Petitioners Brief — Arkansas v. Oklahoma
Supreme Court brief1992
Ask Donna
What actually matters in this document.
Text
Supreme Court of the United States
OCTOBER TERM, 1990
STATE OF ARKANSAS, et al.,
me Petitioners,
STATE OF OKLAHOMA, et al.,
Respondents.
ENVIRONMENTAL PROTECTION AGENCY,
Petitioner,
V.
STATE OF OKLAHOMA, et al.,
Respondents.
On Writs of Certiorari to the
United States Court of Appeals
for the Tenth Circuit
BRIEF OF PETITIONERS
In No. 90-1262
WINSTON BRYANT EDWARD W. WARREN, P.C.
Attorney General DAVID G. NORRELL
Mary B. STALLCUP (Counsel of Record)
ANGELA §S. JEGLEY GARY E. MARCHANT
OFFICE OF THE ATTORNEY DAWN P. DANZEISEN
GENERAL KIRKLAND & ELLIs
200 Tower Building Suite 1200
4th & Center 655 Fifteenth St., N.W.
Little Rock, AR 72201 Washington, D.C. 20005
(202) 879-5070
May 31, 1991
(Additional Counsel Listed On Inside Front Cover)
SD
WILSON - Epes Printinc Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001
fal
JAMES N. McCorD
CITY OF FAYETTEVILLE
207 West Center Street
Fayetteville, AR 72701
ANNE ROBERTS BoBo
A.D.P.C. & E.
P.O. Box 89138
Little Rock, AR 72219-8913
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
QUESTIONS PRESENTED
The Clean Water Act proyides 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 appeals
erred by holding that the Clean Water Act imposes two
further conditions on the issuance of NPDES permits.
The specific questions raised by the court’s decision and
this case 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 District,
petitioners in No. 90-1262 before this Court, were all
cross-petitioners in the court of appeals.
The U.S. Environmental Protection Agency (EPA)
was the respondent in the court of appeals and is the
petitioner in No. 90-1266 before this Court.
The State of Oklahoma, the Oklahoma Scenic Rivers
Commission, the Oklahoma Pollution Control Coordinat-
ing Board, and Save The Illinois River (STIR) were
petitioners in the court of appeals, and the Oklahoma
Wildlife Federation was an intervenor on the side of
Oklahoma. These Oklahoma parties are all respondents
in both cases before this Court.
All of the Arkansas parties appearing as petitioners
are governmental and public entities and have no subsid-
iaries, affiliates, or parent corporations. See Supreme
Court Rule 29.1.
ee
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ....................-.-..-20-.---c--ecceeee i
PARTIES TO THE PROCEEDINGS 0. ii
, NE RE iii
SEI TTEIIED rrrcveccescneceesssinnonansoreciassnunsesuses v
ah cinctincinirrsncipniainaitiieaicinenineesdteneemeninnrenets 1
esi cpnecelseteiephieneceennielbiepigmenininaanin 2
IE iiaiadanscinnivcanscitinmnnecs Sihennads sinticeaniedieontaibvibiiatn 2
STATUTE INVOLVED ............. i ee ee 2
STATEMENT OF THE CASE ..QW002.2.n..22..2eneeeeeeeeeneeee 3
Factual Background ................. scbidahddeaaiiadeinincuumtsiibabanieiae 4
The Agemey Proceedings ...........................ccececo--ee-c<---0 5
The Court of Appeals’ Decision ...............-.. 7
EE GE IIIS cctesicittiittininccttncnceesttnniinninnneonen 9
PETE SE Te ED 11
I. THE CLEAN WATER ACT DOES NOT
MAKE DOWNSTREAM STATE STANDARDS
BINDING IN PERMIT DECISIONS FOR
OUT-OF-STATE FACILITIES ........ 11
A. Congress Specifically Granted Permitting
Agencies Discretion In Their Consideration
Of Downstream State Standards... 12
1. The Provisions Congress Enacted To
Govern Interstate Water Quality Dis-
putes Do Not Require Automatic Com-
pliance With The Standards Of Down-
ee 13
2. The Act’s Legislative History _Fyrther .
Confirms That Congress Did Not Intend
To Make Downstream State Standards
Binding On Out-Of-State Sources _....... 19
(iii)
iv
TABLE OF CONTENTS—Continued
Page
38. Making A Downstream State’s Stand-
ards Applicable To Upstream State
Sources Would Disrupt The Statutory
Scheme And Congress’ Careful Balance
Among State Interests ............. 24
B. EPA Properly Exercised Its Discretion Un-
der The Clean Water Act In This Case And
Decided Not To Impose Additional Restric-
tions On The Fayetteville Discharge _.......... 31
II. EVEN IF THE STANDARDS OF A DOWN-
STREAM STATE WERE APPLICABLE TO
A FACILITY IN AN UPSTREAM STATE,
THE FAYETTEVILLE DISCHARGE COM-
PLIES WITH THE RELEVANT OKLAHOMA
ED ccinntidllaninnieisintintesiticntentinetiioemmcenne 33
A. The Clean Water Act Allows EPA To Con-
clude That Sources Having No Detectable
Impact On Water Quality Would Comply
With Downstream Standards 34
B. The Court Of Appeals Should Have Deferred
To EPA’s Interpretation Of The Oklahoma
Water Quality Standards 2... 36
C. The Specific “Errors” Identified By The
Tenth Circuit Were Harmless And Do Not
Affect The Validity Of EPA’s Decision........ 38
Ill. THE CLEAN WATER ACT DOES NOT RE-
QUIRE A BAN ON NEW PERMITS UP-
STREAM FROM A PRE-EXISTING WATER
EEE SHRINE secnctenneniesccenstintesintinmnienesicame 42
III “aidecsisinjiatethsaibisbinisencienadancedenicest seancneleannia’ ailineads 50
v
TABLE OF AUTHORITIES
Cases Page
Baltimore Gas & Electric Co. v. Natural Resources
Defense Council, Inc., 462 U.S. 87 (1983) —........ 42
Bowles v. Seminole Rock & Sand Co., 325 U.S.
eS 0 37
Champion Int’l Corp. v. EPA, 648 F. Supp. 1390
EEE SS SS EEE See 36
Chevron, U.S.A., Inc. Vv. Natural Resources De-
fense Council, Inc., 467 U.S. 837 (1984) —.......... 9, 45
City of Milwaukee V. Illinois, 451 U.S. 304 (1981)... 26, 29
Costle v. Pacific Legal Foundation, 445 U.S. 194
REE OF Pf ARCS te a CRs SO 16
District of Columbia v. Schramm, 631 F.2d. 854
I a 14
EPA V. California ex rel. State Water Resources
Control Bd., 426 U.S. 200 (1976) 000. ll
Gardebring V. Jenkins, 485 U.S. 415 (1988) 37
Homestake Mining Co. Vv. EPA, 477 F. Supp. 1279
EEE ENS ay a ees 6 a SAR 25
Illinois v. City of Milwaukee, 406 U.S. 91 (1972) . 13, 29
Illinois v. City of Milwaukee, 731 F.2d 403 (7th
Cir. 1984), cert. denied, 469 U.S. 1196 (1985)... 19, 26
International Paper Co. Vv. Ouellette, 479 U.S. 481
RIE IE SE A RR AR AA RP ee ce passim
Kansas V. Colorado, 206 U.S. 46 (1907) ...000..... 31
Mianus River Preservation Comm’n Vv. EPA, 541
Ee Se 14
Missouri V. Illinois, 200 U.S. 496 (1906) _.... sho 13
National Wildlife Federation v. FERC, 912 F.2d
ES A ES a 19
New York v. New Jersey, 256 U.S. 296 (1921). 13
Ohio Vv. Wyandotte Chemicals Corp., 401 U.S. 493
(1971)... Pt ESSE Ae 22D BA Reed Rao 5 13
Save the Bay, Inc. v. EPA, 556 F.2d 1282 (5th
Cir. 1977) . ms 14
South-Central Timber Dev., Ine. v. . Wunnicke, ‘467
U.S. 82 (1984) asa am OIG LR eS LS ERD 28, 31
State v. Champion Int'l Corp., 709 S.W.2d 569
(Tenn. 1986), cert. granted and remanded, 479
FRET Ee ete cea ee a 19
Udall v. Tallman, 380 U.S. 1 (1965)
vi
TABLE OF AUTHORITIES—Continued
Statutes and Regulations Page
Clean Water Act, as amended, 33 U.S.C. §§ 1251-
EERE a aa ca passim
Section 101 (b), 33 U.S.C. § 1251 (b) =e 25
Section 103 (a),33 U.S.C. § 1253(a) 21
Section 208, 33 U.S.C. § 1286 0 47
Section 208 (a) (3), 33 U.S.C. § 1286 (a) (3)...... 48
Section 208 (b) (2), 33 U.S.C. § 1286 (b) (2)... 48
Section 301, 33 U.S.C. § 1311 000. 1 3
Section 301 (b), 33 U.S.C. § 1311(b) 17
Section 301 (b) (1), 33 U.S.C. § 1311(b) (1) ..4, 11, 46
Section 301(b) (1) (C), 33 U.S.C. § 1811(b)
ESET ae ee 17
Section 303, 33 U.S.C. § 1813 000. passim
Section 303 (c), 33 U.S.C. § 1813(c) 20
Section 303 (d), 33 U.S.C. § 1313(d) 47
Section 303(d) (1) (A), 33 U.S.C. § 1813(d)
SEES 47
Section 304(1),33 U.S.C. § 1314(1). 48
Section 306, 33 U.S.C. § 1316... PS 49
Section 401, 33 U.S.C. § 1841... 3, 5, 35, 37
Section 401 (a), 33 U.S.C. § 1341(a) 15, 37
Section 401 (a) (1), 33 U.S.C. § 1341 (a) (1) 16, 17,38
Section 401 (a) (2), 33 U.S.C. § 1341 (a) (2) .... passim
Section 401 (b), 33 U.S.C. § 1341(b). 15
Section 402, 33 U.S.C. § 1342 a 3
Section 402(a),33 U.S.C.§ 1342(a) 15, 16
Section 402 (a) (3), 33 U.S.C. § 1842(a) (3) 3, 15,19
Section 402 (b), 33 U.S.C. § 1342(b) passim
Section 402 (b) (5), 33 U.S.C. § 1342 (b) (5) passim
Section 402 (d) (2), 33 U.S.C. § 1842(d) (2). 14
Section 402 (d) (3), 33 U.S.C. § 1842(d) (3). 20
Section 510, 33 U.S.C. § 1870... 3, 25, 26, 27
Section 510(2), 33 U.S.C. § 1870(2). 26
Section 518, 33 U.S.C. § 1877. _. ee Oe 23
40 C.F.R. § 124.85 (a) (2) ..................00...0................ om 40
40 C.F.R. § 124.85(a) (3) Fae a. SPARED 40
I atlidititacineedinttnnesaceventcssscsnnsesinvensnostvestansonsis 47
vii
TABLE OF AUTHORITIES—Continued
Federal Water Pollution Control Act Amendments,
Pub. L. No. 91-224, § 102, 84 Stat. 91 (1970)...
Pub. L. No. 100-4, § 506, 101 Stat. 77 (1987) .........
28 U.S.C. § 1254(1)....... OE AS SL eae
42 U.S.C. § 7410 (a) (2) (1) .....-----.------ecccceneeeeeneeeeeeeees
AES
Legislative Ma‘ erials
111 Cong. Rec. 8671 (Apr. 28, 1965) (statement
Tv nincnnincccinsacincnieianemnasipuenintiionicadaunes
111 Cong. Rec. 8677 (Apr. 28, 1965) (statement
0 eee
111 Cong. Rec. 8678 (Apr. 28, 1965) (statement
OI i icsnsicieessesinidinsideanabiliphiaetihdaatiaasibtianeeanenn
117 Cong. Rec. 38,805 (Nov. 2, 1971) (statement
of Sen. Randolph), reprinted in 2 Senate Comm.
on Public Works, 93d Cong., Ist Sess., A Legis-
lative History of the Water Pollution Control
Act Amendments of 1972, at 1272 (1973) (Leg.
I a eel
118 Cong. Rec. 10,219 (Mar. 27, 1972) (statement
of Rep. Terry), reprinted in 1 Leg. Hist. of 1972,
ERS eee eee entero een tt San end eee
118 Cong. Rec. 10,234 (Mar. 27, 1972) (statement
of Rep. Roe), reprinted in 1 Leg. Hist. of 1972,
EES SE SES Co, SOE Ore Sac eee CC
118 Cong. Rec. 10,663 (Mar. 28, 1972) (statement
of Rep. Terry), reprinted in 1 Leg. Hist. of
RIE Tn SR SS, a
118 Cong. Rec. 10,795 (Mar. 29, 1972) (statement
of Rep. Robison), reprinted in 1 Leg. Hist. of
AES RE SE a
118 Cong. Rec. 33,712 (Oct. 4, 1972) (statement of
Sen. Tunney), reprinted in 1 Leg. Hist. of 1972,
SR NMS A RE es Si RS er
118 Cong. Rec. 33, 752 (Oct. 4, 1972) (statement
of Rep. Jones), reprinted in 1 Leg. Hist. of
1972, at 288 .............. pS. SEI EE a ee
21
21
28
19
30
20
21
41
41
viii
TABLE OF AUTHORITIES—Continued
118 Cong. Rec. 33,761 (Oct. 4, 1972) (statement
of Rep. Wright), reprinted in 1 Leg. Hist. of
lo
133 Cong. Rec. 999 (Jan. 8, 1987) (statement of
Sen. Hatch), reprinted in 1 Senate Comm. on
Env’t & Pub. Works, 100th Cong., 2d Sess.,
Legislative History of the Water Quality Act
of 1987, at 496 (1988) (Leg. Hist. of 1987) ...... ;
133 Cong. Rec. 1000 (Jan. 8, 1987) (memorandum
to Rep. Udall), reprinted in 1 Leg. Hist. of 1987,
SRE CNR Were ro Se Oe rhe Sana er oe
133 Cong. Rec. 1282 (Jan. 14, 1987) (memoran-
dum to Rep. Udall), reprinted in 1 Leg. Hist. of
a
133 Cong. Rec. 1589 (Jan. 21, 1987) (statement
of Rep. Morrison), reprinted in 1 Leg. Hist. of
a I Oe ee © 2 eee Oem
133 Cong. Rec. 2505 (Feb. 3, 1987) (House debate
on veto override), reprinted in 1 Leg. Hist. of
EEE EE RRS eee cnet =e a
133 Cong. Rec. 2795 (Feb. 4, 1987) (Senate debate
on veto override), reprinted in 1 Leg. Hist. of
RE SR a epee a at ea
54 Fed. Reg. 89,099 (1980) ................................0........
H.R. Conf. Rep. No. 1004, 99th Cong., 2d Sess.
