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An agency action that purports to impose legally binding obligations or prohibitions on regulated parties — and that would be the basis for an enforcement action for violations of those obligations or requirements — is a legislative rule. An agency action that sets forth legally binding requirements for a private party to obtain a permit or license is a legislative rule. An agency action that merely explains how the agency will enforce a statute or regulation — in other words, how it will exercise its broad enforcement discretion or permitting discretion under some extant statute or rule — is a general statement of policy. But those general descriptions do not describe tidy categories and are often of little help in particular cases. So in distinguishing legislative rules from general statements of policy, the cases have focused on several factors. The most important factor concerns the actual legal effect (or lack thereof) of the agency action in question on regulated entities. Another factor in the case law concerns the agency's characterization of the guidance.
In the 1972 Clean Water Act and the 1977 Surface Mining Control and Reclamation Act, Congress struck a balance between the need for coal on the one hand and the desire to mitigate surface coal mining's environmental effects on the other. Congress created an extensive permitting system for surface coal mining projects. To conduct a coal mining project, a business must obtain permits from the Department of Interior or a federally approved state permitting program. If the mining project would result in the discharge of soil or other pollutants into navigable waters, the mining project also requires two Clean Water Act permits. The first Clean Water Act permit (known as the Section 404 permit) must be obtained from the U.S. Army Corps of Engineers. The Army Corps of Engineers permitting process also involves EPA, as EPA can deny the use of the sites selected as disposal sites for dredged or fill material. The second Clean Water Act permit (known as the Section 402 or NPDES permit) is issued by EPA or, as relevant here, EPA-approved state permitting authorities. The state permitting process likewise involves EPA, as States must submit a proposed permit to EPA for review, and EPA may object if the permit in EPA's view does not meet extant state water quality standards or other provisions of the Clean Water Act. In June 2009, the Army Corps of Engineers and EPA adopted an Enhanced Coordination Process to facilitate their consideration of certain Clean Water Act permits. The Enhanced Coordination Process allows EPA to screen Section 404 mining permit applications submitted to the Corps. EPA then initiates discussions with the Corps on proposed mining projects that EPA considers likely to damage water bodies. In 2011, EPA also promulgated a Final Guidance document relating to those Clean Water Act permits. Among other things, the Final Guidance recommends that States impose more stringent conditions for issuing permits under Section 402. The States of West Virginia and later Kentucky, along with coal mining companies and trade associations — whom we will collectively refer to as plaintiffs — challenged the Enhanced Coordination Process and EPA's Final Guidance before the district court as exceeding EPA's authority under the Surface Mining Control and Reclamation Act and the Clean Water Act. The District Court agreed and granted summary judgment for plaintiffs.
Did the EPA and the Corps act within their statutory authority when they adopted the Enhanced Coordination Process?
The court held that an agreement between the U.S. EPA and the U.S. Army Corps of Engineers providing for enhanced consultation and coordination regarding permits under Clean Water Act § 404, 33 U.S.C.S. § 1344, for mining projects did not contravene any permitting requirements and was an appropriate means of inter-agency consultation under U.S. Const. art. II, § 1, cl. 1 (Executive Power Clause) and U.S. Const. art. II, § 3 (Take Care Clause). The notice and comment requirements of 5 U.S.C.S. § 553(b)(3)(A) did not apply because the agreement was a procedural rule, not a legislative rule. A guidance document issued by EPA regarding permits under Clean Water Act § 402, 33 U.S.C.S. § 1342, was not final and reviewable under 5 U.S.C.S. § 704 because it was a general statement of policy and imposed no obligations or prohibitions on regulated entities.