Source: http://elawreview.org/articles/veto-ing-veto-limited-options-remain-clean-water-act-section-404c-epa-allow-development-pebble-deposit/
Timestamp: 2019-04-24 07:54:42+00:00

Document:
However, on July 19, 2017, EPA, under the new Trump Administration, signaled its intent not to move forward with the protection of Bristol Bay. Specifically, EPA’s new action requested comments on its plan to withdraw its 2014 proposed determination. EPA explained that its rationale for withdrawing its previous determination was based on a legal settlement it reached with Pebble Limited Partnership (PLP), a mining company resolute in developing the area, as well as then-EPA Administrator Scott Pruitt’s new “policy direction.” Administrator Pruitt’s decision to settle the case had come on the heels of a private meeting with PLP’s president. Then, following the meeting and without consulting EPA’s scientific staff who had been working on the issue for close to a decade, he directed EPA Regional Office 10 to withdraw its 2014 Proposed Determination, which sought to protect the area pursuant to § 404(c) of the Clean Water Act (CWA).
Unsurprisingly, local residents, as well as fishing, Alaskan Native, and environmental groups decried EPA’s audacious step to retract its previously proposed protection. On the other hand, PLP and other mining advocates applauded EPA’s proposal to not move forward with the restriction. They alleged that the constraint of such use violated due process and exceeded EPA’s statutory authority. And now an application for the development of the Pebble Deposit is pending. Naturally, a legal showdown concerning the proposed “Pebble Mine” is inevitable and is certain to raise many statutory, regulatory, administrative, and constitutional law issues over the coming years.
What steps can (and, arguably, must) EPA take in a future action involving CWA § 404(c) and the Pebble Mine? And what if EPA again attempts to withdraw its 2014 Proposed Determination? This Article examines these key questions. First, it briefly introduces the on-going dispute over the Pebble mineral deposit and explains the importance of the Bristol Bay watershed. Next, the Article explores CWA § 404(c)’s “veto” process. It then analyzes EPA’s 2017 Proposal to Withdraw the 2014 Proposed Determination and assesses whether a future attempt to withdraw the 2014 Proposed Determination would be successful. Finally, it explores whether EPA can be compelled to move forward with its protection of the Bristol Bay watershed under CWA § 404(c).
The Article explains that a court is unlikely to permit EPA to withdraw the 2014 determination on the same basis that EPA proposed to withdraw it in 2017. Moreover, in light of the 2014 determination, EPA’s options are now limited with respect to allowing development of the Pebble Deposit. The Article concludes by proposing that—notwithstanding the settlement agreement with PLP and EPA’s new policy on its CWA § 404(c) authority—principles of administrative, constitutional, and environmental law support arguments that EPA can be compelled to continue the CWA § 404(c) process to prohibit the disposal of mining waste into this critically sensitive area.
This Part briefly introduces the Bristol Bay watershed to demonstrate the importance of the area. Next, it summarizes the legal framework under the CWA to protect its resources, including § 404(c). This will serve as a primer to a discussion in Part III of the proposed mining development of the Pebble Deposit and the proposed protection of the Bristol Bay watershed by EPA, and then an analysis in Part IV of the options that now remain for EPA with respect to the development of mineral resources in the watershed.
EPA’s scientific assessment in 2014 concluded that the watershed “supports the largest sockeye salmon fishery in the world” where “[f]or generations upon generations tens of millions of salmon reliably return to Bristol Bay, year after year.” Annually, Bristol Bay hosts “the world’s largest runs of sockeye salmon, producing approximately half of the world’s sockeye salmon.” As EPA concluded, this salmon population is “the most abundant and diverse populations of this species remaining in the United States.” Likewise, its Chinook salmon runs are also close to the world’s most abundant, and the area is also home to substantial coho, chum, and pink salmon populations.
Congress enacted the CWA with the objective “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” To achieve this goal, CWA § 311(a) makes unlawful “the discharge of any pollutant by any person” except in compliance with the act. Of central importance here is the CWA § 404, which allows the United States Army Corps of Engineers (Corps) to issue permits for the “discharge of dredged or fill material” into the nations’ navigable waters.
When reviewing whether to grant a CWA § 404 permit, the Corps looks to the so-called “404(b)(1) Guidelines” that were promulgated by the EPA. These regulations “provide substantive environmental criteria that the Corps must use to evaluate permit applications,” and, in turn, the Corps has established procedures for reviewing CWA § 404 permit applications.
exercise a veto over the specification by the U.S. Army Corps of Engineers . . . of a site for the discharge of dredged or fill material [but EPA] may also prohibit the specification of a site under CWA section 404(c) with regard to any existing or potential disposal site before a permit application has been submitted to or approved by the Corps or a state.