(1986), reprinted in 2 Leg. Hist. of 1987, at
ESTE ey Renner ow po RR oe aOR
H.R. Rep. No. 127, 91st Cong., Ist Sess. (1969),
reprinted in 1970 U.S. Code Cong. & Admin.
News 2691 ................: SRE I, Seer ene
H.R. Rep. No. 911, 92d Cong., 2d Sess. (1972),
reprinted in 1 Leg. Hist. of 1972, at 753
S. 1128, 99th Cong., Ist Sess. §117 (1985), re-
printed in 2 Leg. Hist. of 1987, at 1546...
S. Conf. Rep. No. 1236, 92d Cong., 2d Sess.
(1972), reprinted in 1 Leg. Hist. of 1972, at
Beh ES SS RS see
S. Rep. No. 50, 99th Cong., Ist Sess. (1985), re-
printed in 2 Leg. Hist. of 1987, at 1420 0.00...
Page
20
23
24
24
23
24
17, 25
19, 27
ix
TABLE OF AUTHORITIES—Continued
S. Rep. No. 414, 92d Cong., Ist Sess. (1971),
reprinted in 2 Leg. Hist of 1972, at 1415 _..... 11, 28, 45
Water Quality Act of 1987, Veto Message of the
President (Jan. 30, 1987), reprinted in 1 Leg.
ey es i telemnsneiaennete 28
Miscellaneous
Brief for the United States as Amicus Curiae,
Scott v. City of Hammond, cert. denied, 496
U.S. 1196 (1985) (No. 84-21) ........2200000002202200.2-.. 30
Comment of U.S. Dept. of the Interior, Fish and
Wildlife Service, on NPDES draft permit Ak-
004978-6, to U.S. EPA, Region 10 (Feb. 12,
Stich did chitacinecicsesiceettedccddaimendiibatinesaminela teal ieieiaaie 43
EPA, In the Matter of: City of Waskom, Texas,
NPDES Appeal No. 90-18 (Jan. 28, 1991)... 43
Memorandum: Revision of Water Quality Stand-
ards and Implementation Plans Under § 303 of
the Federal Water Pollution Control Act (Feb.
3, 1975), incornorated in In Re Bethlehem Steel
Corporation, EPA General Counsel Op. No. 58
(Mar. 29, 1977) ........ MET 1d BSEPL DAME aa 27
[1 State Water Laws] Env’t Rep. (BNA) 611:0111
CEE SE ee a ae 14
Supreme Court Rule 29.1 00.00... sat de ii
IN THE
Supreme Court of the United States
OCTOBER TERM, 1990
No. 90-1262
STATE OF ARKANSAS, et al.,
7 Petitioners,
STATE OF OKLAHOMA, et al.,
Respondents.
No. 90-1266
ENVIRON MENTAL PROTECTION AGENCY,
Petitioner,
Vv.
STATE OF OKLAHOMA, et al.,
Respondents.
On Writs of Certiorari to the
United States Court of Appeals
for the Tenth Circuit
BRIEF OF PETITIONERS
In No. 90-1262 ,
This case presents two fundamental questions affecting
the regulation of the nation’s waterways under the Clean
Water Act: first, whether downstream state standards
must be applied when making permit decisions for sources
in upstream states, and second, whether the inability or
failure of a waterway to attain existing state standards
triggers a mandatory ban on new discharges into that
waterway and its tributaries. The U.S. Court of Appeals
for the Tenth Circuit adopted a rigid construction of the
Act on both questions, which effectively eliminates the dis-
cretion of the permitting agencies that administer the Act.
2
The Arkansas parties ' submit that this construction con-
flicts with Congress’ affirmative assignment of responsi-
bility to EPA and state permitting agencies for resolu-
tion of these questions on a case-by-case basis. The Tenth
Circuit therefore misinterpreted the Act and exceeded its
role as a reviewing court by overturning EPA’s permit
decision in this case. )
OPINIONS BELOW
The Tenth Circuit’s decision is reported at 908 F.2d
595 (1990) and reprinted at Ark. P.A. la-86a. The four
decisions by the Administrative Law Judge and the Chief
Judicial Officer for the U.S. Environmental Protection
Agency (EPA), which upheld the issuance of the permit
in this case, are reprinted at Ark. P.A. 93a-107a, 108a-
12la, 122a-144a, and 145a-153a. The permit is reprinted
at J.A. 66-87.
JURISDICTION
The court of appeals entered its judgment on July 11,
1990. Ark. P.A. at 9la-92a. The court denied timely filed
petitions for rehearing and rehearing en banc on October
11, 1990. Ark. P.A. at 87a-88a. The Tenth Circuit
nevertheless granted a stay of mandate on October 31,
1990 pending the timely filing of petitions for certiorari.
Ark. P.A. at 89a. This Court granted certiorari on
April 1, 1991, and the mandate remains stayed. The
jurisdiction of this Court is invoked under 28 U.S.C.
§ 1254(1).
STATUTE INVOLVED
The statute involved here is the Federal Water Pollu-
tion Control Act, commonly referred to as the Clean
'The Arkansas parties include the State of Arkansas, the
Arkansas Department of Pollution Control & Ecology, the City
of Fayetteville, Arkansas, and the Beaver Water District. The
Appendix to the petition for certiorari filed by these parties is
cited here as “Ark. P.A.,” and the Joint Appendix filed by all
the parties as “J.A.”
3
Water Act (CWA), 33 U.S.C. §§ 1251-1387.2 The pro-
vision enacted in 1972 specifically to address the rele-
vance of downstream state standards in the permitting
process is section 402(b)(5). This section applies di-
rectly to permitting agencies in the thirty-nine states
now authorized to administer their own permit programs
and requires those agencies:
To insure that any State (other than the permit-
ting State), whose waters may be affected by the
issuance of a permit may submit written recom-
mendations to the permitting State (and the Ad-
ministrator) with respect to any permit application
and, if any part of such written recommendations
are not accepted by the permitting State, that the
permitting State will notify such affected State (and
the Administrator) in writing of its failure to ac-
cept such recommendations together with its reasons
for so doing.
Section 402(a) (3), which applies where EPA acts as
the permitting agency, incorporates this same provision
by specifying that EPA’s program “shall be subject to
the same terms, conditions and requirements as apply
to a State permit program.” Other relevant provisions
of the CWA, including sections 301, 303, 401 and 510,
are reprinted in Ark. P.A. at 154a-171a.
STATEMENT OF THE CASE
In the 1972 Amendments to the Clean Water Act,
Congress created the National Pollution Discharge Elim-
ination System (NPDES) and required every point
source that discharges effluent into the waters of the
United States to obtain a discharge permit. CWA § 402.
Each applicant for the NPDES permit must meet two
sets of conditions. First, each discharger must comply
with national uniform technology-based effluent limita-
tions that have been established by EPA for different
2For 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 Ark. P.A. at 154a-171a.
4
categories and classes of discharges. CWA § 301(b) (1).
Second, each discharger must ensure compliance with the
applicable ambient water quality standards that have
been established by the source state and then approved
by EPA. CWA § 303. An NPDES permit translates
both of these conditions into a single set of effluent limi-
tations that a discharging facility must meet.
Factual Background. The City of Fayetteville, like
most major municipalities, operates a wastewater treat-
ment plant that collects and treats the wastewater pro-
duced by industrial, commercial, and residential facilities.
Until recently, Fayetteville relied upon a plant built some
twenty years ago that used older technology and had be-
come responsible for fish kills and frequent violations of
Arkansas’ water quality standards on the White River.
To correct this situation, Fayetteville decided to build a
new, state-of-the-art plant incorporating the most sophis-
ticated treatment technology that was currently avail-
able.*
After conducting numerous studies and approximately
forty public hearings, Fayetteville chose a split-flow dis-
charge design that would divide the facility’s effluent into
two equal discharge streams. Half of the effluent would
be discharged into the White River, which flows into
Beaver Reservoir approximately ten miles downstream
from the point of discharge. Beaver Reservoir is the
source of drinking water for most of Northwest Ar-
kansas. The remaining effluent would be discharged into
an unnamed creek, which flows two miles later into
Mud Creek, which flows three miles more to Clear Creek,
which then flows another thirteen miles before reaching
the Illinois River. Twenty-two miles further downstream,
3’ The new Fayetteville plant, which cost $40 million to build,
uses a combination of biological phosphorous removal and nitrifica-
tion, rapid sand filtration, post-aeration, dechlorination, and ef-
fluent storage, in addition to conventional types of treatment.
Even the Oklahoma Department of Health has acknowledged that
the Fayetteville plant would provide the most thorough and com-
plete treatment available and would result in no noticeable impact
on water quality. See Ark. P.A. at 135a.
and approximately forty miles downstream from the point
of the Fayetteville discharge, the Illinois River crosses
the border into Oklahoma.‘
The Agency Proceedings. In response to the application
Fayetteville submitted for its new facility, EPA published
a draft NPDES permit in July 1985 and held a public
hearing on the proposed permit in August 1985.° Based
on the evidence presented at the hearing, EPA issued a
permit to the Fayetteville facility in November 1985.°
In approving this permit, EPA found that the plant’s
proposed split-flow discharge would comply with the
federally-approved Arkansas water quality standards on
both the White and Illinois Rivers.
Moreover, the Agency found that the discharge would
have no adverse impact on the water quality of Oklahoma,
and therefore the section 401 requirement to notify an
affected state and hold a public hearing on the interstate
effects of the proposed permit was not triggered. See Ark.
P.A. at 100a. The selection of the split-flow design for
the Fayetteville facility minimizes any adverse environ-
mental impact by utilizing the natural assimilative ca-
pacity of both the White and Illinois River basins.’
* Fayetteville chose this split-flow discharge because it minimized
the overall environmental impact of the discharge, as explained
below, and because it has the virtue of returning effluent to the
same river basin generated the waste. Over half of the population
that sends its wastewater to the Fayetteville facility lives in the
Illinois River basin.
SEPA was the permitting agency because Arkansas had not
been delegated permitting authority at the time of the original
permit application. Arkansas’ permit program has since been
approved by EPA.
® The permit imposes very stringent limitations on the effluent
that may be discharged by the facility, and also provides for even
stricter limits if an ongoing study of the Illinois River shows a
need for additional restrictions. See J.A. 84.
™“Assimilation” refers to the natural mechanisms in a water-
way which remove nutrients such as phosphorous and nitrogen
from the water, and includes processes such as sedimentation and
incorporation into living organisms.
While discharging the entire effluent into either river
basin would likely overwhelm a single river’s assimilative
mechanisms during some periods, the low concentration
of nutrients in the effluent will be almost completely
absorbed if the discharge is split between the two river
basins.
Oklahoma and Arkansas have had a number of disputes
over interstate waterways, however, and Oklahoma re-
quested an evidentiary hearing in December 1985 to
challenge the discharge into the Illinois River tribu-
taries. EPA’s Regional Administrator rejected most of
Oklahoma’s objections on their face, but did grant Okla-
homa the opportunity to contest—at a discretionary hear-
ing—EPA’s determination that the Fayetteville discharge
would not violate Oklahoma’s water quality standards.
The parties then submitted extensive expert testimony,
and EPA’s Administrative Law Judge (ALJ) conducted
a three-day evidentiary hearing on this issue. After con-
sidering all of the evidence, the ALJ issued an initial de-
cision upholding the permit. Ark. P.A. at 95a. The
ALJ found that any adverse effect of the Fayetteville
discharge on Oklahoma water quality “would be de
minimis at most” and that the discharge would not have
any “undue impact” on Oklahoma waters. /d. at 103a.
In response to Oklahoma’s appeal, EPA’s Chief Judicial
Officer (CJO), acting for the Administrator, determined
that the proper legal standard to apply in this case was
whether the Fayetteville discharge would “cause an
actual detectable violation of Oklahoma water quality
standards.” Ark. P.A. at 117a (emphasis in original).
Thus, while the CJO did agree to require compliance
with the Oklahoma standards in this case, the CJO rec-
ognized that an assessment of detectability was necessary
for determining “compliance” under EPA’s regulations
and interpretation of the Act. Jd. at 117a n.16. If the
effect of the Fayetteville discharge on Oklahoma water
quality was “not expected to be actually detectable or
measurable,” the ALJ should uphold the permit. /d.
7
On remand, the ALJ applied this legal test and con-
cluded that the Fayetteville discharge would comply
with each relevant Oklahoma water quality standard.
