Petitioners Brief — Arkansas v. Oklahoma

Supreme Court brief1991

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Nos. 90-1266 and 90-1262

OCTOBER TERM, 1990

ENVIRONMENTAL PROTECTION AGENCY, PETITIONER

Vv.

STATE OF OKLAHOMA. FT AL.

STATE OF ARKANSAS, ET. AL.. PETITIONER

Vv.

STATE OF OKLAHOMA. FET AL.

ON WRITS OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF FOR THE ENVIRONMENTAL PROTECTION AGENCY

KENNETH W. STARR

Solicitor General

RICHARD B. STEWART

Assistant Attorney General

LAWRENCE G. WALLACE

Deputy Solicitor General

HARRIET S. SHAPIRO

Assistant to the Solicitor General

MICHAEL A. McCCorD

ANNE S. ALMY

E. DONALD ELLIoT? GARY S. GUZY

General Counsel Altorneys

CATHERINE A. WINER Department of Justice

PAT RANKIN Washington, D.C. 20530

Attorneys (202) 514-2217

Environmental Protection

Agency

Washington, D.C. 20460

i ee _

‘ee

QUESTIONS PRESENTED

1. Whether determination of the appropriate standards

governing the issuance of permits under the Clean Water

Act for discharges into interstate waters involves a ques-

ion of federal law, requiring a reviewing court to uphold

the validity of the Environmental Protection Agency’s per-

mitting action if that action was based upon a reasonable

interpretation and application of the federally approved

water quality standards of the receiving State.

2. Whether the Environmental Protection Agency

reasonably concluded that the contemplated discharge

would comply with the applicable water quality standards

because it would have no detectable impact On current water

quality within the receiving State.

3. Whether the court exceeded the proper scope of

judicial review.

(1)

PARTIES TO THE PROCEEDINGS

The parties to the proceedings in the court of appeals, in

addition to the United States Environmental Protection

Agency, were the State of Arkansas, The Arkansas Depart-

ment of Pollution Control and Ecology, The City of Fayet-

teville, Arkansas, the Beaver Water District, the State of

Oklahoma, the Oklahoma Scenic Rivers Commission, The

Oklahoma Pollution Control Coordinating Board, Save the

Illinois River (STIR), and the Oklahoma Wildlife

Federation.

Opinion below

Jurisdiction

TABLE OF CONTENTS

Statutory and regulatory provisions involved —

Statement

Argument:

Federal law governs the interpretation and

application of federally approved state water

quality standards to out-of-state discharges

This Court’s decisions establish that inter-

State water pollution issues are to be re.

solved by application of federal law -

The Clean Water Act assigns to EPA the

responsibility for resolution of disputes

between states over the discharge of

pollutants into interstate waters __ .

EPA’s interpretation of the tederally-

approved Oklahoma standards is entitled

to judicial deference...

There was no appropriate basis for rejecting

EPA's interpretation and application of the

Oklahoma standards ..........

EPA reasonably construed the state an-

lidegradation provision to allow an out-

ot-state discharge where that discharge

would have no detectable impact on the

current water quality of the protected

TNH BEE Gbbccccccccccee... |

The court of appeals’ policy choices are

not required by the Clean Water Act or

applicable regulations _.__

(til)

lable — Continued: Page

lll. The court of appeals should have considered

whether the record supported issuance of the

permit under the interpretation of the

Oklahoma standard adopted by EPA ..... 30

Cees gg og poate bade e dle Ce enhueteceer 34

TABLE OF AUTHORITIES

Cases:

American Textile Mfrs. Inst. v. Donovan, 452 U.S.

1 RR CE ere ST ep ke 31

Arkansas v. Oklahoma, 488 U.S. 1000 (1989) .. 11

Bowles v. Seminole Rock & Sand Co. , 325 U.S. 410

CD 5 ccucvsvan veencdaeduk ee areeasans 21

Champion Int'l Corp. v. EPA, 850 F.2d 182 (4th Cir.

SE. cu cudnuns euaeuadaa cemede peetteanus 17

Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837

GD da ceacus veuencedvbakeucee deste diaees 21, 28

Citizens to Preserve Overton Park, Inc. v. Volpe,

. £ lh 5 errr er 31

City of Milwaukee y. Iilinois, 451 U.S. 304

OE. conc dunceacscksceudhabetensanas 16, 30, 33

Consolo v. Federal Maritime Commission, 383 U.S.

ey cs coach du ban wedeeeeueews atone. 31, 32

Department of the Treasury v. FLRA, 110 S. Ct.

og a Chien a ee ead 31

E.1. duPont de Nemours & Co. v. Train, 430 U.S.

i Se, on chit bcacheaed i tamen aetna ha 2

EPA v. California ex rel. State Water Resources

Control Bd., 426 U.S. 200 (1976) ........... 3,4

FCC v. Pottsville Broadcasting Co., 309 U.S. 134

CE. a wan onky bis Oe ae oes ee ce wees 3]

FPC v. Idaho Power Co., 344 U.S. 17 (1982) .. 3]

Ford Motor Credit Co. v. Milhollin, 444 U.S. §5§

(1980) Ee lecture ele we ae es el ei ee a 20

Illinois v. City of Milwaukee, 406 U.S. 91

(1972) pat . Piven: |

Cases — Continued: Page

International Paper Co. v. Ouellette, 479 U.S. 48]

coieovars he ELT Cs a ee 16, 17

Aleppe v. Sierra Club, 427 U.S. 390 (1976)... 3]

ots aon ARRELE TT CLEP ET ee ey eae 20

Oklahoma vy. Arkansas, 460 U.S. 1020 (1983) _. 7

Udall v. Tallman, 380 U.S. | | oe 20

United States vy. Larionoff, 431 U.S. 864

GME F6 Nee thn yenaddsacevecsdrosen.cc..:. 20, 21

Statutes and rule:

