Kentuckians for the Commonwealth v. United States Army Corps of Engineers ( 2014 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 14a0046p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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KENTUCKIANS FOR THE COMMONWEALTH and X
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Plaintiffs-Appellants, --
SIERRA CLUB,
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No. 13-6153
,
>
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v.
UNITED STATES ARMY CORPS OF ENGINEERS, -
THOMAS P. BOSTICK, and LUKE T. LEONARD, --
Defendants-Appellees, -
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Intervenor-Appellee. -
LEECO, INC.,
N
Appeal from the United States District Court
for the Western District of Kentucky at Louisville.
No. 3:12-cv-00682—Thomas B. Russell, District Judge.
Argued: February 11, 2014
Decided and Filed: March 7, 2014
Before: KEITH, SILER, and ROGERS, Circuit Judges.
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COUNSEL
ARGUED: Neil Gormley, EARTHJUSTICE, Washington, D.C., for Appellants. J.
David Gunter II, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.,
for Federal Appellees. Robert G. McLusky, JACKSON KELLY PLLC, Charleston,
West Virginia, for Appellee Lecco. ON BRIEF: Neil Gormley, Jennifer C. Chavez,
EARTHJUSTICE, Washington, D.C., Joseph M. Lovett, J. Michael Becher,
APPALACHIAN MOUNTAIN ADVOCATES, Lewisburg, West Virginia, Mary
Cromer, APPALACHIAN CITIZENS LAW CENTER, Whitesburg, Kentucky, for
Appellants. J. David Gunter II, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Federal Appellees. Robert G. McLusky, JACKSON KELLY
PLLC, Charleston, West Virginia, Kevin M. McGuire, JACKSON KELLY PLLC,
Lexington, Kentucky, for Appellee Leeco.
1
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 2
_________________
OPINION
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ROGERS, Circuit Judge. More than six years after the Commonwealth of
Kentucky authorized a surface mining operation in Perry County, this appeal raises the
issue of the proper scope of environmental analysis a federal agency must use in issuing
a permit related to a small but necessary part of the operation. The Surface Mining
Control and Reclamation Act grants Kentucky “exclusive jurisdiction” over the
regulation of surface mining within the state, subject to minimum federal standards. In
order to conduct surface mining in Kentucky, a mine operator must obtain a permit for
the overall operation from Kentucky’s Division of Mine Permits, as well as subsidiary
permits related to water and stream quality, as required by the Clean Water Act. One of
these permits is a § 404 permit, which is issued by the U.S. Army Corps of Engineers
and is required for the discharge of dredged or fill material into waters of the United
States. After obtaining a permit from the Division of Mine Permits, intervenor Leeco,
Inc. applied for and received a § 404 permit from the Corps. The permit authorizes
Leeco to “mine through” and fill certain surface stream beds, which are already in a
degraded state, and requires Leeco to offset the limited environmental effect of the
filling by improving other streams in the watershed.
The plaintiffs challenge the Corps’s issuance of the § 404 permit, arguing that
the National Environmental Policy Act (“NEPA”) requires the Corps to have considered
in its environmental assessment the public health impacts related to surface mining in
general, and that the Corps violated the Clean Water Act by using a flawed analysis of
the associated compensatory mitigation plan. In a comprehensive and thoughtful
opinion, the district court rejected the plaintiffs’ arguments. This appeal followed.
Because the Corps did not abuse its discretion in limiting the scope of its environmental
analysis only to health effects closely related to the discharge of dredged or fill material
into jurisdictional waters, the Corps did not violate NEPA. And because the Corps’s
acceptance of Leeco’s compensatory mitigation plan was not an arbitrary and capricious
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 3
exercise of its specialized expertise, the Corps did not violate its requirements under the
Clean Water Act. Accordingly, we must uphold the Corps’s decision to issue the § 404
permit.
We of course decide only the issues before us—whether the permit at issue in
this case complies with the Clean Water Act and the National Environmental Policy Act.
Our decision takes no position on the public policy questions of whether surface mining
is in the larger public interest, or whether mountaintop removal should be allowed by the
Commonwealth of Kentucky.
Congress passed the Surface Mining Control and Reclamation Act of 1977
(“SMCRA”) in order to “establish a nationwide program to protect society and the
environment from the adverse effects of surface coal mining operations.” 30 U.S.C.
§ 1202(a). The Act set up a system of “cooperative federalism,” in which state
governments could opt in to regulating coal surface mining in their states so long as they
establish agencies to enact and administer their own regulatory programs consistent with
federal minimum standards and subject to federal approval. See Hodel v. Va. Surface
Mining & Reclamation Ass’n, 452 U.S. 264, 289 (1981). Under the Act, a state that
administers a federally approved program “assume[s] exclusive jurisdiction over the
regulation of surface coal mining and reclamation operations” on non-federal lands,
30 U.S.C. § 1253(a), with limited federal oversight to ensure compliance with federal
standards, id. § 1271. Kentucky’s Department for Natural Resources has assumed legal
responsibility for implementation of SMCRA through its Division of Mine Permits. See
Ky. Rev. Stat. §§ 350.028, .465(2). This program has been approved by the U.S.
Department of the Interior since 1982. 30 C.F.R. § 917.10. Thus, any surface mining
operation in the Commonwealth of Kentucky must be conducted with a permit from the
Division of Mine Permits. See 30 U.S.C. § 1256(a).
