Fourth Circuit Upholds Corps Permitting Authority Over Valley Fills in Appalachia

Timothy J. Hagerty

In one more twist in the ongoing battle over the use of so-called valley fills in coal mining operations in mountainous areas, the U.S. Court of Appeals for the Fourth Circuit reversed a district court judgment and injunction on Jan. 29, 2003, restoring the Corps’ ability to issue Section 404 permits for such fills. This is the latest development in a series of actions extending back several years, in which environmental interest groups have fought to halt the practice of valley fills, in which excess overburden from mining operations is discharged into mountain valleys and hollows, which often contain intermittent or ephemeral streams. This latest battle has focused directly on the authority of the Corps to issue permits for such discharges under Section 404.

Valley fills are a necessary consequence of surface mining operations in the mountains of Appalachia. In order to expose coal seams and economically remove the coal, surface mining requires the removal of the overlying rock and dirt from their natural states. The “swelling” of this material by as much as 15 to 25 percent results in excess rock and soil that cannot be placed back on the mountain after the cessation of mining, even if “approximate original contour” is to be restored. When surface mining occurs in mountainous areas, such as Appalachia, the only locations generally available within the “permit areas” for disposal of excess spoil are valleys and hollows. The resulting engineered fill is known as a “valley fill” or “hollow fill.”

Prior efforts by valley fill opponents focused on the federal Surface Mining Control and Reclamation Act (SMCRA) and to so-called stream “buffer zone rule” adopted by the federal Office of Surface Mining (OSM) as part of its SMCRA regulations. That rule prevents mine operators from disturbing land within 100 feet of an intermittent or perennial stream unless the activity meets specific criteria for a variance. In 1999, Judge Charles Haden II, of the Southern District of West Virginia, held that valley fills inherently violated the buffer zone rule, in that they can never satisfy the criteria for obtaining a variance. Bragg v. Robertson, 72 F. Supp. 2d 642 (S.D. W.Va. 1999). The court also stated that valley fills inherently violated the Clean Water Act (CWA), although the CWA portion of the opinion was technically dicta and did not constitute part of the court’s holding. Judge Haden’s decision in Braggwas reversed in 2001 by the Fourth Circuit, which ruled that the plaintiffs’ action was barred by the 11th Amendment to the U.S. Constitution. This ruling was based on the fact that West Virginia had assumed “primacy” in the regulation and permitting of surface mining in that state pursuant to SMCRA, and the regulations cited by the plaintiffs were state regulations implementing that program. Thus, the action was a challenge to state action under state law, and could not be brought without the state’s consent.

Bowed but not broken, the interest groups returned quickly to federal court, this time taking on the CWA issues directly. They based their new challenge on the Corps’ own definition of “fill material,” which excluded the discharge of any material “primarily to dispose of waste.” See 33 C.F.R. § 323.2(e) (2001). The plaintiff in this new action, Kentuckians for the Commonwealth, an Kentucky-based environmental interest group, argued that valley fill discharges are for the very purpose prohibited by the Corps’ regulation – i.e., disposing of waste – and therefore could not be permitted under the Corps’ regulation. Unfortunately, contrary to the language of the Corps’ “fill material” definition, EPA had a longstanding definition of “fill material” – for use in the Section 404 program as well – that defined “fill material” in terms of the effect on waters, rather than the purpose of the discharge. See 40 C.F.R. § 232.2 (2001). Under that definition, valley fills would qualify for permits under Section 404. Moreover, the reality of longstanding agency practice was that the Corps had issued permits under Section 404 for valley fills for many years, and the two agencies had entered into a series of administrative arrangements memorializing that practice. Finally, during the pendency of the recent litigation, the Corps and EPA finally issued a revised, joint definition of “fill material,” essentially adopting EPA’s effects-based test and abandoning the Corps’ “primary purpose” test. 67 Fed. Reg. 31129 (2002). In addition, the agencies explicitly included excess overburden from surface mining in a list of materials regulated under Section 404.

