holding that Corps’ cumulative impacts determination was not arbitrary because it relied on findings by other agencies and directly addressed cumulative impacts in addition to relying on mitigation
How later courts described this case
- holding that Corps’ cumulative impacts determination was not arbitrary because it relied on findings by other agencies and directly addressed cumulative impacts in addition to relying on mitigation
- explaining that the fact that a federal permit must be secured prior to commencing-and "is central to the success" of-a project, "does not itself give the [permitting agency] 'control and responsibility' over the entire" project
- upholding finding of no cumulative impact that was based partly on projected mitigation efforts because the mitigation was a condition of other permitting regimes to *256 which the project was subject and thus was not speculative or conclusory
- noting that, to uphold an agency action, a court must find that “the agency has examined the relevant data” and has provided an explanation of its decision that includes “a ‘rational connection between the facts found and the choice made’ ”
Written by the judges who cited it.
The opinion
Certiorari dismissed, August 19, 2010
Volume 1 of 2
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
OHIO VALLEY ENVIRONMENTAL
COALITION; COAL RIVER MOUNTAIN
WATCH; WEST VIRGINIA HIGHLANDS
CONSERVANCY,
Plaintiffs-Appellees,
and
COAL MAC, INCORPORATED,
Movant,
v.
ARACOMA COAL COMPANY; ELK
RUN COAL COMPANY; ALEX
ENERGY, INCORPORATED;
INDEPENDENCE COAL COMPANY, No. 07-1355
INCORPORATED,
Intervenors/Defendants-Appellants,
and
MINGO LOGAN COAL COMPANY,
Intervenor/Defendant,
and
UNITED STATES ARMY CORPS OF
ENGINEERS; LIEUTENANT GENERAL
ROBERT L. VAN ANTWERP,
Commander and Chief of
Engineers, U. S. Army Corps of
Engineers;
2 OHIO VALLEY v. ARACOMA COAL CO.
COLONEL DANA R. HURST, District
Engineer, United States Army
Corps of Engineers, Huntington
District; WEST VIRGINIA COAL
ASSOCIATION,
Defendants.
NATIONAL MINING ASSOCIATION;
KENTUCKY COAL ASSOCIATION;
COAL OPERATORS AND ASSOCIATES,
INC.; ILLINOIS COAL ASSOCIATION;
COLORADO MINING ASSOCIATION;
ALASKA MINERS ASSOCIATION;
VIRGINIA COAL ASSOCIATION; IDAHO
MINING ASSOCIATION; ALABAMA
COAL ASSOCIATION; PENNSYLVANIA
COAL ASSOCIATION; OHIO COAL
ASSOCIATION; INDIANA COAL
COUNCIL, INC.; UTILITY WATER ACT
GROUP; WEST VIRGINIA
DEPARTMENT OF COMMERCE; WEST
VIRGINIA DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Amici Supporting Appellants.
OHIO VALLEY v. ARACOMA COAL CO. 3
OHIO VALLEY ENVIRONMENTAL
COALITION; COAL RIVER MOUNTAIN
WATCH; WEST VIRGINIA HIGHLANDS
CONSERVANCY,
Plaintiffs-Appellees,
and
COAL MAC, INCORPORATED; FRASURE
CREEK MINING, LLC,
Movants,
v.
UNITED STATES ARMY CORPS OF
ENGINEERS; LIEUTENANT GENERAL
ROBERT L. VAN ANTWERP,
Commander and Chief of No. 07-1479
Engineers, U. S. Army Corps of
Engineers; COLONEL DANA R.
HURST, District Engineer, United
States Army Corps of Engineers,
Huntington District,
Defendants-Appellants,
and
WEST VIRGINIA COAL ASSOCIATION,
Defendant,
and
ARACOMA COAL COMPANY; ELK
RUN COAL COMPANY;
4 OHIO VALLEY v. ARACOMA COAL CO.
ALEX ENERGY, INCORPORATED;
INDEPENDENCE COAL COMPANY,
INCORPORATED; MINGO LOGAN COAL
COMPANY,
Intervenors/Defendants.
NATIONAL MINING ASSOCIATION;
KENTUCKY COAL ASSOCIATION;
COAL OPERATORS AND ASSOCIATES,
INC.; ILLINOIS COAL ASSOCIATION;
COLORADO MINING ASSOCIATION;
ALASKA MINERS ASSOCIATION;
VIRGINIA COAL ASSOCIATION; IDAHO
MINING ASSOCIATION; ALABAMA
COAL ASSOCIATION; PENNSYLVANIA
COAL ASSOCIATION; OHIO COAL
ASSOCIATION; INDIANA COAL
COUNCIL, INC.; UTILITY WATER ACT
GROUP; WEST VIRGINIA
DEPARTMENT OF COMMERCE; WEST
VIRGINIA DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Amici Supporting Appellants.
OHIO VALLEY v. ARACOMA COAL CO. 5
OHIO VALLEY ENVIRONMENTAL
COALITION; COAL RIVER MOUNTAIN
WATCH; WEST VIRGINIA HIGHLANDS
CONSERVANCY,
Plaintiffs-Appellees,
and
COAL MAC, INCORPORATED; FRASURE
CREEK MINING, LLC,
Movants,
v.
WEST VIRGINIA COAL ASSOCIATION,
Defendant-Appellant, No. 07-1480
and
UNITED STATES ARMY CORPS OF
ENGINEERS; LIEUTENANT GENERAL
ROBERT L. VAN ANTWERP,
Commander and Chief of
Engineers, U. S. Army Corps of
Engineers; COLONEL DANA R.
HURST, District Engineer, United
States Army Corps of Engineers,
Huntington District,
Defendants,
and
6 OHIO VALLEY v. ARACOMA COAL CO.
ARACOMA COAL COMPANY; ELK
RUN COAL COMPANY; ALEX
ENERGY, INCORPORATED;
INDEPENDENCE COAL COMPANY,
INCORPORATED; MINGO LOGAN COAL
COMPANY,
Intervenors/Defendants.
OHIO VALLEY ENVIRONMENTAL
COALITION; COAL RIVER MOUNTAIN
WATCH; WEST VIRGINIA HIGHLANDS
CONSERVANCY,
Plaintiffs-Appellees,
v.
UNITED STATES ARMY CORPS OF
ENGINEERS; CARL A. STROCK,
Commander and Chief of No. 07-1964
Engineers, U. S. Army Corps of
Engineers; WILLIAM BULEN,
Colonel, District Engineer, U. S.
Army Corps of Engineers,
Huntington District; WEST
VIRGINIA COAL ASSOCIATION,
Defendants,
and
OHIO VALLEY v. ARACOMA COAL CO. 7
COAL MAC, INCORPORATED; MINGO
LOGAN COAL COMPANY; FRASURE
CREEK MINING, LLC; JUPITER
HOLDINGS LLC,
Intervenors/Defendants,
and
ARACOMA COAL COMPANY; ELK
RUN COAL COMPANY; ALEX
ENERGY, INCORPORATED;
INDEPENDENCE COAL COMPANY,
INCORPORATED,
Intervenors/Defendants-Appellants.
OHIO VALLEY ENVIRONMENTAL
COALITION; COAL RIVER MOUNTAIN
WATCH; WEST VIRGINIA HIGHLANDS
CONSERVANCY,
Plaintiffs-Appellees,
v.
UNITED STATES ARMY CORPS OF
ENGINEERS; ROBERT L. VAN
ANTWERP, Commander and Chief
No. 07-2112
of Engineers, U. S. Army Corps
of Engineers; DANA R. HURST,
District Engineer, United States
Army Corps of Engineers,
Huntington District,
Defendants-Appellants,
and
8 OHIO VALLEY v. ARACOMA COAL CO.
WEST VIRGINIA COAL ASSOCIATION,
Defendant,
and
ARACOMA COAL COMPANY; ELK
RUN COAL COMPANY; ALEX
ENERGY, INCORPORATED;
INDEPENDENCE COAL COMPANY,
INCORPORATED; MINGO LOGAN COAL
COMPANY; COAL MAC,
INCORPORATED; FRASURE CREEK
MINING, LLC; JUPITER HOLDINGS
LLC,
Intervenor/Defendant.
ALABAMA COAL ASSOCIATION;
ALASKA MINERS ASSOCIATION; COAL
OPERATORS AND ASSOCIATES,
INCORPORATED; COLORADO MINING
ASSOCIATION; IDAHO MINING
ASSOCIATION; ILLINOIS COAL
ASSOCIATION; INDIANA COAL
COUNCIL; KENTUCKY COAL
ASSOCIATION; NATIONAL MINING
ASSOCIATION; OHIO COAL
ASSOCIATION; PENNSYLVANIA COAL
ASSOCIATION; UTILITY WATER ACT
GROUP; VIRGINIA COAL
ASSOCIATION; WEST VIRGINIA
DEPARTMENT OF COMMERCE; WEST
VIRGINIA DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Amici Supporting Appellants.
OHIO VALLEY v. ARACOMA COAL CO. 9
Appeals from the United States District Court
for the Southern District of West Virginia, at Huntington.
Robert C. Chambers, District Judge.
(3:05-cv-00784; 3:06-cv-00438)
Argued: September 23, 2008
Decided: February 13, 2009
Before MICHAEL, GREGORY, and SHEDD,
Circuit Judges.
Reversed, vacated and remanded by published opinion. Judge
Gregory wrote the opinion, in which Judge Shedd joined.
Judge Michael wrote a separate opinion dissenting in part and
concurring in part.
COUNSEL
ARGUED: Robert G. McLusky, JACKSON KELLY,
P.L.L.C., Charleston, West Virginia; Michael Thomas Gray,
UNITED STATES DEPARTMENT OF JUSTICE, Environ-
ment & Natural Resources Division, Washington, D.C., for
Appellants. Joseph Mark Lovett, APPALACHIAN CENTER
FOR THE ECONOMY & THE ENVIRONMENT, Lewis-
burg, West Virginia, for Appellees. ON BRIEF: James R.
Snyder, Blair M. Gardner, JACKSON KELLY, P.L.L.C.,
Charleston, West Virginia; Michael R. Shebelskie, William
H. Wright, Jr., HUNTON & WILLIAMS, L.L.P., Richmond,
Virginia, for Intervenors/Appellants Aracoma Coal Company,
Elk Run Coal Company, Alex Energy, Incorporated, Indepen-
dence Coal Company, Incorporated; James S. Crockett, Jr.,
Allyn G. Turner, James C. Lesnett, Jr., SPILMAN THOMAS
& BATTLE, P.L.L.C., Charleston, West Virginia, for Appel-
10 OHIO VALLEY v. ARACOMA COAL CO.
lant West Virginia Coal Association. Ronald J. Tenpas, Act-
ing Assistant Attorney General, UNITED STATES
DEPARTMENT OF JUSTICE, Environment & Natural
Resources Division, Washington, D.C., for Appellants United
States Army Corps of Engineers, Robert L. Van Antwerp,
Commander and Chief of Engineers, U.S. Army Corps of
Engineers, Dana R. Hurst, District Engineer, United States
Army Corps of Engineers, Huntington District. James M.
Hecker, PUBLIC JUSTICE, Washington, D.C.; Stephen E.
Roady, Jennifer C. Chavez, EARTHJUSTICE, Washington,
D.C., for Appellees Ohio Valley Environmental Coalition,
Coal River Mountain Watch, West Virginia Highlands Con-
servancy. Harold P. Quinn, Jr., Karen Bennett, NATIONAL
MINING ASSOCIATION, Washington, D.C.; Christopher T.
Handman, Dominic F. Perella, HOGAN & HARTSON,
L.L.P., Washington, D.C., for Alabama Coal Association,
Alaska Miners Association, Coal Operators and Associates,
Incorporated, Colorado Mining Association, Idaho Mining
Association, Illinois Coal Association, Indiana Coal Council,
Kentucky Coal Association, National Mining Association,
Ohio Coal Association, Pennsylvania Coal Association, Vir-
ginia Coal Association, Amici Supporting Appellants. James
N. Christman, Brooks M. Smith, HUNTON & WILLIAMS,
L.L.P., Richmond, Virginia; Kristy A. N. Bulleit, HUNTON
& WILLIAMS, L.L.P., Washington, D.C., for Utility Water
Act Group, Amicus Supporting Appellants. William R.
Valentino, Assistant Attorney General, WEST VIRGINIA
ATTORNEY GENERAL’S OFFICE, Charleston, West Vir-
ginia; Thomas L. Clarke, Senior Counsel, WEST VIRGINIA
DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Office of Legal Services, Charleston, West Virginia, for West
Virginia Department of Commerce and West Virginia Depart-
ment of Environmental Protection, Amici Supporting Appel-
lants.
OHIO VALLEY v. ARACOMA COAL CO. 11
OPINION
GREGORY, Circuit Judge:
This appeal concerns a challenge by Plaintiffs-Appellees
Ohio Valley Environmental Coalition, the Coal River Moun-
tain Watch, and the West Virginia Highlands Conservancy
(hereinafter referred to collectively as "OVEC") to the U.S.
Army Corps of Engineers ("Corps") issuance of four permits
allowing the filling of West Virginia stream waters in con-
junction with area surface coal mining operations. Granting
judgment for OVEC, the district court rescinded the permits
as violations of the Clean Water Act ("CWA"), 33 U.S.C.
§ 1251 et seq. (2000), the National Environmental Policy Act
("NEPA"), 42 U.S.C. § 4321 et seq. (2000), and the Adminis-
trative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. (2000).
The court also enjoined all activity under those permits and
remanded to the Corps for further proceedings consistent with
its order.
Separately, in an order dated June 13, 2007, the district
court provided declaratory relief to OVEC, holding that the
stream segments linking the permitted fills to downstream
sediment treatment ponds were "waters of the United States"
and that the Corps lacked authority under the CWA to permit
discharge from the fills into the stream segments.
The Corps now appeals these two orders. For the reasons
set forth below, we reverse and vacate the district court’s
opinion and order of March 23, 2007, and vacate the district
court’s injunction. We also reverse the district court’s June
13, 2007, grant of declaratory relief and we remand for further
proceedings consistent with this opinion.
I.
The mountaintop removal method of surface coal mining,
pioneered in West Virginia, involves the blasting of the soil
12 OHIO VALLEY v. ARACOMA COAL CO.
and rock atop a mountain to expose coal deposits below.
While mining operations are ongoing, the overburden is
hauled or pushed into adjacent valleys. This excavated over-
burden is known as "spoil." Once the coal has been extracted,
efforts are made to re-contour the mountaintop by replacing
the removed overburden, but stability concerns limit the
amount of spoil that can be returned to the area. In its natural
state, the spoil material is heavily compacted; once excavated,
however, the loosening of the rock and soil and incorporation
of air causes significant swelling. As a result, large quantities
of the blasted material cannot be replaced, and this excess
spoil ("overburden") remains in the valley, creating a "valley
fill" that buries intermittent and perennial streams in the pro-
cess.
Water that collects in the fill must be moved out to ensure
the fill’s continued stability. Thus, an underdrain system is
constructed by placing large boulders up to and above the
ordinary high-water mark of the stream. The collected water
is then channeled into a treatment pond, where sediment from
the runoff is allowed to settle. Sediment ponds usually are
constructed in existing streambeds, using earth and rock to
create an embankment. After sediments have settled out of the
fill runoff, the treated water is discharged from the sediment
pond back into existing streams. When practicable, a sediment
pond will be constructed in the streambed immediately adja-
cent to the end (or "toe") of the fill. But, because West Virgin-
ia’s steep, mountainous topography often prevents this kind of
positioning, a short stream segment is frequently used to
move runoff from the fill downstream to the sediment pond.
Once a valley fill is stabilized, the embankments of the sedi-
ment pond are removed, and the ponds and the stream seg-
ments are restored to their pre-project condition.
Much of the impact of a valley fill project is felt by head-
water streams. Headwater streams are small streams that form
the origin of larger streams or rivers, and may be intermittent
or ephemeral. Intermittent streams receive their flow from
OHIO VALLEY v. ARACOMA COAL CO. 13
both surface runoff and groundwater discharge, while ephem-
eral streams rely on major rain or snow events for their flow.
The precise role of headwater streams in overall watershed
ecology is a matter of some debate in this litigation, as we dis-
cuss more below, but all parties agree that these streams per-
form important ecological functions.
OVEC initiated this challenge in September 2005 in the
United States District Court for the Southern District of West
Virginia, shortly after the Corps issued an individual valley
fill permit and accompanying Combined Decision Document
("CDD") to the Aracoma Coal Company for the Camp Branch
Surface Mine project ("Camp Branch") under its CWA § 404
authority.1 As the Corps issued subsequent § 404 permits to
West Virginia mining operations, the district court allowed
OVEC to amend its complaint several times to include the
newly issued permits.
In addition to the Camp Branch permit, OVEC’s Third
Supplemental Complaint raised challenges to the individual
§ 404 permits issued to the Elk Run Coal Company for the
Black Castle Mine ("Black Castle"), and to Alex Energy, Inc.,
for the Republic No. 1 and Republic No. 2 Surface Mines
("Republic No. 1" and "Republic No. 2"). The Republic No.
1 challenge was ultimately dismissed on ripeness grounds, but
a challenge raised in a separate complaint to the individual
permit issued to Independence Coal Company for the Laxare
East Surface Mine ("Laxare East") was consolidated with this
proceeding. Each of the affected companies intervened as
1
Mine operators may seek a general § 404 permit for the discharge of
fill material "on a State, regional, or nationwide basis" if their activities
"will cause only minimal adverse effects when performed separately, and
will have only minimal cumulative adverse effect on the environment." 33
U.S.C. § 1344(e)(1)(2000). For fill activities that do not meet the require-
ments for a general permit, the Corps issues individual § 404 permits for
discharges at "specified disposal sites" on a case-by-case basis. 33 U.S.C.
§ 1344(a)(2000); Ohio Valley Envtl. Coal. v. Bulen, 429 F.3d 493, 496
(4th Cir. 2005).
