Petition for Writ of Certiorari — Arkansas v. Oklahoma

Supreme Court of the United States

OCTOBER TERM, 1990

STATE OF ARKANSAS, et al.,

Petitioners,

STATE OF OKLAHOMA, et al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Tenth Circuit

PETITION FOR A WRIT OF CERTIORARI

Winston Bryant

Attorney General

Mary Stallcup

OFFICE OF THE ATTORNEY

GENERAL

200 Tower Building

4th & Center

Little Rock, AR 72201

James N. McCord

CITY OF FAYETTEVILLE

207 West Center Street

Fayetteville, AR 72701

Anne Roberts Bobo

A.D.P.C. & E.

P.O. Box 8913

Little Rock, AR 72219-8913

February 8, 1991

Edward W. Warren, P.C.

David G. Norrell

(Counsel of Record)

Gary E. Marchant

KIRKLAND & ELLIS

Suite 1200

655 Fifteenth Street, N.W.

Washington, D.C. 20005

(202) 879-5070

Walter R. Niblock

THE NIBLOCK LAW FIRM

P.O. Drawer 818

Fayetteville, AR 72702

Nancy L. Hamm

HAMM LAW FIRM

193 West Lafayette

Fayetteville, AR 72702

ee

WILSON - Eres PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

The Clean Water Act provides that all publicly and

privately owned facilities intending to discharge any ef-

fluent into the nation’s waters must obtain a discharge

permit from the U.S. Environmental Protection Agency

or from a designated agency in the source state. To ob-

tain a permit under this National Pollutant Discharge

Elimination System (NPDES), the facility (or point

source) must demonstrate that the discharge will both

meet the technology-based effluent limitations set by EPA

and comply with the approved water quality standards of

the source state.

At issue in this petition is whether the court of ap-

peals erred by holding that the Clean Water Act imposes

two further conditions on the issuance of NPDES per-

mits. The specific questions raised by the court’s decision

and this petition are:

(1) Whether a facility must also comply with the

water quality standards of all downstream states, regard-

less of their terms and severity, and furthermore, whether

EPA lacks any discretion in applying those downstream

standards; and

(2) Whether a pre-existing violation of water quality

standards on any downstream segment, in either the

source state or any downstream state, automatically pre-

cludes the issuance of new permits.

(i)

ii

PARTIES TO THE PROCEEDINGS

The State of Arkansas, the Arkansas Department of

Pollution Control & Ecology (A.D.P.C. & E.), the City

of Fayetteville, Arkansas and the Beaver Water Dis-

trict, petitioners in this Court, were all cross-petitioners

in the court of appeals.

The State of Oklahoma, the Oklahoma Scenic Rivers

Commission, the Oklahoma Pollution Control Coordinating

Board, and Save The Illinois River (STIR) were peti-

tioners in the court of appeals, and the Oklahoma Wild-

life Federation was an intervenor on the side of Okla-

homa. These Oklahoma parties are all respondents in this

Court.

The U.S. Environmental Protection Agency (EPA) was

the respondent in the court of appeals and is filing a

separate petition for certiorari in this Court.

All of the Arkansas parties joining this petition are

governmental! and public entities and have no subsidiaries,

affiliates, or parent corporations. See Supreme Court

Rule 29.1.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .....................0.....0000000000.-000-. i

PARTIES TO THE PROCEEDINGS ................... ianidiliie ii

euromuaes iii

ee Vv

EE 1

csussunonnenes 2

Ee 2

STATEMENT OF THE CASE .............0........... lines 2

Statutory Background... en. i 3

i nsomeurenese 3

I ccccsnsscnscusconcoonss 4

The Court Of Appeals’ Decision ......0...00000 0. 5

REASONS FOR GRANTING THE WRIT .................... 7

I. THE ISSUE OF WHETHER DOWNSTREAM

STATE STANDARDS APPLY IN PERMIT

DECISIONS FOR SOURCES IN UPSTREAM

STATES SHOULD BE RESOLVED BY THIS

a dihteiatetenncsetcenncneneennstcssesesescesscescoczece 9

A. The Tenth Circuit’s Holding Conflicts With

The Decisions Of This Court Holding That

One State Cannot Regulate Sources In An

EESTI Oe 10

B. The Decision Below Conflicts With Congress’

Balance Of Upstream And Downstream

Rights And Will Disrupt Administration Of

ee 13

(iii)

iv

TABLE OF CONTENTS—Continued

Page

C. The Court of Appeals’ Decision Also Con-

flicts With The Decisions Of Courts In Other

Se Fe i iceneen 17

Il. THE TENTH CIRCUIT’S IMPOSITION OF A

PERMIT BAN IN ALL AREAS UPSTREAM

FROM EXISTING VIOLATIONS ALSO RE-

QUIRES SUPREME COURT REVIEY ............ 19

A. A Ban On New Permits Upstream From

Any Violation Of Relevant Water Quality

Standards Is A Radical Departure From

The Statutory Scheme ...........................0-<--.-. 20

B. The Tenth Circuit's Holding Requiring A Ban

On New Permits Will Have Enormous,

Detrimental Consequences Across The Na-

C. The Tenth Circuit’s Ambitious Construction

Conflicts With The Appropriate Role For A

Reviewing Court Under The Chevron De-

I ctninninsieasntiapimaniataneniiniiines aliiiiiedenediatiaaiiiiieasn 23

Ill. THE TENTH CIRCUIT’S DECISION ON

THESE ISSUES THREATENS TO CAUSE

WIDESPREAD DISRUPTION AND _ RE-

QUIRES IMMEDIATE REVIEW |... 25

A. The Tenth Circuit’s Holding On The Appli-

cability Of Downstream State Standards

Will Cause Enormous Confusion And Un-

fairness In NPDES Permitting Decisions... 25

B. The Combined Nationwide Effect Of The

Tenth Circuit’s Two Holdings Will Be Dev-

SETI -sccespateesniiciiasiitaeniasanibinsenbiauialaeiatinectiieniuiedenianen 27

GSCI cnsctsnnssnsssesissssenerscssscntvesnneataansecmmnenstabsaintiate 30

v

TABLE OF AUTHORITIES

Page

Cases

Arkansas Vv. Oklahoma, 488 U.S. 1000 (1989)... 9

Champion International Corp. v. EPA, 652 F.

Supp. 1398 (W.D.N.C. 1987), rev’d on other

grounds, 850 F.2d 182 (4th Cir. 1988) .............. 19

Chevron, U.S.A., Ine. Vv. Natural Resources De-

fense Council, Inc., 467 U.S. 837 (1984) .......... 8, 24, 25

City of Milwaukee v. Illinois, 451 U.S. 304 (1981)

EES oe ee 9, 10, 11, 13, 14

Costle v. Pacific Legal Foundation, 445 U.S. 198

TEE OS ae ee are eee 29

District of Columbia v. Schramm, 631 F.2d 854

I ii rtenrttntacinataia elida en ereteaaies 15

Homestake Mining Co. v. EPA, 477 F. Supp. 1279

see 14

Illinois v. City of Milwaukee, 406 U.S. 91 (1972).. 9

Illinois v. City of Milwaukee, 731 F.2d 403 (7th

Cir. 1984), cert. denied sub nom., Scott v. City

of Hammond, 469 U.S. 1196 (1985) 000000... 17, 18

International Paper Co. v. Ouellette, 479 U.S. 481

EE ee ae EE passim

Kansas v. Colorado, 206 U.S. 46 (1907) ............... 10

Mianus River Preservation Comm. v. EPA, 541

fl 15

Mississippi Commission on Natural Resources v.

Costle, 625 F.2d 1269 (5th Cir. 1980) 14

National Wildlife Federation v. Federal Energy

Regulatory Commission, 912 F.2d 1471 (D.C.

A RE Le ee 18

Ohio Vv. Wyandotte Chemicals Corp., 401 U.S. 493

See era ae ee 9

Oklahoma Vv. Arkansas, 460 U.S. 1020 (19838)... 9

Save the Bay, Inc. v. EPA, 556 F.2d 1282 (5th Cir.

EE EN ASE ee 15

Scott v. City of Hammond, cert. denied, 469 U.S.