Clean Water Act, 33 U.S.C. 1251 ef seq. ...... 2

§ 101(a), 33 U.S.C. Sea 2

§ 101(d), 33 U.S.C. _ . ae 2

SM, USC. 1908 ............... 2

§ 301(a), 33 U.S.C. 131May 0... 4

§ 303, 33 U.S.C. 1313... 2, 20

§ 303(a), 33 ULS.C. Ea 2

§ 303(b), 33 U.S.C. _. . SRA noae 2

§ 30K), 33 U.S.C. eee 19

§ 308eM1), 33 ULS.C. Ao 2

§ 303(cM2), 33 ULS.C. 1313(cM2) ....... a 3

§ 30cK3), 33 U.S.C. 2) 4,19

§ 303(cM4), 33 U.S.C. I313(cM4) 2. 19

§ 303(d 4B), 33 U.S.C. 1313(d)(4)(B) 4, 23

§ 306, 33 U.S.C. 1914 ................. 2

§ 401(a), 33 ULS.C. 1341(a) ... ‘aeneae 5,6

§ 401(ayl), 33 USC. 134l(ayl) 17

§ 401(a)(2), 33 ULS.C. 1341(ay2) 2. 6, 17,

18, 32

§ 402, 33 U.S.C. 1342 ...... 4

§ 402(a), 33 U.S.C. 13424(a) 6, 17

§ 402(b), 33 U.S.C. 1342(b) __- TTT te

» 402(b3), 33 USC. 1342(b)(3) ) , 5

» 402(bMS), 33 ULS.C. 1342(b)S) 5, 17

Statutes and rules — Continued: Page

§ 402(d), 33 U.S.C. 1342(d) .......------. 19

§ 402(d)(1), 33 U.S.C. 1342(d)01) 2... 5

§$ 402(d)(2), 33 U.S.C. 1342(d)(Q2) ... §, 17

§ 402(d)(2M A), 33 U-S.C. 1342(d) 2A) .... §, 17

§ 402(d)(2(B), 33 U.S.C. 1342(d)(2)(B) .... §,17

§ 402(d)(4), 33 U.S.C. 1342(d(4) 5

§ 404, 33 U.S.C. 1344 ........- 2-6 ee eee, 4

§ 404(a), 33 U.S.C. 1344(a) .......------- 4

§ §02(6), 33 U.S.C. 1362(6) .....---- 6-0 4

§ $02(11), 33 U.S.C. 1362011) ...... 66-0 2

§ §02(14), 33 U.S.C. 1362(14) ........--.. 3

Okla. Stat. Ann. tit. 82 (West 1990):

VY |) rer rere eee eee 6, 26

PC dubs deus acbtehsgeevanenesssces 26

40 C.F.R

Pi. 35:

Section 35.15S50(e)(2) (1981) ....--.--- 23

Pt. 122:

i Ce vc caconnteseoscetes 27

Section 122.44(d)(1) ......-..----055- 4

Pt. 123:

ee eee 5

Pt. 124:

Gactign 136.TOID) .. onc cccccecccccees y

i -R i s os Pheer eben needs eee ee 20

Bete. BD co vic cecdccceccscvccccesess 4

Section 131.12(ap3) .........---- 23

Oklahoma Water Quality Standards (1982) ..... 2

Oe seccvusonsabage tasheedshenduess 8, 22, 23, 26

Oe Uns huene sade save cenvdectpeehwaws »

SA. eeeerrrrr reer ere 10

Miscellaneous:

48 Fed. Reg. 51,402-51,403 (1983) .....-...---. 23

Vil

Miscellaneous — Continued: Page

Region IV, Questions and Answers on Implementa-

tion of Tier Ill of the Federal Antidegradation

Policy: Protection of Outstanding National

Resource Waters (Apr. 20, 1989)... 24

Region V, Guidance for Antidegration Policy Im-

plementation for High Quality Waters (Dec. 3,

samt bei tiie ty tery ter te eee 24

Region IX, Guidance On implementing the Anti-

«degradation Provisions of 40 CFR. 131.12 June

We MD 645 100 see svtaeitcarcesccecccc.,.... 24

Jn the Supreme Court of the United States

Oc roner Trea, 1990

No. 90-1266

ENVIRONMENTAL Prope HON AGENCY. PE LETIONER

Vv.

STATE OF Ons NHOMA. ET AI

No. 90-1262

STATE OF ARKANSAS, FI AL pH Li TIONER

Vv.

SEALE OF OKLAHOMA. £4 \l

ON WRITS OF CERTIORARI

OTHE UNITED STATES COURT OF APPITALS

POR THE TENTH CIRC UTI

BRIEF FOR THE ENVIRONMENTAL PROTECTION AGENCY

OPINION BELOW

The opinion of the court of appeals (Pet. App. 1a-97a)!

is reported at 9O8 F.2d $95.

JURISDICTION

The judgment of the court of appeals was entered on July

11, 1990. Petitions for rehearing were denied on October

11, 1990 (Pet. App. 984-994). On December 29, 1990,

Justice White extended the time for filing a petition for a

“Pet. App.” refers to the Pehihion appendix in No. 90-1266: “Ark

Pet. App.” reters to the pehihion appendix in No. 90-126?

(1)

writ of certiorari to and including February 8, 1991. The

petitions were filed on that date, and granted on April 1,

1991. The jurisdiction of this Court rests on 28 U.S.C.

1254(1).

STATUTORY AND REGULATORY PROVISIONS INVOLVED

The relevant provisions of the Clean Water Act, 33

U.S.C. 1251 et seq., are reproduced at Pet. App. 100a-106a.

The relevant provisions of the Oklahoma Water Quality

Standards are reproduced at Pet. App. 96a-97a.

STATEMENT

1. The Clean Water Act, 33 U.S.C. 1251 et seq., is a

comprehensive statute designed “to restore and maintain the

chemical, physical, and biological integrity of the Nation’s

waters” through reduction and eventual elimination of the

discharge of pollutants into those waters. Section 101(a),

33 U.S.C. 1251(a). The Act anticipates a partnership be-

tween the federal government and the States to achieve this

fundamental goal. The Administrator of the Environmen-

tal Protection Agency (EPA) is, with certain explicit excep-

tions not relevant here, responsible for administering the

Act. Section 101(d), 33 U.S.C. 1251(d). A major respon-

sibility of the Administrator under the Act is the develop-

ment and promulgation of uniform national technology-

based standards, known as “effluent limitations guidelines,”

for categories and classes of discharges. Sections 301 and

304, 33 U.S.C. 1311 and 1314. E.1. duPont de Nemours

& Co. v. Train, 430 U.S. 112, 126-136 (1977). An “effluent

limitation” is “a[] restriction * * * on quantities, rates, and

concentrations of chemical, physical, biological, and other

constituents which are discharged from point sources.” Se:

tion S02(11), 33 U.S.C. 1362(11).2

A second major source of authority for reducing pollu-

tion is found in Section 303, which directs States. with

federal approval and Oversight, to institute a range of com-

prehensive requirements, potentially more stringent than the

federally imposed limitations, to assure protection of the

quality of all state waters. Section 303(a), (b), and (c)(1).