In a stunning decision, Judge Haden issued a declaratory judgment and injunction on May 8, 2002, in which he held that the CWA itself, not just the Corps’ prior regulation, prohibited the discharge of excess overburden from coal mining into waters of the United States, absent a “primary constructive purpose.” Kentuckians for the Commonwealth v. Rivenburgh, 204 F. Supp. 2d 927 (2002). Judge Haden based his decision on several complicated and somewhat inconsistent bases, including the legislative history of the CWA, Sections 10 and 13 of the Rivers and Harbors Act of 1899, and Section 404(f) of the CWA. The court also relied upon the agencies’ regulations to interpret the CWA, a rather unorthodox reversal. Finally, he turned to SMCRA, relying on the same arguments he made in his Bragg decision and claiming that those arguments had not been invalidated by the Fourth Circuit’s 11th Amendment decision in that appeal. Reviewing all of the foregoing, Judge Haden concluded that the issuance of Section 404 permits for the discharge of excess overburden, absent a primary constructive purpose, is contrary to the spirit and letter of the CWA. He also declared that the Corps’ and EPA’s new definition of “fill material” was ultra vires, effectively invalidating it before it ever went into effect.

The government and several industry intervenors promptly appealed Judge Haden’s decision to the Fourth Circuit, which heard oral argument on Dec. 4, 2002. Less than two months later, on Jan. 29, 2003, the Fourth Circuit issued a stinging reversal of the district court’s declaratory judgment and injunction. Kentuckians for the Commonwealth v.Rivenburgh, No. 02-1736 (4th Cir., Jan. 29, 2003). The appeals court concluded that “the Corps’ practice of issuing Section 404 permits . . . to create valley fills with the spoil of mountaintop coal mining was not ultra viresunder the Clean Water Act and . . . the injunction issued by the district court was overbroad . . . .” Slip Op. at 5. Notably, despite indications to the contrary at oral argument, the two-judge majority did not limit its decision to the question of whether Judge Haden’s injunction was overbroad, but also addressed the question of whether the Corps was authorized under Section 404 to issue permits for valley fills. Thus, this decision constitutes not only a clear statement of Judge Haden’s overreaching, but a clear refutation of his misinterpretations of Section 404.

In its opinion, the Fourth Circuit rejected all of Judge Haden’s arguments. Noting first that the CWA does not define “fill material” or suggest on its face the limitation found by the district court, the appeals court concluded that this statutory silence created ambiguity. The court rejected Judge Haden’s reliance on Section 404(f)(2), noting, correctly, that this provision is no more than a recapture provision for a subset of the category of activities exempted from regulation under Section 404(f)(1) – none of which cover valley fills. The appeals court also dismissed Judge Haden’s arguments under the Rivers and Harbors Act, the CWA’s legislative history and SMCRA. The court finally concluded that the district court’s reliance on regulatory language and practice to interpret a statute was inappropriate. Because Congress clearly did not speak to the issue, the appeals court analyzed whether the Corps’ action was based on a permissible construction of Section 404.

In reviewing the reasonableness of the Corps’ action, the Fourth Circuit analyzed whether the Corps’ prior, “purpose-based” regulation, as interpreted by the Corps, was based on a permissible reading of the CWA. The appeals court concluded that the agencies’ interpretation was reasonable, and pointed to their longstanding regulatory interpretations as evidence of their longstanding, consistent division of responsibility in this area. Thus, the new definition of “fill material” was consistent with longstanding interpretation and practice and should not be set aside. The court also recognized that the CWA itself clearly intended to divide functions between the Corps and EPA based on the type of discharge involved, and the distinction drawn by the agencies was reasonable.

In a partial dissent, Judge Luttig of the Fourth Circuit argued that the appeals court should have restricted itself to the overbreadth of the injunction, in fact stated that: “It misses the mark to say, as the majority does, that the district court’s injunction was ‘overbroad.’ Such an assessment implies that at least part of the injunction was legitimate. But no part of the district court’s injunction was directed to the controversy presented by the plaintiffs, and therefore none of the injunction was legitimate.” Judge Luttig believed, however, that the merits issues decided by the majority were not properly before the appeals court and should not have been addressed.

The immediate implications of the Fourth Circuit’s decision include a resumption of permitting by the Corps for valley fills in Appalachia. Unfortunately, there is currently a significant backlog of permit requests in the Corps’ Huntington District, and it is unclear how long it will take for the Corps to get caught up. In the long term, the outlook is even less clear. While certainly a significant victory, this decision likely will not be the last battle in the ongoing fight over valley fills. Opponents of valley fills have proved themselves very resourceful and persistent in the past and likely will be back with another line of attack. Only time will tell if this latest victory will provide permanent relief for the coal mining industry of Appalachia.