Ark. P.A. at 122a. In weighing all the evidence pre-
sented in the pre-filed testimony and at the hearing, the
ALJ rejected much of the testimony by Oklahoma’s wit-
nesses because it was based on incorrect assumptions
and was substantially retracted or undermined during
cross-examination. See, e.g., Ark. P.A. at 13la, 136a.
Based on the record in its entirety, the ALJ found that
the Fayetteville discharge would have no detectable effect
on Oklahoma water quality, would not in any way affect
public health, and would not violate the Oklahoma stand-
ards for nutrients, aesthetics, dissolved oxygen, metals,
or beneficial use limitations. Ark. P.A. at 126a-143a.
In fact, the ALJ found that the Fayetteville effluent was
so clean that it would actually improve several water
quality parameters in the Illinois River in Oklahoma.*
The ALJ’s findings were upheld by the CJO on appeal by
the Oklahoma parties. Ark. P.A. at 15la. The permit
then went into effect, and the plant started operating
under its approved permit in January 1989.
The Court of Appeals’ Decision. Still unhappy with
EPA’s permit decision, the Oklahoma parties sought ju-
dicial review in the U.S. Court of Appeals for the Tenth
Circuit. A protective petition filed by the Arkansas par-
ties in the Eighth Circuit was also transferred to the
Tenth Circuit, and that court ultimately reversed EPA’s
permit decision. On the first question presented here,
the Tenth Circuit interpreted the Clean Water Act as
* See, e.g., Ark. P.A. at 139a (discharge will result in net im-
provement of dissolved oxygen levels). Moreover, the evidence
showed that the extremely low concentration of phosphorus in the
Fayetteville effluent (the pollutant of greatest concern at the hear-
ing) would be almost completely assimilated before reaching the
Oklahoma border. Thus, because it will contribute proportionally
more water than phosphorous, the Fayetteville discharge would
actually result in a net decrease in the piosphorous concentration of
the Illinois River as it enters Oklahoma.
requiring sources in upstream states to comply with any
and all federally approved water quality standards of
downstream states. Ark. P.A. at 43a. In reaching this
conclusion, the court found that the statutory language
and legislative history did not clearly reveal Congress’
intent. Jd. at 18a-19a, 42a-48a. Nevertheless, EPA had
decided to require compliance in this case with the Okla-
homa standards, and based on its view of the Act as a
whole, the Tenth Circuit concluded that mandating com-
pliance with downstream state standards was “reason-
able and consistent with Congress’s purposes in enacting
the CWA.” Id. at 19a.
The court sharply disagreed with EPA’s application
of this requirement, however. In: particular, the Tenth
water quality standards, and held that EPA was not
entitled to any discretion in interpreting or applying
those standards. Ark. P.A. at 45a-53a. Moreover, the
court summarily rejected the CJO’s interpretation of the
Act and regulations as providing that, so long as the
Fayetteville discharge would not cause any “detectable”
violation of the downstream Oklahoma standards, the
discharge here would “comply” as a matter of federal
law with those standards. See id. at 53a; supra pages
6-7. When combined with the court’s decision that down-
stream state standards must be applied, this construction
of the statutory scheme eliminates all flexibility for EPA
and state permitting agencies and instead grants down-
stream states an unfettered veto power over permits in
upstream states, regardless of how extreme or unfair the
application of the downstream standards might be.
In the holding giving rise to the second question pre-
sented, the Tenth Circuit then ruled that another require-
ment, which the court found implicit in the statutory.
scheme though not addressed by the parties, absolutely
precluded issuance of the permit in this case. Specifically,
the court held that any pre-existing violation of a down-
stream water quality standard triggers a mandatory ban
on new permits for upstream discharges that contain the
oe OE we
same pollutant. Ark. P.A. at 53a-54a, 79a-80a. This per-
mit ban even precludes discharges that would have no
detectable effect on downstream water quality, provided
some amount of the effluent, albeit undetectable, is pre-
dicted to reach the downstream segment with the exist-
ing violation.
Since EPA had made no findings regarding this new
requirement, the court undertook its own “examination”
of the record and found that Oklahoma’s anti-degrada-
tion policy was being violated before the Fayetteville
facility began discharging. Jd. at 55a-64a. Given the
court’s first holding that these Oklahoma standards apply
to upstream Arkansas facilities, the Tenth Circuit there-
fore concluded that this pre-existing downstream viola-
tion operated as an absolute ban on the new Fayetteville
discharge, irrespective of the fact that Fayetteville did
not cause or contribute to the existing violation, and
regard'ess of how stringently Fayetteville controls its
effluent.
SUMMARY OF ARGUMENT
The court of appeals went far beyond the proper role
of a reviewing court in deciding both of the questions
presented. As this Court has emphasized in a series of
recent decisions, reviewing courts must respect the plain
statutory language and the expressed intent of Congress.
See, e.g., Chevron, U.S.A. Ine. v. NRDC, Inc., 467
U.S 837, 842-43 (1984). When Congress has spoken,
courts are not free to ignore that direction. Furthermore,
even on issues where Congress’ intent is ambiguous,
courts are not free simply to impose their own interpre-
tation, regardless of whether they believe that interpreta-
tion would best serve the statutory purposes. Rather, the
agencies delegated this responsibility by Congress must
resolve such questions in the first instance and reconcile
the competing policies underlying most statutory schemes.
Id.
Congress has spoken to both of the questions presented
here, and it provided a different answer than the Tenth
10
Circuit. On the first issue, Congress specifically gave
permitting agencies the discretion to make permit appli-
cants satisfy a downstream state’s water quality stand-
ards. A source state’s standards are directly applicable;
a downstream state’s standards are neither applicable
nor wholly irrelevant. Rather, Congress intended for
permitting agencies to decide on a case-by-case basis
whether to impose additional conditions on a discharger,
in light of the downstream state standards and a facil-
ity’s impact on that state’s water quality. By inter-
preting the Clean Water Act to always require unswerv-
ing compliance with a downstream state’s standards, and
eliminate all discretion for permitting agencies, the Tenth
Circuit more than ignored Congess’ intent. It adopted a
construction foreclosed by that intent and the specific
provisions Congess enacted to address the issue. See
infra Section I.
The Tenth Circuit’s decision on the second issue is even
more severely flawed. As demonstrated by several pro-
visions in the Act that the court never once mentioned,
Congress intended to afford broad latitude to the states
whose waterways had not yet attained the applicable
water quality standards. Over time, those waterways
must be brought into compliance, but individual states
determine the timetable, set the priorities, and have au-
thority to allocate the burden across all dischargers. The
Tenth Circuit’s imposition of an immediate and absolute
permit ban, based on its view of the statutory purposes,
thus conflicts irreconcilably with Congress’ intent. More-
over, even if the court somehow thought Congress’ intent
was ambiguous, the responsibility for developing a non-
attainment “remedy” rested with EPA, and EPA’s cur-
rent administration of the Act also precludes the court’s
remedy. See infra Section III.
The Tenth Circuit therefore lacked any basis for over-
turning the Fayetteville permit. Indeed, even if a down-
stream state’s standards were legally applicable to out-
of-state sources, the findings EPA made in this case ade-
quately supported issuance of the permit. As part of its
11
permit decision, EPA determined that the Fayetteville
facility would comply with the Oklahoma standards, be-
cause the discharge would not have any detectable effect
on Oklahoma’s water quality. This determination comes
well within the Agency’s discretion. Moreover, the “er-
rors” found by the court in EPA’s permit decision are
demonstrably harmless and could not have affected the
ultimate conclusion to grant the permit. See infra Sec-
tion II. Accordingly, the Tenth Circuit’s decision should
be reversed, the Oklahoma challenges dismissed, and the
Fayetteville permit upheld.
ARGUMENT
I. THE CLEAN WATER ACT DOES NOT MAKE
DOWNSTREAM STATE STANDARDS BINDING IN
PERMIT DECISIONS FOR OUT-OF-STATE FACILI-
TIES.
When Congress rewrote the Clean Water Act in 1972
and created the NPDES permit system, it expected the
program would be administered principally by the states.
Accordingly, Congress created a regulatory structure that
maintained individual state responsibility, yet also con-
tained provisions that would force progressive improve-
ment in the quality of the nation’s waters. As the pri-
mary mechanism to improve water quality, Congress re-
lied on technology-based effiuent limitations that would
be set by EPA and periodically upgraded to reflect im-
provements in control technology.’
As a supplementary mechanism, Congress also retained
a requirement that states adopt and enforce ambient
®CWA §301(b) (1). See S. Rep. No. 414, 92d Cong., 1st Sess. 7
(1971), reprinted in 2 Senate Comm. on Public Works, 93d Cong.,
Ist Sess., A Legislative History of the Water Pollution Control
Act Amendments of 1972, at 1415, 1425 (1973) (hereinafter Leg.
Hist. of 1972) (the 1972 Amendments propose “a major change in
the enforcement mechanism of the federal water pollution control
program from water quality standards to effluent limits”). See also
EPA V. California ex rel. State Water Resources Control Bd., 426
U.S. 200, 205 n.12 (1976).
12
water quality standards. CWA § 303. To promote na-
tionwide uniformity in these standards, Congress directed
EPA to review the standards adopted by states and en-
sure that the standards meet-federal minimum require-
ments. In light of the possibility that some adjoining
states might still adopt inconsistent standards, however,
Congress created a specific procedure in the 1972 Amend-
ments for resolving interstate disputes over water quality.
In creating this procedure, Congress chose not to enact
a rigid rule making downstream state standards auto-
matically applicable or a rule making them wholly irrele-
vant. Rather, the procedure Cengress enacted requires
permitting agencies to decide on a case-by-case basis
whether additional effluent limitations are necessary to
protect the waters of downstream states. The Tenth
Circuit thus misconstrued the Act by mandating strict
compliance with downstream state standards, and as
shown in Section I.B below, the court otherwise lacked
any statutory basis for overturning EPA’s finding that
no additional limitations were needed here to protect
Oklahoma waters.
A. Congress Specifically Granted Permitting Agencies
Discretion In Their Consideration Of Downstream
State Standards.
Congress’ unambiguous intent that permitting agencies
be given case-by-case discretion in their consideration of
downstream state standards is demonstrated by the
specific statutory provisions Congress enacted to govern
interstate water quality disputes. The Clean Water Act’s
legislative history and its other provisions striking a
careful balance among state and federal powers further
compel this interpretation of Congress’ intent and the
Act. See infra pages 18-31. Indeed, in /nternational
Paper Co. v. Ouellette, 479 U.S. 481 (1987), this Court
has already rejected once the contrary interpretation
adopted by the Tenth Circuit, and Congress also rejected
that interpretation when it decided against amending the
Act in 1987.
13
1. The Provisions Congress Enacted To Govern
Interstate Water Quality Disputes Do Not Re-
quire Automatic Compliance With The Stand-
ards Of Downstream States.
The central provision in the Clean Water Act for
resolving interstate water quality disputes is section
402(b) (5). This section is the controlling provision both
when the source state and when EPA has permitting
authority. Section 402(b) (5), which was included as
part of the NPDES permit program enacted in the 1972
CWA Amendments, provides for a consultative mechanism
which requires permitting agencies to consider the stand-
ards of downstream states, but does not require the auto-
matic application of those standards.’ Under this
scheme, EPA is given ultimate authority to determine on
a case-by-case basis whether a permit should contain addi-
tional conditions in light of downstream state water
quality standards.
As this Court is all too well aware, interstate disputes
about water quality antedated the permit program estab-
lished by the 1972 CWA Amendments."' Recognizing that
these disputes involve sensitive issues of federalism and
state sovereignty, Congress enacted specific provisions as-
suring that the legitimate interests of both upstream and
downstream states would be considered. In the event
that states cannot resolve their differences, the Act makes
EPA the federal arbiter to ensure that disputes are re-
solved equitably.
10 By providing special provisions that specifically address only
the application of downstream standards, it is clear that Congress
intended permitting agencies to treat downstream standards dif-
ferently than source state standards. By treating the two types
of standards identically, the Tenth Circuit’s holding contradicts
Congress’ scheme.
11 See, e.g., Illinois v. City of Milwaukee, 406 U.S. 91 (1972);
Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493 (1971) ; New York
v. New Jersey, 256 U.S. 296 (1921); Missouri v. Illinois, 200 U.S.
496 (1906).
14
Section 402(b) (5), the specific provision intended
by Congress to resolve interstate disputes, applies di-
rectly when the source state acts as the delegated per-
mitting authority, which Congress expected to become the
norm over time.'? Under section 402(b) (5), the permit-
ting agency in the source state must provide an oppor-
tunity for any “affected” state to submit written recom-
mendations with respect to a proposed permit. Neither
this provision nor any other section of the Act, however,
imposes an affirmative obligation on the permitting
agency to accept the downstream state’s recommenda-
tions. Instead, section 402(b) (5) recognizes that the
state permitting agency may well decline to accept those
recommendations, and in that event, expressly requires
only that the permitting agency notify the downstream
state of its reasons for not accepting that state’s recom-
mendations.
Furthermore, section 402(d)(2) provides that if the
source state decides not to accept a downstream state’s rec-
ommendations, EPA is authorized but not required to veto
the permit. EPA’s decision on whether to veto a permit
is completely discretionary with the Agency, and a deci-
sion to not veto a permit is not subject to judicial review.
District of Columbia v. Schramm, 631 F.2d 854, 861
(D.C. Cir. 1980)."* Thus, when downstream and source
states differ over whether a proposed discharge should be
permitted, section 402(b) (5) requires both states to ar-
ticulate the reasons for their positions. The source state
12 Thirty-nine states have now been delegated permitting au-
thority, and thus section 402(b) directly applies to most NPDES
permits. [1 State Water Laws] Env’t Rep. (BNA) 611:0111 (Mar.
