2013-07-29_GENERAL DOCUMENTS - C2009087

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from the CWA.` With respect to the exclusion under the CWA, EPA commented in adopting the exemption in 1979 that: "Under some circumstances, it is appropriate to impound navigable streams in order to create a cooling pond or lake. EPA does not mean to prohibit this practice and applicable regulations specifically recognize this use and specify where it is allowable to comply with technology." 44 Fed. Reg. 32858 (June 7, 1979). Until 1980, this regulation included the sentence: "This exclusion applies only to manmade bodies of water which neither were originally created in waters of the United States (such as disposal area in wetlands) nor resulted from the impoundment of waters of the United States." On July 21, 1980, the EPA "suspended until further notice" this sentence. 45 Fed. Reg. 48620 (July 21, 1980). The suspension was prompted by petitions for review filed in several courts of appeals objecting that this language would require industry to obtain permits for discharges into existing waste treatment systems, such as power plant ash ponds, which had been in existence for many years. Id. EPA agreed that the regulation might be overly broad and should be suspended pending a careful reexamination of the scope of the regulation. Id. This suspension continues to the present time. 40 C.F.R. § 122.2. The scope and breadth of the federal waste treatment exemption has been explored in a series of decisions. The exemption was interpreted and applied to a mine by the Fourth Circuit Court of Appeals in Ohio Valley Environmental Coalition v. Aracoma Coal Company, 556 F.3d 177 (4`' Cir. 2009). The Ohio Valley Environmental Coalition ( "OVEC ") challenged the filling of West Virginia stream waters in conjunction with mountain top coal mining operations, contending that the stream segments were "impoundments of water otherwise defined as waters of the United States," and should require a CWA § 402 NPDES permit. The Corps countered that the stream segments and the sediment ponds to which they connect formed a "waste treatment system" under 33 C.F.R. § 328.3(a)(8), were excluded from the "waters of the United States" definition, and a Section 404 permit was sufficient to allow the filling of streams. The district court rescinded the Corps' permits as violations of the CWA and enjoined all activity under those permits. The Fourth Circuit Court of Appeals reversed the district court's injunction and grant of declaratory relief, holding that the scope of the exemption was ambiguous in light of EPA's suspension in 1980 of the provision providing that the waste treatment exemption applied only to manmade impoundments. 556 F.3d at 213. The Circuit Court relied in part on a 1992 EPA memorandum stating, in the context of an Alaskan gold mining project, that impoundments "created by the discharge of fill material ... if permitted by the Corps under Section 404 for purposes of creating a waste treatment system, would no longer be waters of the U.S." 556 F.3d at 214, citing memorandum from LaJuana S. Wilcher, Assistant Administrator for the EPA, to Charles E. Findley, Director, Water Division, Region X, United States Army Corps of Engineers (Oct. 2, 1992), attached hereto as Attachment No. 4. The Circuit Court also relied upon an EPA letter sent to the Corps after commencement of the OVEC litigation, stating "the waste treatment system exclusion continues to apply to the creation or use of a waste treatment system in 2 Following appeals of a 1978 Colorado Department of Public Health and Environment, Division of Administration decision no waste treatment exemption for CF &I Steel Corp.'s use of Salt Creek for mine waste treatment, the WQCD entered into a Settlement Agreement with CF &I Steel finding that the channel of Salt Creek constituted a waste treatment system so no discharge permit was required. The Stipulation was decreed by Pueblo County District Court. CF &I Steel Corp. v. Colorado Department of Health Div. of Administration, CA No. 79 CV 305, April 21, 1979.