Appeals court puts stay on ‘waters of the U.S.’ rule from EPA and the Corps

The U.S. Sixth Circuit Court of Appeals, finding deficiencies in the U.S. Environmental Protection Agency’s rulemaking process, on Oct. 9 put a stay on EPA’s controversial “waters of the United States” rule, which extends federal authority to small water bodies, making it more difficult to permit industrial facilities like coal mines.

One of the three judges making this decision dissented, by the way, saying the court is acting before it establishes its jurisdiction to hear this case. The Sixth Circuit covers Ohio, Michigan, Kentucky and Tennessee.

Ohio-based Murray Energy, the largest privately-held coal producer in the U.S., and the first entity to appeal the rule, immediately hailed the court’s decision. Murray Energy calls the rule a “blatantly unconstitutional effort to radically rewrite the Clean Water Act by unlawfully and unreasonably expanding the definition of ‘Waters of the United States.'”

“This is a very good decision and yet another signal that this Rule is an absolutely illegal overreach by President Obama and his Democrat supporters,” said Robert E. Murray, Murray Energy’s Chairman, President and Chief Executive Officer. “We look forward to continuing our litigation against this Rule and having the Rule completely invalidated on the merits.”

Murray Energy said this decision will likely lead other courts to overturn and invalidate the Obama Administration’s companion Stream Protection Rule, which is being worked on the the U.S. Office of Surface Mining. Murray Energy is also spearheading litigation against this rule.

Murray Energy is one of the largest employers in the U.S. coal industry, producing over 87 million tons of underground mined bituminous coal per year at operations in six states, including Utah, Illinois, Kentucky, Ohio and West Virginia.

Also filing suit against the rule were states like Ohio, Michigan and Oklahoma, with their actions rolled up into one combined case with the Murray Energy action.

Court says EPA and the Corps failed on certain aspects of their rulemaking process

Said the Oct. 9 court stay order: “Petitioners in these four actions, transferred to and consolidated in this court by the Judicial Panel on Multi-District Litigation for handling as a multi-circuit case, represent eighteen states who challenge the validity of a Final Rule adopted by respondents U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency, ‘the Clean Water Rule.’ The Clean Water Rule clarifies the definition of ‘waters of the United States,’ as used in the Clean Water Act.”

“Petitioner states contend that the definitional changes effect an expansion of respondent agencies’ regulatory jurisdiction and dramatically alter the existing balance of federal-state collaboration in restoring and maintaining the integrity of the nation’s waters. Petitioners also contend the new bright-line boundaries used to determine which tributaries and waters adjacent to navigable waters have a ‘significant nexus’ to waters protected under the Act are not consistent with the law as defined by the Supreme Court, and were adopted by a process that failed to conform to the rulemaking requirements of the Administrative Procedures Act (‘APA’).

“Although petitioners have moved the court to dismiss their own petitions for lack of subject matter jurisdiction under 33 U.S.C. § 1369(b)(1)—a matter on which briefing is pending—they also move for a stay of the Clean Water Rule pending completion of the court’s review. Respondents and numerous intervenors oppose the stay.

“Respondents contend that we have jurisdiction, but insist that petitioners have not made the requisite showing to justify a stay of the Rule that became effective August 28, 2015. For reasons that follow, we now grant the stay pending determination of our jurisdiction.

“Petitioners ask us to stay enforcement of the Clean Water Rule that went into effect on August 28, 2015. They ask us to restore the status quo as it existed before the Rule went into effect. Respondents’ position is that the status quo is best preserved by leaving the Rule alone. Considering the pervasive nationwide impact of the new Rule on state and federal regulation of the nation’s waters, and the still open question whether, under the Clean Water Act, this litigation is properly pursued in this court or in the district courts, we conclude that petitioners have acted without undue delay and that the status quo at issue is the pre-Rule regime of federal-state collaboration that has been in place for several years, following the Supreme Court’s decision in Rapanos v. United States, 547 U.S. 715 (2006).

“Meanwhile, we conclude that petitioners have demonstrated a substantial possibility of success on the merits of their claims. Petitioners first claim that the Rule’s treatment of tributaries, ‘adjacent waters,’ and waters having a ‘significant nexus’ to navigable waters is at odds with the Supreme Court’s ruling in Rapanos, where the Court vacated the Sixth Circuit’s upholding of wetlands regulation by the Army Corps of Engineers. Even assuming, for present purposes, as the parties do, that Justice Kennedy’s opinion in Rapanos represents the best instruction on the permissible parameters of ‘waters of the United States’ as used in the Clean Water Act, it is far from clear that the new Rule’s distance limitations are harmonious with the instruction.

“Moreover, the rulemaking process by which the distance limitations were adopted is facially suspect. Petitioners contend the proposed rule that was published, on which interested persons were invited to comment, did not include any proposed distance limitations in its use of terms like ‘adjacent waters and significant nexus.’ Consequently, petitioners contend, the Final Rule cannot be considered a ‘logical outgrowth’ of the rule proposed, as required to satisfy the notice-and-comment requirements of the APA. As a further consequence of this defect, petitioners contend, the record compiled by respondents is devoid of specific scientific support for the distance limitations that were included in the Final Rule. They contend the Rule is therefore not the product of reasoned decision-making and is vulnerable to attack as impermissibly ‘arbitrary or capricious’ under the APA.

“In the extant briefing, [the Corps and EPA] have not persuasively rebutted either of petitioners’ showings. Although the record compiled by respondent agencies is extensive, respondents have failed to identify anything in the record that would substantiate a finding that the public had reasonably specific notice that the distance-based limitations adopted in the Rule were among the range of alternatives being considered. Respondents maintain that the notice requirements were met by their having invited recommendations of ‘geographical limits’ and ‘distance limitations.’ Perhaps. But whether such general notice satisfies the ‘logical outgrowth’ standard requires closer scrutiny. Nor have respondents identified specific scientific support substantiating the reasonableness of the bright-line standards they ultimately chose.

“A stay allows for a more deliberate determination whether this exercise of Executive power, enabled by Congress and explicated by the Supreme Court, is proper under the dictates of federal law. A stay temporarily silences the whirlwind of confusion that springs from uncertainty about the requirements of the new Rule and whether they will survive legal testing. A stay honors the policy of cooperative federalism that informs the Clean Water Act and must attend the shared responsibility for safeguarding the nation’s waters.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.