Although a SMCRA permit authorizes all of the activities related to a surface
mining operation, it alone may not be sufficient to allow a mine operator to conduct
surface mining operations. See Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d
177, 190–91 (4th Cir. 2009). Other permits may be required to authorize portions of the
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 4
operation, if those specific activities are regulated by an independent regulatory
program. For example, if a surface mining operation will affect the navigable waters of
the United States, the Clean Water Act, 33 U.S.C. § 1251 et seq., which aims to “restore
and maintain the chemical, physical, and biological integrity of the Nation’s waters” by
eliminating “the discharge of pollutants into the navigable waters.” 33 U.S.C.
§ 1251(a)(1), requires a surface mine operator to obtain various other permits related to
the quality of water and wetlands.
For the typical surface mining operation, three different Clean Water Act permits
are required. First, a mine operator must obtain a § 401 permit from the proper
permitting agency to ensure that “any discharge into the navigable waters” complies with
regulations designed to limit the discharge of pollutants into navigable waters and to
ensure the maintenance of federal water quality standards. Id. § 1341. Second, a mine
operator must obtain a § 402 permit for “the discharge of any pollutant, or combination
of pollutants.” Id. § 1342. Finally, and most relevant to the present litigation, a mine
operator must also obtain a § 404 permit “for the discharge of dredged or fill material
into the navigable waters at specified disposal sites.” Id. § 1344. This final permit must
be obtained from the U.S. Army Corps of Engineers. See id. § 1344(d); 33 C.F.R.
§ 320.2(f).
In conducting its review for a § 404 permit, the Corps is required to comply with
guidelines promulgated by the Environmental Protection Agency (“EPA”), which are
called the § 404(b)(1) Guidelines. 33 U.S.C. § 1344(b)(1); see also 33 C.F.R. § 320.2(f);
40 C.F.R. pt. 230. The review includes the consideration of the health and welfare of
those that would be affected by the discharge into jurisdictional waters. For example,
under the regulations, the Corps must not issue a permit if the discharge of dredged or
fill material would “cause or contribute to significant degradation of the waters of the
United States,” which may be constituted by certain effects considered individually and
collectively, including “[s]ignificantly adverse effects of the discharge of pollutants on
human health or welfare” and “[s]ignificantly adverse effects of discharge of pollutants
on recreational, aesthetic, and economic values.” 40 C.F.R. § 230.10(c), (c)(1), (c)(4).
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 5
The Corps additionally imposes some general policies that are to be considered in the
evaluation of all permit applications, and not only § 404 permits. Under these policies,
a decision must include “an evaluation of the probable impacts, including cumulative
impacts, of the proposed activity and its intended use on the public interest,” and “reflect
the national concern for both protection and utilization of important resources.”
33 C.F.R. § 320.4(a).
In addition to its responsibilities under the Clean Water Act, the Corps must also
comply with the requirements of NEPA, 42 U.S.C. § 4321 et seq., which requires federal
agencies to “take a ‘hard look’ at the potential environmental consequences of their
actions.” Aracoma Coal, 556 F.3d at 191 (quoting Robertson v. Methow Valley Citizens
Council, 490 U.S. 332, 350 (1989)). NEPA requires federal agencies to prepare a
detailed statement, called an environmental impact statement, for every “major Federal
action[] significantly affecting the quality of the human environment.” 42 U.S.C.
§ 4332(2)(C); see also 40 C.F.R. § 1502.3. When it is not clear whether an
environmental impact statement is required, the agency will prepare an environmental
assessment, “a concise public document . . . that serves to . . . [b]riefly provide sufficient
evidence and analysis for determining whether to prepare an environmental impact
statement or a finding of no significant impact.” 40 C.F.R. §§ 1501.3, 1501.4(b),
1508.9; see also Save Our Cumberland Mountains v. Kempthorne, 453 F.3d 334, 339
(6th Cir. 2006). If an environmental impact statement is not required, the agency must
“[p]repare a finding of no significant impact,” 40 C.F.R. § 1501.4(e), that “briefly
present[s] the reasons why an action . . . will not have a significant effect on the human
environment and for which an environmental impact statement therefore will not be
prepared,” id. § 1508.13. In practice, the environmental assessment generally serves as
the finding of no significant impact when an environmental impact statement is not
required.
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 6
The present action concerns a proposed surface coal mining operation1 in Perry
County, Kentucky, by the intervenor Leeco, Inc. The proposed mining area and the
stream beds within it are already environmentally degraded, having been heavily
impacted in the past century by previous mining, logging, natural gas exploration, and
agricultural activities. The Kentucky Department of Mine Permits authorized the mining
operation, and then in early 2007 Leeco submitted an application to the Department of
the Army for a permit to authorize the discharge of fill material into stream beds on the
project site, as required by § 404 of the Clean Water Act. The Corps issued a public
notice for Leeco’s application, with a 30-day comment period. This original proposal
sought to construct six hollow fills and six sediment control ponds and would have
involved discharges into 22,761 linear feet of stream. In the following years, Leeco
supplemented and revised its application.
