Tag Archives: wetlands

Cert Denied in MCRC v. EPA

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Certdenied4March2019

18-555 among the denied petitions on this morning’s list of Supreme Court orders.

A public agency’s effort to cut a road through the Michigan wilderness for a Canadian mining company has suffered yet another legal setback.

This morning, the Supreme Court published the list of orders from its March 1 conference. The court has denied the petition for certiorari in Marquette County Road Commission v. EPA, the dispute over County Road 595 I’ve been following since 2015. This denial means, simply, that the Supreme Court declines to review the case, without further comment, and the decision by the Sixth Circuit Court of Appeals stands.

The Road Commission’s case turned on the question whether objections by the EPA to the proposal for CR 595 constituted “final agency action.” If so, they would be reviewable by a court. In arguments before the Sixth Circuit, the Pacific Legal Foundation’s Mark Miller insisted that EPA’s objections to the Road Commission’s proposal were tantamount to a “veto,” but his repeated use of that word ended up confusing the judges, and their questions about it exposed the weakness of his argument.. The Road Commission, they reminded him, could always have simply gone back to the Army Corps of Engineers with an amended proposal that took the EPA’s objections into account.

As I’ve written elsewhere, Miller made a lot of other arguments before the Sixth Circuit (and the in pages of the Wall Street Journal) that suggest this case was about more than building a haul road from Eagle Mine to Humboldt Mill. Like others advocating for CR 595, he tried to suggest that the Environmental Protection Agency was in cahoots with environmental groups, and part of an anti-mining conspiracy. These arguments were never intended to go anywhere legally. They were, instead, put forward to raise the profile of the dispute over Country Road 595. They brought in dark money and support from outside groups. They divided people. They helped advance a larger political project.

After a long and fruitless detour through the court system, the Road Commission has come to a legal dead end. But the Road Commission and its allies, within and without Marquette County, still have options. Lundin Mining’s development of Eagle East has extended the life of the mine to 2023 — “at least,” the company says. There is nothing to prevent the Road Commission from revising its proposal, and trying again. The question remains whether doing so would serve the broad public interest, or simply advance the short-term interests of the mining company.

Read other posts about MCRC v. EPA here. 

The Supreme Court is going to do what, exactly? Another update on MCRC v. EPA

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It turns out Marquette County Road Commission v. EPA, the mining haul route case I’ve followed for a few years, is not dead yet. Back in June, the Sixth Circuit denied a petition for an en banc hearing. That seemed the end of it. Now, a TV6 report says that the Pacific Legal Foundation’s Mark Miller is talking — once again — about Supreme Court review.

A Petition for a Writ of Certiorari was filed on October 25th. A response is due on November 28th.*

Maybe Miller knows something about the composition of the court post-Kavanaugh I don’t. The Sixth Circuit firmly rejected his argument — that the EPA’s objections to the Marquette County Road Commission’s plan for County Road 595 were tantamount to a “veto.” Now, he believes

the U.S. Supreme Court will read our petition, review our case on the merits, ultimately, and agree with us that the road commission’s plan as approved by the state should at least be considered by a judge as compared to the EPAs decision to reject that plan.

If I follow what Miller’s saying here, the Supreme Court is going to review a case that was denied en banc hearing at the Sixth Circuit, and then recommend that a judge — what judge? an administrative law judge? in what court?  — consider the Road Commission’s plan and weigh it against the objections of the EPA. I think I got that right.

Jim Iwanicki, Marquette County Road Commissioner, has another set of expectations:

the purpose of the lawsuit is to have the U.S. Supreme Court review the decision of the Michigan Appeals Court to side with the EPA and to get an explanation as to why the the EPA turned down the permit in the first place….Iwanicki says he wants answers on the EPA’s decision. He says the road commission was not given a solid answer on why the EPA ruled against the road’s construction.

The construction of 595 would have gone through undeveloped wetlands.

“There is no mechanism right now to build 595,” said Iwanicki. “Right now it is more of the issue of, were we treated fairly and was the permit looked at properly. If not then those people that didn’t look at it properly should be addressed and called forward on the carpet.”

I wonder if these are actual expectations, or if Miller and Iwaniki — and StandU.P., the dark money 501c4 behind the push for CR 595 — are rabble rousing.

*Update: on November 21st, Solicitor General Noel Francisco requested, and the Supreme Court granted, an extension to December 28th to file a response. The reason given: “the heavy press of earlier assigned cases to the attorneys handling this matter.”

Second Update, 4 December: Two amicus curiae briefs were filed on November 28th in support of the Marquette County Road Commission by the Southeastern Legal Foundation and the Mackinac Center for Public Policy and the County Road Association of Michigan and Stand U.P., the 501c4 dark money organization promoting CR595. Both briefs take their cue from the argument that failed in the Sixth Circuit, asserting that the question before the court involves an “arbitrary and capricious EPA veto.”

Update, 19 December. The Department of Justice has requested a second extension, until January 28, 2019, to file a response. The reason given is, again, “because the attorneys with principal responsibility for preparation of the government’s response have been heavily engaged with the press of previously assigned matters with proximate due dates.” The request goes on to note that counsel for the Marquette County Road Commission does not oppose a second extension. So we can’t expect anything like a resolution in this case until the New Year.