The CWA § 404(c) regulations also establish the procedure by which EPA can arrive at a final determination to prohibit discharges into a given area. If an EPA Regional Administrator (RA) “has reason to believe . . . that an ‘unacceptable adverse effect’ could result from the . . . specification of a defined area for the disposal of dredged or filled material,” the RA may commence the CWA § 404(c) process by first notifying the appropriate District Engineer of the Corps, the owner of the site, and “the applicant, if any” that EPA intends to issue a public notice of a proposed determination.
Thus, although ultimately subject to judicial review, EPA wields a “veto” power over a proposed project under review by the Corps—or even a “pre-emptive” veto for areas not yet authorized as a discharge site by the Corps. And although EPA has used its CWA § 404(c) veto power “infrequently,” it now has taken center stage with respect to mining development in the Bristol Bay watershed.
This Part first summarizes the proposed mining development in the Bristol Bay watershed by the PLP. Next, it explains the proposed protection of the watershed under CWA § 404(c) that is currently underway. This will set up the analysis of EPA’s options under CWA § 404(c) in Part IV.
In December 2017, PLP submitted an application to develop “the Pebble copper-gold-molybdenum porphyry deposit (Pebble Deposit) as an open-pit mine, with associated infrastructure.” “The Pebble Deposit is located under rolling, permafrost-free terrain in the Iliamna region of southwest Alaska, approximately 200 miles southwest of Anchorage and 60 miles west of Cook Inlet.” The site is located in the headwaters of tributaries to both the Nushagak and Kvichak Rivers.
The Pebble Project is situated on lands owned by the State of Alaska, which according to PLP, the state acquired from the federal government in 1974 “specifically for its mineral development potential.” The existence of the deposit was discovered in 1988 by Cominco Alaska, which acquired development rights and began investigating the deposit for several years until it discontinued work on the project in 1997. The Pebble claim was subsequently optioned by Northern Dynasty Minerals Ltd., which began further exploring the size of the deposit raising its estimates from one billion to four billion tons of extractable material.
The exploration of the Pebble Deposit by PLP was well-known to the local communities, especially the native Alaskan tribes in the area. Over the years, most expressed their opposition to the potential development and its potential impact on the Bristol Bay region. Then, on May 2, 2010, six of the federally recognized Bristol Bay tribal governments petitioned EPA to invoke its authority under CWA § 404(c) to protect the area. In response, other groups requested that EPA not take action under CWA § 404(c) at this time and offered reasons, such as additional time was necessary to comprehend the impacts of resource development in the watershed and therefore EPA should wait until an application to develop the area was submitted, which would require a comprehensive “environmental impact statement” under the federal National Environmental Policy Act.
In response, EPA began a scientific assessment (Bristol Bay Assessment or BBA) in order to evaluate the impact of large-scale mining projects on water resources, particularly the Bristol Bay’s salmon fisheries. It explained that its purpose in conducting the assessment was to (1) characterize the biological and mineral resources of the Bristol Bay watershed; (2) increase understanding of the potential impacts of large-scale mining, in terms of both day-to-day operations and potential accidents and failures, on the region’s fish resources; and (3) inform future decisions, by government agencies and others, related to protecting and maintaining the chemical, physical, and biological integrity of the watershed.
EPA requested public input on its first draft assessment in May 2012 and received approximately 230,000 comments by the end of the sixty-day comment period. In June 2012, it also held seven public comment meetings in Alaska and one in Seattle, which were attended by about 2,000 people. EPA’s second draft assessment was released in April 2013 and received approximately 890,000 comments. Then, in March 2014, EPA posted its Response to Public Comments documents for both BBA drafts. Based on public comments, as well as an extensive peer review process, EPA released the Final BBA in January 2014.
EPA considered the additional information submitted by PLP and the State of Alaska, but “was not satisfied that no unacceptable adverse effect could occur, or that adequate corrective action could be taken to prevent an unacceptable adverse effect.” It therefore published its CWA § 404(c) Proposed Determination in July 2014.
