Coeur Alaska Mining

This consolidated case (the other case is where the State of Alaska is a party against SEACC) probes a significant but quite technical issue in understanding the Clean Water Act of 1972. It has to do with whether the permit to dump mining tailings into an Alaskan lake is governed only by sec. 404, and its regulations, of the CWA or also by the sec. 402 regulations. The issue is opaque at this point, so let's tell the story of the case.

Background

Nearly 20 years ago Coeur Alaska ("CA"), a mining company, proposed redeveloping the old Kensington gold mine, about 45 miles north of Juneau. In order to do this they had to obtain permits from the US Forest Service, the Army Corps of Engineers, the Environmental Protection Agency and others. Many studies were done. CA's plan of operations provided for milling ore on-site through a process known as "froth-flotation," designed to separate valuable ore from remaining minerals. About 40% of the remaining minerals, called tailings, could be stored in the mine. Thus, you have to decide what to do with the remaining 60%. Over the life of the proposed project (10-15 years) this would mean several million tons of mine tailings. There were two choices: (a) deposit excess tailings on land; (b) build a slurry or impoundment to dump them into a nearby lake. The first would require destruction of more than 100 acres of wetlands and uplands; the second would affect the lake in considerable ways for a time, but then would create a different ecosystem in the lake. That is, the deposit of the remaining tailings (4.5 tons) into the lake would reduce the lake's depth from 51 feet to 33 feet but would increase its surface area from 23 acres to more than 60 acres. Thus, it would substantially change the available fish habitat by providing more shallow areas. The Corps concluded that the upland disposal would be more damaging than the lake deposit.

The Permits and the Law

Permits were sought to enable CA to build the impoundment and get started with its mining. But, one major question was whether the permits were to be sought under sec. 404 or sec. 402 of the CWA. The two sections govern different kinds of discharges into the waters of the United States. Sec. 404, which is the section under which permits were granted, governs discharges of "fill material." Deposit of this "fill material" must satisfy guidelines jointly developed by the EPA and the Corps. In contrast, discharges that fall under sec. 402 focus primarily on discharges such as wastewater from industrial operations and sewage treatment plants, stormwater and the like. Thus "fill material" will "differ fundamentally from the types of pollutants covered by sec, 402 because the principal concern [under 402] is the loss of a portion of the the water body itself. Thus, 404 regulates discharges that displace water while 402 deals with discharges that actually remove water. Thus, the 402 discharges must meet more stringent effluent limitations, known as "standards of performance." These effluent limitations are described in secs. 301 amnd 306 of the CWA.

In the past few years the Corps and EPA have met to define the statutory term "fill material" for purpose of regulations. They decided that "fill material" was "material placed in waters of the United States where the material has the effect of...[c]hanging the bottom elevation of any portion of a water of the United States." The agencies further provided that "discharge of fill material" "generally includes.. placement of overburden, slurry, or tailings or similar mining-related materials," 33 CFR sec. 323.2(f); 40 CFR sec. 232.2.

Thus, CA sought permits under sec. 404 of the CWA and got them. SEACC and others brought suit arguing that the granting of permits violated the Administrative Procedure Act (5 USC sec 706(s)(a)) and sec. 301 and sec. 306 of the CWA. That is, the theory of the case opposing the permit was that even if it was granted under sec. 404 of the CWA, it still had to comply with the requirements of secs. 301 and 306, which normally were required only for a sec. 402 permit. Thus, the challenge to CA's action was based on a "new reading" of the CWA, where the more stringent permit requirements for liquid effluents would also apply to "fill" discharges. The district court recognized that the CWA "divides the permitting process into two segments," and that different standards applied unders Secs. 402 and 404. Thus, the district court concluded that "if the permit was properly issued under sec. 404, [secs. 301 and 306] are inapplicable."

SEACC appealed to the Ninth Circuit. The Ninth Circuit reversed the judgment of the district court and invalidated CA's sec. 404 discharge permit. The court of appeals concluded that the Corps, by issuing a permit for a discharge that "facially meets the Corps' current regulatory definition of 'fill material,' and 'facially qualifies for permitting under sec. 404,' had nevertheless 'violated the CWA.'" The Ninth Circuit panel concluded that sec. 301 of the CWA, which talks in general about discharges, prohibited any discharge that didn't comply both with sec. 301 and 306, as well as sec. 402 and sec. 404. Thus, what the Ninth Circuit did in its interpretation was to say that there really is one overall process, even though the interpretation of the CWA over the years had bifurcated the process, depending on what kind of discharge is in view.

That, then, will be the issue before the Court in January. Is the Ninth Circuit's rather new reading of the CWA to require a stricter permitting process for fill discharge supported by the text of the statute and regulations? It promises to be a straight "textual interpretation" decision, though its implications are quite vast. I anticipate the Court will reverse the Ninth Circuit, probably on a 6-3 vote.

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