One of the most interesting and potentially far-reaching environmental cases for some time comes out of the United States District Court for the District of Columbia in a Memorandum Opinion filed on January 14, 2011 by U.S. District Court Judge Reggie B. Walton: National Mining Ass’n v. Lisa Jackson, (D.C.D.C. January 14, 2011) Civil Action No. 10-1220, The case is important as Judge Walton’s ruling challenges the EPA’s longstanding habit of circumventing formal rulemaking by issuing “guidance” documents which the EPA then uses to enforce statutes and rules but which, the EPA argues, are immune from challenge because they are not rules.

In this case, the Judge ruled that the the guidance documents in question were in fact final agency action and that National Mining Association could therefore proceed with its lawsuit challenging the use of “extraregulatory” guidance documents to interfere with the U.S. Army Corps of Engineers granting of Section 402 and 404 permits. As a side note, the court did not rule in favor of National Mining Association on its request for a preliminary injunction as it could not prove irreparable harm. The case will presumably proceed on the merits to a full hearing.

The guidance documents at issue were created by the EPA and had not gone through rulemaking. They include a June 11, 2009 Enhanced Coordination Process (known as the “EC Process”) and an April 1, 2010 Detailed Guidance Memorandum.

According to the plaintiff’s allegations, the EC Process was an “extraregulatory” practice to change the Section 404 permitting process by creating a new level of review by the EPA that created an “alternative permitting pathway not contemplated by the regulations.” This process was alleged to be burdensome and “wholly different than that contemplated by the Clean Water Act.” The April 2010 Guidance Memorandum was alleged by the Plaintiffs to call for water quality-based limits in Section 402 and 404 permits, including conductivity levels for pending permits in Appalachia.

Note that because the court’s ruling was issued on a motion to dismiss that the plaintiff’s allegations were assumed to be true. Therefore, it is entirely possible that the allegations of the plaintiffs as to the scope and impact of the guidance documents may be found to be meritless.

The core issue in the case was whether the EPA could continue to skip the rulemaking process and issue “guidance” documents which set out EPA policy. The court did not really attack the question head on. Perhaps because the ruling addresses a motion to dismiss, the court instead addressed the government’s claim that the guidance documents could not be challenged as they did not constitute “final agency action.” See, 5 U.S.C. § 704 of the Administrative Procedures Act. This argument has been used in the past to quash efforts to attack the EPA’s circumvention of rulemaking. One trick used by the EPA is to call a document “draft” or “interim.” There are draft and interim documents used by the EPA every day that date back to the 1970s. According to the EPA, if it is a preliminary step in a process to review or approve a permit, then the EPA must not be making a final decision. The court rejected this reasoning and found that because the EPA’s actions did affect the permits that the EPA’s guidance documents did in, in fact, constitute appealable agency action: “The federal defendants’ view of what amounts to finality is too narrow, as it is possible for an agency to take final agency actions during a permit assessment process prior to actually determining whether to grant or deny an application for a permit.” The court also concluded that “From the moment a permit is screened pursuant to the MCIR Assessment, the EPA seems to be imposing an additional step to the permitting process that is not contemplated or set forth in the 404(b)(1) guidelines. This is also true for the EC Process itself.” The court also noted that the EPA itself announced that the guidance “stands” and would continued to be used to ensure “that mining permits issued in West Virginia and other Appalachian states provide the protection required under federal law.”

The Guidance Memorandum was also found to be final, appealable agency action. The court found that: “While the Guidance Memorandum is perhaps a closer call than the MCIR Assessment and the EC Process, it too, qualifies as final agency action because, despite the representation that it is an interim document, it is nonetheless being applied in a binding manner and has been implemented in its current version even though the EPA continues to receive comments about it.”

The court subsequently addressed the other defenses offered by the EPA to the motion to dismiss, ripeness and standing. The ripeness challenge was rejected on the basis that there was no factual development that could rebut the allegation that the process chosen by the EPA was unlawful. On standing, the court concluded that “the EPA has imposed additional processes—the MCIR Assessment and the EC Process—to the permitting procedures, and that these additional processes are not contemplated or set forth in the 404(b)(1) guidelines.” The court also found that “the Guidance Memorandum is being applied in a binding manner. There is therefore support for both the plaintiff’s allegations of injury in the form of notice and comment violation and, more importantly so far as standing is concerned, in the form of ‘additional, illegal process.'”

In summary, the case is an interesting opening salvo in what is likely to be a long battle over the use of guidance documents in lieu of formal rules. It is a battle that the EPA knows it will lose in the long run. What is curious is why it has taken this long for someone to mount a solid challenge. It is also important to note that the court did not rule that guidance documents of the sort used in this case are in fact illegal. The case is at a procedural stage in which the only issue was whether the petition stated a claim. However, it is fairly clear where the court is headed on this issue.

The backstory behind this litigation is equally interesting. The U.S. Army Corps of Engineers has not tried to stop mountaintop removal operations in West Virginia despite the fact that streams and waterways are irrevocably destroyed in the process. Mountaintop mining operations are currently turning the Appalachian mountains into one huge flat-topped gravel pile in order to extract coal. Industry defends the practice by arguing that it is less expensive and dangerous than trying to mine coal it using traditional underground mining or strip mining operations. However, you will not find the coal mining industry offering “before and after” photographs of the mountains in question. After Barak Obama was elected to the Presidency, his administration promised to do what it could to make it as hard as possible. Nancy Sutley, chairwoman of the White House Council on Environmental Quality was quoted: “Within this plan [the guidance documents later challenged], the Obama administration is doing all it can under existing laws and regulations to curb the most environmentally destructive impacts of mountaintop removal coal mining.”