Amicus Curiae Brief — Arkansas v. Oklahoma

4

Nos. Sote2 and 90-1266 rT 7.7

IN THE MAY SL 199

Supreme Court of the Gnited

OCTOBER TERM, 1990

STATE OF ARKANSAS, et al.,

Petitioners,

Vv.

STATE OF OKLAHOMA, et al.,

Respondents.

ENVIRONMENTAL PROTECTION AGENCY,

Petitioner,

Vv.

THE STATE OF OKLAHOMA, et al.,

Respondents.

On Writ Of Certiorari To The United States Court

Of Appeals For The Tenth Circuit

BRIEF AMICI CURIAE OF CHAMPION INTERNATIONAL

CORPORATION, AMERICAN PAPER INSTITUTE, NATIONAL

FOREST PRODUCTS ASSOCIATION, AMERICAN IRON AND

STEEL INSTITUTE, AMERICAN MINING CONGRESS, THE

FERTILIZER INSTITUTE, CHEMICAL MANUFACTURERS

ASSOCIATION, NATIONAL ASSOCIATION OF

MANUFACTURERS, ASSOCIATED INDUSTRIES OF

ARKANSAS, ARKANSAS FEDERATION OF AIR AND WATER

USERS, INC., AND ARKANSAS POULTRY FEDERATION IN

SUPPORT OF PETITIONERS

MICHAEL K. GLENN J. JEFFREY MCNEALEY

MICHAEL G. DowpD (Counsel of Record)

PORTER, WRIGHT, Morris & JANET J. HENRY

ARTHUR PORTER, WRIGHT, MorRIs &

1233 20th Street, N.W. ARTHUR

Washington, D.C. 20036 41 South High Street

(202) 778-3000 Columbus, Ohio 43215 .

Counsel for (614) 227-2000

Champion International Corporation, American Paper In-

stitute, National Forest Products Association, American

Iron and Steel Institute, American Mining Congress and _

National Association of Manufacturers

May 31, 1991

~~ {Additional Counsel Listed on Inside Front Cover]

EL EE aS

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

Capitol

Litile Arkansas 72201

(501) 731-5800

Counsel for

Associated Industries of

Arkansas and Arkansas

Federation of Air and Water

Users, Inc.

RICHARD A. FLYE

MCKENNA & CUNEO -

1575 Eye Street, N.W.

. Washington, D.C. 20005

(202) 789-5000

Little Rock, Arkansas 72201

(501) 375-9131

Counsel for

Arkansas Poultry Federation

TABLE OF CONTENTS

INTERESTS OF AMICI CURIAE .........cccccessseseeeeeeeees

SUMMARY OF ARGUMENT .........ccccccccceeeeeeeeeeeeseeees

I.

Il.

The Act Requires That A Source Comply

With —_ Federal Standards and

Source State Standards ................ccccccccsseeeees

. The Act Does Not Require That ‘Affected

State” Standards Be Met By An Out-of-State

ea

A. Sections 301(bX1\XC), 303(c), and 510 Do

Not Mandate Compliance Wita “Affected

TTI

B. Federal Approval of a § 303(c) “Affected

State” Standard Does Not Make It A

“Federal Standard” .............cccccccceceseeeeeee

The Tenth Circuit’s Decision Gives Preemi-

nent Status To “Affected State’ Standards,

Contrary To This Court’s Construction Of

TTR

A. Compliance With “Affected State’’ Stand-

ards Cannot Rationally Be Mandatory

When EPA Is The Permit-Issuer, But

Discretio When The Source State Is

TO POPtit-TOGUOF ........ccccccccccccscccccesceeees

B. As This Court Found In Ouvellette, The

Act’s “Savi Clause” Does Not Pre-

serve Rights Under The Law Of An “‘Af-

re

The Tenth Circuit’s Ruling Lacks The Nec-

Support Of A Clear And Unmistak-

able Statutory Authorization For An

“Affected State” To Regulate Commerce Oc-

curring Outside Its Borders ..................::00+-

18

19

21

22

V. a Tenth aay .~— —— Of

ew Discharges To Waters Not Meeting

Water Quality Standards Lacks A Proper

— }

CORBIS cccescccscsesesceseccsecescecssnsscsssssnssesscecsssssossesesses

TABLE OF AUTHORITIES

Page

CASES

nen ition Aled Vile Jen 8 v. EPA, No. 91-2302 (4th Cir.

3, 1991) qunaesssenesuasupeneususescee 3

H.P. Hood yw Sons, Inc. v. DuMond, 336 U.S. 525

DUNE disinttbitencnintinsnintesncatatneneentinanmmenneereenees 24

Hughes v. Oklahoma, 441 U.S. 322 (1979) ............. 24

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

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

Hammond, 469 U.S. 1196 (1985) ....................

