Sierra Club v. U.S. Army Corps of Engineers , 909 F.3d 635 ( 2018 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 18-1173
SIERRA CLUB; WEST VIRGINIA RIVERS COALITION; INDIAN CREEK
WATERSHED ASSOCIATION; APPALACHIAN VOICES; CHESAPEAKE
CLIMATE ACTION NETWORK,
Petitioners,
v.
UNITED STATES ARMY CORPS OF ENGINEERS; MARK T. ESPER, in his
official capacity as Secretary of the U.S. Army; TODD T. SEMONITE, in his
official capacity as U.S. Army Chief of Engineers and Commanding General of the
U.S. Army Corps of Engineers; PHILIP M. SECRIST, in his official capacity as
District Commander of the U.S. Army Corps of Engineers, Huntington District;
MICHAEL E. HATTEN, in his official capacity as Chief, Regulatory Branch, U.S.
Army Corps of Engineers, Huntington District,
Respondents,
MOUNTAIN VALLEY PIPELINE, LLC,
Intervenor.
No. 18-1757
SIERRA CLUB; WEST VIRGINIA RIVERS COALITION; INDIAN CREEK
WATERSHED ASSOCIATION; APPALACHIAN VOICES; CHESAPEAKE
CLIMATE ACTION NETWORK,
Petitioners,
v.
UNITED STATES ARMY CORPS OF ENGINEERS; MARK T. ESPER, in his
official capacity as Secretary of the U.S. Army; TODD T. SEMONITE, in his
official capacity as U.S. Army Chief of Engineers and Commanding General of the
U.S. Army Corps of Engineers; PHILIP M. SECRIST, in his official capacity as
District Commander of the U.S. Army Corps of Engineers, Huntington District;
MICHAEL E. HATTEN, in his official capacity as Chief, Regulatory Branch, U.S.
Army Corps of Engineers, Huntington District,
Respondents,
MOUNTAIN VALLEY PIPELINE, LLC,
Intervenor.
On Petitions for Review of Actions by the U.S. Army Corps of Engineers.
(LRH-2015-592-GBR)
Argued: September 28, 2018 Decided: November 27, 2018
Before GREGORY, Chief Judge, WYNN and THACKER, Circuit Judges.
Vacated by published opinion. Judge Wynn wrote the opinion, in which Chief Judge
Gregory and Judge Thacker joined.
ARGUED: Derek O. Teaney, APPALACHIAN MOUNTAIN ADVOCATES,
Lewisburg, West Virginia, for Petitioners. John David Gunter II, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Respondents. George Peter
Sibley, HUNTON ANDREWS KURTH, LLP, Richmond, Virginia, for Intervenor. ON
BRIEF: Evan D. Johns, APPALACHIAN MOUNTAIN ADVOCATES, INC.,
Lewisburg, West Virginia, for Petitioners. Jeffrey H. Wood, Acting Assistant Attorney
General, Eric Grant, Deputy Assistant Attorney General, Emily A. Polachek,
Environment & Natural Resources Division, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Respondents. Kevin S. Elliker, Richmond, Virginia,
Deidre G. Duncan, Brian R. Levey, HUNTON ANDREWS KURTH LLP, Washington,
D.C.; Robert McLusky, Douglas J. Crouse, JACKSON KELLY PLLC, Charleston, West
Virginia, for Intervenor.
2
WYNN, Circuit Judge:
The Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed
Association, Appalachian Voices, and Chesapeake Climate Action Network
(“Petitioners”) ask this Court to set aside Respondent U.S. Army Corps of Engineers’
(the “Corps”) December 22, 2017, verification (“Verification”) and July 3, 2018,
reinstated verification (“Reinstatement”) that construction of the Mountain Valley
Pipeline (the “Pipeline”) can proceed under the terms and conditions of Clean Water Act
Nationwide Permit 12 (“NWP 12”), rather than an individual permit. For the reasons that
follow, we hold that the Corps lacked statutory authority to substitute its own special
condition “in lieu of” a different special condition imposed by West Virginia as part of its
certification of NWP 12.
We further conclude that, absent completion of the notice-and-comment
procedures required by the Clean Water Act, a state cannot waive a special condition
previously imposed as part of its certification of a nationwide permit. Because West
Virginia did not follow its federally mandated notice-and-comment procedures in
waiving another special condition the state imposed as part of its certification of NWP
12, that condition remains a required—but, in this case, unsatisfied—condition of the
nationwide permit. Accordingly, we vacate, in their entirety, the Corps’ December 22,
2017, Verification and July 3, 2018, Reinstatement authorizing the Pipeline’s compliance
with NWP 12.
3
I.
A.
The 42-inch diameter natural gas Pipeline proposes to run 304 miles through parts
of Virginia and West Virginia, crossing the Corps’ Pittsburgh, Norfolk, and Huntington
Districts. In the Corps’ Huntington District, the Pipeline and related access roads
propose to cross 591 federal water bodies, including four major rivers (the Elk, Gauley,
Greenbrier, and Meadow), three of which are navigable-in-fact rivers regulated by
Section 10 of the Rivers and Harbors Act of 1899 (the Elk, Gauley, and Greenbrier). 33
U.S.C. § 403. Following extensive administrative proceedings, Intervenor Mountain
Valley Pipeline, LLC (“Mountain Valley”) obtained a certificate from the Federal Energy
Regulatory Commission (“FERC”) to construct and operate the Pipeline. Because
construction of the Pipeline will involve the discharge of fill material into federal waters,
the Clean Water Act requires that Mountain Valley obtain clearance from the Corps
before beginning construction. 33 U.S.C. § 1344(a).
The Corps has established, by regulation, two methods to obtain a permit to
discharge fill material into federal waters. See Crutchfield v. Cty. of Hanover, Va., 325
F.3d 211, 214 (4th Cir. 2003). First, the Corps “can issue individual permits on a case-
by-case basis,” through a “resource-intensive review” requiring “extensive site-specific
research and documentation, promulgation of public notice, opportunity for public
comment, consultation with other federal agencies, and a formal analysis justifying the
ultimate decision to issue or refuse the permit.” Id. (citing 33 C.F.R. §§ 320.4, 325.1–
325.3). Alternatively, “interested parties can try to fit their proposed activity within the
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scope of an existing general permit,” in this case NWP 12, “which acts as a standing
authorization for developers to undertake an entire category of activities deemed to create
only minimal environmental impact.” Id. (citing 33 U.S.C. § 1344(e); 33 C.F.R. §§
320.1(c), 330.1(b)–(c)). Potential permittees “must satisfy all terms and conditions of an
NWP for a valid authorization to occur.” 33 C.F.R. § 330.4(a) (emphasis added).
Mountain Valley elected to pursue the general permit approach to obtain the Corps’
clearance to discharge fill as part of Pipeline construction.