PLP also alleged in separate suit before the same federal district court judge that EPA “established and utilized three groups that . . . constituted Federal Advisory Committees” in violation of the Federal Advisory Committee Act (FACA) in order to skew EPA’s scientific assessment and conclusions of the Bristol Bay CWA § 404(c) proposed determination. More specifically, PLP alleged that EPA had created “(i) the Anti-Mine Coalition FAC; (ii) the Anti-Mine Scientists FAC; and the Anti-Mine Assessment Team FAC” to assist EPA to “furtively and unlawfully . . . preemptively . . . prohibit mining of the Pebble Deposit.” PLP subsequently moved for a preliminary injunction (PI) to restrain EPA from moving forward with the CWA § 404(c) determination.
Following the entering of the preliminary injunction in 2014, the parties continued to aggressively litigate the case. But after the Trump administration took control, EPA began negotiations with PLP to settle the pending lawsuits involving the Pebble Deposit. A media outlet reported that on May 1, 2017, within hours of a meeting with the PLP Chief Executive Officer Tom Collier, EPA Administrator Pruitt instructed his staff to withdraw the CWA § 404(c) Proposed Determination for the Pebble Deposit. Shortly thereafter, on May 12, 2017, the parties reached a settlement and jointly moved the court to dissolve the PI and to dismiss the case with prejudice. On that same day, the court entered a one-page order doing that.
The settlement agreement (PLP Settlement), which was not provided to the court, purports to place a temporal limit on EPA’s ability to move forward with the CWA § 404(c) process for the Pebble Deposit for between two and a half to four years. It prohibits the RA from forwarding a signed Recommended Determination to the Administrator for at least thirty months from the date of the PLP Settlement. Moreover, if PLP applies for a CWA § 404 permit for the Pebble Project within thirty months of the date of the settlement (which PLP did), the RA cannot forward a signed Recommended Determination to the Administrator “until EPA publishes a notice in the Federal Register of the final Environmental Impact Statement (EIS) regarding PLP’s Permit Application . . . or 48 months from the Effective Date of the Settlement Agreement, whichever is earlier in time.” It also requires EPA to “propose to withdraw the Proposed Determination” within 60 days after the dissolution” of the PI.
On July 19, 2017, EPA commenced an action that proposed to withdraw its 2014 Proposed Determination for the Pebble Deposit. EPA stated that the action was “to afford the public an opportunity to comment on the rationale for the proposed withdrawal.” When the three-month comment period closed on October 17, 2017, over 950,000 comments had been submitted. Opponents of mineral development in the Bristol Bay watershed were certain that EPA would, in fact, withdraw the 2014 Proposed Development. But on February 28, 2018, in what was regarded as a surprising development, EPA indicated that it was temporarily suspending its proposal.
Although EPA’s 2017 action to withdraw the 2014 Proposed Determination is no longer ongoing, EPA further indicated that it “intends at a future time to solicit public comment on what further steps, if any, the Agency should take under Section 404(c) . . . in light of the permit application [for the Pebble Mine] that has now been submitted to the U.S. Army Corps of Engineers.” Accordingly, this Part assesses the steps now available to EPA and proposes that principles of administrative, constitutional, and environmental law demonstrate that EPA’s options are now limited with respect to allowing the Pebble Project to move forward.
First, this Part analyzes the crucial issue of whether and how EPA can withdraw its 2014 Proposed Determination, if it recommences the process to do so. It sets forth reasons why EPA is constrained to withdraw the 2014 Proposed Determination on the same basis that it proposed in 2017. For instance, in 2014, EPA relied on factors wholly outside of its statutory duty to determine whether a discharge into the area would result in unacceptable adverse environmental impacts.
Second, this Part also details how there are persuasive legal and policy arguments that can be challenged in court to move forward with the CWA § 404(c) process for the Pebble Deposit. Although EPA nominally has discretionary authority to invoke its power under CWA § 404(c), its action (or inaction) is nonetheless subject to judicial oversight. In addition, once it begins the CWA § 404(c) process by issuing a proposed determination, there are convincing reasons why it must either finalize it or adequately justify its withdrawal.
In addition, although EPA might attempt to justify its refusal to complete the CWA § 404(c) process based on its 2017 settlement with PLP, the agreement should not be an impediment. Likewise, former EPA Administrator Pruitt’s new policy addressing EPA’s veto power under CWA § 404(c) does not bar EPA from acting now to complete the CWA § 404(c) Determination for the Pebble Deposit. Finally, this Part concludes that based on the findings and conclusions in its 2014 Proposed Determination, as well as applicable legal standards, EPA, when challenged in the future, will be hard pressed to justify not finalizing its 2014 Proposed Determination to protect the Bristol Bay watershed.