EE eee eee ee a ron 9, 16

State v. Champion Int’l Corp., 709 S.W.2d 569

ERE EPrre eter ever ever renee ere 18

vi

TABLE OF AUTHORITIES—Continued

Page

Tennessee V. Champion Int’l Corp., cert. granted,

judgment vacated and remanded, 479 U.S. 1061

ee a ee 9

Statutes and Regulations

Clean Water Act, as amended, 33 U.S.C. §§ 1251-

gE Se 2

Section 301 (b), 33 U.S.C. § 1811(b) 0000. 3, 21

Section 301(b) (1) (C), 338 U.S.C. § 1811(b)

GP GD crsternsetincnreniscrnrnsersqrssesnmnsstnscetovecsnssstenseces 3

Section 303 (d), 33 U.S.C. § 1813(d) 0... 21, 24, 25

Section 303(d) (1) (A), 33 U.S.C. § 1813(d)

EE SE Se a 21

Section 304 (a), 33 U.S.C. § 1814(a) —200000.. 3

Section 306, 33 U.S.C. § 1816 2... 21

Section 401 (a) (2), 38 U.S.C. § 1841 (a) (2)... 15

Section 402, 33 U.S.C. § 1842 00. 4

Section 402 (b), 33 U.S.C. § 1842(b) 0. 3

Section 402 (b) (5), 33 U.S.C. § 1342 (b) (5)... 14

Section 402(d) (2) (A), 33 U.S.C. § 1342(d)

ae 15

Section 505 (a) (2), 33 U.S.C. § 1365 (a) (2)... 30

Section 509(b) (1), 33 U.S.C. § 1369(b) (1) _.. 30

Section 510, 33 U.S.C. § 1370 inecainanaet 3, 10, 14

Section 518, 33 U.S.C. § 1877... 27

28 U.S.C. § 1264(1) (1988) 22 eee 2

SD TI © GE CID acne es nnsnnnsncncceceeceeneseee 2

42 U.S.C. § 7410(a) (2) (I) (1988) 0. 23

42 U.S.C. § TEOB (1968) nnn nnn nee cence enee eee 23

40 C.F.R. § 122.4(i) (1990) 22... eeeeee eee 25

GO CBR. § BBGTE CRGDO) nace nn ennccnccncenvcnsenneees 28

40 C.F.R. § 124.75(a) (1) (1990) 0. 28

Miscellaneous

Brief for the United States as Amicus Curiae,

Scott v. City of Hammond, cert. denied, 469

TE EE 16

Champion International Corp., Canton Mill,

NPDES Appeal 90-1, at 4-5 (Sept. 5, 1990) ..... 26

vii

TABLE OF AUTHORITIES—Continued

EPA, National Water Quality Inventory, 1988

Report to Congress (EPA 440-4-90-003, April

EES Se eee oer

1983) aaa SE EE ORS IEEE ea nee eae

54 Fed. Reg. 39,099 (1989) ES ER Er

Pub. L. No. 92-500, § 2, 86 Stat. 816 (1972)...

S. Rep. No. 414, 92d Cong., Ist Sess. (1971),

reprinted in 1972 U.S. Code Cong. & Admin.

TENT Tena eee

[1 State Water Laws] Env’t wna (BNA)

I sits

Supreme Court Rule 29.1 .....................---..-.ccceeececeeeees

U.S. General Accounting Office, Water Pollution:

More EPA Action Needed to Improve the Qual-

ity of Heavily Polluted Waters (GAO/RCED-

I arc aersiaeaentainnennet

Zemansky & Zerbe, Adjudicatory Hearings as Part

of the NPDES Permit Process, 9 Ecol. L.Q. 1

DA ES ea oa eNO RENN

Page

14

ii

a a

IN THE

Siypreme Court of the United States

OCTOBER TERM, 1990

No.

STATE OF ARKANSAS, et al.,

. Petitioners,

STATE OF OKLAHOMA, et al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Tenth Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioners, the State of Arkansas, the Arkansas De-

partment of Pollution Control & Ecology, the City of

Fayetteville, Arkansas and the Beaver Water District,

respectfully request that a writ of certiorari issue to re-

view the judgment in this case of the U.S. Court of Ap-

peals for the Tenth Circuit.

OPINIONS BELOW

The opinion of the court of appeals is published at 908

F.2d 595 and is reprinted at App. A in the Appendix to

this Petition. The Initial Decision by the Administrative

Law Judge (ALJ) for the Environmental Protection

Agency (EPA), the Order on Petitions for Review by

EPA’s Chief Judicial Officer (CJO), the ALJ’s Decision

on Remand, and the CJO’s Second Order on Petitions for

Review are reprinted as App. F, App. G, App. H, and

App. I, respectively.

2

JURISDICTION

The judgment of the court of appeals was entered on

July 11, 1990. App. E. Timely petitions for rehearing

and rehearing en bane, filed by the Arkansas parties and

EPA, were denied by the court of appeals on October 11,

1990. App. B. The court of appeals nevertheless granted

a stay of mandate on October 31, 1990 pending the timely

filing of a petition for certiorari. App. C. On December

28, 1990, Justice White extended the time for filing this

petition to and including February 8, 1991. App. D.

The jurisdiction of this Court is invoked under 28 U.S.C.

§$ 125411) and 28 U.S.C. § 1651.

STATUTE INVOLVED

The statute involved is the Federal Water Pollution

Control Act, commonly referred to as the Clean Water

Act (CWA), 33 U.S.C. $$ 1251-1387.' The relevant por-

tions of Sections 301, 303, 401, 402 and 510 of the CWA

are set forth in App. J.

STATEMENT OF THE CASE

This petition presents two issues of fundamental im-

portance to the allocation of regulatory authority and the

implementation of water quality standards under the

Clean Water Act. The first issue involves the authority

of downstream states to compel facilities in upstream

states to comply with downstream standards as a condi-

tion of obtaining new discharge permits. Under the

Tenth Circuit’s decision, downstream states have virtu-

ally unfettered discretion to set more stringent standards

and give them extra-territorial effect, even to the point

of blocking the issuance of new permits in upstream

states.

The second issue presented involves the impact of pre-

existing violations on the ability of EPA and the states

' For the Court’s convenience, citations throughout are to the

sections of the CWA. Parallel citations to the U.S. Code are pro-

vided in the Table of Authorities and in App. J.

3

to grant new permits under the Clean Water Act. Ac-

cording to the Tenth Circuit, a violation of water quality

standards on one segment of a waterway triggers a per-

mit ban for all upstream segments and tributaries, both

in the state of the violation and in any upstream state.

Both of these issues have extraordinary implications for

upstream states, for the resolution of interstate disputes

over water quality, and for the ability to grant new dis-

charge permits throughout much of the nation.

Statutory Background. Any publicly or privately

owned facility that discharges into the nation’s water-

ways must obtain a permit under the CWA’s National

Pollution Discharge Elimination System (NPDES). One

condition for receiving an NPDES permit is that a new

point source must comply with the technology-based ef-

fluent limitations established by EPA. CWA § 301(b).

In addition, a point source must comply with such other

limitations as are necessary to ensure compliance with “ap-

plicable” water quality standards. CWA § 301(b) (1) (C).

Although EPA establishes certain minimum federal cri-

teria, the states are primarily responsible for promul-

gating the water quality standards within their own ju-

risdiction. These standards typically set maximum limits

on the level of various pollutants in the receiving waters,

and while subject to EPA approval, can vary markedly

and sometimes far exceed the federal criteria. CWA

$§ 304(a), 510. The responsibility for issuing NPDES

permits can also be delegated to states with approved

permitting programs. Otherwise, EPA acts as the per-

mitting agency in states that do not have approved pro-

grams. CWA § 402(b).