NWP 12, reissued most recently in 2017, 82 Fed. Reg. 1860 (Jan. 6, 2017),
authorizes the discharge of dredged or fill material into federal waters attributable to “the
construction, maintenance, repair, and removal of utility lines and associated facilities in
waters of the United States.” J.A. 40. NWP 12 includes several General Conditions
designed to ensure that activities falling under NWP 12 minimally impact water quality,
the aquatic environment and adjacent land, and water bodies managed by the Corps. See,
e.g., J.A. 45–46 (establishing conditions related to “adverse effects from impoundments,”
“soil erosion and sediment controls,” and “removal of temporary fills.”). General
Condition 7 provides that, “No activity may occur in the proximity of a public water
supply intake, except where the activity is for the repair or improvement of public water
supply intake structures or adjacent bank stabilization.” J.A. 46.
As with any other federal Clean Water Act permit, an applicant for a Section
1344(a) permit, like Mountain Valley, “shall provide the [Corps] a certification from the
State in which the discharge originates or will originate,” unless the state waives, either
explicitly or by inaction, its right to independently certify the project. 33 U.S.C. §
5
1341(a)(1); see also 33 C.F.R. § 325.2(b)(1)(ii). Section 1344(a)(1)’s state certification
requirement also applies to “general” permits, like NWP 12. 33 C.F.R. § 330.4(c)(1).
When, as is the case with NWP 12, a state’s certification of the general permit imposes
additional “special conditions,” the Corps must “make these special conditions regional
conditions of the NWP for activities which may result in a discharge into waters of the
United States in that state, unless [the Corps] determines that such conditions do not
comply with the provisions of 33 C.F.R. § 325.4.” Id. § 330.4(c)(2).
Pursuant to its authority under 33 U.S.C. § 1341(a)(1), West Virginia imposed,
after providing public notice and receiving public comment, several additional “Special
Conditions” as part of its certification of NWP 12. Relevant to this case are Special
Conditions A and C. Special Condition A, in relevant part, provides that:
Individual State Water Quality Certification is required for
i. Pipelines equal to, or greater than 36 inches in diameter;
ii. Pipelines crossing a Section 10 river (unless the bore is greater than
100 feet below the stream bed on the Ohio River mainstem, or
greater than 50 feet below the stream bed on the Ohio River
mainstem, or greater than 50 feet below the stream bed on all other
Section 10 waters);
J.A. 43. And Special Condition C provides that:
Individual stream crossings must be completed in a continuous, progressive
manner and within 72 hours during seasonal normal or below normal
stream flow conditions. Crossings on the Ohio River, Kanawha River, New
River, Monongahela River, and the Little Kanawha River, below the
confluence with Hughes Rivers, are exempt from the 72-hour requirements.
All stream activities shall be completed as rapidly as possible.
J.A. 43–44. Accordingly, under Special Conditions A and C, NWP 12 in West Virginia
requires certain pipelines to obtain an individual Section 401 certification (Special
6
Condition A) and limit construction of stream crossings to a 72-hour window, except for
certain rivers not at issue in the instant case (Special Condition C). NWP 12 also requires
the submission of a pre-construction notification to the Corps if any of seven criteria are
met. Given the nature and scope of the Pipeline project, it satisfies several of these
conditions. On February 25, 2016, Mountain Valley submitted an NWP 12 pre-
construction notification for the Pipeline’s 591 water crossings in the Huntington District.
B.
To comply with Special Condition A, Mountain Valley applied to the West
Virginia Department of Environmental Protection (the “State Department”) for an
individual water quality certification. On March 23, 2017, the State Department issued a
conditional grant of the certification, subject to certain special conditions and the
standard 401 conditions. Petitioner Sierra Club timely petitioned this Court for review of
the Department’s individual certification. Sierra Club v. W. Va. Dep’t of Envtl. Prot.,
No. 17-1714, ECF No. 3 (4th Cir. June 9, 2017). The State Department then sought
voluntary remand with vacatur of its verification with this Court, contending that “the
information used to issue the Section 401 Certification needs to be further evaluated and
possibly enhanced” and that it “needs to reconsider its antidegradation analysis in the
Section 401 Certification.” Id., ECF No. 42 (4th Cir. Sept. 13, 2017). On October 17,
2017, we granted the motion, vacated the Pipeline’s individual water quality certification,
and remanded to the State Department pursuant to 15 U.S.C. § 717r(d)(3). Id., ECF No.
45 (4th Cir. Oct. 17, 2017). On remand, the State Department purported to waive its
requirement that Mountain Valley obtain an Individual 401 Water Quality Certification.
7
Accordingly, Mountain Valley does not have an individual state water quality
certification under Section 401 of the Clean Water Act.
On December 22, 2017, the Corps issued the Verification concluding that the
Pipeline project meets the criteria of NWP 12, provided Mountain Valley “compl[ies]
with all terms and conditions of the enclosed material and the enclosed special
conditions.” J.A. 1–2. The Verification recognized that Mountain Valley’s expected
construction timeframe of these crossings would “take a total of 4-6 weeks to complete,
1-3 weeks for each side of the crossings.” J.A. 86. Based on consultation with FERC,
Mountain Valley plans to use a “dry open cut” method to construct the Pipeline through
four major, Corps-managed rivers (the Elk, Gauley, Greenbrier, and Meadow), which
requires installing cofferdams directing water away from a riverbed construction area to
minimize sedimentation and erosion. This “dry” open-cut method takes longer than
“wet” open-cut construction, which involves constructing a pipeline while water
continues to flow over the riverbed.
On May 22, 2018, pursuant to 15 U.S.C. § 717r(d)(1), Petitioner Sierra Club
moved this Court to stay the Verification on grounds that contrary to the 72-hour limit set
forth in Special Condition C, Mountain Valley expected to take four-to-six weeks to
construct river crossings for the Pipeline through the Elk, Gauley, Greenbrier, and
Meadow Rivers. ECF No. 40. On that same date, the Corps suspended the verification—
purportedly as to the four rivers only—in order to “evaluat[e] the extent of [Mountain
Valley’s] compliance” with Special Condition C. J.A. 254. On June 21, 2018, this Court
stayed the entire Verification. ECF No. 58.
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On May 30, 2018, the Corps sent a letter to the State Department requesting the
State Department’s “views on whether the use of the dry-cut construction method is
protective of water quality at the four crossings . . . ?” J.A. 256. The Corps further asked
if the State “Department believe[s] that requiring the use of the method is more stringent
for protecting water quality than the time requirement in Special Condition C?” Id. The
next day, the State Department sent a letter to the Corps stating that it “believes the use of
the ‘dry’ cut construction method . . . is more protective of water quality at each of the
crossings” and “provides more stringent water quality protections than the time
requirement in Special Condition C.” J.A. 258. The State Department did not notify or
solicit feedback from the public in any manner before responding to the Corps’ letter.