In June 2009 the Department of the Army, the EPA, and the Department of the
Interior instituted an interagency action plan intended to “significantly reduce the
harmful environmental consequences of Appalachian surface coal mining operations,
while ensuring that future mining remains consistent with federal law.” Implementing
the Interagency Action Plan on Appalachian Surface Coal Mining (June 11, 2009),
available at http://www.osmre.gov/resources/mou/ASCM061109.pdf. In response to
this plan, the EPA conducted a review of Leeco’s pending § 404 permit application. The
EPA’s preliminary assessment concluded that there were “significant concerns that the
project, as proposed, does not comply with the [EPA’s] 404(b)(1) Guidelines.” The EPA
1
The district court accurately described the kind of surface mining to be conducted:
Surface mining entails the excavation of rock to expose and remove coal seams. Once
the coal is extracted, as much as possible of the excavated rock (called “spoil”) is
returned to the mine site in an attempt to restore natural ground contour. However,
because the loosening of the rock and soil and incorporation of air causes the spoil to
“swell” to occupy more volume, much cannot be returned to the area where it was
blasted. Rather, the spoil is placed in “fills” located in adjacent hollows (“hollow fills”
or “valley fills”) that, due to the landscape of the Central Appalachian region, often
contain headwater streams. . . . [S]urface mining laws require that the drainage from
both hollow fills and “mine through” areas pass through sediment control ponds or
structures before being discharged into downstream waters. Each of these activities is
subject to a series of overlapping permits and certifications involving both federal and
state agencies . . . .
Kentuckians for the Commw. v. U.S. Army Corps of Eng’rs, No. 3:12-CV-00682, 2013 WL 4516774, at
*1 (W.D. Ky. Aug. 23, 2013).
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 7
expressed concerns over water quality and mitigation attempts, as well as concern that
“the proposed project may have significant human health impacts on the surrounding
communities, all of which are low-income communities.” In a later letter, the EPA
outlined extensive strategies on how to improve the plan.
In response to these concerns from the EPA, Leeco submitted a significantly
revised permit application on July 19, 2011. The new application consolidated the fill
plan to only one large hollow fill and one sediment control pond. Id. The new plan
would impact only 18,268 linear feet of streams, a decrease of 4,593 linear feet. Id.
This later design would all together impact 11,607 linear feet of ephemeral streams (that
flow only during periods of heavy precipitation), 5,073 linear feet of intermittent streams
(that flow continuously only at certain times of the year, usually because the source, such
as melting snow, is seasonal), and 1,588 linear feet of perennial streams (that flow year
round). The revised application included a compensatory mitigation plan that would
require Leeco to replace 8,376 linear feet of stream in the same watershed area, to
compensate for the loss of intermittent and perennial streams. In addition, Leeco agreed
to pay the Kentucky Department of Fish and Wildlife Resources $752,047.50 in lieu of
mitigation for the impacts on ephemeral streams.
The Corps issued a new public notice on August 5, 2011, with a comment period
that lasted through August 19, 2011. During this comment period, the Sierra Club
submitted comments objecting to the proposal, and attached studies purporting to
demonstrate general health concerns related to surface coal mining. On April 3, 2012,
the EPA informed the Corps that it had no further concerns regarding the proposed
project, indicating the EPA’s approval of the new plan. On May 25, 2012, the Corps
completed its review and decision to issue the permit, along with a detailed document
discussing its decision. In its decision, the Corps found that “issuance or denial of the
requested permit would not constitute a major federal action that would significantly
affect the quality of the human environment,” and that that determination “constitutes
a Finding of No Significant Impact.” The Corps finally granted Leeco the § 404 permit
on July 26, 2012.
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 8
On October 17, 2012, the plaintiffs Kentuckians for the Commonwealth, a
grassroots organization devoted to improving the quality of life for the citizens of
Kentucky, and the Sierra Club, a national environmental nonprofit organization, filed a
complaint against the Corps in the Western District of Kentucky, challenging the
issuance of the permit and alleging that it was issued in violation of the Clean Water Act,
NEPA, and the Administrative Procedure Act, 5 U.S.C. § 500 et seq. Count One alleged
that the Corps had violated NEPA by failing to issue an environmental impact statement,
Count Two alleged that the Corps had failed to consider adverse effects on human health
and welfare as required by the Clean Water Act § 404(b)(1) Guidelines, Count Three
alleged that the Corps had violated its own regulations in failing to properly consider the
public interest, and Count Four alleged that the Corps violated the Clean Water Act
§ 404(b)(1) Guidelines by issuing a permit that will cause or contribute to violations of
water quality standards and significant degradation of waters of the United States.
After motions and cross-motions for partial summary judgment, the district court,
in a thoroughly reasoned opinion, granted summary judgment in favor of the Corps on
all counts, dismissing the suit in its entirety on August 23, 2013. Kentuckians for the
Commw. v. U.S. Army Corps of Eng’rs, No. 3:12-CV-00682, 2013 WL 4516774, at *21
(W.D. Ky. Aug. 23, 2013). The court first held that the plaintiffs had standing because
their members alleged an injury in the form of possible detrimental effects to their
health, livelihood, and outdoor recreational pursuits. Id. at *8. Regarding the NEPA
claim, the court held that the Corps properly limited the scope of review to the filling of
jurisdictional waters, because “under SMCRA, it is the [Kentucky Division of Mine
Permits], and not the Corps, that has control and responsibility over the Stacy Branch
mine site as a whole,” and the Corps was otherwise entitled to deference on the scope
of review. Id. at *10. The court also held that the plaintiffs’ comments during the
second comment period that cited human health studies did not constitute “significant
new information” requiring a supplemental environmental assessment. Id. at *12. With
reasoning similar to that applied to the NEPA claim, the court held that the Corps
properly limited the scope of its review regarding public health under the Clean Water
Act § 404(b)(1) Guidelines, and that its environmental justice review under the
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 9
Guidelines was not thereby arbitrary and capricious. Id. at *12–13. In addressing the
mitigation claim, the court first expressed doubt that the 2008 regulations pertaining to
the assessment of mitigation plans applied to the permit, which was first submitted in
2007. Id. at *14. The court held that, regardless of whether the 2008 regulations apply,
the Corps adequately assessed stream function in its review of the mitigation plan, that
it did not act arbitrarily and capriciously in relying on the Eastern Kentucky Stream
Assessment Protocol, that it did not act inconsistently with regulations in approving an
in-lieu fee payment to a stream-and-mitigation trust fund, and that its analysis of and
plan for monitoring stream conductivity were not arbitrary and capricious. Id. at
*14–20.