33 U.S.C. 1313(a), (b), and (c)(1). These water quality stand-

ards are not technology-based standards; instead, they are

based on the desired uses and condition of the particular

waterway involved. Congress utilized water quality stand-

ards “as a supplementary basis * * * so that numerous point

sources, despite individual compliance with effluent limita-

tions, may be further regulated to prevent water quality

from falling below acceptable levels.” EPA v. C alifornia

ex rel. State Water Resources C ontrol Bd., 426 U.S. 200.

205 n.12 (1976). Section 303(c)(2), 33 U.S.C. 1313(c)(2). A

watcr quality standard is a method of expressing the desired

condition of a waterway. Water quality standards under the

Act generally consist of three elements: (1) one or more

designaied “uses” of that waterway (e.g., public water sup-

ply, recreation, propagation of fish, or agriculture) consis-

tent with the goals of the Act as set forth in Section 101:

(2) “criteria” specifying the amount of various pollutants

that may be present in those waters and still protect the

designated uses, expressed in numerical concentration limits

Or Narrative form; and (3) a Provision restricting the

degradation of certain waters, /.e., an antidegradation

policy. Section 303(c)(2), 33 U.S.C. 1313(c)(2); Section

* A point source is “any discernible, confined and discrete conveyance

* * * trom which pollutants are or may be discharged.” Section SO2(1 4),

BUS, 1362(14).

303(d)(4)(B), 33 U.S.C. 1313(d)(4)(B); 40 C.F.R. Pt. 131,

Subpt. B. The States must submit their water quality stand-

ards to EPA for review and approval. Upon approval by

EPA, a state-adopted water quality standard “shall

thereafter be the water quality standard for the applicable

water of that State.” Section 303(c)(3), 33 U.S.C. 1313¢c)(3).

The primary means for achieving and enforcing effluent

limitations guidelines and state water quality requirements

is the “national pollutant discharge elimination system”

(NPDES) permit program under Section 402 of the Act, 33

U.S.C. 1342. State Water Resources Control Bd., 426 U.S.

at 205. The Act prohibits the discharge of any pollutant’

into the waters of the United States except when authoriz-

ed by an NPDES permit or a Section 404 permit.* Section

l(a), 33 U.S.C. 1311(a). Thus, an NPDES permit (which

may include a timetable for compliance) transforms general-

ly applicable effluent limitations guidelines and state water

quality standards into obligations of the individual

discharger. See 40 C.F.R. 122.44(d)(1).

The Act provides that EPA will issue NPDES permits ex-

cept in those States where EPA has approved a state per-

mit program pursuant to Section 402(b), 33 U.S.C. 1342(b).

Even in those States with approved permit programs, the

State must submit to EPA a copy of each proposed permit

involving an interstate waterway before it may be issued.

ihe term “pollutant” is defined in Section §02(6) of the Act, 33

U.S.C. 136216).

‘ Section 404 permits authorize the discharge of “dredged or till

material.” whereas NPDES permits authorize the discharge of all other

pollutants. Section 404(a), 33 U.S.C. 1344(a) The permit at issue here

is an NPDES permit.

EPA had permit-issuing authority in this case, which involves

discharges arisine in Arkansas, because Arkansas did not have an ap

proved permit program at the time the permit application was made

tPA has subsequently approved the Arkansas permit program

Section 402(d)(1) and (2), 33 U.S.C. 1342(d)(1) and (2): 40

C.F.R. 123.24(d). EPA may Object to issuance of an

NPDES permit if it determines that issuance would be “out

side the guidelines and requirements” of the Act. Section

402(d)(2)(B), 33 U.S.C. 1342(d)(2)(B). On receipt of an

objection, the State may submit an appropriately revised

permit; if it fails to do so, EPA will issue a permit “in ac-

cordance with the guidelines and requirements” of the Act.

Section 402(d)(4), 33 U.S.C. 1342(d)(4).

The Clean Water Act also establishes mechanisms for

resolving interstate water pollution questions, i.¢., situations

where a discharge in one State may affect the waters of

another State. Specifically, the Statutory conditions for EPA

approval of state permit programs require cach program

(O contain specified provisions for dealing with such situa-

tions. The source, or permit-issuing, State must have pro-

cedures for notifying other States, “the waters of which may

be affected,” of a permit application contemplating such

discharges. Section 402(b)(3), 33 U.S.C. 1342(b)(3). Each

potentially affected State must then be afforded an oppor-

tunity to “submit written recommendations to the permit-

ling State” and to EPA regarding the application. Section

402(b)(5), 33 U.S.C. 1342(b)(S). If any part of those recom-

mendations is not accepted by the permitting State, that

State must notify the affected State and EPA. Section

402(b)(S5), 33 U.S.C. 1342(b)(S5). EPA then has the right to

object to issuance of the permit, as provided in Section

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

Where EPA itself retains permit-issuing authority, the

statutory procedures for resolution of interstate disputes are

contained in the provisions governing the issuance of federal]

licenses and permits that may affect water quality. Thus,

Section 401 (a), 33 U.S.C. 1341(a), requires applicants for

federal licenses or permits for activities that may result in

discharges to navigable waters to provide a certificaiion

from the source State that the proposed discharge will com-

ply, inter alia, with applicable water quality standards. I!

the source State denies such a certification, no permit may

be issued. Section 401(a), 33 U.S.C. 1341(a). Whenever EPA

(or any other federal permitting authority) determines that

a discharge might affect water quality in another State, Il

must notify that State. Section 401(ap(2), 33 U.S.C.

1341(a}(2). If the notified State determines that the discharge

will violate its water quality requirements, the federal per-

mitting authority must (if the State requests) hold a hear-

ing to consider the State’s objections and EPA’s recommen-

dations, and “condition such * * * permit in such manner

as may be necessary to insure compliance with applicable

water quality requirements.” Section 401(a), 33 U.S.C.

1341(a)(2).°

2. This case involves an interstate dispute concerning

the waters of the Illinois River, which originates in the State

of Arkansas and flows into the State of Oklahoma.’ In the

early 1980's the City of Fayetteville, Arkansas, operated a

sewage treatment plant that discharged all of its wastewater

into the White River (which is not a tributary of the Illinois

River).* The White River was unable to assimilate that waste

without violating Arkansas’ water quality standards. To

alleviate this situation, Fayetteville constructed a new

wastewater treatment plant, with federal financial assistance

provided by EPA under the Clean Water Act. The plant

* If EPA is itself the permitting agency, the hearing ts held pursuant

to the provisions of Section 402(a), 33 U.S.C. 1342(a).

In 1970. Oklahoma designated the portion of the Hlinois River trom

the state line to the Tenkiller Reservoir a state scenic river. Pet. App.

SQa. 62a; Okla. Stat. Ann. tit. 82, § 1452(b)(1) (West 1990).

