Cahaba Riverkeeper v. U.S. Environmental Protection Agency

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[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 17-11972

________________________

CAHABA RIVERKEEPER, et al.,

Petitioners,

versus

U.S. ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.

________________________

On Petition for Review of Order of the

United States Environmental Protection Agency

________________________

(September 12, 2019)

Before ED CARNES, Chief Judge, BRANCH, Circuit Judge, and GAYLES,*

District Judge.

GAYLES, District Judge:

*

Honorable Darrin P. Gayles, United States District Judge for the Southern District of

Florida, sitting by designation.

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This case places us squarely into another debate of whether United States

Environmental Protection Agency’s (the “EPA”) 1 action (or inaction) was arbitrary,

capricious, or otherwise not in accordance with law under the Administrative

Procedure Act, 5 U.S.C. § 706(2)(A). The parties dispute whether the EPA has

sufficiently supervised how Alabama protects its waterways from pollutants. The

EPA gets this supervisory authority from the Clean Water Act, 86 Stat. 816, as

amended, 33 U.S.C. §§ 1251–1388 (2018) (“CWA”), which allows it to partner

with Alabama to implement appropriate protections. The EPA can withdraw from

the partnership if it finds that there are regulatory violations with Alabama’s

program. Petitioners claim that the EPA must do that here because—and it is not

disputed that—Alabama’s administration of its program has not always complied

with federal law. The EPA disagreed, and Petitioners sued.

The primary question on appeal, therefore, is whether the EPA has discretion

not to commence withdrawal proceedings under 40 C.F.R. § 123.64(b) even if it

finds that a state’s National Pollutant Discharge Elimination System (“NPDES”)

permit program has not always complied with the requirements of the CWA.

Because no statute or regulation requires otherwise, the Court concludes that the

answer is yes.

1

The Court uses the acronym “EPA” to refer to both the U.S. Environmental

Protection Agency and its Administrator.

2

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I. BACKGROUND

A. The Clean Water Act and Regulations

The Clean Water Act aims to eliminate the discharge of harmful pollutants

into U.S. waters. See 33 U.S.C. § 1251(a). It does so by partnering with the states

through a system of grants, projects, and standards; the creation of special

oversight offices; and permit and licensing programs, see id. §§ 1251–1346,

including the NPDES, id. § 1342. By default, the CWA authorizes the EPA to issue

NPDES permits. Id. § 1342(a)(1). But to “recognize, preserve, and protect the

primary responsibilities and rights of States” over environmental issues, id. §

1251(b), the statute sets forth a mechanism for states to assume responsibility for

issuing NPDES permits. Id. § 1342(b).

Under the CWA, a state wishing to operate its own NPDES permit program

submits a proposal that includes a program description and other documentation to

the EPA. Id. The EPA Administrator then “shall approve [the] submitted program

unless he determines that adequate authority does not exist” to, among other

requirements, “insure that the public . . . receive[s] notice of each application for a

permit” and “[t]o abate violations of the permit or the permit program, including

civil and criminal penalties . . . .” Id. § 1342(b), (b)(3), (b)(7) (emphasis added).

State permit programs must comply with the EPA regulations detailed in its state-

program requirements. See id. § 1342(c)(2); 40 C.F.R. pt. 123.

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Four statutory and regulatory requirements for state permit programs are

relevant here: (1) public notice, (2) board membership, (3) inspections of major

dischargers, and (4) the state’s enforcement authority. 2 State programs must “at all

times be in accordance with [§ 1342] and guidelines promulgated pursuant to

section 1314(i)(2) . . . .” 33 U.S.C. § 1342(c)(2). Further, the EPA must withdraw a

state’s authorization to run its own NPDES permit program if it determines, after

conducting withdrawal proceedings and giving the state a chance to take corrective

action, that the program has fallen out of compliance. See id. § 1342(c)(3). Per the

regulation, the EPA may commence withdrawal proceedings on its own “or in

response to a petition from an interested person . . . .” 40 C.F.R. § 123.64(b)(1).

The EPA must respond in writing to any such petition and “may conduct an

informal investigation of the allegations in the petition to determine whether cause

exists to commence proceedings . . . .” Id.