This appeal followed. On September 9, 2013, the district court issued an
injunction pending this appeal.
We review this grant of summary judgment in a challenge to the Corps’s
permitting decision under the Clean Water Act and NEPA under the Administrative
Procedure Act’s arbitrary and capricious standard. See Ky. Riverkeeper, Inc. v. Rowlette,
714 F.3d 402, 407 (6th Cir. 2013). An agency’s decision is arbitrary and capricious if
the agency has:
relied on factors which Congress had not intended it to consider, entirely
failed to consider an important aspect of the problem, offered an
explanation for its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to a difference
in view or the product of agency expertise.
Id. (quoting Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658
(2007)).
“Judicial review of NEPA compliance is limited in scope.” Id. (quoting Cmtys.,
Inc. v. Busey, 956 F.2d 619, 623 (6th Cir. 1992)). Judicial review “ensure[s] that the
agency has adequately considered and disclosed the environmental impacts of its actions
and that its decision is not arbitrary or capricious.” Id. (quoting Balt. Gas & Elec. Co.
v. Nat’l Res. Def. Council, 462 U.S. 87, 97–98 (1983)). “Because NEPA is a procedural
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 10
and not a results-driven statute, even agency action with adverse environmental effects
can be NEPA-compliant so long as the agency has considered those effects and
determined that competing policy values outweigh those costs.” Ohio Valley Envtl.
Coal. v. Aracoma Coal Co., 556 F.3d 177, 191 (4th Cir. 2009) (citing Robertson v.
Methow Valley Citizens Council, 490 U.S. 332, 350 (1989)).
On appeal, the plaintiffs have maintained two challenges to the Corps’s decision
to issue the § 404 permit. First, the plaintiffs argue that the Corps violated NEPA by
failing to consider the public health effects of the overall mining activity in conducting
its NEPA review of the environmental effects of granting the § 404 permit, especially
having considered overall economic benefits of the mining operation. Second, the
plaintiffs argue that the Corps violated the Clean Water Act’s mitigation requirements
by using a flawed analysis to assess the functional effects of the mitigation plan and by
failing to substantiate one figure used in the calculation of the mitigation assessment
protocol.
First, the Corps did not violate NEPA by deciding not to consider the evidence
linking surface coal mining in general to public health problems. In discussing the
public health consequences of granting the § 404 permit, the Corps properly focused on
the possible public health effects of discharges on the local water supply, as well as those
effects caused by air pollution created by the machines that would be conducting permit-
relevant site preparation and operations. The Corps reasonably limited its scope of
review to the effects proximately caused by the specific activities that were authorized
by the permit. Most importantly, the Corps complied with the relevant regulations
interpreting and implementing NEPA’s requirements.
The Corps did not entirely ignore the public health effects of granting the permit,
but rather reasonably limited its scope of analysis only to those human health effects
closely related to the discharge of fill or dredged material into jurisdictional stream beds.
For example, the Corps assessed the potential impact of the permit activities on the local
water supply, and it concluded, in large part because the nearest municipal water supply
intake was a significant distance from the operation, that “it is not anticipated that this
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 11
proposed project would affect the water supply.” Also, the Corps considered the effects
of the permit activities on air pollution, concluding that the dust and emissions “will not
exceed de minimis levels.” This analysis of health effects, albeit not as comprehensive
and wide in scope as that demanded by the plaintiffs, was reasonable given the more
limited nature of the threshold inquiry of whether the Corps’s action significantly affects
the human environment.
The Corps acted without abusing its discretion when it determined that the scope
of its NEPA analysis should be limited to the local, proximate effects of the dredging
and filling activities that were specifically authorized by the permit. The Council on
Environmental Quality’s regulations grant the Corps some discretion in performing the
analysis of whether a federal action is significant enough to warrant an environmental
impact statement. With respect to potential health effects, the Council’s regulations
suggest only that public health effects “should be considered,” 40 C.F.R. § 1508.27(b)
(emphasis added). And when a set of effects is considered, the regulations allow
substantial flexibility in delimiting which subsets of effects are relevant. In particular,
the context of the federal agency’s action should be considered in determining the scope
of its relevant effects: “Significance varies with the setting of the proposed action. For
instance, in the case of a site-specific action, significance would usually depend upon
the effects in the locale rather than in the world as a whole.” Id. § 1508.27(a).
The Corps was not required, as the plaintiffs contend, to expand the scope of its
review beyond the effects of the filling and dredging activity to the effects of the entire
surface mining operation as a whole. The Corps regulations, the validity of which is not
in dispute, govern the Corps’s obligations under NEPA. Those regulations state that any
NEPA document related to a permit should only “address the impacts of the specific
activity requiring a [Corps] permit and those portions of the entire project over which
the district engineer has sufficient control and responsibility to warrant Federal review.”
33 C.F.R. pt. 325, app. B § 7(b)(1). Here, the overall mining project is not the specific
activity authorized by the § 404 permit, nor does the Corps’s district engineer maintain
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 12
sufficient control and responsibility over other portions of the entire project to warrant
federal review.
