Southeast Alaska Conservation Council v. United States Army Corps of Engineers (486 F.3d 638, 2007)

HUG, Circuit Judge.

This case presents the question of whether the issuance of a permit by the U.S. Army Corps of Engineers violates the Clean Water Act. The permit issued in this case authorizes Coeur Alaska, Inc., to discharge process wastewater containing tailings from its gold mine into a lake that is a navigable water of the United States. Coeur Alaska proposes to discharge daily 210,000 gallons of process wastewater containing 1,440 tons of tailings from its mine into Lower Slate Lake. The tailings in the discharge will raise the bottom elevation of the lake by 50 feet. A 90-foot high, 500-foot long dam will be built to contain the discharge and the area of the lake will be increased about three-fold. The U.S. Army Corps of Engineers contends that the permit was properly granted under § 404 of the Clean Water Act, which relates to the disposal of “fill material,” and that it is not subject to the effluent restrictions of § 301 or § 306 of the Clean Water Act. The plaintiffs contend that this mine disposal discharge must comply with the effluent restrictions of § 301 and § 306, and that any permit allowing discharge must be issued by the Environmental Protection Agency. The district court held that the issuance of the permit was proper. We reverse and remand with instructions to vacate the permit.

I.

Coeur Alaska intends to open the Kens-ington Gold Mine on the site of a prior mine in southeast Alaska that operated from 1897 to 1928. Although the mining operation will include several above-ground facilities, the mine itself will be entirely subterranean.

To process the gold ore retrieved from the mine, Coeur Alaska will construct a froth-flotation mill facility. In the froth-flotation process, ore-bearing rock from the mine will be transported to a mill and moved through a series of mechanical crushing and grinding procedures. After the rock is finely ground, it will be fed into a tank where water and chemicals referred to as conditioners, frothers, surfactants, and scale inhibitors will be added. Air is then pumped into the tank, producing bubbles that attach to the gold deposits. The bubbles rise, bringing the gold with them and forming a froth that is skimmed off the top.

After the gold has bubbled up to the surface and the froth is removed, the tail-ings — residual ground rock — remain as a waste product. Of the 2,000 tons of ore that the Kensington mine will process each day, only about 100 tons (5 percent) contain economically viable gold minerals. About 40 percent of the tailings will be used as backfill in the mine. The remaining volume is, according to Coeur Alaska, too large to transport off site and presents a waste disposal problem. This dispute arises from Coeur Alaska’s current plan for addressing that disposal problem.

Coeur Alaska’s earlier plan of operations for the Kensington Gold Mine called for the construction of a “dry tailings facility,” in which the mine would dispose of waste from its froth-flotation mill on dry “uplands.” This disposal process involved the construction of berm and drainage structures around the designated disposal area, dewatering the process wastewater, and placement of the tailings within an enclosure. After the closure of the mine in about 10 to 15 years, Coeur Alaska would have been required to cover the disposal area with native material to support re-vegetation. The U.S. Forest Service (“Forest Service”) approved the plan of operations for the dry tailings facility, and the U.S. Army Corps of Engineers (“Corps”) and the Environmental Protection Agency (“EPA”) issued permits to the company authorizing the construction of this facility in 1997. The price of gold subsequently dropped to $400 an ounce, however, prompting Coeur Alaska to investigate less expensive ways to develop the mine project. In 2004, Coeur Alaska proposed a new plan of operations with significant amendments. The most important change for our purposes was that, instead of the dry tailings facility, Coeur Alaska proposed to discharge its process wastewater containing the tailings directly into nearby Lower Slate Lake.

Lower Slate Lake, a 23-acre subalpine lake in the Tongass National Forest, is one of several small lakes in the vicinity of the mine. The lake is a fish and wildlife habitat and supports about 1,000 Dolly Varden Char (a freshwater fish) and other native fish and aquatic life. The lake is also a tributary of Slate Creek and drains into Berners Bay.