Factual Background. The City of Fayetteville is lo-

cated in the northwest corner of Arkansas, approximately

thirty miles from the Oklahoma border. Like virtually

all other cities, Fayetteville operates a wastewater treat-

ment facility that collects, treats, and eventually must

discharge the water used by local residents and busi-

4

nesses. In the early 1980’s, Fayetteville decided to re-

place its aging treatment plant, which had caused nu-

merous violations of Arkansas water quality standards and

recurring fish kills, by constructing a new state-of-the-

art treatment facility at the cost of $40,000,000.2 After

extensive studies and hearings, the Arkansas authorities

concluded that a split-flow discharge of the new facility’s

treated effluent, between the White River and a creek

that ultimately flows into the Illinois River, would best

minimize any environmental impact of the new facility.*

The Agency Proceedings. In due course, Fayetteville

applied to EPA for an NPDES discharge permit under

CWA § 402 to operate this new plant and authorize the

split-flow discharge.‘ EPA then determined that the

Fayetteville discharge would comply with all federally-

approved Arkansas water quality standards on both the

White and Illinois Rivers. Furthermore, the Agency

* The new Fayetteville wastewater treatment plant incorporates

advanced wastewater treatment utilizing biological phosphorous

removal and nitrification, rapid sand filtration, post-aeration, de-

chlorination, and effluent storage, in addition to conventional types

of treatment. There are very few wastewater treatment plants in

the United States that have this level of sophistication for treating

effluent to remove nutrients and other pollutants.

*The Arkansas authorities found that a 100% discharge into

the White River would violate Arkansas’ water quality standard

for dissolved oxygen. In contrast, the split-flow alternative would

permit compliance with the standards on both rivers, and would

minimize the environmental impact by utilizing the natural assim-

ilative capacity of both river basins to remove the very low con-

centration of nutrients and other materials that remain in the

treated effluent. In addition, since 55% of the population that

contributes waste to the new facility lives in the Illinois River

Basin and the remaining 45% lives in the White River Basin, the

split-flow approach has the virtue of returning effluent to the

same basin that generates it.

*EPA had not delegated permitting authority to Arkansas

when the application was filed in June 1985. Although Arkansas

has since received this authority, that fact does not affect EPA’s

issuance of the permit in this case or the continuing importance

of the issues presented here.

5

found that the discharge from the Fayetteville facility

would have no adverse impact on the receiving waters.

Oklahoma and Arkansas, however, have had a number of

disputes regarding the rivers that flow between those

states, and Oklahoma promptly objected to EPA’s deci-

sion based on the partial discharge into tributaries of the

Illinois River, which flows into Oklahoma about forty

miles downstream from Fayetteville.°

Following a three-day evidentiary hearing in August

1987, the ALJ upheld the permit based on a finding that

the Fayetteville discharge would have no “undue impact”

on Oklahoma water quality. App. 105a. The ALJ’s deci-

sion was upheld in part and vacated in part by EPA’s

CJO on June 28, 1988, who determined that the proper

legal standard for interstate water disputes was whether

the Fayetteville discharge would “cause an actual detect-

able violation of Oklahoma’s water quality standards.”

App. 117a (emphasis in original). Applying this stand-

ard on remand, the ALJ found that the Fayetteville dis-

charge would have no detectable impact on Oklahoma

water quality, and therefore again approved the permit.

App. 122a. The ALJ’s decision to approve the permit was

upheld by the CJO on December 22, 1988, App. 145a, and

the Fayetteville facility began discharging under its ap-

proved permit in January 1989.

The Court Of Appeals’ Decision. The Oklahoma parties

then sought judicial review, and in the decision below,

the Tenth Circuit reversed EPA’s approval of the split-

flow discharge. This decision rests on two key holdings.

First, the court held that a facility could not receive an

NPDES permit for a discharge into an interstate water-

way or its tributary unless it complied with all the fed-

5 Specifically, the challenged half of the facility’s effluent is dis-

charged into an unnamed tributary of Mud Creek, which flows

two miles to the tributary’s confluence with Mud Creek, which

flows three miles to Clear Creek, which flows thirteen miles to

the Illinois River, which then flows approximately twenty-two

additional miles to the Oklahoma border.

6

erally-approved water quality standards of all down-

stream states. App. 43a. To this extent, the court agreed

with EPA’s decision and rejected Arkansas’ contention

that the Oklahoma standards were inapplicable. How-

ever, the court went on to reject EPA’s approach for

applying the downstream Oklahoma standards and also

specifically rejected EPA’s exception for discharges hav-

ing a “non-detectable” impact. App. 45a-538a. Under the

court’s approach, EPA is left no discretion to apply, in-

terpret or determine compliance with the standards of a

downstream state. This construction of the CWA, in ef-

fect, gives downstream states an absolute veto over per-

mit decisions in the source state.

The Court made its second key holding in the course of

deciding against remanding the case to EPA. In particu-

lar, based on its interpretation of the statutory scheme,

the court held that any pre-existing downstream viola-

tion of a relevant water quality standard should preclude

granting new permits on upstream segments of that wa-

terway or its tributaries. App. 79a-80a. This ban on

new permits even applies to new discharges that would

have no detectable impact on downstream water quality

and would not contribute in any way to the downstream

violation. So long as some amount of the effluent would

reach the downstream segment experiencing water qual-

ity violations, the discharge is banned.”

*A “relevant” water quality standard refers to a standard that

applies to the types of pollutants discharged by a particular source.

Thus, the Tenth Circuit’s decision imposes a ban on any new dis-

charge of pollutants that are of the type responsible for a pre-

existing violation of a downstream water quality standard.

7 Although the court did limit this ban to dischargers whose

effluent “would reach” the downstream segment experiencing a

water quality violation, App. 67a, the practical significance of this

limitation is unclear. EPA previously had found that the Fayette-

ville discharge would have no detectable effect on Oklahoma water

quality, App. 78a, and even though the court did not disturb that

finding, it still concluded that enough eifluent from the Fayetteville

facility “reached” Oklahoma waters for the ban to apply.

7

In applying this new rule, the Tenth Circuit did not

disturb EPA’s finding that the Fayetteville discharge

would have no detectable effect on Oklahoma water qual-

ity. App. 78a. Under the court’s view, that finding was

simply irrelevant. Instead, the court undertook its own

review of the record and found that pre-existing viola-

tions of Oklahoma’s non-degradation standard were oc-

curring on segments of the Illinois River in Oklahoma,

and that some amount of the Fayetteville discharge, even

if undetectable, would reach Oklahoma. App. 67a. Based

upon these factual “findings” and the two legal holdings

described above, the court concluded that no remand to

the Agency was required and that EPA was compelled to

deny the permit for the split-flow discharge into the Illi-

nois River tributaries. App. 83a.

REASONS FOR GRANTING THE WRIT

The two legal issues raised by the Tenth Circuit’s de-

cision are critical to the administration of the Clean

Water Act and to the resolution of interstate disputes

over water quality regulation. The NPDES program now

governs the permitting for virtually all public and private

facilities that discharge into the nation’s waterways. The

ability of countless facilities to obtain those permits, and

the enormous investment required of public authorities

and private industry to build those plants and comply

with NPDES permits, frequently depend on the delinea-

tion of authority between upstream and downstream

states. Similarly, the Tenth Circuit’s conclusion that

either in-state or out-of-state violations of water quality

standards preclude new discharges—on all upstream seg-

ments and tributaries—will dramatically affect the avail-

ability of new permits and the completion of pending

projects throughout many regions of the country.

Not only are the two issues presented vital for all the

states, but the Tenth Circuit’s resolution of those issues

threatens to undermine twenty years of precedent and

radically alter administration of the CWA. In particular,

8

with respect to the first issue of interstate authority,

the Tenth Circuit’s decision conflicts with a series of this

Court’s decisions holding and assuming that a state can

only regulate sources within its own borders. At least

two other circuits and one state supreme court have also

reached conclusions that are directly opposite to the Tenth

Cireuit’s holding. In addition, the Tenth Circuit’s deci-

sion would disrupt the careful balance of upstream and

downstream state interests established elsewhere in the

CWA, by giving downstream states an unlimited right to

impose their standards on sources in upstream states.

See Section I infra.