B. Alabama’s NPDES Permit Program

In 1979, the EPA authorized the Alabama Department of Environmental

Management (“ADEM”) to administer Alabama’s NPDES permit program. As

2

40 C.F.R. § 123.25(a)(28) (public notice); 40 C.F.R. § 124.10(c)(2), (d)(1)(vii)

(public notice); 33 U.S.C. § 1314(i)(D) (board membership); 40 C.F.R. § 123.25(c)(1)(i) (board

membership); 40 C.F.R. § 123.26(e)(5) (inspections of major dischargers); 40 C.F.R.

§ 123.27(a)(3)(i) (the state’s enforcement authority).

4

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required by 40 C.F.R. § 123.21(a)(4), the state and the EPA entered into a

Memorandum of Agreement, which may be updated periodically. See § 123.24(c).

Petitioners here are seven environmental groups: Cahaba Riverkeeper;

Choctawhatchee Riverkeeper, Inc.; Friends of Hurricane Creek; Black Warrior

Riverkeeper, Inc.; Sierra Club Alabama Chapter; Friends of the Locust Fork River;

and Alabama Rivers Alliance (collectively, “Petitioners”). All seven are Alabama

nonprofit, member corporations that advocate for the environmental protection of

particular waters. On January 14, 2010, Alabama Riverkeepers Alliance and 13

other environmental groups, including Petitioners, petitioned the EPA to

commence proceedings to withdraw Alabama’s authority to administer the NPDES

permit program. The groups cited 26 regulatory and statutory violations as grounds

for withdrawal. Complying with the EPA’s request, ADEM responded to the

petition on April 13, 2010, addressing each of the 26 alleged violations in turn.

On April 9, 2014, the EPA issued its interim response to the petitions,

indicating that it would not commence withdrawal proceedings based on 20 of the

26 grounds but would defer a decision on the remaining six.3

Petitioners appealed the interim response to this Court. Cahaba Riverkeeper

v. EPA, 806 F.3d 1079 (11th Cir. 2015). The Court held that its statutorily-given

3

The EPA considered the petition simultaneously with three other petitions to

withdraw Alabama’s authority to administer the NPDES program.

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jurisdiction to review “any determination” by the EPA regarding a state NPDES

program was limited to final agency actions. Id. at 1084; see 33 U.S.C. §

1369(b)(1) (vesting jurisdiction in the Courts of Appeals to review the EPA’s

action “in making any determination as to a State permit program submitted under

section 1342(b) of [Title 33] . . . .”). The Court dismissed the appeal without

prejudice, noting that “[t]he organizations will . . . be able to appeal once the EPA

resolves the outstanding matters and makes a definitive decision on the relief

requested by the petitions.” Cahaba Riverkeeper, 806 F.3d at 1084.

On January 11, 2017, the EPA issued its final response to the petitions,

affirming its previous refusal to commence withdrawal proceedings against

Alabama. Petitioners now seek review of that final response. They argue that the

EPA’s refusal to commence withdrawal proceedings based on four specific

statutory and regulatory grounds was arbitrary and capricious, an abuse of

discretion, or contrary to law.

II. JURISDICTION

The Courts of Appeals have original jurisdiction to review the EPA’s action

“in making any determination as to a State [NPDES] program . . . .” 33 U.S.C.

§ 1369(b)(1); see Friends of the Everglades v. EPA, 699 F.3d 1280, 1285 (11th Cir.

2012). Before we can exercise that jurisdiction, we must ensure that the action

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before us is a “case” or “controversy” “of the justiciable sort referred to in Article

III.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).

The justiciability analysis begins with the question of Petitioners’ standing.4

Organizations have standing to sue on behalf of their members only when the

members themselves “would otherwise have standing to sue in their own right.”

Hunt v. Wa. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977). An individual

has standing to sue when “(1) [he or she] has suffered an ‘injury in fact’ that is (a)

concrete and particularized and (b) actual or imminent, not conjectural or

hypothetical; (2) the injury is fairly traceable to the challenged action of the

defendant; and (3) it is likely, as opposed to merely speculative, that the injury will

be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl.

Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000). But an individual can enforce a

procedural right, such as “the right to challenge agency action unlawfully

withheld,” “without meeting all the normal standards for redressability and

immediacy.” Massachusetts v. EPA, 549 U.S. 497, 517–18 (2007) (citations and

quotation marks omitted). Instead, “[w]hen a litigant is vested with a procedural

right, that litigant has standing if there is some possibility that the requested relief

will prompt the injury-causing party to reconsider the decision that allegedly

4

Amicus Curiae Manufacture Alabama, Inc., contends that this case is not justiciable

because Petitioners lack standing to bring it. Manufacture Alabama argues that none of the

Petitioners’ members have standing to sue and that, as a result, neither do Petitioners.

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harmed the litigant.” Id. at 518 (citation omitted); see Lujan, 504 U.S. at 573 n.8

(explaining that an individual “assuredly can” enforce procedural rights “so long as

the procedures in question are designed to protect some threatened concrete

interest of his that is the ultimate basis of his standing”); Ouachita Watch League v.

Jacobs, 463 F.3d 1163, 1170 (11th Cir. 2006) (“To show a cognizable injury in fact

in a procedural injury case, a plaintiff must allege that the agency violated certain

procedural rules, that these rules protect a plaintiff’s concrete interests and that it is

reasonably probable that the challenged action will threaten these concrete

interests.”).

To prove standing, Petitioners submitted declarations from three of their

members: (1) John Wathen of Friends of Hurricane Creek; (2) Michael William

Mullen of Choctawhatchee Riverkeeper, Inc.; and (3) Myra Ann Crawford of

Cahaba Riverkeeper. Each of these individuals serves as the “Riverkeeper” (or, in

the case of Wathen, the “Creekkeeper”) for their respective waterways, and they

have been swimming, kayaking, and fishing in those waterways for years. They

allege that the EPA’s decision not to commence withdrawal proceedings threatens

their enjoyment of their waterways. They also claim to have “witnessed the

pollution” of the waterways and “attribute much of this pollution to poor regulation

of pollution sources under the Alabama NPDES permit program . . . and poor

oversight of the Alabama NPDES permit program by EPA.” They also state that

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they would “recreate in these waters more and enjoy [their] recreational activities

more, if EPA required that Alabama’s NPDES program fully complied with the

minimum requirements of 40 C.F.R. pt. 123.”

Those statements are enough to establish injury in fact. “[E]nvironmental

plaintiffs adequately allege injury in fact when they aver they use the affected area

and are persons ‘for whom the aesthetic and recreational values of the area will be

lessened’ by the challenged activity.” Friends of the Earth, 528 U.S. at 183

(quoting Sierra Club v. Morton, 405 U.S. 727, 735 (1972)); see also Sierra Club v.

Johnson (Johnson I), 436 F.3d 1269, 1279 (11th Cir. 2006) (concluding that the

plaintiff’s “injury in fact exists as a result of concerns about pollution, concerns

that arise because the failure to use one of the mandated public participation

procedures leaves him uncertain about whether pollution is being emitted in illegal

quantities”).

The declarations are also adequate to show that the EPA’s decision not to

commence withdrawal proceedings is a cause of the alleged injuries. “The proper

focus on causation is not harm to the environment, but harm to the plaintiffs.”

Jacobs, 463 F.3d at 1172. For instance, in Jacobs, where a coalition of

environmental groups challenged the U.S. Forest Service’s change to certain forest

plans, this Court held that the plaintiffs had standing to sue because their rights

under the National Environmental Policy Act (“NEPA”) had been violated, and

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“[s]ince the Forest Service (according to [the plaintiffs]) failed to follow NEPA, it

[was] clear that the Forest Service caused [the plaintiffs’] alleged injury.” Id. at

1173. And that, this Court said, “is the extent of [the plaintiffs’] burden to establish

causation.” Id.

So too here. Like the plaintiffs in Jacobs, Wathen, Mullen, and Crawford all

trace their injuries to the EPA’s decision not to commence withdrawal

proceedings. According to them, if the EPA had commenced withdrawal

proceedings, then Alabama’s program would have been brought into compliance

with the minimum requirements of the Clean Water Act. That, in turn, would have

given Petitioners greater enjoyment of the waterways they protect. Those

allegations are enough to show causation. See id.; see also Nat’l Ass’n of Home

Builders v. Defenders of Wildlife, 551 U.S. 644, 650 (2007) (explaining that the

NPDES program “is designed to prevent harmful discharges into the Nation’s

waters”).

