By Taylor Kuykendall

Brief for the Respondent in opposition filed with Supreme Court of the United States on February 18.

The U.S. EPA said in a Feb. 14 filing with the U.S. Supreme Court that the "dire predictions" of chilled private investment following the agency's retroactive denial of the Spruce mountaintop removal coal mining permit are "implausible" as it seeks to sway the nation's top court not to hear a controversial case surrounding the action.

The agency filed its brief with the court in response to a petition for writ of certiorari by coal mine operator Mingo Logan Coal Co., a unit of Arch Coal Inc.

Sources say the high court could decide on whether to hear the case by late March. A broad group of parties have joined coal mining interests in an attempt to block EPA authority they claim removes certainty from the permitting process and hurts business investment.

Mingo Logan is asking the court to reverse a 2011 veto of the 2,278-acre Spruce No.1 strip mine in Logan County, W.Va., which would be the largest surface mine in the state if developed. Arch is arguing that the EPA overstepped its authority in denying a permit after the U.S. Army Corps of Engineers had already granted the permit, but the EPA said in its brief that its authority is clear.

The EPA wrote in its latest filing that while the Corps has the primary authority to issue permits under authority granted by Section 404 of the Clean Water Act, it contends that the "plain language" of the code clearly allows the EPA to retain withdrawal authority, even after permit issuance.

"Even if the statute was ambiguous, the agency's longstanding interpretation is reasonable and entitled to deference," the EPA wrote in its brief. The EPA said Arch's "attempts to evade the plain language" regarding the agency's authority under the CWA are "unavailing."

"Petitioner's principal contention is that all disposal-site specifications are extinguished the moment the Corps issues a permit, leaving nothing for the EPA to withdraw thereafter," EPA said. "That convoluted understanding finds no support in the statute, its legislative history, applicable agency regulations, or any action taken by the Corps or the EPA in more than four decades of practice under the [Act]."

The EPA said it has exercised retroactive veto authority only three times in the past and that there is no reason to believe it will increase its use of that supposed authority. The agency said that even if it did not have the authority to retroactively change a permit, the Corps would still have that right.

A federal court first sided with Arch, ruling March 23, 2012, that the EPA had overstepped its authority. The decision was later overturned by an appeals court.

The U.S. Department of Justice declined to comment further on behalf of the EPA.

Supporters line up behind Arch in seeking review of EPA authority

Legal experts interviewed by SNL Energy in 2013 said it is likely that the case would not be reviewed by the Supreme Court. Those interviewed noted that aside from the limited number of cases reviewed each year, the court has been "selective" of hearings on CWA permits.

Chris Walker, an assistant professor of law at Ohio State University, told SNL Energy Feb. 19 that the case is somewhat atypical of the textbook example of a Supreme Court case because its chances for review rests primarily on the judges' interpretation of the importance of the case and not a need to settle confusion among the lower courts. Walker, who also represents both the U.S. Chamber of Commerce and the Farm Bureau in their amicus filings in support of Arch Coal, said the case's prospects for review could be boosted by the number and diversity of supporters filing as friends of the court in the case.

"In this case, the stakes are pretty high," Walker said. "There definitely is a pretty strong view from the business community about the importance of the case. … It's going to come down to how important the court thinks the issue is to the business community and the government."

The case has attracted plenty of support from those outside of the mining sector, including 27 states led by West Virginia. Cory Andrews, an attorney representing the Washington Legal Foundation, said their group filed their support of Arch due to what it views as a "brazen, unprecedented power grab by the EPA."

"If the decision below is allowed to stand, it will devastate permit holders not only in the coal industry, but in virtually every regulated industry throughout the country," Andrews said.

Jeff Augello, senior counsel for the National Association of Homebuilders, said the NAHB has joined Arch as a friend of the court for the potential increased costs, project delays and project uncertainty for homebuilders. He said most of the businesses he represents are small businesses that are defined as a "small entity" by the U.S. Small Business Administration.

"Profit margins are thin," Augello said. "Any action that would disrupt the established system of permitting under the section 404 program is a big deal."

An Arch spokeswoman declined to comment on the new filing or the timing of a Supreme Court decision to hear the case.

Attorneys with various parties in the case said a reply from Arch is due 30 days after the EPA's filing, and the case should be sent to a conference sometime in March. Walker said the hearing should go to conference on March 21. Rod Walston, an attorney representing the U.S. Conference of Mayors, another group backing Arch, said that once the conference is held, the court will likely announce its decision the following Monday.