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4th Circuit overturns Murray victory on EPA coal jobs study

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Bob Murray

A federal appeals court has ruled that a judge in West Virginia was wrong to order the U.S. Environmental Protection Agency to conduct a study of the impact of air pollution rules on mining jobs, overturning a previous court victory for West Virginia’s largest coal producer.

The 4th U.S. Circuit Court of Appeals said Thursday that the type of suit brought by Murray Energy and a collection of affiliate companies was not authorized by Congress under the Clean Air Act, and thus the district court did not have jurisdiction to hear the case or order any action by the EPA.

EPA had appealed a ruling by U.S. District Judge John Preston Bailey in Wheeling that ordered the federal agency to complete a study both of the general jobs impact of air pollution rules and the specific effects of such regulations on the coal industry.

The 4th Circuit’s ruling on Thursday came just days before a July 1 deadline that Bailey had instituted for EPA to submit to the court a comprehensive “evaluation of the coal industry and other entities affected by rules and regulations.” Bailey had also set a Dec. 31, 2017, deadline for the EPA to tell the judge how it planned to “continuously evaluate the loss and shifts in employment” resulting from administration and enforcement of the Clean Air Act.

Late Thursday afternoon, EPA lawyers asked Bailey to stay the effect of his orders -- noting that an official “mandate” which gives effect to the 4th Circuit ruling hadn’t yet been issued -- in a court filing in which they said the agency “does not intend” to file the report Bailey had required by submitted by July 1.

Murray Energy CEO Bob Murray, whose company brought the litigation, has been one of the most outspoken of the many coal industry officials who criticized environmental policies of the Obama administration, and has blamed the mining industry’s downturn on EPA rules. President Donald Trump has likewise blamed EPA rules for coal’s downfall, and promised that his efforts to undo government regulations would put the nation’s coal miners back to work. Led by Attorney General Patrick Morrisey, West Virginia was one of 16 states that filed legal arguments supporting Murray’s position in the case against the EPA.

While acknowledging that pollution rules play a role in coal’s ongoing troubles, most energy market experts have said that stiff competition from low-priced natural gas has been a larger factor. And in Southern West Virginia — as opposed to the northern part of the state where Murray operates — the mining out of the best coal seams has also been cited as a central reason for the industry’s decline. Before he joined the Trump administration, EPA Administrator Scott Pruitt testified to Congress that “positive market forces,” especially competition from natural gas, had more to do with coal’s decline than what he then called the “heavy hand” of the EPA.

In his earlier ruling, Bailey had cited a section of federal law that states the EPA “shall conduct continuing evaluations of potential loss or shifts of employment which may result from the administration or enforcement” of the law, including “where appropriate, investigating threatened plant closures or reductions in employment allegedly resulting from such administration or enforcement.”

But the 4th Circuit said that the law does not impose on EPA “a specific and discrete duty amendable” to legal review by the courts. Instead, the appeals court said, the law imposes on the EPA “a broad, open-ended statutory mandate” and gives the agency wide discretion in how to evaluate the economic impact of its rules on a continuing basis.

“The agency gets to decide how to collect a broad set of employment impact data, how to judge and examine this extensive data, and how to manage these tasks on an ongoing basis,” Judge Henry F. Floyd wrote for a three-judge panel. “A court is ill-equipped to supervise this continuous, complex process.”

Floyd was initially appointed to a federal district court in South Carolina by President George W. Bush, and then appointed to the 4th Circuit by President Barack Obama. The other two judges who heard the case, Albert Diaz and Stephanie Thacker, were both appointed by Obama.

A spokesman for Murray Energy said the company is reviewing the 4th Circuit ruling and intends to appeal.

The EPA issued a press statement saying that the agency, under the Trump administration, “will take the economic and jobs impacts of its proposed regulations into account consistent with its statutory requirements, regardless of the outcome of this particular case.”

In the case, EPA had appealed one of Bailey’s orders, issued in October 2016. The EPA appealed in December 2016, after the November election, but before Trump took office. Agency lawyers also appealed a second of Bailey’s rulings, which was issued on Jan. 11, in February, after the change in administration.

In mid-February, lawyers for Murray Energy and EPA filed a joint motion asking that Bailey delay the July 1 and Dec. 31 deadlines for the EPA to file reports with the court. That joint motion noted the change in administration and argued that the delays were needed to “allow EPA time to brief incoming administration officials with decision-making responsibility in the case, so that they may become familiar with the subject matter and issues presented.”

Bailey refused to extend those deadlines, saying he didn’t see how the change in administration would affect EPA’s evaluation of the impact of rules and regulations on the coal and power-generation industries.

Bailey had required the EPA to identify coal mines and plants that have closed since 2009 or that are at risk of closure because of agency regulations and “evaluate the impacts of potential loss and shifts in employment” because of those rules, and also identify “those subpopulations at risk of being unduly affected by job loss and shifts and environmental justice impacts.”

The EPA warned in a court filing last month that the sort of study Bailey had ordered would be challenging to prepare. Among other concerns, EPA noted that economic impacts “were difficult to quantify” because many dislocated workers are rehired by the same firm at a different operation, and some displaced workers are shifted into other firms or economic sectors. EPA also cited “the difficulty of obtaining information to substantiate or refute allegations that environmental regulations were a significant factor in a plant closure.”

Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.

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