14 OHIO VALLEY v. ARACOMA COAL CO.
defendants in the action, as did the West Virginia Coal Asso-
ciation.
All together, the four challenged permits authorize the cre-
ation of 23 valley fills and 23 sediment ponds, and they
impact 68,841 linear feet of intermittent and ephemeral
streams, or just over 13 miles.2 For each of the four permits,
the Corps prepared Environmental Assessments that con-
cluded that the permitted activity would not result in signifi-
cant environmental impacts given planned mitigation
measures. On that basis, the Corps issued a "Finding of No
Significant Impact" for all four permits.
OVEC’s Third Supplemental Complaint charged that the
Corps’ issuance of the § 404 fill permits for these mining
projects violated both substantive and procedural provisions
of the CWA and NEPA, and were "arbitrary, capricious, and
an abuse of discretion" under the APA. According to OVEC,
the Corps was required under NEPA to prepare an Environ-
mental Impact Statement for each of the projects before issu-
ing a permit, given the significant individual and cumulative
adverse effects the projects would have on water quality,
aquatic and terrestrial ecosystems and habitats, species sur-
vival and diversity, crucial stream functions, forests, and the
aesthetic value of the destroyed mountains. Similarly, OVEC
claimed that the Corps failed to properly determine the
2
The Camp Branch project includes 4 fills impacting 15,059 linear feet
of intermittent and ephemeral streams, and 4 associated sediment ponds
that would temporarily impound an additional 455 linear feet of intermit-
tent streams. The Black Castle project includes 9 valley fills impacting
13,401 linear feet of intermittent and ephemeral streams, and 6 associated
sediment ponds, temporarily impounding an additional 879 linear feet of
intermittent streams. Republic No. 2’s project includes 3 valley fills
impacting 9,918 linear feet of intermittent and ephemeral streams, and 3
associated sediment ponds temporarily impounding an additional 690 lin-
ear feet of intermittent streams. Finally, the Laxare East project involves
7 valley fills, impacting 24,860 linear feet of intermittent and ephemeral
streams, and 10 associated sediment ponds temporarily impounding an
additional 3,099 linear feet of intermittent and ephemeral streams.
OHIO VALLEY v. ARACOMA COAL CO. 15
adverse individual and cumulative impacts to the affected
aquatic ecosystems in accordance with the CWA and the
Corps’ CWA Guidelines.
Trial in the case was originally scheduled for June 20,
2006, but on June 16, on the Corps’ motion, the district court
remanded the permits to the Corps and stayed the proceed-
ings. Almost a month later, the Corps reissued the permits,
but this time with a supplemented administrative record that
incorporated new comments from the public and the parties,
including the reports prepared by OVEC’s proposed expert
witnesses. The district court lifted its stay on July 26, and a
six-day bench trial was held in October 2006.
The district court granted judgment in favor of the plaintiffs
on March 23, 2007, rescinding the permits, enjoining the
Corps and Intervenors from taking any action under those per-
mits, and remanding the permits to the Corps for further pro-
ceedings consistent with the court’s order.3
The district court found, inter alia, that the probable
impacts of the valley fills would be significant and adverse
under both the CWA and NEPA; that the mitigation plans for
each permit were not sufficient to compensate for those
adverse impacts; that, in each permit, the Corps improperly
limited its scope of review under NEPA to look only at the
impact on jurisdictional waters rather than the broader impact
of the entire valley fill project; and, finally, that the Corps
inadequately evaluated the cumulative impacts of the projects.
On June 13, 2007, the district court granted summary judg-
ment to OVEC on a separate claim under which the plaintiffs
sought a declaratory judgment that the stream segments run-
ning from the valley fill toes to the sediment pond embank-
3
The court later granted Intervenors’ request for a limited stay of the
injunctions for some of the fills, provided that Intervenors complied with
all conditions, including mitigation requirements, of the permits.
16 OHIO VALLEY v. ARACOMA COAL CO.
ments are "waters of the United States," and that the Corps
thus did not have authority to permit the discharge of pollu-
tants into these segments with a CWA § 404 permit. Accord-
ing to the district court, mining operators who wished to
discharge runoff from the fill into a stream segment needed to
obtain a CWA § 402 permit from the EPA or proper state
authority. On September 13, 2007, the district court granted,
pursuant to Federal Rule of Civil Procedure 54(b), the Inter-
venors’ motion for entry of final judgment on the June 13 order.4
The Corps and Intervenors filed timely notices of appeal from
both the March 23 and June 13 orders.
On appeal, the Corps contends that it is entitled to defer-
ence on its determination about the scope of its NEPA analy-
sis and that its findings on individual and cumulative impacts
and mitigation were not arbitrary or capricious. The agency
further argues that its interpretation of its CWA regula-
tions—treating stream segments and sediment ponds as part
of a unitary waste treatment system and thus excepting them
from separate CWA § 402 permitting—was entitled to defer-
ence. Intervenors have raised these same challenges to the dis-
trict court’s ruling, but also argue that OVEC’s stream
segment claim was barred in the first place under principles
of res judicata. OVEC has also filed two motions for judicial
notice, asking this Court to take notice of five new permits
that the Corps has issued since the district court’s orders were
entered.
II.
We review de novo a district court’s findings on an admin-
istrative record. See Crutchfield v. County of Hanover, 325
F.3d 211, 217 (4th Cir. 2003). This de novo standard applies
to questions of both law and fact. See id.
4
The court also granted a motion by the Intervenors to stay the effect
of the June 13 order pending appeal.
OHIO VALLEY v. ARACOMA COAL CO. 17
Both NEPA and CWA claims are subject to judicial review
under the APA, 5 U.S.C. § 706 (2006). For all agency actions,
a reviewing court must set aside the action if it is found to be
"arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law." 5 U.S.C. § 706(2)(A) (2006); Citi-
zens To Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402,
413-14 (1971).
III.
A complex statutory framework undergirds the regulation
of valley fills and associated sediment ponds, and it is this
framework that provides the foundation for our opinion. Thus,
we begin with a brief overview of the relationship of the four
statutes that affect the scope of the Corps’ authority to issue
fill permits in connection with mountaintop coal mining oper-
ations: the Surface Mining Control and Reclamation Act of
1977 ("SMCRA"), 30 U.S.C. § 1201 et seq. (2000), the CWA,
NEPA, and the APA.
A.
Congress passed SMCRA in 1977 to "establish a nation-
wide program to protect society and the environment from the
adverse effects of surface coal mining operations." 30 U.S.C.
§ 1202(a) (2000). Congress also recognized a need, however,
to "strike a balance between protection of the environment
and agricultural productivity and the Nation’s need for coal as
an essential source of energy." 30 U.S.C. § 1202(f) (2000). In
striking this balance, SMCRA utilizes a "cooperative federal-
ism" approach, allocating responsibility for the regulation of
surface coal mining among both state and federal agencies.
Bragg v. W. Va. Coal Ass’n, 248 F.3d 275, 288 (4th Cir.
2001).
Under SMCRA, states have "exclusive jurisdiction over the
regulation of surface coal mining and reclamation operations"
on non-Federal lands, so long as their regulatory program has
18 OHIO VALLEY v. ARACOMA COAL CO.
been approved by the Secretary of the Interior as satisfying
the Act’s minimum requirements.5 30 U.S.C. § 1253 (2000).
Once a state’s SMCRA program has been approved, anyone
wishing to engage in surface coal mining operations within
the state must first obtain a permit from the state’s regulatory
authority.6 30 U.S.C. § 1256(a) (2000). In West Virginia, the
federally approved regulatory authority is the Department of
Environmental Protection ("WVDEP").
Regulation of the disposal of excess spoil material from
surface coal mining operations is within SMCRA’s purview.
As part of its environmental protection performance stan-
dards, SMCRA requires that all excess spoil material from
surface mining operations be disposed of "in a controlled
manner . . . and in such a way to assure mass stability and to
prevent mass movement." 30 U.S.C. § 1265(b)(22)(A) (2000).
The Act clearly contemplates that valley fills will be used in
the disposal process. See 30 U.S.C. § 1265(b)(22)(D) (2000)
(requiring that, where the disposal area contains "springs, nat-
ural water courses, or wet weather seeps . . . lateral drains
[must be] constructed from the wet areas to the main under-
drains in such a manner that filtration of the water into the
spoil pile will be prevented."); Kentuckians for the Common-
wealth, Inc. v. Rivenburgh, 317 F.3d 425, 443 (4th Cir. 2003)
("[I]t is beyond dispute that SMCRA recognizes the possibil-
ity of placing excess spoil material in waters of the United
States . . . .").
B.
An SMCRA permit by itself, however, does not suffice to
allow a mine operator to construct a valley fill in conjunction
5
States are free to adopt more stringent regulations than those mandated
by SMCRA. 30 U.S.C. § 1255(b) (2000).
6
Where a state does not have a federally approved SMCRA program in
place, surface mining operations within that state must be permitted by the
Secretary of the Interior. 30 U.S.C. § 1256 (2000).
OHIO VALLEY v. ARACOMA COAL CO. 19
with its mountaintop removal activities. Mining companies
must also obtain permits certifying their project’s compliance
with the CWA. The CWA aims to "restore and maintain the
chemical, physical, and biological integrity of the Nation’s
waters" by eliminating "the discharge of pollutants into the
navigable waters." 33 U.S.C. § 1251(a)(2000). In the surface
mining context, three sections of the CWA are relevant to the
permitting process.
First, a mine operator applying for a federal permit under
the CWA must comply with CWA § 401, 33 U.S.C. § 1341
(2000), by providing the federal permitting agency with a cer-
tification from the proper state authority—in this case,
WVDEP—stating that any discharge from the mine site will
comply with all applicable water quality standards. Next, the
mine operator must obtain a National Pollutant Discharge
Elimination System ("NPDES") permit pursuant to CWA
§ 402, 33 U.S.C. § 1342 (2000), if their project involves the
discharge of a pollutant from a point source within the mining
operation into navigable waters.7 33 U.S.C. §§ 1342, 1362(12)
(2000). The CWA defines "navigable waters" as "the waters
of the United States, including the territorial seas." 33 U.S.C.
§ 1362(7) (2000). The release of treated waters from sediment
ponds back into a stream, for example, require a CWA § 402
NPDES permit.
States wishing to administer their own NPDES program
must be approved by the Environmental Protection Agency
("EPA") before they can begin issuing § 402 permits. 33
U.S.C. § 1342(c) (2000). West Virginia has had an EPA-
approved § 402 program since 1982. See Approval of West
Virginia’s NPDES Program, 47 Fed. Reg. 22, 363 (May 24,
1982).
7
A "point source" is "any discernible, confined and discrete conveyance,
including but not limited to any pipe, ditch, channel, tunnel, conduit, well,
discrete fissure, container, rolling stock, concentrated animal feeding oper-
ation, or vessel or other floating craft, from which pollutants are or may
be discharged." 33 U.S.C. § 1362(14) (2000).
20 OHIO VALLEY v. ARACOMA COAL CO.
Finally, and most importantly for the purposes of this litiga-
tion, surface mining projects that intend to dispose of excess
spoil from their mining operations in jurisdictional waters
must obtain a CWA § 404, 33 U.S.C. § 1344 (2000), permit
from the Corps. Section 404 permits allow "the discharge of
dredged or fill material into the navigable waters at specified
disposal sites." 33 C.F.R. § 1344(a) (2008). The Corps uses
§ 404 permits to authorize the fill activity itself, as well as the
construction of downstream sediment ponds.8
In issuing § 404 permits, the Corps follows the § 404(b)(1)
Guidelines ("CWA Guidelines") promulgated by the Environ-
mental Protection Agency ("EPA") pursuant to 33 U.S.C.
§ 1344(b)(1) (2008), and incorporated by the Corps into its
own regulations. See 40 C.F.R. pt. 230 (2008); 33 C.F.R.
§ 320.2(f) (2008). The Guidelines prohibit discharges that
"will cause or contribute to significant degradation of the
waters of the United States."9 40 C.F.R. § 230.10(c) (2008).
A discharge contributes to significant degradation if it has
"[s]ignificantly adverse effects" on human health or welfare,
on aquatic life and other wildlife dependent on aquatic eco-
systems, on aquatic ecosystem diversity, productivity, and sta-
bility, or on recreational, aesthetic, and economic values. Id.
The Corps’ § 404 permit evaluation process must also
include a public interest review component, in which "[t]he
benefits which reasonably may be expected to accrue from the
proposal must be balanced against its reasonably foreseeable
detriments." 33 C.F.R. § 320.4(a)(1) (2008). The Corps’ deci-
sion to issue a permit "should reflect the national concern for
8
In Kentuckians for the Commonwealth, 317 F.3d 425, this Court
upheld the Corps’ interpretation of the term "fill material" to include coal
mining overburden as a permissible construction of CWA § 404.
9
"Waters of the United States" include interstate waters and all waters
used (or that could potentially be used) in interstate commerce, and "[a]ll
other waters such as intrastate lakes, rivers, streams (including intermittent
streams) [et al.] . . . the use, degradation or destruction of which could
affect interstate or foreign commerce . . . ." 40 C.F.R. § 230.3(s) (2008).
OHIO VALLEY v. ARACOMA COAL CO. 21
both protection and utilization of important resources." Id.
Ultimately, the § 404 permitting process requires extensive
review and coordination with numerous federal and state
agencies, as well as significant consideration of the public
interest.
C.
Under NEPA, federal agencies must take a "hard look" at
the potential environmental consequences of their actions.
Robertson v. Methow Valley Citizens Council, 490 U.S. 332,
350 (1989). Because NEPA is a procedural and not a results-
driven statute, even agency action with adverse environmental
effects can be NEPA-compliant so long as the agency has
considered those effects and determined that competing pol-
icy values outweigh those costs. Id.
NEPA requires only that federal agencies prepare an Envi-
ronmental Impact Statement for "major Federal actions signif-
icantly affecting the quality of the human environment." 42
U.S.C. § 4332(2)(C) (2000). Significance is determined by
evaluating both the context of the action and the intensity, or
severity, of the impact. 40 C.F.R. § 1508.27 (2008). Where it
is not readily discernible how significant the environmental
effects of a proposed action will be, federal agencies may pre-
pare an Environmental Assessment ("EA"). 40 C.F.R.
§ 1501.4(b) (2008). An EA is a "concise public document . . .
that serves to . . . [b]riefly provide sufficient evidence and
analysis for determining whether to prepare an [EIS] or a
finding of no significant impact [("FONSI")]." 40 C.F.R.
§ 1508.9(a)(1) (2008); see also 33 C.F.R. §§ 230.10-230.11
(2008) (explaining the Corps’ requirements for an EA).
Even where an EA determines that a proposed action will
have a significant environmental impact, an agency may
avoid issuing an EIS where it finds that mitigating measures
can be taken to reduce the environmental impact of the project
below the level of significance. Roanoke River Basin Ass’n v.
22 OHIO VALLEY v. ARACOMA COAL CO.
Hudson, 940 F.2d 58, 62 (4th Cir. 1991). In these situations,
the agency can issue a "so-called mitigated FONSI." Spiller
v. White, 352 F.3d 235, 241 (5th Cir. 2003) (internal quota-
tions omitted).
D.
Claims challenging federal agency action under the CWA
and NEPA are subject to judicial review under the APA. 5
U.S.C. § 702 (2006); Holy Cross Wilderness Fund v. Madi-
gan, 960 F.2d 1515, 1521 (10th Cir. 1992). In issuing the
§ 404 permits challenged here, the Corps was engaged in
informal ("notice and comment") rule-making. 33 U.S.C.
§ 1344(a) (2000); Ohio Valley Envtl. Coal. v. Bulen, 429 F.3d
493, 496 (4th Cir. 2005). Such informal rulemaking, done
pursuant to Section 4 of the APA, 5 U.S.C. § 553 (2006),
must be reviewed under Section 10 of the APA, 5 U.S.C.
§ 706(2) (2006). Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C.
Cir. 1976).
Section 10 of the APA establishes that, as a general rule,
"agency action, findings, and conclusions" will be set aside
only when they are "found to be . . . arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law."
5 U.S.C. § 706(2) (2000); Citizens To Preserve Overton Park,
Inc. v. Volpe, 401 U.S. 402, 413-14 (1971). Review under this
standard is highly deferential, with a presumption in favor of
finding the agency action valid. Natural Res. Def. Council,
Inc. v. EPA, 16 F.3d 1395, 1400 (4th Cir. 1993). Especially
in matters involving not just simple findings of fact but com-
plex predictions based on special expertise, "a reviewing court
must generally be at its most deferential." Baltimore Gas &
Elec. Co. v. Natural Res. Def. Council, 462 U.S. 87, 103
(1983).
In determining whether agency action was arbitrary or
capricious, the court must consider whether the agency con-
sidered the relevant factors and whether a clear error of judg-
OHIO VALLEY v. ARACOMA COAL CO. 23
ment was made. Citizens To Preserve Overton Park, 401 U.S.
at 416. "Although this inquiry into the facts is to be searching
and careful, the ultimate standard of review is a narrow one.
The court is not empowered to substitute its judgment for that
of the agency." Id. Deference is due where the agency has
examined the relevant data and provided an explanation of its
decision that includes "a ‘rational connection between the
facts found and the choice made.’" Motor Vehicle Mfrs. Ass’n
v. State Farm Mutual Auto Ins. Co., 463 U.S. 29, 43 (1983)
(quoting Burlington Truck Lines, Inc. v. United States, 371
U.S. 156, 168 (1962)); accord Ohio River Valley Envtl. Coal.,
Inc. v. Kempthorne, 473 F.3d 94, 102-03 (4th Cir. 2006).
The "arbitrary and capricious" standard is not meant to
reduce judicial review to a "rubber-stamp" of agency action.