“The final piece of constitutional standing is redressability.” Jacobs, 463

F.3d at 1173. If the Court concludes that the EPA has failed to follow the

requirements of the Clean Water Act and 40 C.F.R. pt. 123, as the Petitioners

allege, then “that injury is plainly redressable[,]” id., because the APA requires that

a “reviewing court shall . . . compel agency action unlawfully withheld or

unreasonably delayed” and “hold unlawful and set aside agency action, findings,

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and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance law . . . [,]” 5 U.S.C. § 706(1), (2)(A).

In short, because Wathen, Mullen, and Crawford have established standing

to sue in their individual capacities, the organizations that are suing on their behalf

also have standing. See Hunt, 432 U.S. at 343. And “[s]o long as one party has

standing, other parties may remain in the suit without a standing injury.” Jacobs,

463 F.3d at 1170.

III. STANDARD OF REVIEW

Judicial review of an agency’s interpretation of the statute it administers is a

two-step inquiry. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S.

837, 842 (1984). First, the Court must determine “whether Congress has directly

spoken to the precise question at issue.” Id. at 842. “If the intent of Congress is

clear, that is the end of the matter; for the court, as well as the agency, must give

effect to the unambiguously expressed intent of Congress.” Id. at 842–43. If,

however, “the statute is silent or ambiguous with respect to the specific issue,” the

Court will give effect to an agency’s interpretation so long as it is a “permissible

construction of the statute.” Id. at 843.

Similarly, an agency’s interpretation of its own regulation will be upheld

unless it is “plainly erroneous or inconsistent with the regulation.” Auer v.

Robbins, 519 U.S. 452, 461 (1997) (quoting Robertson v. Methow Valley Citizens

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Council, 490 U.S. 332, 359 (1989)) (internal quotation marks omitted); see also

Kisor v. Wilkie, — U.S. —, 139 S. Ct. 2400, 2416 (2019) (affirming that “the

agency’s reading must fall ‘within the bounds of reasonable interpretation’”)

(quoting Arlington v. FCC, 569 U.S. 290, 296 (2019)). Under this standard, the

EPA enjoys the “power to resolve ambiguities in [its] own regulations,” but must

not act contrary to regulations passed with the benefit of notice and comment.

Auer, 519 U.S. at 463. “This deferential standard applies as long as the agency

does not promulgate ‘a parroting regulation’ that does nothing more than

‘paraphrase the statutory language’ that it should be implementing.” Johnson I, 436

F.3d at 1274 (quoting Gonzales v. Oregon, 546 U.S. 243, 257 (2006)).

When applying these principles of deference, the agency’s action (or

inaction) will be upheld unless it is “arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law . . . .” 5 U.S.C. § 706(2)(A); see Citizens to

Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 413–14 (1971), abrogated by

Califano v. Sanders, 430 U.S. 99 (1977). Though the standard is deferential, and

the Court will not “substitute our own judgment for that of the agency,” the Court

“must consider whether an agency’s decision ‘was based on a consideration of the

relevant factors and whether there has been a clear error of judgment.’” Johnson I,

436 F.3d at 1273–74 (quoting Fund for Animals, Inc. v. Rice, 85 F.3d 535, 541

(11th Cir. 1996)); see also Mendoza v. Sec’y, Dep’t of Homeland Sec., 851 F.3d

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1348, 1353 (11th Cir. 2017). The Court will find an agency action to be arbitrary

and capricious only where “(1) the agency relied on factors which Congress has

not intended it to consider, (2) the agency failed to consider an important aspect of

the problem, (3) the agency explained its decision in a way that runs counter to the

evidence, or (4) the action is so implausible that it could not be ascribed to a

difference in view or the product of agency expertise.” Mendoza, 851 F.3d at 1353

(internal quotation marks omitted) (citations omitted).

IV. DISCUSSION

The central question in this appeal is whether the EPA acted within the

bounds of permissible discretion. The antecedent issue, therefore, is the scope of

the EPA’s discretion to commence withdrawal proceedings. The parties equally

misrepresent the other’s position. Petitioners contend that the EPA seeks unlimited

discretion; the EPA claims that Petitioners argue for no discretion.