Second, the Tenth Circuit’s imposition of a permit ban

on upstream discharges similarly represents a major de-

parture from the current administration of the NPDES

program and the criteria governing the issuance of per-

mits. As shown below, the court created this major new

regulatory requirement essentially out of thin air, based

solely on the court’s view that the ban was necessary to

fulfill the CWA’s purposes. In fact, this compulsory and

immediate ban on new permits conflicts with the statu-

tory framework and will disrupt the permitting programs

of EPA and the states. It will also result in a shutdown

of new economic growth and industrial development in

many regions of the country. The Tenth Circuit’s uni-

lateral imposition of such a radical new requirement in-

fringes on the policymaking responsibility of EPA and

conflicts with the limited role of a reviewing court rec-

ognized in Chevron v. NRDC, 467 U.S. 837 (1984). See

Section II infra.

As shown below, the Tenth Circuit’s decision on both

issues presented will create tremendous uncertainty in

ongoing and future permit proceedings. Its first holding

will inevitably provoke and exacerbate a number of state-

versus-state disputes and downstream state challenges in

permit proceedings. Its second holding, at a minimum,

will enormously complicate permit proceedings and inun-

9

date permitting agencies with data requirements and

hearing requests. Together, these rulings will create un-

precedented confusion for permitting agencies and ap-

plicants and disrupt ongoing efforts to improve water

quality. See Section III infra.

I. THE ISSUE OF WHETHER DOWNSTREAM STATE

STANDARDS APPLY IN PERMIT DECISIONS FOR

SOURCES IN UPSTREAM STATES SHOULD BE

RESOLVED BY THIS COURT.

Disputes among the states over the authority to regu-

late water quality on interstate waterways have provoked

extensive litigation during the past two decades. The vast

majority of the nation’s rivers and streams either cross

state borders or feed interstate waterways, and recur-

ring disputes over these waters have required review

by this Court on numerous occasions. See, e.g., Ohio Vv.

Wyandotte Chemicals Corp., 401 U.S. 493 (1971); Jlli-

nois V. City of Milwaukee, 406 U.S. 91 (1972); City of

Milwaukee v. Illinois, 451 U.S. 304 (1981) (Milwaukee

11); International Paper Co. v. Ouellette, 479 U.S. 481

(1987).* The importance of the issues, the implications

for state sovereignty, and the state-versus-state character

of these disputes all create a compelling need for resolu-

tion of these cases by this Court and for clear guidance

to the states and EPA.

The instant case similarly requires plenary review, not

just to resolve a longstanding dispute between Arkansas

and Oklahoma, but to settle a fundamental question for

all states about the applicability of downstream state

standards in CWA permit proceedings. Moreover, as

demonstrated below, the Tenth Circuit’s decision on this

issue conflicts with the decisions of this Court, threatens

8 See also Oklahoma Vv. Arkansas, 460 U.S. 1020 (1983) (denying

motion for leave to file a bill of complaint); Scott v. City of Ham-

mond, cert. denied, 469 U.S. 1196 (1985); Tennessee v. Champion

Int'l Corp., cert. granted, judgment vacated and remanded, 479

U.S. 1061 (1987); Arkansas v. Oklahoma, 488 U.S. 1000 (1989)

(denying motion for leave to file a bill of complaint).

10

to disrupt the balance of state interests under the Clean

Water Act, and creates a substantial conflict with the

decisions of other circuits and state courts.

A. The Tenth Circuit’s Holding Conflicts With The

Decisions Of This Court Holding That One State

Cannot Regulate Sources In An Adjoining State.

The issue of whether downstream states have authority

to regulate sources in upstream states has come before

the Supreme Court in at least three contexts during the

past decade. In each of these contexts, this Court has

decided that downstream states do not have such rights.

The Tenth Circuit’s holding that allows a downstream

state to control the permitting for out-of-state sources

conflicts with the holdings and premise of this Court’s

decisions in all three contexts.°

In the first of these contexts, this Court held that the

enactment of the CWA foreclosed downstream states from

bringing federal common law actions to “regulate” dis-

charges in upstream states. Milwaukee II, 451 U.S. 304

(1981). This holding rested fundamentally on the con-

clusion that while Section 510 of the CWA did indeed

allow a state to adopt more stringent water quality

standards for its own waters than the federal criteria,

the CWA did not allow a state to apply such standards

against an out-of-state source. Thus, “[s]tates may

adopt more stringent limitations through state admin-

istrative processes, or even .. . may establish such limi-

® The fundamental premise underlying all of this Court’s deci-

sions on interstate water quality disputes is that considerations

of interstate equality and sovereignty prevent one state from im-

posing its standards on another state:

[No] state can legislate for, or impose its own policy upon

the other .... One cardinal rule, underlying all the relations

of the states to each other, is that of equality of right. Each

state stands on the same level with all the rest. It can impose

its own legislation on no one of the others, and is bound to

yield its own views to none.

Kansas Vv. Colorado, 206 U.S. 46, 95-98 (1907).

11

tations through state nuisance law, and apply them to

in-state discharges.” Jd. at 328 (emphasis added). Nev-

ertheless, the Court recognized a sharp distinction be-

tween the regulation of in-state and out-of-state sources,

for “[{ijt is quite another [thing] to say that the States

may call upon federal courts to employ federal common

law to establish more stringent standards applicable to

out-of-state dischargers.” Jd. (emphasis added).

In the second context, this Court held that the CWA

preempts downstream states from bringing actions under

their own common law to “regulate” sources in an up-

stream state. International Paper Co. v. Ouellette, 479

U.S. 481 (1987). The distinction between in-state and

out-of-state sources was again the key premise of the

holding. Based on this important distinction, the Court

held that the CWA does not preempt a state from apply-

ing its own common law to in-state sources, but does

preempt application of that law to out-of-state sources.

As a result of this delineation in regulatory authority,

“when a court considers a state-law claim concerning

interstate water pollution that is subject to the CWA,

the court must apply the law of the State in which the

point source is located.” Jd. at 487.

The third context where this Court has addressed the

issue of downstream state authority also arose in Ouel-

lette and parallels the precise issue decided by the Tenth

Cireuit. Specifically, as the predicate for its preemption

holding, this Court carefully interpreted the CWA provi-

sions relating to interstate water quality disputes and

concluded that under the Clean Water Act, a downstream

state “only has an advisory role in regulating pollution

that originates beyond its borders.” Jd. at 490. While

an “affected” downstream state must be notified of a

pending permit and afforded an opportunity to object, the

downstream state cannot block issuance of the permit in

th ~2am state:

[A.n affected State does not have the authority to

block the issuance of the permit if it is dissatisfied

12

with the proposed standards. An affected State’s only

recourse is to apply to the EPA Administrator, who

then has the discretion to disapprove the permit if he

concludes that the discharges will have an undue im-

pact on interstate waters. ... Thus the Act makes

it clear that affected States occupy a subordinate

position to source States in the federal regulatory

program.

id, at 490-91 (emphasis added).

The Court’s interpretation of the CWA as not allow-

ing a downstream state to impose its stricter water qual-

ity standards on an out-of-state discharge was the sine

qua non of the Court’s holding that the CWA preempted

the common law of a downstream state but not of the

source state. In particular, the Court held that the extra-

territorial application of the downstream state’s common

law would conflict with the CWA’s prohibition against

applying downstream water quality standards to regu-

late an out-of-state discharge. As this Court put it, the

application of the common law of a downstream state is

preempted because it would allow downstream states to

“do indirectly what they could not do directly—regulate

the conduct of out-of-state sources.” Jd. at 495.’

The Tenth Circuit’s decision squarely contradicts the

allocation of authority recognized in ali of these deci-

sions. Under Ouellette, EPA can elect to impose stricter

limitations on an upstream source to protect the water

quality of a downstream state, but the downstream state

has no right to foree EPA or the source state to adopt

1 The Tenth Circuit characterized this discussion of the Clean

Water Act as dicta, which it declined to follow. App. 26a. In fact,

this construction of the CWA was a necessary element of the

Court’s holding that the CWA preempted application of Vermont

nuisance law against a discharge located in New York. Since the

Court found that the CWA had neither expressly preempted state

law nor completely occupied the field, the Court was actually re-

quired to interpret the CWA provisions allocating interstate au-

thority, in order to determine whether the state law action con-

flicted with the Congress’ specific allocation of responsibility among

upstream and downstream states. See 479 U.S. at 492.

