Environmentalists know about the Environmental Protection Agency’s Water Transfer Rule. See 40 CFR § 122.3(i). It states in essence that discharging polluted water from one body of water to another unpolluted body of water is not a discharge of a pollutant under the Clean Water Act. According to the EPA, this action would not be regulated by the Act, because no pollutant is being “added” to the “waters of the United States.” There may be an addition of a pollutant to a particular body of water, but that is not enough, the EPA says. There must be an addition to the “waters of the United States” as a whole. This is also known as the “unitary waters” approach.
This issue has arisen in a number of different cases, perhaps most notably in South Fla. Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95 (2004), in which polluted water from canals was being pumped into Lake Okeechobee without a permit. The Supreme Court rendered its decision in that case before the EPA adopted the Rule, although EPA had earlier interpreted the Act informally to the same effect. The Court declined to decide the validity of the EPA’s informal interpretation, remanding the case to the lower courts on other grounds. After remand and the EPA’s adoption of the Rule, the Eleventh Circuit upheld the transfer, deferring to the EPA’s interpretation of the Act under Chevron, USA, Inc. v. NRDC, 467 U.S. 837 (1984). Before the Eleventh Circuit issued its decision, however, environmental groups had filed direct challenges to the Rule in both district and circuit courts. Those cases were stayed pending the decision in the Miccosukee case, and after that decision the circuit court cases were consolidated in the Eleventh Circuit.
Inasmuch as the Eleventh Circuit had already ruled on the validity of the Rule, environmental groups argued that the court did not have jurisdiction to hear a direct challenge to the rule and that only district courts had jurisdiction to hear the challenges. If they could divest the Eleventh Circuit of jurisdiction in favor of district courts, then challenges brought in district courts in other circuits might reach a different conclusion as to the validity of the Rule. The EPA, on the other hand, would like the Eleventh Circuit to rule on the case because a favorable outcome to the Agency would be ensured.
The Eleventh Circuit ruled in favor of the environmental groups and dismissed the petition for review, holding that it did not have jurisdiction under the direct review provision, 33 U.S.C. § 1369(b)(1). Now the government is seeking certiorari, asking the Supreme Court to reverse that jurisdictional determination, in the unusual circumstance of having prevailed in the court of appeals by having the petition for review of its rule dismissed. The government wants a decision on the merits and not to have to re-litigate the merits in a district court in some other circuit.
The direct review provision of the Act provides direct and exclusive review in courts of appeal of EPA’s actions in specified circumstances. See 33 U.S.C. § 1369(b)(1). If the EPA’s action does not fall within those specified circumstances, then review can only be had in district courts under the Administrative Procedure Act. Moreover, the direct review in a court of appeal must be made within 120 days of EPA’s action, whereas review under the APA may be had anytime within six years of the action.
For purposes relevant here, the direct review provision states it applies to EPA action “approving or promulgating any effluent limitation or other limitation under section 1311, 1312,1316, or 1345 of [title 33],” 33 U.S.C. § 1369(b)(1)(E), and to EPA action “issuing or denying any permit under section 1342 [title 33],” 33 U.S.C. § 1369(b)(1)(F). “Effluent limitation” is defined in the Act as “any restriction established by ... the Administrator on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters, the waters of the contiguous zone, or the ocean, including schedules of compliance.” 33 U.S.C. 1362(11).
The plain language of these provisions would not seem to include the Water Transfers Rule, inasmuch as that rule neither establishes any restrictions or limitations nor issues nor denies any permit. Instead, the Water Transfers Rule simply interprets the CWA as not applying to water transfers; no permit is required and no limitation is established because there is no discharge into a water of the United States. Notwithstanding the plain language, however, courts, including the Supreme Court, have sometimes interpreted the language to encompass EPA actions that do not fall directly within the plain language. For example, in Crown Simpson Pulp Co. v. Costle, 445 U.S. 193 (1980), the Court held that the language authorizing direct review of EPA’s “denial” of a permit could be interpreted to include direct review of EPA’s veto of a state permit. Inasmuch as the law was clear that direct review would lie if EPA itself denied the permit, as would be the case where the state was not authorized to issue Clean Water Act permits, it would make no sense, the Court said, to have a different form of review where EPA’s action functionally denied a permit, simply because the permit would come from an authorized state.