Coeur Alaska’s current disposal plan involves piping approximately 210,000 gallons of process wastewater, including 1,440 tons of tailings, each day to the bottom of Lower Slate Lake in the form of a slurry. This slurry would consist of about 45 percent water and 55 percent tailings. A polymer and flocculent would be added to the slurry to enhance settling of the tail-ings. Over the 10-to 15-year life of the mine, approximately 4.5 million tons of tailings would be deposited into the lake. The discharge ultimately would raise the bottom of the lake 50 feet, to its current high water mark, and nearly triple its surface area. Coeur Alaska and the Corps admit that the discharge and settling of the tailings into the lake would kill all the fish and nearly all the aquatic life. The effluent would have a pH factor of over 10, which is considerably higher than the lake’s current pH factor, and would contain concentrations of several potentially hazardous materials, including aluminum, copper, lead, and mercury. The toxicity of the discharge may have lasting effects on the lake and may negatively affect its ability to sustain aquatic life in the future. The Corps intends that aquatic life would be reintroduced into the lake, but the extent to which aquatic life could be restored eventually is unclear.

To prepare the lake for use as a waste-water disposal facility and the consequent expansion of the lake’s surface, Coeur Alaska would construct a 90-foot high, 500-foot long dam at the lake’s outfall point. Coeur Alaska’s long-term plan to use the lake as a disposal facility also includes the construction of a diversion ditch. Constructing the ditch would require cutting trees on 7.6 acres of forested land, building a 30-foot wide road, excavating and digging a 3,000-foot ditch, and filling in 4.3 acres of nearby wetlands with 28,800 cubic yards of fill material. In addition, during the 10-to 15-year period of the lake’s use as a disposal facility, Slate Creek would be diverted around the lake through a pipeline.

The Forest Service approved Coeur Alaska’s current plan of operations at the Kensington Gold Mine, including the revised disposal plan, in a Record of Decision (“ROD”) on December 9, 2004. Because the proposed discharge would have the effect of raising the bottom elevation of Lower Slate Lake, the Corps reasoned that the permit program under § 404 of the Clean Water Act, rather than § 402, applies to Coeur Alaska’s planned discharges. Accordingly, the Corps issued a permit for the discharge into Lower Slate Lake on June 17, 2005.

Under the permit, when operations at the mine eventually cease, the Corps would require Coeur Alaska to mitigate the environmental impacts at the lake by installing a cap of native material over the tailings at the bottom of the lake. The Corps would also require Coeur Alaska to reintroduce native fish species into the lake and monitor the health of the ecosystem.

II.

Southeast Alaska Conservation Council, the Sierra Club, and Lynn Canal Conservation (collectively “SEACC”) filed this lawsuit challenging the Corps’ permit and the Forest Service’s ROD approving the general plan on the grounds that they violate § 301(a), § 301(e), and § 306(e) of the Clean Water Act. The crux of SEACC’s argument is that the Corps violated the Clean Water Act by issuing a permit for the discharge of process waste-water from a froth-flotation mill into a body of water protected by the Clean Water Act.

After the complaint was filed, the Corps decided to suspend the permit and reconsidered its decision to issue the permit. For that purpose, the Corps moved for voluntary remand of the case before briefing on the merits began, which the district court granted on November 14, 2005. The Corps reinstated the original permit, without changes, on March 29, 2006. At the same time, the Corps issued a revised ROD in which it explained its rationale. SEACC then filed an amended complaint, in which it reiterated its allegations and reasserted its causes of action. Coeur Alaska, Goldbelt, Inc., and the State of Alaska intervened as defendants. The parties filed cross-motions for summary judgment.