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

IIT iatiidiciactieiieeaiihiereataaaiapatanantnrmapenenmmenscananeeses passim

City of Milwaukee v. Illinois, 451 U.S. 304

ea 21

Northeast Bancorp, Inc. v. Board of Governors, 472

U.S. 159 (1985) ..............cceee0 d uniiinmaneeennen 23

Pike v. Bruce Church, Inc., 397 U.S. 137 (1970) .. 24

South-Central Timber Development, Inc. v. Wun-

nicke, 467 U.S. 82 (1984) ...........ccccceeeeeeeeeeeeeee 23

Sporhase v. Nebraska, 458 U.S. 941 (1982) ........... 23

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

SUA TIIII ich aiicsiiinipanectepannnnnieenampenensens 21

State of Oklahoma v. EPA, 908 F.2d 595 (10th

Gy SI ciniesicetetiencnnccenseemcesensanmienteanenenens 3,16,19,26

Tennessee v. Champion Int'l Corp nted

vacated and soneadid 479 79 US. 1061

EFT 22

STATUTES AND REGULATIONS

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

BS GHEE cesscesessesecesssscsaccsecsvssecesesevecccsoseoeseses 2

§ 101(a), 33 U.S.C. § 1251(a) ..............ccceseeeeee 9

$ 101(b), 33 U.S.C. § 12510D) ..........cceccceeeeeeeees 10

Ue 10

§ 301(b), 33 U.S.C. § 13110D) ..........ccccceeeeeeees 14

iv

Table of Authorities Continued

7°

Page

§ 301(bK1XC), 33 U.S.C. § 1311(bX1NC) ....... 12-16,24

Ee 10,16

ee 15,17

§ 303(c), 33 U.S.C. § 1313(C) ........ccsceseereeees 10,14-16

§ 303(cX1), U.S.C. § 1313(CM1) ........ccecceseereenees 10

§ 303(cX2), U.S.C. § 1313(cM2) .........ccecceeceeseeees 10

§ 303(cM3), U.S.C. § 1313(CX(3) .........-cceccereeeees 8,11,18

§ 303(cX4), U.S.C. § 1313(CM4) ........cccecceeceeeeeees 11,16

eee eas 10

8 10

I i enisemenenintes 10

£0 15

§ 401(aX1), 38 U.S.C. § 1341(aX1) .............00000- a

§ 401(aX2), 33 U.S.C. § 1341(aX{2) ............00000 passim

§ 401(d), 33 U.S.C. § 1341(d) ...........ccccceeceseeeees 12

Sf 8 3

§ 402(a), 33 U.S.C. § 1342(a) ...........ccecceeeeeees 11,12,20

§ 402(aX3), 33 U.S.C. § 1342(aX(3) «2.0.0... 12,20

§ 402(b), 33 U.S.C. § 1342(b) ............c.cccceereeeees 10-12

§ 402(bX5), 33 U.S.C. § 1342(b\5) .............0c00 13

§ 402(dX2), 33 U.S.C. § 1342(d\(2) ............. 8,13,18-20

§ 505(e), 33 U.S.C. § 1365(e) .............ccccceceeeeeee 21

ee 13-16,21

ET

> | eee 7

toss ae one 7

Table of Authorities Continued

Page

MISCELLANEOUS

Commerce Clause, Constitution of the United States,

AAT 11,22-24,26,27

Revision of Water ity Standards and Imple-

mentation Plans Under Sec. 303 of the Federal

Water Pollution Control Act, Op. EPA General

Counsel, No. 58 (March 29, 1977) ...........00000. 16,17

Federal Water Pollution Control Act Amendments

of 1972, Pub. L. No. 92-500, 86 Stat. 816

EE ene aa 10

Water Quality Act of 1965, Pub. L. No. 89-234, 79

Stat. ES ERIE 10,16

Zener, “The Federal Law of Water Pollution Con-

trol,”” Federal Enviornmental Law (E.L. Dol-

gin and T.G.P. Guilbert eds. 1974) 715 ......... 10

*—

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1990

Nos. 90-1262 and 90-1266

STATE OF ARKANSAS, et al.,

Petitioners,

Vv.

STATE OF OKLAHOMA, et al.,

Respondents.

ENVIRONMENTAL PROTECTION AGENCY,

Petitioner,

v.

THE STATE OF OKLAHOMA, et al.,

Respondents.

BRIEF AMICI CURIAE OF CHAMPION

INTERNATIONAL CORPORATION, AMERICAN PAPER

INSTITUTE, NATIONAL FOREST PRODUCTS

ASSOCIATION, AMERICAN IRON AND STEEL

INSTITUTE, AMERICAN MINING CONGRESS,

THE FERTILIZER INSTITUTE,

CHEMICAL MANUFACTURERS ASSOCIATION,

NATIONAL ASSOCIATION OF MANUFACTURERS,

ASSOCIATED INDUSTRIES OF ARKANSAS,

ARKANSAS FEDERATION OF AIR AND WATER USERS,

INC., AND ARKANSAS’POULTRY FEDERATION

IN SUPPORT OF PETITIONERS

Champion International Corporation, the American Pa- .

per Institute, the National Forest Products Association,

the American Iron and Steel Institute, the American Min-

ing Congress, The Fertilizer Institute, the Chemical Man-

ufacturers Association, the National Association of

Manufacturers, the Associated Industries of Arkansas, the

Arkansas Federation of Air and Water Users, Inc., and

the Arkansas Poultry Federation (“industry amici’’) file

this brief amici curiae in support of petitioners State of

Arkansas, et al., and request that the decision of the lower

court be reversed.'

INTERESTS OF AMICI CURIAE

Industry amici represent private manufacturing, pro-

cessing, mining, and other companies whose interests are

vitally affected by the lower court’s rulings interpreting

the Clean Water Act.

The American Paper Institute is a non-profit trade as-

sociation whose members include companies which account

for approximately 90 percent of the domestic manufacture

of pulp, paper, and paperboard, many of whom own .or

operate facilities which discharge treated process waste-

water to interstate waterways or their tributaries in con-

formance with the Clean Water Act, 33 U.S.C. §§ 125i-

1387 (1988).?

Champion International Corporation (“Champion’’) is a

member of the American Paper Institute and one of the

‘Industry amici also agree with petitioner U.S. Environmental Pro-

tection Agency (“EPA”) that the lower court’s decision should be re-

The consent of counsel for each of the parties has been obtained

and a letter from each counsel indicating his consent to the filing of

? Citations in this brief are to the Federal Water Pollution Control

Act, as amended, commonly referred to as the Clean Water Act (“CWA”

or the “Act’”’), 33 U.S.C. §§ 1251-1387 (1988). Parallel citations to the

United States Code are provided in the Table of Authorities.

3

nation’s largest producers of pulp, paper, and solid wood

products. Champion owns and operates numerous mills and

other facilities in North Carolina, Florida, Michigan, and

elsewhere which discharge treated process wastewater to

interstate waterways in accordance with Clean Water Act

permits issued under the National Pollutant

Elimination System (‘national discharge” or “NPDES”

permits), CWA § 402. Champion’s Canton, North Carolina

mill, which discharges treated process wastewater to a

river that flows into Tennessee some 26 miles below the

mill, has been the subject-of a long-standing dispute be-

tween the States of North Carolina and Tennessee over

the applicable “color” standard for a renewal of the Can-

ton mill’s national discharge permit.

