trending Market Intelligence /marketintelligence/en/news-insights/trending/ewtcifohuxdzcrfoqjbn4q2 content esgSubNav
In This List

Winning case against EPA over nixed mine cleanup rules may prove 'difficult'


Essential IR Insights Newsletter - April 2023


Masters of Risk | Episode 2: A Discussion with Ilya Khaykin


According to Market Intelligence, April 2023


Discover the Power of S&P Capital IQ Pro

Winning case against EPA over nixed mine cleanup rules may prove 'difficult'

Environmental groups suing the U.S. Environmental Protection Agency over its 2017 decision to drop rulemaking that would have slapped more financial requirements on U.S. mining operations for cleanups are facing an uphill battle in court in trying to reverse the decision, a legal expert said.

"These kinds of lawsuits are difficult for challengers," said Jeffrey Lubbers, a professor in administrative law at the Washington College of Law. "There have been one or two cases where courts have demanded reasons for abandoning a rulemaking that has already occasioned a lot of comments, but those cases are rare."

Lubbers said courts tend to defer to agency decisions on priorities unless the challenger can show there is a pressing issue that needs to be fixed. Still, the case could hinge on other factors. "A lot depends on the sympathies of the judge who would draw the case."

R. Timothy McCrum, a partner with Crowell & Moring who has represented the National Mining Association, took a similar view. He said it is impossible to predict the outcome of the lawsuit, but the EPA did a sound job on rulemaking, and "their determination should be deferred to by the federal courts."

After a series of court battles over the past decade or so, the EPA was under a court-mandated deadline to make a decision on rulemaking covering financial assurances by Dec. 1, 2017. The rules were developed under the Obama administration after environmental groups argued successfully that the federal government was legislatively required to take some form of action under section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which is commonly known as Superfund.

In its 2017 decision the EPA, under the Trump administration, decided the proposed rules were not needed. "Additional financial assurance requirements are unnecessary and would impose an undue burden on this important sector of the American economy and rural America, where most of these mining jobs are based," EPA Administrator Scott Pruitt said in a prepared statement at the time.

As states typically require some form of bonding or insurance to cover potential impacts of mining, the EPA decision was in line with arguments by industry groups and others that the new rules duplicate what already exists and would, if enacted, hurt the U.S. mining industry.

But environmental groups have said existing rules are not enough, and greater assurances are needed at the federal level as well. In launching the lawsuit against the EPA, Earthjustice, representing a group of environmental organizations including the Sierra Club, said it was challenging the agency's decision not to "hold the hard-rock mining industry financially responsible for cleaning up its toxic pollution."

"The rulemaking served to implement EPA authority granted 30 years ago under the federal Superfund program, and was initiated after more than a decade of litigation brought by environmentalists alarmed by toxic releases from hard-rock mining — the leading source of hazardous releases in the U.S.," Earthjustice said in a May 16 news release. A spokesperson could not be reached.

The National Mining Association, which plans to intervene in the case to side with the EPA decision, said existing financial assurances are enough, and the EPA's proposed rules made under the Obama administration were outdated.

"Mining practices in use today and for the future, coupled with existing state and federal environmental and financial assurance requirements, comprehensively cover the same risks contemplated under the CERCLA program when it was introduced in 1980," National Mining Association spokesperson Ashley Burke said in an emailed statement. "Given our increasing reliance on imports for minerals that we have here at home — a reliance that has reached historic levels and continues to grow — we should be doing more to encourage domestic mining."

McCrum said the goal of the environmental groups is to drive the mining industry out of business. "They want to increase financial assurances to cover all possible risks associated with metallic mining activities," he said. "Whether those activities are rendered uneconomic is of little concern to them. In fact, that's their objective; to make it economically infeasible to operate metallic mines in the country."

Lubbers said the case may turn on how the EPA decided to end the rulemaking process. "Did EPA respond favorably to a petition, or did it just decide after all these years that it wanted to carry out that authority given to it under the Superfund act?" he said. "If the latter, a court might allow EPA to change its mind more readily."