The district court granted summary judgment to the defendants on August 4, 2006. In its opinion, the district court focused on whether the Corps misapplied § 404 of the Clean Water Act. The district court noted that SEACC challenged the granting of the permit on the grounds that it did not comply with § 301(e) and § 306(e). It held that if the permit was issued under § 404 for the disposal of “fill material,” then § 301(e) and § 306(e) were inapplicable. '

SEACC appealed on August 7, 2006, three days after the district court’s decision, and this court, on SEACC’s motion, granted an injunction pending appeal on August 24, 2006, which prohibited Coeur Alaska, the Corps, and the Forest Service from proceeding with further construction activities related to preparing the lake for use as a waste disposal site. See SEACC v. U.S. Army Corps of Eng’rs, 472 F.3d 1097, 1099 (9th Cir.2006). Since granting the injunction, we have addressed two emergency motions related to stabilizing a temporary coffer dam that was hastily constructed by Coeur Alaska prior to the injunction. Id.; SEACC v. U.S. Army Corps of Eng’rs, 479 F.3d 1148, 1151-52 (9th Cir .2007).

III.

We review the district court’s grant of summary judgment de novo and must determine whether the district court correctly applied the relevant substantive law. Turtle Island Restoration Network v. Nat’l Marine Fisheries Serv., 340 F.3d 969, 973 (9th Cir.2003); United States v. City of Tacoma, 332 F.3d 574, 578 (9th Cir.2003). “De novo review of a district court judgment concerning a decision of an administrative agency means the court views the case from the same position as the district court.” Turtle Island, 340 F.3d at 973 (citing Nev. Land Action Ass’n v. U.S. Forest Serv., 8 F.3d 713, 716 (9th Cir.1993)). Judicial review of administrative decisions under the Clean Water Act is governed by § 706 of the Administrative Procedure Act (“APA”). Nat’l Wildlife Fed’n v. U.S. Army Corps of Eng’rs, 384 F.3d 1163, 1170 (9th Cir.2004). Under the APA, a court may set aside an agency action if the court determines that the action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); Turtle Island, 340 F.3d at 973.

IV.

Two different regulations contain plain language interpreting the Clean Water Act that would appear to govern Coeur Alaska’s proposed plan of operations at the Kensington Gold Mine, but they result in different interpretations of the Act. The discharge of wastewater containing'tailings from Coeur Alaska’s froth-flotation mill operation facially meets the Corps’ current regulatory definition of “fill material” because it would have the effect of raising the bottom elevation of the lake. See 33 C.F.R. § 323.2(e). Accordingly, under this interpretation, the discharge would be subject to the permit process governed by § 404 of the Clean Water Act. However, EPA previously promulgated a performance standard, pursuant to § 301 and § 306 of the Clean Water Act, that prohibits discharges from froth-flotation mills into waters of the United States. See 40 C.F.R. § 440.104(b)(1).

Both of the regulations appear to apply in this case, yet they are at odds. As explained below, the plain language of the Clean Water Act resolves this conflict and requires that the performance standard controls. The statute is unambiguous on this point, and the performance standard applies to discharges from the froth-flotation mill at Coeur Alaska’s Kens-ington Gold Mine into Lower Slate Lake. Furthermore, the federal agencies’ clear statements at the time they adopted the current regulatory definition of the term “fill material” demonstrate that they did not intend for waste products subject to effluent limitations and performance standards to be regulated as “fill material.” For these reasons the Corps should not have issued a permit to Coeur Alaska under § 404. The district court’s grant of summary judgment in favor of the Corps is reversed, and we remand for summary judgment to be entered in favor of the plaintiffs with directions to vacate the permit granted by the Corps.

A.

We begin, as we must, with the text of the Clean Water Act itself to determine “whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). “If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.” Id. at 843 n. 9, 104 S.Ct. 2778.

1.