Update, 28 January 2019. The Environmental Protection Agency responded today to the Road Commission’s petition for Supreme Court review.  As expected, the reply focuses on the fact the Road Commission “voluntarily discontinued the permitting process” back in 2015, then turned around and brought suit, saying the EPA had acted in an arbitrary and capricious way.

The EPA replies that this is a mess of the Road Commission’s own making.

To be sure, EPA’s objections may have had the practical effect of making the overall Section 404 permitting process (if petitioner had continued to pursue it) more protracted than it otherwise would have been…. At most, however, EPA’s objections required petitioner to continue with a permitting process that petitioner was obligated to invoke regardless of EPA’s objections—a requirement “different in kind and legal effect from the burdens attending what heretofore has been considered to be final agency action.”

The Road Commission has repeatedly failed to convince the lower courts of its central contention, that EPA objections amounted to a veto.  Instead, when the Michigan Department of Environmental Quality declined in July of 2015 to grant or deny the Road Commission’s application, permitting authority for CR 595 transferred to the Army Corps of Engineers. The Road Commission could have simply continued the permitting process.  Why didn’t they? Instead, they’ve ended up here, at the door of the Supreme Court, looking for relief from — what, exactly? their own impatience?

Update, 11 February 2019. Attorneys for the Marquette County Road Commission have filed a Reply Brief. In a more sophisticated version of the veto argument rejected by the Sixth Circuit, they accuse the EPA of playing “a semantic shell game” around the issue of final agency action. They still use the word “veto” throughout the brief, and argue that EPA has made an important concession in its 28 January filing:

they now concede one crucial point that below they denied: the Corps required the Road Commission to submit a new Section 404 CWA permit application after the EPA vetoed the permit the State of Michigan stood ready to issue. [Here they cite a sentence from the EPA brief, which states:] “the Corps asked petitioner to submit a ‘new’ application.” That factual concession amounts to an implicit legal concession that, in regards to the State of Michigan Department of Environmental Quality (MDEQ) Section 404 CWA permit application process, the EPA’s work was consummated… Moreover, it recognizes that there were consequences to the Road Commission that flowed from that consummation of EPA’s work in regards to that vetoed state permit: now, the Road Commission had to take action in order to obtain a Section 404 CWA permit—it had to submit a new permit application to the Corps.

Who, exactly, is playing shell games? This argument appears to be little more than sophistry. When the EPA brief uses the word “new” at the indicated place (page 11), the brief is quoting the Marquette County Road Commission’s own petition. That is why the EPA places “new” inside quotation marks. EPA is, moreover, quoting Marquette County Road Commission in order to refute the assertion that this was anything but the continuation of an ongoing review process. To quote your opponent is not to concede his point.

The Reply Brief also cites the recent Weyerhaeuser decision over enforcement of the Endangered Species Act to argue that there is “a basic presumption of judicial review for any party suffering legal wrong because of agency action.” This would seem to create the burden of proving that the Road Commission suffered legal wrong — which would seem to bring us full circle: the Road Commission only suffered legal wrong if, in fact, the EPA’s objections constituted a veto.

Round and round we go. Now it’s up to the Roberts court to sort this out, or just turn it down. I still think the latter is the most likely outcome.

Update, 19 February 2019. A 13 February entry in the docket shows the case has been distributed for conference on the first of March. It is one of ten Sixth Circuit cases up for consideration.

You’ll find my other posts on MCRC v. EPA here. 

A Quick Update on MCRC v. EPA at the Sixth Circuit (With Several Additional Updates)

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EagleTrucksAAA

Ore trucks from Eagle Mine.

I’ve been doing my best to keep track of developments in Marquette County Road Commission v. EPA, the litigation over County Road 595 in Michigan’s Upper Peninsula. CR 595 was conceived and planned as a haul route from Eagle Mine to Humboldt Mill. From the outset, the project was a cause of public contention. As plans to cut through wilderness and destroy wetlands to build the road met with objections from the permitting authorities, the companies operating Eagle Mine — first Rio Tinto, then Lundin Mining — stayed on the sidelines, or worked quietly behind the scenes, leaving the people of Marquette County to slug it out with the federal government, and with each other.

The latest entry in the CR 595 legal saga looks like a win for the EPA, or at least a point in its favor. Last week, on Thursday, March 1, Ellen Durkee, the DOJ attorney representing the EPA, submitted a one paragraph letter to the U.S. Court of Appeals for the Sixth Circuit about a Ninth Circuit case called Southern California Alliance of Publicly Owned Treatment Works v. EPA. This is another piece of litigation over Section 402 of the Clean Water Act.

The plaintiff in this case was making an argument similar to that made by Mark Miller, the Pacific Legal Foundation attorney representing the Marquette County Road Commission before the Sixth Circuit: that EPA objections were tantamount to a permit denial (or what Miller insisted on calling a “veto”). If we follow Miller’s argument, the Marquette County Road Commission would have had no recourse after the EPA weighed in on its plans. In administrative legal parlance, the EPA’s objections to the Road Commission’s permit application would constitute “final agency action,” and could therefore come up for review by the court.