Ethyl Corp., 541 F.2d at 34. While the standard of review is
narrow, the court must nonetheless engage in a "searching and
careful" inquiry of the record. Citizens To Preserve Overton
Park, 401 U.S. at 416. But, this scrutiny of the record is
meant primarily "to educate the court" so that it can "under-
stand enough about the problem confronting the agency to
comprehend the meaning of the evidence relied upon and the
evidence discarded; the questions addressed by the agency
and those bypassed; the choices open to the agency and those
made." Ethyl Corp., 541 F.2d at 36.
IV.
With this statutory guidance in mind, we turn now to the
substance of this appeal, first taking up the issues on appeal
concerning the district court’s March 23, 2007, opinion and
order.10
10
In their appeal of the March 23 opinion and order, the Intervenors
have questioned OVEC’s standing to challenge the Republic No. 2 permit.
Intervenors claim that organizational standing is inappropriate because no
member of the three plaintiff organizations has sustained an "injury in
fact" as a result of the Corps’ § 404 permitting with respect to Republic
No. 2.
24 OHIO VALLEY v. ARACOMA COAL CO.
A.
The Corps and Intervenors (collectively "Appellants")
claim on appeal that the Corps’ decision about the scope of
its NEPA analysis for each of these permits was entitled to
deference as a reasonable interpretation of its own regula-
tions. The district court found that the Corps acted contrary to
its regulations by limiting the scope of its NEPA analysis to
the impact of the filling of jurisdictional waters and by not
looking at the larger environmental impacts of the valley fill
as a whole. Agreeing with the district court, OVEC argues
that the Corps’ NEPA analysis should have considered all
environmental impacts caused by the fill, including the
impacts to the upland valleys where the fills will be located.
The Corps counters that it reasonably determined that, under
its regulations, its jurisdictional reach was limited to the
affected waters and adjacent riparian areas and that this deter-
mination is entitled to deference.
Because we are asked here to review the Corps’ interpreta-
tion of its own regulations, our review is cabined to assessing
the reasonableness of that interpretation. This kind of review
is highly deferential, with the agency’s interpretation "con-
"[E]nvironmental plaintiffs adequately allege injury in fact when they
aver that they use the affected area and are persons ‘for whom the aes-
thetic and recreational values of the area will be lessened’ by the chal-
lenged activity." Friends of the Earth, Inc. v. Laidlaw Environmental
Services, 528 U.S. 167, 183 (2000) (quoting Sierra Club v. Morton, 405
U.S. 727, 735 (1972)). As the district court determined below, one of
OVEC’s members and employees, Vivian Stockman, travels to the Repub-
lic No. 2 mine site to take photographs of nature and she intends to do so
regularly in the future. Ms. Stockman will thus suffer a direct aesthetic
injury as a result of the permitted activity, and OVEC therefore has stand-
ing to proceed with its challenge to the Republic No. 2 permit. See id. at
181 (noting that an organization has standing to bring suit on behalf of its
members where members could sue in their own right, the interests
involved are germane to the organization’s purpose, and the requested
relief does not require the participation of individual members in the suit).
OHIO VALLEY v. ARACOMA COAL CO. 25
trolling unless plainly erroneous or inconsistent with the regu-
lation." Auer v. Robbins, 519 U.S. 452, 461 (1997) (internal
quotations omitted); see also Bowles v. Seminole Rock &
Sand Co., 325 U.S. 410, 413-14 (1945); Kentuckians for the
Commonwealth v. Rivenburgh, 317 F.3d 425, 439 (4th Cir.
2003) (noting that, when reviewing an agency’s interpretation
of its own regulation, "[t]he reviewing court does not have
much leeway"). In applying this principle, also known as
"Auer deference" or "Seminole Rock deference," we must first
determine whether the regulation itself is unambiguous; if so,
its plain language controls. See Christensen v. Harris County,
529 U.S. 576, 588 (2000); United States v. Deaton, 332 F.3d
698, 709 (4th Cir. 2003). If ambiguous, however,
Auer/Seminole Rock deference is applied. See Christensen,
529 U.S. at 588; Deaton, 332 F.3d at 709.
NEPA requires federal agencies to take a "hard look" at the
environmental consequences of their actions, but the statute
does not specify how an agency should determine the scope
of its NEPA analysis. Wetlands Action Network v. United
States Army Corp of Eng’rs, 222 F.3d 1105, 1115 (9th Cir.
2000). The Corps’ implementing regulations, however, spec-
ify that the proper scope of analysis for NEPA review is "to
address the impacts of the specific activity requiring a DA
[Department of the Army] permit and those portions of the
entire project over which the [Corps] district engineer has suf-
ficient control and responsibility to warrant Federal review."
33 C.F.R. pt. 325, App. B, § 7(b)(1) (2008). OVEC’s chal-
lenge to the scope of the Corps’ NEPA review rests largely
on its misapprehension of what constitutes the "specific activ-
ity" requiring a permit.
The Corps’ regulations are unambiguous in requiring a dis-
trict engineer to address the impacts of the "specific activity
requiring a DA [Department of the Army] permit" in its
NEPA analysis. Id. According to OVEC, the Corps’ § 404
permit is a permit for the entire valley fill, down to the last
shovelful of dirt at the edge of the valley. But § 404 is itself
26 OHIO VALLEY v. ARACOMA COAL CO.
unambiguous about what the Corps is authorized to permit
under the CWA: the Corps "may issue permits, after notice
and opportunity for public hearings for the discharge of
dredged or fill material into the navigable waters at specified
disposal sites." 33 U.S.C. § 1344(a) (2000) (emphasis added).
The specific activity that the Corps is permitting when it
issues a § 404 permit is nothing more than the filling of juris-
dictional waters for the purpose of creating an underdrain sys-
tem for the larger valley fill. In fact, the Corps has no legal
authority to prevent the placement of fill material in areas out-
side of the waters of the United States. All other fill activity
falls under the exclusive jurisdiction of the WVDEP, as the
federally approved state SMCRA regulatory authority.
Of course, even if the "specific activity" being permitted
under CWA § 404 is the filling of valley streams, the Corps
could still be required under NEPA to consider larger impacts
of the broader valley fill project if the Corps is found to have
"sufficient control and responsibility to warrant Federal
review." 33 C.F.R. pt. 325, App. B, § 7(b)(1) (2008). In cases
where the permitted activity is only one part of a larger proj-
ect, the regulations specify that the Corps has "control and
responsibility for portions of the project beyond the limits of
Corps jurisdiction where the Federal involvement is sufficient
to turn an essentially private action into a Federal action.
These are cases where the environmental consequences of the
larger project are essentially products of the Corps permit
action." 33 C.F.R. pt. 325, App. B, § 7(b)(2) (2008) (empha-
sis added).
The regulations go on to suggest several factors to be con-
sidered in making this determination, including:
(i) Whether or not the regulated activity comprises
"merely a link" in a corridor type project (e.g., a
transportation or utility transmission project).
(ii) Whether there are aspects of the upland facility
in the immediate vicinity of the regulated activity
OHIO VALLEY v. ARACOMA COAL CO. 27
which affect the location and configuration of the
regulated activity.
(iii) The extent to which the entire project will be
within Corps jurisdiction.
(iv) The extent of cumulative Federal control and
responsibility.
Id.
OVEC’s argument that the Corps has sufficient control and
responsibility over the larger valley fill to warrant its consid-
eration of the environmental impacts of the entire valley fill
project has some intuitive appeal. As OVEC points out, "[t]he
Corps could not seriously contend that, if the § 404 permit for
the stream-covering portions of the fill were denied, the appli-
cants could build the remainder of the fills with a cutout
around the streams. That could be dangerous. The valley fill
is designed for stability as an integral unit." (Appellees’ Br.
at 35 n.2.) Undoubtedly, obtaining a § 404 permit is a "small
but necessary" component of the overall upland project.
United States Army Corps of Engineers, Combined Decision
Document for the Camp Branch Surface Mine Project 4 (July
6, 2006) [hereinafter Camp Branch CDD]; see also United
States Army Corps of Engineers, Combined Decision Docu-
ment for the Black Castle Surface Mine Project 6 (July 18,
2006) [hereinafter Black Castle CDD]; United States Army
Corps of Engineers, Combined Decision Document for the
Laxare East Surface Mine Project 7 (July 18, 2006) [hereinaf-
ter Laxare East CDD]. But the fact that the Corps’ § 404 per-
mit is central to the success of the valley-filling process does
not itself give the Corps "control and responsibility" over the
entire fill. See Wetlands Action Network v. U.S. Army Corps
of Eng’rs, 222 F.3d 1105, 1116-17 (9th Cir. 2000) (observing
that the fact that construction of a development project cover-
ing hundreds of acres was dependent on a Corps § 404 permit
to fill sixteen acres of wetlands did not suffice to make the
28 OHIO VALLEY v. ARACOMA COAL CO.
Corps responsible for including the entire project in the scope
of its NEPA analysis).
The Corps’ jurisdiction under CWA § 404 is limited to the
narrow issue of the filling of jurisdictional waters. To say that
the Corps has a level of control and responsibility over the
entire valley fill project such that "the environmental conse-
quences of the larger project are essentially products of the
Corps permit action," 33 C.F.R. pt. 325, App. B, § 7(b)(2)
(2008), is to effectively read out of the equation the elaborate,
congressionally mandated schema for the permitting of sur-
face mining operations prescribed by SMCRA.
Under SMCRA, the state of West Virginia has "exclusive
jurisdiction over the regulation of surface coal mining and
reclamation operations." 30 U.S.C. § 1253 (2000). Congress
clearly contemplated that the regulation of the disposal of
excess spoil and the creation of valley fills fall under the
SMCRA rubric. See 30 U.S.C. § 1265(b)(22)(D) (2000)
(requiring that lateral drains be constructed where a spoil dis-
posal area contains "springs, natural water courses or wet
weather seeps"); Kentuckians for the Commonwealth, Inc. v.
Rivenburgh, 317 F.3d 425, 443 (4th Cir. 2003) ("[I]t is
beyond dispute that SMCRA recognizes the possibility of
placing excess spoil material in waters of the United States
. . . .").
As part of its federally approved SMCRA regulatory pro-
gram, the WVDEP surface mine permitting process examines
"[e]very detail of the manner in which a coal mining opera-
tion is to be conducted . . . . includ[ing] the plan for disposal
of excess spoil for surface . . . mining operations . . . ." (Br.
for the W. Va. Dep’t of Commerce and the W. Va. Dep’t of
Envtl. Prot. as Amici Curiae Supporting Appellants at 13.) As
the Corps explains in its permits, "the social and environmen-
tal impacts associated with surface coal mining and reclama-
tion operations are appropriately analyzed by WVDEP in this
context before that agency decides whether to permit the min-
OHIO VALLEY v. ARACOMA COAL CO. 29
ing operation under SMCRA." Camp Branch CDD 4; Black
Castle CDD 6; Laxare East CDD 7; United States Army
Corps of Engineers, Combined Decision Document for the
Republic No. 2 Surface Mine Project 6 (July 6, 2006) [herein-
after Republic No. 2 CDD]. A SMCRA permit applicant must
provide detailed information about possible environmental
consequences of the proposed operations, as well as assur-
ances that damage to the site will be prevented or minimized
during mining and substantially repaired after mining has
come to an end. The WVDEP must ensure compliance with
SMCRA’s environmental protection performance standards.
See 30 U.S.C. §§ 1257, 1260, 1265 (2000).
If the Corps, by issuing a § 404 permit, can turn a valley
fill project "into a Federal action," 33 C.F.R. pt. 325, App. B,
§ 7(b)(2) (2008), the WVDEP’s regulation of the fill process
becomes at best duplicative, and, at worst, meaningless.
NEPA plainly is not intended to require duplication of work
by state and federal agencies. See 40 C.F.R. § 1506.2(b)
("Agencies shall cooperate with State and local agencies to
the fullest extent possible to reduce duplication between
NEPA and State and local requirements . . . ."). The Corps’
general regulatory approach echoes this sentiment. See 33
C.F.R. § 320.1(a)(5) (2008) ("The Corps believes that state
and federal regulatory programs should complement rather
than duplicate one another."); 33 C.F.R. § 337.1 (2008) (not-
ing that, in issuing public notice for projects involving the dis-
charge of fill material into jurisdictional waters, "[d]istrict
engineers are encouraged to develop procedures to avoid
unnecessary duplication of state agency procedures").
SMCRA also calls for a coordinated and non-duplicative
approach to environmental review. See 30 U.S.C.
§ 1253(a)(6) (2000) (requiring that a state SMCRA program
establish "for the purposes of avoiding duplication, . . . a pro-
cess for coordinating the review and issuance of permits for
surface coal mining and reclamation operations with any other
Federal or State permit process applicable to the proposed
30 OHIO VALLEY v. ARACOMA COAL CO.
operations"). While SMCRA’s provisions should not be con-
strued as "superseding, amending, modifying, or repealing"
the requirements of NEPA or the CWA, 30 U.S.C. § 1292(a)
(2000), neither should NEPA be construed to require the
Corps to essentially federalize an environmental review pro-
cess that has already been delegated to federally approved
state programs. See Wetlands Action Network, 222 F.3d at
1117 (noting, in support of its finding that the Corps’ NEPA
analysis for a wetlands-filling permit need not include the
effects of the larger development project, that state regula-
tions control the design of the project and that the larger proj-
ect was already subject to extensive state environmental
review); Sylvester v. U.S. Army Corps of Eng’rs, 884 F.2d
394, 401 (9th Cir. 1989) ("We, finally, draw comfort from the
fact that ordinary notions of efficiency suggest a federal envi-
ronmental review should not duplicate competently performed
state environmental analyses.").
In Department of Transportation v. Public Citizen, 541
U.S. 752, 767 (2004), the Supreme Court rejected the idea
that "an agency’s action is considered a cause of an environ-
mental effect [for purposes of NEPA] even when the agency
has no authority to prevent the effect." The Court instructed
that proximate causation, rather than "but for" causation, was
the relevant measure of the causal relationship between the
agency action and the environmental effects. 541 U.S. at 767.
In engaging in this proximate cause analysis, "‘courts must
look to the underlying policies or legislative intent in order to
draw a manageable line between those causal changes that
may make an actor responsible for an effect and those that do
not.’" Id. (quoting Metro. Edison Co. v. People Against
Nuclear Energy, 460 U.S. 766, 774 n.7 (1983)).
But for the Corps’ § 404 permit, a valley fill could not be
built; yet it is WVDEP, and not the Corps, that has "control
and responsibility" over all aspects of the valley fill projects
beyond the filling of jurisdictional waters.11 Thus, under the
11
The Ninth Circuit’s opinion in Save Our Sonoran, Inc. v. Flowers, 408
F.3d 1113 (9th Cir. 2005), is not to the contrary. In that case, the court was
OHIO VALLEY v. ARACOMA COAL CO. 31
plain language of the regulation, activity beyond the filling of
jurisdictional waters is not within the Corps’ "control and
responsibility" because upland environmental effects are "not
essentially a product of Corps action," 33 C.F.R. pt. 325, App.
B, § 7(b)(2) (2008).
Even if we credit OVEC’s arguments regarding the Corps’
control and responsibility over the greater valley fill project
as a plausible construction of the Corps’ regulation, we must
still deem the regulation "ambiguous," and the Corps’ inter-
pretation would be entitled to deference as long as it is not
"plainly erroneous or inconsistent with the regulation." Auer,
519 U.S. at 461 (internal quotations omitted); see also Semi-
nole Rock, 325 U.S. at 413-14; Kentuckians for the Common-
wealth, 317 F.3d at 439. In the case of each of the challenged
permits, the Corps’ engineers reasonably determined that a
scope of NEPA analysis extending beyond the Corps’ limited
jurisdiction to include environmental effects on upland areas
would encroach on the regulatory authority of WVDEP,
which administers the state’s SMCRA program and is respon-
sible for determining the social and environmental impacts
associated with surface mining operations.12 Camp Branch
CDD 6-7; Black Castle CDD 5-7; Laxare East CDD 6-8;
Republic No. 2 CDD 4-7. Thus the Corps did not act arbitrar-
not confronted, as we are, with the problem of overlapping federal and
state regulatory schemes.
12
This interpretation is also not in tension with NEPA itself. "[T]o get
to Seminole Rock deference, a court must first address the straightforward
Chevron [Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837
(1984)] question whether an agency regulation, as interpreted violates the
statute." Kentuckians for the Commonwealth, 317 F.3d at 440 (quoting
John F. Manning, Constitutional Structure and Judicial Deference to
Agency Interpretations of Agency Rules, 96 Colum. L. Rev. 612, 627 n.78
(1996)). NEPA is not a results-driven statute, and requires only that fed-
eral agencies carefully consider and weigh competing policy values, Rob-
ertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989),
which the Corps has plainly done here.
32 OHIO VALLEY v. ARACOMA COAL CO.
ily or capriciously in determining the scope of its NEPA anal-
ysis.
B.
The Corps next challenges the district court’s finding that
the Corps failed to adequately support its mitigated FONSIs
under NEPA and its findings of no significant degradation to
waters of the United States under the CWA.13 The Corps takes
issue with three areas in which the district court found the
Corps’ findings to be lacking: (1) the Corps’ CWA analysis
of the impact of the permitted fills on the structure and func-
tion of affected streams; (2) the sufficiency of the proposed
mitigation measures for purposes of CWA and NEPA compli-
ance; and (3) the adequacy of the Corps’ NEPA and CWA
assessments of cumulative impacts of the proposed fills. In
finding fault with the Corps’ conclusions, the district court
failed to heed the admonition of Citizens of Overton Park
that, in reviewing agency action, "[t]he court is not empow-
ered to substitute its judgment for that of the agency," 401
U.S. at 416. Focusing now on the administrative record before
us, and viewing the Corps’ findings through the lens of arbi-
trary and capricious review, we cannot say that its findings
regarding stream structure and function, mitigation, or cumu-
lative impacts were an "abuse of discretion" or "not in accor-
dance with law," 5 U.S.C. § 706(2) (2000).
1.