Champion also operates and is seeking an NPDES re-

newal permit for a mill in Pensacola, Florida, which dis-

charges treated process wastewater to a stream that

empties into Perdido Bay (a boundary water between Flor-

ida and Alabama), to which the State of Alabama has

objected.‘ In both of these cases, the “affected states” of

* Champion is currently a petitioner before the U.S. Court of Appeals

for the Fourth Circuit regarding an EPA-issued NPDES renewal permit

for the Canton, North Carolina mill, in which EPA’s reliance upon

Tennessee’s federally-approved water quality standard for color is at

issue. Champion Int’l Corp. v. EPA, No. 91-2302 (4th Cir. petition filed

Jan. 3, 1991). In denying Champion’s request for an evidentiary hearing

on the applicability of North Carolina’s own federally-approved color

standard—which EPA rejected without « finding of any “undue impact

on interstate waters” in Tennessee—the EPA Administrator cited and

relied upon the Tenth Circuit’s decision below in State of Oklahoma v.

EPA, 908 F.2d 595 (10th Cir. 1990). Briefing has been suspended pend-

ing a decision by this Court in the present case.

*The Attorney General of Alabama has filed a request for an evi-

dentiary hearing on a recent EPA-issued renewal permit for Champion's

Pensacola, Florida mill. The basis of Alabama’s request is that the

permit fails to insure compliance with Alabama's water quality stand-

ards, including its “‘non-degradation” policy, in keeping with the Tenth

Circuit’s decision below. EPA has not yet ruled on whether to grant

Alabama’s hearing request.

+

Tennessee and Alabama have contended that their differ-

ing or more stringent state water quality standards must

be met by Champion’s out-of-state discharges. These two

cases illustrate the problem which the Tenth Circuit’s de-

cision poses for industrial discharges to interstate water-

ways and their tributaries.

The National Forest Products Association, the American

Iron and Steel Institute, the American Mining Congress,

The Fertilizer Institute, and the Chemical Manufacturers

Association are national trade associations of the timber,

steel, mining, fertilizer, and chemical industries, respec-

tively, each representing a majority of the companies within

their respective industries, many of whom discharge

treated process wastewater to interstate waterways or

their tributaries in conformance with the Clean Water Act.

The National Association of Manufacturers is a national

organization which represents the business interests of

large and small manufacturers, including their interest in

the proper administration of the Clean Water Act with

respect to discharges to interstate waterways.

The Associated Industries of Arkansas, the Arkansas

Federation of Air and Water Users, Inc., and the Arkansas

Poultry Federation are statewide associations which col-

lectively represent a majority of Arkansas manufacturing

companies, many of whom discharge treated process was-

tewater directly to interstate waterways or into publicly-

owned treatment works (such as the City of Fayetteville’s

treatment plant) which discharge to interstate waterways.

The two principal statutory rulings of the Tenth Circuit

under review by this Court are that the Clean Water Act

(1) forbids the permitting of any discharge to an in-

terstate waterway in Arkansas (or any other

“source state’’) unless the permit also insures com-

pliance with the state water quality standards of

Oklahoma (or any other “affected state’’), and

5

(2) forbids the permitting of any new or increased

discharge to a waterway not currently meeting

applicable water quality standards.

These two unprecedented Clean Water Act rulings are

a radical departure from past administrative and judicial

interpretations of the Act. If upheld, they will fund-

amentally change the way the Clean Water Act affects

industrial, municipal, and other discharges to interstate

waterways. No longer will a discharger to an interstate

waterway be able to rely, for Clean Water Act compliance

purposes, solely or even principally on the federal and

state laws and regulations which apply in the discharger’s

home state. No longer will a state “downstream” from a

proposed discharge merely have the right to “object”’ on

a case-by-case basis and “recommend” that its differing

or more stringent water quality standards be considered

in a particular permit. Instead, under the Tenth Circuit’s

decision, EPA is required to insure that every proposed

discharge to an interstate waterway will comply with the

water quality laws and regulations of every potentially af-

fected downstream state, to whatever extent the down-

stream state’s water quality standards or other

requirements are different from or more stringent than

those of the source state.

For the first time, EPA is virtually compelled by the

Tenth Circuit’s decision to adopt complex new procedures

requiring the submission of advance demonstrations, cert-

ifications, or similar means of insuring, if possible, that

all downstream state standards will be met, in every case,

by a newly-permitted upstream state discharge. The lower

court’s decision thus will impose substantial new Clean

Water Act permit burdens—and potential new control re-

quirements or discharge prohibitions—on thousands of new

and existing industrial, municipal, and other facilities which

propose new, increased, or continued discharges of treated

process wastewater to interstate rivers and streams, lakes

and reservoirs, bays, estuaries, and coastal waters nation-

wide.

For example, a discharger located in northeast Ohio on

a tributary of the Ohio River will be required to show

that its discharge will not have the potential to cause or

contribute (even by an undetectable amount, according to

the Tenth Circuit) to the violation of any different, add-

itional, or more stringent water quality standards adopted

by the downstream states of Pennsylvania, West Virginia,

Kentucky, Indiana, Illinois, Missouri, Tennessee, Arkansas,

Mississippi, and Louisiana. To try to prevent the possibility

that any newly-proposed downstream state standards might

preclude the construction, expansion, or continued opera-

tion of its Ohio-based facility, the Ohio source will have

to participate in the water quality standards-setting activ-

ities of all these downstream states and, if possible, make

sure the downstream state standards do not present in-

surmountable compliance concerns beyond the standards

which apply in Ohio. Moreover, it can be expected that

the Ohio source will have to actually demonstrate, in con-

junction with its Ohio Clean Water Act discharge appli-

cation, that no potentially relevant numerical, narrative,

or “non-degradation” standards of any downstream states

* Prior to the Tenth Circuit’s decision, most companies and munici-

will be violated.* No such downstream state standards com-

pliance demonstration is required on the face of the statute

or under any prior interpretation of the statute.’