A. Can EPA Withdraw the 2014 Proposed Determination?
Given the policy preferences expressed by EPA, it also is likely that EPA will propose again to withdraw the 2014 Proposed Determination. And a future attempt by EPA to withdraw its prior determination will surely be challenged. This Part explores some key legal issue that will be presented in a challenge, including the issue of whether EPA attempts to withdraw the 2014 Proposed Determination on the same basis that it did in 2017.
EPA’s regulations instruct that if the Administrator chooses to review such decision, the RA must provide to the Administrator the administrative record and then the Administrator proceeds to review the RA’s decision pursuant to the regulations. The regulations further state that “[w]here there is review of a withdrawal of proposed determination or review of a recommended determination . . . final agency action does not occur until the Administrator makes a final determination.” On the other hand, if the Administrator does “not notify [the RA], the [RA] shall give notice at the withdrawal of the proposed determination . . . [and] [s]uch notice shall constitute final agency action.” These provisions therefore unambiguously make an action to either withdraw or finalize a proposed determination subject to judicial review as final agency action.
Any such review would be under the Administrative Procedure Act (APA), which, as applicable here, instructs courts to hold unlawful and set aside agency action, findings, and conclusions found to be (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (B) contrary to constitutional right, power, privilege, or immunity; (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (D) without observance of procedure required by law.
Thus, although EPA may choose to withdraw a proposed CWA § 404(c) determination, such an action would be constrained primarily by the APA’s arbitrary, capricious, abuse of discretion or otherwise not in accordance with law standard.
In turn, the EPA regulations that implement CWA § 404(c) echo these parameters. Indeed, EPA has stated that the “guiding principle should be that degradation or destruction of special sites may represent an irreversible loss of valuable aquatic resources.” These environmental considerations apply with equal force in the context of determining whether to withdraw a proposed determination under CWA § 404(c) as when EPA assesses whether to make a final determination.
Devoid in CWA § 404(c) and during the consideration of past CWA § 404(c) actions are the impact of voluntary settlements and an unspecified “policy direction.” As the Supreme Court explained, an agency action would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. In its 2017 Proposal to Withdraw the 2014 Proposed Determination, EPA has done just that.
At issue in Mattaponi I was a challenge to a CWA § 404 permit issued to the city of Newport News, Virginia. The project was projected to “flood over 1,500 acres of land and require the excavation, fill, destruction and flooding of approximately 403 acres of freshwater wetlands and the elimination of 21 miles of free-flowing streams” in King William County, Virginia.
After EPA did not veto the permit at issue under CWA § 404(c), plaintiffs asserted that one of the reasons that EPA’s failure to do so was arbitrary and capricious was because “the Regional Administrator’s declaration shows that his decision not to veto the permit was not based on any analysis of the environmental effects of granting the permit.” The court agreed.
The court also faulted EPA for not looking to see whether the project complied with the CWA § 404(b) Guidelines, which “EPA’s regulations specifically direct him to do in determining whether issuance of a permit would result in unacceptable adverse effects.” The court concluded that EPA’s reliance “on factors which Congress has not intended [it] to consider,” rendered its decision arbitrary and capricious.
Similar to Mattaponi I, when deciding whether to withdraw the 2014 Proposed Determination, EPA must base the decision on adverse environmental effects and not on reasons that are extraneous to the statutory text of CWA § 404(c), such as policy preferences or representations that EPA made in a voluntary settlement agreement. EPA’s statement in its 2017 proposal that “[t]oday’s action is the agreed-upon initiation” specified in the PLP Agreement and that its proposal was “[p]ursuant to the settlement agreement” was fatal to its legitimacy.
Finally, EPA’s limitation of the scope of the public comment period to these reasons further shows why a future court would likely reject EPA’s withdrawal on this basis. EPA made clear that it “is not soliciting comment on the proposed restrictions or on science or technical information underlying the Proposed Determination.” Simply stated, its acknowledgment shows how EPA used “divorced reasoning” from CWA § 404(c) and that any such future decision to withdraw the 2014 Proposed Determination on this basis would be found arbitrary and capricious.
In sum, this is not to say, of course, that EPA can never withdraw a proposed determination under CWA § 404(c). The cases above establish, however, that any such decision by EPA must be based on EPA’s determination whether discharges in the area will “have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas . . . , wildlife, or recreational areas.” But, as set forth in Part IV.B, once EPA has issued a proposed determination, its discretion to either withdraw that determination or to not finalize the determination is more limited.