* The sewage treatment plants of other Arkansas communitics have,

however, historically discharged their effluent into the Iilinow River

above the state line. See Ark. Pet. App. 128a.

was designed so that its discharges into the White River

would not cause a violation of Arkansas water quality stand-

ards: discharged pollutants were to be greatly reduced, and

half of the treated effluent was to be discharged into a

tributary of the Illinois River. Pet. App. 2a, Sa.°

In 1985, Fayetteville applied to EPA for an NPDES per-

mit for its new treatment plant. Following public notice and

an informal public hearing (see 40 C.F.R. Pt. 124), EPA

issued an NPDES permit to Fayetteville on November §,

1985, to become effective on December 10, 1985. The per-

mit authorized split flow into both the White River and the

Illinois River tributary; it contained stringent limits with

respect tO Oxygen demand, total suspended solids, and

Phosphorus. It also prohibited discharge of inadequately

treated sewage, so that if the plant malfunctioned,

wastewater would have to be stored and retreated. Finally,

a reopener provision in the permit specified that if an on-

going study of water quality in the Illinois River showed

a need for more stringent limitations on Fayetteville’s

Gischarge to ensure compliance with Oklahoma water quali-

ly standards, the permit would be modified accordingly. Pet.

App. Sa-6a.

Both Oklahoma and Arkansas requested an evidentiary

hearing before EPA on its issuance of the NPDES permit.

The sole issue addressed in the evidentiary hearing was

whether the Fayetteville discharge into the tributary of the

* Fayetteville’s plans prompted the State of Oklahorna to move this

Court for leave to file an original action against the State of Arkansas

(and other entities) alleging causes of action under the federal and state

common law of nuisance. Oklahoma vy. Arkansas, No. 93 Orig. In

response to the Court's invitation, the United States filed a brief Op

posing the motion for leave to file the complaint, on the ground that

the Clean Water Act permitting procedures would afford the State an

adequate remedy for any threat to its water quality standards. This

€ ourt demed the motion for leave to file the complaint. 460 U.S. 1020

(1983).

Hlinois River would cause a violation of the Oklahoma water

guality standards (Oklahoma standards). Ark. Pet. App.

98a. The evidence at the hearing consisted largely of expert

testimony discussing various mathematical models designed

to predict the impact of the proposed tlow on the waters

of the Illinois River in Oklahoma. /d. at 99a. Reliance on

this type of evidence was necessary not only because no ac-

‘ual effluent measurements were available (since the Fayette-

ville plant was not yet in operation), but also because the

effluent was to be discharged at the Fayetteville plant, 39

miles upstream from the Oklahoma state line. It was

therefore necessary to predict the changes the effluent would

undergo while it was still in Arkansas—e.g., changes

resulting from the assimilation of nutrients by biota in the

river, and from reoxygenation through aeration and tur-

bulence. See Ark. Pet. App. 99a, 129a, 139a.

The relevant Oklahoma standards include numeric

dissolved oxygen requirements, limitations on the concen-

trations of nutrients (phosphorous and nitrogen/phos-

phorous concentration ratio), and numeric limitations on

inorganic elements and organic chemicals. Ark. Pet. App.

127a, 136a-137a, 140a-142a. In addition, the Oklahoma

standards include beneficial use and antidegradation pro-

visions. The beneficial use provision prohibits “any new

point source discharge of wastes [into protected rivers] * * *

except under conditions described in Section 3.” Oklahoma

standard § 5, Pet. App. 96a. Section 3, Oklahoma’s an-

tidegradation provision, in turn provides that “[nJo further

water quality degradation which would interfere with or

become injurious to existing instream water uses shall be

allowed.” Pet. App. 96a. Recognizing that certain high

quality waters currently exceed their beneficial use stand-

ards, Section 3 also provides that “[nJo degradation shall

be allowed in high quality waters.” /d. at 97a. High quality

waters include designated state scenic rivers such as the

Illinois River above the Tenkiller Reservoir.

The EPA’s Administrative Law Judge upheld the permit.

finding that the discharge into the Illinois River would not

violate the Oklahoma Standards, including the state anti-

degradation provision, because ihe discharge would not have

an “undue impact” on Illinois River water quality in

Oklahoma. Ark. Pet. App. 95a-107a. On Oklahoma’s ap-

peal, EPA’s Chief Judicial Officer (acting pursuant to a

delegation of authority under 40 C.F.R. 124.72(b), see Ark.

Pet. App. 145a n.4) found that the ALJ had applied the

wrong standard: while compliance with the Oklahoma

Standards was required, such compliance was to be judged

by whether there would be a “detectable” or “measurable”

violation of water quality standards at the boundary. /d.

at 11Sa-I2la.

On remand, the ALJ ruled that the proposed discharge

would have no “detectable” impact on the Oklahoma por-

tion of the Illinois River and thus upheld the permit. Ark.

Pet. Anp. 122a-144a. Specifically, the ALJ found that the

phosphorous added to the Illinois River by the Fayetteville

discharge would largely be assimilated before the river

reach. | the Oklahoma border (id. at 129a).'° Because this

small increase in phosphorous would not result in an in-

'® The ALJ calculated that if the Fayetteville plant released the max-

imum permissible daily effluent of 3.5 million gallons, 6 pounds of

phosphorous per day would reach the Oklahoma state line. Ark. Pet.

App. 129a. Other Arkansas entities currently discharge approximately

750 pounds of phosphorous per day into the Illinois river, but new treat-

ment plants under construction at three Arkansas cities will permit “large

phosphorus reductions” in their effluent — resulting in an estimated $4»

reduction of total Phosphorus loading to the Ilinois River basin. Ark

Pet. App. 128a, 1 32a.

crease in eutrophication of waters in Oklahoma (/bid.),'

the ALJ ruled that the Fayetteville discharge would not

cause a violation of the Oklahoma standards for nutrients.

Ark. Pet. App. 132a. The ALJ also found that the Fayette-

ville effluent would achieve complete oxygen recovery before

the river reached the Oklahoma border; therefore there was

no violation of the Oklahoma standards for dissolved oxy-

gen. /d. at 140a. Finally, the ALJ found that there would

be no discernible violation of aesthetic standards (id. at

134a) or of the numeric criteria as to metals or organic

chemicals. /d. at 143a. In sum, the ALJ concluded that the

proposed discharge would not cause a violation of any ot

the Oklahoma water quality standards.

Oklahoma filed an administrative appeal, and, in an order

issued on December 22, 1988, the Chief Judicial Officer

declined further review. Ark. Pet. App. 145a-153a. In that

order, the Chief Judicial Officer again stated that the gov-

erning interpretation of the antidegradation provision ts that

“(flor a [water] quality degradation to exist, there must be

a degradation caused by a change in some water quality

parameter such as nutrients, metals, dissolved oxygen, etc.