The Tenth Circuit’s decision also means that a down-

stream state has the power unilaterally to preclude up-

stream state industries and municipalities from

constructing new discharging facilities, expanding opera-

tions at existing facilities, or even continuing to operate

existing plants under a newly-issued permit. That is, under

the lower court’s decision, any state whose water quality

may be affected by upstream state sources will be able to

adopt a “total elimination of discharges” policy or a strict

“non-degradation” rule applicable at the state line, or per-

haps simply adopt different or more stringent pollutant-

specific standards, and thereby preclude discharges (and

thus commercial activity) from being permitted in the up-

stream state. No such direct or indirect downstream state

power to regulate or prohibit out-of-state discharges (or

C.F.R. § 124.53. It is impossible to predict exactly what kind of down-

stream state standards compliance demonstration may be required by

the Tenth Circuit’s decision, what it will cost, or whether it is feasible

at all. It is conceivable that the “responsible corporate official’”” who

i the Ohio permit application would be required to certify, under

minimum federal water quality requirements. To the extent any indi-

vidual state chooses to adopt (and EPA “approves”) standards more

stringent than the Act requires, such state standards generally cannot

standards.” See notes_16 and 17, infra, and

!

interfere with interstate commerce) is authorized by the

Act or any prior interpretation of the Act.

Recognizing that conflicts could arise between two or

more states regarding the application of differing state

water quality standards to shared interstate waterways,

the Clean Water Act expressly grants EPA the exclusive

authority to resolve interstate water quality disputes. That

is, when brought to EPA’s attention by a downstream

state’s “objection” or “recommendation” regarding a par-

ticular upstream state discharge application, EPA must

consider (but need not necessarily apply) the water quality

standards of the downstream state. The Act thus leaves

no room for the Tenth Circuit’s contrary inference (much

less any room for a contrary finding of “unmistakable”

authorization by Congress) that affected state standards

apply automatically to out-of-state sources and thus may

burden interstate commerce freely at the discretion of the

downstream state.

SUMMARY OF ARGUMENT

The Tenth Circuit’s unprecedented ruling that the EPA-

approved water quality standards of downstream ‘‘affected

states” must be met by an out-of-state discharge sweeps

aside express provisions of the Clean Water Act. Congress

expressly provided in § 303(c\(3) of the Act that a federally-

approved state water quality standard “shall thereafter be

the water quality standard for the applicable waters of

that State’ (emphasis added). Moreover, when a water

quality dispute arises between states sharing an interstate

waterway, Congress expressly granted EPA exclusive,

case-by-case discretionary authority to resolve such a dis-

pute, whether the permit is one issued by EPA or the

source state. Thus, the Act’s express water quality stand-

ards dispute resolution provisions, §§ 401(aX2) and 402(d\(2)

of the Act, do not extend the reach of a downstream

state’s federally-approved water quality standards beyond

the waters “of that State.” In ruling to the contrary, the

9

Tenth Circuit ignored this Court’s teaching in Interna-

tional Paper Co. v. Ouellette, 479 U.S. 481 (1987) (“Oue-

lette”), spelling out the “subordinate” status of a

downstream state’s water quality standards and finding

that any exceptional EPA decision to base an upstream

state discharge limitation on a downstream state standard

is authorized only when EPA determines that the failure

to do so would have an “undue impact on interstate

waters” in the downstream state.

The Tenth Circuit’s second unprecedented ruling, that

no new or increased discharge may be permitted into (or

upstream from) a waterway not currently meeting appli-

cable water quality standards, is based on an equally flawed

reading of the Act. Although stringent conditions are re-

quired in permitting new or increased discharges, the stat-

ute has never been read to forbid categorically any new

or increased discharges to such waters. Even assuming,

for example, that a downstream state’s “non-degradation”’

standard were to apply automatically to an out-of-state

source (which it does not), the Act nowhere prohibits ab-

solutely any new or increased discharge to a waterway

not currently meeting that water quality standard.

ARGUMENT

; Act Requires That A Source Comply With Ap-

plicable Federal Standards and Source State Stand-

ards

:

a

brief statement of the statutory context of the two

issues discussed here may be helpful. The succinctly-stated

objective of the Clean Water Act is “to restore and main-

tain the chemical, physical, and biological integrity of the

Nation’s waters.” CWA § 101(a). The means by which the

Act’s stated objective is to be achieved are set forth in a

series of interrelated provisions for federally-established,

technology-based effluent limitations and other national

standards, for state-established ambient (in-stream) water

10

quality standards, and for case-by-case permitting of in-

dividual proposed discharges.

The establishment of federal technology-based effluent

limitations and other national standards—none of which is

at issue in this case—is solely within the province of the

EPA Administrator. CWA §§ 301, 302, 304, 306, and 307.

With respect to state-by-state establishment of in-stream

water quality standards, however—such as the Oklahoma

“non-degradation” standard at issue here—the Act pro-

vides a more complex and flexible scheme.*

The Act directs the Governor of each state to adopt in-

stream water quality standards for all waters of the United

States within each individual state (both intrastate and

interstate waters) and to submit such state standards to

the EPA Administrator. CWA §§ 303(cX1) and (2). State

standards are to be based, at least in part, on EPA-

recommended ambient water quality “criteria’’ and other

scientific information developed and published by the EPA

Administrator, and are to reflect state-designated “uses”

dividual states to define

fs

opted np dhl

Water Pollution Control Amendments of 1972, Pub. L. No. 92

500, 86 Stat. 816 (1972), was based entirely on state-established, in-

stream water quality standards, which virtually all states adopted and

the federal government approved before 1972. E.g., Water Quality Act

of 1965, Pub. L. No. 89-234, 79 Stat. 903 (1965). The federal govern-

ment’s role before 1972 was confined largely to supporting state pro-

grams and mediating the application and enforcement of state standards

with respect to interstate waters. See Zener, “The Federal Law of

Water Pollution Control,” Federal Environmental Law (E.L. Doilgin

and T.G.P. Guilbert eds. 1974) 715.

11

requirements of the Act for the state-designated uses, the

state standard thereupon becomes “the water quality

standard for the applicable waters of that State.”? CWA

§ 303(cX3). The term “applicable waters of that State”

necessarily refers to waters within the state. Traditional

notions of state sovereignty and federalism, as well as the

Commerce Clause of the Constitution of the United States,

Art. I, §8, do not ordinarily allow the extra-territorial

application of a state’s individual water quality standards

to sources locgted outside that state’s jurisdictional bound-

aries. See pp. 22-25, infra.

Federal effluent limitations and other federally-promul-

gated standards, together with source state water quality

standards, provide the foundation for case-by-case permit-

12

accordance with § 301(bX1\C).% See pp. 14-15, infra.