On July 3, 2018, the Corps sent the Reinstatement to Mountain Valley
“reinstat[ing] with modifications” its prior Verification of the Pipeline project’s
compliance with NWP 12. J.A. 229–30. Citing 33 C.F.R. § 330.5(d)(1)—which
provides that the District Engineer has discretionary authority to modify a “case specific
activity’s authorization under an NWP”—the Corps imposed several additional “special
conditions” in the Reinstatement. In particular, Special Condition 6 provides that:
Construction of each river crossing (Greenbrier River, Gauley River, Elk
River and Meadow River) will [be] conducted using the “dry” open-cut
methodology (water-filled cofferdam approach) to minimize adverse effects
to water quality, the aquatic environment, and overall environmental
impacts. This Special Condition shall apply in lieu of Special Condition C
of the West Virginia Department of Environmental Protection’s (WVDEP)
Section 401 Water Quality Certification (WQC) issued for Nationwide
Permit 12 in West Virginia.
9
J.A. 232. The Reinstatement further noted that, in its Final Environmental Impact
Statement for the Pipeline project, FERC concluded that “the proposed ‘dry’ method is
preferred [to the ‘wet’ method] and thus found this method to be ‘acceptable.’” J.A. 229.
And the Reinstatement emphasized that the State Department also determined that the use
of the “dry” cut construction “is more protective of water quality at each of the crossings
of the Gauley, Greenbrier, Elk, and Meadow Rivers” as such techniques “generally
provide better control of environmental sedimentation and more protection to the aquatic
environment” than “wet” cuts, though “dry” crossings take longer to complete. J.A. 228.
Petitioners again timely filed a petition with this Court challenging the Corps’
Reinstatement, and on July 6, 2018, Petitioners and Respondents filed a joint motion to
consolidate that petition with Petitioners’ earlier challenge to the Verification. Petitioners
raise four issues: (1) whether the Corps exceeded its authority in the Reinstatement to
impose Special Condition 6 “in lieu of” NWP 12’s Special Condition C; (2) whether the
Huntington Verification is inconsistent with Special Condition A; (3) whether the
Verification lacked sufficient analysis of General Condition 7, and therefore fails
arbitrary and capricious review; 1 and (4) whether complete vacatur or remand without
vacatur is an appropriate remedy.
1
Because we find that the Verification and Reinstatement exceeded the Corps’
statutory authority, we need not—and thus do not—address whether the Corps acted
arbitrarily and capriciously in its determination that Mountain Valley complied with
General Condition 7. To the extent that Mountain Valley again seeks to fit the Pipeline
project within the scope of NWP 12, the Corps, in the first instance, can more fulsomely
address the Pipeline’s compliance with General Condition 7 if it believes doing so would
be necessary or beneficial.
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II.
Petitioners’ challenges to the Verification and the Reinstatement are governed by
the standards for reviewing administrative actions set forth in the Administrative
Procedure Act (“APA”). Under the APA, we may “hold unlawful and set aside agency
action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of
discretion, or not otherwise in accordance with law.” 5 U.S.C. § 706(2)(A).
We first address Petitioners’ claim that the Corps exceeded its statutory and
regulatory authority by imposing Special Condition 6 “in lieu of” NWP 12’s Special
Condition C. Petitioners assert that the verification was “not . . . in accordance with
law,” 5 U.S.C. § 706(2)(A), because (1) the Corps was without authority under the Clean
Water Act to reject or replace a condition imposed as part of West Virginia’s certification
of NWP 12 and (2) even if the Corps had such statutory authority, imposing Special
Condition 6 “in lieu of” Special Condition C conflicted with the Corps’ regulations
implementing the Clean Water Act.
A.
1.
We turn first to the statutory claim. Petitioners challenge Special Condition 6 on
grounds that the Corps lacks authority under the Clean Water Act to “reject Section 401
certification conditions or remove them from a federal permit.” Pet’rs’ Br. at 30. When
a challenger asserts that an agency action conflicts with the language of a statute, we
generally apply the two-step analytical framework set forth in Chevron U.S.A., Inc. v Nat.
Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). A court first “looks to the ‘plain
11
meaning’ of the statute to determine if the regulation responds to it.” King v. Burwell,
759 F.3d 358, 367 (4th Cir. 2014), aff’d, 135 S. Ct. 2480 (2015) (quoting Chevron, 467
U.S. at 842–43). “If it does, that is the end of the inquiry and the regulation stands.” Id.If the statute is ambiguous, courts then “move[] to Chevron’s second step and defer[] to
the agency’s interpretation so long as it is based on a permissible construction of the
statute.” Id.But as the Supreme Court held in United States v. Mead Corp., 533 U.S. 218(2001), when an agency does not act with “the force of law,” the agency action is not
entitled to Chevron deference. Sierra Club v. U.S. Dep’t of the Interior, 899 F.3d 260,
286 (4th Cir. 2018) (quoting Mead, 533 U.S. at 226–27). Rather, in such circumstances,
we afford the agency “modest” Skidmore deference, to the extent the agency’s reasoning
“give[s] it power to persuade,” or, in the absence of such reasoning, no deference at all.
Sierra Club, 899 F.3d at 288. An agency interpretation carries the “force of law” when
“first, Congress has ‘delegated authority to the agency generally to make rules’ and,
second, the ‘agency interpretation claiming deference was promulgated in the exercise of
that authority.’” Id. at 286 (quoting Mead, 533 U.S. at 226–27).
When an agency’s interpretation “derives from notice-and-comment rulemaking,”
it will “almost inevitably receive Chevron deference.” Knox Creek Coal Corp. v. Sec’y
of Labor, Mine Safety & Health Admin., 811 F.3d 148, 159 (4th Cir. 2016) (citation
omitted). However, “where an agency has interpreted a statute without aid or constraint
from APA rulemaking procedures,” we must look for “‘other circumstances’. . . where
there are ‘indicia of a legislative-type determination.’” Id. (citations omitted). Agency
12
decisions with “procedural hallmarks of legislative decision-making” must include, “[a]t
minimum . . . future application to claim rulemaking power.” Sierra Club, 899 F.3d at
287. Other indicia of a legislative-type determination include the agency’s consideration
of “conflicting policies . . . [and] adversarial viewpoints” and its use of
“a relatively formal administrative procedure tending to foster the fairness and
deliberation that should underlie a pronouncement of law.” Id. at 287–88.
The Corps’ July 3, 2018, Reinstatement to Mountain Valley authorizing Special
Condition 6 “in lieu of” Special Condition C necessarily rests on the Corps’
determination that it has the statutory authority to substitute, on a case-specific basis, its
own conditions for those conditions imposed by states as part of their certification of an
NWP. Yet this determination, which the Corps nowhere expressly addresses in the
Reinstatement, neither results from notice-and-comment rulemaking nor bears any of the
“procedural hallmarks of a legislative-type determination.” Id. at 288. This legal
determination, upon which the Reinstatement relies, has no precedential value.