The Corps’ CWA Guidelines require the Corps to
"[d]etermine the nature and degree of effect that the proposed
discharge will have, both individually and cumulatively, on
the structure and function of the aquatic ecosystem and organ-
isms." 40 C.F.R. § 230.11(e) (2008). The Guidelines do not
13
The CDDs issued with each of the challenged permits included the
Corps’ NEPA and CWA analyses and conclusions, as well as details of the
proposed compensatory mitigation plans.
OHIO VALLEY v. ARACOMA COAL CO. 33
expressly define the phrase "function of the aquatic
ecosystem," but they do identify a variety of factors the
Corps’ should consider, including "potential changes in sub-
strate characteristics and elevation, water or substrate chemis-
try, nutrients, currents, circulation, fluctuation, and salinity,
on the recolonization and existence of indigenous aquatic
organisms or communities." 40 C.F.R. § 230.11(e) (2008).
In February 1990, the Corps and EPA developed a Memo-
randum of Agreement to make clear what kind of functional
analysis the Corps was required to conduct. Memorandum of
Agreement Between the Environmental Protection Agency
and the Department of the Army Concerning the Determina-
tion of Mitigation Under the Clean Water Act Section
404(b)(1) Guidelines, 55 Fed. Reg. 9210 (Mar. 12, 1990)
[hereinafter "MOA"]. The MOA sets out a common approach
for evaluating stream function, calling for functional values to
be assessed "by applying aquatic site assessment techniques
generally recognized by experts in the field and/or the best
professional judgment of Federal and State agency representa-
tives, provided such assessments fully consider ecological
functions included in the Guidelines." Id. In 2002, the Corps
issued a Regulatory Guidance Letter that called upon Corps
district offices "when possible" to "use functional assessments
by qualified professionals to determine impacts and compen-
satory mitigation requirements." United States Army Corps of
Engineers Regulatory Guidance Letter, No. 02-2 (Dec. 24,
2002) [hereinafter "RGL 02-02"]. RGL 02-02 provided that
assessment techniques should be "generally accepted by
experts or the best professional judgment" of federal and state
agency representatives. Id.14
14
In April 2008, an amendment to the Guidelines superseded RGL 02-
02 as guidance on implementation of the Corps’ compensatory mitigation
policy. See 40 C.F.R. § 230.91(e)(1) (2008). It also superseded the MOA
with respect to any provisions "relating to the amount, type, and location
of compensatory mitigation projects," though all other provisions of the
MOA remain in effect. See 40 C.F.R. § 230.91(e)(2) (2008). Because the
MOA and RGL 02-02 were valid guidance in place at the time of the
Corps’ permitting decisions, however, we must consider the agency’s
action in light of those guidance documents to determine whether the
Corps acted in an arbitrary or capricious manner.
34 OHIO VALLEY v. ARACOMA COAL CO.
The Corps currently does not have a functional assessment
protocol in place for use in West Virginia, though it is in the
process of developing one. As a result, the Corps relies on the
best professional judgment of its staff to assess aquatic
impacts and potential mitigation measures. This generally
means assessing stream structure as a surrogate for function.
OVEC argues that the plain language of the Guidelines
requires that the Corps analyze both the structural and the
functional effects of fill permits on the affected streams. In
their view, this means that a full functional assessment is
required. The Corps’ failure to complete such an assessment,
OVEC continues, is inconsistent with the plain language of its
regulation,15 and the Corps’ substitute method of using its
"best professional judgment" was arbitrary and capricious
because it lacked any objective standards.
Appellants argue that because the CWA Guidelines provide
no definition of "function" or any specific methodology for
evaluating function, the Corps’ interpretation and implemen-
tation of the regulation is entitled to deference. According to
Appellants, the methodologies used by the Corps were an
effective surrogate for functional assessment, and these tech-
niques are compliant with the Guidelines, the MOA, and RGL
02-02.
The district court agreed with Appellants that a functional
assessment was not required and that the Corps was entitled
to deference on how to measure stream structure and function.
It further found that the Corps was entitled to use its "best
professional judgment" in accordance with the MOA and
RGL 02-02 in evaluating functional loss. Nonetheless, the
court concluded that, even under a "best professional judg-
ment" standard, the Corps was obligated, and failed, to fully
assess all ecological functions; to take a "hard look" at the
15
OVEC further contends that, consistent with the CWA Guidelines, the
MOA also compels a full functional assessment.
OHIO VALLEY v. ARACOMA COAL CO. 35
evidence; and, to provide a reasoned basis for its conclusions.
Based on our review of the administrative record, however,
we cannot say that the Corps’ assessments of stream functions
in the challenged permits were arbitrary and capricious.
Contrary to OVEC’s position that the CWA Guidelines
mandate a full functional assessment, the Guidelines in fact
offer no definition of the word "function" or any explanation
of how "structure" and "function" are to be assessed. The
MOA and RGL 02-02 attempt to fill this gap by encouraging
use of a functional assessment but allowing Corps engineers
to use their best professional judgment when such an assess-
ment is not possible. An agency’s interpretation of its own
regulations is due significant deference, Kentuckians for the
Commonwealth Inc., 317 F.3d at 439, and the MOA/RGL 02-
02 approach does not appear plainly erroneous or inconsistent
with the Guidelines.
In this case, the Corps, using its best professional judgment,
used stream structure as a surrogate for assessing stream func-
tion.16 Taking Black Castle as an example, the Corps used
detailed measurements provided by Intervenors on the benthic
macroinvertebrate population17 to draw conclusions about the
level of stream function at the proposed fill sites. Black Castle
16
The dissent misconstrues the significance of the Corps’ use of struc-
tural measurements as a surrogate for a full functional analysis. The
Corps’ methodology does not, as the dissent suggests, make ‘function’
"merely a redundancy for ‘structure.’" Infra at 77. Instead, the Corps has
determined, using its best professional judgment, that structural measure-
ments can provide adequate indications of stream function where a full
functional assessment is not possible. Given the highly deferential stan-
dard under which we review administrative action, we cannot say that this
approach is "plainly erroneous or inconsistent with the regulation." Auer,
519 U.S. at 461 (internal quotations omitted). Acknowledgement of this
basic principle of Seminole Rock deference is conspicuously absent from
the dissent.
17
Benthic macroinvertebrates are nonvertebrate, aquatic organisms that
are large enough to be seen with the naked eye.
36 OHIO VALLEY v. ARACOMA COAL CO.
CDD 102 ("Biological measurements (metrics) represent ele-
ments of the structure and function of the bottom-dwelling
macroinvertebrate assemblage. . . Such a measure of structure
and function of the biota . . . is an appropriate indicator of
ecological quality, the integrity of soil and water chemistry,
geological processes, and land use changes.").18 The Corps
also used the EPA’s Rapid Bioassessment Protocol for Use in
Streams and Wadeable Rivers ("RBP") to assess aquatic habi-
tat, it used the EPA-developed West Virginia Stream Condi-
tion Index ("WV-SCI") for measuring the types and
proportions of benthic insects, and it followed the EPA’s field
manual for measuring the ecological condition of streams.
OVEC identifies nutrient cycling as one of the factors the
Corps is instructed, but failed, to consider under 40 C.F.R.
§ 230.11(e) (2008). The Corps’ CDDs themselves acknowl-
edge this shortcoming, noting that the effects of filling
ephemeral streams on nutrient cycling are difficult to measure
and that there is a lack of consensus among the relevant agen-
cies about how best to collect quantitative evidence regarding
these functions. To compensate for these effects, however, the
Corps’ permitting decisions call for limiting impacts to chan-
nels that do not sustain long periods of flow and for establish-
ing a riparian buffer around mitigation sites.
In fact, in each of its CDDs, the Corps provides its com-
plete findings under 40 C.F.R. § 230.11(e) (2008), including
a section on "Physical and Chemical Characteristics of the
Aquatic Ecosystem," which covers substrate characteristics,
water quality, current patterns and water circulation, water
fluctuations, and salinity gradients; and a section on "Biologi-
cal Characteristics of the Aquatic Ecosystem," which covers
threatened and endangered species and their habitat, aquatic
organisms in the food web, and other wildlife. Camp Branch
18
Similar language can be found in the CDDs for the other permits. See
Camp Branch CDD (Supplement) 5-6; Laxare East CDD 106-07; Repub-
lic No. 2 CDD 43-44.
OHIO VALLEY v. ARACOMA COAL CO. 37
CDD 10-16; Black Castle CDD 13-31; Laxare East CDD 15-
28; Republic No. 2 CDD 15-19. The Corps is entitled to use
its best professional judgment for assessing the structure and
function of the affected aquatic ecosystem, and its CDDs
address the required considerations under the Guidelines, 40
C.F.R. § 230.11(e) (2008).19 Thus, these findings were not
inconsistent with the Corps’ regulations and cannot be charac-
terized as arbitrary, capricious, or otherwise not in accordance
with the law.
The district court placed great weight on the Appellees’
expert testimony at trial in finding that the Corps’ functional
evaluation was lacking. We acknowledge the importance of
extra-record evidence in NEPA cases to inform the court
about environmental factors that the agency may not have
considered. While review of agency action is typically limited
19
The dissent suggests that we have "failed to identify the stream func-
tions to be measured under § 230.11(e)," and thus "cannot meaningfully
evaluate the adequacy of the stream assessment protocols that were used."
Infra at 75. But the only clues § 230.11(e) offers regarding the stream
functions to be measured are the § 230.11(e) factors—"potential changes
in substrate characteristics and elevation, water or substrate chemistry,
nutrients, currents, circulation, fluctuation, and salinity, on the recoloniza-
tion and existence of indigenous aquatic organisms or communities," 40
C.F.R. § 230.11(e) (2008) — and each of the Corps’ CDDs undisputedly
address these factors.
For the Court to attempt to define stream function beyond these guide-
lines would certainly be inappropriate judicial intrusion into the Corps and
EPA’s sphere of authority. Yet that is precisely what the dissent attempts
to do. The dissent looks to the functional assessment protocol that is cur-
rently being developed by the EPA and divines from that a list of func-
tions that the Corps should have evaluated. See infra at 79-82. At this
stage, however, the EPA protocol is still only in development. The dissent
provides no explanation of why "the most logical place to begin an inquiry
into the meaning of the term ‘function,’" infra at 79, would be with a pro-
tocol that still has not been developed as opposed to the already existing
internal guidance documents issued by the EPA and the Corps. In fact, it
is difficult to understand how the Corps could have abused its discretion
by not following guidance that did not even exist at the time it issued the
permits.
38 OHIO VALLEY v. ARACOMA COAL CO.
to the administrative record that was available to the agency
at the time of its decision, Camp v. Pitts, 411 U.S. 138, 142
(1973) (per curiam), a NEPA suit is inherently a challenge to
the adequacy of the administrative record, see County of Suf-
folk v. Sec’y of the Interior, 562 F.2d 1368, 1384 (2d Cir.
1977). That is why, in the NEPA context, "courts generally
have been willing to look outside the record when assessing
the adequacy of an EIS or a determination that no EIS is nec-
essary." Webb v. Gorusch, 699 F.2d 157, 159 n.2 (4th Cir.
1983) (citing County of Suffolk, 562 F.2d at 1384).
Such consideration of extra-record evidence in a NEPA
case does not, however, give courts license to simply substi-
tute the judgment of plaintiff’s experts for that of the agency’s
experts.20 Hughes River Watershed Conservancy v. Johnson,
165 F.3d 283, 289-90 (4th Cir. 1999). "Agencies are entitled
to select their own methodology as long as that methodology
is reasonable," and we must defer to such agency choices. Id.
at 289; see also Native Ecosystems Council v. United States
Forest Serv., 428 F.3d 1233, 1244 (9th Cir. 2005) (finding, in
the context of a NEPA challenge, that because the Forest Ser-
vice had provided a "thorough and reasoned explanation" for
its position, the court would not "take sides in a battle of the
experts" (internal quotations omitted)); Spiller v. White, 352
F.3d 235, 244 (5th Cir. 2003) (same).
Having found that the Corps was not obligated to engage
in a full functional assessment, it is not our place to dictate
how the Corps should go about assessing stream functions
and losses. In matters involving complex predictions based on
special expertise, "a reviewing court must generally be at its
most deferential." Baltimore Gas & Elec. Co. v. Natural Res.
Def. Council, 462 U.S. 87, 103 (1983). When presented with
20
Moreover, whatever concerns OVEC’s experts had regarding the suf-
ficiency of the Corps’ functional analysis were expressed in their com-
ments to the Corps during the notice-and-comment period for the permits,
and were incorporated into and responded to in the CDDs.
OHIO VALLEY v. ARACOMA COAL CO. 39
conflicting evidence, courts must generally defer to the
agency evaluation because "an agency must have discretion to
rely on the reasonable opinions of its own qualified experts
even if, as an original matter, a court might find contrary
views more persuasive." Marsh v. Or. Natural Res. Council,
490 U.S. 360, 378 (1989). The CDDs issued with each permit
include substantial analysis and explanation about the Corps’
impact findings. These determinations are within the agency’s
special expertise and were based on Corps staff’s "best pro-
fessional judgment." As such, the Corps cannot be said to
have acted arbitrarily or capriciously.
2.
OVEC next questions the sufficiency of the mitigation
plans contained in the CDDs for each of the challenged per-
mits. OVEC charges that the proposed mitigation measures
are insufficient both to satisfy the Corps’ requirements under
the CWA and to justify the issuance of a mitigated FONSI in
lieu of a full EIS under NEPA.
Under the Corps’ CWA Guidelines, a § 404 permit cannot
issue "unless appropriate and practicable steps have been
taken which will minimize potential adverse impacts of the
discharge [of fill material] on the aquatic ecosystem." 40
C.F.R. § 230.10(d) (2008). In their MOA of 1990, the EPA
and Corps make "no overall net loss" the goal of the § 404
regulatory program,21 and agree that mitigation has three com-
ponents: avoidance, minimization, and compensatory mitiga-
tion. 55 Fed. Reg. 9210 (Mar. 12, 1990). Avoidance is defined
as the selection of the least environmentally damaging practi-
cal alternative. Id. Minimization is achieved through practica-
ble project modifications and permit conditions that minimize
21
"No overall net loss" is classified only as a "goal" because the agen-
cies "recognized that no net loss of wetlands functions and values may not
be achieved in each and every permit action." 55 Fed. Reg. 9210 (Mar. 12,
1990).
40 OHIO VALLEY v. ARACOMA COAL CO.
adverse impacts. Id. Finally, compensatory mitigation is used
where appropriate to compensate for unavoidable adverse
impacts after all avoidance and minimization measures have
been taken. Id.
Compensatory mitigation can include the restoration of
existing wetlands or the creation of new wetlands, and is to
be done as close to the discharge site as possible ("on-site mit-
igation"). Id. Where on-site mitigation is not possible, off-site
mitigation is permitted but should take place in the same geo-
graphic area if possible. Id. The MOA specifically directs that
the functional values lost should be carefully considered when
determining compensatory mitigation, and that, generally, in-
kind mitigation should be used. Id. Noting the continued
uncertainty of success in wetland creation, the MOA further
instructs that restoration options should be considered before
creation options. Id.
The mitigation measures specified for the four challenged
fill projects include stream enhancement,22 stream restoration,
and stream creation. Each of the proposed compensatory miti-
gation plans would, according to the Corps, lead to no net loss
of habitat.23
22
Enhancement may take the form of planting of native species of trees
and plants along and in streams, establishing proper stream crossings, sta-
bilizing banks, and/or cleaning stream beds to improve the streams’ habi-
tat, aquatic diversity, and water quality.
23
For the Camp Branch project, the Corps’ mitigation plan requires res-
toration of 2,035 linear feet of impacted streams, including the sediment
ponds and the stream segments running between the fill and the sediment
pond. It also requires creation of 41,271 linear feet of stream, both at the
mining site and at an adjacent off-site location within the same watershed.
A minimum 50-foot vegetated riparian zone would be established along all
of the restored and created stream areas.
For the Black Castle project, the Corps’ mitigation plan includes plans
to compensate for temporary impacts caused by construction of the sedi-
ment ponds by restoring 7,590 linear feet of stream. Permanent impact
mitigation will include enhancement of 18,000 linear feet of perennial
OHIO VALLEY v. ARACOMA COAL CO. 41
Much of OVEC’s concern over the proposed compensatory
mitigation plans focuses on the potential impacts on headwa-
ter streams. As noted earlier, the role of headwater streams in
downstream ecology is a matter of some debate in the scien-
tific community and among the parties to this litigation.
According to OVEC’s experts, headwater streams function
uniquely in stream ecology, collecting and transporting
organic matter to nourish aquatic life downstream, allowing
higher levels of nutrient uptake than perennial streams, and
serving as a habitat for a variety of benthic organisms. Inter-
venors, on the other hand, offered expert testimony that, while
headwater streams are "very important" to stream ecology
(J.A. 4345), downstream waters could still maintain a healthy
benthic community even when headwater streams were filled,
as long as the water quality below the fill remained good.24
streams. The Corps further estimates that the placement of alkaline over-
burden from the mining project into the fills will actually improve another
5,420 feet of stream below the fills by decreasing the acidity and alumi-
num levels found in those waters as a result of prior mining activity and
construction.
In the case of the Laxare East project, the Corps developed a mitigation
plan calling for restoration of 7,101 linear feet of temporarily impacted
streams, as well as creation of 13,621 linear feet of stream and enhance-
ment of another 16,000 linear feet.
Finally, the Corps’ mitigation plan for the Republic No. 2 project calls
for restoration of 2,276 linear feet of temporarily impacted stream, as well
as enhancement of 10,777 linear feet of Long Branch, a tributary adjacent
to the permit area. As with the Black Castle project, the Corps found that
the streams that would be filled already suffered from poor to fair water
quality due to previous, pre-SMCRA mining activities.
