If one was to search the Internet using the phrases “EPA,” “stunning,” and “entirely disingenuous,” as of March 23, 2012, a new document would be included in the list of results. That would be the Memorandum Opinion issued by United States District Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia, in the matter of Mingo Logan Coal Company, Inc., v. U.S. Environmental Protection Agency (Civ. Action No. 10-0541; 3/23/12). In it, Judge Jackson announced her decision invalidating EPA’s so-called “veto” of a Clean Water Act § 404 permit that had been issued to Mingo Logan by the U.S. Army Corps of Engineers, authorizing the construction of several valley fills at Mingo Logan’s Spruce No. 1 coal mining operation in Logan County, West Virginia.

Though the opinion is lengthy, that is primarily due to the complicated procedural background of the case and the several alternative grounds upon which the Court determined EPA’s action to be illegal. The procedural facts are complex because the 404 permit in question was issued in January 2007, while EPA’s “veto” of it was not announced until January 2011. As to the legality of that veto, Judge Jackson concluded that regardless of what standard of review applies, EPA over-reached in purporting to take such an action.

For example, though the text of the Clean Water Act provides nothing of the sort, EPA’s action against Mingo Logan was based on EPA’s position that that it has “plenary” or supreme authority under the statute to modify or revoke any 404 permit that has been duly issued by the U.S. Army Corps of Engineers. As the Court stated, “[T]his is a stunning power for an agency to arrogate to itself when there is absolutely no mention of it in the statute.”

The Clean Water Act as a whole, as well as its legislative history, is contrary to EPA’s position. Because of that, under normally applicable legal principles (established in the seminal decision of Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc. (US Supreme Court, 1984)), EPA’s policy would not be entitled to any deference on review. Nevertheless, even putting that aside and assuming the agency’s approach should be treated as presumptively valid, the Court found EPA’s interpretation to be plainly unreasonable. That finding, in turn, was at least in part based upon the fact that EPA itself could not clearly define what interpretation of the statute it was advancing.

In promulgating regulations in 1979 addressing its authority under CWA § 404, EPA stated that it believed it had authority to “withdraw the specification of particular fill sites” under § 404 after a permit had been issued. However, in that same statement EPA agreed with others who had commented on the proposed regulation, that “it would be inappropriate” to exercise such authority after a 404 permit had been issued. Further, Judge Jackson observed that none of EPA’s other regulations dealing with § 404 permitting refers to any action that might be taken by that agency to affect a permit after it has been issued. In addition, in the more than 30 years since the single regulation addressing this issue was promulgated, EPA had never before invoked its Clean Water Act § 404 authority to review a permit that had already been issued by the Corps.

After Judge Jackson posed the question to EPA’s counsel “several times” during oral argument, the government’s lawyer eventually claimed that all of this regulatory history could be reconciled on the grounds that EPA’s 1979 statement simply did not affect its “unlimited authority” under the statute to withdraw particular areas from filling activities even after a 404 permit had been issued. In the Memorandum Opinion the Court finds this interpretation to be unacceptable “because it is illogical and impractical.” In short, under EPA’s interpretation of its statutory authority, it is able to cause a “non-revocation revocation” of a duly issued 404 permit in a manner that is both “logistically complicated” and would “leave permittees in the untenable position of being unable to rely upon the sole statutory touchstone for measuring their Clean Water Act compliance: the permit.”

In the end, the Court determined that EPA’s position with respect to the Mingo Logan permit and the broader question of its scope of authority under section 404 of the Clean Water Act would “sow a lack of certainty into a system that was expressly intended to provide finality.” Determining that EPA was wrong regardless of the legal standard that is applied, the Court invalidated EPA’s “withdrawal of specification” with respect to the Mingo Logan 404 permit, and ruled that the permit was and remains fully effective.

Though it unfortunately took Mingo Logan considerable time to obtain this even-handed, straightforward review of EPA’s action, one would hope that the agency (which is an enormously powerful bureaucracy even without self-aggrandizement) will take a cautionary lesson from this decision. Regardless, those who are engaged in activities regulated by EPA should take note: sometimes the Emperor really has no clothes.