Indeed, the imposition of Special Condition 6 is highly specific to the four river
crossings across the Greenbrier, Gauley, Elk, and Meadow Rivers, and makes no mention
of the Condition even applying to all future crossings across those rivers. See also High
Sierra Hikers Ass’n v. Blackwell, 390 F.3d 630, 648 (9th Cir. 2004) (“The Forest Service
was not acting with the force of law in this case because it was granting permits, not
acting in a way that would have precedential value for subsequent parties.”). Nor does
the Reinstatement indicate any “adversarial or deliberative process where opposing views
were presented or considered” with respect to whether the Corps has the statutory
13
authority to substitute its own conditions in place of state-imposed conditions. Sierra
Club, 899 F.3d at 288. Instead, the Corps issued the Reinstatement after making a one-
off, independent, and case-specific determination that Mountain Valley’s “proposed
discharge of dredged and/or fill material” at the four river crossings meets the criteria for
NWP 12, provided Mountain Valley comply with all terms and conditions of the permit.
J.A. 229. Further, were Chevron even to apply, the Corps would receive no deference
because the Clean Water Act, as described further below, is not ambiguous as to whether
Special Condition C applies to NWP 12.
Because the Corps’ interpretation of the Clean Water Act with respect to Special
Condition 6 does not merit Chevron review, we next consider whether it is entitled to
Skidmore deference. Skidmore deference is appropriate depending upon “the
thoroughness evident in [the agency’s] consideration, the validity of its reasoning, its
consistency with earlier and later pronouncements, and all those factors which give it
power to persuade, if lacking power to control.” Skidmore, 323 U.S. at 140.
Here, however, the Reinstatement is completely devoid of any statutory analysis—
Special Condition 6 does not even reference the Clean Water Act. In fact, the only
explicit reference to the Act in the entire Reinstatement states the following: “Section 404
of the Clean Water Act . . . requires a Department of Army permit be obtained prior to
discharging dredged and/or fill material into waters of the United States, including
wetlands.” J.A. 228. There is no effort made to explain or justify how the statutory text
affords the Corps the authority to issue one special condition “in lieu of” a state-imposed
condition, as it did in replacing Special Condition C with Special Condition 6. See
14
Sierra Club, 899 F.3d at 288 (“[B]ecause NPS makes no effort to specifically apply
§ 460a-8 to natural gas pipelines or to evaluate contrary arguments, its interpretation
wholly lacks explanatory and persuasive power.”).
Accordingly, the Corps’ Reinstatement warrants neither Chevron nor Skidmore
deference. So, we review de novo the Corps’ construction of its authority under the
Clean Water Act to replace a state-imposed condition on a nationwide permit.
2.
In interpreting a statute, the “cardinal rule . . . is that the intent of [Congress] is to
be given effect.” NLRB v. Wheeling Elec. CO., 444 F.2d 783, 787 (4th Cir. 1971). To
ascertain congressional intent, we first “determine whether the language at issue has a
plain and unambiguous meaning.” Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997).
When considering the plain meaning of the statutory language, we also “must consider
the context in which the statutory words are used because . . . we read statutes as a
whole.” Ayres v. U.S. Dep’t of Veterans Affairs, 473 F.3d 104, 108 (4th Cir. 2006)
(citation omitted). If the statute is unambiguous, “our inquiry into Congress’ intent
is at an end, for if the language is plain and the statutory scheme is coherent and
consistent, we need not inquire further.” William v. Gonzales, 499 F.3d 329, 333 (4th
Cir. 2007) (internal quotation marks omitted). We also look to a statute’s legislative
history as further evidence of congressional intent. Elm Grove Coal Co. v. Director,
O.W.C.P., 480 F.3d 278, 293 (4th Cir. 2007). Accordingly, we start with the plain
language of Section 1341(d) of the Clean Water Act but also consider its structure,
purpose, and legislative history as additional evidence of congressional intent. See
15
Healthkeepers, Inc. v. Richmond Ambulance Auth., 642 F.3d 466, 471 (4th Cir. 2011)
(“[S]tatutory construction . . . is a holistic endeavor.”) (citing United Sav. Ass’n. v.
Timbers of Inwood Forest Assocs., 484 U.S. 365, 371 (1988)).
The plain language of Section 1341(d) of the Clean Water Act provides that any
state certification “shall become a condition on any Federal license or permit.” 33 U.S.C.
§ 1341(d) (emphasis added). This language leaves no room for interpretation. “Shall” is
an unambiguously mandatory term, meaning, as courts have uniformly held, that state
conditions must be conditions of the NWP—i.e., the Corps “may not alter or reject
conditions imposed by the states.” U.S. Dep’t of Interior v. F.E.R.C., 952 F.2d 538, 548
(D.C. Cir. 1992) (emphasis added); see also Am. Rivers, Inc. v. F.E.R.C., 129 F.3d 99,
107 (2d Cir. 1997) (recognizing the “unequivocal” and “mandatory” language of Section
1341(d)). Every Circuit to address this provision has concluded that “a federal licensing
agency lacks authority to reject [state Section 401 certification] conditions in a federal
permit.” Snoqualmie Indian Tribe v. F.E.R.C., 545 F.3d 1207, 1218 (9th Cir. 2008)
(collecting cases); see also F.E.R.C., 952 F.2d at 548 (“FERC may not alter or reject
conditions imposed by the states through section 401 certificates.” (emphasis added)).
The plain language of the statute does not authorize the Corps to replace a state condition
with a meaningfully different alternative condition, even if the Corps determines that the
alternative condition is more protective of water quality.
The Corps concedes as much, acknowledging that it is an “established principle
that an agency may not ignore a state condition and issue a permit with less stringent
conditions.” Gov’t Br. at 21. Nevertheless, the Corps contends that its imposition of
16
Special Condition 6 “in lieu of” Special Condition C does not run afoul of that rule
because the Corps does not claim discretion to ignore, reject, or replace Special
Condition C. Instead, the Corps claims that it “has incorporated Special Condition C into
NWP 12 in West Virginia, and Special Condition C continues to define the scope of
NWP 12 authorizations in other cases.” Id. at 21–22. Put differently, the Corps argues
that Section 1341(d) authorizes the Corps to reject or alter conditions in a state
certification of a Nationwide Permit on a project-specific basis if the condition meets the
“floor for water quality protection” provided for in Special Condition C. Id.The Corps’ argument fails for two reasons. First, contrary to the Corps’ position,
the Reinstatement’s explicit language applying Special Condition 6 “in lieu of” Special
Condition C indicates that it is replacing Special Condition C. See Dorzback v. Collison,
195 F.2d 69, 72 (3d Cir. 1952) (“The phrase ‘in lieu of’ means ‘instead of.’”). By
substituting Special Condition 6 for Special Condition C, the Corps effectively and
unlawfully “reject[ed]” a state-imposed condition. F.E.R.C., 952 F.2d at 548. Second,
the Corps’ argument presupposes that the Clean Water Act’s requirement regarding the
mandatory incorporation of state conditions differs in the context of nationwide permits
versus individual permits. Yet no statutory language supports this claim. On the
contrary, neither Section 1341(d), nor any other provision in Section 1341, draws any
distinction between nationwide and individual permits.
The Corps also claimed at oral argument that its position is supported by the Ninth
Circuit’s decision in Snoqualmie. Oral Argument at 39:47–40:40. In that case, the
Washington State Department of Ecology issued a water quality certification specifying
17
minimum water flows over the Snoqualmie Falls, a sacred site for the Snoqualmie Tribe.