Congress passed the Clean Water Act in 1972 “to restore and maintain the chemical, physical, and biological integrity” of the waters of the United States. 33 U.S.C. § 1251(a). To achieve this objective, the Clean Water Act sought to eliminate completely the discharge of all pollutants into the nation’s navigable waters by 1985. 33 U.S.C. § 1251(a)(1). It also sought to make those waters suitable for fish, shellfish, wildlife, and recreation. 33 U.S.C. § 1251(a)(2). One of Congress’s principal concerns in passing the Clean Water Act was the use of water for waste disposal, which Congress deemed “unacceptable.” See S.Rep. No. 92-414, at 7 (1971), reprinted in 1971 U.S.C.C.A.N. 3668, 3674 (“The use of any river, lake, stream or ocean as a waste treatment system is unacceptable.”), quoted in Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1043 (9th Cir.1978).

The “cornerstone” and “fundamental premise” of the Clean Water Act is § 301, which prohibits all discharges of any pollutant except in compliance with specified provisions of the statute. Ass’n to Protect Hammersley, Eld, & Totten Inlets v. Taylor Res., Inc., 299 F.Bd 1007, 1009 (9th Cir.2002); Natural Res. Def. Council, Inc. v. EPA, 822 F.2d 104, 109 (D.C.Cir.1987). Specifically, § 301(a) provides that “the discharge of any pollutant by any person shall be unlawful” except when the discharge complies with the requirements of, inter alia, § 301, § 306, § 402, and § 404. 33 U.S.C. § 1311(a). In furtherance of this mandate, § 301(b) requires EPA to adopt increasingly stringent, technology-based effluent limitations for point sources. Once an effluent limitation is promulgated, § 301(e) requires that it “shall be applied to all point sources of discharge of pollutants in accordance with the provisions of’ the statute. 33 U.S.C. § 1311(e) (emphasis added).

Similarly, § 306 requires EPA to implement even more stringent “standards of performance” for new sources such as the new Coeur Alaska mine project. 33 U.S.C. § 1316(b). To carry out § 306’s directive, EPA must promulgate a list of categories of sources and, for new sources within each category, establish a national standard of performance (also referred to as a New Source Performance Standard). Id. A standard of performance is defined as “a standard for the control of the discharge of pollutants which reflects the greatest degree of effluent reduction which [EPA] determines to be achievable through application of the best available demonstrated control technology, processes, operating methods, or other alternatives, including, where practicable, a standard permitting no discharge of pollutants.” 33 U.S.C. § 1316(a)(1) (emphasis added). As with the effluent reductions promulgated under § 301, § 306 states that, once a standard of performance takes effect, “it shall be unlawful for any owner or operator of any new source to operate such source in violation of any standard of performance applicable to such source.” 33 U.S.C. § 1316(e). Congress thus “intended these regulations to be absolute prohibitions.” E.I. du Pont de Nemours & Co. v. Train (“Du Pont”), 430 U.S. 112, 138, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977) (citing S.Rep. No. 92-414, at 58 (1971)). The legislative history of § 306 indicates that Congress made a “deliberate choice not to allow variances for new sources.” Riverkeeper, Inc. v. EPA, 358 F.3d 174, 192 (2d Cir. 2004). As such, no exceptions to a standard of performance are allowed. See id.; Du Pont, 430 U.S. at 138, 97 S.Ct. 965.

To ensure compliance with effluent limitations and performance standards established pursuant to § 301 and § 306, Congress created the National Pollutant Discharge Elimination System (“NPDES”) permit program under § 402 of the Act. Through the NPDES program, EPA may permit a discharge, but only if it complies with § 301 and § 306. Additionally, NPDES permits are supposed to limit the release of pollutants into waterways as much as possible by imposing numerical discharge restrictions. Rybachek v. EPA, 904 F.2d 1276, 1283 (9th Cir.1990). For this reason, the NPDES permit program is considered “central to the enforcement” of the Clean Water Act. Natural Res. Def. Council, Inc. v. Costle, 568 F.2d 1369, 1374 (D.C.Cir.1977).

