& 07-990: Coeur Alaska, Inc. v. Southeast Alaska Conservation Council/Alaska v. Southeast Alaska Conservation Council - Supplemental Reply (Merits)

Nos. 07-984 and 07-990

In the Supreme Court of the United States

COEUR ALASKA, INC., PETITIONER

v.

SOUTHEAST ALASKA CONSERVATION COUNCIL, ET AL.

STATE OF ALASKA, PETITIONER

v.

SOUTHEAST ALASKA CONSERVATION COUNCIL, ET AL.

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

SUPPLEMENTAL REPLY BRIEF
FOR THE FEDERAL RESPONDENTS
SUPPORTING PETITIONERS

ELENA KAGAN

Solicitor General

Counsel of Record

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

In the Supreme Court of the United States

No. 07-984

COEUR ALASKA, INC., PETITIONER

v.

SOUTHEAST ALASKA CONSERVATION COUNCIL, ET AL.

No. 07-990

STATE OF ALASKA, PETITIONER

v.

SOUTHEAST ALASKA CONSERVATION COUNCIL, ET AL.

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

SUPPLEMENTAL REPLY BRIEF
FOR THE FEDERAL RESPONDENTS
SUPPORTING PETITIONERS

The government agrees with petitioner Coeur Alas ka, Inc. (Coeur) and petitioner State of Alaska (Alaska) that, contrary to the premise of the questions on which this Court ordered supplemental briefing, new-source performance standards promulgated under Section 306 of the Clean Water Act (CWA), 33 U.S.C. 1316, do not apply to discharges of fill material. See Coeur Supp. Br. 7-9; Alaska Supp. Br. 10-13. As explained in our merits briefs, that conclusion is compelled by the text of the CWA, and it is reinforced by the longstanding shared view of the Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps).

If the Court nevertheless holds that Section 306 stan dards do apply to discharges of fill material, the various briefs in this case suggest three possibilities as to the permitting process that might be used to determine whether a particular fill discharge satisfies an applicable performance standard. That determination might be made by the Corps pursuant to Section 404, 33 U.S.C. 1344; it might be made by EPA pursuant to Section 402, 33 U.S.C. 1342; or the CWA and implementing regula tions might be read to provide that neither permitting agency will assess the consistency of a proposed fill dis charge with applicable Section 306 standards.

Respondents Southeast Alaska Conservation Coun cil, Sierra Club, and Lynn Canal Conservation (SEACC) contend that, even accepting the premise that the dis charge at issue is "fill material" within the meaning of the CWA and applicable regulations, Section 402 is the proper permitting regime. That argument is foreclosed by the text of the CWA, which authorizes the Corps to issue permits for discharges of dredged or fill material and limits EPA's permitting authority to discharges of other pollutants, and by longstanding agency regulations confirming that Section 404 is the exclusive permitting regime for discharges of fill material. See Gov't Supp. Br. 13-14. Because Question 2 posed by the Court as sumes a discharge that "satisfies the definition of fill material," SEACC's contention that EPA is the proper permitting agency cannot be reconciled with the perti nent statutory and regulatory provisions.

The logical consequence of arguments advanced in petitioners' supplemental briefs-that, even if Section 306 standards are held to apply to discharges of fill ma terial, neither the Section 402 nor the Section 404 per mitting process is available to consider whether a partic ular fill discharge satisfies those standards-is equally unsatisfying. The CWA establishes a permitting scheme under which a federal agency can determine, before a proposed discharge occurs, whether the discharge com plies with all applicable CWA requirements. Under peti tioners' approach, however, questions concerning a dis charge's consistency with applicable performance stan dards would effectively be deferred until a subsequent citizen suit or EPA enforcement action is brought against the permittee. That approach would disserve the CWA's water-protective purpose, since an after-the- fact determination of illegality is less effective than a pre-discharge permit denial. See Gov't Supp. Br. 8. It also would disserve the interests of permittees, who would be subject to potential enforcement proceedings even though they were given no advance notice through the permitting process that their proposed fill dis charges were illegal.

The only tenable conclusion is that, if Section 306 standards are held to apply to discharges of fill material, the Corps must take those standards into account in determining whether particular fill discharges will be permitted. That is consistent with this Court's interpre tation of the Administrative Procedure Act (APA), 5 U.S.C. 706(2)(A), as requiring agency decisions to com ply with relevant statutory mandates (including a forti ori those contained in the Act that the agency is charged with administering) and with the agency's own regula tions (which here require the Corps in issuing Section 404 permits to evaluate "compliance with applicable ef fluent limitations," 33 C.F.R. 320.4(d)). Accordingly, a Section 404 permit authorizing a discharge of fill mate rial that would violate an applicable Section 306 stan dard and thus the CWA-as the Court hypothesizes in Question 1-would be subject to invalidation as agency action "not in accordance with law." 5 U.S.C. 706(2)(A).