1990).
13 See also Mianus River Preservation Comm’n V. EPA, 541 F.2d
899, 907-09 (2d Cir. 1976) (the decision to not veto a permit is
committed to the agency’s “almost unfettered discretion”); Save
the Bay, Inc. v. EPA, 556 F.2d 1282, 1294-95 (5th Cir. 1977)
(“the legislative history makes very clear that Congress intended
EPA to retain discretion to decline to veto a permit even after
the agency found some violation of application guidelines’).
15
agency then makes the decision whether to impose addi-
tional limitations in the permit, and EPA can review the
written justifications for each state’s position to deter-
mine whether the source state has adequately protected
the interests of the downstream state.
Congress provided the same discretionary authority for
situations where EPA acts as the permitting agency,
by incorporating section 402(b) (5) into section 402(a).
In particular, section 402(a) (3) provides that NPDES
permits issued by EPA “shall be subject to the same
terms, conditions, and requirements” as apply to state
permits under section 402(b). Together, sections 402(a)
and 402(b) serve as the source of authority for both
EPA and state agencies to issue permits under the
NPDES system, and this focal provision expressly treats
downstream state standards as a relevant, but not neces-
sarily binding, consideration.
Although the provisions that Congress retained in 1972
from the predecessor legislation are less probative, the
same intent to focus on source state requirements and
allow discretionary treatment of downstream state stand-
ards is reflected in section 401(a) of the Act, which Con-
gress adopted in 1970 before creating the NPDES per-
mit program."* Specifically, section 401(a)(2) requires
EPA to determine whether the approval of a federal per-
mit or license by a federal agency may “affect” the water
quality of a downstream state. If EPA makes such a
threshold determination, section 401(a)(2) requires
_ EPA to notify the downstream state and then requires
the federal permitting authority to consider any recom-
mendations by an objecting state, along with any other
evidence presented at a hearing. Significantly, this entire
process applies only if EPA makes a threshold determi-
nation that the discharge may adversely affect the qual-
ity of a downstream state’s waters, at which point the
federal agency becomes ultimately responsible for consid-
14 Federal Water Pollution Control Act Amendments, Pub. L. No.
91-224, § 102, 84 Stat. 91, 108 (1970) (enacting § 21(b) (2)).
16
ering all the recommendations and determining whether
additional effiuent restrictions are needed to protect
the downstream state’s water quality.”®
Congress provided further evidence in section 401
(a) (1), a corollary 1970 provision, of its intent to focus
on source state requirements and give permitting agen-
cies more discretion regarding downstream state stand-
ards. This section requires the federal permitting au-
thority to obtain a certification from the source state that
the proposed discharge would comply with its require-
ments, including water quality standards. CWA § 401
(a)(1). If Congress also had intended strict and auto-
matic compliance with the standards of a downstream
state, it no doubt would have required certification from
that state as well. Instead, however, Congress purpose-
fully rejected multi-state certification in favor of requir-
ing certification only from the source state when it
selected the section 401(a)(1) procedure and rejected a
competing proposal to require certification from both
the source state and any other affected state.’* Thus,
15 To the extent that section 401(a)(2) and section 402(b) (5)
elaborate these requirements differently, section 402 is obviously
controlling since it applies specifically only to NPDES permits and
the language of section 401 was adopted in 1970, prior even to the
creation in 1972 of the NPDES permitting program. Furthermore,
since section 402(b) (5) unambiguously gives state permitting agen-
cies discretion in considering downstream state standards, and
Section 401(a) (2) does not apply to the state agencies, it would be
highly anomalous to read section 401(a)(2) as requiring strict
compliance when EPA acts as the permitting agency under section
402(a). Such a reading would make the substantive outcome of
permit proceedings depend on the “fortuitous circumstances” of
whether the source state had been delegated permitting authority
by EPA. See Costle v. Pacific Legal Foundation, 445 U.S. 194, 197
(1980) (“we are unwilling to read the Act as creating such a seem-
ingly irrational bifurcated system”). Moreover, it is inconceivable
that Congress intended to give federal permitting authorities less
discretion than source state permitting agencies when considering
downstream standards.
16 Compare H.R. Rep. No. 127, 91st Cong., Ist Sess. (1969),
reprinted in 1970 U.S. Code Cong. & Admin. News 2691, 2710
17
while section 401(a)(1) does require certification and
strict compliance with the standards of the source state,
Congress deliberately required federal permitting agen-
cies only to consider the recommendations of a down-
stream state.
This Court has already recognized in International
Paper Co. Vv. Ouellette, 479 U.S. 481 (1987), that sections
402(b) and 401(a)(2) are the key provisions enacted by
Congress to resolve interstate water quality disputes.
Furthermore, this Court expressly relied upon the inter-
pretation of those provisions outlined above in holding that
the Act preempted the application of downstream state law
against out-of-state sources.'’ The Court explained that
in enacting sections 402(b) and 401(a) (2), Congress
provided a specific mechanism for resolving interstate
(requiring certification from “the affected State or States”) with
Pub. L. No. 91-224, § 102, 84 Stat. 91, 108 (1970) (requiring
certification only “from the State in which the discharge origi-
nates’’).
17Oklahoma has contended, and the Tenth Circuit concluded,
that section 301(b)(1)(C), rather than section 402(b) (5), is the
controlling statutory provision for deciding whether a permitting
agency must automatically apply the standards of a downstream
state. See Ark. P.A. at 19a-23a; Okl. Br. Opp. at 16-17. However,
section 301(b) is a general timing provision that describes the
deadlines for meeting the statutory goals, as the heading of the
subsection itself indicates. Moreover, unlike section 402(b) (5),
this provision does not specifically address the issue of interstate
water quality disputes. Contrary to the Tenth Circuit’s assumption,
the word “any” in “any State law or regulations,” as used in section
301(b) (1) (C), modifies “law or regulations,” rather than “States.”
The word therefore does not in any way signify that this phrase
includes the standards of downstream states. Similarly, the phrase
“applicable water quality standard” appearing later in this subsec-
tion does not even begin to address the question of whether a down-
stream state’s standards are, in fact, “applicable.” The Tenth Cir-
cuit’s assumption to the contrary again simply begs the question. The
legislative history of the CWA expressly states that Congress in-
tended “applicable” water quality standards only to mean those
standards which regulate the types of pollutants that are con-
stituents of the effluent from a particular discharger. H.R. Rep.
No. 911, 92d Cong., 2d Sess. 121 (1972), reprinted in 1 Leg. Hist.
of 1972, at 753, 8°8.
18
water quality disputes, which gives EPA and the source
state the discretion necessary to impose more stringent
effluent limitations when required to adequately protect
downstream water quality:
The CWA carefully defines the role of both the
source and affected States, and specifically provides
for a process whereby their interests will be con-
sidered and balanced by the source State and EPA.
This delineation of authority represents Congress’
considered judgment as to the best method of serving
the public interest and reconciling the often compet-
ing concerns of those affected by the pollution.
479 U.S. at 497.
As this Court further recognized, sections 402(b) and
401(a)(2) of the CWA make “it clear that affected
States occupy a subordinate position to source States in
the federal regulatory program.” Jd. at 491. A down-
stream state’s water quality standards, while relevant,
are not binding and may in EPA’s discretion be applied
or moderated as necessary to serve the overall public
interest :
While source States have a strong voice in regulat-
ing their own pollution, the CWA contemplates a
much lesser role for States that share an interstate
waterway with the source .... Even though it may
be harmed by the discharges, an affected State only
has an advisory role in regulating pollution that
originates beyond its borders. ... [A]n affected
state does not have the authority to block the issuance
of the permit if it is dissatisfied 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 wndue impact on
interstate waters.
Id. at 490-91 (emphasis added). Until the decision be-
low, all other federal and state appellate courts have uni-
'’The Tenth Circuit attempted to avoid this Court’s construc-
tion of the relevant provisions of the Clean Water Act in Ouellette
19
formly adopted this same construction of the relevant
provisions in the CWA.”
2. The Act’s Legislative History Further Confirms
That Congress Did Not Intend To Make Down-
Stream State Standards Binding On Out-Of-State
Sources.
The legislative history of the Clean Water Act further
demonstrates Congress’ specific intent that EPA and
state permitting agencies have discretion to determine
on a case-by basis whether the water quality and
standards of a downstream state warrant imposing addi-
tional permit conditions.
First, while Congress saw relatively little need in 1972
to amplify the clear meaning of sections 402(b) (5) and
402(a) (3), every explanation it did provide mirrored the
statutory language requiring permit agencies to con-
sider—but not necessarily accept—an objection based on
downstream state standards.” Similarly, Congress con-
sistently chose permissive language—such as “may then
object” or “can veto”—to describe EPA’s role in review-
ing a state permit that does not require compliance
by characterizing it as dictum. Ark. P.A. at 26a. This depreciation
of the Supreme Court’s decision is not only dangerous, but wrong.
This Court’s construction of sections 402(b) and 401(a) (2) were an
integral and essential part of its holding that these provisions con-
flicted with, and hence preempted, the application of the common
law of a downstream state against a facility in an upstream state.
Ark. Reply Br. at 5.
19 See, ¢.g., Illinois v. City of Milwaukee, 731 F.2d 403 (7th
Cir. 1984), cert. denied, 469 U.S. 1196 (1985) (downstream state’s
common law and water quality standards do not apply to out-of-
state source); National Wildlife Fed’n v. FERC, 912 F.2d 1471,
1483-84 (D.C. Cir. 1990) ; State v. Champion Int’l Corp., 709 S.W.2d
569 (Tenn. 1986), cert. granted and remanded, 479 U.S. 1061 (1987)
(same).
2 See, e.g., S. Conf. Rep. No. 1236, 92d Cong., 2d Sess. 139
(1972), reprinted in 1 Leg. Hist. of 1972, at 281, 322; 118 Cong.
Rec. 10,219 (Mar. 27, 1972) (statement of Rep. Terry), reprinted
in 1 Leg. Hist. of 1972, at 388-89.
20
with downstream state standards.** Indeed, Congress
even added a provision that expressly allows EPA to
waive its right to review’ and object to such a permit.
CWA § 402(d) (3).
The language Congress used to explain the standard
for EPA’s exercise of its veto power also conveys Con-
gress’ intent that, far from expecting EPA to slavishly
follow downstream state standards, EPA should make
its own evaluation of whether the permitting state acted
reasonably in deciding not to condition a permit on com-
pliance with the downstream standards. For example,
Congress explained that the Act authorizes (but does not
require) EPA to veto a permit that would result in “un-
acceptable effects” on the waters of a downstream state
or when the complaint of the downstream state is “rea-
sonable.” * This guidance confirms that Congress granted
state permitting agencies and EPA broad discretion to
weigh all factors, and consider all interests, in deciding
whether to approve a permit with interstate effects. Sig-
nificantly, nowhere did Congress state, either in connec-
tion with these provisions or the other 1972 amendments,
that it intended to make downstream state standards ap-
plicable directly or to require strict compliance with such
standards.
Second, the legislative history demonstrates that Con-
gress intended to satisfy potential downstream state con-
cerns by enacting an alternative approach. In particular,
Congress attempted to prevent interstate disputes from
arising in the first place by requiring EPA to review
state water quality standards and ensure that they meet
federal minimum requirements. CWA § 303(c). In other
words, to improve the quality of interstate waterways
and protect the interests of downstream states, Congress
21 See, e.g., 118 Cong. Rec. 33,761 (Oct. 4, 1972) (statement of
Rep. Wright), reprinted in 1 Leg. Hist. of 1972, at 262; 118 Cong.
Rec. 10,663 (Mar. 28, 1972) (statement of Rep. Terry), reprinted
in 1 Leg. Hist. of 1972, at 581.
22 Jd. at 262, 581.
21
focussed primarily on forcing source states to adopt ade-
quate standards. Thus, Congess specifically intended to
address downstream state concerns by a fundamentally
different approach than allowing downstream states to
impose their standards extra-territorially on sources in
upstream states.
Congress had originally sought to implement this ap-
proach in 1965, when it first required states to adopt
ambient water quality standards for “interstate” water-
ways, which Congress thought were most likely to create
tensions between the states.** In 1972, Congress substan-
tially strengthened this requirement and reinforced its
selection of this alternative approach. Under the new
section 303, Congress bolstered EPA’s authority to review
state standards and even authorized EPA to promulgate
federal standards if a state failed to adopt adequate
measures. CWA § 303. Reflecting the same intent, sec-
tion 103(a) of the rewritten Act specifically directs EPA
to encourage interstate cooperation and the enactment of
“uniform State laws relating to the prevention, reduction,
and elimination of pollution.”
As a result, Congress expected that the federal ap-
proval process for state standards would “insure uni-
form water quality standards across the Nation” and
prevent states from creating pollution havens that may
impair the water quality of downstream states.** Since
an upstream state must adopt and enforce EPA-ap-
proved standards that will adequately protect water
23 Even in 1965, Congress explained that the purpose of requir-
ing states to adopt standards on interstate waterways was “to en-
sure that one State will not be polluting waters which also belong
to others.” 111 Cong. Ree. 8677 (1965) (statement of Rep.
Dwyer). The concern for protecting downstream states from out-
of-state discharges was also the primary motivation for Congress’
decision to require federal approval of state standards. See, e.g.,
111 Cong. Rec. 8671 (1965) (statement of Rep. Ottinger); id. at
8678 (statement of Rep. Dwyer).