Snoqualmie, 545 F.3d at 1211. As required by Section 401 of the Clean Water Act,
FERC made compliance with the state’s water quality certification a condition of its
license. Id. Subsequently, FERC revised its license to require higher minimum flows at
all times during May and June. Id. at 1212. The Ninth Circuit considered whether a
federal agency like FERC could “impose additional, more stringent requirements above
the standards contained in a state’s [certification].” Id. at 1218. The Court held that an
agency “may require additional license conditions that do not conflict with or weaken the
protections” in the state certification. Id. at 1219 (emphasis added). But unlike the case
here, “FERC’s increase in minimum water flows is not contrary to, nor did it weaken, the
minimum flow requirements” in the state’s water quality certification. Id. at 1219. Put
differently, FERC’s revised condition in Snoqualmie still allowed for compliance with
the state condition.
Snoqualmie meaningfully differs from the instant case because there is no dispute
that Special Condition 6 and Special Condition C cannot simultaneously be satisfied. In
fact, Special Condition 6 expressly contemplates that the “dry” method will take longer
than the 72-hour limit prescribed by Special Condition C, and therefore Mountain Valley
cannot satisfy Special Condition C while using the “dry” method. Only if Special
Condition 6 had required a river-crossing time of within 72 hours could both conditions
be satisfied. Indeed, the Reinstatement specifically states that the “dry” open-cut method,
which cannot be achieved in 72 hours, would “otherwise be inconsistent with Special
Condition C.” J.A. 245. Because the Clean Water Act mandates that Special Condition
18
C be followed under NWP 12, we conclude that the Corps’ issuance of the Reinstatement
authorizing Special Condition 6 “in lieu of” Special Condition C exceeded its statutory
authority and therefore must be vacated under 5 U.S.C. § 706(2)(C).
Congress’s express purpose in enacting the Clean Water Act—and Section 1341,
in particular—as well as that provision’s legislative history are in accord with Section
1341(d)’s plain and unambiguous language. If adopted, the Corps’ broad interpretation
of its own discretionary authority would significantly upset Congress’s carefully
prescribed allocation of authority between federal and state agencies in the Clean Water
Act. The Act explicitly recognizes “[i]t is the policy of the Congress to recognize,
preserve, and protect the primary responsibilities and rights of States to prevent, reduce,
and eliminate pollution, to plan the development and use (including restoration,
preservation, and enhancement) of land and water resources.” 33 U.S.C. § 1251(b)
(emphasis added). And the Act further states that, unless expressly provided, “nothing . .
. shall preclude or deny” the right of states to “control the discharge of dredged or fill
material in any portion of the navigable waters within the jurisdiction of such State,” and
agencies “shall comply” with these state requirements. 33 U.S.C. § 1344(t).
Legislative history further emphasizes the central role Congress intended for the
States to play under the regulatory scheme laid out in the Act. See S. Rep. 92–414, at 4
(1971) (“The States have first responsibility for enforcement of their standards.”); see
also S. Rep. 92–414, at 69 (1971) (“In addition, [Section 401] makes clear that any water
quality requirements established under State law, more stringent than those requirements
established under this Act, also shall through certification become conditions on any
19
Federal license or permit.”) (emphasis added); Jim Rossi & Thomas Hutton, Federal
Preemption and Clean Energy Floors, 91 N.C. L. Rev. 1283, 1294–95 (2013) (observing
that the Act’s authorization of state-determined water quality standards is “widely
considered a leading example of cooperative federalism”).
Of particular relevance, the Senate Report addressing the version of Section 401
ultimately enacted by Congress also specifically states that “[t]he purpose of the
certification mechanism provided in [Section 1341] is to assure that Federal licensing or
permitting agencies cannot override State water quality requirements.” S. Rep. 92–414,
at 69 (1971) (emphasis added). Yet “overriding” state water quality requirements is
precisely what the Corps seeks to do here. By substituting Special Condition 6 for Special
Condition C, the Corps has essentially directed a federal agency override of West
Virginia’s state-imposed condition as part of NWP 12. Such agency action is explicitly
barred by the Act.
The State certifications under Section 401 are “essential in the scheme to preserve
state authority to address the broad range of pollution,” S.D. Warren Co. v. Maine Bd. of
Envtl. Prot., 547 U.S. 370, 386 (2006), and states remain, “under the Clean Water Act,
the prime bulwark in the effort to abate water pollution.” Keating v. FERC, 927 F.2d
616, 622 (D.C. Cir. 1991); see also Sierra Club v. State Water Control Bd., 898 F.3d 383,
390 (4th Cir. 2018) (“Under the CWA, states have the primary role in promulgating water
quality standards.”) (citation omitted). Were the Corps’ construction of the Clean Water
Act accepted, the Corps could, in future, replace any state condition with an alternative
condition, so long as it deemed the alternative condition more environmentally
20
protective. We decline to sanction this level of discretionary authority that would allow
the Corps, with few guardrails, to replace state-imposed conditions.
Indeed, such authority would materially alter the Clean Water Act’s balance of
authority between federal agencies and the states. For example, another special condition
imposed by West Virginia as part of its certification of NWP 12—Special Condition L—
provides that “[n]o structure authorized by this permit shall impede or prevent fish
movement upstream or downstream.” J.A. 44. Under the Corps’ theory, it would be
permissible for the Corps to replace that structure prohibition with, for example, a “dry”
open cut provision so long as the Corps determined the “dry” provision was, overall,
more protective of water quality than the structure provision, even though those
conditions appear to target substantively different environmental protection goals.
Further, the state may have legitimate reasons for preferring the structure condition to the
dry-cut condition, even if the dry-cut condition is more environmentally protective. For
example, the state may be more concerned with preserving places for fish to spawn than
preventing erosion and sedimentation. 2 Put simply, the state may prefer protecting the
environment in one way to protecting it in another way. But in enacting Section
1341(a)(1), Congress did not intend to allow federal agencies to “override” such state
policy determinations. S. Rep. 92–414, at 69 (1971). That the Corps seeks to override
state policy decisions without providing public notice or receiving public comment—
2
We recognize that West Virginia has issued a draft for public comment to modify
its Special Conditions for Section 401 NWPs. However, until that process concludes and
a modification is issued, we are bound by the state’s current certification of NWP 12.
21
procedures required by Congress in Sections 1341 and 1344—renders the Corps’ claim of
unconstrained authority to set aside state certification conditions on a case-by-case basis
all the more problematic. See infra Part III.
Absent any further limiting principles, the Corps’ interpretation would radically
empower it to unilaterally set aside state certification conditions as well as undermine the
system of cooperative federalism upon which the Clean Water Act is premised. Further,
the plain language of the Clean Water Act does not authorize the Corps to replace a state
condition with a meaningfully different alternative condition, even if the Corps
reasonably determines that the alternative condition is more protective of water quality.
