July 28, 2013

Court Creates Uncertainty for Construction Projects With Army Corps Permits

Environmental Alert

On April 23, 2013, the U.S. Court of Appeals for the District of Columbia held that the U.S. Environmental Protection Agency (EPA) can retroactively veto an existing Clean Water Act § 404 dredge and fill permit. At issue was a § 404 permit already issued by the U.S. Army Corps of Engineers (Army Corps) to a mining company that allowed the placement of the mine's overburden material in a manner that impacted three small streams. Despite expressing concerns about the stream impacts, the EPA did not exercise its power under the Clean Water Act to veto the permit application. The Army Corps issued the § 404 permit in January 2007. Four years later, the EPA retroactively exercised its veto power and revoked the existing permit in January 2011.

Appeals Court Review: In the case, Mingo Logan Coal Co. v EPA, the Court of Appeals ruled that under the Clean Water Act, the EPA can retroactively veto § 404 permits whenever it determines that the discharge of disposal materials will have an "unacceptable adverse impact" on the environment. The Appeals Court held that the Clean Water Act's use of the term "whenever" provided EPA with the authority to withdraw the determination of disposal areas at any time–even after a permit is issued by the Army Corps.

Impacts to Developers: The ruling has serious implications for all construction projects involving dredge and fill activity and requiring a § 404 permit. Any project with a Clean Water Act § 404 permit is at risk if EPA determines, at any time, that the project could have adverse effects on the environment. This gives project developers little guarantee that an Army Corps-issued § 404 permit is, in fact, final. Developers must now pay careful attention to any issues raised or comments made by the EPA during the § 404 permit application process. Further, developers should monitor EPA concerns that may be raised after a § 404 permit is issued, in order to proactively address those concerns. No matter what, the Court of Appeals' ruling makes all § 404 permits–in process and issued–vulnerable to the possibility of an EPA veto.