The specific activity that is the subject of the permit is only the dredging and
filling of jurisdictional waters. The Clean Water Act, as only one aspect of a more
comprehensive multi-permit regulatory scheme, requires the Corps to provide a § 404
permit only for the “discharge of dredged or fill material into the navigable waters.” 33
U.S.C. § 1344(a). The statement accompanying the Corps’s NEPA implementing
regulations confirms the limited purpose of § 404, stating that “[t]he Corps authorizes
the discharge of dredged or fill material in 404 permits” and that, “[t]herefore, the
activity the Corps studies in its NEPA document is the discharge of dredged or fill
material.” Environmental Quality; Procedures for Implementing the National
Environmental Policy Act (NEPA), 53 Fed. Reg. 3120, 3121 (Feb. 3, 1988) (“Corps
Procedures”).2
The district court correctly determined that, given the Corps’s relatively minor
role in the congressionally designed scheme for regulating surface mining, the Corps did
not have sufficient control and responsibility over other aspects of the surface mining
operation to warrant expanding the scope of its NEPA review. See Kentuckians,
2013 WL 4516774, at *10. It is clear that Congress intended SMCRA to create a
centralized regulatory program for surface coal mining, and that the Corps’s role in the
overlapping permitting scheme is secondary, affecting only a small albeit necessary part
of the particular surface coal mining operation.
In any case, because the question of the proper scope of analysis in the
environmental assessment entails interpretation of the Corps’s own regulations, the
2
The plaintiffs argue that the Corps authorized actual surface coal mining, beyond the mere filling
of stream beds, because Leeco’s permit states that the Corps “authoriz[es] your company’s proposal to
construct . . . various ‘mine throughs.’” This argument misconstrues the specialized language used in the
permit and disregards the context in which the permit is granted. As the Corps explained at oral argument,
“mining through” is the process of scraping away the surface of an ephemeral stream bed, extracting the
coal seams that are then exposed, and refilling the stream bed. The Corps did not authorize mining per se,
but only the discharges into streams that are a necessary part of a “mine through.” That is, the Corps
authorized “mining through” because of the activity’s impacts on stream beds and not because of its
purpose to extract coal. Furthermore, the Corps does not even have the authority to authorize surface coal
mining, and the plaintiffs do not argue that the permit exceeded the scope of § 404.
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 13
Corps is entitled to substantial deference with regard to its determination that the district
engineer lacked “sufficient control and responsibility” to warrant review of other
portions of the entire mining project.3 In its decision, the Corps reasoned:
The NEPA Scope of Analysis in this case would include jurisdictional
“waters of the U.S.,” and the immediate adjacent riparian corridor that
would be filled directly or indirectly by the construction of the
Hollowfill, construction of the sediment pond, and the mining through of
streams. A broader scope is not appropriate because the [Clean Water
Act] does not provide the Corps legal authority to regulate surface coal
mining beyond the limits of the “waters of the U.S.” Rather, overall
surface coal mining operations are permitted by and regulated under
SMCRA, administered by the Kentucky [Division] of Mine Permits.
This reasoning properly weighed two of the factors that the Corps’s regulations use to
determine whether there is sufficient control and responsibility to warrant the Corps to
expand its scope of analysis to other portions of the state-authorized mining activity:
“[t]he extent to which the entire project will be within Corps jurisdiction” and “[t]he
extent of cumulative Federal control and responsibility.” 33 C.F.R. Pt. 325, App. B
§ (7)(b)(2)(iii)–(iv).
3
This court must defer to the Corps’s interpretations of its own NEPA implementing regulations.
See Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177, 193 (4th Cir. 2009). Courts generally
“defer to the agency’s interpretation [of its own regulation] unless it is plainly erroneous or inconsistent
with the regulation.” Summit Petroleum Corp. v. EPA, 690 F.3d 733, 740 (6th Cir. 2012) (quoting Auer
v. Robbins, 519 U.S. 452, 461 (1997)) (internal quotation marks omitted). Plaintiffs are correct to point
out that Auer deference applies only to disputes over the meaning of an agency’s own regulation.
However, the dispute in this case concerns the interpretation of the Corps’s NEPA implementing
regulations, in particular how to interpret the terms “specific activity requiring a . . . permit” and “sufficient
control and responsibility” in the context of assessing whether NEPA requires an environmental impact
statement for the decision to grant a § 404 permit.
It is true that Congress gave the authority to interpret NEPA in a general sense to the Council on
Environmental Quality, Andrus v. Sierra Club, 442 U.S. 347, 358 (1979), which Congress instituted to
“consult[] with” agencies to “insure that presently unquantified environmental amenities and values may
be given appropriate consideration in decisionmaking along with economic and technical considerations.”
42 U.S.C. § 4332(2)(B). Pursuant to this mandate, the Council has instituted a number of regulations to
help guide federal agencies in executing their NEPA obligations. However, the Council has also granted
agencies significant flexibility in interpreting NEPA’s requirements for purposes of conducting their own
independent NEPA reviews. See, e.g., 40 C.F.R. § 1507.1. Indeed, the Council’s regulations require
federal agencies to, “as necessary, adopt procedures to supplement” the Council’s regulations, in particular
procedures related to the identification of which actions require an environmental impact statement and
which do not, and that such implementing regulations should be adopted after opportunity for public
review and review by the Council. See id. § 1507.3.