Accordingly, we vacate the July 3, 2018, Reinstatement as exceeding the Corps’ statutory
authority. 5 U.S.C. § 706(2)(C).
B.
The Corps’ own Clean Water Act implementing regulations reinforce our
conclusion that Section 1341(d)’s plain and unambiguous language bars the Corps from
replacing Special Condition C with Special Condition 6. The Reinstatement primarily
cites to 33 C.F.R. §§ 330.1(d) and 330.1(e)(2) as the relevant authority for the Corps’
replacement of Special Condition C, although the Reinstatement does not explain in any
depth how the Act authorizes such an interpretation or application of those provisions.
Instead, the Reinstatement merely states that the Corps “used its discretion” under these
two provisions and “determined a modification of Special Condition C is necessary to
‘further condition or restrict the applicability’ of NWP 12.” J.A. 245.
Section 330.1(d) provides:
22
District and division engineers have been delegated a discretionary
authority to suspend, modify, or revoke authorizations under an NWP. This
discretionary authority may be used by district and division engineers only
to further condition or restrict the applicability of an NWP for cases where
they have concerns for the aquatic environment under the Clean Water Act
section 404(b)(1) Guidelines or for any factor of the public interest.
Likewise, Section 330.1(e)(2) provides that the Corps district engineer, in responding to a
precertification notice
may add activity-specific conditions to ensure that the activity complies
with the terms and conditions of the NWP and that the adverse impacts on
the aquatic environment and other aspects of the public interest are
individually and cumulatively minimal.
Although not mentioned in the Reinstatement, the Corps also relies in its briefing on 33
C.F.R. § 330.4(e), which provides that the Corps “reserves the right (i.e., discretion) to
modify . . . NWP authorizations.” 33 C.F.R. § 330.4(e). Modification “means the
imposition of additional or revised terms or conditions on the authorization.” Id. The
Corps argues that Special Condition 6 constitutes a “further condition or restrict[ion]” on
NWP 12 and therefore was within its discretionary authority.
But a close reading of those regulations and the Corps’ other regulations
implementing Section 1341, as well as the plain language of that statute, do not support
the discretionary authority the Corps claims to substitute Special Condition 6 for Special
Condition C. The Corps’ regulations state that “a prospective permittee must satisfy all
terms and conditions of an NWP for a valid authorization to occur.” 33 C.F.R. § 330.4(a)
(emphasis added). This regulation therefore further supports that we must follow the
specific mandates of Section 1341(d), which govern the state certification of NWPs.
Under that “mandatory” and “unequivocal” language, the Act rejects agencies’ ability to
23
unilaterally “review and reject state-imposed conditions.” Am. Rivers, 129 F.3d at 107;
see also supra Part II.A.
The other regulations relied upon by the Corps similarly require that a project
satisfy all terms and conditions of an NWP before obtaining “authorization” to proceed
under the NWP. For instance, Section 330.2(c) provides that “[a]uthorization means that
specific activities that qualify for an NWP may proceed, provided that the terms and
conditions of the NWP are met. After determining that the activity complies with all
applicable terms and conditions, the prospective permittee may assume an authorization
under an NWP.” 33 C.F.R. § 330.2(c) (emphases added). Put differently, “[a]n activity
is authorized under an NWP only if that activity and the permittee satisfy all of the
NWP’s terms and conditions.” 33 C.F.R. § 330.1(c) (emphasis added).
Thus, a precondition for “authorization” of the Pipeline project is satisfaction of
“all of the NWP’s terms and conditions,” necessarily including state-imposed conditions
like Special Condition C under Section 1341(a). 33 C.F.R. § 330.1(c) (emphasis added).
The Corps’ regulations specifically refer to the Corps’ ability to modify “authorizations
under an NWP” (Section 330.1(d)) and “NWP authorizations” (Section 330.4(e)). So,
only a successful authorization activates the discretionary authority in Sections 330.1(d)
and 330.4(e)(1) upon which the Reinstatement purports to rely. In other words, full
compliance with each and every condition in the underlying NWP, including Special
Condition C, is a precondition for the Corps to exercise its discretionary authority to
modify the conditions.
24
Notably, the “definitions” section of the regulations defines the “discretionary
authority” conferred on the Corps as the authority of the relevant Corps official “to
modify an NWP authorization by adding conditions, to suspend an NWP authorization,
or to revoke an NWP authorization and thus require individual permit authorization.” 33
C.F.R. § 330.2(g) (emphasis added). That the regulations define the Corps’ discretionary
authority as the power to “add[] conditions” further establishes that the Corps can
exercise its discretionary authority only after all “terms and conditions” of an NWP have
been satisfied because it presupposes that the NWP’s other conditions are already met.
The plain language of the regulations does not permit the Corps to replace conditions in
the NWP, as it did by substituting Special Condition 6 “in lieu of” Special Condition C.
Instead, the Corps’ discretionary authority allows it to supplement the conditions set forth
in an NWP with additional conditions, but that discretionary authority is triggered only
upon a successful NWP authorization—i.e., satisfaction of all terms and conditions of the
NWP. Further, that authority is limited to providing additional conditions, above and
beyond those found in the NWP, not replacing them wholesale, as the Corps did here.
The Corps argues that such a reading of its regulations would render Section
330.4(e)’s language superfluous. In particular, the Corps focuses on Section 330.4(e)’s
language that “[m]odification means the imposition of additional or revised terms or
conditions on the authorization.” 33 C.F.R. § 330.4(e) (emphasis added). The Corps
argues that under this reading, the phrase “or revised” would be meaningless, because
then “all modifications to the NWP authorization would be ‘additional.’” Gov’t Br. at
25.
25
However, as above, we must consider this provision in conjunction with the Clean
Water Act and the language of the Corps’ other regulations. See Epps v. JP Morgan
Chase Bank, N.A., 675 F.3d 315, 324 (4th Cir. 2012) (emphasizing the “cardinal rule that
statutory [or regulatory] language must be read in context because a phrase gathers
meaning from the words around it”) (citation omitted) (brackets in original). Given the
regulations’ repeated indication that an “authorization” requires full compliance with the
terms and conditions of the underlying NWP, Section 330.4(e) is most naturally read to
mean that only after a project has received such an “authorization”—potentially an
authorization including “additional” “activity-specific” conditions—can the Corps
modify the existing “authorization” by adding further conditions or “revis[ing]” any
activity-specific conditions previously imposed. Under this reading, the Corps could still
“revise” existing conditions under an obtained authorization when any of the criteria
mentioned in 33 C.F.R. § 330.5 are met, including when there are “changes in
circumstances relating to the authorized activity since the NWP itself was issued.” 33
C.F.R. § 330.5(d)(1). Therefore, the Corps still retains substantial discretionary
authority, but a project must first meet the underlying conditions of the NWP, and
therefore be authorized, to trigger that authority.