24
The Intervenors’ expert, Mr. Kirk, did acknowledge that mayfly popu-
lations in downstream waters have been reduced as a result of the place-
ment of valley fills in headwaters, but he characterized mayflies as
particularly "sensitive" organisms and indicated that the reduction in their
numbers was "one of the only dramatic changes that occurs, if the water
quality still is fairly good downstream . . . ." (J.A. 4352.) Another expert
for the Intervenors, Dr. Donald Cherry, testified however that the func-
tions served by the mayflies in these waters were fulfilled by other organ-
isms.
42 OHIO VALLEY v. ARACOMA COAL CO.
Another expert for the Intervenors further testified that, in
fact, ephemeral streams "will not provide as much benefit as
downstream reaches," because their ephemeral nature does
not allow them to "be giving the same type of value and pro-
cesses as the one that’s functioning all the time." (J.A. 4381.)
The Corps, meanwhile, seems to take the position that,
whatever the functional uniqueness of headwater streams,
nothing in NEPA, the CWA, or the Corps’ regulations pre-
vents them from allowing mitigation of headwater stream
destruction through enhancement, restoration, or creation of a
downstream perennial system.
The district court, again relying heavily on the trial testi-
mony of OVEC experts, concluded that the Corps had failed
to fully assess the impacts of destroying headwater streams.
Taking OVEC’s view of the unique role of headwater
streams, the district court found that the mitigation plans
failed to explain how a valley fill’s destruction of headwater
streams could be compensated for simply by the creation,
enhancement, or replacement of an equal or greater length of
some other stream type. The court further suggested that the
Corps’ failure to conduct a full functional assessment meant
that it ignored a number of critical headwater stream values
in its evaluation of adverse impacts, and therefore the mitiga-
tion plans could not possibly be adequate to offset adverse
impacts.
The Corps defends the mitigation plans by arguing that
nothing in the CWA Guidelines requires compensatory miti-
gation measures that precisely replicate the functions of the
impacted streams. Having reviewed the Guidelines, this Court
concludes that, whatever the role of headwater streams in
overall watershed ecology, the Corps is not required to differ-
entiate between headwater and other stream types in the deter-
mination of mitigation measures.
In reaching this conclusion, we look to the Corps’ guidance
in RGL 02-02, which provides that "[d]istricts should require
OHIO VALLEY v. ARACOMA COAL CO. 43
compensatory mitigation projects for streams to replace
stream functions where sufficient functional assessment is
feasible. However, where functional assessment is not practi-
cal, mitigation projects for streams should generally replace
linear feet of stream on a one-to-one basis."
As we have already noted, a full functional assessment pro-
tocol is not yet available to the Corps, and the Corps is thus
entitled to use its best professional judgment to assess struc-
tural and functional losses for purposes of the Guidelines.
Similarly, RGL 02-02 advises that, where a full functional
assessment is not feasible, the only compensatory mitigation
measure the Corps must require in a permitting decision is
stream replacement on a one-to-one basis.25 Nothing in the
Corps’ CWA guidance requires that only in-kind, on-site miti-
gation measures be used. By this standard, the Corps’ permit-
ting decisions have exceeded the mitigation requirements by
creating mitigation plans involving greater than one-to-one
replacement schemes. The Camp Branch project, for example,
involved 15,514 linear feet of direct impacts, and the permit
requires mitigation of 43,306 feet.
The Corps’ guidance does instruct that "functional values
lost by the resource to be impacted must be considered" in
developing a mitigation plan. MOA, 55 Fed. Reg. 9210 (Mar.
12, 1990). But the guidance also provides that compensatory
mitigation must be "practicable." Id. The Corps’ guidance
documents indicate that, in "determining ‘practicability,’ Dis-
25
The dissent contends that this provision of the RGL is inconsistent
with 40 C.F.R. § 230.11(e) and thus "illegal." Infra at 87. But this conten-
tion is grounded on the dissent’s faulty assumption that a full functional
assessment is required in order to satisfy § 230.11(e). The fact remains
that § 230.11(e) provides no guidance as to how ‘function’ is to be
assessed beyond identifying several factors which the Corps should con-
sider. See 40 C.F.R. § 230.11(e). All four of the challenged CDDs address
each of these factors. Given that the Corps’ guidance documents are not
plainly contrary to the meaning of the Guidelines, the dissent’s efforts to
undermine their legitimacy are unavailing.
44 OHIO VALLEY v. ARACOMA COAL CO.
tricts will consider the availability of suitable locations, con-
structability, overall costs, technical requirements, and
logistics." RGL 02-02. "In certain circumstances of regions of
the country, on-site compensatory mitigation opportunities are
limited," and the Corps must look instead to other compensa-
tory options. Thomas F. Caver, Deputy Dir. of Civil Works,
U.S. Army Corps of Eng’rs, Internal Guidance on Mitigation
for Impacts to Aquatic Resources from Surface Coal Mining
(May 7, 2004). In other circumstances, the stream functions
being lost on-site may be "ubiquitous in the watershed," while
"wetland functions are rare or degraded." Id. In such a situa-
tion, "it may be appropriate to replace lost stream functions
with wetlands functions." Id. Thus, where on-site or in-kind
functional mitigation is not practicable or even ecologically
preferable, the Corps’ guidance allows compensation plans
that employ off-site or out-of-kind mitigation based on
improvements to the overall aquatic health of the watershed.
For example, in the case of the Laxare East and Black Cas-
tle permits, the Corp’s mitigation plans aimed to improve the
water quality of already severely distressed streams in por-
tions of the Laurel Creek watershed. Similarly, in the case of
the Republic No. 2 mine, the mitigation plan was designed to
address stability issues along the Long Branch tributary,
based on an assessment that "this section of stream could con-
tribute to improved aquatic habitat and ultimately aquatic
diversity. . . . by attempting to replace the chemical, hydro-
logic, and geomorphic functions of the impacted channels."
Republic No. 2 CDD 13. Each of these mitigation plans
accords with the holistic watershed approach called for in the
Corps’ guidance documents.
Moreover, each of the mitigation plans for the challenged
permits included requirements for continued monitoring of
the efficacy of the mitigation measures, in some cases for as
much as 10 years.26 Each permit also contains detailed special
26
If minimum criteria are not met at the end of the established monitor-
ing period, further monitoring may be required.
OHIO VALLEY v. ARACOMA COAL CO. 45
conditions that impose numerous performance standards to
measure and ensure the success of mitigation.27
OVEC also takes issue with the use of stream creation as
a mitigation measure. The Camp Branch and Laxare East
plans both employ stream creation as a significant component
of their compensatory mitigation schemes. Under these plans,
sediment ditches used during mining to collect runoff, control
drainage, and collect sediment, will be converted into new
stream channels. OVEC’s experts have questioned these
stream creation proposals, calling them scientifically untested
and unsound.
The Corps’ support for its claim that the proposed stream
creation measures have good potential for success is admit-
tedly limited. The Corps cites one example of stream creation
in a mining area in Kentucky as well as an Ohio State Univer-
sity study on the potential for enhancing the natural ecology
of drainage ditches. See Camp Branch CDD 44; Laxare East
CDD 98-101. However, the novelty of a mitigation measure
alone cannot be the basis of our decision to discredit it. When
an agency is called upon to make complex predictions within
its area of special expertise, a reviewing court must be at its
most deferential. Baltimore Gas & Elec. Co. v. Natural Res.
Def. Council, 462 U.S. 87, 103 (1983); see also Marsh v. Or.
Natural Res. Council, 490 U.S. 360, 378 (1989) ("When spe-
27
OVEC takes issue with the mitigation measurement standards
employed by the Corps, claiming that, for three of the four challenged per-
mits, the Corps relies improperly on the Stream Habitat Unit ("SHU")
model developed by the applicants to determine mitigation. According to
OVEC, the SHU lacks a scientific basis and distorts the evaluation of
streams by focusing on habitat measures and physical appearance and giv-
ing insufficient weight to stream function measures and to the unique role
of headwater streams in watershed ecology. But, the Corps did rely not on
the SHU to determine required mitigation. The Corps’ baseline standard
for mitigation is the one-to-one linear feet replacement called for by the
Corps’ guidance documents. The SHU model was used to provide supple-
mental data regarding habitat and as a measurement standard to help mon-
itor the success of habitat creation, enhancement, or restoration efforts.
46 OHIO VALLEY v. ARACOMA COAL CO.
cialists express conflicting views, an agency must have dis-
cretion to rely on the reasonable opinions of its own qualified
experts even if, as an original matter, a court might find con-
trary views more persuasive."). The Corps admits that "[t]ime
is required with any new, scientifically based development as
well as monitoring and evaluation to show the success and/or
failures of the project." Camp Branch CDD (Supplement) 3.
And, the monitoring plans in place for Camp Branch and Lax-
are East allow the Corps to reevaluate their efficacy determi-
nations as the stream creation projects progress.
Because the mitigation measures reflect the Corps’ deter-
minations of the most appropriate and practicable means of
compensating for anticipated impacts and losses of value, we
cannot say that the Corps’ conclusion that compensatory miti-
gation would offset the adverse effects of the fill activity was
arbitrary, capricious, or otherwise not in accordance with the
requirements of the CWA. Cf. Fla. Keys Citizens Coal., Inc.
v. U.S. Army Corps of Eng’rs, 374 F. Supp. 2d 1116, 1158-59
(S.D. Fla. 2005); Airport Cmtys. Coal. v. Graves, 280 F.
Supp. 2d 1207, 1227-28 (W.D. Wash. 2003).
The Corps’ proposed mitigation plans are also sufficient to
justify issuance of a mitigated FONSI for purposes of NEPA.
In O’Reilly v. U.S. Army Corps of Engr’s, 477 F.3d 225 (5th
Cir. 2007), the Fifth Circuit found that the Corps’ EA and
mitigated FONSI for a § 404 permit application were inade-
quate because the Corps failed to establish that identified
adverse impacts of wetland filling would actually be corrected
by its proposed mitigation measures.28 The court noted that
generally "proposed mitigation measures need not be laid out
to the finest detail," but they also could not be purely perfunc-
tory or conclusory. Id. at 231 (citing Robertson v. Methow
Valley Citizens Council, 490 U.S. 332, 352 (1989)).
28
Given our earlier finding that the Corps reasonably restricted the
scope of its NEPA analysis, the Corps did not need to consider mitigation
efforts beyond those aimed at countering the impacts of the filling of juris-
dictional waters.
OHIO VALLEY v. ARACOMA COAL CO. 47
Volume 2 of 2
OHIO VALLEY v. ARACOMA COAL CO. 55
In this case, by contrast, the Corps did explain how mitiga-
tion would compensate for fill impacts. In the Black Castle
CDD, for example, the Corps explains that:
[t]he applicant’s mitigation plan would be expected
to result in the replacement of the appropriate type
and quantity of aquatic functions lost due to project
impacts. The goal of the applicant’s CMP [Compen-
satory Mitigation Plan] is to re-establish, restore,
and/or enhance the values of each habitat parameter
(i.e. embeddedness and sediment deposition, veloci-
ty/depth regime, riparian cover, bank stability and
vegetative protection), in order to promote a general
improvement in the area’s existing benthic condi-
tions. Before impacts, the streams proposed to be
impacted by the proposed activities were measured
for detailed Rosgen-type morphological parameters,
56 OHIO VALLEY v. ARACOMA COAL CO.
aquatic resources, habitat, substrate, and riparian
parameters in order to reconstruct these sections of
channels to their approximate original state . . . , thus
utilizing an ecological restoration approach on these
sections of channels by replacing the physical and
geomorphic functions . . . . This approach focuses on
replacing the corridor structure and function, there-
fore, enabling communities to recover to a sustain-
able level. Stream functions were identified and
quantified as part of the conducted benthic surveys,
water sampling, habitat assessments, and [West Vir-
ginia Stream Condition Index] WVSCI and were
used in the design of the applicant’s CMP. A variety
of components that address aquatic habitat functions
such as improvement to water quality and tempera-
ture, organic input, and macroinvertebrate, fisheries,
and riparian habitat has been incorporated into the
applicant’s mitigation plan. The applicant’s specific
goals include reducing sediment runoff, improving
marginal aquatic habitats for benthic macroinverte-
brates and fish both functionally and aesthetically,
and restoring functions by eradicating invasive spe-
cies, stabilizing eroded and collapsed banks, install-
ing proper road crossings, placing or repositioning
boulders, and planting native riparian vegetation.
These improvements would ultimately improve
aquatic habitat for fauna within the Laurel Creek
watershed.
Black Castle CDD 42-43; see also id. at 102-03.29
The Corps is thus able to "articulate a satisfactory explana-
tion for its action including a ‘rational connection between the
facts found and the choice made.’" Motor Vehicle Mfrs. Ass’n
29
Similar explanations were provided in the other challenged CDDs. See
Camp Branch CDD 61-62; Laxare East CDD 41-42, 108-09; Republic No.
2 CDD 13-14.
OHIO VALLEY v. ARACOMA COAL CO. 57
v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)
(quoting Burlington Truck Lines, Inc. v. United States, 371
U.S. 156, 168 (1962)); see also Ohio River Valley Envtl
Coal., Inc. v. Kempthorne, 473 F.3d 94, 102-103 (4th Cir.
2006). Given this, we conclude that the compensatory mitiga-
tion plans contained in the CDDs for each of the challenged
permits were sufficient both for purposes of satisfying the
Corps’ requirements under the CWA and for justifying issu-
ance of a mitigated FONSI under NEPA.
3.
Under both NEPA and the CWA, the Corps is required to
consider the cumulative impacts of an applicant’s proposed
project. Under NEPA, the Corps must evaluate "[w]hether the
action is related to other actions with individually insignifi-
cant but cumulatively significant impacts." 40 C.F.R.
§ 1508.27(b)(7) (2008). Under the CWA, the Corps’ Guide-
lines instruct that a project should not receive a § 404 permit
"unless it can be demonstrated that [the project] will not have
an unacceptable adverse impact either individually or in com-
bination with known and/or probable impacts of other activi-
ties affecting the ecosystems of concern." 40 C.F.R.
§ 230.1(c) (2008). In each of the four challenged permitting
decisions, the Corps found that no cumulatively significant
impacts would occur.
OVEC argues that the Corps’ cumulative impact analysis
failed in two respects. First, OVEC claims that, because the
Corps improperly limited the scope of its NEPA analysis to
the streams alone, it also failed to assess the cumulative
impacts of the fills on the valleys themselves. Given our ear-
lier finding that the Corps was entitled to deference in its
decision to limit the scope of its NEPA analysis to the impacts
from the filling of jurisdictional waters, this first argument by
OVEC must fail.
Second, OVEC argues that the Corps’ conclusions about
cumulative impacts with regard to the streams and watersheds
58 OHIO VALLEY v. ARACOMA COAL CO.
themselves were insufficient. Appellants respond that the
Corps complied with relevant regulations and guidance in its
cumulative impact analysis. For each CDD, the Corps
included an evaluation of (1) present conditions and probable
future conditions if fill activity is not allowed; (2) the direct
and indirect effects that fill activity would have on those con-
ditions; and (3) how fill activity would interact with past or
future impacts from other activity in the area. See Camp
Branch CDD 24-30; Black Castle CDD 43-53; Laxare East
CDD 43-56; Republic No. 2 CDD 21-24.
The district court found the Corps’ cumulative impact anal-
ysis faulty because it presumed that the Corps’ determination
relied improperly on mitigation to eliminate adverse impacts.
The district court is correct that a "mitigated to insignifi-
cance" analysis does not suffice to demonstrate an absence of
cumulatively significant impacts. The Fifth Circuit rejected
just such an approach in O’Reilly, 477 F.3d at 234-35.
In O’Reilly, the Corps had issued a CWA § 404 permit to
a residential developer after issuing a mitigated FONSI. The
court agreed with plaintiffs, area residents who opposed the
planned subdivision being developed, that the Corps acted
arbitrarily in issuing the mitigated FONSI because it failed
both to properly articulate how adverse effects were mitigated
to insignificance and to adequately consider cumulative
effects. Id. at 227. On this latter shortcoming, the Corps had
stated that "mitigation for impacts caused by the proposed
project, possible future project phases, and all Corps permit-
ted projects will remove or reduce e[x]pected impacts." Id. at
235 (alteration in original) (internal quotations omitted). The
court rejected this argument, observing that, without further
explanation from the Corps, it could not accept the presump-
tion that "when the individually ‘mitigated-to-insignificant’
effects of this permit are added to the actual post-dredge and
fill effects of 72 other permits issued to third parties by the
Corps in the area, that the result will not be cumulatively sig-
nificant." Id. (emphasis in original).
OHIO VALLEY v. ARACOMA COAL CO. 59
This case is different. While the Corps’ finding of no
cumulative adverse impacts does lean, to some extent, on mit-
igation, it is not in the same perfunctory, conclusory way that
was found inadequate in O’Reilly. For one thing, the Corps’
findings rely in part on both the WVDEP’s CWA § 401 certi-
fication and SMCRA permitting process. Under CWA § 401,
the WVDEP must certify that proposed mining activity will
not cause or contribute to a violation of state water quality
standards. See 33 U.S.C. § 1341 (2000). The § 401 certifica-
tion process involves, among other things, consideration of:
impacts of the project in light of other activities in
the watershed . . . and anti-degradation requirements
. . . . [which] work to reduce or eliminate cumulative
impacts by providing a process to maintain existing
water quality levels to meet intended uses. . . .
Therefore, the Corps views the state water quality
certification as satisfying the water quality portion of
cumulative impact analysis . . . .
Laxare East CDD 122. A § 401 certification is considered
conclusive, and no independent analysis of the certification is
required. 33 C.F.R. § 320.4(d) (2008); see also Bering Strait
Citizens for Responsible Res. Dev. v. U.S. Army Corps of
Eng’rs, 524 F.3d 938 (9th Cir. 2008).
