Army Corps Properly Limited Scope of NEPA Review of Section 404 Permits to Impacts of Filling Jurisdictional Waters
Ohio Valley Environmental Coalition v. U.S. Army Corps of Engineers, No. 07-1355 (4th Cir. 2009)
by Robert J. Uram, Aaron Foxworthy, and James Rusk
The Fourth Circuit Court of Appeals recently reversed a District Court decision and upheld a decision by the Army Corps of Engineers (the "Corps") to prepare Environmental Assessments and mitigated FONSIs under the National Environmental Policy Act ("NEPA") for four Clean Water Act section 404 permits issued for mountaintop removal coal mining projects in West Virginia. In Ohio Valley Environmental Coalition v. U.S. Army Corps of Engineers, No. 07-1355 (4th Cir. 2009), the court held that the Corps did not err in focusing its NEPA review on the impact of the filling of jurisdictional waters of the United States, and excluding from consideration the impacts on surrounding upland areas from associated mining activities. This decision highlights the ability of the Corps to focus its NEPA review of Section 404 permits on the impacts associated with the fill of jurisdictional waters, rather than on the larger project necessitating the permit.
The Ohio Valley case involved four mountaintop removal coal mining projects in West Virginia. Mountaintop removal mining results in the deposit of large amounts of "overburden"—excess rock and soil blasted from the mountaintops—in nearby valleys. In this manner, valley fill buries intermittent and perennial streams located in the valleys. The mining projects as a whole are subject to the jurisdiction of the West Virginia Department of Environmental Protection ("WVDEC"), pursuant to the federal Surface Mining Control and Reclamation Act of 1977 ("SMCRA"). The streams also fall within the Corps' regulatory jurisdiction under the Clean Water Act ("CWA"), and the projects therefore required section 404 permits to fill the streams. See slip op. at 12-14.
Collectively, the four projects sought section 404 permits that would allow impacts to more than 13 miles of jurisdictional streams. To satisfy NEPA environmental review requirements, the Corps prepared an environmental assessment (an "EA") for each of the four permits. In each case, the Corps determined that the permitted activity would not result in significant environmental impacts, taking into account required mitigation measures. The Corps therefore issued a mitigated finding of no significant impact (a mitigated "FONSI") for each permit. Slip op. at 14.
The plaintiffs challenged the FONSIs, arguing that the Corps had inadequately assessed the environmental impacts of the projects and was required to prepare an environmental impact statement (an "EIS") before issuing each of the permits. Among other things, the plaintiffs charged that the Corps had arbitrarily and capriciously restricted its NEPA analysis to the projects' impacts on jurisdictional waters. The plaintiffs argued that because the valley fill projects could not proceed without the permits, the environmental effects of the larger projects were essentially products of the Corps' permit actions. According to the plaintiffs, the Corps therefore retained control and responsibility for the valley fill activities and, under the Corps' own NEPA regulations, should have considered the broader impacts of the entire valley fill projects in its NEPA analysis of the section 404 permits. In addition, the plaintiffs alleged that the Corps failed to comply with CWA regulatory requirements (the 404(b)(1) guidelines) for determining the adverse individual and cumulative impacts to aquatic ecosystems affected by the Section 404 permits. The district court agreed with the plaintiffs and rescinded the permits, remanding them to the Corps for further action. Slip op. at 14-15.
The Corps Properly Excluded Upland Fill Activities From Its Scope of Review Because It Lacked 'Control and Responsibility' Over Those Activities
The Fourth Circuit reversed the district court's decision, holding that the Corps did not act arbitrarily or capriciously in limiting the scope of NEPA analysis to impacts on jurisdictional waters. The court viewed OVEC's suit as a challenge to the Corps' interpretation of its NEPA implementing regulations, found at 33 C.F.R. Part 325 Appendix B. As the Court stated, judicial review is highly deferential to agencies' interpretations of their own regulations, and an agency's interpretation should be upheld unless "plainly erroneous or inconsistent with the regulation." Slip op. at 24-25.
The Corps' NEPA regulations state that the scope of analysis under NEPA should address the "specific activity requiring a [Corps] permit and those portions of the entire project over which the [Corps] has sufficient control and responsibility to warrant Federal review." 33 C.F.R. pt. 325 App. B § 7(b)(1). Addressing those regulations, the Ohio Valley court first determined that the "specific activity" for which the Corps issued the section 404 permits was "the filling of jurisdictional waters . . .." The court next determined that the Corps lacked sufficient "control and responsibility" over other portions of the valley fill projects to warrant review of those actions under NEPA. Slip op. at 26.
The court acknowledged that the fill of the valleys as a whole could not occur if the Corps did not issue Section 404 permits for the fill of the streams within those valleys. The court disagreed, however, that this in itself gave the Corps' "control and responsibility" over the entire valley fill projects. The court observed that WVDEP retained regulatory control over all aspects of the valley fills and mining operations beyond the fill of jurisdictional waters pursuant to SMCRA. To require the Corps to undertake review of the entire valley fill project as a part of the Section 404 permit action would render WVDEP's review under SMCRA "at best duplicative, and, at worst, meaningless." Slip op. at 29. This interpretation would "effectively read out of the equation the elaborate congressionally mandated schema for the permitting of surface mining operations prescribed by SMCRA." Id at 28.