A. Scope of EPA Discretion

The CWA’s structure emphasizes the supervisory role the EPA is to play and

the “restraint” the agency should exercise when doing so. See Save the Bay, Inc. v.

Administrator of EPA, 556 F.2d 1282, 1287 (11th Cir. 1977). Both its structure and

text make clear that states must maintain primary responsibility for environmental

issues. See 33 U.S.C. § 1251(b), (g). Revoking permit authority is a drastic

remedy, not intended for just any statutory or regulatory violation; “only the most

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egregious flouting of federal requirements in the context of an individual permit

could justify that sanction.” See Save the Bay, 556 F.2d at 1290 (expressing “some

skepticism whether a state authority’s unsatisfactory handling of a single permit

would ever warrant [the] EPA’s revocation of NPDES authority, much less judicial

reversal of a decision not to revoke”).

At the heart of this dispute over the scope of the EPA’s discretion lies the

following statutory language:

Whenever the Administrator determines after public hearing that a State

is not administering a program approved under this section in

accordance with requirements of this section, he shall so notify the State

and, if appropriate corrective action is not taken within a reasonable

time, not to exceed ninety days, the Administrator shall withdraw

approval of such program. The Administrator shall not withdraw

approval of any such program unless he shall first have notified the

State, and made public, in writing, the reasons for such withdrawal.

33 U.S.C. § 1342(c)(3). Whether the EPA’s decision to commence withdrawal

proceedings is discretionary is a question of first impression in this Court. But as

the Court noted in this case’s earlier incarnation, “most courts passing on the issue

have ruled that the EPA’s decision as to whether to commence withdrawal

proceedings is a discretionary one.” Cahaba Riverkeeper, 806 F.3d at 1084 (citing

Sierra Club v. EPA, 377 F. Supp. 2d 1205, 1208–209 (N.D. Fla. 2005)).

The statutory text at issue encompasses “both a discretionary and a

nondiscretionary component.” Cf. Sierra Club v. Johnson (Johnson II), 541 F.3d

1257, 1265 (11th Cir. 2008) (noting that the provision at issue in the Clean Air Act

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“contain[ed] both a discretionary and nondiscretionary component”). “Congress’s

use of the word ‘shall’ creates a nondiscretionary duty for the Administrator; it

plainly mandates” the withdrawal of state permit authority under particular

conditions. Id. “At the same time, it is undeniable [§ 1342(c)] also contains a

discretionary component: it requires the Administrator to make a judgment of

whether a petition demonstrates a [state program] does not comply with clean

[water] requirements.” Id. at 1266. In this case, as in Johnson II, when faced with a

petition to commence withdrawal proceedings, the EPA must decide whether

petitioners have made a sufficient showing to warrant withdrawal proceedings. See

id.; see also N.Y. Pub. Interest Research Grp. v. Whitman, 321 F.3d 316, 333 n.11

(2d Cir. 2003) (“There clearly is some room for the exercise of agency expertise in

[the statutory text], which requires petitioner to make a demonstration to the EPA,

but none of the questions that could arise under the exercise of the EPA’s

judgment—such as, perhaps, questions of the burdens facing a petitioner—have

arisen in this case.”).

As one district court in this Circuit has explained, “neither the [CWA] nor

the regulations impose any prescribed method by which, or specific time within

which, the EPA must evaluate a complaint or evidence of a state’s noncompliance

and make a determination.” Sierra Club, 377 F. Supp. 2d at 1208. This leaves

courts to evaluate simply whether the EPA has made a “reasonable inquiry . . .

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within a reasonable time . . . [and] these are standards that ring of discretion.” Id.;

see also id. at 1208–09 (comparing cases determining whether commencement of

withdrawal proceedings is discretionary).

While the EPA’s decision whether to commence withdrawal proceedings is

discretionary, the agency’s discretion is not boundless as it must faithfully enforce

the CWA and its implementing regulations. See 33 U.S.C. § 1342(c). And the

regulations enumerate the conditions under which withdrawal is appropriate. Even

so, the regulations indicate that the decision to withdraw a state’s NPDES authority

is ultimately a discretionary one: “The Administrator may withdraw program

approval when a State program no longer complies with the requirements of [the

implementing regulations], and the State fails to take corrective action.” 40 C.F.R.