But in Southern California Alliance, writes Durkee, “the Ninth Circuit explained that under the statutory scheme, EPA objections are not functionally similar to a permit denial and that a challenge to EPA objections is premature.” That decision, made back in April of 2017, would seem to lend more support to the federal government’s position, that EPA objections merely constitute an “interlocutory step.” There is nothing final about them at all. So when it came to the permit application for CR 595, the Michigan DEQ still had three options: grant, deny, or do nothing. This was a point Judge White highlighted when she questioned Miller about the word “veto” during oral argument before the Sixth Circuit.

There was a new development in the Ninth Circuit case just last month, which is what prompted Durkee’s letter to the Sixth Circuit. On February 20th, the Supreme Court declined a petition to review the Ninth Circuit decision in Southern California Alliance. This means the Ninth Circuit’s ruling stands, and it might help bolster the EPA’s argument in the Sixth Circuit. It also suggests that the Supreme Court would probably not be favorably disposed toward a new petition for review on a point of administrative law it has just left up to a lower court. Miller, who has vowed publicly to take this case to the Supreme Court if the Road Commission does not prevail at the Sixth Circuit, might have to check his ambition.

Update: A Decision. On March 20th, 2018, the Sixth Circuit agreed with and affirmed the district court’s decision to dismiss the Road Commission’s complaint. Miller’s argument that EPA objections were tantamount to a “veto” and constituted final agency action failed to win over the three judge panel. “Though the Road Commission characterizes EPA’s objections as a ‘veto,’ the facts show that EPA’s objections did not end the Road Commission’s pursuit of a Section 404 permit. To the contrary, when EPA lodged objections, the permit review process continued precisely as directed by statute.” Given what I say here about Southern California Alliance, this looks like the end of the road.

Another Update. 9 April 2018. A story by Cecilia Brown in the Mining Journal suggests this case may take yet another turn. Dissatisfied with the March 20th decision by the three judge panel, the Road Commission is now asking for an en banc hearing at the Sixth Circuit. And if that doesn’t work out, they have “authorized” the Pacific Legal Foundation to seek review at the Supreme Court. For reasons I suggest above, I think it’s unlikely the Supreme Court will grant certiorari (or review the case). So far as I can tell from the docket, the Road Commission had not yet filed a petition with the Sixth Circuit requesting en banc review.

Yet Another Update. On May 2nd, Michael J. Patwell of Clark Hill , PLC and Mark Miller of the Pacific Legal Foundation filed a petition for an en banc hearing at the Sixth Circuit. This would bring the Road Commission’s case against the EPA before all the judges in the Circuit, and ask them to revisit the March 20th decision by the three judge panel.

The petition acknowledges that “this Court rarely rehears a case en banc” but then tries to argue that this case involves “an exceptionally important question of federal jurisdiction.” Oddly enough, the petition does not back down from the argument that EPA objections to the Road Commission’s permit “crystalize into what amounts to a veto” — an argument the Sixth Circuit panel met with skepticism at the hearing, then explicitly rejected in its opinion. So an en banc hearing at the Sixth Circuit would seem unlikely.

Petition for En Banc Hearing Denied, 29 May 2018. Today, Beverly L. Harris, the En Banc Coordinator for the Sixth Circuit, notified Mark Miller of the Pacific Legal Foundation that his petition for an en banc hearing has been denied. This comes as no surprise. The original three-judge panel found no fault with their decision, observing that “the issues raised in the petition were fully considered upon the original submission and decision of the case. The petition then was circulated to the full court. No judge has requested a vote on the suggestion for rehearing en banc.” As I noted back on April 9th, there are reports that the Marquette County Road Commission has authorized Miller to pursue this matter to the Supreme Court. After not a single judge took Miller up on the en banc review, it seems unlikely that the nation’s highest court would find anything irregular or meriting review here.

Mandate issued. On Thursday, 7 June 2018, the Sixth Circuit issued a mandate in MCRC v. EPA. This suggests, among other things, that Pacific Legal Foundation’s Mark Miller did not seek a stay of mandate — which he might have done were he ready to petition the Supreme Court.

A Comment on the Aquila Back Forty Wetland Permit

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AquilaWetlandMap

An Aquila Resources map outlines the wetlands that will be impaired by its open pit sulfide mine on the Menominee River.

Earlier this morning, I sent this comment on the Aquila Resources Back Forty Wetland Permit to the Michigan Department of Environmental Quality. Public comments may be submitted here until February 2nd.

To the MDEQ:

You have probably already received a number of comments on the Back Forty Mine wetland permit application from people who live out of state, as I do. Some of those opposed to sulfide mining on the Menominee River live on the Wisconsin side, just across or downstream from the proposed mine site. Others, across the country and around the world, are deeply concerned about the cumulative effects the current leasing, exploration, and sulfide mining boom around Lake Superior will have, and are alarmed to see federal and state regulatory agencies abdicating their responsibilities to the American public in order to do the bidding of foreign mining companies.

Denying the wetland permit is the only prudent and responsible course for MDEQ to take.