Under instruction from the Council, the Corps has instituted its own regulations to guide its
preparation of NEPA-compliant environmental assessments and environmental impact statements. See
33 C.F.R. § 230.1; id. pt. 325, app. B. And because the Corps promulgated the specific regulations that
govern the question of how great the scope of the Corps’s NEPA review is, see 40 C.F.R. pt. 1507, the
Corps is entitled to deference with respect to the interpretation of those provisions.
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 14
The Corps decision in this regard is consistent with the congressional design of
both NEPA and the regulatory scheme at issue. Regarding surface coal mining
regulation, Congress intended that primary regulatory power be placed in only one
agency, in this case the Kentucky Department for Natural Resources. There are many
considerations that must be balanced before authorizing a massive and environmentally
significant operation, and Congress has determined that such a careful and sensitive
decision is best made primarily by one decisionmaker. There are good reasons that
Congress would not have designed a regulatory system in which each regulatory actor
involved in a large operation, even in a comparatively minor way, is required to consider
all of the effects of the overall project.
The restriction of the Corps’s scope of analysis is consistent with the
congressional policy to give to state governments the primary responsibility to regulate
overall surface mining operations. In enacting SMCRA, Congress declared that “the
primary governmental responsibility for developing, authorizing, issuing, and enforcing
regulations for surface mining and reclamation operations . . . should rest with the
States.” 30 U.S.C. § 1201(f); see also Horizon Coal Corp. v. United States, 43 F.3d 234,
240 (6th Cir. 1994) (quoting Save Our Cumberland Mountains, Inc. v. Lujan, 963 F.2d
1541, 1544 (D.C. Cir. 1992)). The Corps, when it adopted its NEPA-implementing
regulations, stated that “in order to prevent the unwarranted situation where ‘the Federal
tail wags the non-Federal dog’, the scope of analysis would be confined to the
environmental effects of only the activity requiring a Corps permit.” Corps Procedures,
53 Fed. Reg. at 3122. To thwart Kentucky’s decision to permit surface mining by
permitting the Corps to consider effects of the entire mining operation in its
decisionmaking process would violate Congress’s intent to place primary responsibility
for surface mining with state regulators.4
4
The plaintiffs’ reliance on 42 U.S.C. § 4332(2)(D) for the assertion that “[t]he Corps cannot rely
on Kentucky’s overlapping SMCRA jurisdiction to refuse to consider the full environmental impact of a
mine it regulates” is misplaced. See Appellants’ Reply Br. at 7. That statute does not involve the kind of
situation presented in this case. That statute only involves a situation in which there is “a major Federal
action funded under a program of grants to States” and in which the environmental impact statement is
“prepared by a State agency or official.” 42 U.S.C. § 4332(2)(D) (emphasis added). That provision
merely “allows a state agency to prepare an [environmental impact statement] for a federal agency if
certain conditions are met.” Macht v. Skinner, 916 F.2d 13, 18 (D.C. Cir. 1990). When NEPA states that
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 15
And although “NEPA is a procedural and not a results-driven statute,” Aracoma
Coal, 556 F.3d at 191, adherence to its “procedures [is] almost certain to affect the
agency's substantive decision,” Robertson v. Methow Valley Citizens Council, 490 U.S.
332, 350 (1989). See also 40 C.F.R. § 1500.1. It stands to reason that, in the context of
a complete regulatory scheme, agencies may reasonably limit their NEPA review to only
those effects proximately caused by the actions over which they have regulatory
responsibility. See Dep’t of Transp. v. Pub. Citizen, 541 U.S. 752, 767 (2004) (citing
Metro. Edison Co. v. People Against Nuclear Energy, 460 U.S. 766, 774 & n.7 (1983)).
Moreover, the “rule of reason” recognized by the Supreme Court in Public Citizen
dictates that agencies make NEPA determinations “based on the usefulness of any new
potential information to the decisionmaking process.” Id. These principles, which
support a reasonable delimitation of the proper NEPA scope of review, are effectuated
in practice by the Corps’s analysis of whether it has “sufficient control and
responsibility” over the whole project. See Aracoma Coal, 556 F.3d at 196–97; White
Tanks Concerned Citizens, Inc. v. Strock, 563 F.3d 1033, 1040 (9th Cir. 2009).
The most closely analogous circuit court case, Ohio Valley Environmental
Coalition v. Aracoma Coal Co., 556 F.3d 177 (4th Cir. 2009), strongly and persuasively
supports the Corps’s decision to limit its scope of analysis. Like the instant case,
Aracoma Coal involved the Corps’s NEPA obligations during the consideration of a
§ 404 permit application related to surface mining operations in a state in which the state
manages an approved SMCRA regulatory program. See id. at 195. Recognizing that
“[t]he Corps’ jurisdiction under [Clean Water Act] § 404 is limited to the narrow issue
of the filling of jurisdictional waters,” id., and that “[u]nder SMCRA, the state of West
Virginia has ‘exclusive jurisdiction over the regulation of surface coal mining and
reclamation operations,’” id. (quoting 30 U.S.C. § 1253), the Fourth Circuit held that the
Corps did not act arbitrarily and capriciously in determining that its scope of review in
“[t]he procedures in [§ 4332(2)(D)] shall not relieve the Federal official of his responsibilities for the
scope, objectivity, and content of the entire statement,” it is referring to the federal official who has
delegated NEPA responsibilities to the state-level grantee. See, e.g., Heeren v. City of Jamestown, Ky.,
39 F.3d 628, 629 (6th Cir. 1994). Here, there is no grant program and the Corps is not delegating its
NEPA responsibility.