B. Can EPA Be Compelled to Continue the CWA § 404(c) Process?
During such time, EPA will surely receive comments imploring EPA to invoke its discretion to finalize the 2014 Proposed Determination. In response, EPA might point to the PLP Settlement, as well as a recent memorandum by former Administrator Pruitt addressing EPA’s CWA § 404(c) regulations as legitimate reasons for EPA to not move forward now with the process. This Subpart explores these arguments.
As an initial matter, there are compelling arguments that even though the CWA § 404(c) appears to be a discretionary process that is not subject to judicial review, EPA can in fact be challenged in court to move forward with CWA § 404(c) process. Next, it is questionable whether the PLP Settlement’s provisions that restrict EPA’s authority to proceed with a final determination are enforceable. Likewise, former Administrator Pruitt’s recent memorandum on proposed revisions to EPA’s CWA § 404(c) regulations does not affect EPA’s current ability to move forward with the § 404(c) process. Finally, EPA’s factual findings in the 2014 proposed determination, as well as applicable legal principles, suggest that it will be difficult for EPA to justify not finalizing its 2014 determination.
At first blush, the language in CWA § 404(c) suggests that the determination as to whether and how EPA uses its authority to prohibit disposal into a particular area is a purely discretionary act that is not subject to juridical review. After all, the text of CWA § 404(c) states that EPA “is authorized to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site” if EPA determines a discharge will “have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas . . . , wildlife, or recreational areas.” But a careful analysis of the APA, the statutory and regulatory scheme of the CWA, recent case law, and the current procedural posture of the Pebble Deposit’s CWA § 404(c) action support two independent bases that challengers can raise to bring suit to force EPA to move forward with the process to finalize the 2014 Proposed Determination.
First, because EPA has missed its deadline to decide whether to issue a final determination or withdraw its proposed determination, its failure to act should afford challengers the right to compel further action by EPA. According to EPA’s CWA § 404(c) regulations, the RA is required to “either withdraw the proposed recommendation or prepare a recommended determination” within either thirty days of the public hearing, “or if no hearing was held, within 15 days after the expiration of the comment period.” Although EPA extended this deadline for “good cause” and then suspended work on the CWA § 404(c) process due to a court order, EPA’s basis for not continuing the process evaporated upon the dissolution of the preliminary injunction by the United States District Court for the District of Alaska in 2017.
However, on May 12, 2017, the Alaskan District Court dissolved the injunction, thereby putting EPA “back on the clock” with respect to its duty to continue the CWA § 404(c) process. No matter how one recalculates EPA’s new deadline based on the dissolution of the PI, EPA is at least one year overdue. Indeed, EPA conceded as much in its 2017 proposal to withdraw the 2014 Proposed Determination when it stated “[p]rior to the preliminary injunction, the next step in the section 404(c) process would have been for EPA Region 10 to either forward a Recommended Determination to EPA Headquarters or to withdraw the Proposed Determination pursuant to 40 CFR 231.5(a).” Thus, it appears clear that EPA can be compelled under § 706(1) of the APA, which authorizes courts to “compel agency action unlawfully withheld or unreasonably delayed,” to move forward with the CWA section 404(c) process.
Second, EPA’s decision on whether to invoke its authority under CWA § 404(c) is subject to judicial review under APA § 706(2)(A). Pertinent here, § 706(2)(A) instructs courts to “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” As stated above, judicial review of discretionary action—and in particular the decision by an agency not to act—is often precluded by APA § 701(a)(2), which makes the APA inapplicable to “agency action . . . committed to agency discretion by law.” Indeed, some courts have found in the CWA § 404(c) context that EPA’s decision not to invoke its authority is not subject to challenge because of that APA provision. In those cases, the courts compared EPA’s discretion under CWA § 404(c) to that of an agency’s refusal to take enforcement action applying the Supreme Court’s guidance set forth in Heckler v. Chaney.
A more persuasive analysis of this issue, however, is found in the 2007 case of Alliance To Save Mattaponi v. U.S. Army Corps of Engineers (Mattaponi II). In that case, the court found that plaintiffs could bring suit against EPA for its failure to exercise its CWA § 404(c) authority. As discussed in Part IV.A.2, the case involved a challenge by environmental groups and the Mattaponi Tribe to a CWA § 404 permit issued to the City of Newport News, Virginia for the construction of a 1,526-acre reservoir in King William County, Virginia. After the plaintiffs moved to amend their complaints to, among other things, add a claim against EPA under the APA, the United States, as federal defendants, moved to dismiss all claims against EPA, and moved the court to deny the motion for leave to amend the complaints.