In his Decision on Remand, the ALJ concluded that the

Fayetteville discharge would not cause a detect[a]ble change

in any of these parameters.” /d. at 1S2a. The Chief Judicial

Officer upheld that conclusion (id. at 153a), and thus the

'' The ALJ explained (Ark. Pet. App. 127a, quoting Oklahoma

standard § 7.10(b)) that eutrophication ts:

the normally slow aging process by which a lake evolves into

a bog or marsh and ultimately assumes a terrestrial state. During

eutrophication the lake becomes so rich in nutritive compounds

(especially nitrogen and phosphorus) that algae and other

microscopic plant life become superabundant, thereby “chocking”

the lake, and causing the lake to advance in serial stages.

permit went into effect. Operations pursuant thereto com-

menced on January 21, 1989.

3. Three petitions for review were tiled in early 1989.

The Arkansas petition challenged EPA's authority to require

that an Arkansas discharger comply with Oklahoma water

quality standards. Petitions by the Oklahoma Parties and

by an environmental group, Save The Illinois River (STIR),

alleged violations of Oklahoma water quality standards

resulting from EPA's grant of the NPDES permit. Arkan-

sas’ petition for review, which was initially filed in the Eighth

Circuit, was transferred to the Tenth Circuit and con-

solidated with those of the Oklahoma parties and STIR.

On July 11, 1990, the Tenth Circuit issued its opinion

in this matter. Pet. App. la-97a. Rejecting Arkansas’

challenge, the court first determined that EPA had prop-

erly interpreted the Act to require it to consider, in the

NPDES permit procedure, whether a proposed discharge

would violate the federally approved water quality standards

of a downstream State. /d. at 14a-48a. The court proceeded,

however, to reverse EPA’s decision to issue the permit. The

court rejected EPA’s conclusion that the antidegradation

provisions of the Oklahoma water quality standards are

satisfied so long as the Fayetteville discharge does not result

in any detectable change to any water quality parameter at

* In the course of the administrative proceedings, several rulings were

made to which Arkansas objected; Arkansas thereupon moved this

C ourt for leave to file an origmal action against Oklahoma concerning

the application of Ok!ahoma’s water quality standards to an Arkansas

permittee. Arkansas v. Oklahoma, No. 115 Orig. The United States

tiled a brief as amicus curiae. arguing that Arkansas was attempting

to bypass the established administrative procedures for resolving this

interstate dispute. The State’s remedy, the brief argued, way to let the

permitting process run its course and to seek judicial review under the

Clean Water Act if it was displeased with the result. The ¢ ourt denied

leave to file an original action. 488 U.S. 1000 (1989).

the Oklahoma state line. Finding that EPA “incorrectly con-

strued and applied [the] Oklahoma regulations” (id. at 60a,

83a-84a), the court adopted a novel interpretation of the

antidegradation provisions of the Oklahoma standards not

advanced by any party. /d. at 48a. The court’s approach

was this: In light of its view of the federal policies embodied

in the Clean Water Act and EPA regulations,'* the court

read the Oklahoma antidegradation provisions as pro-

hibiting any further release of pollutants that will reach an

“already degraded” river.'* The court summarized its view

of the relevant provisions (id. at 90a-91a):

[I]f a body of water is experiencing [water quality stand-

ard] violations and a proposed new source would

discharge the same pollutants to which those standards

apply, that source may not be permitted if its effluent

will reach the degraded waters.

Analyzing the record before EPA, the court concluded

that there was “ample evidence from which the ALJ could

have concluded” (Pet. App. 63a) that the Illinois River in

Oklahoma was already degraded (id. at 62a-73a),'° and that

') See, e.g., Pet. App. 85a-90a (discussing Clean Water Act policy

and legislative history), 54a (court's examination of state policy 1s

“guided by the minimum requirements * * * set forth in EPA's regula-

tion”), 85a (EPA's position inconsistent with “federal water pollution

control strategy engineered by the Clean Water Act and enhanced by

Oklahoma law”), 90a (“We will not ascribe to the [Clean Water] Act

either the gaping loophole or the irrational purpose necessary to uphold

EPA’s action.”), 94a (EPA “decision is inconsistent 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”).

4 The court used 1970, the date of Oklahoma's designation of the

relevant portion of the Illinois River as a “scenic river” (see note 7,

supra), as the benchmark from which to determine whether water quall-

ty had been degraded. Pet. App. 62a.

'’ Because the parties had not considered the historic water quality

of the Illinois River significant to the propriety of the issuance of the

pollutants from the Fayetteville discharge would reach the

Oklahoma boundary (id. at 73a-76a) and would contribute

to the existing degradation of the river at that point (id. at

76a-82a).'* The court expressly “reject[ed] any notion that

once water quality standards have been violated (i.e., the

itself be detectable.” /d. at 90a. Instead, the court was of

the view that it was necessary to deny the permit because

“[a]t worst, [permitting the Proposed discharges] will in-

crease the frequency and severity of ongoing violations; at

best, it will thwart efforts to bring the river back into com-

pliance with the applicable standards.” /d. at 9la.

In sum, the court concluded that “EPA’s failure to exer-

cise its authority to deny the Fayetteville permit is arbitrary

and capricious or otherwise not in accordance with law.”

Id. at 94a. The court flatly held that Fayetteville discharges

“may not be permitted” (id. at 61a) and that, accordingly,

“the Fayetteville permit may not issue.” /d. at 83a n.49. In-

stead of remanding to EPA for reconsideration of the per-

mit decision under the judicially prescribed Standards, the

court of appeals simply “reverse[d] EPA’s decision authoriz-

ing Fayetteville’s municipal treatment plant to discharge a

portion of its effluent to the Illinois River basin.” Jd. at

9Sa.'’

permit, the court’s factual! findings on this aspect of the case constitute

gleanings from “a record that consists of five boxes and four years of

briefs, orders, (ranscripts, prepared testimony, correspondence,

technical reports, and miscellaneous other documents” (Pet. App. 62a)

on a matter that had not been addressed in the EPA Proceedings, nor

briefed and argued by the parties. See id. at 6la n.40.

* The court was not deterred by its recognition that this latter issue

involves “more a scientific question than it is a legal one.” Pet. App. 76a.

~~ On October 31, 1990, the court granted Arkansas’ motion to Stay

the issuance of the mandate pending this Court’s action on Petitions

are continuing.