Whenever EPA is the permit-issuer, as here, the source

state also must certify to EPA that the proposed discharge

complies with all relevant federally-promulgated effluent

limitations and standards, as well as the source state’s

water quality standards and any other more stringent

source state requirements."* CWA §§ 401(aX1) and (d).

If a particular proposed discharge ‘“‘may affect” the

waters of another state, EPA must notify the potentially

affected downstream state of the permit application and

soetiis (hak duals Gn teeeaandiag © CUI” ak aeons

an EPA hearing.” Based upon any “recommendations” of

an affected state, EPA’s own evaluation, and any addi-

tional evidence submitted, EPA is then required to con-

dition the permit “as may be necessary” to insure

compliance with “applicable water quality requirements.”’

CWA § 401(aX2).

The situation thus can arise for a permit issued by EPA

under § 402(a), as presented here, wherein EPA deter-

mines and a source state certifies that a proposed dis-

charge will comply with all applicable federal and source

state requirements, but a downstream state believes its

water quality “will be affected” and that it. dditional or

more stringent requirements should be made “applicable”’

by EPA. In this situation, § 401(aX2) of the Act imposes

upon EPA a duty to consider the downstream state’s ‘“‘ob-

Section 402(aX3) provides that an EPA-issued permit ‘‘shal] be sub-

ject to the same terms, conditions, and requirements as apply to a

[§ 402(b)] State permit program and permits issued thereunder .. .”

“ “The CWA therefore establishes a regulatory ‘partnership’ between

the Federal Government and the source State.” Ouellette, 479 U.S. at

490.

“While source States have a strong voice in regulating their own

pollution, the CWA contemplates a much lesser role for States that

share an interstate waterway with the source (the affected States).”’

Ouellette, 479 U.S. at 490.

13

jection” or “recommendation” and grants EPA the dis-

cretion to determine what permit conditions are

“necessary.”"* Section 401(aX2) does not define, however,

what requirements are “necessary’’ to protect downstream

state water quality, thus leaving for EPA to determine

the “applicable water quality requirements” on a case-by-

case basis.

II. The Act Does Not Require That “Affected State”

Standards Be Met By An Out-of-State Source

14

the Tenth Circuit, if any state (including, but not neces-

sarily limited to, the source state and any downstream

state) has adopted, pursuant to § 510, an effluent limitation

more stringent than the appropriate EPA-promulgated ef-

fluent limitation, or if any state has determined that a

more stringent limitation is required to implement a water

quality standard which that state has adopted pursuant to

§ 303(c), then EPA must treat any such state’s more strin-

gent limitation as an “applicable water quality require-

ment” under § 401(aX(2). This interpretation of the Act will

not withstand scrutiny.

A. Sections 301(b\(1)(C), 303(c), and 510 Do Not Man-

date Compliance With “Affected State’’ Standards

An important statutory construction issue is whether,

in the context of a particular proposed permit, the Tenth

Circuit correctly interpreted the phrases “any State law

or regulations” and “any applicable water quality stand-

ard” in § 301(bX1XC) to refer, literally, to the laws, reg

Industry amici submit that, when read in the context

of a particular permit application, §§ 301(bX1XC), 303(c),

and 510 have nothing to do with the issue of whether a

produce the absurd result that a discharge located in New York

} more stringent limitation established by the

California since § 301(bX1\(C), by its own terms,

more

i

S

15

“Timetable for achievement of objectives” —indicates that

this section has to do with the schedule for achieving the

Act’s various standards and requirements, rather than de-

fining or creating any “applicable water quality require-

ments” of the Act. Only by reference to §§ 303 and 510

does § 301(b\X1XC) incorporate the right of a state to es-

tablish—for application within its own boundaries—certain

standards or other requirements which are more stringent

than those mandated by the Clean Water Act. Signifi-

cantly, § 301(b\X1C) does not incorporate by reference any

“requirements” of an affected downstream state under

§ 401(aX2) of the Act. Therefore, § 301(b\1\C) can only

reasonably be interpreted to refer to more stringent re-

quirements of the kind preserved under §510 for source

state administration and more stringent § 303(c) source

state water quality standards (which, it is significant to

note, are the only state law requirements subject to a § 401

compliance certification).

sources. Such an expansive interpretation of §§ 301(bX1\C),

303(c), and 510 would nullify the express provisions of the

Act which grant EPA discretionary authority, under the

case, industry amici believe that, in order for EPA to give “federal

effect” to a downstream state’s water

of resolving an interstate water quality dispute, EPA must comply with

procedural requirements akin to those associated with “federal stand.

eae

16

B. Federal Approval of a § 303(c) “Affected State”’

Standard Does Not Make It A ‘“‘Federal Standard”

If downstream state standards are not generally appli-

cable to an out-of-state source under §§ 301(bX1XC), 303(c),

or 510, the only other way they might be considered gen-

erally applicable to an out-of-state source is if they are

“federal standards.” Not surprisingly, the Tenth Circuit

attached special significance to the “‘federally-approved’’

water quality standards of an affected downstream state.

That is, federal approval of a downstream state standard

was considered by the Tenth Circuit to give it greater

status than a mere “recommendation” with respect to an

out-of-state source. 908 F.2d at 602, n.5, 607, and 608.

Indeed, the Tenth Circuit made no distinction at all be-

tween federally-approved state standards, which must re-

spect state boundaries, and federally-promulgated

standards, which may apply across state lines.

The Act, however, gives no special status to downstream

state “objections” or “recommendations” which are based

on a downstream state’s “federally-approved” standards.

Since the Water Quality Act of 1965 at least, all state

water quality standards must meet minimum federal re-

quirements and must be federally approved. In addition,

ards” promulgation under § 303(cX4), or those required when EPA

establishes a water quality related effluent limitation under § 302 of

the Act. It is difficult to distinguish, in substance or effect, an EPA

decision resolving an interstate water quality dispute from an EPA

See note 16, infra, regarding a 1977 EPA General Counsel’s opinion

which suggests that (in 1977, at least) EPA might well have reached

17

EPA has seldom if ever failed to “approve” state-submit-

ted standards which are more stringent than those nec-

essary to meet the Clean Water Act’s water quality

requirements.