As the organization American Rivers noted when it placed the Menominee River on its list of “most endangered” rivers in 2017, the Aquila Resources Back Forty project poses a “significant threat” of acid mine drainage to the river, and to the “cultural and natural resources of the Upper Peninsula, Wisconsin, and the Great Lakes Region.” Allowing Aquila to destroy or compromise area wetlands to construct its mine will only heighten the risk of large scale environmental catastrophe.

The risk is compounded by both regulatory and scientific uncertainty. As you are well aware, the Menominee Tribe maintains that the MDEQ lacks authority to issue this permit, because under provisions of the Clean Water Act the Menominee River and its wetlands are federal waters. This question remains unsettled. In the meantime, a third party, independent review of Aquila’s wetland permit application found errors and inconsistencies regarding the company’s findings on groundwater drawdown and the mine’s feasibility analysis. The wetland permit application you are considering is either flawed, because the people who filed it are incompetent, or misleading, because they have something to hide.

Deceit might be Aquila’s best strategy at this point. The Back Forty project has no claim to social license — none. The Menominee and other Wisconsin tribes have been adamant in their opposition. Local residents are overwhelmingly opposed as well. Of the 90 people who had the opportunity to speak at the January 23rd public hearing in Stephenson, only 4 could muster an argument for the mine, mainly because they put stock in the vague promise of “jobs” made by mining proponents. The rest — 86 out of 90, or 95 percent — stood in opposition to the mine.

Even if Aquila is not deliberately misleading the MDEQ and the public, the Canadian company has demonstrated time and again that it is not a responsible steward of Michigan or Menominee lands. In archaeological surveys of the region, for instance, Aquila claims to have uncovered nothing of “historical significance.” That is telling. These surveys have found nothing because they fail, or refuse to see, the significant Menominee history and culture that is right in front of their eyes. As tribal members have made repeatedly clear, Menominee history, ancestry, and culture begin and end in the river, the land, and the forest. What is historically significant or meaningful is not merely a collection of artifacts; it is a way of life and a deep connection to place. The Back Forty Mine threatens to destroy that connection.

In sum, the wetland permit application is flawed, the company has no social license to operate, and allowing the Back Forty to go forward would violate the public trust.

Postscript: On Monday, 4 June, Michigan DEQ Director Heidi Grether granted this wetlands permit, despite the DEQ’s own findings that the Aquila Resources project will likely cause “an unacceptable disruption to the aquatic resources of the State…and that the activities associated with the project are not consistent with the permitting criteria for an acceptable impact to the resources regulated under Parts 301, Inland Lakes and Streams, and Part 303, Wetlands Protection.” The permit DEQ issued — over its own objections — includes 28 pages of special conditions. It’s unclear why the DEQ did not simply deny the permit, as its findings warranted and in keeping with EPA objections to the Aquila application. More here.

Another Note on the Boundary Waters Reversal

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Jorjani Calendar

A 25 July 2017 entry from Daniel Jorjani’s calendar shows a meeting with Antofagasta Plc on the Twin Metals project.

One point I hoped to get across in Monday’s post about the Boundary Waters reversal has to do with journalism, or, more broadly, with storytelling. Just to highlight: scandal-mongering that generates clicks doesn’t necessarily get at the more prosaic and more complex truth of the story, and may end up doing a disservice. In the case of the Boundary Waters reversal, it is tempting to focus on the story of Chilean billionaire Andronico Luksic Craig and his Washington, D.C. tenants, Ivanka Trump and Jared Kushner. Was Luksic Craig’s purchase of the mansion where Jared and Ivanka now live an opening bid? Was the reversal connected to the rental?

This story of the rich and famous still merits investigating, but it carries with it a whole set of ideas — exaggerated and somewhat cartoonish ideas — of what corruption looks like: foreign billionaires, mansions, nepotism, winks and nods (remember what Luksic Craig said about meeting Trump at the Patriots’ game: “lo saludé.” “I said ‘hi’”).  All of those elements are certainly in play here, and they are part of what makes this administration appear so unabashedly corrupt and downright villainous.

At the same time, the story of Luksic Craig and his D.C. tenants could turn out to be a red herring, or what nowadays people call a nothingburger or fake news. Besides, there’s another, more immediately credible story that’s just there for the telling. What it lacks in tabloid glamour it makes up for with evidence. It unfolds among the banalities of meeting rooms, conference calls, memos, and after work events. This is the story Jimmy Tobias pursues in an excellent piece in the Pacific Standard, which I had not read before writing my post (and which, after reading, I linked to in a postscript).

Tobias beat me to the punch on the FOIA request, and obtained Principal Deputy Solicitor Daniel Jorjani’s calendar from May through December of 2017. He identifies two meetings about the Twin Metals project. The first is on June 14, 2017, with Raya Treiser and Andy Spielman of WilmerHale, the law and lobbying firm, on behalf of Antofagasta Plc.

Spielman is the Chair of WilmerHale’s Energy, Environment and Natural Resources Practice, and his name appears on the calendar heading, so we know that this is a high priority matter for the lobbying firm and presumably for the Department of Interior. And Treiser comes directly from the Department of the Interior, where she served under President Obama. She helped to “streamline” permitting on large infrastructure projects, and worked on the reform of offshore drilling regulations and energy development in Alaska. Now, as her biography on the WilmerHale site informs us, she has “successfully leveraged her substantive knowledge and insight into government processes.”