The Corps further argues that this reading fails to meaningfully distinguish a
“verification” from an “authorization” because “authorization” exists “even when no
verification is required,” and the Corps’ “authority to impose ‘additional or revised terms
or conditions’ applies to the ‘authorization,’ not to the broader Nationwide Permit or the
narrower verification.” Gov’t Br. at 23. We agree that verifications and authorizations
26
meaningfully differ, and that a project can be “authorized” even if it is not “verified”
because authorization inheres, even without verification, if a project complies with the
terms and conditions of the NWP. However, that distinction does not advance the Corps’
argument.
Here, the Pipeline project never satisfied all terms and conditions of NWP 12
because, without dispute, it cannot satisfy the time limit set forth in Special Condition C.
The Pipeline project never obtained “authorization” under NWP 12, and therefore there is
no “authorization” for the Corps to “modify” through “revis[ion].” To agree with the
Corps would allow the Corps’ discretionary authority to permit noncompliance with an
NWP condition. Such a finding would reject the plain language of the Clean Water Act,
which bars the Corps from rejecting, altering, or overriding a state-imposed condition.
See supra Part II.A.
We accord no deference to an agency’s “improper interpretation of a decidedly
unambiguous regulation.” Sierra Club v. United States Forest Serv., 897 F.3d 582, 602–
03 (4th Cir. 2018). Therefore, Special Condition 6 cannot constitute a “further condition
or restrict[ion]” under 33 C.F.R. § 330.1(d) because the plain language of the regulations,
governed by the Clean Water Act, presupposes that all the conditions in the NWP have
been met. Given the unambiguous language of the Act that state conditions mandatorily
become conditions on the NWP, “[t]o defer to the [Corps] . . . would be to permit the
agency, under the guise of interpreting a regulation, to create de facto a new regulation.”
Christensen v. Harris Cty., 529 U.S. 576, 588 (2000).
27
Because the Reinstatement replaced Special Condition C with Special Condition
6, rather than merely supplementing or revising the Conditions in the underlying NWP,
the Corps exceeded its statutory authority. See supra Part II.A. That the Reinstatement
conflicts with the Corps’ regulations provides further support for our decision to vacate
the Reinstatement.
III.
We next address Petitioners’ argument that the Verification was “not . . . in
accordance with law,” 5 U.S.C. § 706(2)(A), because Special Condition A provides that
individual state water quality certifications are required for pipelines equal to or greater
than 36 inches in diameter crossing Section 10 rivers. Because the Department waived
its requirement that Mountain Valley obtain an individual 401 state water quality
certification, the parties agree that Mountain Valley does not possess an individual
certification, even though it meets the triggering criteria for Special Condition A.
As a threshold matter, this Court must determine what legal standard it will
apply—an issue neither party squarely addresses. The Corps appears to believe the
deferential standard of review set forth in Chevron applies, arguing at several points that
the Corps’ interpretation of Special Condition A is “reasonable,” and that Petitioners’
plain language interpretation “is permissible, [but] not compelled.” Gov’t Br. at 35, 38,
41; see also id. at 37 (stating that the Corps’ alternative interpretation of Special
Condition A is “available”). However, as stated above, Chevron applies only if an
agency action “carries the force of law.” Sierra Club, 899 F.3d at 286.
28
As with the Reinstatement, there is no evidence that the Corps intended to act with
the force of law in rendering its determination in the Verification that a state can waive a
condition it imposed in certifying an NWP—here, Special Condition A—without
providing public notice and soliciting public comment. The Corps’ Verification simply
states that “On 1 November 2017, [the Department] waived the requirement for Mountain
Valley to obtain an [individualized permit].” J.A. 94. The Verification includes no
explanation of the Corps’ rationale for why it concluded that the state’s waiver of its
condition without notice-and-comment was valid, let alone any indication that it viewed
that determination as binding in future cases. Sierra Club, 899 F. 3d at 288. Nor was this
determination the product of an adversarial process in which opposing views were
presented. Id. at 288. And the more extensive reasoning offered in the Corps’ briefing
constitutes “mere[] litigation positions that do not reflect an exercise of delegated
legislative authority.” Id. at 286. Accordingly, under Mead, the Verification’s legal
conclusion that it could rely on the State Department’s purported waiver of its state-
specific condition absent notice-and-comment is not entitled to Chevron deference.
Similarly, as with the Reinstatement, the Verification is not entitled to Skidmore
deference, as the Corps provided no reasoning at all as to its legal conclusion regarding
the state’s ability to waive Special Condition A without notice-and-comment under the
text of the Clean Water Act. See Skidmore, 323 U.S. at 140.
The Corps argues that it lawfully relied on the State Department’s waiver letter to
conclude Special Condition A was satisfied. Its argument primarily rests on the claim
that the “certification” in Special Condition A is reasonably understood as having the
29
same meaning as “certification” in Section 1341(a)(1). Examining several certification
requirements under the Act, the Corps and Mountain Valley maintain that Section
1341(a)(1)’s use of the term “certification” “implicitly encompasses the possibility of
waiver” and contend that the use of “certification” in Special Condition A should be read
similarly. Gov’t Br. at 37. Under this reading, a “state’s waiver may substitute for an
individual water quality certification” under Special Condition A. Id. at 39.
However, the Corps’ argument ignores one critical aspect of the statutory
language. Although Section 1341(a)(1) expressly contemplates that the state may
“waive” its right to separately certify a federal permit, it also uses both the terms
“certification” and “waive[],” thus undermining the Corps’ argument that the Corps
validly interpreted Special Condition A to be satisfied by the Department’s waiver.
Ultimately, under Section 1341(a)(1), “certification” does not encompass “waiver,” as the
certification requirements do not even apply when a state has waived its certification
authority. Further support for this reading comes from the Corps’ regulations themselves.
Section 330.4(c)(1) states that “State 401 water quality certification pursuant to section
401 of the [CWA], or waiver thereof, is required prior to the issuance or reissuance of
NWPs.” 33 C.F.R. § 330.4(c)(1) (emphasis added). Accepting the Corps’ reading of
“certification” would therefore likely render its own regulation redundant.
At any rate, even assuming West Virginia could waive Special Condition A, the
waiver was invalid because it did not result from the notice-and-comment process
contemplated by Section 1341(a)(1). That section provides that each state “shall
establish procedures for public notice in the case of all applications for certification by it
30
and, to the extent it deems appropriate, procedures for public hearings in connection with
specific applications.” 33 U.S.C. § 1341(a)(1). Put differently, federal law requires that
the states establish notice-and-comment procedures for reviewing applications for
certification of nationwide or individual permits.
Here, West Virginia followed its Section 1341(a)(1)-mandated notice-and-
comment procedures in certifying NWP 12, and therefore in imposing Special Condition
A. But the State Department did not provide a notice-and-comment opportunity in
waiving Special Condition A for the Pipeline project. Allowing West Virginia to revoke,
on a case-specific basis, conditions imposed in its certification of a nationwide permit
would impermissibly allow the state to circumvent Section 1341(a)(1)’s explicit
requirement that state permit certifications satisfy notice requirements.
Our decision in United States v. Smithfield Foods, Inc., 191 F.3d 516 (4th Cir.