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issuing a finding of no significant impact did not “extend[] beyond the Corps’ limited
jurisdiction to include environmental effects on upland areas,” id. at 197.5 The court
reasoned that “under the plain language of the [Corps’ NEPA implementing] regulation,
activity beyond the filling of jurisdictional waters is not within the Corps’ ‘control and
responsibility’ because upland environmental effects are ‘not essentially a product of
Corps action.” Id. (quoting 33 C.F.R. pt. 325, app. B § 7(b)(2)). The plaintiffs in this
case argue for an even wider scope of review than that rejected in Aracoma Coal. The
Fourth Circuit rejected the plaintiffs’ argument that “the Corps’ § 404 permit is a permit
for the entire valley fill, down to the last shovelful of dirt at the edge of the valley,” id.
at 194, while here the plaintiffs argue that the entire mining operation is within the
proper scope of the Corps’s NEPA review. The reasoning of Aracoma Coal precludes
such a vast extension of NEPA review.
The plaintiffs incorrectly argue that “[i]f the Corps does not investigate and
address these serious health concerns, no agency will.” Appellants’ Reply Br. at 11.
First, the Corps actually did consider public health in its substantive review of the § 404
permit. The EPA, which signed off on the permit and with which the Corps coordinated
in reviewing the § 404 permit application’s compliance with the Clean Water Act and
its associated regulations, specifically addressed concerns that “the proposed project may
have significant health impacts on the surrounding communities, all of which are low-
income communities.”
More importantly, Kentucky’s Division of Mine Permits, in complying with the
federal standards contained in SMCRA and through is power to impose stricter standards
in Kentucky, has the means to address public health concerns associated with surface
coal mining. SMCRA is designed in part to “to protect society and the environment
from the adverse effects of surface coal mining operations,” 30 U.S.C. § 1202(a),
through “the establishment of appropriate standards to minimize damage to the
5
The reference to “upland areas” was to parts of the valley outside of the stream beds that would
be filled. See id. at 186–87. The state SMCRA regulator had authorized the use of “valley fills,” while
the Corps authorized only the filling of stream beds, which constituted only a portion of the valley to be
filled.
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environment and to productivity of the soil and to protect the health and safety of the
public,” id. § 1201(d). Kentucky’s surface mining permitting program, as required by
the comprehensive minimum federal standards, includes extensive regulations designed
to minimize the harmful impacts of surface mining activities. This includes
requirements to “minimize disturbance of the hydrologic balance in both the permit area
and adjacent areas,” 405 Ky. Admin. Regs. 16:060 § 1(1), to ensure that “[d]ischarges
of water from areas disturbed by surface mining activities shall at all times be in
compliance with all applicable federal and state water quality standards,” id.
16:070 § 1(1)(g), to place excess spoil in designated areas designed to “[m]inimize the
adverse effects of leachate and surface water run-off from the fill on surface and ground
water,” id. 16:130 § 1(1)(a), and to “minimize disturbances and adverse impacts on fish,
wildlife, and related environmental values, and . . . achieve enhancement of those
resources where practicable,” id. 16:180 § 1(1). Generally, Kentucky’s regulatory
program maps directly onto the federal minimum requirements established by any
regulations passed pursuant to SMCRA. Ky. Rev. Stat. § 350.069. These
comprehensive regulations, promulgated by the U.S. Department of the Interior and
adopted by Kentucky’s Department for Natural Resources, are intended to “strike a
balance between protection of the environment and agricultural productivity and the
Nation’s need for coal as an essential source of energy.” 30 U.S.C. § 1202(f). To the
extent that there is scientific evidence establishing that surface mining is generally bad
for the public health, the plaintiffs should raise these concerns with those agencies in
which Congress has placed the primary responsibility of regulating surface mining,
either the federal Office of Surface Mining or the federally approved state regulators.
The plaintiffs also argue that the Corps violated its NEPA regulations by
considering the positive economic impacts of the overall mining project without
considering the public health impacts of the overall mining operation. This argument
fails to take into account that the Corps has other obligations besides its NEPA
obligations, and that the final decision document also contains independent (albeit
related) analyses required by the Clean Water Act and the Corps’s own regulations.
Even though the Corps’s regulations require a public interest review for all permit
No. 13-6153 Kentuckians for the Commw., et al. v. USACE, et al. Page 18
decisions, 33 C.F.R. § 320.4(a), and the § 404(b)(1) Guidelines require the consideration
of certain effects on the public interest, see, e.g., 40 C.F.R. § 230.10(c), these are not
NEPA obligations. It is true that for NEPA purposes “the scope of analysis used for
analyzing both impacts and alternatives should be the same scope of analysis used for
analyzing the benefits of a proposal.” 33 C.F.R. Pt. 325, App. B, § 7(b)(3); see also
Corps Procedures, 53 Fed. Reg. at 3122 (adopting rule from Sierra Club v. Siegler,
695 F.2d 957 (5th Cir. 1983)). However, the fact that the Corps used a wider scope of
review in performing its public interest analysis, as required by the § 404(b)(1)
Guidelines and its own regulations, does not mean that the Corps violated its NEPA
obligations. By using one document to serve many functions, the Corps can limit the
scope of its review in one part and expand it in another, as each regulatory task requires.
For example, the discussions of economic benefits that the plaintiffs point to are
contained within sections that discuss alternatives to granting the permit or analyze
“human use characteristics,” which are relevant to the § 404(b)(1) Guidelines and the
Corps’s public-interest review. The plaintiffs’ arguments conflate the substantive
decision whether to grant a § 404 permit with the procedural requirements under NEPA.