Having made this determination, the court followed the holding in Department of Public Transportation v. Public Citizen, 541 U.S. 752 (2004), that proximate causation, rather than "but for" causation, is the relevant measure of the causal relationship between agency action and environmental effects. In these circumstances, the Corps' permitting action could not be considered the "proximate cause" of the entire valley fill project because WVDEP had ultimate control and responsibility over all aspects of the valley fill projects beyond the waters of the United States. Slip. op. at 30. Thus, activity beyond the filling of jurisdictional waters was not within the control and responsibility of the Corps, and "under the plain language of the [Corps'] regulation," it was not required to be included in the scope of the Corps' NEPA review. Id at 31. Furthermore, the Corps' interpretation of its NEPA regulations as requiring a limited scope of analysis in this case was "reasonable" and therefore entitled to deference even if the regulation was ambiguous. Consequently, the Corps did not act arbitrarily or capriciously in limiting the scope of its NEPA analysis. Slip op. at 30-32.
The Corps' Analysis of Impacts and Mitigation Measures Was Adequate
In reversing the district court's decision, the Fourth Circuit also held that the Corps adequately analyzed the effects of the stream fills on the "structure and function" of the aquatic ecosystem and organisms, as required by the CWA section 404(b)(1) Guidelines. See 40 C.F.R. § 230.11(e). The district court had found that the Corps failed to satisfy the Guidelines because it did not use a "functional assessment" methodology to analyze stream functions at the proposed fill sites. Instead, the Corps used stream structure as a surrogate for functional assessment. Emphasizing that the Corps was owed substantial deference in choosing a methodology for analysis, the appellate court held that the Corps' use of structure as a proxy for stream function did not violate either the Guidelines or Corps guidance. Slip op. at 32-38.
The appellate court likewise reversed the district court's finding that the permits contained inadequate mitigation measures to justify a FONSI. The Corps allowed the applicants to mitigate the destruction of "headwater" streams through enhancement, restoration and creation of downstream waters. The district court found this mitigation inadequate, based on the testimony of plaintiffs' experts that headwater streams play a unique role in the aquatic ecosystem and that stream creation is an unproven mitigation technique. The Fourth Circuit panel, however, rejected these conclusions. The appellate court held (1) that the Corps was not required to differentiate between headwater and other stream types in determining mitigation measures, and (2) that the Corps was entitled to deference in assessing the adequacy of mitigation measures—an area within its "special expertise." Slip op. at 39-46.
Finally, the appellate court reversed the district court's finding that the Corps inadequately considered the cumulative impacts of the proposed project. The district court found that the Corps' cumulative impact analysis was inadequate because the Corps improperly relied on mitigation as the basis for its conclusion. Citing the recent Fifth Circuit opinion in O'Reilly v. U.S. Army Corps of Engineers, 477 F.3d 225 (2007), the district court stated that the mitigation of individual impacts to insignificance does not in itself demonstrate that the project will not lead to cumulatively significant impacts when combined with the effects of other actions. Slip op. at 58.
The Fourth Circuit acknowledged this point but found that the Corps' analysis did not rely on mitigation "in the same perfunctory, conclusory way" as the Corps' analysis in O'Reilly. In Ohio Valley, the Corps' findings regarding cumulative impacts were based in part on the CWA section 401 water quality certification issued for the project by WVDEP, which the Corps viewed as "satisfying the water quality portion of cumulative impact analysis." The Corps' conclusion also relied on the SMCRA permitting process for the projects, which included an assessment of cumulative impacts on the "hydrologic balance" in the area of the mines. Slip op. at 59. Overall, the Corps found that the proposed action and mitigation measures actually would "improve the overall health of the [affected] watershed" because they would help mitigate the impacts of previous mining projects. C.f. Bering Strait Citizens for Responsible Resource Development v. U.S. Army Corps of Engineers, 524 F.3d 938 (9th Cir. 2008) (reaching a similar conclusion regarding the cumulative impacts of gold mining on wetlands near Nome, Alaska). The court thus concluded that the Corps had adequately addressed the issue of cumulative impacts and articulated a rational basis for its conclusion that the impacts would not be significant. Slip op. at 60-61.
Fourth Circuit's Reasoning Is Consistent with Wetlands Action Network
The Fourth Circuit's reasoning in Ohio Valley, with its emphasis on the "overlapping federal and state regulatory schemes" of the Corps and WVDEP, is consistent with the leading case on this issue and reinforces the ability of the Corps to limit the scope of its NEPA review in California, where projects are subject to robust state and local regulation under the California Environmental Quality Act and other state laws. The Ohio Valley opinion relies on Wetlands Action Network, a Ninth Circuit case from California holding that the NEPA analysis for a permit to fill sixteen acres of wetlands need not include the entirety of a development project covering hundreds of acres. Wetlands Action Network v. U.S. Army Corps of Engineers, 222 F.3d 1105 (9th Cir. 2000). The Ohio Valley opinion notes that, in Wetlands Action Network, state regulations already controlled the project design, and the larger project was subject to extensive state environmental review.
The Ohio Valley opinion likewise distinguishes the Ninth Circuit case Save Our Sonoran, in which the court found that the proper scope of NEPA analysis for a Corps permit included the entirety of a development site in the Arizona desert that was crisscrossed by ephemeral washes. Save Our Sonoran, Inc. v. Flowers, 408 F.3d 1113 (9th Cir. 2005). According to the Fourth Circuit, Save Our Sonoran did not involve the "problem of overlapping federal and state regulatory schemes" found in Ohio Valley. Slip op. at 30-31 n. 11. Ohio Valley therefore provides additional support for the proposition that the Corps generally should limit the scope of its NEPA analyses to activities that occur in jurisdictional waters, especially when issuing section 404 permits for projects in California.
Robert J. Uram
Robert Uram is a partner in the Real Estate, Land Use and Environmental Practice Group in the firm's San Francisco office. Aaron Foxworthy and James Rusk are associates in the Real Estate, Land Use and Environmental Practice Group in the firm's San Francisco office.