24118 Cong. Rec. 10,795 (Mar. 29, 1972) (statement of Rep.
Robison), reprinted in 1 Leg. Hist. of 1972, at 727.
22
quality, the likelihood that a discharge in an up-
stream state would cause an unacceptable impairment of
a downstream state’s water quality is greatly dimin-
ished. Congress therefore intended to deal directly with
the possibility of insufficient upstream state standards,
rather than make downstream state standards applicable
to upstream sources through the permit process, as the
Tenth Circuit surmised.
A third aspect of the legislative history that demon-
strates Congress’ intent arose in connection with the
legislative review and reauthorization of the Clean Wa-
ter Act in 1987. During the 1987 reauthorization, Con-
gress considered two proposed amendments that were
directly relevant to the issue of the extra-territorial ap-
plication of downstream state standards. The first
was a proposal in the Senate to restrict EPA’s discre-
tion by requiring the Agency to veto any permit that
would cause a “substantial” downstream water quality
violation.” In describing the Senate provision, the Con-
ference Committee explained the difference between the
existing law and the proposed amendment :
Under current law, a State whose waters may be
affected by the issuance of a permit in another State
may submit recommendations to the permitting State.
If those recommendations are not accepted by the
25S. 1128, 99th Cong., Ist Sess. §117 (1985), reprinted in 2
Senate Comm. on Env’t & Pub. Works, 100th Cong., 2d Sess.,
Legislative History of the Water Quality Act of 1987, at 1546,
1603 (1988) (hereinafter Leg. Hist. of 1987). In requiring EPA
to veto only those permits that would result in “substantial” viola-
tions of downstream standards, the proponents of stricter compliance
with such standards recognized the potential for abuse inherent in a
scheme that required unbending compliance with downstream stand-
ards. The Senate Report accompanying the bill including this
amendment stated that the requirement that downstream violations
be substantial “assures that these provisions are not used by down-
stream States in an attempt tc alter the water quality standards of
upstream States in the absence of a significant pollution problem
emanating from upstream States.” S. Rep. No. 50, 99th Cong.,
lst Sess. 49 (1985), reprinted in 2 Leg. Hist. of 1987, at 1420, 1470.
23
permitting State, the Administrator may object to
the issuance of the permit.
The Senate bill requires the Administrator to de-
cide the merits of such a dispute. Where the permit-
ting State fails to accept the recommendations of the
downstream State, the Administrator shall determine
whether any substantial violation of a water quality
requirement (including any standard) or adverse
effect on the public health of the downstream State
would result from the issuance of the permit. If so,
the Administrator must object to the issuance of
the permit or provide specific modifications to the
permit.”*
Thus, the Senate amendment would have changed EPA’s
veto authority from a discretionary function to a manda-
tory duty, albeit only for “substantial” downstream
violations. The Senate amendment was not accepted by
the House, however, and it was rejected in Conference,
théreby preserving the “current law” that gives EPA
discretionary authority.
The other relevant amendment that Congress considered
in 1987, and did adopt, authorized EPA to treat Indian
tribes as states under the Clean Water Act.”” Several
Congressmen expressed concern that such an amendment
would cause intolerable confusion and uncertainty if the
Act were interpreted to require sources in one “state”
to comply with the standards of downstream “states.” **
Since Indian tribes would now be treated as “states” under
the amendment, the number of jurisdictions that would be
able to impose their standards on a particular facility
under this construction of the Act would increase
dramatically.
*6 H.R. Conf. Rep. No. 1004, 99th Cong., 2d Sess. 177 (1986),
reprinted in 2 Leg. Hist. of 1987, at 690, 866 (emphasis added).
*7 Pub. L. No. 100-4, § 506, 101 Stat. 77 (1987) (enacting CWA
§ 518). :
28 See, e.g., 133 Cong. Rec. 999 (Jan. 8, 1987) (statement of
Sen. Hatch), reprinted in 1 Leg. Hist. of 1987, at 496; 133 Cong.
Rec. 1589 (Jan. 21, 1987) (statement of Rep. Morrison), reprinted
in 1 Leg. Hist. of 1987, at 550.
24
In the floor debates addressing this amendment, both
the House and Senate proponents of the bill relied
extensively on a memorandum reassuring members of
Congress that neither the existing Act nor the 1987
Amendments required out-of-state sources to comply with
the standards of downstream states:
Where two or more states, sharing a common water
body, have plans approved by EPA with differing
standards of water quality, the Act does provide
mechanisms for resolving inter-state conflicts. How-
ever, there is nothing in the existing Act or in the
proposed amendments which gives EPA the power to
force one state to changes [sic] its approved water
quality standards or those valid activities done in
accordance with its plan in order to accommodate
the water quality needs of another state or states.”
Congress accordingly reauthorized and amended the Clean
Water Act in 1987 with the express understanding that a
downstream state cannot impose its standards on an out-
of-state source.”
3. Making A Downstream State’s Standards Appli-
cable To Upstream State Sources Would Disrupt
The Statutory Scheme And Congress’ Careful
Balance Among State Interests.
The Tenth Circuit’s interpretation of the Clean Water
Act conflicts, as shown above, with both the express
2183 Cong. Rec. 1000 (Jan. 8, 1987) (memorandum to Rep.
Udall), reprinted in 1 Leg. Hist. of 1987, at 551; 133 Cong. Rec.
1282 (Jan. 14, 1987) (memorandum to Rep. Udall), reprinted in
1 Leg. Hist. of 1987, at 395.
39 Congress had already decided to adopt the amendment treat-
ing Indian tribes as states, and to reject the proposed amendment
that would require EPA to veto permits that substantially impair
the waters of a downstream state, when the Ouellette decision was
announced. The 1987 Amendments were still pending, however,
because President Reagan had vetoed the Water Quality Act of
1987 in late January of 1987. Following this Court’s decision, both
houses of Congress voted to override the President’s veto in Feb-
ruary 1987, see 1 Leg. Hist. of 1987, at 359, 313, 341, and Congress
expressed no concern at that time about the Ouellette decision or
indicated any inclination to alter the result reached by this Court.
25
language in the controlling statutory provisions and
Congress’ unambiguous expression of its intent in the
legislative history. It also conflicts with the delicate
balance Congress created in the overall statutory struc-
ture among the responsibilities of source states, down-
stream states, and EPA. As shown below, the Tenth
Circuit’s decision to give downstream state standards
extra-territorial applicability cannot be reconciled with
the balance struck by Congress, and, in fact, threatens
to render the statutory scheme unworkable.
As one cornerstone of the 1972 Amendments, Congress
assigned primary responsibility to the individual states
for implementing the Act’s programs. In so doing, Con-
gress preserved the sovereignty of each state to adopt
and enforce the regulations for sources and waters
within its own borders. See, e.g., CWA §$101(b) (the
Act preserves the “primary responsibilities and rights of
States”). Although Congress circumscribed the states’
minimum authority to adopt standards lower than the
requirements set by EPA, it recognized that some states
might wish to adopt more stringent requirements for
their own sources.
In deference to the principle of state sovereignty, there-
fore, Congress enacted a “savings clause” in section 510
that allows states to impose more demanding stand-
ards on their own industries and municipalities.“ More-
over, as construed by EPA and reviewing courts, section
510 precludes EPA from disapproving the adoption
of more stringent standards by a state, even if the Agency
considers the state standards to be unnecessarily or un-
reasonably stringent. See, e.g., 54 Fed. Reg. 39,099
(1989); Homestake Mining Co. v. EPA, 477 F. Supp.
1279, 1284 (D.S.D. 1979).
The sovereignty rationale underlying section 510 ends
at the state line, however, and in no way suggests that
one state’s decision to adopt more stringent standards
51 See e.g., H. Rep. No. 911, 92d Cong., 2d Sess. (1972), reprinted
in 1 Leg. Hist. of 1972, at 753, 823.
26
should be binding on sources in other states.® Indeed,
according to its own terms, section 510 limits the appli-
cation of stricter standards adopted under this section
to in-state sources, by explicitly protecting the right of
each state to exercise exclusive jurisdiction over its own
waters, except as expressly provided by the Act. CWA
§ 510(2).%
In light of this statutory language and purpose, this
Court has consistently construed section 510 as authoriz-
ing a state to apply stricter standards only to in-state
sources. In City of Milwaukee v. Illinois, 451 U.S. 304
(1981), this Court explained that section 510 authorizes
a state to “adopt more stringent limitations through state
administrative processes [or through state common law |
and apply them to in-state dischargers.” Id. at 328 (em-
phasis added). Again in the Ouellette decision, this Court
confirmed that a state’s authority to regulate sources
under section 510 is limited “to discharges flowing di-
rectly into a State’s own waters, i.e., discharges from
within the State.” 479 U.S. at 481 ( emphasis in origi-
nal) .*
*2 Interstate water quality disputes usually arise when a down-
stream state on an interstate waterway adopts a stricter water
quality standard under section 510 that exceeds the federal mini-
mum requirements. The Tenth Circuit’s decision fails to recognize
that there are federally-approved state standards for each state.
CWA § 303. The issue before this Court is not whether to enforce
a federally-approved standard, it is rather a question of which one
of the federally-approved standards should control—that of the
source state or that of the downstream state. Based on this Court’s
rationale ir Ouellette, the standards of the source state should con-
trol when there are conflicting federally-approved state standards.
See 479 U.S. at 491. .
‘83 Section 510(2) states that “nothing in this chapter shall .. .
be construed as impairing or in any manner affecting any right or
jurisdiction of the States with respect to the waters (including
boundary waters) of such States.”
** Lower courts have consistently reached the same conclusion.
See, e.g., Illinois v. City of Milwaukee, 731 F.2d 403, 413 (7th
Cir. 1984), cert. denied, 469 U.S. 1196 (1985) (“In the light of
the structure of [the CWA] ... and in the light of the conflict
and confusion which could result from any different construction, we
27
The Tenth Circuit’s interpretation of the Act would
simply nullify Congress’ intent and ethis Court’s prior
construction of section 510. In the Tenth Circuit’s view,
EPA’s approval of a section 510 standard justifies this
extraordinary step, apparently on the theory that EPA
approval transforms the state standard into federal law.
Ark. P.A. at 18a, 14a & 14a n.5. But this theory ignores
the fact that EPA approval of a section 510 standard is
automatic; the Agency cannot disapprove a standard on
the ground that it is too restrictive. See supra page 25.
The court’s theory also ignores EPA’s longstanding judg-
ment that despite federal approval, a state standard re-
mains state law, rather than federal law.®* The legisla-
tive history of the CWA similarly makes clear Congress’
understanding that standards adopted under section 510
constitute state law and are not standards imposed
under the Clean Water Act, much less federal standards.**
In addition to conflicting with section 510, the Tenth
Cireuit’s decision would deprive source state agencies of
the ability to administer the Act in the manner Congress
intended. As this Court emphasized in Ouellette, Con-
gress made each state accountable for setting its own
standards based on local conditions, the impact of differ-
conclude that [section 510] 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 limitations upon discharges in another
state.”’).
85 Memorandum: Revision of Water Quality Standards and Imple-
mentation Plans Under § 303 of the Federal Water Pollution Con-
trol (Feb. 3, 1975), incorporated in In Re Bethlehem Steel Cor-
poration, EPA General Counsel Op. No. 58 (Mar. 29, 1977). Other
grounds given by EPA’s General Counsel for reaching this conclu-
sion were that federally-approved water quality standards are not
directly enforceable, and that EPA approval of state water quality
standards did not involve notice and comment rulemaking.
%® For example, the Conference Report for the 1972 CWA Amend-
ments explains that section 510 “provides that States... retain the
right to set more restrictive standards and limitations than those
imposed under this Act.” S. Conf. Rep. No. 1236, 92d Cong., 2d
Sess. (1972), reprinted in 1 Leg. Hist. of 1972, at 281, 331 (em-
phasis added).
28
ent alternatives on municipal treatment facilities and
local industries, and a variety of other social and eco-
nomic considerations. 479 U.S. at 494.7 This system
will not work if the standards set by one state apply
automatically to sources in all upstream states. The
state imposing its standards will have little incentive to
consider the interests of the other states, and the source
state’s ability to have all the relevant factors considered
in setting standards and issuing permits will be vitated.* .
At the same time, the potential for overlapping and con-
flicting standards will cause widespread confusion and
uncertainty about the applicable requirements and the
ability of thousands of facilities to obtain new or renewed
permits.*
Finally, the Tenth Circuit’s decision threatens to create
an impasse between upstream and downstream states, at
the same time it eliminates EPA’s intended role as a
mediator for interstate water quality disputes. Since per-
mit agencies are rigidly bound under the Tenth Circuit’s
view to apply a downstream state’s standards, those
states would have an unfettered veto over the permits
for new and existing facilities in upstream states. This
power creates the distinct risk—which history shows has
37 See, e.g., 117 Cong. Rec. 38,805 (Nov. 2, 1971), reprinted in
2 Leg. Hist. of 1972, at 1272.
38 “Unrepresented interests will often bear the brunt of regula-
tions imposed by one State having a significant effect on persons
or operations in other States.” South-Central Timber Development,
Inc. Vv. Wunnicke, 467 U.S. 82, 92 (1984).
8° One of the important goals of the CWA is to provide “clear
and identifiable” standards that individual dischargers are re-
quired to meet. S. Rep. No. 414, 92d Cong., Ist Sess. 81 (1971),
reprinted in 2 Leg. Hist. at 1415, 1499. This Court previously rec-
ognized in Ouellette that “[{a]pplication of an affected State’s law to |
an out-of-state source . . . would undermine the important goals of
efficiency and predictability in the permit system.” 479 U.S. at 496.