The court found that EPA’s failure to exercise its CWA § 404(c) authority did not fall within the APA’s ambit of “agency action . . . committed to agency discretion by law,” which would preclude review. This exception to judicial review, the court found, is reserved to situations where the underlying law is “drawn in such broad terms that in a given case there is no law to apply,” so that “the court would have no meaningful standard against which to judge the agency’s exercise of discretion.” Thus, contrary to other courts, the Mattaponi II court recognized that not every provision that grants discretion to an agency, including EPA’s CWA § 404(c) authority, is shielded from review.
As the Supreme Court has concluded, this construction of APA § 701(a)(2) makes good sense. To find otherwise would create a tension with the APA’s central standard of review under APA § 706(2)(A), which requires courts to overturn agency action that is “arbitrary, capricious, [or] an abuse of discretion.” In other words, it cannot be that “action committed to agency discretion can be unreviewable [under APA § 701(a)(2)] and yet courts still can review agency actions for abuse of that discretion” under APA § 706(2)(A).
The Mattaponi II court next addressed the related question of whether a challenge to EPA’s inaction for not exercising its CWA § 404(c) authority provides a separate basis for finding that “agency action is committed to agency discretion by law.” The court distinguished the situation presented in a CWA § 404(c) from that of “a prosecutor’s decision not to prosecute—a decision which ‘has traditionally been committed to agency discretion.’” Like in Mattaponi II, the inaction presented by EPA’s failure to move forward with the Pebble Deposit CWA § 404(c) process does not “involve to the same extent the difficult decisions regarding manpower and allocation of resources that inform enforcement decisions and give rise to the hesitancy to undertake judicial review.” Moreover, the court noted that the crucial justification for withholding review remains whether “the court would have no meaningful standard against which to judge the agency’s exercise of discretion,” which, as here, the court has. These arguments apply a fortiori where EPA has already initiated the CWA § 404(c) process and issued a proposed determination because, as set forth in more detail in Part III.B.4, EPA has already set forth that a CWA § 404(c) action is warranted.
In sum, regardless of whether APA review is available to “compel agency action unlawfully withheld or unreasonably delayed” under § 706(1) based on EPA’s failure to follow the steps and deadline pursuant to its regulations, or whether EPA’s failure to continue the § 404(c) process is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” under § 706(2)(A), challengers should have an avenue for APA review.
In a future action by EPA “to solicit public comment on what further steps, if any, the Agency should take under Section 404(c)” or during a lawsuit brought to compel EPA to finalize the 2014 Proposed Determination, EPA will likely attempt to rely on its 2017 Settlement Agreement with PLP as a basis for not moving forward expeditiously. However, certain terms in the PLP Settlement that purport to cabin EPA’s authority under CWA § 404(c) might not be enforceable because a court could find that EPA lacks the authority to bind future executive action in this manner.
As set forth in Part III.D, the PLP Settlement states that EPA agrees to not exercise its discretion regarding CWA § 404(c) review for a certain period of time that spans years. More specifically, EPA states that the settlement agreement limits the Agency’s ability to move forward with a signed Recommended Determination if PLP submits a permit application to the Army Corps within 30 months from the date of settlement . . . [and i]f PLP files a permit application during that time, EPA may not move forward with a signed Recommended Determination for 48 months from the effective date of the settlement agreement or following issuance of a final environmental impact statement on PLP’s permit application, whichever comes first.
EPA’s settlement under these terms, however, does not conform to EPA’s own regulations governing the CWA § 404(c) process (as set forth above) and, more importantly, with policy directives of the United States Department of Justice (DOJ) with respect to settlements that limit the future exercise of executive branch authority. These policies reflect DOJ’s sensitivity that certain settlements that attempt to constrain future agency discretion are subject to both statutory and constitutional limitations. In particular, DOJ explained that such constitutional restrictions inhere in (1) the constitutional limitations that are rooted in both the general executive power that Article II of the Constitution vests in the President and that may constrain, in extreme cases, the executive branch’s authority to adopt enforceable limitations on the future exercise of congressionally conferred executive discretion, as well as the specific discretionary powers that Article II confers directly upon the President, such as the power to recommend legislation to Congress and (2) the restrictions that Article III imposes on the power of federal courts to enforce certain types of executive branch settlements that are otherwise constitutionally permissible.