1. If The Proposed Discharge Would Violate Section 306, The Section 404 Permits Are "Not In Accordance With Law"

The government agrees with SEACC that, if Section 306 standards are held to apply to discharges of fill ma terial, so that the proposed discharge at issue here would violate Section 306, then the challenged Section 404 permits could be set aside as agency action "not in accordance with law." 5 U.S.C. 706(2)(A); see SEACC Supp. Br. 2-10. That conclusion follows from the as sumed premise that the permits authorize discharges that would violate the CWA itself. See Gov't Supp. Br. 3-8.1

Petitioners' contrary conclusion rests on precedents that apply the APA (or other administrative-review pro visions) to agency decisions made under very different circumstances. As explained in our supplemental brief (at 4-6), PBGC v. LTV Corp., 496 U.S. 633 (1990) (LTV), is distinguishable on three separate grounds. First, the PBGC did not have any obligation to consider the "pub lic interest" (id. at 646), whereas the Corps must do so in evaluating permit applications (33 C.F.R. 320.4(a)).2 Second, the Court's question here assumes an actual statutory violation, not just an agency failure to consider the "policies and goals" that underlie a statute. LTV, 496 U.S. at 645. Third, and most importantly, the hypo thetical violation at issue is of the very statute under which the Corps issues its Section 404 permitting deci sions. Sections 301 and 306 are not provisions of a dif ferent statutory regime, let alone of an entirely different field of law, as was the case in LTV. Id. at 646.

The Court's decisions in McLean Trucking Co. v. United States, 321 U.S. 67 (1944), and Community Tele vision v. Gottfried, 459 U.S. 498 (1983) (see Alaska Supp. Br. 5-6), are similarly distinguishable. In McLean Trucking Co., the Court held that, although the Inter state Commerce Commission had a duty to consider the effect of a motor carrier merger on competition in deter mining whether the merger would serve overall trans portation policy, it had no duty to apply the standards of the antitrust laws, which it lacked power to enforce. 321 U.S. at 79-80, 85-87. In Community Television, the Court held that, although the Federal Communications Commission could not ignore the needs of the hearing impaired in renewing television licenses, it had no duty to adjudicate alleged violations of the Rehabilitation Act of 1973, 29 U.S.C. 794, which it was never intended to enforce. 459 U.S. at 508-510. Unlike in McLean Truck ing and Community Television, which involved inde pendent statutory provisions that the agencies were not charged with administering, Section 306 is part and par cel of the very Act under which the Corps issues Section 404 permits.

Regulations governing the Section 404 permitting process specifically require the Corps to consider other environmental laws (40 C.F.R. 230.10) and, in particular, "compliance with applicable effluent limitations" (33 C.F.R. 320.4(d)), in determining whether permits for fill discharges should be issued. See Gov't Supp. Br. 5-7. To be sure, the agencies have not heretofore construed Section 320.4(d) to require consideration of performance standards promulgated under Section 306, since the agencies have not viewed those standards as "applica ble" to discharges of fill material. But if this Court were to hold that Section 306 standards do apply to fill dis charges, Section 320.4(d) by its plain terms would re quire the Corps to assess compliance with those stan dards in ruling on applications for Section 404 permits.

As SEACC points out (Supp. Br. 4-6), in the event of such a holding, the permits at issue here could be set aside for an additional reason as well. The Corps issued the Section 404 permits in this case on the rationale, consistent with EPA's construction of the CWA, that the proposed discharge of fill material was not subject to Section 306 standards. J.A. 342a ("This decision has been made in conformance with the USEPA memoran dum, entitled 'Clean Water Act Regulation of Mine Tail ings,' dated May 17, 2004."); see J.A. 144a-145a ("[E]f fluent limitations guidelines and standards, such as those applicable to gold ore mining (see 40 C.F.R. Part 440, Subpart J), do not apply to the placement of tailings into the proposed impoundment.").3 Because the Corps relied on a rationale that would be legally incorrect un der the premise of Question 1, the permits at issue could be set aside on that basis alone if this Court concludes that fill discharges are subject to Section 306 standards. See SEC v. Chenery, 318 U.S. 80, 93-94 (1943); cf. FEC v. Akins, 524 U.S. 11, 25 (1998) ("If a reviewing court agrees that the agency misinterpreted the law, it will set aside the agency's action and remand the case-even though the agency * * * might later, in the exercise of its lawful discretion, reach the same result for a differ ent reason.").4

In arguing that the Corps was not required to take Section 306 standards into account during the Section 404 permitting process, even assuming that those stan dards apply to discharges of fill material, petitioners do not identify any alternative mechanism for applying those standards to fill discharges like those at issue here. Petitioners correctly recognize that EPA lacks authority to issue permits for discharges of dredged or fill material. See Couer Supp. Br. 1-7; Alaska Supp. Br. 13-17. As discussed above (p. 3, supra), petitioners' po sition therefore logically implies that, even if Section 306 standards were held to apply to discharges of fill mate rial, neither EPA nor the Corps would consider those standards in determining whether permits for such dis charges should be issued. Such a gap in the permitting regime would be at odds with the basic design of the CWA, which establishes permits as the principal mode of compliance to ensure that the legality of a proposed discharge is assessed before the discharge occurs. And under petitioners' view, compliance with a valid permit would no longer shield the permittee from CWA liabil ity. See Gov't Supp. Br. 7-8; SEACC Supp. Br. 11.5