If all EPA-approved downstream state standards are

“federal standards,” and always have been as the Tenth

Circuit apparently believes, EPA long ago would have been

required to adopt rules and procedures to insure that such

“federal standards” be met in every case of a potential

downstream state impact. That EPA has not done so, in

more than 25 years of administering federal water quality

legislation, strongly indicates that EPA itself has never

considered federally-approved downstream state standards

to be “federal standards” or generally applicable require-

ments with respect to an out-of-state source. Thus, to

the extent the Tenth Circuit’s grant of mandatory com-

pliance status to affected downstream state standards is

tied to their “federally-approved” status, the lower court

has given far greater significance to the éffect of federal

approval than does EPA or the statute itself.1”

‘*In 1977, EPA’s General Counsel issued a legal opinion directly

addressing the question of whether EPA’s approval of a state water

quality standard creates a “federal standard.” The EPA General

Counsel, in an opinion which has not since been superseded, ruled that

it does not, for the following reasons: “[Tyhe Act in Sec. 303 contains

no language suggesting that an approval creates a federal standard.

Moreover, in view of the unusual nature of such an action, we do not

58 (March 29, 1977).

" By giving automatic “federal effect” or mandatory out-of-state com-

pliance status to all EPA-approved § 308 state water quality standards,

the lower court would essentially repeal Congress’ express directive in

18

III. The Tenth Circuit’s Decision Gives Preeminent Sta-

tus To “Affected State’ Standards, Contrary To

This Court’s Construction Of The Act In Queilette

The Tenth Circuit’s decision makes a virtual mockery

of this Court’s construction of the Clean Water Act in

International Paper Co. v. Ouellette, 479 U.S. 481 (1987).

In analyzing both of the statutory provisions which grant

EPA discretionary authority to resolve water quality dis-

putes among states, this Court’s unambiguous conclusion

was that “‘affected States occupy a subordinate position

to source States in the federal regulatory framework.” 479

U.S. at 491. In the case of an EPA-issued permit, as here,

this Court clearly recognized EPA’s discretionary authority

with respect to downstream state standards in stating that

an affected downstream state “only has an advisory role

in regulating pollution that originates beyond its borders.”’

479 U.S. at 490 (emphasis added). In the case of a permit

issued by the source state, instead of EPA, this Court also

clearly read the Act as giving EPA the discretion to accept

a downstream state’s “recommendation” and disapprove

the proposed permit if EPA determines that the proposed

discharge “will have an undue impact on interstate

waters.” 479 U.S. at 490-91 (emphasis added).

The Tenth Circuit’s decision, however, gives any down-

stream state which chooses to adopt water quality stand-

ards which are more stringent than the Clean Water Act

requires (or which are different from or more stringent

than source state requirements) a preeminent position in

the federal regulatory framework. In doing so, the lower

court not only ignores this Court’s confirmation of the

preeminent status of the source state’s permit standards

§ 303(cX3) that EPA-approved state standards generally apply only to

the waters “of that State,” and would effectively repeal as well Con-

gress’ §§ 401(aX2) and 402(d\2) grant of discretionary authority to EPA

to determine that giving effect to a downstream state standard may

be “necessary” under the facts of a particular case.

19

and policy choices,“ but it also creates an implausible in-

consistency in the statute concerning EPA’s authority to

resolve water quality disputes among neighboring states.

A. Compliance With “‘Affected State” Standards Can-

not Rationally Be Mandatory When EPA Is The

Permit-Issuer, But Discretionary When The Source

State Is The Permit-Issuer

As interpreted by the Tenth Circuit, § 401(aX2) abso-

lutely requires that the permit insure compliance with af-

fected downstream state standards when EPA is the

permit-issuer, as here. When a source state is the permit-

issuer, however, EPA’s authority under § 402(d\2) to re-

quire compliance with downstream state standards is

clearly discretionary, as confirmed by this Court in Ouel-

lette and acknowledged by the lower court as well (908

F.2d at 611). Thus, under the Tenth Circuit’s reasoning,

EPA has no alternative but to apply downstream state

requirements when EPA issues the permit, but when a

source state issues the permit EPA may or may not choose

to apply downstream state requirements.” It is irrational

““{T}t is not surprising that the Act limits the right to administer

the permit system to the EPA and the source States. ... If a New

York source were liable for violations of Vermont law, that law could

effectively override both the permit requirements and the policy choices

made by the source State.” Ouellette, 479 U.S. at 495.

‘In recognizing that § 402(d\2) grants EPA discretionary authority

to consider imposing additional downstream state requirements when

a source state issues the permit—and thus § 402(dX2) conflicts with the

lower court’s perception of EPA’s non-discretionary duty to apply

downstream state requirements under § 401(aX2) when EPA issues the

permit—the Tenth Circuit obviously was obliged to explain this apparent

inconsistency it found in the statute. The lower court did so by taking

the position that § 402(dX2)—like the court’s interpretation of

§ 401(aX2)—requires EPA, once EPA decides merely to review a source-

state proposed permit, to insist that the permit comply with the stand-

ards of affected downstream states. 908 F.2d at 611, n.19. In contrast

to this Court’s Ouellette discretionary “undue impact” standard for”

20

and thus implausible that Congress intended compliance

with downstream state requirements to be compulsory

when EPA is the permit-issuer, but discretionary when

the source state is the permit-issuer.”

Far more plausible and consistent with the statute as

a whole, as well as this Court’s construction of the Act

in Ouellette, is an intent of Congress that EPA always

appropriate characterization of EPA’s duty to consider the

application of (but not automatically apply) a downstream

State standard ‘“‘as may be necessary.’’ Among other things,

an undue or unacceptable impact test preserves the sta-

tutory preeminence of source state requirements, without

denying downstream states their statutorily-provided op-

portunity to convince EPA that compliance with additional

EPA’s review authority under § 402(d2), the Tenth Circuit thus in-

terpreted EPA’s § 402(d\2) review authority as being limited to simply

confirming whether or not any downstream state requirements would

be violated. Thus, if one accepts the Tenth Circuit’s reasoning, EPA

§ 402(dX2) once EPA decides to “review the impact” of the proposed

discharge. The only way for EPA to avoid the need to comply with

state requirements under § 402(dX2) would be for EPA to

Stay completely out of the interstate dispute, and thus defer to the

source state.

