Clean Water Act, Section 404 Applicants: May the Odds Be Ever in Your Favor

By Bailey, Jason | American University Business Law Review, January 3, 2014 | Go to article overview

Clean Water Act, Section 404 Applicants: May the Odds Be Ever in Your Favor


Bailey, Jason, American University Business Law Review


"In the business world, the rearview mirror is always clearer than the windshield."

- Warren Buffett

Introduction

If Washington, D.C. needed to build a new bridge across the Potomac River when a current one becomes outdated, then it would need to obtain a Clean Water Act ("CWA"), section 404 permit.1 If Honolulu International Airport needed to extend its runways into Mamaia Bay to accommodate larger planes, then it would also need to obtain a section 404 permit.2 If the United States government follows through with the Keystone XL pipeline and builds it in areas where water or wetlands exist, then it, too, would require a section 404 permit.3 What would have been a routine task a few years ago now involves abundant uncertainty at the behest of the Environmental Protection Agency.

Business activities such as development, water resource projects, infrastructure expansion, and mining ventures require a CWA, section 404 permit before discharging dredged or fill material into U.S. waters.4 Although the permit is issued by the U.S. Army Corps of Engineers ("Army Corps"), the EPA has veto power over parts of the application.5 For the first time, in Mingo Logan Coal Co. v. EPA ("Mingo Logan"), federal courts examined whether the EPA could use its section 404(c) power to retrospectively withdraw disposal site specifications after a permit has been issued by the Army Corps.6

The U.S. Court of Appeals for the District of Columbia held in Mingo Logan that the text of section 404(c) does not put a time limit on the EPA Administrator's authority to withdraw a permit's specification, but instead, empowers him to "prohibit, restrict or withdraw the specification 'whenever .. . ,"7 In March 2014, the Supreme Court chose not to hear the case and denied Mingo Logan Coal Co.'s petition for writ of certiorari.8 This case of first impression, decided forty-one years after Congress passed the CWA, will have a destructive effect on industries that rely on a CWA, section 404 permit if the EPA is able to revoke permits whenever it chooses, including years after issuance.9 Even avid supports of the federal regulatory regime may be skeptical about the uncertainty of the EPA's power and how it will loom over businesses and their investors.10

This Comment argues that the court of appeals' recent decision in Mingo Logan will have an extremely toxic effect on industries across the country, and Congress is responsible for remedying the situation before it spirals out of control. Part II discusses the background and evolution of the pertinent section of the CWA and why it has been controversial. It gives a detailed factual and procedural history of the recent cases that brought this issue to light. Part III then analyzes the plain meaning of the statute at issue and its legislative history to determine whether the Court of Appeals' decision deviates from the legislation's original intent and how it, nevertheless, leaves industries in a position of insecurity and instability. Part IV sets forth recommendations to Congress and to courts that will inevitably decide similar cases in the future. Finally, this Comment concludes that the U.S. Court of Appeals' recent unprecedented ruling will have a destructive effect on a vast array of industries and that the courts and Congress should take action to provide additional guidance as to how and when the EPA can invoke its section 404(c) veto power.

I. The Origin and Evolution of the EPA's Section 404(c) Power

This Section supplies pertinent background information on CWA, section 404, including its original purpose. Specifically, it provides an indepth discussion of the EPA's veto power11 as set forth by section 404(c) of the CWA. After discussing past instances when the EPA used its power and the subsequent court battles, it addresses the recent rulings in Mingo Logan and why this case of first impression has the potential to inflict unnecessary risk and confusion on the business community. …

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