2. A Discharger of Fill Material May Obtain a Section 404 Permit Only

All parties correctly agree that a discharger may obtain only one CWA permit for any proposed dis charge. See Gov't Supp. Br. 11-14; SEACC Supp. Br. 12-13; Coeur Supp. Br. 1-7; Alaska Supp. Br. 13-17. SEACC, however, disagrees with the government and petitioners as to which permitting regime applies. Rely ing on the same arguments advanced in its merits brief, SEACC argues that, if Section 306 standards apply to fill discharges, permitting authority rests with EPA un der Section 402 rather than with the Corps under Sec tion 404. SEACC Supp. Br. 13-15. As explained in the government's prior briefs, that contention is foreclosed by the plain text of the CWA (see 33 U.S.C. 1342(a)(1), 1344(a)) and by the agencies' longstanding interpreta tions of the statutory scheme, which establish Section 404 as the exclusive permitting regime for discharges of fill material. See Gov't Br. 18-40; Gov't Reply Br. 4-5, 11-22; Gov't Supp. Br. 13-14. For those reasons, this Court should hold that a discharge of fill material may be permitted only under Section 404, regardless of whether Section 306 standards are deemed applicable.

* * * * *

For the foregoing reasons and those stated in our opening supplemental brief, Section 404 is the appropri ate permitting regime for the proposed discharge of fill material at issue here, even if this Court were to hold that Section 306 standards apply to that discharge. Be cause the statutory and regulatory scheme contemplates that the Corps in issuing Section 404 permits will con sider all applicable CWA provisions, a Section 404 per mit for a discharge that violated the CWA, including Section 306, could properly be set aside as agency action "not in accordance with law." For the reasons stated in our original merits briefs, however, the Court should reject the premise of its supplemental questions, hold that Section 306 standards do not apply to the proposed discharge, and reverse the judgment of the court of ap peals.

Respectfully submitted.

ELENA KAGAN

Solicitor General

MAY 2009

1 The government disagrees, however, with SEACC's conclusory contention that the Forest Service's Record of Decision (ROD) could also be set aside. Because the ROD applies the Forest Service's own regulatory criteria and makes clear that Coeur's entitlement to dis charge fill material into protected waters within the National Forest System is contingent on the issuance of CWA permits by the Corps, invalidity of the Section 404 permits would not cast doubt on the legality of any decision that the Forest Service made or was required to make. See Gov't Supp. Br. 8-11. As a practical matter, however, if the Section 404 permits were set aside and Coeur decided to pursue an alternative disposal arrangement, the Forest Service might have to approve a new plan of operations (and hence issue a new ROD).

2 Alaska is therefore mistaken in asserting (Supp. Br. 7) that the Corps is not subject to broad public interest standards but is subject "only" to the specific standards of Section 404 and the Guidelines prom ulgated thereunder.

3 Petitioners argue that because the Corps relied on EPA's control ling interpretation as to the inapplicability of Section 306 standards to the proposed discharge, the Corps' decision should not be disturbed "[r]egardless of whether EPA's interpretation of its regulations was correct." Alaska Supp. Br. 8; see Coeur Supp. Br. 14-16. That argu ment lacks merit. By analogy, when a district court applies controlling circuit precedent, but the circuit precedent is overturned on appeal, the court of appeals ordinarily would reverse the district court's judgment even though the district court had acted pursuant to then-controlling law. Cf. Rodriguez de Quijas v. Sharson/American Express, Inc., 490 U.S. 477, 484-485 (1989) (explaining that "the Court of Appeals should follow the [Supreme Court] case which directly controls," yet applying "the general rule of long standing * * * that the law announced in the Court's decision controls the case at bar" after overturning the prev iously controlling precedent).

4 The government disagrees, however, with SEACC's additional ar gument (Supp. Br. 10) that the Corps' issuance of the Section 404 per mits here impermissibly "trenches on EPA's authority." EPA ex pressed the view-not only in the government's briefs in this Court but also in the 2002 fill rule and the 2004 Mine Tailings Memorandum-that the proposed discharge should be regulated by the Corps under Section 404. See Gov't Reply Br. 11-22. As discussed in the government's sup plemental brief (Supp. Br. 13-14) and in Part 2, infra, permitting au thority over discharges of fill material rests with the Corps under Sec tion 404, regardless of whether Section 306 standards apply to fill dis charges.

5 Because the Section 404 permits would not be "in accordance with law" if the proposed discharge would violate Section 306, the Court can not simply uphold the Section 404 permits and reserve the question whether Section 306 standards actually apply. See Coeur Supp. Br. 9; Alaska Supp. Br. 3. As explained above, the two issues are inextricably intertwined.