§ 123.63(a) (emphasis added). In other words, the Administrator may withdraw

authority under certain conditions but is not compelled to do so. The EPA’s

interpretation of the regulation is consistent with the statute.

Petitioners argue that the EPA’s decision to commence withdrawal

proceedings (or not) must be based solely on the agency’s determination of

whether “cause” exists to commence proceedings. As support, Petitioners point to a

different regulatory provision, which states:

The Administrator may order the commencement of withdrawal

proceedings on his or her own initiative or in response to a petition from

an interested person alleging failure of the State to comply with the

requirements of this part as set forth in § 123.63 . . . . He may conduct

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an informal investigation of the allegations in the petition to determine

whether cause exists to commence proceedings under this

paragraph . . . .

40 C.F.R. § 123.64(b)(1).

Petitioners argue that “cause . . . to commence proceedings” means cause “to

find that the State program is not being administered in accordance with the

minimum requirements of 33 U.S.C. § 1342 and 40 C.F.R. pt. 123.” According to

Petitioners, if the EPA determines that a program is not in compliance, then

“cause” exists to commence withdrawal proceedings. And that cause

determination, they assert, is tied to the first sentence in § 123.64(b)(1): “The

Administrator may order the commencement of withdrawal proceedings on his or

her own initiative or in response to a petition from an interested person alleging

failure of the State to comply with the requirements of this part.” (emphasis

added).

Petitioners argue that the use of the word “may” does not give the EPA

unbridled discretion, but instead means only that the EPA has a choice to grant or

deny the petition. But according to Petitioners, it is not much of a choice. They

insist that because the EPA “must conform to the requirements of C.F.R. 40

§ 123.64(b)(1),” everything turns on the EPA’s decision about whether the program

is in compliance. If the EPA decides compliance is lacking, Petitioners say, then

“cause” exists to commence withdrawal proceedings.

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This Court is not persuaded. The regulation does not define what

“cause . . . to commence proceedings” means, and it certainly does not define it the

way Petitioners have. The Court will defer to the EPA’s contrary interpretation “so

long as the interpretation sensibly conforms to the purpose and wording of the

regulations.” Johnson I, 436 F.3d at 1274 (quoting Legal Envtl. Assistance Found.,

Inc. v. EPA, 276 F.3d 1253, 1262 (11th Cir. 2001)). That is the case here.

Moreover, the EPA has long rejected the idea that “program withdrawal should be

mandatory for any violation by a State” because “[s]uch a requirement would be

draconian.” 45 Fed. Reg. 33,384 (1980); see Barnhart v. Walton, 535 U.S. 212, 220

(2002) (“[T]his Court will normally accord particular deference to an agency

interpretation of ‘longstanding’ duration.”) (quoting North Haven Bd. of Ed. v.

Bell, 456 U.S. 512, 522 n.12 (1982)).

This Court need not pinpoint the precise conditions under which the EPA

should exercise its discretion to initiate withdrawal proceedings. It is enough to

observe that the EPA is not required by statute or regulation to commence

withdrawal proceedings over any single violation. See 33 U.S.C. § 1342(c)(3); 40

C.F.R. § 123.63(a). Petitioners concede this point. The regulations further reinforce

broad agency discretion over the decision to withdraw authority. See 40 C.F.R. §

123.63(a) (listing circumstances for which the Administrator may withdraw

program approval). The EPA, however, may not absolve states of their obligations

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under the CWA. See Johnson I, 436 F.3d at 1280 (“EPA is not a board of pardons.

Its duty is to enforce requirements, not to grant absolution to state agencies that

have violated them.”).

So, all that remains here is whether the EPA reasonably exercised its

discretion to refuse to commence withdrawal proceedings. Petitioners point to four

violations of the EPA’s regulations (and one corresponding violation of the CWA)

that Petitioners say justified such action. But when considering each argument

under the deference framework enumerated above, this Court cannot agree. 5

U.S.C. § 706(1), (2)(A) (courts shall “hold unlawful” agency actions “found to be

arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

the law”); see also Christensen v. Harris Cnty., 529 U.S. 576, 588 (2000) (noting

that Auer deference applies to an agency’s interpretation of a regulation “when the

language of the regulation is ambiguous”).

