Southeast Alaska Conservation Council, the Sierra Club and Lynn Canal Conservation (collectively SEACC) appealed the district court's grant of summary judgment for Coeur Alaska, Inc. (Coeur Alaska), alleging that the permit issued to Coeur Alaska by the United States Army Corps of Engineers (Corps) and the Record of Decision (ROD) from the United States Forest Service (USFS) violated sections 301 and 306 of the Clean Water Act (CWA).The Ninth Circuit held 1) that the discharge from froth-floatation mills is governed by sections 301 and 306 of the CWA and not section 404, and 2) that the permit violated the performance standards promulgated under the CWA. Accordingly, the Ninth Circuit reversed the district court's grant of summary judgment for Coeur Alaska and vacated both the permit issued by the Corps and the ROD issued by the USFS.
Coeur Alaska planned to open a gold mine near the Lower Slate Lake in the Tongass National Forest, which would require construction of a "froth-floatation mill" to process gold ore. In the mining process, gold ore from the mine passes through a series of crushers and grinders, then is delivered to a tank where water and chemicals are added. When air is pumped into the tank, gold attaches to the air bubbles and rises to the surface, forming a froth that is skimmed off. This process separates economically viable gold from the remaining mine tailings. To deal with the waste generated in the process, Coeur Alaska proposed to pump the mine tailings and wastewater to the bottom of Lower Slate Lake, a 23 acre subalpine fresh water lake that supports both aquatic and terrestrial plant and wildlife habitat and is a tributary of Slate Creek which drains into Berners Bay. Pumping the mine's wastewater and tailings in slurry form into the lake would ultimately raise the bottom level of the lake by fifty feet and nearly triple the surface area of the lake. Additionally, all of the fish and almost all other aquatic life would perish after being covered by debris or harmed by chemical changes to the lake caused by the slurry.
To accommodate the increased water level and surface area of the lake, Coeur Alaska proposed to build a large dam and a diversion ditch-the construction of which would entail cutting trees, building a road, and excavating and filling a wetland. Couer Alaska's plans also required diverting Slate Creek around the dam through a pipeline. Coeur Alaska sought approval from both the Corps and the USFS for the project; the USFS issued a ROD approving the plan, and the Corps issued a section 404 permit under the CWA. SEACC filed suit, alleging that the section 404 permit and ROD violated the CWA. The district court allowed Coeur Alaska, Goldbelt, Inc., and the State of Alaska to intervene.
Following the district court's grant of summary judgment for the defendants, SEACC appealed to the Ninth Circuit, which granted SEACC's motion for an injunction prohibiting any activities to prepare the lake to be used as a disposal site,and denied Coeur Alaska's request for permission to build a "Western Interceptor Ditch" to stabilize a temporary dam.On appeal, a district court's grant of summary judgment is reviewed de novo while review of agency actions is governed by the Administrative Procedure Act (APA).Under the APA, a court will set aside an agency action if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."
The Ninth Circuit first noted that several regulations of the CWA applied to Coeur Alaska's plan to operate the froth-floatation mill. The slurry to be discharged from the mill meets the definition of "fill material" because it raises the bottom elevation of the lake;therefore, section 404 of the CWA could govern, allowing the Corps to issue a permit. Conversely, a performance standard promulgated by the United States Environmental Protection Agency (EPA) pursuant to sections 301 and 306 of the CWA flatly prohibits "discharges from froth-floatation mills into waters of the United States."Relying on the plain language of the statute, the regulatory history, the agencies' past statements, and principles of regulatory interpretation, the court determined that the performance standard issued under sections 301 and 306 of the CWA controls.
The Ninth Circuit began with the plain language of the CWA, noting "[i]f the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress."Section 301(a) of the CWA prohibits the discharge of a pollutant except if the discharge is in accordance with the Act, specifically with sections 301 and 306.Under section 301(b), EPA is directed to issue technology-based effluent restrictions for point sources that apply to all point sources once issued.Additionally, under section 306, EPA must adopt performance-based standards for new sources (commonly referred to as New Source Performance Standards, or NSPS).Once EPA has adopted an NSPS, that standard applies to all new sources for which the standard was issued without exception.Under section 402 of the Act, the EPA can permit discharges of pollutants into waterways provided that such discharges are consistent with the standards promulgated under sections 301 and 306. In addition, under section 404 of the Act, the Corps can issue permits for discharges of "fill material."
Relying on Congress' use of the word "and" in section 301(a) to link section 301 and section 306, the court determined that Congress meant for the effluent limitations and NSPS to apply to all applicable sources, even if discharges seemingly qualify for a permit under section 404.Additionally, the court noted that section 301(e) states that it applies to all discharges.Finally, the court pointed out that section 306(e) prohibits all discharges not consistent with the NSPS.Thus, the court determined that "[n]either section 301 nor section 306 contains an exception for discharges that would otherwise qualify for regulation under section 404. Rather, section 301 and section 306 are 'absolute prohibitions' with no exceptions."Thus, the plain language indicated that section 301 and section 306 govern, not section 404.