In determining to issue a finding of no significant impact, the Corps performed
an environmental assessment, limited in scope pursuant to the Corps’s own regulations
designed to determine whether a permit decision requires an environmental impact
statement. The content of this analysis is rational and appears to be thorough. That ends
the inquiry. There is no substantive component to NEPA review; this court may only
“insist that the agency has, in fact, adequately studied the issue and taken a hard look at
the environmental consequences of its decision.” Meister v. U.S. Dep’t of Agric.,
623 F.3d 363, 377 (6th Cir. 2010). The Corps reasonably complied with its own
regulations and did not act arbitrarily and capriciously.
With respect to the plaintiff’s second claim on appeal, namely that the mitigation
plan violates the Clean Water Act, the Corps did not act arbitrarily and capriciously in
determining that the compensatory mitigation plan proposed by Leeco in its 2011 permit
application complied with the requirements of the § 404(b)(1) Guidelines.
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First, the Corps was entitled to rely on the Eastern Kentucky Stream Assessment
Protocol (“EKSAP”), which provides for an assessment of functional stream quality in
determining whether a mitigation plan sufficiently replaces the aquatic functionality of
lost streams. According to the Corps’s decision document, the EKSAP is the product
of federal and state interagency initiative and is designed to “assess[] the relative quality
of a particular headwater stream ecosystem based on observations of regional indicator
data concerning its physical[,] . . . chemical[,] . . . and biological . . . characteristics and
provides an estimate of the integrity of the system as a whole.” The use of this type of
metric complies with regulations and is consistent with relatively recent changes in
mitigation plan policy. In 2008, the Corps and the EPA passed regulations confirming
the validity of—indeed, a preference for—functional metrics designed “to replace lost
aquatic resource functions.” See 33 C.F.R. § 332.3(f)(1); Compensatory Mitigation for
Losses of Aquatic Resources, 73 Fed. Reg. 19,594, 19,601 (Apr. 10, 2008).6 The fact
that EKSAP uses structural proxies rather than direct measurements of aquatic function
is consistent with the new regulations, since the changes in structural conditions
rationally relate to improvements in functionality. See 33 C.F.R. § 332.3(f)(1). This
particular plan employs the “natural channel design” strategy of mitigation, in which
habitat structures in the stream will “give support to more species diversity” and a larger
riparian buffer zone of vegetation along the stream will “ensure a more productive
stream by means of shading and as a food source.” And the use of structural proxies that
rationally predict aquatic functionality based on objective, measurable structural
qualities of the stream satisfies the regulations’ command that “[p]erformance standards
must be based on attributes that are objective and verifiable.” Id. § 332.5(b). In the end,
given the various interrelated factors and possible assessment metrics that could be used
in a mitigation plan, the choice of mitigation performance standards requires the exercise
6
We need not resolve the parties’ dispute about whether these 2008 regulations apply to the Leeco
permit application. The dispute arose because the original 2007 application would not be covered under
the regulations, and there were significant revisions to the application before its final form took shape in
2011. This dispute presents a question requiring the interpretation of interrelated procedural regulations.
Ultimately, however, the Corps assessed the application as though the 2008 mitigation regulations applied,
and we affirm on that assumption.
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of complex scientific judgment and deference to the Corps’s expertise is appropriate.
See Marsh v. Or. Natural Res. Council, 490 U.S. 360, 377 (1989).
Lastly, the Corps permissibly based its estimation of an eighty-percent likelihood
of success on its experience with other mitigation projects. Without any evidence that
the Corps’s ballpark figure is way off the mark, this court can defer to the expertise of
the Corps in fulfilling its requirement to “assess the likelihood for ecological success and
sustainability” in evaluating a compensatory mitigation plan. 33 C.F.R. § 332.3(a)(1).
The sources cited by the plaintiff do not persuasively demonstrate that the mitigation is
likely to be unsuccessful, since the pessimistic assessments of mitigation they cite are
from reports over ten years old, which came out before the Corps’s adoption of the
functional “watershed approach” in 2008. E.g., Compensatory Mitigation for Losses of
Aquatic Resources, 73 Fed. Reg. at 19,594. As further assurance of mitigation success,
the possibility of failure in the primary mitigation plan is prepared for in a contingency
plan that would be triggered in the circumstance that Leeco does not accomplish the
mitigation plan. Moreover, one of the conditions of the mitigation plan is that a certain
number of units of functional stream quality “would be held as a contingency against
failure of the restoration to reach the predicted EKSAP scores.”
In short, the Kentucky Division of Mine Permits, to which Congress has granted
exclusive jurisdiction over the regulation of surface mining in Kentucky, approved
Leeco’s surface mining operation. Meanwhile, the Corps of Engineers granted a
secondary permit related only to the filling of jurisdictional waters. The Corps, in light
of the entire project’s approval under the more comprehensive SMCRA, did not abuse
its discretion in limiting the scope of its NEPA review to environmental consequences
closely related to the filling of jurisdictional stream beds. Where an existing state
regulatory scheme already governs surface coal mining, NEPA does not require the
Corps to expand its review to the environmental consequences of the entire mining
operation. The Corps also did not abuse its discretion in approving the mitigation plan
provisions requiring the improvement of other local streams, since those provisions were
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rationally designed to ensure that there is not a net loss of aquatic function in the mine
location’s watershed.
The district court’s judgment is AFFIRMED.