It is significant to recall here as well that § 402(aX3) of the Act (see

note 10, supra) requires EPA to apply the source state’s permit stand-

ards whenever EPA is the permit-issuer under § 402(a).

21

or more stringent downstream state requirements should

be found “necessary” in a particular case.

B. As This Court Found In Ouellette, The Act’s “‘Sav-

ings Clause’ Does Not Preserve Rights Under The

Law Of An “Affected State”’

It is clear from this Court’s opinion in Ouellette, as well

as the Court’s earlier pronouncements in City of Milwaukee

v. Illinois, 451 U.S. 304, 318 (1981), that Congress in-

tended the Clean Water Act to be comprehensive and thus

preempt or “dominate the field” of water quality regu-

lation. 479 U.S. at 492. The central issue in Ouellette was

whether, in light of the Act’s generally preemptive federal

regulatory scheme—but simultaneous preservation in § 510

of the right of a state to regulate its own waters more

stringently, as well as the right of any person to seek

enforcement of any state statutory or common law right

under § 505(e)—Congress intended to “save” a right to

bring suit under the common law of an affected state. The

Court found that Congress did not intend these provisions

to save the law of an affected downstream state.2! In fact,

the Court found that the Act’s goals and policies, as ex-

tensively examined by the Court, indicate that Congress

intended just the opposite—to preempt an action based on

the law of an affected state.

* Of particular importance to the present case, the Court noted in

Ouellette that § 510’s more-stringent-regulation saving clause arguably

applies only to “discharges flowing directly into a state’s own waters

original). Moreover, the Court stated that § 505(e) itself does not “pur-

port to preclude preemption of state law by other provisions of the

Act.” Id. Thus, the Act’s Savings provisions—while preserving certain

rights in the source state—do not preclude federal preemption of the

law of an affected downstream state.

*In 1986, the State of Tennessee sought to enforce its state water

quality standards and common law remedies against Champion’s Can-

ton, North Carolina mill discharge. The Supreme Court of Tennessee

ruled—consistent with the Seventh Circuit’s opinion in Illinois v. City

22

There is nothing in this Court’s analysis of the Clean

Water Act in Ouellette, or in the Act itself, to suggest

that any different conclusion should be reached regarding

a downstream state’s water quality statutes and regula-

tions. The very same comprehensive federal regulatory

scheme—including an express grant of EPA discretionary

authority to resolve interstate water quality disputes and

to consider downstream state law requirements “as may

be necessary”—clearly indicates that Congress did not in-

tend the water quality laws and regulations of downstream

states to govern automatically in every case. In other

words, Congress’ express provision of an exclusive EPA

forum to resolve applicable water quality standards dis-

putes for interstate waterways leaves no room for the

assertion of any downstream state “rights” with respect

to the application of differing or more stringent down-

stream state law requirements against an out-of-state

source.

IV. The Tenth Circuit’s Ruling Lacks The N

Support Of A Clear And Unmistakable Statutory

Authorization For An “Affected State” To Regu-

late Commerce Occurring Outside Its Borders

The only way the Tenth Circuit’s ruling giving preem-

inent, mandatory compliance status to affected down-

stream state standards could be legally sustained—as a

of Milwaukee, 731 F.2d 403, 414 (7th Cir. 1984) cert. denied sub nom.,

Scott v. City of Hammond, 469 U.S. 1196 (1985)—that Tennessee could

not bring an action to enforce its law against Champion's out-of-state

23

matter of Commerce Clause law, if not proper statutory

construction—would be if, as an element the Act’s com-

prehensive scheme of federal regulation, Congress had ez-

pressly and unmistakably granted downstream states the

power to control out-of-state discharges, and thus interfere

with out-of-state commercial activities in the manner which

the Tenth Circuit’s ruling clearly allows. In short, absent

the finding of such an express delegation by Congress, the

lower court’s decision violates well-established Commerce

Clause principles.

State-of-the-art industrial water usage and treatment

practices are such that virtually every industrial plant of

every size and kind must discharge at least some waste-

water effluent after it is treated to meet the requirements

of the Clean Water Act. The power to regulate or prohibit

industrial discharges, therefore, is the power to regulate

or prohibit industrial activity itself.

Oklahoma’s adoption of a “‘non-degradation” standard in

the Illinois River at the Arkansas-Oklahoma state line, as

applied by the Tenth Circuit, represents an assertion of

downstream state power to prohibit upstream state dis-

charges. The question here is whether Congress plainly

and unmistakably granted downstream states, such as

Oklahoma in this case, the power unilaterally to interfere

with or prohibit commerce in another state.”

Such an express downstream state power to burden in-

terstate commerce cannot reasonably be said to exist on

™ Congress is free to authorize state-law intrusions upon interstate

commerce, but any such delegation of Congress’ exclusive authority

over interstate commerce must be “expressly stated.”” Sporhase v. Ne-

braska, 458 U.S. 941, 960 (1982). Courts have been hesitant to find

that Congress intended to abandon Commerce Clause protections, re-

quiring that such an intent be “unmistakably clear.” South-Central Tim-

ber Development, Inc. v. Wunnicke, 467 U.S. 82, 92 (1984); accord

Northeast Bancorp, Inc. v. Board of Governors, 472 U.S. 159, 174 (1985)

(requiring ‘‘plain authorization” by Congress).

24

the face of the statute, for all the reasons previously dis-

cussed. It is evident from the lower court’s own extensive

and somewhat strained analysis of the Act that the Tenth

Circuit also could not find in the statute any plain or

unmistakable delegation of such power to downstream

states. Nor is it sufficient for a court to infer such power

from the statutory purposes or the legislative debates.”

ignored the Commerce Clause implications of its decision, as well as

the broad federal preemption basis of this Court’s decision in Ouellette.

25

When Congress has spoken clearly and unmistakably to

the contrary by providing an exclusive, case-by-case, EPA

forum for resolving interstate water quality disputes, no

court should be allowed to grant a downstream state the

power to interfere unilaterally with permitting decisions

in the source state.

