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Oral arguments begin in long-running Spruce coal mine permit veto case

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Oral arguments begin in long-running Spruce coal mine permit veto case

Oral arguments in a case to decide whether the federal government actedinappropriately when it canceleda mining permit for what could have been one of the country's largest mountaintopremoval projects began April 11 in the U.S. Court of Appeals for the District ofColumbia Circuit.

The case,which was remanded back to the court after the U.S. Supreme Court to hear it, concerns the denialof a mining permit granted by the U.S. Army Corps of Engineers by the U.S. EPA basedon environmental grounds. Specifically, the agency argued that the permit was deniableunder the Clean Water Act.

Accordingto the EPA, at question in the case is whether the agency can base its permit decisionon what it deemed an unacceptable adverse effect downstream of a disposal area atthe Spruce mine and whether the agency adequately explained its factual conclusionthat fill material proposed for discharge would have an unacceptable adverse effecton wildlife.

Followingup on briefs submittedby both sides in December 2015, attorneys for Mingo Logan Coal Co., a subsidiary of Arch Coal Inc., argued that the EPA had acted "arbitrarilyand capriciously" in denying a permit for the Spruce Mine No. 1.

Speakingon behalf of the coal company, attorney Paul Clement fielded questions from thetwo judges in attendance about whether a "heightened justification" wasnecessary to deny a permit that had already been approved by another agency andwhether costs and investments made prior to the permit veto should be consideredin that process.

Whena company is forced to go from a "green light to full red light," newcriteria should be used to review the permit, Clement said.

 SNL Image

Judge Sri Srinivasan

Source: SNL Energy

JudgesSri Srinivasan and Brett Kavanaugh pressed Clement on whether the company had adequatelyincluded evidence of losses associated with the denial of the permit, with Srinivasansuggesting that it had only been mentioned once in the submitted brief.

ArchCoal could not be reached for comment on whether additional evidence of investmentsmade following the Army Corps approval of the permit.

A thirdjudge on the panel, Karen LeCraft Henderson, was not in attendance at the oral arguments,but will participate in the decision of the case. According to Fred Wagner, a principalwith Washington, D.C. law firm Beveridge & Diamond PC, the absence of one ofthe three judges is not out of the ordinary and while oral arguments are important,the submitted briefs are far more important.

Arguingon behalf of the EPA, Matthew Littleton answered questions about the considerationof cost in the agency's decision to reject the permit. Littleton said it was theresponsibility of the company to provide information about its financial losses— something it had not done.

EmmaCheuse, a staff attorney for EarthJustice, which filed an amicus brief in the casealongside Appalachian Mountain Advocates, downplayed the issue of Arch's investmentin reliance on the permit, telling S&P Global Market Intelligence that it wasnot required of the EPA in its denial and that the company had not provided evidenceof losses.

"They'reraising a new argument on appeal," Cheuse said. "They're saying that EPAsomehow did not consider — even though the statute does not require it — reliance.The record has no evidence that the industry relied on this permit."

Further,Cheuse said the brief period ensuing between the granting of the permit and thefirst legal challenge against it provided sufficient notice to the company thatinvestments were not advised. "Days after the Corps issued this permit, communitygroups challenged it in court as unlawful under the Clean Water Act," Cheusesaid. "There was no question that this was a controversial permit."

She addedthat within days of the legal challenge, there was an agreement that the companywould not proceed with further investments in most of the permit. "Basically,that agreement prevented any real reliance within days of issuance because theyagreed that they would wait until litigation was resolved," Cheuse said.

Archcould not be reached for comment on this agreement. When asked for further evidenceof reliance by Judge Srinivasan, the company's attorney said he could not provideit at that moment.

Beyondthe issues of reliance and authority, Cheuse argued that the case was about thefederal agency's ability to enforce decisions intended to protecting clean water.

"Thecoal companies keep looking for a way to stop EPA from protecting clean water, evenas the scientific evidence links mountaintop removal mining and serious health threatslike cancer and birth defects," Cheuse said. "Now it's finally time tolet EPA just do its job and prevent mountaintop removal operations like the Sprucemine from wreaking havoc in Appalachian communities and natural areas that simplycan't afford more destruction of vital mountains and streams."

The Sprucemine permit denial marked another setback for mountaintop removal mining effortsin the U.S. The controversial mining practice has been a target of environmental advocacy groups, including thosewho have pressured financial institutions to reduce or cut ties to the practice.

Whilethere is no average amount of time required before a decision in the case can beannounced, an attorney familiar with the court suggested that it could take sixto nine months.