13

stricter limitations. In the present case, EPA concluded

that the Fayetteville discharge would have no adverse

impact on Oklahoma water quality, and that no additional

limitations on the Fayetteville discharge were necessary

to protect Oklahoma water quality.

Instead of deferring to EPA’s delegated discretion to

balance the interests of upstream and downstream states,

the Tenth Circuit adopted a fundamentally different ap-

proach which requires an out-of-state facility to strictly

comply with the water quality standards of a downstream

state. Moreover, the court’s decision strips EPA of any

discretion to apply or interpret the downstream stan-

dards, to disregard standards that are blatantly discrim-

inatory, or otherwise unreasonable, see note 14 infra, or

to assess compliance with the downstream standards. In

effect, the Tenth Circuit’s decision gives downstream

states unlimited power to regulate sources in an upstream

state, even when the out-of-state discharge would have no

detectable impact on downstream water quality. This

conflict with the decisions in Milwaukee II and Ouellette,

and with well-established principles of interstate equality

and sovereignty, will severely affect all downstream states

and plainly requires review by this Court.

B. The Decision Below Conflicts With Congress’ Bal-

ance Of Upstream And Downstream Rights And

Will Disrupt Administration Of The Clean Water

Act.

Another reason the Tenth Circuit’s decision warrants

review is that it conflicts with the CWA and disrupts the

careful balance of state interests established by that

Act. As this Court explained in Ouellette, the CWA

“carefully defines the role of both the source and affected

States, and specifically provides for a process whereby

their interests will be considered and balanced by the

source State and the EPA.” 479 U.S. at 497. By giving

downstream states unlimited power to impose their regu-

latory standards on out-of-state sources, the Tenth Cir-

cuit’s decision destroys this delicate balance between the

interests of upstream and downstream states.

14

The most obvious conflict with the statutory scheme

relates to Section 510 of the Act. This provision allows

states to adopt water quality standards that are signifi-

cantly stricter than the minimum federal criteria. The

Tenth Circuit seemed to believe this authority was tem-

pered by the need to obtain EPA approval for such

standards. App. 14a n.5. In fact, however, both EPA

and reviewing courts have long concluded that EPA lacks

the authority to disapprove the adoption of more strin-

gent standards by a state, even though EPA may con-

sider them unnecessary, unreasonable, or otherwise in-~

appropriate. Rather, EPA can only review these state

standards to ensure that they at least meet the minimum

federal criteria. Homestake Mining Co. v. EPA, 477 F.

Supp. 1279, 1284 (D.S.D. 1979); see also 54 Fed. Reg.

39,099 (1989); Mississippi Commission on Natural Re-

sources V. Costle, 625 F.2d 1269, 1273 (5th Cir. 1980).

This recognition of blanket authority makes sense when

a state is setting more stringent standards solely for in-

state sources, as this Court allowed in Milwaukee II. But

it will create the regulatory equivalent of gridlock if

downstream states can set such standards and compel

compliance by sources in all upstream states. Yet that is

precisely the consequence of the Tenth Circuit’s decision,

and EPA will be left with no power to clear the impasse.

In addition, the Tenth Circuit’s approach conflicts with

the statute’s carefully balanced consultative process for

considering downstream state water quality standards

when making permit decisions. These statutory provi-

sions clearly provide only an advisory role for down-

stream states and give EPA the discretion to make rea-

sonable accommodations between the interests of up-

stream and downstream states. For example, when a

state acts as the permitting authority—which is the sit-

uation now for most states ''—Section 402(b)(5) re-

quires the permitting state to notify a potentially affected

11 As of March 1990, thirty-eight states and the Virgin Islands

had been delegated permitting authority under the CWA. [1 State

Water Laws) Env’t Rep. (BNA) 611:0111.

15

state of a permit application, and to provide the down-

stream state an opportunity to submit written recommen-

dations. Nevertheless, the statutory procedure does not

require the permitting state to accept the downstream

state’s recommendations; its only obligation under the

Act is to notify the downstream state and EPA in writ-

ing if it decides not to accept the downstream state’s

recommendations.

However, if the permitting state does reject the rec-

ommendations of a downstream state, EPA may then

decide to veto the permit under Section 402(d) (2) (A).

EPA’s authority to veto the permit is also discretionary,

and a decision not to veto a permit is unreviewable in

federal courts. See, e.g., District of Columbia v.

Schramm, 631 F.2d 854, 861 (D.C. Cir. 1980). To-

gether, these consultative provisions encourage negotiated

solutions and give both the permitting state and EPA

the authority to impose additional discharge limitations

that will protect the water quality of a downstream

state. But the Act clearly does not require such addi-

tional limitatiors, and the statutory procedure obviously

withholds from downstream states the power to insist

that their standards be imposed on an out-of-state source.

The statute provides a similar advisory mechanism

when EPA is the permitting authority for a discharge

that may have interstate effects. Under Section 401

(a) (2), EPA must first make an initial threshold find-

ing whether the discharge will adversely affect the water

quality of a downstream state. If EPA does make such a

finding, the downstream state may then notify the per-

mitting agency in writing of its objections to the pro-

posed permit, and may request a public hearing. Based

on the evidence presented at the hearing, EPA must then

determine whether any additional limitations on the pro-

"EPA has “almost unfettered discretion” to decline to veto a

state-issued permit even if the permit violates applicable guide

lines or standards established under the Act. Mianus River Pres-

ervation Comm. V. EPA, 541 F.2d 899, 907-09 (2d Cir. 1976);

Save the Bay, Inc. v. EPA, 556 F.2d 1282, 1294-95 (5th Cir. 1977).

16

posed discharge are necessary to protect the water quality

of the downstream state.

This carefully constructed consultative process would

be rendered meaningless by the Tenth Circuit’s decision,

which automatically requires out-of-state sources to rig-

idly comply with a downstream state’s water quality

standards."* The court’s decision thus leaves no room for

the balancing of state interests, and it leaves no apparent

limits on the power of a downstream state to adopt un-

reasonably strict water quality standards and impose

them unfairly on out-of-state sources."* As a result, the

13 As the United States explained in its brief as amicus curiae

opposing certiorari in Scott v. City of Hammond, allowing a down-

stream state to regulate an out-of-state source would disrupt the

delicate balance established by the Clean Water Act:

The CWA creates a federal-state partnership in the area of

interstate water quality, but it is a partnership in which

the federal role is dominant. The federal goverrment estab-

lishes threshold pollution control requirements, subject to

state decisions to “adopt more stringent limitations through

state administrative processes, [or] establish such limitations

through state nuisance law, and apply them to in-state dis-

chargers.” Under this partnership, the stetes must defer to

the federal government’s choice of minimum national require-

ments, but they reserve the unqualified power to determine to

what degree they wish to impose more stringent pollution lim-

itations within their borders. If . .. one state may impose its

limitations beyond its borders, this balance of federal and

state roles is destroyed. Where several states are situated on

a particular body of water the state that has the most string-

ent limitations will displace the federal government as the

arbiter of minimum pollution control requirements; this result

is clearly contrary to the “full purposes and objectives of

Congress.”

Brief for the United States as Amicus Curiae at 10, Scott v. City

of Hammond, cert. denied, 469 U.S. 1196 (1985) (No. 84-21) (em-

phasis in original) (citations omitted).

14 By imposing very strict water quality standards on only the

first few miles of an interstate waterway after it enters the

state, a downstream state can impose stringent requirements on

sources in an upstream state without imposing similar restric-

tions on ir-state sources. This is precisely what has happened

17

Tenth Circuit’s one-sided construction not only creates a

fundamental conflict with the balance struck by Con-

gress, but it also undermines any basis for interstate

cooperation and threatens to seriously disrupt adminis-

tration of the Act.

C. The Court Of Appeals’ Decision Also Conflicts With

The Decisions Of Courts In Other Circuits And

States.

Finally, the Tenth Circuit’s holding on the extra-terri-

torial application of state water quality standards should

be reviewed because it conflicts with the decisions of

courts in other circuits and states. Indeed, until now

every other final decision addressing the issue has con-

cluded that a downstream state cannot impose its stand-

ards on an out-of-state source.