To address these concerns, then-Attorney General Meese issued a policy in 1986, pursuant to the litigation and settlement authority vested to him by Congress. The policy prohibits DOJ from entering into certain consent decrees and settlements, and further requires the Attorney General, the Deputy Attorney General, or the Associate Attorney General, to, among other things, approve settlement agreements that “divest discretionary power granted by Congress or the Constitution to respond to changing circumstances, to make policy or managerial choices, or to protect the rights of third parties.” The PLP Settlement terms in question fit neatly into this category.
In 1999, DOJ’s Office of Legal Counsel (OLC) analyzed the 1986 Policy and issued a memorandum, titled “Authority of the United States to Enter Settlements Limiting the Future Exercise of Executive Branch Discretion” (OLC Authority Memo). OLC concluded that although “there is no per se constitutional prohibition against settlements of this type that divest discretionary power granted by Congress,” such agreements “will be determined by the statutes that govern the executive branch agency on behalf of which the settlement would be entered.” Therefore, of prime importance for an analysis of the PLP Settlement terms are the statutory and regulatory provisions of the CWA and the APA.
The OLC Authority Memo found that “actions taken pursuant to settlements are not inherently immune from APA review.” In other words, “[t]o the extent that a discretion-limiting settlement is subject to APA review . . . it must conform to the substantive and procedural requirements that the APA imposes upon agency action outside the settlement context.” Although the EPA pledged in the settlement not to act under CWA § 404(c), the APA still provides a meaningful check on whether EPA is abusing its discretion. And, unlike situations where courts have accepted a “limited infringement on the Agency’s discretion,” which involved instances where the settlement “leaves the outcome of the process . . . to the Agency’s discretion,” the prohibition for EPA to exercise its CWA § 404(c) authority where the statutory criteria have been met would appear to constitute a significant—and impermissible—infringement.
On June 26, 2018, then-EPA Administrator Pruitt issued a memorandum proposing a change to the regulations that govern EPA’s authority under CWA § 404(c). In his view, when EPA uses its veto authority “preemptively and without the benefit of the fully developed factual record or attempts to reimagine its authority in ways that diverge from statutory text or congressional intent, it diverts its attention” from EPA’s core mission to protect public health and the environment, as well as to provide regulatory certainty.
To address these concerns, then-Administrator Pruitt directed EPA’s Office of Water to propose changes to EPA’s CWA § 404(c) regulations. He required the proposed changes to 1) eliminate EPA’s authority to begin a CWA § 404(c) before a permit application has been filed, 2) eliminate EPA’s authority to begin a CWA § 404(c) process after a permit has been granted by the Corps, 3) require a RA to seek approval from EPA Headquarters prior to beginning a CWA § 404(c) process, 4) require a RA to “review and consider the finding of a final Environmental Assessment or Environmental Impact Statement prepared by the Corps or a state before preparing and publishing notice of a proposed determination,” and 5) require EPA to publish and seek comment on a final determination prior to the determination being effective.
The present impact of the memorandum on the Pebble Deposit’s CWA § 404(c) process is negligible. As an initial matter, Pruitt resigned effective July 6, 2018, and Deputy Administrator Andrew Wheeler assumed the role of Acting EPA Administrator on July 7, 2018. It is therefore unclear whether Wheeler will withdraw the June 26, 2018 policy directive. Recent media reports suggest, however, that EPA continues to work on the changes. Congress has also taken note of the issue. For example, Senator Tom Carper and Representative Peter DeFazio requested that Acting Administrator Wheeler “immediately and publicly” withdraw Pruitt’s memorandum. In their view, the proposed changes conflict with “the will of Congress” because CWA § 404(c) “provides EPA with clear authority” to act whenever EPA determines a discharge would have an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas, wildlife, or recreational areas. It could be that either Congress or EPA will step in to stop the proposed changes.
In any event, by the policy’s own terms, the memorandum does not prohibit EPA from continuing to use its CWA § 404(c) authority. Rather, it directs the Office of Water to begin the process to change its existing CWA § 404(c) regulations. With respect to timing, the Office of Water has until late December 2018, to propose new regulations to the Office of Management and Budget and any such proposal would be followed by a notice and comment period. Thus, a final regulation establishing these changes is not likely until late 2019, and it certainly will be challenged, which would potentially take years to resolve, assuming a new administration (or Administrator) does not rescind the proposal before judicial review is complete.