In addition to the NPDES permit program, the Clean Water Act established a secondary permit program for the discharge of “dredged or fill material” under § 404. According to § 404, the Corps “may issue permits ... for the discharge of dredged or fill material into the navigable waters at specified disposal sites.” 33 U.S.C. § 1344(a). We conclude that the permit scheme under § 404 is a limited permit program that applies only to dredged or fill material, not to the discharge of pollutants from industrial or municipal sources.

2.

The language of the Clean Water Act is clear on the issue at the center of this dispute. First, § 301(a) prohibits any discharge that does not comply with several enumerated sections, including both § 301 and § 306, as well as § 402 and § 404. 33 U.S.C. § 1311(a). The use of “and” as a connector, instead of “or,” indicates that Congress intended for effluent limitations and standards of performance to apply to all applicable discharges, even those that facially qualify for permitting under § 404. Second, § 301(e) applies effluent limitations established by EPA to all discharges. 33 U.S.C. § 1311(e). Third, § 306(e) prohibits any discharge that does not comply with performance standards promulgated by EPA. 33 U.S.C. § 1316(e). In clear and precise terms, § 301 and § 306 require that discharges comply with applicable effluent limitations and standards of performance. Neither § 301 nor § 306 contains an exception for discharges that would otherwise qualify for regulation under § 404. Rather, § 301 and § 306 are “absolute prohibitions” with no exceptions. Du Pont, 430 U.S. at 138, 97 S.Ct. 965.

Nevertheless, the defendants argue that § 301 and § 306 do not apply to § 404 permits because § 402 explicitly requires compliance with those sections whereas § 404 does not. The defendants then reason, by way of negative inference, that § 404 contains an implied exception to the requirements of § 301 and § 306 whenever a proposed discharge would meet the agencies’ regulatory definition of “fill material.” We disagree. Negative inferences and implied exceptions are generally disfavored. As the Supreme Court stated in United States v. Rutherford, 442 U.S. 544, 99 S.Ct. 2470, 61 L.Ed.2d 68 (1979): “Exceptions to clearly delineated statutes will be implied only where essential to prevent ‘absurd results’ or consequences obviously at variance with the policy of the enactment as a whole.” Id. at 552, 99 S.Ct. 2470 (citing Helvering v. Hammel, 311 U.S. 504, 510-11, 61 S.Ct. 368, 85 L.Ed. 303 (1941)). That is because courts have “generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion” of particular language. S.D. Warren Co. v. Me. Bd. of Envtl. Prat, - U.S.-, 126 S.Ct. 1843, 1852, 164 L.Ed.2d 625 (2006) (quoting Bates v. United States, 522 U.S. 23, 29-30, 118 S.Ct. 285, 139 L.Ed.2d 215 (1997)). The defendants have produced no compelling reason to believe that Congress intended an exception within § 404 that it did not explicitly create. If the defendants’ interpretation were correct, Congress would have written § 301 and § 306 within § 402, not as separate sections. Moreover, the implied exception urged by the defendants, if adopted, would turn § 404 into an exception that swallows the rule created by § 301, § 306, and § 402 by allowing the Corps to use a negative inference from an exception clause within § 402. Thus, § 404’s silence regarding the explicit and detailed requirements in § 301 and § 306 cannot create an exception to those sections’ strongly-worded blanket prohibitions.

The defendants’ interpretation would render § 301(e) and § 306(e) effectively meaningless. Courts strive to avoid interpreting a statute “in a manner that renders other provisions of the same statute inconsistent, meaningless, or superfluous.” Boise Cascade Corp. v. EPA, 942 F.2d 1427, 1432 (9th Cir.1991), quoted in Cuevas-Gaspar v. Gonzales, 430 F.3d 1013, 1024 (9th Cir.2005); see also Ratzlaf v. United States, 510 U.S. 135, 140-41, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994); Watt v. Alaska, 451 U.S. 259, 267, 101 S.Ct. 1673, 68 L.Ed.2d 80 (1981) (