B. Discharge Notices

Before issuing an NPDES permit, the state permit authority must publish “a

notice in a daily or weekly newspaper within the area affected by the facility or

activity . . . .” 40 C.F.R. § 124.10(c)(2)(i). The notice must include, among other

information, “a general description of the location of each existing or proposed

discharge point and the name of the receiving water . . . .” Id. § 124.10(d)(vii).

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Petitioners argue that Alabama’s notices are insufficient because, while the

notices identify the receiving water, they do not give a general description of the

location of existing or proposed discharge points. Instead, Alabama’s published

notices refer readers to a freely accessible government website that gives greater

information about the proposed discharge points and permit. Petitioners argue that

this notice system runs contrary to the regulatory requirements. But the EPA

disagrees; it concluded that withdrawal proceedings were unnecessary because

Alabama’s notice procedures, in the EPA’s view, “achieves the goals of the

regulatory requirement . . . .” In effect, the EPA determined that ADEM

substantially complied with federal regulations.

Petitioners argue that Alabama’s procedure is not only contrary to the plain

regulatory language, but does not actually achieve the regulatory goal, because

one-third of Alabama households lack high-speed internet access. While the EPA

does not dispute this, it notes that not all Alabamians have newspaper access either.

The EPA agrees that, per its regulations, public notices must contain a

general description of the location of discharge points. The agency nevertheless

determined that Alabama’s public-notice procedure did not merit withdrawal

proceedings, deciding instead that the more appropriate regulatory oversight action

was to “encourage ADEM to supplement its public notices with more specific

information.” As explained above, the decision whether to commence withdrawal

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proceedings is one the CWA and regulations give to the EPA. So even if Alabama’s

imperfect notice procedure does not fully comply with the CWA, the EPA’s

decision not to commence withdrawal proceedings was not “arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law . . . .” 5 U.S.C. §

706(2)(A).

C. Board Conflicts

The CWA charges the EPA with promulgating a regulatory “requirement that

no board or body which approves permit applications or portions thereof shall

include, as a member, any person who receives, or has during the previous two

years received, a significant portion of his income directly or indirectly from

permit holders or applicants for a permit[].” 33 U.S.C. § 1314(i)(D). But the CWA

does not define "board or body," leaving open the question of whether any conflict

prohibits membership or whether recusal in specific instances satisfies the

requirement. See Chevron, 467 U.S. at 843 (holding that deference to an agency's

interpretation applies where a statute is ambiguous). To clarify that ambiguity, the

EPA regulation elaborates on the requirement to include “any individual, including

the Director, who has or shares authority to approve all or portions of permits

either in the first instance, as modified or reissued, or on appeal.” 40 C.F.R. §

123.25(c)(1)(i).

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The board members of Alabama’s NPDES permit program must annually

complete a NPDES Conflict of Interest Disclosure Form, disclosing any income

received from permit holders or applicants. “Conflicted members” must then

complete and file a General Recusal Form, recusing themselves from voting on

“any NPDES or Water Pollution Control related matters.” The Alabama

Environmental Management Commission indicates which matters require recusal

during meetings, and those members who are conflicted do not participate in

deciding those matters. Additionally, Alabama requires the Chair of the

Commission, if conflicted, to defer to the Vice Chair on NPDES matters.

The EPA’s regulatory definition of “board or body” clearly allows for the

recusal policy that Alabama has implemented: recused members do not “share[]

authority to approve all or portions of permits either in the first instance, as

modified or reissued, or on appeal.” 40 C.F.R. § 123.25(c)(1)(i). And the regulation

does not simply parrot statutory text, but rather responds to a genuine ambiguity in

the text about whether “a board or body” consists of only those members who

decide NPDES matters or all members of a “board or body,” some of who decide

NPDES matters. See Johnson I, 436 F.3d at 1274. Because the EPA’s application of

its regulatory definition to Alabama’s recusal policy is reasonable and the

regulation responds to a genuine statutory ambiguity rather than parroting statutory

text, the EPA’s decision not to initiate withdrawal proceedings on this ground was a

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reasonable one. 5 Auer, 519 U.S. at 461. And accordingly, it was also not “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law . . . .” 5

U.S.C. § 706(2)(A).