The SMCRA permitting process also requires the director
of WVDEP to prepare an assessment of the probable cumula-
tive impact of all anticipated (past, present, and future) min-
ing on the hydrologic balance in the area of the mine and
make a finding that the proposed operation has been designed
to prevent material damage to the hydrologic balance outside
the permit area. W. Va. Code § 22-3-18(b)(3) (2005). This
Cumulative Hydrologic Impact Assessment ("CHIA") is part
of the administrative record for each of the challenged per-
mits. See, e.g., Laxare East CDD 134.
In finding the Corps’ cumulative impact analysis inade-
quate, the district court charged that "[t]he Corps does not
60 OHIO VALLEY v. ARACOMA COAL CO.
explain how the cumulative destruction of headwater streams
already affected by mining in these watersheds will not con-
tribute to an adverse impact on aquatic resources." Ohio Val-
ley Envtl Coal. v. U.S. Army Corps of Eng’rs, 479 F. Supp.
2d 607, 659 (S.D. W. Va. 2007). In fact, each of the Corps’
permits directly addresses the cumulative impact issue. In the
Republic No. 2 CDD, for example, the Corps acknowledges
that the impact of pre-SMCRA mining has degraded the upper
Cabin Creek watershed. See Republic No. 2 CDD 23. How-
ever, the Corps notes that mining in the same seams as pro-
posed for Republic No. 2 has not resulted in any acid mine
drainage problems. Id. at 16. The Corps also notes that as part
of the CWA § 402 NPDES program, anti-degradation stan-
dards have been calculated for each pond outlet to ensure no
material impacts to water quality downstream and to ensure
water quality standards are met. Id. Significantly, the CHIA
prepared by WVDEP, which considered the impact of the
Republic No. 2 operation and all other past, present, and
future mining in the watershed, determined there would be no
cumulative adverse impact. Id.
Thus, the Corps concluded that
while there would be short-term impacts to the
aquatic and terrestrial environment as a result of the
proposal, it is anticipated the proposed mining activi-
ties would have no adverse cumulative environmen-
tal impacts within the subwatershed or the overall
Cabin Creek watershed. The proposal, if imple-
mented as described, should improve the overall eco-
logical balance of the area. Further, the proposal and
resultant mitigation and reclamation requirements
are expected to improve the overall health of the
Cabin Creek watershed.
Id. at 24.30
30
Similar language can be found in the other permits. See, e.g., Black
Castle CDD 43-53; Laxare East CDD 43-56.
OHIO VALLEY v. ARACOMA COAL CO. 61
Because the Corps has analyzed cumulative impacts in each
of the challenged permits and has articulated a satisfactory
explanation for its conclusion that cumulative impacts would
not be significantly adverse, we find that the Corps did not act
arbitrarily or capriciously in conducting its required cumula-
tive impact analysis.
V.
Appellants also challenge the district court’s June 13, 2007,
order granting OVEC declaratory relief on the question of
whether stream segments connecting valley fills to down-
stream sediment ponds are properly classifiable under the
CWA as waters of the United States and thus not within the
Corps’ § 404 authority to allow. We conclude that stream seg-
ments, together with the sediment ponds to which they con-
nect, are unitary "waste treatment systems," not "waters of the
United States," and that the Corps’ has not exceeded its § 404
authority in permitting them.
A.
At the outset of our analysis on this issue, we must deal
with the Intervenors’ argument that the doctrine of res judi-
cata precludes OVEC’s claim of entitlement to declaratory
relief. Intervenors argue that plaintiffs could and should have
raised this claim in the course of the Bragg v. Robertson liti-
gation, and their failure to do so bars them from raising it
now. The district court rejected this argument in a memoran-
dum opinion and order dated August 10, 2006; we review de
novo, see Q Int’l Courier, Inc. v. Smoak, 441 F.3d 214, 216
(4th Cir. 2006).
In Bragg v. Robertson, 54 F. Supp. 2d 653 (S.D. W. Va.
1999), aff’d in part, rev’d in part sub nom. Bragg v. W. Va.
Coal Ass’n, 248 F.3d 275 (4th Cir. 2001), the plain-
tiffs—including several individuals and the West Virginia
Highlands Conservancy, one of the plaintiffs in this
62 OHIO VALLEY v. ARACOMA COAL CO.
case—brought suit against, inter alia, the Corps and WVDEP
for various alleged violations of their statutory duties under
SMCRA, the CWA, and NEPA in the course of their moun-
taintop removal permitting activities. With respect to the
Corps, the plaintiffs’ complaint alleged that the agency did
not have authority under the CWA to regulate valley fills
because mining spoil did not meet the definition of "fill mate-
rial" under the CWA.
Plaintiffs subsequently entered into a settlement agreement
with the Corps that resolved their claims regarding the Corps’
past alleged violations under the CWA and NEPA.31 See id.
Under the terms of the agreement, the plaintiffs gave up their
right to challenge the Corps’ authorization of valley fills
under the theory that mining spoil is not fill material. See id.
at 657 n. 5. The agreement expressly reserved for the plain-
tiffs, however, "the right to challenge under the APA any
future Corps’ CWA section 404 authorization for any valley
fill in waters of the United States that may be authorized by
the Corps after the Effective Date of this Settlement Agree-
ment." (J.A. 139-40); see also Bragg, 54 F. Supp. 2d at 657.
The district court approved the settlement agreement and dis-
missed all outstanding claims against the Corps with preju-
dice. Bragg, 54 F. Supp. 2d 653-54.
Intervenors claim that the district court’s orders in the
Bragg litigation were final adjudications for purposes of claim
preclusion and that principles of res judicata bar OVEC from
now challenging the Corp’s permitting of the use of stream
31
The district court in Bragg, having determined that the settlement
agreement was "fair, adequate, and reasonable," dismissed plaintiffs’
claims against the federal defendants with prejudice, but granted leave for
the plaintiffs to file a second amended complaint. 54 F. Supp. 2d at 670.
In a separate memorandum opinion and order, see Bragg v. Robertson, 83
F. Supp. 2d 713 (S.D. W. Va. 2000), the court resolved all outstanding
claims (which involved only WVDEP and claims under SMCRA), by
accepting a consent decree between the plaintiffs and WVDEP.
OHIO VALLEY v. ARACOMA COAL CO. 63
segments to connect fills to downstream sediment ponds. We
find this argument unpersuasive.
Res judicata or claim preclusion bars a party from suing on
a claim that has already been "litigated to a final judgment by
that party or such party’s privies and precludes the assertion
by such parties of any legal theory, cause of action, or defense
which could have been asserted in that action." 18 James Wm.
Moore et al., Moore’s Federal Practice § 131.10(1)(a) (3d ed.
2008). For res judicata to prevent a party from raising a claim,
three elements must be present: "(1) a judgment on the merits
in a prior suit resolving (2) claims by the same parties or their
privies, and (3) a subsequent suit based on the same cause of
action." Aliff v. Joy Mfg. Co., 914 F.2d 39, 42 (4th Cir. 1990).32
In finding that the second suit involves the same cause of
action, the court need not find that the plaintiff in the second
suit is proceeding on the same legal theory he or his privies
advanced in the first suit. See id. at 43. As long as the second
suit "arises out of the same transaction or series of transac-
tions as the claim resolved by the prior judgment," the first
suit will have preclusive effect. Id. (internal quotations omit-
ted).
OVEC argues that the claims involved in this case and in
Bragg are different, because in Bragg the plaintiffs chal-
lenged the Corps’ authority to permit valley fills and in this
case the plaintiffs have challenged the Corps’ authority to
authorize pollutant discharge into stream segments. This argu-
ment, as Intervenors point out, misunderstands the principles
of claim preclusion. Even claims that were not raised in the
original suit may be precluded if they arose from the same
transaction or occurrence as those raised in the first suit and
were available to the plaintiff at the time of the first suit. See
Aliff, 914 F.2d at 42-43.
32
OVEC does not challenge in its arguments that the "same parties or
their privies" requirement is met.
64 OHIO VALLEY v. ARACOMA COAL CO.
Nonetheless, claim preclusion does not apply in this case
for two reasons. First, the Bragg settlement agreement explic-
itly reserved plaintiffs’ right to challenge the Corps’ valley fill
permit authority in the future. The Bragg plaintiffs conceded
only that they would not raise such a challenge on the theory
that mining spoil is not fill material. Settlement agreements
operate on contract principles, and thus the preclusive effect
of a settlement agreement "should be measured by the intent
of the parties." 18A Charles Alan Wright, Arthur R. Miller,
& Edward H. Cooper, Federal Practice and Procedure
§ 4443 (2d ed. 2002). Here it seems clear that the parties
intended to retain for the plaintiffs the right to challenge the
Corps’ permitting of future valley fill projects on any grounds
other than the one specifically raised in Bragg.
Second, OVEC is challenging a different set of permits in
this case than those at issue in Bragg. The Corps had not even
issued the permits in question here at the time of the Bragg
litigation. Intervenors’ argument that OVEC should have
raised its stream segment claim during the Bragg litigation
falls flat because the claim here concerns four permits that
were not even in existence at the time of Bragg. The fact that
the two suits involve challenges to very similar courses of
conduct does not matter; a prior judgment "cannot be given
the effect of extinguishing claims which did not even then
exist . . . ." Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322,
328 (1955). A contrary finding would confer "partial immu-
nity from civil liability for future violations." Id. at 329.
For these reasons, we affirm the lower court’s finding that
OVEC’s stream segments claim is not barred by principles of
res judicata.
B.
The district court’s June 13, 2007, order granted OVEC’s
motion for partial summary judgment on its claim that the
Corps did not have authority under § 404 of the CWA to
OHIO VALLEY v. ARACOMA COAL CO. 65
authorize the discharge of fill sediment into the stream seg-
ments that link the fill to a downstream sediment pond. The
court found that the stream segments were "waters of the
United States" and not part of "waste treatment systems," as
the Corps characterized them. While acknowledging the def-
erence traditionally due an agency’s interpretation of its own
regulations, the court found that in this case the Corps’ inter-
pretation was a post hoc rationalization, created for the pur-
poses of this litigation. As a result, the court held that
discharges from the fill into the segment streams were imper-
missible without a separate CWA § 402 NPDES permit. We
review this question of law de novo. United States v. Deaton,
332 F.3d 698, 703-04 (4th Cir. 2003).
Because this is an issue of statutory and regulatory interpre-
tation, we must apply the framework for review laid out in
Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S.
837, 843 (1984) and Bowles v. Seminole Rock & Sand Co.,
325 U.S. 410, 413-14 (1945).
In determining whether the Corps’ interpretation is entitled
to deference, this Court must first look to the language of the
authorizing statute. Chevron, 467 U.S. at 842-43 (1984). An
agency’s reasonable interpretation of a statute is entitled to
deference, unless Congress has already expressed a clearly
contrary intent. Id.
The CWA prohibits the discharge of any pollutant unless
done in compliance with statutory requirements. 33 U.S.C.
§ 1311 (2000). It goes on to define the phrase "discharge of
a pollutant" to include "any addition of any pollutant to navi-
gable waters from any point source . . . ." 33 U.S.C.
§ 1362(12)(A) (2000). The term "navigable waters," in turn,
is defined as "the waters of the United States." 33 U.S.C.
§ 1362(7) (2000).
The Corps’ regulations implementing the CWA have
defined the "waters of the United States" to include interstate
66 OHIO VALLEY v. ARACOMA COAL CO.
waters as well as "all other waters such as intrastate lakes, riv-
ers, [and] streams (including intermittent streams). . . ." 33
C.F.R. § 328.3(a)(3) (2008); 40 C.F.R. § 232.2 (2008). The
regulations also include in the definition "[a]ll impoundments
of waters otherwise defined as waters of the United States
under the definition." 33 C.F.R. § 328.3(a)(4) (2008); see also
40 C.F.R. § 232.2 (2008). The regulations, however, exclude
from the definition "waste treatment systems, including treat-
ment ponds or lagoons designed to meet the requirements of
CWA." 33 C.F.R. § 328.3(a)(8) (2008); see also 40 C.F.R.
§ 232.2 (2008).
In Deaton, 332 F.3d at 709, this Court found that Congress’
decision to define "navigable waters" broadly as "waters of
the United States" evinced an intent to regulate at least some
waters that would not be considered navigable. The Court
went on to find, however, that the Act was not clear what non-
navigable waters it intended to cover, and thus that the phrase
"waters of the United States" was "sufficiently ambiguous to
constitute an implied delegation of authority to the Corps" to
determine the scope of the phrase. Id. at 709-10.
Given that the Corps has the authority to determine which
waters are covered by the CWA, this Court must next look to
the Corps’ regulations implementing the CWA. Id. at 710. If
the regulation defining "waters of the United States" is ambig-
uous, then the Corps’ interpretation of that definition is enti-
tled to Seminole Rock deference and controls unless plainly
erroneous or inconsistent with the regulation. Id. at 711.
Appellants and OVEC agree that, in the absence of the val-
ley fill, the stream segments in question would be considered
"waters of the United States" because they would be part of
a natural stream pursuant to 33 C.F.R. § 328.3(a)(3). OVEC
contends that, even after the streams have been co-opted for
use in conjunction with valley fills, the segments are still "im-
poundments of water otherwise defined as waters of the
United States" and thus treated as "waters of the United
OHIO VALLEY v. ARACOMA COAL CO. 67
States" under 33 C.F.R. § 328.3(a)(4). If OVEC is correct,
any discharge of sediment into these stream segments from
the valley fills would require a CWA § 402 NPDES permit.
The Corps, however, counters that the stream segments and
the sediment ponds to which they connect form a "waste treat-
ment system" under 33 C.F.R. § 328.3(a)(8). Thus, in the
Corps’ view, the stream segments are exempt from the "wa-
ters of the United States" definition and a § 404 permit suf-
fices to authorize them.
The Corps’ definition of "waters of the United States"
relies heavily on that adopted by the EPA in its CWA § 402
regulations. Compare 33 C.F.R. § 328.3 (2008) and 40 C.F.R.
§ 232.2 (2008) with 40 C.F.R. § 122.2 (2008). In its exemp-
tion of waste treatment systems, the EPA regulations provide
that "[t]his exclusion applies only to manmade bodies of
water which neither were originally created in waters of the
United States . . . nor resulted from the impoundment of
waters of the United States." 40 C.F.R. § 122.2. Significantly,
however, that sentence was suspended by the EPA in 1980.
See 45 Fed. Reg. 48620 (July 21, 1980). At the time, the
agency indicated that it intended to promptly issue a revised
definition, see id., but it never did. Without that definitional
sentence for the term "waste treatment system," it is not obvi-
ous from the plain language of the regulation what the term
is intended to cover. Because the Corps’ definition relies on
the EPA definition, and because the EPA definition is ambig-
uous, the intent behind the Corps’ "waste treatment excep-
tion" is ambiguous.
The issue, then, is to determine whether the Corps’ inter-
pretation of 33 C.F.R. § 328.3(a)(8) (2008) is "plainly errone-
ous or inconsistent with the regulation." Seminole Rock, 325
U.S. at 414 (1945). Appellants argue that the Corps is entitled
to Seminole Rock deference because it has consistently treated
stream segments and sediment ponds as "waste treatment sys-
tems" in accordance with longstanding EPA guidance on the
matter. OVEC contends, however, that we should follow the
68 OHIO VALLEY v. ARACOMA COAL CO.
district court and find that the Corps’ position is a post hoc
rationalization, created for the purposes of defending this liti-
gation, and is thus entitled to no deference. As support for this
argument, OVEC points to the fact that none of the CDDs for
the four challenged permits included any reference to the
"waste treatment" exception when originally issued; only
when the permits were reissued after voluntary remand to the
Corps did the waste treatment language appear.
Notwithstanding the Seminole Rock principle that signifi-
cant deference is due an agency’s interpretation of its own
regulations, such deference may not be required when the
agency’s advocated interpretation is one that it has just
adopted for the purpose of litigation and that is "wholly
unsupported by regulating, rulings, or administrative prac-
tice." Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212
(1988). The interpretation must reflect the agency’s fair and
considered judgment on the matter. See Auer v. Robbins, 519
U.S. 452, 462 (1997). To the extent that Appellees are right,
and the Corps only adopted this position as a litigation
defense, it is not entitled to Seminole Rock deference. How-
ever, the Corps argues that its position has been consistent
and consonant with longstanding EPA guidance.
As with much in this case, the history of the EPA’s and the
Corps’ positions on this issue is complicated. As noted earlier,
in 1980, the EPA suspended its definition of the term "waste
treatment system," found originally in 40 C.F.R. § 122.2, and
did not issue a revised definition. Almost a decade later, in
West Virginia Coal Association v. Reilly, 728 F. Supp. 1276
(S.D. W. Va. 1989)—a challenge by two coal mining associa-
tions and several mining companies to the EPA’s policies
strictly limiting the use of in-stream treatment of mining
waste—the EPA took the position that in-stream sediment
ponds and the waters above them are included in the defini-
tion of "waters of the United States" because they are an
impoundment of waters of the United States. The court upheld
this position, finding that it was not plainly erroneous or
OHIO VALLEY v. ARACOMA COAL CO. 69
inconsistent with the EPA’s regulations or with the CWA
itself. Id. at 1290-91.
The Reilly plaintiffs argued that the stream segments and
sediment ponds were excepted from § 402 regulation because
they fell under the Corps’ § 404 authority instead. Id. at 1285.
The court rejected this argument finding that, while the regu-
lations themselves offered confusing guidance on the matter,
the Corps and the EPA had agreed that sediment-laden runoff
from the valley fills was subject to § 402 permitting require-
ments.33 Id. This Court affirmed the district court’s opinion in
an unpublished opinion. See West Virginia Coal Ass’n v.
Reilly, Nos. 90-234, 90-2040, 1991 U.S. App. LEXIS 9401,
at *14 (4th Cir. May 13, 1991) (agreeing with district court
that in-stream sediment ponds and the waters above them are
"waters of the United States").