SUMMARY OF ARGUMEN!I

Federal — not state —law governs the complex issues raised

in disputes involving interstate water pollution. In the Clean

Water Act, Congress has entrusted to EPA the primary

responsibility for resolving such federal issues that arise in

the context ot its consideration of applications for NPDES

permits. Before issuing a permit authorizing discharges 1n-

to an interstate waterway, EPA must determine that the pro-

posed permit will meet all applicable requirements of the

Act and implementing regulations, including compliance

with federally approved water quality standards of the

receiving State. But in any interstate dispute involving the

application of a receiving State’s water quality standards,

the statutory scheme provides that EPA — not the receiving

State —is to determine the proper application of the stand-

ards. Accordingly, the validity of EPA’s decision to issue

the Fayetteville permit depends on whether the Ageiicy

reasonably interpreted and applied applicable Oklahoma

water quality standards, not on whether issuance of the per-

mit is consistent with the reviewing court’s own interpreta-

tion of those standards as a question of the law of the receiv-

ing State simpliciter.

in this case, EPA reasonably concluded that the

Oklahoma antidegradation standard permits a discharge

that will have no detectable impact on the current condi-

tion of Oklahoma’s protected waters. The court of appeals,

however, preferred a policy that would prohibit any

discharge that would theoretically reach waters that were

already degraded. Under well-established principles of ad-

ministrative law, this preference was an impermissible basis

for rejecting EPA’s contrary interpretation. To make mat-

ters worse, the court’s interpretation would create serious

practical difficulties in implementing water quality re-

quirements for interstate waterways. The court of appeals’

error was compounded by the fact that the court based its

decision on issues not raised or briefed by the parties; en-

gaged in independent tact-finding that disregarded the scien-

tific expertise of the Agency; and declined to remand the

permit decision to the Agency.‘In short, the court of ap-

peals not only ignored the special role given EPA under the

Clean Water Act but transgressed basic principles of ad

ministrative law which require reviewing courts Lo give ap-

propriate deference to the administrative process.

ARGUMENT

i. FEDERAL LAW GOVERNS THE INTERPRETATION AND

APPLICATION OF FEDERALLY APPROVED STATE

WATER QUALITY STANDARDS TO OUT-OF-STATE

DISCHARGES

The court of appeals fundamentally misconstrued the

teachings of the Court and the effect of the Clean Water

Act in the context of an interstate dispute. Instead of inter-

preting the requirements of the Clean Water Act in this con-

text as ©. matter of federal law, the court of appeals treated

the question of how the Oklahoma water quality standards

(specifically, the beneficial use and antidegradation provi-

sions) should be interpreted in this case as entirely a ques-

tion of state law.'* It then undertook to construe the pro-

visions on its own without first examining the reasonableness

of EPA’s interpretation of the federally-approved standard.

Pet. App. at 53a-54a.

‘* For instance, the court noted that “[t}he Oklahoma courts ap

parently have not interpreted these provisions” and in a footnote con

cluded that an opinion of the Oklahoma Attorney General discussing

the provisions seemed contrary to the language of the provisions

themselves. Pet. App. S3a.

\. This Court's Decisions Establish That Interstate Water Pollu-

tion Issues Are To Be Resolved By Application Of Federal Law

This Court’s decisions make clear that when interstate

water pollution issues are involved, the interpretation of the

State, law. See //linois vy. City of Milwaukee, 406 U.S. 91,

Water Pollution Control Act (now the Clean Water Act)

“establish an all-encompassing program of water pollution

regulation” (City Of Milwaukee vy. Ilinois, 451 U.S. 304,

318 (1981) (Milwaukee /1)), under which “[flederal courts

lack authority to impose more Stringent effluent limitations

* * * than those imposed by the agency charged by Con-

gress with administering this comprehensive scheme” under

the guise of applying federal common law. /d. at 320.'° And

in Ouellette, the Court specifically concluded that “the CWA

precludes a court from applying the [common] law of an

affected State against an out-of-state source.” 479 U.S. at

494. Instead, “the Act limits the right to administer the per-

mit system to the EPA and the source States.” /d. at 495.

It follows from this Court’s Precedents that the question

of the proper standards to be applied to the Fayetteville

discharges under the Clean Water Act ultimately involves

4 question of federal law.

‘In explaining why courts should not invoke federal common law

'O supplement the comprehensive Statutory scheme, the Court noted

(451 U.S. at 325): “[nJot only are the technical problems difficult -

doubtless the reason Congress vested authority to administer the Act

In administrative agencies POSsessing the Necessary expertise — but the

general area is Particularly unsuited to the [case-by-case] approach in-

evitable under a regime of federal common law.” These same considera-

UlONs, Of course, counsel reliance on the expert agency’s interpretation

and application of the relevant federal requirements,

B. The Clean Water Act Assigns To EPA The Responsibility For

Resolution Of Disputes Between States Over The Discharge Of

Pollutants Into Interstate Waters

The Clean Water Act directs EPA to address interstate

water pollution issues in either of two ways, depending upon

whether the source State or EPA is the permit-issuing

authority. If the source State’s program has been approved

by EPA under Section 402(b), 33 U.S.C. 1342(b), the State

may issue the permit, unless EPA objects pursuant to Sec-

tion 402(d)(2), 33 U.S.C. 1342(d)(2).2° Where, as here, EPA

is the permit-issuing authority, EPA is directly responsible

for determining whether a proposed permit will meet all ap-

plicable requirements of the Act and implementing regula-

tions (Section 402(a)). Although the federal permitting

authority may not issue a permit if the source State deter-

mines that the permit will not comply with its water quali-

ty standards, the federal permitting authority need only

consider the “recommendations” of a receiving State in

determining whether the permit will comply with that State’s

standards. Section 401(a)(1) and (2), 33 U.S.C. 1341(a)(Q1)

and (2). As this Couri explained in Ouellette, 479 U.S. at

491, “the Act makes it clear that affected States occupy a

subordinate position to source States in the federal

regulatory program.” Thus, the text of the Clean Water Act

commits the determination of whether the permit will

20 That provision sets forth two grounds for an objection. See Cham-

pion Int'l Corp. v. EPA, 850 F.2d 182, 185 (4th Cir. 1988). Under Sec-

tion 402(d)(2A), EPA may object when there is an unresolved in-

terstate dispute that has been brought to EPA’s attention under the pro-

cedures in Section 402(b)(S)(providing for notification to EPA of a

receiving State’s objections to the issuance of the permit, and of the

permitting State’s action with regard to those objections). Under Sec-

tion 402(d(2)B), EPA may—even in the absence of a state

complaini — object to the issuance of any permit “as being outside the

vuidelines and requirements” of the Act.

achieve compliance with the receiving State’s water quality

standards to the federal permitting agency:?!