D. Annual Inspections

The EPA regulation here requires that “State NPDES compliance evaluation

programs shall have procedures and ability for . . . [i]nspecting the facilities of all

major dischargers at least annually.” 40 C.F.R. § 123.26(e)(5). To free resources for

other environmental issues, the EPA’s 2007 National Compliance Monitoring

Strategy set a goal of inspecting major dischargers biennially.

According to the plain language of the regulation, state programs must have

“procedures and ability” for annual inspections, not that annual inspections occur.

Recognizing as much, Petitioners argue that because the resources for annual

inspections are diverted to other tasks, Alabama no longer has the “procedures and

ability” for annual inspections. The record does not show, however, that Alabama

is unwilling or incapable of conducting annual inspections. Nor is there an

indication that annual inspections are required. Presumably, if the EPA reinstated

annual inspections as a policy goal, then the state would, or could, simply divert

resources back to inspections. Thus, the agency’s determination that this ground

5

The Court notes that there is no evidence in the record that Alabama’s NPDES

permit program board members voted on conflicted matters.

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does not warrant commencing withdrawal proceedings was not “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law . . . .” 5

U.S.C. § 706(2)(A).

E. Lawsuit Limitations

Finally, Petitioners argue that Alabama’s program fails to comply with the

regulation requiring that the state be able to

assess or sue to recover in court civil penalties and to seek criminal

remedies, including fines, . . . for the violation of any NPDES permit

condition; any NPDES filing requirement, any duty to allow or carry

out inspection, entry or monitoring activities; or, any regulation or

orders issued by the State Director.

40 C.F.R. § 123.27(a)(3)(i). Alabama can “assess or sue” in this manner, except as

it relates to its state agencies, which have not waived—and under the Alabama

Constitution may not waive—sovereign immunity in the courts. See id. §

123.27(a); Ala. Const. 1901, art. I, § 14.

The EPA acknowledges that sovereign immunity prevents ADEM from

suing its state agencies or entities. Nonetheless, the EPA argues that neither the

statute nor regulation requires the waiver of sovereign immunity. Petitioners, on

the other hand, argue that per the regulation’s plain language, the state must be able

to sue to recover penalties for any violation.

The EPA maintains that state agency violations can be abated through citizen

and federal enforcement and that Alabama’s sovereign immunity is not reason

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enough to commence withdrawal proceedings. The EPA further notes that

Petitioners’ preferred reading of the statute would raise a “serious constitutional

question” because it would force states to sacrifice their immunity. Petitioners, in

turn, contend that because the agency did not specifically rely on this basis to deny

commencing withdrawal proceedings, it is an inappropriate ground on which to

affirm the agency’s determination.

It is not clear that the EPA can force states to sacrifice sovereign immunity

without a clear statement from Congress to that effect. Nevertheless, when

possible, the Court should avoid a serious constitutional question. See Clark v.

Martinez, 543 U.S. 371, 380–81 (2005) (“[A] court must consider the necessary

consequences of its choice. If one of them would raise a multitude of constitutional

problems, the other should prevail—whether or not those constitutional problems

pertain to the particular litigant . . . .”). As Congress has not explicitly required

states to waive sovereign immunity in exchange for operating NDPES permit

programs, and as the regulations are silent as to sovereign immunity, the Court

concludes that the agency’s interpretation is a reasonable one. Auer, 519 U.S. at

461. And, as with the other grounds, the agency’s interpretation of this regulation

was not “arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law . . . .” 5 U.S.C. § 706(2)(A).

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***

The EPA’s discretion is not unlimited, but neither is it as constrained as

Petitioners would suggest. The agency must faithfully administer the CWA and its

implementing regulations, but its decision to commence withdrawal proceedings is

largely a discretionary one. For the four alleged violations, the Court finds that the

EPA reasonably construed the statutory and regulatory text. The Court also finds

that the EPA’s decision not to commence withdrawal proceedings in the face of

these alleged violations was not arbitrary, capricious, or an abuse of discretion, or

otherwise not in accordance with the law.

AFFIRMED.

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