It seems unlikely that EPA will be able to withdraw its 2014 Proposed Determination on the same basis that it attempted to do so in 2017. It also seems clear that EPA can be challenged to continue the CWA § 404(c) process for the Pebble Deposit. What, then, are EPA’s options moving forward? If EPA is challenged for its inaction, can EPA justify not finalizing the 2014 Proposed Determination? This section offers some brief concluding observations and tentative conclusions on these complicated legal, technical, and scientific questions.
Applying these principles to the EPA’s decision not to move forward with a CWA § 404(b) Final Determination for the Pebble Deposit, EPA will be strained to justify the absence of unacceptable adverse effects in the Bristol Bay watershed from mineral development of the Pebble Deposit. To be sure, the analysis of effects is more challenging in the situation here because EPA proposed and analyzed its preemptive veto in the absence of an issued permit for a project. And because a Pebble Deposit permit has not been finalized it might be easier for EPA to dispute the existence of an unacceptable adverse effect. However, the facts and conclusions established in the 2014 Proposed Determination and the Bristol Bay Assessment, the watershed’s unique topography and the parameters under which mining would need to be undertaken in the Bristol Bay watershed make the likely unacceptable adverse effects possible to assess and difficult to refute.
Impact on an aquatic or wetland ecosystem which is likely to result in significant degradation of municipal water supplies or significant loss of or damage to fisheries, shellfishing, or wildlife habitat or recreation areas. In evaluating the unacceptability of such impacts, consideration should be given to the relevant portions of the Section 404(b)(1) Guidelines.
It also stated that EPA’s longstanding view of the term “unacceptable . . . refers to the significance of the adverse effect” and in the past it had characterized an unacceptable adverse effect as “‘a large impact’ and ‘one that the aquatic and wetland ecosystem cannot afford.’” Given these past interpretations and definitions, as well as the breadth of these terms, it will be challenging for EPA to “walk back” its previous conclusions to a reviewing court when determining whether any unacceptable adverse effect would result.
“Elimination of streams and wetlands due to drowning by the tailings impoundment.
Dewatering of streams and other aquatic resources due to pumping of groundwater from the mine pit.
Fragmentation of aquatic resources due to the placement of the mine pit, waste rock pile, or [Tailings Storage Facility].
Degradation of downstream fish habitat due to streamflow alterations resulting from water capture, withdrawal, storage, treatment, or release at the mine site.
Based on these conclusions documenting “unacceptable adverse effects” even at the .25 stage mine level, it is unlikely that EPA could muster sufficient arguments to supply a “reasoned explanation [to a reviewing court] . . . for disregarding facts and circumstances that underlay or were engendered” by the prior proposed determination to overcome even the very deferential “arbitrary and capricious” standard. Moreover, any argument that EPA sets forth would also have to be confined to “the relevant factors” found in CWA § 404(c).
The vitality of the Bristol Bay watershed lies in the balance due to proposed development of the Pebble Deposit. CWA § 404(c) provides the most effective basis for ensuring the watershed’s survival. But if EPA’s policy views remain in place over the next decade, litigation will be the best prospect to protect the area. To that end, EPA’s initiation of the CWA § 404(c) process provides a solid foundation and building block for successfully forcing EPA to limit the development of the Pebble Deposit.
To be sure, challengers face a long battle to convince a court to force EPA to finalize its 2014 Proposed Determination. But based on the current procedural posture of the CWA § 404(c) process for the Pebble Deposit, convincing arguments can be made that EPA cannot withdraw its proposed determination without articulating a basis that adequately justifies that no unacceptable adverse effects will result from mineral development in the area. Moreover, judicial intervention should be available to compel EPA to continue the CWA § 404(c) process for the Pebble Deposit. And based on the comprehensive analysis already performed by EPA on the Pebble Deposit, which led to the 2014 Proposed Determination, EPA faces nearly insurmountable arguments to justify its refusal to invoke its CWA § 404(c) authority to protect the Bristol Bay watershed.
Kevin O. Leske is an Associate Professor of Law at Barry University School of Law.
Unacceptable adverse effect means impact on an aquatic or wetland ecosystem which is likely to result in significant degradation of municipal water supplies (including surface or ground water) or significant loss of or damage to fisheries, shellfishing, or wildlife habitat or recreation areas. In evaluating the unacceptability of such impacts, consideration should be given to the relevant portions of the section 404(b)(1) guidelines (40 CFR part 230).

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