June 23, 2009

SCOTUS reverses Ninth Circuit, allows needed mining project to go forward

By Damien M. Schiff Senior Attorney

Today the Supreme Court issued a decision in Coeur Alaska v. Southeast Alaska Conservation Council. The Court reversed a 2007 decision by the Ninth Circuit and held that the discharge of tailings material from a mine is subject only to the permitting scheme of Section 404 of the Clean Water Act, not the more burdensome requirements of Section 402. The decision is available here.

PLF authored an amicus brief (available here) that called for the Court to clarify that Section 404 is the proper provision for regulation of mine tailings. In a press release, PLF attorney Brandon Middleton issued this statement applauding the Court's ruling:

"The Court got it right on both legal and practical grounds. A redundant, double permit requirement for disposing of mine tailings isn’t required by the statute. And, as the court recognized, in a practical sense an overly bureaucratic, double permitting rule would create costly confusion in the permitting process. The decision allows the most common and environmentally sound methods for the disposal of mining waste to continue. The court rejected environmentalist arguments that could have the effect of crippling the mining industry. This is a sound decision and an especially welcome development given the precarious status of the national economy.

 "The nation’s mining industry, and especially Alaska’s, would have suffered a serious blow had the Court ruled in favor of environmental organizations. Instead, the Court’s decision provides much needed clarity to mining companies like Coeur Alaska and will better enable them to provide jobs for Alaskans and Americans everywhere."

Three aspects of the Court's decision are worth noting:

1. Contrary to those who would argue that today's decision is a loss for the environment, the Court recognized how mining companies like Coeur Alaska can be part of a long-run improvement in environmental conditions.  The decision rests in part "[o]n the premise that when the mining ends the lake will be at least as environmentally hospitable, if not more so, than now." Indeed, it is hard to imagine how the environmental community would have been satisfied had the Court ruled against Coeur Alaska — the decision allows mine tailings to be discharged into a lake, but "[i]f the tailings did not go into the lake, they would be placed on nearby wetlands. The resulting pile would rise twice as high as the Pentagon and cover three times as many acres. . . . If it were chosen, that alternative would destroy dozens of acres of wetlands–a permanent loss."

2. Some may wish to blame the Bush administration for this decision. For example, Earthjustice President Trip Van Noppen suggests that the current regulatory status "was caused by a Bush administration rule reversing 30 years of successful regulation under the Clean Water Act." (h/t: New York Times) Mr. Van Noppen fails to recognize that the Obama administration had also voiced its support for regulating tailings discharges under Section 404 of the Clean Water Act, not Section 402.

3. The Court was clearly concerned with how its decision would affect the regulated public.  Consider Justice Kennedy's response to SEACC's arguments that the Corps of Engineers was precluded from issuing a permit under Section 404, and that the correct permitting provision was Section 402:

SEACC’s reading of §404 would create numerous difficulties for the regulated industry. As the regulatory regime stands now, a discharger must ask a simple question—is the substance to be discharged fill material or not? The fill regulation, 40 CFR §232.2, offers a clear answer to that question; and under the agencies’ view, that answer decides the matter—if the discharge is fill, the discharger must seek a §404 permit from the Corps; if not, only then must the discharger consider whether any EPA performance standard applies, so that the discharger requires a §402 permit from the EPA.

Under SEACC’s interpretation, however, the discharger would face a more difficult problem. The discharger would have to ask—is the fill material also subject to one of the many hundreds of EPA performance standards, so that the permit must come from the EPA, not the Corps? The statute gives no indication that Congress intended to burden industry with that confusing division of permit authority.

Justice Kennedy likewise noted that a two-permit regime "would cause confusion, delay, expense, and uncertainty in the permitting process."  Fortunately, today's decision by the Court gives regulated entities a little bit of certainty in an uncertain world.

Coeur Alaska's press release on the decision is available here.  More analysis from Legal Planet's Dan Farber is available here

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