The second meeting is directly with Antofagasta Plc: the Chilean mining company comes to the Department of Interior to discuss its Minnesota claim, and it appears the Department rolls out the red carpet. WilmerHale had done its work. In addition to Principal Deputy Solicitor Jorjani, thirteen administration officials are in attendance, representing the highest reaches of the Department of Interior, the Bureau of Land Management, and the Environmental and Natural Resources Division of the Department of Justice. As Tobias notes, no conservation groups were invited to discuss the reversal with the Department of Interior. This was a conversation for insiders only.

At the center of this story is not a mansion, but a revolving door (and if you are not familiar with Bill Moyers’ short video essay on the subject, you should be). This feature of the story becomes even more apparent when we look at a couple of other meetings on Deputy Solicitor Jorjani’s calendar that Tobias didn’t flag but are connected with the Boundary Waters reversal. One is a Friday, May 26 call with Rachel Jacobson of WilmerHale, regarding a “DC Bar Event”; this call or this event might well have provided an opportunity to tee up the Twin Metals issue. It is the first contact WilmerHale makes with Principal Deputy Solicitor Jorjani— and who should they choose for that task but Jacobson, who held Jorjani’s job of Principal Deputy Solicitor under the Obama administration.

Then on Thursday, September 7th, when work on the reversal memo is presumably well underway, there is an internal meeting on Twin Metals: Jorjani with Jack Haugrud, who was Acting Secretary of the Interior until Zinke’s appointment, and Joshua Campbell, an Advisor to the Office of the Solicitor. Campbell is profiled here, on Western Values Project “Department of Influence” site, documenting the revolving door between special interests and the Department of Interior.

In these meetings, the public interest does not even come into play.

Postscript: Today, as I was writing this post, the Washington Post reported that the Forest Service will cancel a planned environmental impact study and instead conduct an abbreviated review of the Obama-era proposal to withdraw the Superior National Forest lands near the Boundary Waters from minerals exploration for up to 20 years. The story also appears in the Star Tribune. Things are moving fast now, and pressure is mounting.

MCRC v. EPA at the Sixth Circuit

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mcrc_map1s

“Well, if you took all these papers,” said EPA counsel Ellen J. Durkee, referring to the various proposals put forward for CR 595, “what you’d have is their proposal in June, their proposal in July, their proposal in October, their proposal in November, their proposal in, you know, different — twice in December…. really what’s needed is they have to say…what is the proposal that they consider their application at this point.” A good review of the various proposals for the Eagle Mine haul route can be found here.

In remarks before the Sixth Circuit Court of Appeals on Wednesday, Mark Miller of the Pacific Legal Foundation waved the flag of “cooperative federalism,” complained that the Environmental Protection Agency has “gone way beyond the powers that Congress gave them,” and even, at one point, raised the familiar spectre of an anti-mining conspiracy at the EPA and the Army Corps of Engineers.

They did not want a permit here from before. In the pre-application process, there was a meeting, among the parties — not among Marquette County Road Commission, they were not invited — but the government said we are not going to approve this road project. This was a well-known proposed road project from a mine to a mill, and the EPA and the Corps wanted none of it. So that’s why it was futile factually.

Miller has elaborated on these arguments in the Wall Street Journal and elsewhere. As I have suggested in previous posts on Marquette County Road Commission v. EPA, grandstanding arguments like these are intended to raise the profile of this dispute and make it about much more than a haul road. They have been used, repeatedly, to connect the Road Commission’s case with a larger, coordinated effort — a right-wing, dark-money political project — to sideline federal regulators in Michigan and weaken enforcement of the Clean Water Act; stifle local environmental watchdogs; and arrogate the authority and power to direct economic development in the Upper Peninsula to a set of undisclosed actors.

But on Tuesday, those arguments didn’t count for much in Miller’s presentation before the Sixth Circuit panel. At the center of the dispute is still the question whether EPA’s objections to CR 595 constitute “final agency action,” as the Road Commission claims, or if they are an “interlocutory step” (in which case, the Road Commission can still take the EPA’s objections under advisement and go back to the Corps with a proposal).

Miller claimed right off the bat, in the very first sentence of his argument, that EPA’s objections were tantamount to a “veto.” I’ve written about this argument before. On Tuesday, the judges wanted to know what exactly Miller meant by that word. “You keep saying the EPA vetoed the application for the permit,” asked one of the judges just four minutes into the proceedings. “What do you mean by that?” Ten minutes later, another Judge indicated she was still not satisfied on this point:

JUDGE: What makes it — you keep using the word veto.
MILLER: Yes, your honor.
JUDGE: But it was really objections, right?
MILLER: Your honor I think that’s a distinction without a difference because effectively here the EPA has twice said, “no, DEQ, this permit you’re ready to issue is not good enough for us.” And the reasons the EPA was giving were not within its powers to give. Then the EPA knew it was taking advantage of the statute to say well now it’s going to bounce to the Corps.

That there is no “difference” between objections and vetoes is critical to Miller’s argument for futility, which claims it would be a “farce” for the Road Commission to go back to the Corps.