In Illinois v. City of Milwaukee, 731 F.2d 403 (7th

Cir. 1984), cert. denied sub nom., Scott v. City of Ham-

mond, 469 U.S. 1196 (1985), the Seventh Circuit held

that applying either the regulatory standards or common

law of a downstream state against an out-of-state facil-

ity would “lead to chaotic confrontation between sover-

eign states” and would make it “virtually impossible to

predict the standard for a lawful discharge into an in-

terstate body of water.” Jd. at 414. In construing Section

510 of the CWA, which permits a state to adopt water

quality standards that are stricter than the minimum fed-

eral criteria, the Seventh Circuit stated:

In the light of the structure of [the CWA], with its

emphasis upon the role of the state where the dis-

charge in question occurs, except for provisions ex-

here. Oklahoma declared the segment of the Illinois River im-

mediately inside its border an outstanding National resource and

adopted extremely strict water quality standards for this segment

of the river only. Since Arkansas sources are upstream from

this segment, they must comply with these harsh standards under

the Tenth Circuit’s decision. At the same time, Oklahoma has

adopted far less stringent standards further downstream, where

most Oklahoma sources discharge effiuent into the Illinois River.

18

pressly protecting the interests of other states, and

in the light of the conflict and confusion which could

result from any different construction, we conclude

that this provision refers to the right of a state with

respect to discharges within that state, and not to

any right of a state to impose more stringent limi-

tations upon discharges in another state.

Id. at 413. This interpretation of the CWA was also

supported by the United States in its amicus brief suc-

cessfully urging this Court not to review the Seventh

Circuit’s decision.*®

Similarly, in a case decided shortly after the Tenth

Cireuit’s decision, and which involved another new Ar-

kansas facility that allegedly had the potential to vio-

late Oklahoma water quality standards, the D.C. Cir-

cuit followed this Court’s construction of the CWA in

Ouellette and held that only Arkansas’ (and not Oxla-

homa’s) water quality standards were applicable to the

Arkansas facility. National Wildlife Federation v. Fed-

eral Energy Regulatory Commission, 912 F.2d 1471,

1483-84 (D.C. Cir. 1990). The D.C. Circuit noted with

approval that “[o]ther states, even if they are affected

by a discharge, have only an advisory role in regulating

the discharge, and they do not have the authority to block

the issuance of permits if they are dissatisfied with the

proposed standards.” Id. at 1483.

The Tennessee Supreme Court has also recently held

that under the CWA provisions at issue here, Tennessee

could not require a discharger located in North Carolina

to comply with Tennessee water quality standards. State

v. Champion Int’l Corp., 709 S.W.2d- 569 (Tenn. 1986).

The court concluded that “‘[e]ach state ... clearly oper-

ates within the sphere of its own jurisdiction, and may

15 See supra note 13. Arkansas recognizes that the federal

government has not always taken a consistent position regarding

the applicability of downstream state standards in permitting

decisions. Nevertheless, this fact itself emphasizes the compelling

need for this Court to definitively resolve this issue under the

Clean Water Act.

19

not . . . control points of discharge lying within the juris-

diction of other states.” Id. at 574."

In sum, this Court should grant certiorari because the

Tenth Circuit’s decision regarding the extra-territorial

application of downstream standards creates a conflict

with the decisions of this Court, other circuits, and state

courts, and will disrupt the balance of interests struck by

Congress in the Clean Water Act.

II. THE TENTH CIRCUIT’S IMPOSITION OF A PER-

MIT BAN IN ALL AREAS UPSTREAM FROM EX-

ISTING VIOLATIONS ALSO REQUIRES SUPREME

COURT REVIEW.

The second issue presented also has nationwide impli-

cations and is critical to the administration of the Clean

Water Act. As described above, the Tenth Circuit held

that the existence of a water quality violation on one

downstream segment of a waterway precludes the issu-

ance of a new NPDES permit on any upstream segment

or tributary of that waterway. App. 79a-80a. Thus, the

court’s finding of prior and unrelated violations on sec-

tions of the Illinois River in Oklahoma triggered an ex-

16 This decision was subsequently vacated, apparently on a sep-

arate ground, and remanded to the Tennessee Supreme Court for

further consideration in light of Ouellette. 479 U.S. 1061 (1987).

While Ouellette and the Tennessee Supreme Court’s decision were

in agreement that the law of a downstream state could not be

applied against an out-of-state discharger, the two decisions were

in conflict over whether the courts of a downstream state could

exercise jurisdiction over an out-of-state facility to apply the law

of the source state.

The same Tennessee-North Carolina dispute was also brought

to federal court, where a district court held that a downstream

state’s water quality standards should not be a decisive factor

in the permitting decision for a facility proposing to discharge

into an interstate waterway, although they were a “relevant

factor” that the EPA Administrator could consider. Champion

International Corp. v. EPA, 652 F. Supp. 1398, 1400 (W.D.N.C.

1987). On appeal, the Fourth Circuit emphasized that it agreed

with much of the district court’s decision, but it ultimately vacated

the district court’s decision for lack of subject matter jurisdiction.

850 F.2d 182 (4th Cir. 1988).

20

traordinary ban on granting new permits in Arkansas

for discharges that contain the same pollutant.

The drastic repercussions and extreme nature of this

new rule are demonstrated by the court’s decision not

even to remand this proceeding to EPA. So long as any

amount of effluent would reach the areas of violation in

Oklahoma, EPA was required to deny the permit. EPA’s

prior findings that the Fayetteville discharge would have

no detectable effect on downstream water quality and

would not contribute to any Oklahoma violations were

legally irrelevant, as was the actual cause of the viola-

tion in Oklahoma. As shown below, this draconian con-

struction of the Act radically alters the statutory scheme,

threatens to initiate a permit ban throughout much of

the nation, and manifestly warrants plenary review by

this Court.

A. A Ban On New Permits Upstream From Any Vio-

lation Of Relevant Water Quality Standards Is A

Radical Departure From The Statutory Scheme.

The Tenth Circuit’s holding represents a radical de-

parture from the framework and language of the CWA.

Congress never intended nor envisioned that an existing

water quality violation would preclude new discharges.

At the time the 1972 Amendments were enacted, many

of the nation’s waterways were severely polluted,’’ yet

Congress never suggested that this would require a ban

on new permits for affected waterways. Rather, Con-

gress adopted a fundamentally different approach to

gradually achieve acceptable water quality on polluted

waterways by imposing effluent limitations on point

sources that were to become progressively more stringent

with time.’* Although more stringent effluent limitations

17 See S. Rep. No. 414, 92d Cong., Ist Sess. 7 (1971), reprinted

in 1972 U.S. Code Cong. & Admin. News. 3668, 3674.

1* As originally enacted, the 1972 Amendments required point

sources other than publicly owned treatment works to achieve

the “best practicable control technology currently available” by

July 1, 1977, and the “best available technology economically

achievable” by July 1, 1983. Pub. L. No. 92-500, § 2, 86 Stat. 816,

21

are required for new sources under Section 306, there

is no discussion in the CWA or its legislative history

of a ban on new permits when there is an existing vio-

lation of water quality standards.

The Tenth Circuit itself admitted it could find no “ex-

plicit imprimatur” in the CWA for holding that the

Act requires a ban on new permits upstream from a

violation of a relevant water quality standard. App. 81a.

In fact, the court’s holding is directly inconsistent with

Section 303(d) of the Act, the only provision in the

CWA that addresses existing violations of water quality

standards. Section 303(d) requires states with existing

violations to establish maximum daily loads designed to

bring affected water segments into compliance.'® How-

ever, Section 303(d) does not require states to imme-

diately establish maximum daily loads for all waterways

with existing violations. Instead, a state may establish

maximum daily loads according to the state’s own prior-

ity ranking of its waterways, with no fixed deadline for

completing the process for all waterways. CWA § 303

(d)(1)(A). Moreover, even if a maximum daily load

has been established for a waterway, new discharges or

increased discharges from existing sources would be al-

lowed provided they are included in the maximum daily

load allocation. Thus, Section 303(d) gives source states

a flexible and gradual mechanism for establishing priori-

ties and, when the time is appropriate, allocating equit-

ably the burden of reducing discharges. The Tenth Cir-

cuit’s immediate and absolute ban is fundamentally in-

consistent with this statutory scheme.