Then, in a 1992 guidance document, the EPA indicated, in
the context of advising on an Alaskan gold mining project,
that impoundments "created by the discharge of fill material
. . . if permitted by the Corps under Section 404 for purposes
of creating a waste treatment system, would no longer be
waters of the U.S." Memorandum from LaJuana S. Wilcher,
Assistant Administrator for the EPA, to Charles E. Findley,
Director, Water Division, Region X, United States Army
Corps of Engineers, on Clean Water Act Regulation of Mine
Tailings Disposal (Oct. 2, 1992).
Finally, in March 2006, after this litigation began, the EPA
sent the Corps a letter in which the EPA states that, in the
context of Appalachian surface mining, "the waste treatment
system exclusion continues to apply to the creation or use of
a waste treatment system in waters below a valley fill permit-
33
The creation of the sediment ponds themselves fall within the Corps’
§ 404 authority because their embankments are created through the place-
ment of fill material at the bottom of the streams. See Reilly, 728 F. Supp.
at 1288.
70 OHIO VALLEY v. ARACOMA COAL CO.
ted by the Corps under CWA § 404." Letter from Benjamin
H. Grumbles, Assistant Administrator for the EPA, to the
Hon. John Paul Woodley, Assistant Secretary of the Army
(Civil Works) (Mar. 1, 2006) (emphasis added) [hereinafter
"the EPA Letter"]. The EPA Letter goes on to note that,
because it is often impracticable to locate sediment ponds
directly below valley fills, the use of a stream segment to con-
nect the fill and pond is "an unavoidable and necessary com-
ponent of the treatment system." Id. The Corps then relied on
this letter to introduce the "waste treatment system" language
into the permits on voluntary remand.
The district court found, and OVEC now argues, that the
EPA Letter was a post hoc rationalization and did not consti-
tute the "fair and considered judgment" of the EPA or, in turn,
the Corps. In support of its argument that the "waste treatment
system" interpretation was not a post hoc rationalization, the
Corps points to the fact that, over the twenty-five years that
the EPA and WVDEP have been issuing § 402 NPDES per-
mits, those agencies have never required an NPDES permit
for the stream segments that are used in numerous surface
mining operations to link § 404-permitted valley fills to
downstream sediment ponds. Moreover, the WVDEP, which
has been operating an EPA-approved NPDES program since
1982, has also taken the position that the permitting of seg-
ment streams is within the Corps’ authority. (See Joint
Amicus Brief of the West Virginia Department of Commerce
and the West Virginia Department of Environmental Protec-
tion as Amici Curiae Supporting Appellants at 16.)
This kind of consistent administrative practice suggests that
the Corps’ and EPA’s position is not a post hoc rationaliza-
tion. Cf. Bowen, 488 U.S. at 212 ("We have never applied the
principle [of deference] . . . to agency litigating positions that
are wholly unsupported by regulations, rulings, or administra-
tive practice."). The EPA’s position in Reilly, at first glance,
seems difficult to reconcile with the position it and the Corps
now claim. But, the distinction lies in the fact that the Reilly
OHIO VALLEY v. ARACOMA COAL CO. 71
case arose in the context of the EPA’s oversight of West Vir-
ginia’s § 402 program. See 728 F. Supp. 1276.
In Reilly, the EPA was objecting to the fact that West Vir-
ginia, in issuing § 402 permits that allowed in-stream treat-
ment ponds, had analyzed discharges from the ponds but had
not analyzed the impacts of creating the ponds themselves.
The EPA was not confronted in Reilly with a situation where
the treatment system was authorized by a § 404 permit issued
by the Corps.34 When the Corps exercises its § 404 authority
to permit the use of a stream segment as part of the treatment
system for fill runoff, it has allowed the temporary removal
of these waters from the definition of "waters of the United
States" only after analyzing the impacts of creating the system
and mitigating those impacts as necessary. Thus, a sediment
pond and stream segment waste treatment system authorized
by a § 404 permit is a treatment system "designed to meet the
requirements of the CWA." 40 C.F.R. § 232.2 (2008).
Even if the Corps’ "waste treatment system" argument was
a post hoc rationalization when it was first raised, once the
34
The mining company plaintiffs in Reilly argued, in a motion for sum-
mary judgment, that the EPA did not have jurisdiction to regulate in-
stream treatment facilities because regulatory authority rested with the
Secretary of the Army under CWA § 404. 728 F. Supp. at 1282. In
response, the EPA took the position that the ponds and the waters above
them were "waters of the United States" and within their regulatory juris-
diction because they were an impoundment of waters that would otherwise
be "waters of the United States." Id. at 1289-90. But the mining company
plaintiffs had not obtained a § 404 permit for their in-stream treatment
facilities, and it was not Corps action, but the actions of West Virginia’s
§ 402 NPDES regulatory authority, to which the EPA was taking excep-
tion.
In fact, the EPA’s policy for in-stream treatment that the court was con-
sidering in Reilly allowed that exceptions to the EPA-mandated prohibi-
tion on in-stream treatment ponds would be made where there were no
other feasible alternatives to in-stream treatment and where the mine oper-
ator complied with the Corps’ CWA Guidelines. 728 F. Supp. at 1279-80
nn. 1-2.
72 OHIO VALLEY v. ARACOMA COAL CO.
Corps reconsidered and reissued the permits on voluntary
remand, the justification was no longer post hoc and it is enti-
tled to deference.35 When a court reviews an agency action,
the agency is entitled to seek remand "without confessing
error, to reconsider its previous position." SKF USA Inc. v.
United States, 254 F.3d 1022, 1028 (Fed. Cir. 2001). "[A]n
agency must be allowed to assess ‘the wisdom of its policy on
a continuing basis.’" Id. at 1030 (quoting Chevron, 467 U.S.
at 864). As the Supreme Court recently found in Long Island
Care at Home, Ltd. v. Coke, 127 S. Ct. 2339, 2349 (2007), "as
long as interpretive changes create no unfair surprise . . . the
change in interpretation alone presents no separate ground for
disregarding the Department’s present interpretation." Dec-
ades worth of administrative practice cannot constitute an
"unfair surprise." Because, to the extent there was a "change"
in written administrative policy, that change reflected the con-
sidered views and longstanding practice of the Corps and the
EPA, the Corps’ interpretation of the "waste treatment"
exception to its regulatory definition of "waters of the United
States" is entitled to deference. See id. at 2349.
The final step in the combined Chevron and Seminole Rock
analysis is to determine whether the agency’s interpretation of
the statute is reasonable and entitled to deference. In this case,
we must determine whether, considering Congress’ intent for
the CWA, it was reasonable for the Corps to conclude that
stream segments connecting valley fills to sediment ponds are
"waste treatment systems" and not "waters of the United
States."
In making this determination, we must first appreciate the
statutory tightrope that the Corps walks in its permitting deci-
sions. In passing the CWA, Congress aimed "to restore and
maintain the chemical, physical, and biological integrity of
35
The CDDs accompanying the reissued permits expressly reference the
applicability of the waste treatment exception to the stream segments. (See
J.A. 1252, 1729, 2267, 3562-63.)
OHIO VALLEY v. ARACOMA COAL CO. 73
the Nation’s waters." 33 U.S.C. § 1251(a) (2000). But, in
passing SMCRA, Congress sought to "strike a balance
between protection of the environment and agricultural pro-
ductivity and the Nation’s need for coal as an essential source
of energy." 30 U.S.C. § 1202(f)(2000). The Corps, in permit-
ting sediment ponds and accompanying stream segments
under its § 404 authority, is attempting to harmonize the two
statutes’ goals: ensuring that mining operations can proceed
while maintaining the highest level of water quality possible
outside of the mining area.
Sediment ponds represent the "best technology currently
available" for the treatment of sedimentary runoff from sur-
face mining valley fills. In fact, the regulations of the Depart-
ment of the Interior’s Office of Surface Mining specifically
contemplate the use of in-stream sediment ponds. 30 C.F.R.
§ 816.46(c) (2008). While ideally these ponds would be
located immediately adjacent to the fills, the steep Appala-
chian terrain often does not allow this result. The topographi-
cal realities of the area make stream segments a necessary
component of the construction of a waste treatment system for
valley fill runoff. (See, e.g., J.A. 653.) This system, in turn,
is necessary to ensure that water released from the mining
area into existing streams meets CWA § 402 standards.
It is undisputed in this litigation that the Corps has the
authority under CWA § 404 to permit the filling of jurisdic-
tional waters to move runoff away from valley fills. See Ken-
tuckians for the Commonwealth v. Rivenburgh, 317 F.3d 425
(4th Cir. 2003). It is also undisputed that the Corps has
authority to permit the construction of sediment ponds to treat
that runoff before it is discharged back into jurisdictional
waters. OVEC asks us now to take the position that it would
be an unreasonable construction of the CWA to allow the
Corps to also use its § 404 authority to permit the stream seg-
ments that must, as a practical reality, be used to move runoff
from the fill to the sediment ponds. We decline to do so, and
find instead that the Corps’ interpretation of its authority was
74 OHIO VALLEY v. ARACOMA COAL CO.
reasonable in light of the CWA and entitled to deference. The
district court’s grant of partial summary judgment on OVEC’s
claim for declaratory relief is reversed.
VI.
Since the district court’s rulings in this case, the Corps has
issued five new individual CWA § 404 permits for surface
coal mines in West Virginia. OVEC now requests that this
court take judicial notice of these permit decision documents,
as public records relevant to the matter at issue. The Corps
does not object to our taking notice of the existence of the
documents, but points out that OVEC actually seeks notice of
its own interpretation of the contents of those documents. The
parties clearly and reasonably disagree about the meaning to
be ascribed to these new decision documents, and we there-
fore decline to judicially notice them. See Fed. R. Evid.
201(b); Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1239
(4th Cir. 1989).
VII.
For the foregoing reasons, we reverse and vacate the dis-
trict court’s March 23, 2007, opinion and order rescinding the
four challenged permits and vacate the district court’s injunc-
tion of activity under those permits. We also reverse the dis-
trict court’s June 13, 2007, order granting declaratory relief to
OVEC on the issue of whether the stream segments used to
connect valley fills to downstream sediment ponds are prop-
erly characterized as "waters of the United States." Finally,
we deny OVEC’s motions for judicial notice. We remand for
further proceedings consistent with this opinion.
IT IS SO ORDERED
MICHAEL, Circuit Judge, dissenting in part and concurring
in part:
The U.S. Army Corps of Engineers (Corps) has authorized
the filling of twenty-three valleys and more than thirteen
OHIO VALLEY v. ARACOMA COAL CO. 75
miles of headwater streams in Southern West Virginia in con-
nection with four mountaintop removal mining operations.
Despite its failure to fully assess the impact that the proposed
valley fills will have on the aquatic ecosystem, the Corps
claims that, after mitigation measures have been imple-
mented, the valley fills will not significantly degrade the
waters of the United States or have a significant adverse
impact on the human environment. Because the record in this
case does not support the Corps’ claims that the assessments
conducted and the mitigation measures imposed were ade-
quate to fulfill the requirements of the Clean Water Act
(CWA) and the National Environmental Policy Act (NEPA),
I respectfully dissent from part IV.B of the majority’s opin-
ion.
The Corps’ regulations implementing the CWA’s § 404(b)
dredge and fill program require the Corps to assess the effect
that a proposed fill will have "on the structure and function of
the aquatic ecosystem and organisms." 40 C.F.R. § 230.11(e).
In upholding the Corps’ interpretation of its obligations under
§ 230.11(e), the majority declines to give effect to the unam-
biguous requirements of the regulations. The majority—
agreeing with the Corps—concludes that an evaluation of
stream structure may substitute for an evaluation of function.
This interpretation, however, is impossible to reconcile with
the plain language of the regulations, which clearly mandates
that the Corps assess both structure and function. The major-
ity then accepts the Corps’ alternative argument that the (non-
functional) stream assessment protocols used by the Corps
provided sufficient information about stream function to sat-
isfy the demands of § 230.11(e). But because the majority has
failed to identify the stream functions to be measured under
§ 230.11(e), the majority cannot meaningfully evaluate the
adequacy of the stream assessment protocols that were used.
The majority’s analysis of the mitigation approved by the
Corps also overlooks the plainly stated requirements of
§ 230.11(e). Rather than basing its decision on the (binding)
76 OHIO VALLEY v. ARACOMA COAL CO.
language of the regulations, the majority focuses instead on
the Corps’ compliance with an internal guidance document
that is at odds with the regulations’ clear requirements. The
effect is to completely undermine the goal of mitigation:
replacement of what is being lost. Because the Corps has
offered no basis on which to conclude that the environmental
impacts of the valley fill projects as mitigated will be insignif-
icant, this court should reject the mitigation as inadequate
under the CWA and NEPA.
For these reasons, I would affirm the district court’s judg-
ment rescinding the permits and direct that court to remand
the permits to the Corps for further consideration consistent
with the requirements of § 230.11(e) and NEPA.
I concur in the parts of the majority opinion upholding the
scope (or physical boundary) of the Corps’ NEPA analysis
(part IV.A) and the Corps’ interpretation of its regulatory def-
inition of "waters of the United States" (part V).
I.
Before the Corps can issue a dredge or fill permit, it must
determine, pursuant to its § 404(b) regulations, the "nature
and degree of effect that the proposed discharge will have,
both individually and cumulatively, on the structure and func-
tion of the aquatic ecosystem and organisms." 40 C.F.R.
§ 230.11(e). As the Corps points out, "[t]he Guidelines [or
regulations] do not . . . define the ‘function of the aquatic
ecosystem’ or provide any guidance on how that function is
to be measured." Corps’ Br. at 35. The Corps therefore con-
tends that under its internal guidance documents, its district
officials may "discharge their responsibility to analyze stream
function by exercising their ‘best professional judgment’
when it is not feasible to conduct a full functional assess-
ment." Corps’ Br. at 35.
OHIO VALLEY v. ARACOMA COAL CO. 77
A.
The Corps, purporting to exercise its "best professional
judgment," claims initially that stream structure can be mea-
sured as a surrogate for function. Corps’ Br. at 36. The major-
ity accepts the Corps’ argument, stating that "[i]n this case,
the Corps, using its best professional judgment, used stream
structure as a surrogate for assessing stream function". Ante
at 35. Neither the Corps nor the majority explains how the
assessment of structure as a surrogate for function can be
squared with the plain language of the regulations. If stream
structure were truly an adequate surrogate for stream function,
the Corps and the majority should offer some explanation as
to why § 230.11(e) explicitly requires assessments of the
effects of proposed fills on both the structure and function of
the aquatic ecosystem and organisms. One of the most basic
rules of statutory interpretation is that all of the words in a
statute must be given effect. PSINet, Inc. v. Chapman, 362
F.3d 227, 232 (4th Cir. 2004) ("General principles of statutory
construction require a court to construe all parts to have
meaning and to reject constructions that render a term redun-
dant."); Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979)
("In construing a statute we are obliged to give effect, if pos-
sible, to every word Congress used."). It is not within the
bounds of permissible interpretation to say that the word
"function" as used in § 230.11(e) is merely a redundancy for
"structure."1
1
The majority contends that I have not afforded the Corps the appropri-
ate level of deference in interpreting its regulations. Ante at 35 n.16. The
majority does acknowledge, however, that the Corps may not proffer an
interpretation that is "plainly erroneous or inconsistent with the regula-
tion." Auer v. Robbins, 519 U.S. 452, 461 (1997). Of course, "[t]he agen-
cy’s interpretation need not be the best or most natural one by grammatical
or other standards. Rather, it need only be a reasonable construction of the
regulatory language." Dist. Mem’l Hosp. of Southwestern North Carolina,
Inc. v. Thompson, 364 F.3d 513, 518 (4th Cir. 2004) (internal quotations
and citations removed).
78 OHIO VALLEY v. ARACOMA COAL CO.
The argument that "structure" is a surrogate for "function"
is further undermined by the fact that a separate functional
stream assessment protocol is currently being developed by
the Environmental Protection Agency (EPA). Once the proto-
col is completed, the Corps will use it to conduct § 230.11(e)
functional analyses for new permit applications. This func-
tional stream protocol will direct the assessment of numerous
stream functions (including nutrient uptake and transport,
organic matter retention, and downstream export of organic
matter) that the Corps did not measure for any of the permit
applications at issue in this appeal. If existing schemes used
by the Corps to assess stream structure were adequate surro-
gates for a functional assessment protocol, it would make lit-
tle sense for the EPA to be currently undertaking the
expensive and time-consuming effort of developing an inde-
pendent functional protocol.
The Corps’ determination that stream structure can be used
as a surrogate for function under § 230.11(e) constitutes a
clear abuse of discretion. This court should not uphold a con-
struction that gives no effect to a central term in the control-
ling regulations.
B.
The Corps, perhaps recognizing the weakness of its posi-
tion, does not rely entirely on the argument that structure is
a surrogate for function. It contends at times in its opening
brief that the stream assessments conducted here were suffi-
As I have explained, the Corps’ contention that a structural assessment
may substitute for a functional one is wholly inconsistent with
§ 230.11(e)’s clear mandate that the Corps assess both structure and func-
tion. Further, in light of the Corps’ failure to define "function" for pur-
poses of § 230.11(e), its unsubstantiated assertion that the structural
assessments used in this case provide adequate information about stream
function cannot be upheld as a reasonable construction of its regulations.
See Dist. Mem’l Hosp., 364 F.3d at 518.
OHIO VALLEY v. ARACOMA COAL CO. 79
cient to satisfy both the structure and function inquiries man-
dated by § 230.11(e). The majority attempts to uphold the
Corps on this alternative ground as well. Unfortunately,
because the majority does not come to grips with the plain
language of § 230.11(e), its review lacks both a defined scope
and a clear legal standard.
The majority credits the Corps for using "detailed measure-
ments provided by [permit applicants] on the benthic
macroinvertebrate population to draw conclusions about the
level of stream function at the proposed fill sites." Ante at 35.
