect of: i) replacing any portion of a water of the United States with dry land; or ii) changing the bottom elevation of any portion of a water of the United States.”[15] Examples of fill material include rock and “overburden from mining and other excavation material.”[16] In addition, the term “discharge of fill material” refers to the “addition of fill material into waters of the United States,” including the placement of overburden, slurry, or tailings or similar mining-related materials.”[17] The Corps argued that it had authority to permit Coeur Alaska’s discharges under section 404 of the CWA because the discharge of mine tailing into the lake would have the effect of raising the lake’s bottom elevation.

Ninth Circuit Ruling

To resolve the apparent conflict between the Corps’ regulatory authority under section 404 and EPA’s performance standard for froth flotation mills, the Ninth Circuit turned to the CWA’s plain language. The Court found that CWA sections 301 and 306 unambiguously require discharges to comply with applicable effluent limitations and standards of performance, and do not contain any exception for discharges that otherwise qualify for regulation under CWA section 404. Given this clear language, the Court determined that CWA sections 301 and 306 apply to the mine tailing disposal.[18]

In concluding that the CWA’s plain language addressed the regulatory conflict, the Court addressed defendant’s argument that CWA sections 301 and 306 should not apply because section 404 does not expressly require compliance with those sections, in contrast to the permitting scheme for effluent discharges under CWA section 402.[19] Rejecting defendant’s argument, the Court advanced what it termed a “simpler” construction of the statute that did not rely on a negative inference–that is, that “Congress never intended for section 404 to govern discharges subject to effluent limitations or performance standards.” According to the Court, there was no need for Congress to refer to sections 301 and 306 within section 404, because those provisions would preclude the use of a section 404 permit scheme where EPA has adopted an applicable effluent limitation or performance standard.[20]

The Court found further support for its interpretation of the CWA in the agencies’ own interpretation of “fill material.”[21] At the time the Corps and EPA adopted their joint definitions of “fill material” and “discharge of fill material,” they emphasized that the rule would not change “any determination that we have made regarding discharges that are subject to an effluent limitation guidelines and standards, which will continue to be regulated under section 402 of the CWA.[22] Consequently, the Court concluded that the agencies themselves did not intend for the definition of “fill material” to replace EPA’s performance standard for froth flotation mills.

Finally, the Court found that a basic principle of regulatory interpretation supported Plaintiffs’ arguments. This principle states that “a narrow precise and specific subject is not submerged by a later enacted regulation covering a more generalized spectrum.”[23] In this case, the Court concluded that the performance standard for froth flotation mills is narrower than the EPA and Corps regulation which applies to fill material generally. Given this, the Court found that the fill rule does not supersede the more specific performance standard.[24]

Accordingly, the Ninth Circuit reversed the district court’s decision and remanded the case to the district court to vacate the mine tailings permit. The Court also vacated a second permit issued to Golbelt, Inc. for construction of the associated Cascade Point Marine Facility and the U.S. Forest Service’s Record of Decision approving the general plan, because both actions depended upon the validity of the Corps’ section 404 permit to Coeur Alaska.

Conclusion

By clarifying that discharges subject to EPA’s effluent limitations and performance standards are not subject to the Corps permitting authority, the Court has better defined the scope of Corps jurisdiction over discharges to waters of the United States. As a result, the case has application well beyond proposed mining operations in Alaska, and is relevant to operations that result in discharges that are regulated under CWA sections 301 and 306, even though those discharges would otherwise fall within the Corps’ permitting scheme.