This functional, rather than literal, approach to the direct review provision has also been applied in the lower courts on occasion. For example, in NRDC, Inc. v. EPA, 673 F.2d 400 (D.C. Cir. 1982), the D.C. Circuit exercised jurisdiction over a petition to review EPA’s Consolidated Permit Regulations. Although the regulations did not themselves set any particular limitation on point sources, the regulations did establish the standards upon which permits could be issued and in that way would in effect create a limitation on industry. Although the court stressed the broadness of the language “other limitation,” which the review provision uses in addition to “effluent limitation,” to reach its result, it also cited to other policy reasons why direct review of general program regulations is best had in a court of appeal, rather than in numerous district courts. See NRDC, Inc. v. EPA, 673 F.2d at 405 n.15. A later Ninth Circuit case reached a similar result when it reviewed a challenge to EPA’s storm water permitting regulations, which also did not impose any particular limitation on discharges. See NRDC, Inc. v. EPA, 966 F.2d 1292 (9th Cir. 1992). Nevertheless, the court said in its brief discussion of jurisdiction that it had “the power to review rules that regulate the underlying permit procedures.” Id., at 1297.
There are two courts of appeals cases in addition to Miccosukee that involve EPA regulations that exempt persons from permit requirements. In Northwest Environmental Advocates v. EPA, 537 F.3d 1006 (9th Cir. 2008), environmental groups challenged in district court EPA’s exemption of certain marine water discharges from the Clean Water Act’s permit program. When the environmental groups prevailed, the government appealed to the Ninth Circuit arguing among other things that the district court did not have jurisdiction to review the exemption, because the courts of appeal had exclusive jurisdiction under the direct review provision of the Clean Water Act. The Ninth Circuit rejected that argument. First, it found that the exemption from any permit requirement did not result in any limitation or restriction on discharges. Second, it held that the exemption did not constitute the functional equivalent of granting a permit. It distinguished cases like NRDC, Inc. v. EPA, supra, in which the permit regulations interpreted statutory exclusions from permit requirements, drawing a line between what required a permit and what not. Here, however, EPA had created an exemption out of whole cloth, exempting a class of discharges from the Act entirely.
The other court of appeal case is National Cotton Council of America v. EPA, 553 F.3d 927 (6th Cir. 2009). In that case, the Sixth Circuit held that it had jurisdiction to review EPA’s rule exempting from the Clean Water Act any application of pesticides in accordance with the Federal Insecticide, Fungicide, and Rodenticide Act. Without citing Northwest Environmental Advocates, and instead citing NRDC, Inc. v. EPA, which the Ninth Circuit had distinguished, the court concluded that courts of appeal have “the power to review rules that regulate the underlying permit procedures,” and because this rule “regulates the permitting procedures,” the court had jurisdiction.
It is fair to say that the decisions in Northwest Environmental Advocates and National Cotton Council are in conflict. Both involved exclusions from the Clean Water Act permit program codified at 40 CFR § 122.3; both were rules that were stand-alone exemptions untethered to any statutory exemption defining what is and is not subject to the Act. The Eleventh Circuit in Miccosukee recognized the conflict, but it was persuaded that the Ninth Circuit’s analysis was sounder. Total exclusion from the Act does not place any restriction or limitation at all on the discharger, and exempting persons from having to obtain permits under the Act is not the functional equivalent of granting a permit. Granting a permit involves establishing time limitations and conditions on the permit; excluding an activity from the Act involves none of that.
The Solicitor General, in seeking certiorari, stresses two points, first, that Miccosukee is in conflict with National Cotton Council, and second, that allowing for court of appeals review of the Water Transfers Rule (and cases like it) will result in faster, national determinations of EPA’s regulations. On both points, the S.G. is clearly correct. Whether those facts justify Supreme Court review, however, as well as whether they merit reversal of the Eleventh Circuit is another question. It seems fairly obvious that the decisions in Miccosukee (and Northwest Environmental Advocates before it) are more faithful to the statutory text. National Cotton Council, and the line of cases upon which it relies, stretches the text of the direct review provision to achieve a policy end – expediting a final judicial determination as to the validity of EPA’s actions. That is a pragmatic interpretation of the direct review provision, but it is not wholly consistent with the text, especially given the different and broader equivalent provision in the Clean Air Act, see 42 U.S.C. § 7607(b)(1). That parallel provision also specifies a number of EPA actions that may only be reviewed directly in the United States Court of Appeals for the District of Columbia, but unlike the provision in the Clean Water Act the Clean Air Act provision ends with the language that such review applies to “any other ... final action taken by the Administrator under this chapter....” There the language is clear that Congress intended to be pragmatic and expedite a final judicial determination of the validity of the Administrator’s action. In the Clean Water Act, however, there is no equivalent language suggesting a congressional intent to be so pragmatic. To the contrary, the review specified for courts of appeals under the Clean Water Act is very specifically delineated.
If the Court takes the case, it will present an interesting line up for the justices with those who favor following the plain text arrayed against those who would be more pragmatic.
Bill Funk, CPR Member Scholar; Professor of Law, Lewis & Clark Law School -- Portland, Oregon. Bio.
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