When it came to her turn, Ellen Durkee, arguing for the EPA and the Army Corps, pursued the point:

I’d like to speak to this issue of this continued use of the word “veto,” because I think that that is, seems to be the critical characterization for the plaintiff’s argument here. A veto means that you cannot get a permit. In [Section] 404 [of the Clean Water Act] itself, there’s a distinction between what happens in 404j with EPA objections and a true veto, and you know they — in this case, the EPA objection gives the state opportunity to take action. And then when the state, as it did here — there’s an impasse, because they didn’t take action within the statutory time, it simply shifts the permitting authority. That is not a veto. The Corps may look at this and say we think it’s satisfactory. EPA, you know, they may come up with the provisions that they need to satisfy that, the objections, in which case they could still get a permit. What [the Road Commission] simply did was stop the process and decide not to continue.

And the word “veto” was still begging questions at the end of the proceeding, when Judge Helene N. White went back to Miller.

JUDGE; Let me just ask you this question. Once the EPA made its objections, the DEQ still had three options, correct?
MILLER: Yes your honor.
JUDGE: And they were grant, deny, or do nothing.
MILLER: In this case the DEQ threw its hands up because they could never — if they granted the permit, the landowner would have nowhere to go because the EPA made it clear it was not going to sign off on it. So they deny it and then transfer– they threw their hands up because the reasons the EPA gave were improper under the statute.
[Crosstalk.]
MILLER: Yes, your honor.
JUDGE: Ok. Did they have three options? Grant, deny, or do nothing?
MILLER: Your honor, they had the options, but ultimately once the EPA gives arbitrary and capricious objections they really had no choice.
JUDGE: But they could have said, they could have denied the permit, right? They could have said we are honoring the objections and we deny the permit.
MILLER: Right and they didn’t, your honor, respectfully they didn’t.

You can listen to the whole proceeding here, or read my (imperfect) transcript of the proceeding.

Mozambique, Michigan, and the SEC Complaint Against Rio Tinto

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Chinde_Rusting_boats

Rusting boats at the port of Chinde, where Rio Tinto proposed to barge Riversdale coal via the Zambezi River.

Yesterday, the Securities and Exchange Commission brought a complaint in New York City against Rio Tinto, charging Tom Albanese, the former CEO of Rio Tinto, and Guy Elliott, his Chief Financial Officer, with fraud. According to the complaint, Albanese and Elliott actively misled the Rio Tinto board, audit committee, auditors, and the investing public about their acquisition of the Riversdale coal business in Mozambique in 2011.

The fraud that Albanese and Elliott are accused of perpetrating looks awfully familiar to those who have followed the development of Eagle Mine and the controversy over County Road 595. Having noticed the parallel between Mozambique and Michigan back in 2013, when Tom Albanese was forced to step down, I now have to wonder whether prosecutors will take the company’s representations around the Eagle Mine into account when building their case.

In Mozambique, they told investors, coal would be transported by barge to the Indian Ocean port of Chinde. Although their technical advisors “highlighted the ‘showstopping’ risks” associated with the barging proposals before the acquisition, Albanese and Elliott blundered recklessly ahead. Then eight months later, the Mozambique government denied Rio Tinto a permit to transport the coal by barge down the Zambezi River. Suddenly, the coal business they had acquired for $3.7 billion appeared to be worth a negative $680 million. According to the SEC’s complaint, Albanese and Elliott “concealed and glossed over” the fact that they had no viable haul route for the 30 million tons per year they projected in their business plans, and misled investors as they raised $5.5 billion in US debt offerings.

In that very same period, Rio Tinto was also promoting Eagle Mine to investors and promising economic renewal in the Upper Peninsula, though they had not yet secured a transportation route — a haul route — for Eagle’s sulfide ore. In Michigan, it appears, the company took the same cavalier attitude toward planning and risk that the SEC complaint says got them into trouble in Mozambique.

Way back in 2005, John Cherry, who was then a Kennecott Minerals project manager and is now President and CEO of the Polymet project in Minnesota, characterized Eagle as a “direct ship” operation, “meaning that the rock would not be processed on site, thereby avoiding the storage of highly toxic debris left over, called tailings.” Presumably this is what Michigan DEQ’s Robert McCann had in mind in 2007, when he told The Blade that Kennecott’s permit “would require them to keep the ores underground, put them in covered rail cars, and ship them to Ontario for processing”; the Marquette Monthly told roughly the same story that year, only now there were trucks in the picture: “ore would be transported by truck and rail to a processing site in Ontario.” This seems to have been nothing more than a cover story.

Everything changed in 2008, when Rio Tinto bought the Humboldt Mill. Those permit requirements the DEQ’s McCann touted back in 2005? They were quickly abandoned. Covered rail cars come into the picture only after the ore is crushed, ground into a slurry, floated and rendered into concentrate at Humboldt Mill. A glossy 2010 company publication promoting Eagle Mine includes not a single word about how Rio Tinto and Kennecott plan to travel the 30 kilometers from mine to mill: “Happily, processing of the nickel and copper can take place in Humboldt, around 30 kilometres [sic] away, at a previously abandoned iron ore plant.” By 2011, the company had “considered more than a half dozen transportation routes” from mine to mill, according to a Marquette Mining Journal article by John Pepin published in February of that year, but they still had no viable haul route.