1999), guides our ruling today. In that case, the Environmental Protection Agency
(“EPA”) brought an enforcement action under the Clean Water Act against Smithfield, a
pork processing and packing company. Smithfield’s two swine slaughtering and
processing plants discharged pollutants into federal waters, for which it obtained
authorization by a permit from both the EPA and the relevant state regulator. Id. at 520.
The state regulator subsequently modified Smithfield’s permit, after allowing public
review and comment, to apply a more restrictive provision further limiting the maximum
discharge amount of a particular pollutant. Afterward, the state regulator issued several
orders, without engaging in the notice-and-comment process, purportedly delaying
Smithfield’s obligation to comply with the new standard, and Smithfield failed to comply
31
with the new standards. Id. at 522–23. Due to state inaction, the EPA brought an
enforcement action against Smithfield for violating its state permit. Id. at 523. In
defense, Smithfield sought to rely on the state regulator’s subsequent orders as
modifications of the terms of the permit. Id. at 523–24. Smithfield additionally argued
that the district court erred in finding that the EPA’s suit was not barred by Section
309(g)(6)(A)(ii) of the Clean Water Act, which provides in part that “any violation of the
CWA ‘which a State has commenced and is diligently prosecuting an action under a State
law comparable to this subsection’ shall not be the subject of a federal civil enforcement
action.” Smithfield, 191 F.3d at 524–25.
Two aspects of the district court’s reasoning and judgment—and this Court’s
adoption of that reasoning and judgment—are particularly relevant to the present case.
First, the district court in Smithfield found that the state regulator’s subsequent orders did
not change the terms of the permit because they did not follow the “specific, mandatory
procedures for modification” of the permit laid out in 40 C.F.R. § 122.62. 965 F. Supp.
at 787. That regulation implements Sections 318, 402, and 405 of the Clean Water Act.
40 C.F.R. § 122.1(a)(1), (3). Like Section 401 of the Act, which is codified at Section
1341(a)(1), Section 402 of the Act, 33 U.S.C. § 1342(b)(3), explicitly provides for the
“opportunity for public hearing” before the administrator issues the relevant pollutant
discharge permit. Further, also like Section 1341(a)(1), Section 1342(b)(3) provides that
the public “receive notice of each application for a permit.”
Admittedly, Smithfield involved a different form of permit issued by the EPA and
a distinct portion of the Act. However, Section 1342(b), just like Section 1341(a), lays
32
out mandatory procedures for notice-and-comment before the issuance of a proposed
state permit. Therefore, under our reasoning in Smithfield, the Corps’ Verification cannot
recognize the state’s waiver of Special Condition A absent the state following the
“specific, mandatory procedures for modification” laid out in Section 1341(a). 965 F.
Supp. at 787.
In Smithfield, we also agreed with the district court’s ruling that Virginia’s
enforcement scheme was not sufficiently comparable to Section 309(g) of the Act to
trigger the statutory provision barring the EPA’s suit. Id. at 530 n.4. Central to the
district court’s analysis was that for a state law to be comparable to Section 309(g)—and
therefore for the EPA’s suit to be barred—the state law must contain “public notice and
participation rights that are similar to Section 309(g).” 965 F. Supp. at 793. We adopted
the district court’s reasoning and judgment that Virginia’s law was not sufficiently
comparable to Section 309(g). Smithfield, 191 F.3d at 530 n.4. As the district court
concluded, the state’s enforcement scheme lacked Section 309(g)’s “public notice and
participation safeguards . . . to ensure that interested citizens have an opportunity to
contest administrative actions.” Smithfield, 965 F. Supp. at 793; see also 33 U.S.C. §
1319(g)(4)(A) (“Before issuing an order assessing a civil penalty under this subsection
the Administrator or Secretary, as the case may be, shall provide public notice of and
reasonable opportunity to comment on the proposed issuance of such order.”).
Again, this aspect of Smithfield addressed a different provision of the Act. But our
reasoning nonetheless signals the critical importance of notice-and-comment
requirements throughout the Clean Water Act. Smithfield could not argue that an EPA
33
suit was barred precisely because the state enforcement scheme lacked the notice-and-
comment requirements required by the Act. In the instant case, this reasoning carries
even more weight, as any state modifications to its certification of NWP 12 are directly
subject to Section 1341(a)(1)’s requirement that states establish notice-and-comment
procedures.
In sum, Section 1341(a)(1) of the Clean Water Act specifically contemplates and
requires a notice-and-comment process for case-specific modifications of conditions
imposed as part of a state’s Section 401 certification of a nationwide permit. To hold
otherwise would constitute a back-door mechanism for a state to circumvent Congress’s
intended notice-and-comment process: the state could issue certification conditions after
engaging in the required notice-and-comment process but then refuse to apply those
conditions in each case. Accordingly, if West Virginia desires to waive Special
Condition A, it must do so through the proper notice-and-comment procedures laid out in
Section 1341(a)(1). Because the Corps’ Verification and Reinstatement ignored this
requirement, and impermissibly found that Mountain Valley complied with all terms and
conditions of NWP 12, we vacate them both in their entirety.
IV.
Finally, the Corps and Mountain Valley argue that this Court need not vacate the
Verification and Reinstatement in their entirety but should instead remand the case to the
Corps to further consider whether verification is appropriate. In support of this position,
the Corps and Mountain Valley rely on the D.C. Circuit’s decision in Allied-Signal, Inc.
34
v. U.S. Nuclear Reg. Comm’n, 988 F.2d 146, 150–51 (D.C. 1993), concluding that a court
may decline to vacate an insufficiently supported agency decision on equitable grounds.
This Court has never formally embraced the Allied-Signal remand-without-vacatur
approach. Nevertheless, even if we were to follow Allied-Signal, that decision would not
support the Corps’ and Mountain Valley’s argument. Allied-Signal holds that in deciding
whether to exercise its discretion to remand, rather than vacate, an unlawful agency
action, a court should consider “the seriousness of the order’s deficiencies (and thus the
extent of doubt whether the agency chose correctly),” and whether “there is at least a
serious possibility that the [agency] will be able to substantiate its decision on remand.”
Allied-Signal, 988 F.2d at 150–51. Therefore, Allied-Signal’s use of the remedy of
remand without vacatur principally is relevant in matters where agencies have
“inadequately supported rule[s].” Id. at 150. That is not the case here. Instead, we find
that the Verification and Reinstatement’s conclusions as to Special Conditions A and C
were legally deficient, as they exceeded the Corps’ statutory authority. The Supreme
Court has recognized that Section 706(2)(A) “requires federal courts to set aside federal
agency action” that is “not in accordance with law.” F.C.C. v. NextWave Pers.
Commc’ns Inc., 537 U.S. 293, 300 (2003).
Given that Special Condition C cannot be satisfied by the “dry” method, an
individual permit will likely be necessary. Therefore, there is not a “serious possibility”
that the agency will be able to “substantiate its decision on remand.” Allied-Signal, 988
F.2d at 151. Accordingly, we vacate the Verification and Reinstatement in their entirety.
VACATED
35