Such agency * * * shall condition such license or per-

mit in such manner as may be necessary to insure com-

pliance with applicable water quality requirements.

33 U.S.C. 1341(a)(2). In determining compliance, the agency

necessarily has to make decisions concerning the proper in-

lerpretation of the receiving State’s water quality standards

and how those standards apply to an out-of-state

, discharger.??

The permitting authority's responsibility under federal law to deter-

mine whether the issuance of the permit will comply with the

downstream State’s s.andards Suggests a fully sufficient alternative basis

for affirming the PA decision to issue a permit in this case. The

threshold question of the showing necessary to determine under the

CWA whether there is compliance with any particular state Standard

is itself a matter of federal, not State, law. Therefore, EPA’s decision

that “the permit should be upheld it the record shows by a

preponderance of the evidence that the authorized discharges would

not cause an aciual detectable violation of Oklahoma’s water quality

standards” (Ark. Pet. App. 117a) represents an EPA interpretation of

the federal statute's requirement for compliance in the context of this

case. rather than an interpretation of any Oklahoma standard at all.

Under this alternative analysis, the “detectability” requirement simply

represents an intensely practical conclusion that. as a matter of federal

law, the threshold question of whether an issue of compliance with the

receiving State’s standards is even presented is definitively answered in

the negative where the effect of the proposed discharge cannot be

detected at the critical point —the receiving State’s boundary. /d. at 1 18a

n. 16.

The Arkansas petition correctly recognizes that, in determining

whether to issue a permit fora discharge into interstate waters, EPA

has authority “to assess compliance with downstream standards.” Ark.

Pet. 13. But Arkansas also appears Lo suggest that EPA is free to ignore

the receiving State’s standards altogether, or to balance the respective

interests of the States through which an interstate Waterway passes. /d.

at 13-16. EPA has never asserted such authority, in this or any other

As a result, in any interstate dispute involving the applica-

tion of a downstream State’s water quality standards, the

statutory scheme provides that EPA — not the downstream

State — is to determine the proper application of the stand-

ards. either in reviewing the permits for possible objection

under Section 402(d) or in its role as permit issuer. This

federal responsibility complements EPA's responsibility

under the Act to review and approve proposed state water

quality standards. Section 303(c), 33 U.S.C. 1313(c). Before

granting approval, EPA must determine that the proposed

standard “meets the requirements” of the Act. Section

303(c)(3), 33 U.S.C. 1313(c)(3).2> In determining whether

a proposed standard meets the statutory requirements, 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

case, and the terms of the NPDES permit issued by EPA to Fayetteville

would not have been affected if EPA had agreed with Arkansas’ inter-

pretation. It is therefore unnecessary for this Court to consider whether

the Act gives EPA the authority claimed for it by Arkansas.

2. If EPA cannot make that finding, it must allow the State to make

the changes necessary to bring the standards into conformity with the

Act. If the State fails to do so in a timely manner, EPA will promulgate

the water quality standards for the State. Section 303(c)(3) and (4), 33

U.S.C. 1313(c)(3) and (4).

Arkansas suggests (90-1262 Pet. 14) that EPA has no authority to

disapprove a state water quality standard on the ground that it has a

discriminatory impact on éut-of-state dischargers. EPA has never disap-

proved a state standard on the ground that it has such a “predatory”

effect, and accordingly has not considered the extent of its power to

do so, or, if such power exists, the criteria to be applied to identity

a predatory standard. Because there was no such disapproval of the

Oklahoma standards in this case, the Court need not address that issue

here.

24 Since many water quality standards are, like the Oklahoma an-

tidegradation provision at issue here, in narrative form and thus

disputed provision. which Presumably reflects its

understanding of that Provision when approval was granted,

should normally te dispositive.25

C. EPA's Interpretation Of The Federally-Approved Oklahoma

Standards Is Entitled To Judicial Deterence

In light of the key role assigned by the Clean Water Act

to EPA as arbiter of interstate water pollution disputes

under the Act and EPA’s responsibility for approving state-

submitted water quality standards, EPA’s interpretation of

the water quality standards involved in this case should,

under established principles of administrative law, be ac-

corded deference. It is beyond dispute that a reviewing court

should defer to an agency's reasonable interpretation of a

regulation it is charged with administering. Ford Motor

Credit Co. v. Mithollin, 444 U.S. 555, 566 ( 1980); United

States v. Larionoff, 431 U.S. 864, 872-873 (1977): Udall

\. Tallman, 380 U.S. 1, 16-17 (1968): Navistar Intl Transp.

Corp. v. EPA, 858 F.2d 282, 288 (6th Cir. 1988), cert.

denied, 490 U.S. 1039 (1989) (EPA’s interpretation of a

tederally approved state air quality standard is accorded the

same deference by a reviewing court as EPA’s interpreta-

necessarily expressed in rather general terms, disagreements as to their

meaning will often surtace only when the standards are applied in the

context of a specific permit Proceeding — as happened here.

* To guide the States in the promulgation of water quality stand-

ards, EPA regulations set out (at 40 C.F.R. Pt. 131) model water quality

standards satisfying the requirements of Section 303 of the Clean Water

Act, 33 U.S.C. 1313. Where, as here, the water quality standard adopted

by the State is based on the EPA model (see note 27, infra), and there

is NO clear indication at the time the Proposed standard was submitted

to EPA tor approval that the State intended a different meaning, it

's surely reasonable and appropriate tor EPA to construe the state stan-

dard as being consistent with the model Provision,

tion of its own regulations). Cf. Chevron U.S.A. Inc. v.

NRDC, Inc. , 467 U.S. 837, 844 (1984). Accordingly, to the

extent that the terms of a federally approved state standard

are ambiguous or silent on a particular point at issue in an

interstate dispute, EPA’s interpretation of the standard

should be followed “unless it is plainly erroneous or incon-

sistent with the regulation.” United States v. Larionoff, 431

U.S. at 872 (quoting Bowles v. Seminole Rock & Sand Co.,

325 U.S. 410, 414 (1945)).

In short, the question is not whether EPA interpreted the

water quality standards applicable to the Oklahoma por-

tion of the I!linois River in the same way they would be in-

terpreted by the reviewing court or even by Oklahoma itself

(see, ¢.g., Pet. App. 60a). Instead, the question, in review-

ing the validity of EPA’s administrative action, is whether

EPA’s reading and application of those standards in the per-

mitting proceeding was reasonable.