A good prosecutor with a rigorous and thorough discovery process would probably be able to determine whether the evasions and misrepresentations perpetuated on the public over the Eagle Mine haul route also amounted to fraud, or were part of a larger pattern of deliberately misleading statements. It’s clear Rio Tinto never came clean — and perhaps never really had a firm plan — on mine to mill transport at Eagle before it sold the works to Lundin Mining in June of 2013 and decamped. As long as regulators in Michigan continued to be more accommodating than those in Mozambique, the company seems to have been content to let the people of Marquette County fight out the haul route issue among themselves.

Will Pruitt Retreat From the Yellow Dog Plains?

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It’s no coincidence that the Marquette County Road Commission announced that it would renew the battle for County Road 595 just as the U.S. Senate geared up to confirm Oklahoma Attorney General Scott Pruitt as head of the EPA.

CR 595 seemed like a lost cause after Judge Robert Holmes Bell denied a motion to alter or amend his dismissal of MCRC v. EPA back in December. (I wrote about that motion here). But if the election of Trump and his nomination of Pruitt can change the outlook for big mining projects like the Pebble Mine in Alaska, it can certainly help the MCRC build a haul road for Lundin Mining through the Yellow Dog wilderness.

A federal mediator is now scheduled to hear from both sides on March 9th. The appeal will go forward in the event the parties cannot agree.

The Pacific Legal Foundation — which now represents the MCRC — is clearly well equipped to appeal Bell’s decision. The libertarian-leaning PLF are even more likely than their Clark Hill predecessors to grandstand about federal overreach and economic self-determination. As I’ve tried to suggest in other posts (e.g., here or here), that’s cynical posturing: in this case a victory for the Road Commission will amount to ceding economic development authority to a Canadian mining company and its local proxies.

But libertarian huffing and puffing will not be what makes the Pacific Legal Foundation especially formidable. The PLF argued, and won, the Hawkes decision — which, as I explained in previous post, allowed the plaintiffs to challenge a ruling that wetlands on their property were subject to the Clean Water Act — and they regard Judge Bell’s rejection of the Hawkes decision in the CR 595 case as “a legally reversible error.” Indeed, the PLF are already advertising the Marquette County Road Commission’s case on their blog as “Hawkes Come to Michigan.”

And after today’s confirmation of Pruitt, the PLF will likely have have a much less formidable opponent in the EPA. The decision to go forward with this appeal clearly took that into account. Hawkes may not need to come to Michigan at all. Pruitt might just order the EPA to retreat.

Update, 24 August 2017: New briefs recently filed with the Sixth Circuit Court of Appeals show the Road Commission asking to present oral arguments in this case.

The case turns on three points: whether EPA objections constitute “final agency action” and are therefore subject to judicial review (a claim I explored here); failing that first condition, judicial review might be warranted under Leedom v. Kyne (which provides an exception to the final agency action rule when an agency’s conduct is “a readily-observable usurpation of power,” but the court has already ruled that the Leedom exception does not apply in this case); failing on those scores, the Road Commission wants to invoke a “futility exception” in order to bring the case under judicial review: the Army Corps of Engineers, they say, had already decided against County Road 595, and there was no point in returning to the permit process. But as the EPA notes in its 8 August response, this is speculative on the part of the Road Commission.

The larger issue here — which helps put the MCRC case in context — is that this ongoing litigation concerns a provision of the Clean Water Act, Section 404, which covers permits issued to discharge dredged or fill materials into the waters of the United States. Since stepping into his role at EPA, Scott Pruitt has been leading the charge to rescind the Obama-era definition those waters, revert to an earlier (pre-2015) definition, and make enforcement of the Clean Water Act more favorable to industries like mining.  If MCRC v. EPA continues to make its way through the courts, the case could easily become caught up in the toxic politics of Pruitt’s tenure at EPA.

Update, 17 October 2017: Oral argument is now scheduled for Tuesday, 5 December, before a three-judge panel of the Sixth Circuit Court of Appeals. In a 15 October Detroit News op-ed, Pacific Legal Foundation attorney Mark Miller argues EPA should “immediately” retreat, to deliver on Trump’s campaign promises and “send a signal to the EPA bureaucrats.” It would appear that the Marquette County Road Commission is being enlisted in what a recent episode of Frontline calls the “War on the EPA” and the larger political project to dismantle the administrative state.

The Political Project of MCRC v. EPA, Revisited

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Judge Robert Holmes Bell dismissed the Marquette County Road Commission’s case against the EPA back in May, and last week the Road Commission’s attorneys at Clark Hill PLC filed a motion to alter and amend that judgment. They complain that the Court’s dismissal for failure to state a claim is not only mistaken on points of law but, more dramatically, it allows the “EPA and the Corps to wage a war of attrition on local governments seeking to protect the health and welfare of their people.”