The court rejected the defendants' argument that section 301 and section 306 do not apply to section 404 permits because section 404 does not clearly require compliance with those sections, whereas section 402 does. Under the defendants' reasoning, section 404 has an implied exception when a discharge otherwise qualifies for fill material. The court noted that implied exceptions are "generally disfavored" and are only used when there will be an absurd result or another compelling reason for the implied exception.Thus, the Ninth Circuit refused to imply an exception within section 404 because the defendants had not presented a compelling reason to infer an implied exception, and because the implied exception advocated by the defendants would broaden section 404 such that it would swallow the rules created by sections 301, 306, and 402 and render section 301 and section 306 meaningless. Instead, the court reconciled the seemingly contradictory sections: when the EPA has issued an NSPS under section 306 or an effluent limitation under section 301, a discharge must comply with section 402 rather than section 404 . Lastly, the court noted that while section 404 contains exceptions to other parts of the CWA, it does not contain exceptions for section 301 or section 306. Following the principle of statutory construction that "[w]here Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied,"the Ninth Circuit determined that Congress did not intend to include an exception within section 404.
The court also discussed the regulatory history to further support its determination that section 404 did not apply. The Ninth Circuit stated that courts "consider contemporaneous explanations of regulations . . . to determine an agency's intent,"and that courts "will not defer to an agency's interpretation of a regulation that contradicts the agency's intent at the time it promulgated the regulation."When the Corps and the EPA issued the current definition of fill material, the agencies determined that "wastes subject to performance standards and effluent limitations would not be considered 'fill material.'"Thus, the Corps's position in the present case contradicted its interpretation at the time the agency issued the regulation. Furthermore, the court determined that the EPA intended for the effluent limitation and the zero-discharge performance standard promulgated for gold mines to apply, knowing that the slurry from gold mining could qualify as "fill material" under section 404. The court made this determination based on the fact that the zero-discharge standard applies to any discharge and that the few exceptions included in the regulation do not include section 404.
The court also looked to the history of the definition of "fill material." The Corps and EPA initially defined "fill material" as "any pollutant used to create fill in the traditional sense of replacing an aquatic area with dry land or of changing the bottom elevation of a water body for any purpose."The Corps later changed its definition to "any pollutant discharged into the water primarily to dispose of waste."Acknowledging the potential overlap, the Corps stated that there were materials "which technically fit within our definition of 'fill material' but which were intended to be regulated under [section 402]."The EPA therefore continued to regulate material that could be considered "fill material" under section 402 and continued to issue effluent limitations and NSPS for such wastes. Furthermore, the agencies entered into a Memorandum of Agreement, allowing the EPA to regulate discharges from mines that could qualify as "fill material."More recently, the agencies issued joint definitions for "fill material" and "discharge of fill material."In promulgating the new definitions, the agencies clearly indicated they would maintain the practice of allowing the EPA to regulate discharges of materials that had an effluent limitation or performance standard even if the material qualified under the new definitions. For such wastes, section 402, not section 404, applies.
The Ninth Circuit rejected the defendants' and district court's reliance on a single sentence in the preamble to the new rule, which stated that "mining-related material that has the effect of fill when discharged will be regulated as 'fill material.'"The court noted the agencies' statement that the new definition would not change their prior practice and clearly stated that "if EPA has previously determined that certain materials are subject to an [effluent limitation guideline] under specific circumstances, then that determination remains valid."Furthermore, the Ninth Circuit observed that the Corps had applied this approach to Coeur Alaska, declining to exercise jurisdiction on the proposed mining project multiple times in the recent past.
In addition to the plain language, regulatory history, and history of application of agency practice to the present case, the court also applied principles of regulatory interpretation to support its determination that section 301 and section 306 govern. The court stated that "[i]t is a basic principle of regulatory interpretation that a regulation dealing with a 'narrow, precise, and specific subject is not submerged' by a later enacted regulation 'covering a more generalized spectrum.'"Thus, because the effluent limitation and NSPS are more detailed and specifically deal with discharges from froth-floatation mills, those regulations govern, not section 404's more general fill rule.
The Ninth Circuit also addressed the permit the Corps issued to Goldbelt, Inc., to build a marine terminal facility. The court determined that because the proposed facility was entirely dependent on the construction and operation of Coeur Alaska's mine, and Coeur Alaska's permit was invalid, Goldbelt, Inc.'s permit and ROD should accordingly be vacated.
In conclusion, the Ninth Circuit held that the Corps violated the CWA when it issued Coeur Alaska a section 404 permit to discharge mining wastewater from its froth-floatation mill. As demonstrated by the plain language of the CWA, the regulatory history, and principles of statutory interpretation, EPA's effluent limitation and NSPS applied to Coeur Alaska's activities. Accordingly, the Ninth Circuit reversed the district court's grant of summary judgment for Coeur Alaska, vacated the permits issued by the Corps and the RODs issued by USFS, and remanded the case to the district court.
 SEACC III, 486 F.3d 638, 652 (9th Cir. 2007)(quoting U.S. Army Corps of Engineers and Environmental Protection Agency's Response to Comments on the April 20, 2000 Proposed Rule Revising the Clean Water Act Regulatory Definitions of "Fill Material" and "Discharge of Fill Material" 12 (May 3, 2002)).