On Tuesday, April 23, 2013, the DC Circuit Court of Appeals upheld EPA’s power to retroactively veto a permit that was validly issued four years prior to EPA’s action. The court pointed out language in the Clean Water Act granting power to the EPA Administrator to deny or restrict use of any defined area “whenever he determines” there to be potential negative environmental effects. The Court found that the word “whenever” is not limited to the permit review time.
The problem with this reasoning is the pall this casts on the ability of any business or enterprise to rely on the validity of any permit issued under similar terms. Most permitted activities include substantial investment of time and resources by the permittee and – importantly – by the investors in and lenders to the enterprise. Prior to the decision announced yesterday, investors and lenders would generally require the majority of permitting work to be completed before financial close. How will the financial community react when the certainty of permitting is now so very uncertain?
We will have to wait to see if the plaintiff appeals to the Supreme Court, or if Congress acts to eliminate this retroactive power (West Virginia Record – Congress Promises Action! ), before we have any answer to that question.