844-45 (1972). The timetable for achieving the latter standard

was subsequently relaxed to March 31, 1989. See CWA § 301(b).

A maximum daily load is the total quantity of effluent that

can be discharged into a waterway per day without exceeding the

relevant water quality standards.

22

B. The Tenth Circuit’s Holding Requiring A Ban On

New Permits Will Have Enormous, Detrimental

Consequences Across The Nation.

The Tenth Circuit’s imposition of a construction ban

upstream from an existing violation of a relevant water

quality standard will severely disrupt economic develop-

ment in many states, the construction plans for many

new and proposed facilities, and the NPDES permitting

programs of EPA and state agencies. A significant pro-

portion of the nation’s waterways have existing viola-

tions of water quality standards. According to EPA’s

most recent National Water Quality Inventory, thirty

percent of the river and stream miles that have been

assessed nationwide were found to be not fully in com-

pliance with applicable water quality standards.” Be-

cause the Tenth Circuit’s decision would effectively block

any new discharge that is upstream from a segment with

such a water quality violation, the decision has the po-

tential to block all new permits on a large majority of

the nation’s waterways. Consequently, the Tenth Cir-

cuit’s decision may essentially impose a freeze on new

industrial development and economic growth in many re-

gions of the country.

The Tenth Circuit’s holding is also inconsistent with

EPA’s current administration of the CWA, and will

cause serious disruption of the permitting program of

EPA and the states. In considering the permit applica-

tion of a point source discharge under the CWA, EPA

and state permitting agencies usually do not make an

assessment of other discharges into the waterway or of the

downstream water quality. Rather, a permitting agency

looks at each source individually to determine if that dis-

charge will cause a water quality violation at the point

of discharge.”

20 EPA, National Water Quantity Inventory, 1988 Report to

Congress (EPA 440-4-90-003, Apr. 1990), at 1-3.

21 See U.S. General Accounting Office, Water Pollution: More

EPA Action Needed to Improve the Quality of Heavily Polluted

Waters (GAO/RCED-89-38, Jan. 1989). Technically, a point

23

Under the new rule announced by the Tenth Circuit,

a permitting agency will be required to assess water

quality on all downstream segments to determine if there

are existing violations of relevant water quality stand-

ards. This requirement will present enormous practical

problems for permitting agencies, especially since the

water quality of only twenty-nine percent of the nation’s

stream miles has been evaluated.” Thus, the Tenth Cir-

cuit’s decision will impose tremendous informational and

administrative burdens on permitting agencies, which

will be compelled to obtain data on downstream water

quality and incorporate this information into the decision-

making process for permit applications. The complexity

and delays involved in permit decisions will be increased

dramatically.

C. The Tenth Circuit’s Ambitious Construction Con-

flicts With The Appropriate Role For A Reviewing

Court Under The Chevron Decision.

The Tenth Circuit exceeded the proper role of a court

by unilaterally extending the statutory scheme to impose

a ban on new permits upstream from a water quality

violation. This type of fundamental policy determination,

which will have enormous consequences for the nation, is

the appropriate domain of Congress and not the courts.

A ban on new sources upstream from an existing viola-

tion of a relevant water quality standard is analogous to

the construction ban required in non-attainment areas

under the Clean Air Act. 42 U.S.C. § 7410(a) (2) (1)

(1988). However, the construction ban required by the

Clean Air Act was enacted by Congress, whereas the

Tenth Circuit acted without Congressional authorization

source’s compliance with water quality standards is usually meas-

ured at the edge of a designated area called a “mixing zone” that

allows some dilution of the effluent. See EPA, Water Quality Stand-

ards Handbook (Dec. 1983).

*2 EPA, supra note 20, at 1. Furthermore, for the 29%- of stream

miles that have been evaluated, the reliability of the available

data is questionable because of the inconsistent and imprecise

methods that have often been used to assess water quality. Id. at 3.

24

or support in imposing a construction ban for non-attain-

ment areas under the CWA. Furthermore, the construc-

tion ban imposed by the Tenth Circuit is much more ex-

treme than the ban required by the Clean Air Act. The

Tenth Circuit’s ban is much broader because it extends

beyond the area of non-attainment of ambient standards

to also ban any new source upstream from an existing

violation. In addition, the Tenth Circuit’s ban is much

more absolute than the equivalent requirement under the

Clean Air Act. That Act permits the construction and

operation of a new source in a non-attainment zone if it

offsets its new emissions with an equivalent reduction of

emissions from other sources in the same area. 42 U.S.C.

§ 7503 (1988). The Tenth Circuit’s decision allows no

comparable exception; the ban on new permits is absolute.

The Tenth Circuit’s imposition of this ban thus clearly

exceeds the appropriate role for a reviewing court under

this Court’s decision in Chevron, U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 842-43

(1984). Under the first step of Chevron, a reviewing

court must look to see whether Congress has directly

spoken to the precise question at issue. Jd. As discussed

above, Congress did expressly address the problem of

existing violations of water quality standards by enact-

ing Section 303(d). Furthermore, as the Tenth Circuit

itself acknowledged, App. 8la, Congress did not enact

any express language requiring a ban on new permits

when there is an existing water quality violation. The

court of appeals, therefore, could find no expression of

Congress’ intent sufficient under Chevron to support im-

posing its permit ban.

Moreover, even if Congress’ intent were not clear, the

second step in the Chevron standard requires a review-

ing court to defer to EPA’s interpretation of the statute

provided it is reasonable. As the Agency responsible for

administering the CWA, EPA has never suggested that

an existing violation of water quality standards auto-

matically requires an absolute ban on new permits, espe-

cially for discharges that will have no detectable effect on

25

water quality.” Instead of deferring to EPA’s long-

standing interpretation of the CWA, the court adopted

a novel construction of the Act which will dramatically

change the substance and administration of the statute

in violation of the court’s responsibility under Chevron.

Il. THE TENTH CIRCUITS DECISION ON THESE

ISSUES THREATENS TO CAUSE WIDESPREAD

DISRUPTION AND REQUIRES IMMEDIATE RE-

VIEW.

Every publicly and privately owned facility that

wishes to begin discharging into the nation’s waters

must obtain an NPDES permit. This includes municipal

treatment plants, business establishments and manufac-

turers, and many federal agencies and projects. The fa-

cilities themselves and the technology developed to meet

CWA requirements represent enormous investments, and

the administrative process for obtaining permits often

takes years. The Tenth Circuit’s resolution of the two

issues presented here, especially in combination, creates

intolerable uncertainty about the law governing pend-

ing and future proceedings and necessitates immediate

review by this Court.

A. The Tenth Circuit’s Holding On The Applicability

Of Downstream State Standards Will Cause Enor-

mous Confusion And Unfairness In NPDES Per-

mitting Decisions.

The Tenth Circuit’s holding that EPA must rigidly ap-

ply the federally-approved water quality standards of

*3In some instances, of course, Section 303(d) of the Act and

EPA’s implementing regulations can restrict discharges from new

sources. 40 C.F.R. § 122.4(i) (1990); see page 21 supra. These

restrictions only apply after a state has established a total maximum

daily load for a particular waterway, and even then, only in accord-

ance with the priorities and allocation established by that state.

Moreover, these restrictions would only apply to new sources that

actually “cause or contribute to” a water quality violation. 40 C.F_R.

§ 122.4(i) (1990). Oklahoma has not established any such plan

for the Illinois River, and this gradual mechanism bears no re-

semblance to the Tenth Circuit’s compulsory and immediate ban.

26

downstream states when considering the permit applica-

tions of upstream facilities has the potential to create

tremendous uncertainty for ongoing and future permit

proceedings. Most streams and rivers in the lower forty-

eight states cross state boundaries or flow into interstate

waterways. Therefore, thousands of facilities that dis-

charge into interstate waterways or their tributaries will

have to assure compliance with the water quality stand-

ards of all downstream states when applying for or re-

newing their discharge permits.”

