As noted in a prior post, a mining company decided to reopen a gold mine in Alaska using a "froth flotation" technique to extract gold; it obtained permission from the Corps of Engineers to dispose of a rock and water slurry mixture by pumping it into a nearby lake. Environmental groups challenged the decision, claiming that the decision to issue a permit under 33 U.S.C. Section 1344 violated the law because the mining company should have sought a permit from the EPA under 33 U.S.C. Section 1342, and because the proposed discharge violated performance standards the EPA promulgated under 33 U.S.C. Section 1316(b). The District Court awarded summary judgment to the mining company and the State of Alaska, but the Ninth Circuit Court of Appeals reversed, holding that the proposed discharge would violate the EPA's performance standards and 33 U.S.C. Section 1316(e).
In Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, 2009 U.S. LEXIS 4730 (6/22/09), the Supreme Court held:
1. The Corps, not the EPA, has authority to permit the slurry discharge. By specifying that, "[e]xcept as provided in . . . [Section 1344]" the EPA "may . . . issue permit[s] for the discharge of any pollutant," Section 1342(a) forbids the EPA to issue permits for fill materials falling under the Corps' Section 1344 authority. Even if there were ambiguity on this point, it is resolved by the EPA's own regulation providing that "[d]ischarges of . . . fill material . . . which are regulated under [Section 1344] do not require [Section 1342] permits." 40 CFR § 122.3. The agencies were thus seen to have interpreted this regulation to essentially restate Section 1342's text. Because it is not "plainly erroneous or inconsistent with the regulation," the Court accepted the EPA's interpretation as correct. Because Section 1344(e) empowers the Corps to "issue permits . . . for the discharge of . . . fill material," and the Agencies' joint regulation defines "fill material" to include "slurry . . . or similar mining-related materials" having the "effect of . . . [c]hanging the bottom elevation" of water, 40 CFR § 232.2, the slurry that Coeur Alaska was to discharge into the lake was interpreted by the Court as falling within the Corps' Section 1344 permitting authority, rather than the EPA's Section 1342 authority.
2. The Corps acted in accordance with law in issuing the slurry discharge permit to Coeur Alaska. The plaintiff contended that because the EPA's performance standard forbids even minute solid waste discharges, 40 CFR § 440.104(b)(1), it also forbids Coeur Alaska's slurry discharge, 30% of which is solid waste, into the lake. As such, plaintiff contended that the slurry discharge was "unlawful" under Section 1316(e), which prohibits "any owner . . . of any new source to operate such source in violation of any standard of performance applicable to such source." In contrast, Coeur Alaska and the intervening Federal agencies asserted that Section 1344 granted the Corps authority to determine whether to issue a permit allowing the slurry discharge without regard to the EPA's new source performance standard or Section 1316(e)’s prohibition. The Court found that the CWA was ambiguous on the question whether Section 1316 applied to discharges of fill material regulated under Section 1344. On the one hand, Section 1316 provides that a discharge that violates an EPA new source performance standard is "unlawful" -- without an exception for fill material. On the other hand, Section 1344 grants the Corps blanket authority to permit the discharge of fill material -- without mentioning Section 1316. The Court viewed this seeming void as indicating that Congress has not "directly spoken" to the "precise question" at issue within the meeting of the Chevron doctrine. However, to make matters complex, the regulations, like the CWA, were not consistent one with the other.
Given this “ambiguity” and seeming inconsistency, the Court examined the Agencies’ subsequent interpretation of the applicable regulations, as provided in Auer v. Robbins, 519 U.S. 452 (1997). The Court found guidance on this issue in EPA's internal "Regas Memorandum", which explains that the performance standard applies only to the discharge of water from the lake into the downstream creek, and not to the initial discharge of slurry into the lake. The Court noted that although the Memorandum is not subject to sufficiently formal procedures to merit full Chevron deference, the Court defers to it because it is not "plainly erroneous or inconsistent with the regulations." Plaintiff alleged that the Memorandum is not entitled to any deference because it has been contradicted by Agency statements; the Court was not convinced by the inconsistency; to the contrary, the Court found the Memorandum to be on point on the issue before the Court. Further, Coeur Alaska cited to two instances in which the Corps issued a Section 1344 permit authorizing a mine to discharge solid waste as fill material. The Court found that these permits illustrated that the Agencies did not have a prior practice of applying EPA performance standards to discharges of mining wastes that qualify as fill material.
Further, under Section 1344(c), EPA had authority to veto the permit issued by the Corps. However, it did not do so.
The Ninth Circuit opinion was reversed, and the case remanded.