The majority also credits the Corps for making use of the
EPA’s Rapid Bioassessment Protocol (RBP) and the West
Virginia Stream Condition Index (WVSCI or Index). But
because the majority has not identified the relevant stream
functions to be measured, it is not possible to say whether
these assessment protocols provide relevant information. Fur-
ther, by failing to acknowledge or employ in its review the
relevant language from the regulations that requires the Corps
to assess the "nature and degree of effect" that the proposed
fills will have on stream function, the majority affords itself
no legal basis for testing the sufficiency of any assessment of
stream function.
To the extent that the record provides some indication of
the appropriate meaning of "function" as used in § 230.11(e),
the Corps’ assessment of function was demonstrably inade-
quate. There is some dispute among the parties as to which
stream functions are appropriately covered by § 230.11(e).
However, as mentioned above, the EPA (with Corps’
approval) is in the process of developing a functional assess-
ment protocol for streams in West Virginia’s Huntington Dis-
trict that will serve as the standard for future § 230.11(e)
functional assessments. Hence, the most logical place to begin
an inquiry into the meaning of the term "function" in
80 OHIO VALLEY v. ARACOMA COAL CO.
§ 230.11(e) is with EPA’s proposed (or draft) stream assess-
ment protocol.2 Under the proposed protocol:
2
The majority points out that any attempt by this court "to define stream
function beyond these guidelines [that is, the language in § 230.11(e)
itself] would certainly be inappropriate judicial intrusion into the Corps
and EPA’s sphere of authority." Ante at 37 n.19. I do not disagree. The
majority’s observation underscores precisely why the proper judicial reso-
lution of this issue would have been to conclude that the Corps abused its
discretion in failing to offer an interpretation of the term "function" as
used in § 230.11(e) that is not "plainly erroneous or inconsistent with the
regulation." Auer, 519 U.S. at 461. So long as the Corps declines to pro-
vide a construction that gives meaning to the operative terms in its regula-
tions, this court cannot uphold the Corps’ actions.
I have engaged in what the majority calls an "inappropriate judicial
intrusion" only to point out the shortcomings of the majority’s analysis.
The majority has determined that the Corps did not abuse its discretion in
approving the stream assessments conducted in this case. The majority
upholds the Corps in spite of the agency’s unwillingness to define the term
"function." Any evaluation of the majority’s (or the Corps’) determination
that the assessment of stream function was adequate, however, necessarily
requires giving some meaning to the term "function."
According to the majority, ante at 37 n.19, "the only clues § 230.11(e)
offers regarding the stream functions to be measured are the . . . factors"
listed in one sentence in § 230.11(e). The sentence provides in full: "Con-
sideration shall be given to the effect at the proposed disposal site of
potential changes in substrate characteristics and elevation, water or sub-
strate chemistry, nutrients, currents, circulation, fluctuation, and salinity,
on the recolonization and existence of indigenous aquatic organisms and
communities." 40 C.F.R. § 230.11(e) (2006). The majority mistakes the
significance of these "factors." They are not stream functions. The term
"function" refers to the "role, duty, work" or "purpose" of a thing. Web-
ster’s Third New Int’l Dictionary 920 (2002). The factors listed in
§ 230.11(e) are merely stream characteristics (or attributes), and
§ 230.11(e) requires the Corps to analyze the effects that changes to these
stream characteristics will have on the "recolonization and existence of
indigenous aquatic organisms and communities." Compliance with this
sentence cannot be determinative of whether the Corps has adequately
analyzed the effects of the proposed fills on stream function.
Since the factors identified by the majority cannot constitute the stream
functions contemplated by § 230.11(e), there is no reason to discount the
relevance of the proposed functional protocol currently under development
OHIO VALLEY v. ARACOMA COAL CO. 81
Contractor activities would involve field and labora-
tory studies aimed at conventional measurement of
headwater stream functional processes in mined and
un-mined watersheds. These functional processes
can include, but are not limited to: 1) organic matter
decomposition rates; 2) nutrient transport and
uptake; 3) primary production and metabolism; 4)
secondary production; and 5) organic matter reten-
tion and transport.
J.A. 1836.3
A look at only those functions listed by the EPA in its pro-
posed functional stream assessment protocol reveals that the
assessments carried out by the Corps were deficient. The data
provided by the EPA’s RBP and the WVSCI, the protocols
used by the Corps in this case, are insufficient to assess the
for the Huntington District of West Virginia. Until the Corps itself identi-
fies a specific set of functions to be measured, nothing could be more rele-
vant to determining the meaning of "function" in § 230.11(e) than the list
of the stream functions proposed to be measured in future § 230.11(e)
functional analyses. Consequently, nothing could be more useful in
reviewing the adequacy of the assessment protocols used in this case than
this proposed list of stream functions. The Corps should not be rewarded
for its recalcitrance in defining function and for its lengthy delay in devel-
oping a usable functional assessment protocol for West Virginia.
3
If we pieced together the stream functions that the Corps itself identi-
fies in the Combined Decision Documents (CDDs) in this case, the list is,
if anything, more inclusive than the preliminary list proposed to be mea-
sured by the EPA. Specifically, the Corps in the Black Castle CDD states
that: "Some important functions of . . . headwater streams include the
maintenance of natural discharge regimes, the regulation of sediment
export, the retention of nutrients, the processing of terrestrial organic mat-
ter, and the exportation of water nutrients and organic matter to down-
stream areas." J.A. 1823; see also, Camp Branch CDD, J.A. 1319 (same
language). The Corps also observes in its § 230.11(e) analysis in the
Republic No. 2 CDD that nutrient cycling, organic matter dynamics, respi-
ration, and primary and secondary production are functions "typically
found in scientific research analysis." J.A. 3570.
82 OHIO VALLEY v. ARACOMA COAL CO.
bulk of the functions listed by the EPA to a degree that satis-
fies the requirements of § 230.11(e).
Indeed, the Corps, in its CDD for the Republic No. 2 mine,
acknowledges the limitations of using the EPA’s RBP to
assess stream function:
While the rapid bioassessment protocol does not pro-
vide a detailed analysis of nutrient cycling, organic
matter dynamics, respiration, measurement of prima-
ry/secondary production, as is typically found in sci-
entific research analysis[,] it does provide baseline
data that can be used to analyze chemical, physical,
and biological conditions of the stream channel.
J.A. 3570. The functions about which the RBP fails to provide
detailed analysis are the very functions the EPA’s proposed
functional analysis would evaluate. And the plain language of
§ 230.11(e)—requiring an assessment of the "nature and
degree of effect that the proposed discharge will have . . . on
the structure and function of the aquatic ecosystem and
organisms"—makes clear that stream function must be
assessed in some detail. The Corps does not explain how the
baseline data on stream condition generated by the RBP will
assist in any way in measuring the (actual) stream functions
for which the RBP provides no detailed analysis. Accord-
ingly, the RBP appears to be an inadequate substitute for a
functional assessment protocol.
The WVSCI fares only slightly better. The Index purports
to measure stream "quality" and notes that its surveys "are
used to measure the attainment of biological integrity." A
Stream Condition Index for West Virginia Wadeable Streams,
at 3 (July 21, 2000), available at http://www.wvdep.org/Docs/
536_WV-Index.pdf. The Index asserts that it is "an appropri-
ate indicator of ecological quality, reflecting biological
responses to changes in physical habitat quality, the integrity
of soil and water chemistry, geologic processes, and land use
OHIO VALLEY v. ARACOMA COAL CO. 83
changes (to the degree that they affect the sampled habitat)."
Id. at 4. It makes no mention of organic matter processing or
retention, primary or secondary production, nutrient retention,
cycling, transport or uptake, or respiration. And nowhere does
it claim to be a functional assessment protocol.
It is not enough that the Corps’ expert Dr. Mindy Armstead
testified that the WVSCI’s EPT Index "was a good surrogate
for the functional measurement of secondary biomass," J.A.
4424-25, one of the functions to be covered by the EPA’s
functional assessment protocol. Measurement of a single
function does not make the Index an adequate replacement for
the required functional assessment. For decomposition and
primary production, two other functions to be measured under
the EPA’s proposed functional assessment protocol, the
Corps’ experts claim only that the WVSCI provides informa-
tion about their presence or absence. The mere ability of an
assessment protocol to detect the presence or absence of a
stream function is insufficient to fulfill the more exacting
"[d]etermine the nature and degree of effect" language of
§ 230.11(e). And for the remaining functions slated to be
measured under the EPA’s functional stream assessment
protocol—nutrient uptake and processing, organic matter
retention, and downstream export of organic matter—the
Corps makes no claim that the WVSCI provides any relevant
information at all.
The majority opinion considers only one stream function—
nutrient cycling—and concedes that the Corps’ assessment of
that function was deficient: "The Corps’ CDDs themselves
acknowledge this shortcoming, noting that the effects of fill-
ing ephemeral streams on nutrient cycling are difficult to
measure and that there is a lack of consensus among the rele-
vant agencies about how best to collect quantitative evidence
regarding these functions." Ante at 36. The majority excuses
this deficiency, noting that: "[t]o compensate for these effects
. . . the Corps’ permitting decisions call for limiting impacts
to channels that do not sustain long periods of flow and for
84 OHIO VALLEY v. ARACOMA COAL CO.
establishing a riparian buffer around mitigation sites." Ante at
36. Unfortunately, the Corps’ attempt to minimize impacts to
stream functions that it has failed to assess sufficiently has no
bearing on whether it has met its obligations under
§ 230.11(e) to "[d]etermine the nature and degree of effect"
on stream function.
Finally, and most fundamentally, in asserting that the pro-
posed mitigation measures meet regulatory requirements, the
Corps implicitly concedes that the stream assessment proto-
cols used in this case failed to sufficiently assess stream func-
tion. The Corps’ Regulatory Guidance Letter (RGL) provides
that "Districts should require compensatory mitigation proj-
ects for streams to replace stream functions where sufficient
functional assessment is feasible." J.A. 1174. Where sufficient
functional assessment is not feasible, the RGL permits the
Corps to rely on a substitute one-to-one linear stream foot
mitigation that does not specifically account for lost stream
function. In this case, the Corps does not claim that its mitiga-
tion measures will replace lost stream functions. The Corps
asserts in its opening brief that its "approach is not arbitrary
and capricious just because the precise functions of ephemeral
or intermittent streams are not being replaced" by the mitiga-
tion measures required in this case. Corps’ Br. at 47. Instead,
the Corps elects to rely on the substitute one-to-one mitigation
ratio. By choosing to rely on one-to-one mitigation rather than
attempting to replace lost function, the Corps implicitly but
clearly concedes that the EPA’s RBP and the WVSCI did not
provide for an adequate assessment of stream function. If
these protocols had generated the requisite data for a suffi-
cient functional assessment, the Corps could not have logi-
cally invoked the RGL’s one-to-one mitigation provisions.
Since the Corps’ actions show that it does not believe its own
contention that it has sufficiently assessed stream function,
this court is under no obligation to believe it either.
II.
On the issue of the adequacy of the Corps’ proposed miti-
gation measures, the majority again errs in overlooking the
OHIO VALLEY v. ARACOMA COAL CO. 85
plain language of the relevant regulations. The majority
chooses to rely on internal Corps guidance documents that are
inconsistent with, and must therefore yield to, the clear
requirements of the regulations.
A.
The valley fills will bury more than 68,000 feet of intermit-
tent and ephemeral headwater streams. The Corps does not
dispute that, absent mitigation measures, the adverse impacts
of the proposed projects would be significant, and an Environ-
mental Impact Statement (EIS) would therefore be required
under NEPA. The Corps instead asserts that the mitigation
measures it has approved are sufficient to reduce adverse
impacts of the fills below the threshold of significance and
avoid significant degradation of waters of the United States.4
4
The majority quotes 40 C.F.R. § 230.10(d)—providing that a § 404
permit cannot issue "unless appropriate and practicable steps have been
taken which will minimize potential adverse impacts of the discharge [of
fill material] on the aquatic ecosystem"—but does not mention other rele-
vant provisions of section 230.10 that should also inform its analysis. See
ante at 39.
Read in its entirety, 40 C.F.R. § 230.10 requires that a permitted dredge
or fill activity not only include appropriate and practicable steps to mini-
mize potential adverse impacts, but also that the discharge result in no sig-
nificant degradation of waters of the United States, taking into account
required mitigation.
Section 230.10 describes four restrictions on discharge, all of which
must be met before a dredge or fill permit can issue. Section 230.10(c)
provides that "no discharge of dredged or fill material shall be permitted
which will cause or contribute to significant degradation of the waters of
the United States." 40 C.F.R. § 230.10(c) (2006).
Section 230.12(a)(2) (2006) allows the Corps to permit a dredge or fill
activity as "complying with the requirements of these Guidelines with the
inclusion of appropriate and practicable discharge conditions (see Subpart
H) to minimize pollution or adverse effects to the affected aquatic eco-
systems." But paragraph (a)(3) makes clear that a project must be
"[s]pecified as failing to comply with the requirements of these Guidelines
86 OHIO VALLEY v. ARACOMA COAL CO.
The Corps bases these assertions on the anticipated success of
a combination of stream creation and enhancement of existing
stream channels. The Corps does not claim that the proposed
mitigation will replace lost stream function; rather the mitiga-
tion will replace or enhance at least as many stream feet as the
valley fills will bury.
To justify allowing the Corps to approve this so-called one-
to-one mitigation in lieu of requiring the replacement of lost
stream function, the majority relies on the language of a
Memorandum of Agreement (MOA) between the Corps and
the EPA and an internal Corps’ Regulatory Guidance Letter
(RGL).
From a legal standpoint, the majority’s discussion of the
MOA and RGL is largely beside the point. To the extent that
the MOA and RGL are inconsistent with the plain language
of the regulations, the regulations control. The MOA itself
states that it "does not change the substantive requirements of
the Guidelines [regulations]. It is intended to provide guid-
ance regarding the exercise of discretion under the Guide-
lines." J.A. 1165. Similarly, RGLs are "‘issued without notice
and comment and do not purport to change or interpret the
regulations applicable to the section 404 program . . . [and]
are not binding, either upon permit applicants or Corps Dis-
trict Engineers." Northwest Bypass Group v. U.S. Army Corps
of Eng’rs, 470 F.Supp.2d 30, 51 (D. N.H. 2007) (quoting
Envtl. Def. v. U.S. Army Corps of Eng’rs, No. 04-1575(JR),
2006 WL 1992626 at *7 (D.D.C. July 14, 2006).
where . . . (ii) [t]he proposed discharge will result in significant degrada-
tion of the aquatic ecosystem under § 230.10(b) or (c) . . . ."
Consequently, when § 230.10 is taken as a whole, it is apparent that for
a discharge of dredge or fill material into waters of the United States to
be permitted, not only must appropriate steps have been taken to minimize
adverse impacts, but the Corps must also find that, once appropriate miti-
gation measures are accounted for, the discharge will not significantly
degrade the waters of the United States.
OHIO VALLEY v. ARACOMA COAL CO. 87
An analysis of the sufficiency of the mitigation in this case
must begin with the provisions that are truly mandatory: those
in the regulations. Compliance with 40 C.F.R. § 230.11(e) is
non-discretionary. The Corps cannot issue a § 404(b)(1) per-
mit without first assessing the "nature and degree of effect
that the proposed discharge will have, both individually and
cumulatively, on the structure and function of the aquatic
ecosystem and organisms." Thus, when confronted with a
decision about the appropriate mitigation measures to require,
the Corps should never find itself in a position where it has
failed to sufficiently assess stream function; § 230.11(e)
always requires the Corps to conduct this assessment. Consid-
ered in light of the clear requirement of § 230.11(e), the pro-
vision in the Corps’ RGL that purports to permit one-to-one
mitigation where a sufficient stream functional assessment is
not feasible can never be properly triggered. Simply put, the
Corps cannot rely on an illegal provision in its RGL to justify
a failure to mitigate for lost stream functions.
The majority’s analysis skirts the requirements of
§ 230.11(e). First, the majority observes that "a full functional
assessment protocol is not yet available to the Corps." Ante at
43. It then concludes that under the Corps’ RGL, "where a full
functional assessment is not feasible, the only compensatory
mitigation measure the Corps must require in a permitting
decision is stream replacement on a one-to-one basis." Ante at
43. The majority’s approach is unsupportable. Whatever it
means to sufficiently assess stream function, it should mean
the same thing under both § 230.11(e) of the regulations and
the Corps’ MOA and RGL. To allow the Corps to interpret
sufficiency of assessment differently for purposes of measur-
ing function and determining appropriate mitigation wholly
undermines the purposes of mitigation. Indeed, the MOA
itself states that "[t]he determination of what level of mitiga-
tion constitutes ‘appropriate’ mitigation is based solely on the
values and functions of the aquatic resource that will be
impacted." J.A. 1166. It is paradoxical to conclude that the
(largely structural) assessments carried out as part of the
88 OHIO VALLEY v. ARACOMA COAL CO.
Corps’ § 230.11(e) analysis adequately measured stream func-
tion and to simultaneously conclude that these same assess-
ments provided insufficient data on stream function to require
mitigation to replace lost function. The majority’s construc-
tion of the Corps’ functional assessment and mitigation
requirements defeats the basic goal of the MOA, the RGL,
and compensatory mitigation.
B.
Since the Corps cannot properly rely on its RGL to avoid
mitigating for lost stream function, we would ordinarily look
next at whether the mitigation measures required by the Corps
will adequately replace lost function. This inquiry is prema-
ture in the present instance, however, because the Corps did
not engage in the functional analysis required by 40 C.F.R.
§ 230.11(e). Thus, even if we credited the Corps’ almost
wholly unsubstantiated assertion that the new stream creation
projects required in the CDDs will create working streams,
the CMPs and CDDs offer no guarantees that the newly cre-
ated streams will replace lost headwater stream functions the
Corps has failed to quantify. The Corps therefore acted in
direct contravention of the applicable regulations.5
Furthermore, even under the majority’s construction of the
Corps’ mitigation duties (allowing for one-to-one mitigation
where sufficient functional assessment is not feasible), there
5
The Corps does in various places make claims that the mitigation it
re
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