Under the Tenth Circuit’s decision, permit proceedings

will become much more complicated and uncertain as

permitting agencies and the applicants struggle with the

myriad of different state standards that may apply to a

single discharge. The “important goals of efficiency and

predictability in the permit system” recognized by this

Court in Ouellette, 479 U.S. at 496, will be undermined

by the patchwork of inconsistent state water quality

standards that will apply to each permit. Additional evi-

dence may be required concerning the impact on down-

stream states, and the new rules announced by the Tenth

Circuit will require a different outcome in many proceed-

ings.**

Under the court’s decision, EPA will no longer be al-

lowed the flexibility to carefully balance and accommo-

date the competing interests of upstream and down-

stream states and ensure that the burden of controlling

pollution is allocated equitably between states. Down-

24 According to statistics provided by EPA, there are currently

over 75,000 outstanding NPDES permits in the nation. Since

each permit is only valid for a maximum of five years, over 15,000

new or renewal permit applications must be processed each year.

25 The Tenth Circuit’s holding on the extra-territorial applica-

tion of state water quality standards is already being applied

nationwide. For example, EPA’s Chief Judicial Officer recently

concluded that the Tenth Circuit’s decision required him to deny

an evidentiary hearing requested by a North Carolina facility

that was being forced to comply with Tennessee water quality stand-

ards. Champion International Corp., Canton Mill, NPDES Appeal

90-1, at 4-5 (Sept. 5, 1990).

2 ea

27

stream states may attempt to use the Tenth Circuit’s

rigid decision to restrict unfairly the discharges from

upstream states.** The court’s decision will allow down-

stream states to impose their standards on upstream

states, and will also create the potential for downstream

states that have polluted their own waterways (or wish

to reserve discharge rights for their own residents) to

obstruct unfairly or discriminate against industrial ac-

tivities in upstream states.” Furthermore, the uncer-

tainty about the extra-territorial application of water

quality standards created by the Tenth Circuit’s decision

will likely inflame many existing or potential water qual-

ity disputes between states and invite regional economic

warfare in many areas of the country.

B. The Combined Natienwide Effect Of The Tenth

Circuit’s Two Holdings Will Be Devastating.

The nationwide impact of the Tenth Circuit’s decision

will be staggering when the court’s first holding on the

interstate application of water quality standards is com-

bined with the second holding prohibiting new discharges

upstream from a pre-existing violation of a relevant

water quality standard. If the Tenth Circuit’s decision

was applied nationally, for example, a slight violation of

Louisiana’s water quality standards near the mouth of

the Mississippi River would likely require that no new

facility that discharges the offending pollutant could be

permitted in the entire watershed of the Mississippi

26 See supra note 14.

27 The provision in the 1987 amendments to the CWA that au-

thorizes EPA to treat an Indian tribe as a state for purposes of

setting water quality standards will compound all of these prob-

lems. CWA §518. In applying the Tenth Circuit’s holding, a

discharging facility will have to comply with the water quality

standards of downstream Indian tribes as well as downstream

states, creating further potential for confusion and disputes. EPA

has already approved state status for at least one Indian tribe,

and numerous others will be seeking approval.

River and all its tributaries, an area that comprises a

substantial portion of the continental United States.”

Furthermore, the Tenth Circuit’s decision will imme-

diately create uncertainty about the ability to obtain per-

mits for projects that are now under construction or de-

velopment. Municipalities and other local authorities

need a high level of confidence that new facilities they

begin to construct will be permitted, since they cannot

afford to waste scarce resources and spend years in ad-

ministrative proceedings and litigation. Similarly, the

uncertainty and risk of a rigid ban on new discharges

will disrupt plans for new economic and industrial de-

velopment, especially in regions of the country vulnerable

to downstream objections.

Finally, if the decision of the Tenth Circuit is allowed

to stand, opponents of new permits will now have a much

greater reason to demand an evidentiary administrative

proceeding to challenge almost any new or modified dis-

charge permit. Under EPA’s regulations, any interested

party can contest a final permit decision by requesting an

evidentiary hearing.” The request must set forth ‘‘ma-

terial issues of fact relevant to the issuance of the per-

mit” before it can be granted by EPA.”

In the past, evidentiary hearings have primarily been

requested by permit applicants rather than permit oppo-

nents.*' However, under the Tenth Circuit’s decision, op-

ponents of almost every new permit will easily be able to

set forth “material issues of fact” to challenge an ap-

28 The only criterion for triggering the ban, under the Tenth

Cireuit’s decision, is that some amount of the offending pollutant

would have to reach the downstream segment that is experiencing

a water quality violation.

2940 C.F.R. § 124.71 (1990). Most states provide for a similar

administrative appeal process to challenge state-issued NPDES

permits.

30 40 C.F.R. § 124.75(a) (1) (1990).

81 See Zemansky & Zerbe, Adjudicatory Hearings as Part of the

NPDES Permit Process, 9 Ecol. L.Q. 1, 4 (1980).

- ae eR ee ne a

— a en ee

29

proved permit on the grounds that there is a downstream

violation of a relevant water quality standard. Under

the Tenth Circuit’s decision, the permit applicant and the

permitting agency that issued the permit would have the

burden of proof to demonstrate that there are no exist-

ing downstream water quality violations.** Given the

prevalence and uncertainty of water quality violations, it

will be very difficult for any permit to be approved under

the Tenth Circuit’s new rule.

Even if the source and permitting agency do succeed

in making the requisite showing at the evidentiary hear-

ing that there are no relevant downstream water quality

violations, the delays and burdens imposed on the

agency’s permitting process by the increased requests for

evidentiary hearings will be extensive. Statistics regard-

ing past evidentiary hearings, which primarily dealt with

much less complex issues than the existence of water

quality violations, indicate that the hearing process fre-

quently delays permitting decisions by three years or

more.’ As this Court has previously recognized, any sig-

nificant increase in the number of evidentiary hearings

“would raise serious questions about the EPA’s ability to

administer the NPDES program.” Costle v. Pacific Legal

Foundation, 445 U.S. 198, 215 (1980). EPA and states

with approved permitting programs will quickly be over-

whelmed by a substantially increased number of eviden-

tiary administrative proceedings under the CWA as a re-

sult of the Tenth Circuit’s decision.”

%2 According to the Tenth Circuit, the “permit applicant always

bears the burden of persuading the Agency that a permit authoriz-

ing pollutants [to] be discharged should be issued and not denied

and this burden does not shift.” App. 72a n.49 (quoting the ALJ’s

Initial Decision, App. 102a).

83 Zemansky & Zerbe, supra note 31, at 16.

% The Tenth Circuit’s decision will also provide fertile grounds

for petitions for judicial review of NPDES permits, and is likely

to substantially increase the number of such cases that courts must

decide. Parties dissatisfied with EPA’s final permit decisions can

30

Only plenary consideration by this Court can avoid

these immediate and severe consequences of the Tenth

Circuit’s decision and provide permitting states, EPA,

permit applicants and lower courts the necessary guid-

ance for interpreting the relevant provisions of the CWA.

CONCLUSION

For the foregoing reasons, a writ of certiorari should

issue to review the judgment of the Court of Appeals for

the Tenth Circuit.

Respectfully submitted,

Winston Bryant Edward W. Warren, P.C.

Attorney General David G. Norrell

Mary Stallecup (Counsel of Record)

OFFICE OF THE ATTORNEY Gary E. Marchant

GENERAL KIRKLAND & ELLIS

200 Tower Building Suite 1200

4th & Center 655 Fifteenth Street, N.W.

Little Rock, AR 72201 Washington, D.C. 20005

James N. McCord (202) 879-5070

CITY OF FAYETTEVILLE °

207 West Center Street Walter R. Niblock

Fayetteville, AR 72701 THE Nistock Law Fins

’ P.O. Drawer 818

Anne Roberts Bobo Fayetteville, AR 72702

A.D.P.C. & E.

P.O. Box 8913 Nancy L. Hamm

Little Rock, AR 72219-8913 HAMM LAW FIRM

193 West Lafayette

February 8, 1991 Fayetteville, AR 72702

challenge the decisions in a U.S. Circuit Court of Appeals. CWA

§ 509(b) (1). Interested persons may also be able to file citizen

suits to challenge EPA’s failure to perform the non-discretionary

duty to deny permits when there is an existing violation of a rele-

vant downstream water quality standard. CWA § 505(a) (2).