EPA’s role in issuing permits for discharges to inter-

state waterways, and EPA’s role in resolving water quality

disputes concerning discharges to interstate waterways,

was not intended by Congress to be reduced to a me-

chanical process of simply applying, whenever they are

different or more stringent, the EPA-approved standards

of affected downstream states. There is thus no basis for

the lower court’s conclusion that downstream state stand-

ards occupy a position of preeminence (or even occupy an

equivalent status with source state standards) in the fed-

eral regulatory framework.

V. The Tenth Circuit’s Absolute Prohibition Of New

Discharges To Waters Not Meeting Water Quality

Standards Lacks A Proper Statutory Basis

Compounding the error of giving preeminent, mandatory

compliance status to affected downstream state standards,

the Tenth Circuit also misread the Act as absolutely pro-

hibiting any new or increased discharges to a waterway

which is not currently meeting the downstream state’s (or

the source state’s) water quality standards.

While it is true that a stated “goal” of the Act is the

elimination of discharges of pollutants, it is equally un-

deniable that the specific substantive provisions of the Act

do not require such elimination and that the Act allows

each state to decide for itself how far and how fast it will

move towards achieving that goal. The Act has never been

interpreted by EPA, or by any court heretofore, to require

an absolute ban on new or increased discharges in order

to achieve the Act’s goals, whether at the behest of a

downstream state or not.

26

In support of its conclusion that such a prohibition exists

_ in the Act, the Tenth Circuit relied almost exclusively upon

its “common sense” understanding of the Act’s goals and

purposes and the “absurdity” of a policy that would allow

a new discharge—including one whose individual impact is

undetectable—to be made into a waterway which is not

currently meeting applicable water quality standards. 908

F.2d at 631-32. The absence of “an explicit imprimatur’’

in the statute (908 F.2d at 632, emphasis in original) for

the court’s absolutist ruling, however, obviously cannot be

overlooked.

The “national goal’’ of eliminating the discharge of pol-

lutants into navigable waters by 1985, upon which the

lower court placed so much emphasis (908 F.2d at 630-

32), has not been achieved by 1991 and by many accounts

may not ever be achieved. Nor should undue weight be

given to the equally slippery notion, adopted by the Tenth

Circuit, that EPA’s “watchful role” and other responsi-

bilities as custodian of the navigable waters is sufficient

to “subsume the power [or duty] to prohibit any new dis-

charge of pollution, regardless of the magnitude of its

impact, where the existing quality of the receiving waters

does not meet required standards.’’*

It is illogical to conclude that EPA’s powers or duties

under the Act are unlimited when it comes to regulating

the out-of-state application of a broadly prohibitive ‘“‘non-degradation”’

or similar downstream state water quality standard without express

authorization by Congress.

27

‘ if express federal preemption is found not to exist), the

Tenth Circuit got it exactly backwards. The statute ex-

plicitly grants EPA discretion to determine the “applicable

water quality requirements” for discharges to interstate

waterways when a dispute arises among neighboring states,

whether EPA itself or the source state is the permit-issuer.

The statute imposes no strict duty and confers ‘no broad

authority upon EPA (and certainly not upon a downstream

state) to ban all new or increased discharges to waterways

not currently meeting water quality standards.

Indeed, the breadth of EPA’s duties and the scope of

EPA’s authority in both of these respects cannot be more

aptly described than by asking, in the words of this Court

in Ouellette: Does the proposed discharge, in EPA’s judg-

ment, have an “undue impact” or unacceptable effect on

the waters in question? Requiring EPA to apply auto-

matically the additional or more stringent standards

adopted by an affected downstream state (or stay com-

pletely out of the interstate dispute, and thus defer to the

source state), and requiring EPA to ban absolutely any

new discharge to a waterway not currently meeting the

applicable standards, robs EPA of the federal balancing

role which Congress expressly granted EPA under the

Act, as recognized by this Court in Ouellette.2’

CONCLUSION

The Tenth Circuit’s grant of automatic, mandatory com-

pliance status to the federally-approved state water quality

standards of affected downstream states—giving them

preeminent status over federally-approved source state

standards—is contrary to the Clean Water Act, this Court’s

broad federal preemption construction of the Act in Oue-

lette, and Commerce Clause principles as well.

" Judicial review of EPA’s exercise of that discretion, based upon a

proper record of EPA's decision, is available to protect aggrieved par-

28

The lower court’s absolute ban on new discharges to

waterways not currently meeting applicable water quality

standards is without any proper statutory basis.

Steel Institute, American Mining Congress, The Fertilizer

Institute, Chemical Manufacturers Association, National

Association of Manufacturers, Associated Industries of Ar-

kansas, Arkansas Federation of Air and Water Users, Inc.,

and Arkansas Poultry Federation respectfully urge the

Court to reverse the decision of the Court of Appeals.

29

RICHARD A. FLYE

McKENNA & CUNEO

1575 Eye Street, N.W.

Washington, D.C. 20005

(202) 789-5000

Counsel for

The Fertilizer Institute

THEODORE L. GARRETT

CORINNE A. GOLDSTEIN

COVINGTON & BURLING

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20044

(202) 662-6000

Counsel for

Chemical Manufacturers

sea

CHARLES R. NESTRUD

JANTE W. McFARLIN

CHISENHALL, NESTRUD &

JULIAN, P.A.

400 West Capitol

Little Rock, Arkansas 72201

(501) 731-5800

Counsel for

Associated Industries of

Arkansas and Arkansas

Federation of Air and Water

Users, Inc.

May 31, 1991

R full bmitted.

J. JEFFREY MCNEALEY

(Counsel of Record)

JANET J. HENRY

PORTER, WRIGHT, Morris &

ARTHUR

41 South High Street

Columbus, Ohio 43215

(614) 227-2000

MICHAEL K. GLENN

MICHAEL G. Dowp

PORTER, WRIGHT, Morris &

ARTHUR

1233 20th Street, N.W.

Washington, D.C. 20036

(202) 778-3000

Counsel for

Champion International

Corporation, American Paper

Institute, National Forest

Products Association,

American Iron and Steel

Institute, American Mining

Congress and National

Association of Manufacturers

JERRY C. JONES

Jess ASKEW III

Rose Law Firm

120 East Fourth Street

Little Rock, Arkansas 72201

(501) 275-9131

Counsel for

Arkansas Poultry Federation