The tangled patchwork of inconsistent and overlapping downstream
state standards resulting from the Tenth Circuit’s interpretation
would make it virtually impossible to predict the standard for a
lawful discharge. “It is unlikely—to say the least—that Congress
intended to establish such a chaotic regulatory structure.” Id. at 497.
2
29
been realized all too often—that some states may apply
their law to discriminate against out-of-state facilities
and unfairly advance their own economic interests.°
But even under the best of circumstances, the Tenth
Cireuit’s view would remove any incentive for down-
stream states to compromise their interests for the facil-
ities and needs of another state. The downstream state
interests would always control, and the only alternatives
for source states would be to acquiesce or perhaps retal-
iate on rivers where they are downstream. Congress in-
tended to prevent, not promote, this form of interstate
warfare.
. Congress further intended that if interstate disputes
did arise, EPA would act as the mediator to balance the
interests of both the upstream and downstream states.*?
By making downstream state standards automatically ap-
*° Whether inftptional or not, it would be very easy for a down-
stream state to selectively impose stricter standards on out-of-state
sources under the court of appeals’ decision. For example, the
downstream state could simply set very stringent standards for
the segment of a stream as it first enters that state, and then
impose much more lenient standards for downstream segments
into which the state’s own sources discharge. Under such an ar-
rangement, only sources in the upstream state would be required
to meet the stricter standards, putting these upstream sources
at a competitive disadvantage relative to similar sources in the
downstream state. Indeed, in the present case, Oklahoma has set
a very stringent standard for the segment of the Illinois River
just inside its border with Arkansas, but has established a much
more lenient standard further downstream on the same waterway,
where most Oklahoma dischargers are located.
*' The need for a federal mediator to resolve interstate water
quality disputes has long been recognized by this Court. When
the prolonged water quality dispute between the State of Illinois
and the City of Milwaukee first came before this Court in 1972,
the Court made federal courts the mediator in interstate water
quality disputes through their application of federal common law.
Illinois v. City of Milwaukee, 406 U.S. 91, 107 (1972). When the
same dispute reappeared a decade later, the Court found that Con-
gress had intended for EPA to replace the federal courts as the
federal mediator when it enacted the 1972 CWA Amendments. City
of Milwaukee v. Illinois, 451 U.S. 304, 326 (1981).
30
plicable, with no room left for deviation or federal inter-
pretation, the Tenth Circuit’s decision would nullify this
federal intermediary role and disrupt the federal-state
partnership established by Congress.“ As shown above,
the CWA attempts to prevent unjust and unreasonable
consequences by giving EPA the discretion to balance the
competing interests on a case-by-case basis and to im-
pose additional effiuent restrictions on upstream sources
when necessary to protect downstream water quality. The
Tenth Circuit’s construction of the Act would destroy any
basis for compromise between states and then leave the
affected parties with no mediator having the power to
strike a balance.*
42 See, e.g., 118 Cong. Rec. 10,234 (Mar. 27, 1972) (statement of
Rep. Roe), reprinted in 1 Leg. Hist. of 1972, at 426. The Solicitor
General has previously emphasized the importance of Congress’ care-
ful allocation of state and federal responsibilities under the Clean
Water Act. In its brief as amicus curiae opposing certiorari in
Scott v. City of Hammond, the United States therefore explained
that allowing a downstream 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. . . . Under this partnership, the
states must defer to the federal government’s choice of mini-
mum national requirements but they reserve the unqualified
power to determine to what degree they wish to impose more
stringent pollution limitations 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 stringent limitations will displace the fed-
eral government as the arbiter of minimum pollution control
requirements; this result is clearly contrary to the “full pur-
poses 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)
(citations omitted).
#8 As the United States’ petition for certiorari here explained,
the Tenth Circuit’s decision has “undermined EPA’s authority to
implement the Clean Water Act by usurping EPA’s role under the
Act as the arbiter of interstate water pollution disputes.” EPA
Pet. at 13.
31
In light of the extraordinary constitutional implica-
tions of allowing one state to regulate conduct in an-
other,“* a reviewing court should be very reluctant to in-
terpret a statute as having that effect absent an unequivo-
cal mandate from Congress to do so. This Court has
held in an analogous context that an “unmistakably
clear” authorization from Congress is needed before one
state can regulate entities in another state. See, ¢.g.,
South-Central Timber Development, Inc. v. Wunnicke, 467
U.S. 82, 91-92 (1984). Here, there is no expression of
any Congressional intent, much less a clear expression,
that downstream states should be allowed through the
NPDES permitting process to apply their water quality
standards to an out-of-state source. In fact, the plain
language, legislative history, and statutory structure all
show the contrary, and if there were any doubt whatso-
ever about Congress’ intent, the statute should not have
been given the far-reaching interpretation adopted by the
Tenth Circuit.
B. EPA Properly Exercised Its Discretion Under The
Clean Water Act In This Case And Decided Not To
Impose Additional Restrictions On The Fayetteville
Discharge.
EPA did even more than the statute requires in this
case, and the Tenth Circuit’s rationale for overturning the
Agency’s permit decision rests on a mistaken interpre-
tation of the law and EPA’s obligations. As shown above,
the Oklahoma water quality standards are not directly
applicable to a facility in Arkansas, and EPA was not
required to assure that the Fayetteville discharge would
comply with those standards. Instead, EPA was required
to consider those standards and the impact of the discharge
on downstream water quality, and to then make a case-
4 It is a well-established principle that one state cannot extend
its regulatory authority into another state. As this Court ex-
plained long ago in Kansas v. Colorado, 206 U.S. 46 (1907), “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 . . . can impose its
own legislation on no one of the others.” Jd. at 95-98.
32
specific determination whether additional limitations on
the Fayetteville discharge were appropriate in light of all
the circumstances.
Before making its decision to approve the permit, EPA
was fully aware of Oklahoma’s views and interpretation
of the relevant water quality standards. Despite those
views, and regardless of whether Oklahoma’s interpreta-
tion of the standards was correct, EPA found that no ad-
ditional limitations were needed to protect Oklahoma
water quality. Specifically, after evaluating Fayetteville’s
permit application, the EPA Administrator made an ini-
tial threshold determination that the Fayetteville facility
would have no adverse impact on the water of Oklahoma.
See Ark. P.A. at 100a.% EPA nevertheless granted Okla-
homa a discretionary evidentiary hearing to challenge
that finding and EPA’s consideration of the Oklahoma
water quality standards. See Ark. P.A. at 96a. Follow-
ing that evidentiary hearing, the ALJ and CJO upheld
the Agency’s decision to approve the permit, based on
the finding that the Fayetteville discharge would have
no adverse effect on Oklahoma water quality. See Ark.
P.A. at 151a; supra pages 5-7.
None of the “errors” identified by the Tenth Circuit
provide a legal ba@is for upsetting this exercise of the
agency’s discretion. For even if EPA did “misinterpret”
the Oklahoma standards—a point addressed below—these
standards were not legally binding, and the discretion to
require compliance necessarily subsumes the discretion
to interpret. Moreover, EPA’s finding that the Fayette-
ville discharge would have no detectable impact on Okla-
homa water quality does not in any way depend upon
5 As a result, the notice and hearing provisions of section
401(a)(2) were not triggered. The statute provides that the 401
(a) (2) requirements are only triggered by a threshold finding that
the water quality of a downstream state will be adversely “affected”
by a proposed discharge in an upstream state. See supra page 15.
Both the ALJ and the CJO upheld the Administrator's determina-
tion that the 401(a) (2) procedures were not triggered in this case.
Ark. P.A. at 100a, 109a n.3.
,
:
;
:
the interpretation of the Oklahoma standards here. Ark.
P.A. at 15la. Under these circumstances, EPA’s decision
not to impose additional limitations on the discharge had
to be a proper exercise of its discretion.
II. EVEN IF THE STANDARDS OF A DOWNSTREAM
STATE WERE APPLICABLE TO A FACILITY IN
AN UPSTREAM STATE, THE FAYETTEVILLE
DISCHARGE COMPLIES WITH THE RELEVANT
OKLAHOMA STANDARDS.
The Tenth Circuit’s decision must also be reversed even
if the Clean Water Act were somehow interpreted as
making downstream state standards legally “applicable”
to upstream sources. For even though it was not required
to do so, EPA did thoroughly consider the Oklahoma
water quality standards here before granting the permit,
and the Agency made detailed findings that the Fayette-
ville discharge would not violate those standards.
While the Tenth Circuit may have reached a different
conclusion if it were the initial decisionmaker, the Clean
Water Act and the findings made by EPA still require
that the Agency’s decision be upheld on each of the fol-
lowing three grounds: (A) EPA properly found that
the Fayetteville discharge would “comply” with the Okla-
homa standards, as a matter of federal law, because the
discharge would not cause any “actual detectable” viola-
tion of those standards; (B) Congress affirmatively gave
EPA the discretion to interpret downstream state stan-
dards when making permit decisions, and the Tenth
Cireuit’s reversal expressly rested on a refusal to afford
the agency that deference; and (C) even if the court’s
preferred interpretation of the Oklahoma standards were
correct, the specific ‘errors” cited by the Tenth Circuit
were harmless, given the Agency’s factual findings. The
Tenth Circuit therefore lacked any basis for overturning
the permit or even remanding the case to EPA.
34
A. The Clean Water Act Allows EPA To Conclude
That Sources Having No Detectable Impact On
Water Quality Would Comply With Downst gam
Standards.
EPA’s Chief Judicial Officer, acting on behalf of the
Administrator, held here that the Fayetteville facility
would comply with the downstream Oklahoma standards
absent evidence that the discharge would cause “an actual
detectable violation” of Oklahoma’s standards. Ark. P.A.
at 117a. A minor transgression of the downstream state’s
standards “predicted through modeling but not expected
to be actually detectable or measurable . . . should not by
itself block the issuance of the permit.” Jd. In adopting
this interpretation of the word “comply” the CJO also
recognized that “[t]he element of detectability is implied
in EPA’s regulations.” Jd. n.16.*°
The Tenth Circuit provided no reason or explanation
for rejecting EPA’s construction of the CWA as pro-
viding a “detectability” threshold for evaluating com-
pliance with a downstream state’s water quality stan-
dards. The court of appeals did not disturb EPA’s find-
ing that the Fayetteville discharge will have no detect-
able effect on Oklahoma water quality. Ark. P.A. at 78a.
But by overturning EPA’s decision to approve the per-
mit, the court must either have ignored or rejected the
Agency’s interpretation of the CWA regarding the sig-
nificance of detectability.*’
46 See also EPA Pet. at 24-25 (“At least where the effects of a
discharge are undetectable at the State boundary, the receiving
State can have little more than a theoretical basis for concluding
that its water has been degraded. In such circumstances, it is at
least reasonable for the responsible agency to conclude that the
balance of equities favor permitting the discharge and that the
discharge is not prohibited.”).
*? Somewhat inconsistently with this result, the court did agree
at one point in its opinion that “[t]he ability, as well as the au-
thority, to require compliance with the WQS of downstream
states is necessarily limited by the ability to measure a source’s
impact on the water quality of the receiving waters.” Ark. P.A.
at 24a.
ee ae
EPA’s construction of the Act in this regard must be
permissible. Nothing in the Act requires a different in-
terpretation of compliance or precludes tying that term
to detectability on a case-by-case basis. Indeed, EPA’s
conclusion is strongly supported by the provisions of the
CWA that directly address the interstate application of
water quality standards. For example, the requirements
of section 401(a) (2) to notify a downstream state and
consider that state’s standards are only triggered by a
threshold finding that the proposed discharge “may
affect, as determined by the Administrator, the quality of
the waters of any other State.” CWA § 401(a) (2) (em-
phasis added). It is entirely reasonable, therefore, for
EPA to conclude that a discharge having no measurable
or detectable impact on a downstream state’s water qual-
ity will not “affect” such waterways.
EPA properly applied this interpretation of the CWA
in the instant case and made the requisite factual finding
of “no effect” under section 401. As stated by the ALJ:
It should be noted that the requirements for public
hearing under Section 401 are only triggered if the
Administrator or the issuing Agency determines that
the discharge will have an adverse impact on the
waters of the receiving state. In this instance the
Administrator, after evaluating the record. deter-
mined that no such impact would exist and therefore
notification of the State of Oklahoma was not given
and no public hearing under Section 401, as just
described was ever held.
Ark. P.A. at 100a.“° The CJO subsequently upheld the
Administrator’s threshold determination, that the section
*8 Similarly, section 402(b) (5) also requires a threshold finding
by the permitting agency that a downstream state’s water quality
“may be affected” in order to trigger the requirements of that
provision
*? Oklahoma was given a second opportunity to challenge EPA’s
finding that the Fayetteville discharge would comply with Okla-
homa water quality standards at an evidentiary hearing before
the ALJ. Based on all the evidence, the ALJ still found that
Fayetteville’s discharge would have no detectable impact on the
downstream state’s waters. Ark. P.A. at 127a-143a.
36
401 requirements were not triggered because the Fayette-
ville discharge would not “affect” the water quality of
Oklahoma, and the CJO also adopted the detectability
test for compliance described above. See Ark. P.A. at
109a n3, 117a & n.16.
The element of “detectability” is an essential prerequi-
site of any duty to comply with the water quality stand-
ards of a downstream state. As the CJO concluded:
“Clearly, unless there is some method for measuring
compliance, there is no way to ensure compliance.” Ark.
P.A. at 118 n.16 (quoting Champion International Corp.
v. EPA, 648 F. Supp. 1390, 1895 (W.D.N.C. 1986)). In-
deed, without the detectability threshold implicit in the
CWA and EPA’s regulations, there often would be no
way of determining compliance and the Agency’s task
would be impossible.