I was struck by this inflammatory piece of political rhetoric about federal overreach for a couple of reasons. First, because it’s just the sort of hyperbolical language Michigan State Senator Tom Casperson and StandUP, the 501c4 dark-money organization funding the Road Commission lawsuit, have used to frame the case for County Road 595 and advance what, in a series of posts (1, 2, 3, 4) last summer, I called the political project of MCRC v. EPA. Second, because the motion here tacitly admits that mining activity on the Yellow Dog Plains has put “the health and welfare” of people in Marquette County at risk. Rio Tinto and then Lundin Mining proceeded with their plans to mine copper and nickel at Eagle Mine and truck it to Humboldt Mill without a clear haul route. They not only went ahead; they were permitted by the state to do so. The risk was transferred to the public.

This is a familiar pattern, but the story it tells is not about federal overreach or intrusive oversight. Quite the opposite: it’s a story about mining companies rushing projects into production without due consideration for the communities in which they are operating, regulatory capture or lax oversight and enforcement, and elected officials who all-too-easily and all-too-conveniently forget where their real duties lie.

The June 13th motion doesn’t often have recourse to this kind of language. For the most part, the motion deals with fine points of administrative law, citing a few cases that it claims the court misread or misapplied. Probably the most important of these is the Supreme Court’s discussion of the Administrative Procedure Act in a May 2016 opinion, United States Army Corps of Engineers v. Hawkes Co.. (Miriam Seifter explains Hawkes over at ScotusBlog. Even with her very clear analysis in hand I can only hope to make a layman’s hash of things.)

In Hawkes, a company that mines peat for golf-putting greens — a process that pollutes and destroys wetlands — sought an appeal of “jurisdictional determinations” by the Army Corps of Engineers that wetlands on their property were subject to the Clean Water Act.

The “‘troubling questions’ the Clean Water Act raises about the government’s authority to limit private property rights” came up for some brief discussion in Hawkes, notes Seifter, but that was not the main focus of the Supreme Court opinion. The case instead revolved around the question whether jurisdictional determinations are “final,” which in this context means they constitute an action “by which rights or obligations have been determined, or from which legal consequences will flow.”

The Army Corps in Hawkes maintained that appeals of the Corps’ jurisdictional determinations should not be allowed, because the determinations of the Corps are still subject to review and are not “final” or binding. The court found unanimously in favor of the peat-miners, saying that determinations by the Corps were final — they would put legal constraints on the peat-miners, who would have to stop polluting or face penalties — and therefore could be reviewed in court.

In MCRC v. EPA, the Road Commission now seeks a decision along similar lines. “The Court erred,” the motion complains, “by holding that EPA’s veto was not ‘final’ because Plaintiff could submit a new application to the Corps.”

In other words, the court held that the EPA’s objections to County Road 595 weren’t the last word: they didn’t constitute “final agency action” and did not entail legal consequences or impose obligations the Road Commission didn’t already have. The Road Commission can even now take EPA’s opposition to the road under advisement, go back to the Corps and seek a new permit. They can continue to work with the EPA, whose objections to the road are “tentative and interlocutory”: there is still room for conversation.

The attorneys for the Road Commission don’t deny that the Road Commission could have gone back to the Army Corps of Engineers; but they say that it would have been time consuming, burdensome and ultimately futile, as the Corps had joined the EPA in its objections to the road, and the EPA’s objections had the effect of a veto.

This brings us back to the arguments advanced in the original complaint. The EPA didn’t just object to the Road Commission’s proposal; they unfairly vetoed the new road, in a “biased and predetermined ‘Final Decision’.” The Final Decision, according to the motion, took the form of a December 4, 2012 objection letter from the EPA to the Marquette County Road Commission, to which the Road Commission replied on December 27th. They did not receive a reply, and the EPA’s failure to reply was tantamount to a “refusal.”

The EPA’s refusal (or failure) to reply to the Road Commission’s December 27th letter indicated that their objections had “crystalize[d] into a veto,” according to the motion. “Unequivocal and definitive,” a veto is a final agency action, “akin” to jurisdictional determinations made by the Corps. What legal consequences flowed from the veto? For starters, the EPA’s Final Decision divested the state, specifically the Michigan Department of Environmental Quality, of any further authority in the matter.

While this is not a new position for the Road Commission, the way the motion lays it out is nonetheless clarifying. The discussion of Hawkes, especially, brings into focus the question before the court — a question of administrative law concerning the “finality” of the EPA’s objections to CR 595. Of course that question entails others: whether the EPA’s failure to reply to the Road Commission’s letter of December 27th amounts to a refusal of the Road Commission, whether that refusal, in turn, crystalized their objections into a veto, and whether EPA vetoes are really “akin” to jurisdictional determinations by the Corps.

Stronger accusations are only being held at bay here. For example, it would be difficult to read the EPA’s failure to reply to the Road Commission’s December 27th letter as a deliberate refusal to reply without accepting the original complaint’s charges of bias and allegations of conspiracy at the EPA, or indulging its witch hunt for “anti-mining” attitudes and its demonizing of “activists.” But even if we are not willing to follow the plaintiff down that dark road, it would also be difficult, now, to overlook the serious dysfunction and administrative incompetence exposed by the Flint Water Crisis, which cost the head of EPA Region 5 her job, and which showed the world just how broken the system of environmental governance is in Michigan.