Essentially, the group argued that valley fills are waste material, and that the corps' own Clean Water Act regulations did not allow the agency to permit waste disposal under so-called dredge-and-fill permits.
When it passed the Clean Water Act, Congress gave the corps authority under Section 404 of the law to issue permits "for the discharge of dredged or fill material" into rivers and streams. Authority to permit discharges of other types of pollutants was given to the U.S. Environmental Protection Agency under Section 402.
Congress didn't define "fill material." In its own definition, the corps excluded any material that was deposited into streams mainly as a way to dispose of waste.
Faced with a court challenge to new valley fill permits, the Bush administration revised a Clinton-era plan. In May 2002, the corps and EPA rewrote their regulations to specifically allow fills under Section 404.
In his ruling, Haden said that the agencies' new rule-making didn't matter. Most valley fills, the judge said, were prohibited by the Clean Water Act itself.
Haden said that valley fills could be approved only if they were proposed with a constructive primary purpose. The judge likened that test to the requirement that strip mines that don't restore mined land to its "approximate original contour," or AOC, must propose post-mining land development plans.
In its ruling Wednesday, the 4th Circuit flatly declared that Haden was wrong.
First, the appeals court said that Congress didn't define "fill material," and that in such situations courts should defer to administrative agencies' interpretations.
The court said Haden "did not give any deference to the agency's interpretation of this regulation, nor did it explain why such deference was inappropriate." Second, the appeals court said that its own reading of the Clean Water Act and its legislative history shows that coal-mining valley fills are allowed under Section 404.
"In sum, we conclude that the Corps' interpretation of 'fill material' as used in [Section] 404 of the Clean Water Act to mean all material that displaces water or changes the bottom elevation of a water body except for 'waste' - meaning garbage, sewage and effluent that could be regulated by ongoing effluent limitations as described in [Section] 402 - is a permissible construction of [Section] 404," Niemeyer wrote in the majority opinion.
In his own opinion, Luttig agreed that the 4th Circuit should throw out Haden's decision.
But, Luttig said that the appeals court should have stopped at saying that Haden's injunction was overbroad.
Haden did not block the Kentucky permit challenged in the lawsuit.
Instead, he issued a broader injunction that covered all future mining permit applications considered by the corps' district office in Huntington.
Luttig said that the 4th Circuit should have thrown out the injunction, but not ruled yet on the central issue of whether fills are legal. Instead, Luttig said, Haden should have been instructed to decide only the legality of the Kentucky permit.
"Rather than right the palpable wrongs of the district court, and explain to the parties wherein their errors lie, the majority instead adds to those wrongs by proceeding precisely as did the district court.
.. simply reaching different conclusions from those reached by the district court, and aligning itself with one side of the litigation rather than the other," Luttig wrote.
"If a new judge is not to be designated, the integrity of the judicial process requires at least that we wipe the slate clean, returning these parties to where they started, and require the district court in the first instance to decide the issue presented by the complaint - and only that issue - after which a decision on the merits of the dispute would be in order."