In sum, even if the Act were read as requiring up-
stream sources to “comply” with downstream state stand-
ards, as the Tenth Circuit erroneously did here, EPA
must have the discretion to define the meaning of “com-
ply.” The Tenth Circuit gave no reason for rejecting
EPA’s construction of the Act and the Agency’s regula-
tions on this point, and EPA’s conclusion about the
meaning of “comply” must be upheld as a matter of
federal law, as well as the Agency’s application of that
test in this case.
B. The Court Of Appeals Should Have Deferred To
EPA’s Interpretation Of The Oklahoma Water
Quality Standards.
The Tenth Circuit also erred by refusing to defer to
EPA’s construction and application of the Oklahoma
standards. Settled principles of judicial review and Con-
gress’ specific delegation of responsibility here to EPA
both required the court to respect the Agency’s interpre-
tation absent a showing that EPA’s view was clearly
erroneous. Consequently, the Tenth Circuit’s decision
must be reversed, and the Agency’s permit decision up-
held, on this ground as well.
a ee
- a
37
Based on its own interpretation of the Oklahoma stand-
ards and evaluation of the factual record, the Tenth Cir-
cuit concluded here that EPA had incorrectly construed
and applied the Oklahoma water quality standards. Ark.
P.A. at 53a. In substituting its interpretation of the
Oklahoma standards for that of the expert agency re-
sponsible for administrating the statute—and even ex-
pressly declining to afford EPA any deference—the court
of appeals exceeded the proper scope of judicial review.
This Court has long held that a reviewing court must
defer to an agency’s reasonable interpretation of its own
administrative regulations. See, e.g., Udall v. Tallman,
380 U.S. 1, 16 (1965) (“When the construction of an
administrative regulation rather than a statute is in
issue, deference is even more clearly in order.”). See
also Bowles v. Seminole Rock & Sand Co., 325 U.S. 410,
413-14 (1945); Gardebring v. Jenkins, 485 U.S. 415,
430 (1988). The Clean Water Act also requires deference
to EPA’s interpretation of state standards, at least in
the interstate context, because EPA itself is responsible
for setting the federal minimum requirements. Moreover,
Congress gave EPA the task of reviewing and approving
all such standards for consistency with such requirements.
This deference is particularly appropriate where the rel-
evant state standards are based on EPA’s own model
standards,” and EPA is acting as the permitting agency.
To the extent that Congress directed EPA to consider
or apply the standards of downstream states in permit
decisions, Congress must also have delegated to EPA the
authority to interpret these standards.” Instead of de-
% As EPA explained in its petition for certiorari, “[i]n deter-
mining whether a proposed standard meets the statutory require-
ment, it is, of course, necessary for EPA to determine the meaning
of that standard. Therefore, if a dispute concerning the meaning of
the standard subsequently arises in the context of a permitting
decision, EPA’s interpretation of the disputed provision, which will
reflect its understanding of that provision when approval to im-
plement it was granted, should normally be dispositive.”
*! For example, when EPA is the permitting authority, section
401(a)(2) authorizes EPA, not the downstream state, to hold a
38
ferring to EPA’s reasonable interpretation of the Okla-
homa water quality standards, the court of appeals re-
jected EPA’s construction and application of the Okla-
homa standards in favor of its own interpretation. In
so doing, the court plainly exceeded the appropriate role
for a reviewing court.
C. The Specific “Errors” Identified By The Tenth Cir-
cuit Were Harmless And Do Not Affect The Valid-
ity of EPA’s Decision.
A final reason that EPA’s permit decision must be
upheld—even if the Oklahoma standards were applicable
and were misinterpreted by EPA—is that the specific
“errors” found by the Tenth Circuit were plainly harm-
less. Given the specific findings of fact made by the
ALJ with respect to each of the standards raised by
Oklahoma, the errors could not affect the substance or
outcome of EPA’s decision.”
The first error identified by the Tenth Circuit is that
the ALJ appeared to believe the Oklahoma nutrients
standards applied only to lakes and not to streams. Ark.
P.A. at 45a-46a. But even if the ALJ did err in constru-
ing the nutrients standard, the error was clearly harm-
less. The water segment where there was the gredatest
risk of Fayetteville causing a noncompliance with the
hearing and make a determination about whether additional con-
ditions should be imposed in light of a downstream state’s water
quality standards. In contrast, section 401(a)(1) gives the source
state final interpretive authority through the certification proce-
dure to determine whether a federally-issued permit will comply
with its standards. Thus, section 401 expressly allocates the inter-
pretive authority to source states when standards are applied intra-
state, but assigns the authority to EPA to construe and apply
standards in the interstate context.
In light of its subsequent holding that the CWA required a
permit ban upstream from existing water quality violations, see
infra p. 42, the court of appeals did not decide whether the
“errors” committed by EPA were serious enough to warrant re-
mand to the Agency. See Ark. P.A. at 53a. As shown below, they
plainly were not.
ek
ee
ee eae
39
Oklahoma nutrients standard was Lake Francis.’ The
water in Lake Francis is shallow and slow moving, and
therefore presents the greatest danger of accumulated
concentrations of nutrients. Yet the ALJ found, and the
court did not question this finding, that the Fayetteville
discharge would not cause a violation of the Oklahoma
nutrients standard in Lake Francis.“ A fortiori, the
same discharge could not cause a violation of the nu-
trients standard in the more rapidly flowing segments
of the Illinois River downstream from Lake Francis and
the asserted misinterpretation was plainly inconsequen-
tial.™
Next, the court found that the ALJ erred by applying
the 1985, rather than the 1982, Oklahoma water quality
standards. Ark. P.A. at 52a. EPA’s Chief Judicial Offi-
cer specifically considered this error and explained that
it was harmless, because there are no material differences
between the 1982 and 1985 Oklahoma standards that
are relevant to this case. Ark. P.A. at 149a-150a. The
court of appeals barely mentioned this explanation by
the CJO, much less gave a sufficient reason for rejecting
it, since the court itself did not identify any difference
between the two sets of standards that eculd have changed
the result reached by EPA. Indeed, the Arkansas parties
contended in the proceedings below that if EPA applied
any Oklahoma standards, it should apply the 1982
standards, in part because they were easier to satisfy
than the 1985 standards. See Ark. P.A. at 123a. There-
58 See, e.g., Ark. P.A. at 57a-60a (focus of most of the concern
and testimony at the evidentiary hearing was the water quality
problems of Lake Francis).
5 Ark. P.A. at 127a-132a.
*S Lake Francis is an artificial lake formed by a dam on the
INinois River just inside the Oklahoma/Arkansas border, Thus. it
is the segment of the Illinois River in Oklahoma closest to the
Fayetteville discharge and would be expected to receive the highest
nutrient concentrations. Moreover, nutrients tend to accumulate
to a much greater extent in a shallow sedentary lake than in a
flowing river.
40
fore, the CJO correctly concluded that since the ALJ
found the layetteville discharge would comply with the
stricter 1985 standards, that finding also supported his
own conclusion that the discharge would comply with
the similar, but slightly less stringent, 1982 standards.
Finally, the court suggested that EPA erred by placing
the burden of proof on Oklahoma to show why the permit
should not be issued, rather than on the Agency and the
permit applicant to demonstrate that the proposed dis-
charge would comply with all applicable requirements
under the CWA. Ark. P.A. 52a-53a. This “error” is
based on a misinterpretation of the ALJ’s decision, since
the ALJ in fact placed the burden on the permit appli-
cant’ and Fayetteville met that burden in this case.°”
EPA had originally issued the permit, following a hear-
ing and written comments on the draft permit, based on
its finding that the proposed discharge would comply with
all applicable requirements. When Oklahoma challenged
the final permit at the evidentiary hearing granted by
EPA, the Agency and the permit applicant again met
their burden of coming forward with an affirmative ‘case
to support the final permit. See 40 C.F.R. § 124.85(a)
(2), At this point, the Oklahoma parties, who were chal-
lenging the permit, had the burden of coming forward
to present an affirmative case with respect to the permit
conditions they were challenging. Jd. § 124.85(a) (3). It
was this burden that the Oklahoma parties failed to meet,
"The ALJ clearly placed the burden of proof on the permit
applicant: “Based on the voluminous administrative record . . . I
am of the opinion that the permit applicant has successfully borne
the burden of persuading the writer that. the permit ... should
be issued and not denied and that the evidence put forth by the
Oklahoma parties was not sufficiently strong to persuade this
writer that the permit should be denied or otherwise be invalid.”
Ark. P.A. at 105a (emphasis added).
** The CJO, in upholding the ALJ’s decision, determined that
the ALJ had properly found that “the record shows by a prepon-
derance of the evidence that the authorized discharges would not
cause ... [a] violation of Oklahoma’s water quality standards.”
Ark. P.A. at 15la.
41
since the ALJ conducted a thorough review of the evi-
dence for each parameter of Oklahoma water quality
that could possibly be affected by the Fayetteville dis-
charge, and he concluded that the evidence presented at
the hearing demonstrated that the discharge would cause
no violation of Oklahoma water quality standards."
Thus, EPA and the permit applicant did satisfy their
burden of proof, and the court’s conclusion that the
agency erred in assigning the burden to Oklahoma was
mistaken.*”
Whether considered individually or collectively, none
of the errors cited by the Tenth Circuit are of sufficient
importance to cal] into question the Agency’s conclusion
that the Fayetteville discharge will fully comply with all
Oklahoma water quality standards.” The court of appeals
58 Ark. P.A. at 127a-148a.
°° Moreover, when the disputed issue is whether an out-of-state
facility will comply with the standards of a downstream state, the
legislative history of the CWA clearly indicates that Congress
intended to place the burden of proof on the downstream state to
demonstrate that its waters would be unreasonably impaired by the
out-of-state discharge. See 118 Cong. Rec. 33,712 (Oct. 4, 1972)
(statement of Sen. Tunney), reprinted in 1 Leg. Hist. of 1972, at 209
(EPA can only veto a permit affecting a downstream state “where
the Governor of a downstream State demonstrates that his waters
are being polluted by permitted effluent discharges in another
State”) ; 118 Cong. Rec. 33,752 (Oct. 4, 1972) (statement of Rep.
Jones), reprinted in 1 Leg. Hist. of 1972, at 238 (same).
The court of appeals also criticized some of the ALJ’s factual
findings on eutrophication. Ark. P.A. at 67a n.47, 74a. However,
as EPA’s certiorari petition stated, “the court took statements of
the ALJ out of context, focused on the irrelevant, and materialiy
misconceived what the ALJ did say.” EPA Pet. at 19. The court of
appeals’ assessment of the facts relied almost exclusively on the pre-
filed testimony of the Oklahoma expert witnesses, but the court
failed to recognize that virtually all of the testimony was retracted
or substantially qualified during cross-examination at the evidenti-
ary hearing. See, e.g., Ark. P.A. at 103 (all Oklahoma expert
witnesses admitted on cross-examination that any impact from
the Fayetteville discharge would be non-detectable and only theoreti-
cal). The court’s mistaken impression about the facts of this com-
plex, technical case demonstrate the dangers of allowing a reviewing
42
lacked any legitimate ground for failing to defer to
EPA’s interpretation and application of the federally-
approved Oklahoma standards, or for disturbing the
Agency’s findings that the Fayetteville discharge will
fully comply with the Oklahoma standards.
Ill. THE CLEAN WATER ACT DOES NOT REQUIRE
A BAN ON NEW PERMITS UPSTREAM FROM A
PRE-EXISTING WATER QUALITY VIOLATION.
After identifying the errors discussed above, the court
actually overturned EPA’s permit decision based on an
issue not even raised by Oklahoma. Specifically, in a
second major holding, the court concluded that the Clean
Water Act requires imposing a ban on new permits up-
siream from any segment of the waterway with pre-
existing water quality violations. This harsh new rule
would unfairly punish new permit applicants for the
problems created by existing facilities and other sources
of pollution, and was never intended by Congress. In-
stead, Congress intended a fundamentally different and
more reasonable approach when it enacted the CWA. In
particular, the 1972 CWA Amendments rejected a cate-
gorical ban on new sources in favor of giving state agen-
cies flexibility to allocate the responsibility for reducing
pollution levels fairly among the sources actually causing
or contributing to existing water quality problems.
In contrast, the Tenth Circuit’s extreme approach
would ‘impose a rigid ban on new facilities in many
areas of the country. Moreover, because it only applies
to new discharges, the Tenth Circuit’s permit ban would
discourage municipalities and industries from building
new, modern facilities to replace old existing plants that
are equipped with outdated pollution control technologies.
The end result of the Tenth Circuit’s holding will there-
court to dabble in massive administrative records, especially those
involving highly scientific matters. “[A] reviewing court must gen-
erally be at its most deferential” when reviewing scientific deter-
minations, as opposed to simple findings of fact. Baltimore Gas &
Electric Co. Vv. Natural Resources Defense Council, Inc., 462 U.S. 87,
103 (1983.
43
fore be counterproductive to all the goals embodied in the
Clean Water Act.
Although the Tenth Circuit’s decision is ambiguous in
many respects, the court clearly based its imposition of
the permit ban upon an interpretation of the CWA and
its view of the Act’s purposes.*' Thus, the court empha-
sized that “EPA’s express power and obligations under
the CWA necessarily subsume the power to prohibit any
new discharge of pollution, regardless of the magnitude
of its impact, where the existing quality of the receiving
water do not meet required standards.” Ark. P.A. at
8la-82a.% Even though the court could point to no spe-
cifie statutory provisions supporting this construction of
the Act, it nonetheless concluded that “Congress cannot
reasonably be presumed to have intended” that new per-
mits would be approved upstream from an existing vio-
lation. Ark. P.A. at 78a.®
*! The court’s permit ban holding is already being interpreted and
applied by the U.S. Government in various permit proceedings as
deriving from the CWA. See EPA, In the Matter of: City of
Waskom, Texas, NPDES Appeal No. 90-18, at 6 (Jan. 28. 1991).
