U.S. Supreme Court Holds That Discharge of “Fill Material” Can Be Permitted by the Corps of Engineers Under Section 404 of The Clean Water Act, Even If EPA’s Effluent Restrictions Otherwise Would Apply

June 26, 2009

On June 22, 2009, the U.S. Supreme Court handed down its decision in an important Clean Water Act case, Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, upholding a discharge permit issued by the U.S. Army Corps of Engineers to Coeur Alaska, Inc., a subsidiary of Coeur d’Alene Mines Corp., seeking to revitalize the historic Kensington Gold Mine near Juneau, Alaska. 577 U.S. —-, No. 07-984 (June 22, 2009), available at http://supremecourtus.gov/opinions/08pdf/07-984.pdf (last accessed June 23, 2009).  In upholding Coeur Alaska’s permit, the Court held that any discharge meeting the agencies’ definition of “fill material” should be permitted under Section 404 of the Clean Water Act, even if EPA’s effluent restriction otherwise would apply.  Gibson Dunn successfully briefed and argued the case for Coeur Alaska before the U.S. Supreme Court.

Section 404 gives the Corps authority over “fill material.”  In 2002, EPA and Corps revised their definition of fill material to include any material having the effect of replacing water with dry land or changing the bottom elevation of water–including specifically mine tailings.

The case involved Coeur Alaska’s plan to dispose of mine tailings–the rock and sand left over once the ore-bearing minerals have been extracted–in a small lake located near the mine.  After concluding that placing the tailings in the depths of the lake was the “least environmentally damaging alternative,” the Corps of Engineers issued a permit for the discharge under Section 404 of the Clean Water Act–a decision in which the Environmental Protection Agency concurred.

Environmental groups, including Southeast Alaska Conservation Council, the Sierra Club, and Lynn Canal Conservation, challenged the Corps of Engineers’ issuance of the permit under the Administrative Procedure Act, arguing that any disposal of mine tailings from the Kensington mine could be permitted only by the EPA under Section 402 of the Clean Water Act, and that the Corps’s permit violated Sections 301(a), 301(e), and 306(e) of the Act.  Coeur Alaska, Inc., Goldbelt, Inc., and the State of Alaska joined the Corps as defendants in the case.

A federal district court in Alaska upheld the permit, but a unanimous panel of the Ninth Circuit U.S. Court of Appeals vacated it.  The Ninth Circuit ruled that, even though the discharge in the case fell within the definition of “fill material,” the discharge could not be permitted under Section 404 of the Clean Water Act because it was subject to a performance standard promulgated by EPA.  The Ninth Circuit stated that the text of Sections 301 and 306 of the Act mandated this result and that, in any case, the regulatory history made EPA’s claim that its performance standard did not apply to the discharge of fill material unreasonable.

In its petition for certiorari, Coeur Alaska emphasized that the Ninth’s Circuit decision radically altered the longstanding structure of the Clean Water Act’s discharge permit programs and would cause significant harm to the economies of western states and the nation itself.  The Court granted Gibson Dunn’s petition for a writ of certiorari in June 2008.

After briefing and argument on the merits, the Supreme Court sided with Coeur Alaska and reversed the decision of the Ninth Circuit.  In a decision written by Justice Kennedy (joined by Chief Justice Roberts and Justices Thomas, Alito, and Scalia (who also wrote a short concurrence), with Justice Breyer concurring), the Court found that the Clean Water Act authorized the discharge to be permitted by the Corps under Section 404.  The Court explained that the definition of “fill material”  is the dividing line between discharges permitted by the Corps under Section 404 and discharges permitted by EPA under Section 402.  Finding that both the Clean Water Act and the regulations were ambiguous on the question of whether effluent standards apply to discharges of fill material, the Court deferred to the agencies’ interpretation of their own regulations.  The Court found reasonable the agencies’ view that EPA effluent restrictions do not apply to discharges of fill material, and held that it must defer to EPA’s determination that its performance standards did not apply to discharge permitted under Section 404.  In sum, the Court concluded that “the Corps was the appropriate agency to issue the permit and that the permit is lawful.”

In confirming that any discharge meeting the agencies’ definition of “fill material” should be permitted under Section 404 of the Clean Water Act, even if EPA’s effluent restriction otherwise would apply, the Court also confirmed that the definition of “fill material” operates as the dividing line between the Corps’ and EPA’s respective permitting jurisdictions under the Clean Water Act.  The Corps has exclusive jurisdiction over discharges of “dredged or fill material” under Section 404, and the EPA has exclusive jurisdiction over all other pollutants under Section 402.  The effect of the decision on mining companies, however, could be undone by Congress or the Obama administration.  A bill in Congress with 151 cosponsors, the Clean Water Protection Act, redefines “fill” to exclude mining waste.  The Corps or EPA could also change the rule.

Gibson, Dunn & Crutcher, who represented Coeur Alaska, Inc. in front of the Supreme Court in the case discussed above, has particular expertise in a range of  environmental matters nationwide.  To learn more about the firm’s Environmental Litigation and Mass Tort Practice, please contact the Gibson Dunn attorney with whom you work or any of the following:

Los Angeles
Patrick Dennis (213-229-7568, [email protected])
Jeffrey D. Dintzer (213-229-7872, [email protected])

Orange County
Alan N. Bick (949-451-4211, [email protected])

Washington, D.C.
Peter E. Seley (202-887-3689, [email protected])

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