See also Comment of U.S. Dept. of the Interior, Fish and Wildlife
Service, on NPDES draft permit AK-004978-6, to U.S. EPA, Region
10 (Feb. 12, 1991) (interpreting Tenth Circuit’s holding as requir-
ing a ban on new permits upstream from an existing water quality
violation in Alaska).
*2 See also Ark. P.A. at 83a (“Particularly in light of the existing
pollution of the Illinois scenic river, the agency’s decision is incon-
sistent with the language of the Clean Water Act, as interpreted
in light of the legislative history, and frustrates the policy that
Congress sought to implement.”’) .
*3 An alternative reading of the Tenth Circuit's holding is that
the Oklahoma antidegradation policy requires a ban on new permits
upstream from an existing violation of the standard. However,
the court of appeals’ own interpretation of this Oklahoma standard
in other parts of its opinion was clearly inconsistent with such a
reading. See Ark. P.A. at 49a. Furthermore, the permit ban holding
lacks any foundation in the Oklahoma antidegradation standard,
because this standard does not in any way suggest or imply that it
would apply differently, depending on whether or not there is an
existing downstream violation of the standard. The standard only
44
Despite basing its permit ban holding on an interpre-
tation of the goals and purposes of the CWA, the court
admitted that there was no “explicit imprimatur” in the
CWA for its holding. Ark. P.A. at 81a. Moreover, the
court acknowledged that its approach was revolutionary,
having never been suggested by any party in the briefs
or oral argument, or indeed even hinted at in any of the
dozens of CWA cases decided by federal courts. Ark.
P.A. at 54a nn.39 & 40. The court nevertheless held
that EPA’s failure to consider the consequences of a pre-
existing violation of Oklahoma’s water quality standards
was “the principal flaw in the agency’s decision-making
rationale” which required denial of the permit. Ark. P.A.
at 75a.
In elaborating the terms of this new rule, the Tenth
Circuit identified three findings that are needed to trig-
ger the imposition of this permit ban on new sources.
Ark, P.A, at 55a. First, there must be a pre-existing in-
state or out-of-state violation of an applicable down-
stream water quality standard.“ Second, some amount
of a source’s discharge, even if undetectable, must reach
the downstream segment experiencing a water quality
violation. See Ark. P.A. at 65a. Finally, the existing
downstream violation must have been “caused at least in
part by pollutants that are constituents of [the source’s]
effluent.” Ark. P.A. at 72a. Although EPA had made no
addresses the prospective impact of a proposed activity, and past
degradation by other sources is not a relevant consideration in
application of the standard to new sources.
** Of course, if as demonstrated above, the water quality stand-
ards of a downstream state do not automatically apply to an out-
of-state source, then nonattainment of a downstream standard would
only result in a permit ban within that downstream state.
** A new permit cannot be approved if “any amount of that ef-
fluent can reasonably be expected to reach the degraded waters.”
Ark. P.A. at 82a n.58 (emphasis added). In theory, under the
Tenth Circuit's holding, a single molecule of effluent reaching the
downstream segment would trigger the permit ban. It is hard to
imagine how a permit applicant could prove that none of its efflu-
ent would reach the downstream segment.
45
findings on these newly-formulated conditions, the court
made its own independent evaluation of the record and
concluded that all three conditions were met and there-
fore the Fayetteville permit was prohibited as a matter
of federal law. Ark. P.A. at 7la-72a.
The Tenth Circuit’s imposition of a permit ban based
on its own novel interpretation of the Clean Water Act
clearly exceeds the appropriate role for a reviewing court
under this Court’s decision in Chevron, U.S.A., Inc. vy.
Natural Resources Defense Council, Inc., 467 U.S. 837,
842-43 (1984).° Under the initial step in the analysis
mandated by Chevron, a reviewing court must look to
see whether Congress has directly spoken to the precise
question at issue. Jd. In the event Congress has not
spoken of its intent or a particular issue is ambiguous,
Chevron then requires a reviewing court to defer to the
agency’s construction of the statute, rather than simply
adopt its own. 467 U.S. at 842-43.
The Tenth Circuit’s decision cannot be sustained under
this analysis. Even the court below acknowledged that
no provision in the Act expressly supported imposing this
permit ban. Ark. P.A. at 81a. In fact, Congress clearly
intended not to impose such a ban, as shown below. More-
over, the court certainly should not have undertaken the
crafting and imposition of this ban in the first instance.
°° The Tenth Circuit’s permit ban is analogous to the construc-
tion ban required in nonattainment areas under the Clean Air
Act. 42 U.S.C. §7410(a) (2) (1) (1988). However, the construc-
tion ban required by the Clean Air Act was enacted by Congress,
whereas the Tenth Circuit acted without Congressional authoriza-
tion or support in imposing a construction ban for nonattainment
areas under the CWA. Furthermore, the construction ban imposed
under the CWA by the Tenth Circuit is much more extreme than
the ban required by the Clean Air Act. Unlike the Clean Air Act,
the Tenth Circuit’s ban extends beyond the area of nonattainment
to all upstream water segments, and does not contain an exception
for new sources that “offset” new discharges with equivalent re-
ductions from existing sources in the Same area. See 42 U.S.C.
$7503 (1988)..
46
As the agency responsible for administering the CWA,
EPA has never suggested that an existing violation of
water quality standards automatically requires an abso-
lute ban on new permits, especially for discharges that
will have no detectable effect on water quality.
The Tenth Circuit’s holding is not only inconsistent with
EPA’s administration of the CWA, but it is also contra-
dicted by several express provisions in the CWA, which
the court of appeals completely overlooked, for dealing
with ongoing violations of water quality standards. The
statutory scheme created by Congress in the 1972 CWA
amendments included two strategies intended to bring
about improvements in water quality on the nation’s
many degraded waterways.” The first was to shift the
focus of the Act from water quality standards to national
technology-based effluent limitations that applied automat-
ically to every point source.“ Congress expected that
water i would improve steadily as effluent limita-
tions based on best available technology become progres-
sively more stringent over time.”
The second element of Congress’ strategy attacked the
problem of nonattainment with water quality standards
67 At the time the NPDES permitting program was enacted in
the 1972 CWA Amendments, 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. See S. Rep.
No. 414, 92d Cong., Ist Sess. 7 (1971), reprinted in 2 Leg. Hist.
of 1972, at 1415, 1425.
* CWA §301(b)(1). See supra note 9. Congress described
the pre-1972 approach of controlling water pollution, which placed
primary reliance on ambient water quality standards, as “inade-
quate in every vital respect.” S. Rep. No. 414, 93d Cong., Ist Sess.
7 (1971), reprinted in 2 Leg. Hist. of 1972, at 1415, 1425.
% See, e.g., 8. Rep. No. 414, 92d Cong., Ist Sess. 42 (1971),
reprinted in 2 Leg. Hist. of 1972, at 1415, 1460 (“the program
established by this section requires increasingly tougher controls
on industry ... [I)ndustry will be required every five years to
re-evaluate its control efforts and to apply the best technology then
available . . . [and] industries will have to show every five years
that no-discharge is not attainable.”).
47
directly. Specifically, the Act requires state agencies to
identify sources that are contributing to ongoing water
quality violations, and to implement plans for reducing
discharges from such sources to bring the affected water-
ways into compliance. The principle underlying this ap-
proach chosen by Congress was that the responsibility for
improving water quality should be placed on those sources
that are causing the problems, not on new sources that
may be built later.
The key provision of this statutory scheme is section
303(d), which requires states to establish maximum daily
loads necessary to bring waterways with existing water
quality violations into compliance.” EPA’s implement-
ing regulations require the state to adopt a waste load
allocation plan that distributes the allowable maximum
daily load among all dischargers." Whereas the Tenth
Cireuit’s holding would require a categorical ban on new
discharges, section 303(d) authorizes the state to allocate
equitably the burden of reducing waste loads between
new and existing sources. Thus, if the state has estab-
lished a maximum daily load for a given waterway,
new sources or increased discharges from existing
sources would be permitted provided they are included
in the waste load allocation plan.”
The approach adopted by Congress in section 303(d) is
reinforced by section 208, which requires states to de-
7 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.
7140 C.F.R. § 130.7. Section 303(d) does not require a state to
establish immediately maximum daily loads for all waterways with
existing water quality violations. Rather, the Act directs states to
establish such plans incrementally according to the state’s own
priority ranking of its waterways, with no fixed deadline for com-
pleting the process for all waterways. CWA § 303(d) (1) (A).
*2In this case, Oklahoma has not established a maximum daily
load or waste load allocation plan for the Oklahoma segments of
the Illinois River that are allegedly experiencing ongoing vio-
lations of Oklahoma water quality standards.
48
velop and implement “areawide waste treatment man-
agement plans” for regions experiencing “substantial
water quality control problems.” * Under this planning
process, states must identify the causes of water quality
violations, and allocate the responsibility for alleviating
these problems. CWA § 208(b) (2). Section 208 directs
states to consider ali point and non-point sources of pollution
in the planning process, and to include in their manage-
ment plans the many different strategies and methods for
controlling pollution that are expressly required by sec-
tion 208(b)(2). Significantly, the extensive repertoire
of specific control strategies required by Congress in
this section does not include a ban on new sources.
In short, the CWA expressly provides a specific and com-
prehensive strategy for the improvement of water quality
on polluted waterways. The Tenth Circuit ignored these
provisions, and instead created its own novel solution to
address a problem that Congress had expressly dealt with
by taking a very different approach. In so doing, the
court adopted an approach that not only conflicts with
the choices made by Congress, but also threatens to seri-
ously disrupt the effort of EPA and the states to imple-
ment the programs intended by Congress to improve
water quality. In particular, the Tenth Circuit's holding
would force agencies to divert their focus from controlling
existing sources that are the cause of ongoing water
quality violations to prohibiting new sources regardless of
whether they will contribute to or cause water quality
violations,
*’ When one or more states share a region or waterway with
common water quality control problems, section 208 requires states
to “consult and cooperate” in developing and implementing a joint
management plan. CWA § 208(a) (3).
™ Section 304(1) is yet another provision that addresses how to
ameliorate ongoing water quality violations. This provision re-
quires states to identify waterways with ongoing violations of
water quality standards caused by toxic pollutants, and to impose
“individual control strategies” on point sources that the state identi-
fies as contributing to such violations.
49
Moreover, the shift in emphasis from imposing addi-
tional controls on existing sources to banning new sources
altogether, regardless of their impact on water quality,
will ultimately be counterproductive to Congress’ goal of
improving water quality. Since only new discharges are
affected by the Tenth Circuit’s ban, municipalities and
businesses will be given an incentive to continue opera-
ting existing, often outmoded facilities, rather than
building new, state-of-the-art plants that may be denied
a permit under the court’s holding. But because new
facilities are required to incorporate the best and most
recent technology for controlling pollution under section
306 of the Act, the replacement of aging facilities
equipped with obsolete pollution control technologies
would otherwise produce a net benefit for the environ-
ment.”
The Tenth Circuit’s imposition of an absolute and im-
mediate permit ban, based on its view of the best remedy
to fulfill the Act’s purposes, was thus manifestly inappro-
priate. Unless overturned, the Tenth Circuit’s exercise in
creative judicial lawmaking will block any new industrial
or economic development in a substantial portion of the
nation. Such an extreme result was never envisioned by
Congress, and is totally unnecessary and even counter-
productive. The Tenth Circuit’s “principal” reason for
overturning the Fayetteville permit therefore directly
conflicts with the Clean Water Act and EPA’s adminis-
tration of the Act, and must be reversed.
7 Such is the case with the replacement of the old Fayetteville
wastewater treatment plant by the construction of a new state-
of-the-art facility. In addition to being counterproductive, the Tenth
Circuit’s holding would unfairly hold new permit applicants respon-
sible for the problems created by existing facilities. Indeed, the
Tenth Circuit admitted that it is “arguably unfair to ‘punish’
Fayetteville for pre-existing dischargers’ past failure to comply
with WQS.” Ark. P.A. at 8la.
50
CONCLUSION
For the foregoing reasons, the judgment of the court
of appeals should be reversed and the NPDES permit
issued to Fayetteville should be upheld.
WINSTON BRYANT
Attorney General
Mary B. STALLCUP
ANGELA 8. JEGLEY
OFFICE OF THE ATTORNEY
GENERAL
200 Tower Building
4th & Center
Little Rock, AR 72201
JAMES N. McCorp
CITY OF FAYETTEVILLE
207 West Center Street
Fayetteville, AR 72701
ANNE ROBERTS Boso
A.D.P.C. & E.
P.O. Box 8913
Little Rock, AR 72219-8913
May 31, 1991
Respectfully submitted,
EDWARD W. WARREN, P.C.
DAVID G. NORRELL
(Counsel of Record)
GARY E. MARCHANT
DAWN P. DANZEISEN
KIRKLAND & ELLIs
Suite 1200
655 Fifteenth St., 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
SY
“
f '"
>.
™
?
"2
—
,
ty f
|
I
r
. 5 J .
v4 fs
pa
I i 7
f - ‘
:
}
'
4
» r :
<
S a. f
Be *
‘ “
“a .
a,
‘
> >
-
7 4
+*
.
we
en?
fr’
v4
y .
in
¥
4
omy a
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.