The court of appeals failed to address this issue. Instead,

it candidly admitted that it was substituting its own inter-

pretation for that of EPA (Pet. App. 48a-49a, 54a-SSa),

adopted a restrictive construction of the applicable standards

not advanced by any party (id. at 48a), and rejected EPA’s

construction out ot hand. /d. at 53a-57a.°°

il. THERE WAS NO APPROPRIATE BASIS FOR REJECTING

EPA’S INTERPRETATION AND APPLICATION OF THE

OKLAHOMA STANDARDS

Before issuing the permit to Fayetteville to discharge et-

fluent into a tributary of the Illinois River, EPA as the per-

pretation defies the plain language of the Beneficial Use Limitations

and the Anti-Degradation Policy that it references.” Pet. App. 57a. The

court ignored the fact that the governing interpretation was set forth

in the Chief Judicial Officer's opinion of June 28, 1988 (Ark. Pet. App.

117a) and was reaffirmed in his order of December 22, 1988, denying

review. /d. at 1$2a-1S3a.

”

_—

milling agency had to determine whether the permit condi-

tions would assure compliance with the Oklahoma Water

Quality Standards applicable to that river in Oklahoma.

In particular, EPA had to interpret Oklahoma Standard

S$ 3, which provides that “[nJo degradation shall be allowed

in high quality waters,” including the portion of the Illinois

River between the Oklahoma boundary and Tenkiller Reser-

voir. EPA concluded that Oklahoma standard § 3 permits

a discharge upstream from protected waters so long as that

discharge will have no detectable impact on current water

quality in the protected waters. The court of appeals rejected

both the “no-detectable impact” and the “current condition”

aspects of EPA’s interpretation of Oklahoma standard § 3

as Inconsistent with its plain meaning (Pet. App. 53a). The

court ruled that the antidegradation requirement prohibited

the issuance of any permit for a new discharge in

Arkansas — whether or not that discharge would have any

detectable impact on water quality parameters in Oklahoma

—if the water quality in the waterw ay in Oklahoma has been

degraded compared to an historical benchmark (here, 1970,

when the River was designated a “scenic river”). /d. at 62a.

90a. In so concluding, the court improperly rejected EPA’s

reasonable interpretation of the federally approved anti-

degradation standard.

A. EPA Reasonably Construed Ihe State Antidegradation Proyi-

sion To Allow An Out-Ot-State Discharge Where That

Discharge Would Have No Detectable Impact On The Current

Water Quality Ot The Protected Waters

In its operative Provisions, Oklahoma Water Quality

Standard § 3, which was adopted in 1982 (Pet. App. 50a

n. 29), isa verbatim replication of the federal antidegrada-

tion standard that was then in effect.?’ Accordingly, in con-

sidering the Fayetteville NPDES permit application, EPA

interpreted the Oklahoma standard as identical to the tederal

one.

While a similar antidegradation standard may be adopted

by any State,’* there has been no national rulemaking or

determination on how to interpret and apply the terms o!

the standard.?* Questions can therefore arise as to what con-

stitutes a “degradation” of water quality, and as to the

benchmark from which degradation is to be measured.

»* fven the court of appeals noted the similarities between the state

provision and EPA's model provision (Pet. App. 54a n. 34). Compare

the antidegradation provision of Oklahoma standard § 3:

No degradation shall be allowed in high quality waters which con

stitute an outstanding resource or in waters of exceptional recrea

tional or ccological significance.

with the corresponding language in EPA’s model antidegradation

revulations in ettect until 1983 (40 CPR. 38. 18SO(e (2) (19ST)

Additionally, no degradation shall be allowed in high quality waters

which constitute an outstanding National resource, such as waters

** * of exceptional recreational or ecological significance,

fhe current regulations provide that high quality waters “shall be

maintained and protected” (40 C.F. R. 131.12(4)3)). This change was

to allow for temporary degradation associated with construction pro}

ects. The change did not affect the restrictions for long-term sources

of pollutants. 48 Fed. Reg. 51,402-51,403 (1983).

* The antidegradation requirements of the federal model water qual)

ty standards were created by administrative action. Ihe antidegrada

tion policy was first enunciated by Secretary Udall of the Interior

Department in 1968. The instant antidegradation standaid was adopted

by EPA in 1978. Congress subsequently referred to the antidegrada

tion policy in the 1987 Amendments to the Clean Water Act. See 33

U.S.C. 13b Md 4B).

2” This standard is termed a Tier HI antidegradation standard, and

the waters protected by it are Known as “outstanding national resource

waters,” or ONRW.

1. There is general agreement that the “no degradetion

of water quality” requirement means that a new discharge

should not result in a lowering of water quality in an

ONRW.' but EPA has not attempted to prescribe general

standards tor determining what constitutes a “lowering” of

water quality. Instead, the individual decisionmaker, ic.

the State or EPA, must determine on a case-by-case basis

Whether addition of pollutants to a water body will result

in a lowering of water quality. *'

In this interstate case, EPA's determination of what con-

stitutes degradation, or a lowering of water quality, was set

forth in the Chief Judicial Officer's initial decision of June

28, 1988 (Ark. Per App. 117a):

[A] mere theoretical impairment Of Oklahoma’s wate:

quality standards —i.¢.. an infinitesimal IMpairment

Predicted through modeling but not expected to be ac-

tually detectable or Measurable — should not by itselt

block the issuance of the permit. In this Case, the per

mit should be upheld if the record shows by a

preponderance of the evidence that the authorized

discharges would not cause an actual detectable viola.

tion of Oklahoma’s walter quality standards.

The Chief Judicial Otficer’s order of December 22. 198s,

clarified the application of this interpretation to the State's

antidegradation policy. The CJO explained that because the

" See, @.g., Region 1[V. Questions and Answers on Implementation

' Tier UWL of the bederal Nntidevradation Poly: Protection of

‘outstanding National Resource Waters (Apr. 20, 1989). which states

ihat there should be no new discharve of Pollutants directly mre at)

ONRW: discharges to (ributavies are Permissible if they do not lower

Water quality at the boundary of the ONRW

See. @.g., Region V, Guidance tor Antidevradation Policy Im

plementation for High Quality Waters (Dec. 3, 1986): Region 1X.

Guidance on Implementing the Antidevradation Provisions of 40C_ FR

131.12 (lune 3. 1YR7)

antidegradation policy for waters subject to the highest

degree of protection is in fact a “policy,” not a numeric

standard, it would be violated if there were any water quality

degradation im such waters. But “[fJor a quality degrada-

tion to exist, there must be a degradation caused by a change

in Some water quality parameter such as nutrients, metals,

dissolved oxygen, etc.” Ark. Pet. App. 1'S2a. In other words,

if a discharge “will not cause a detect{a]ble change in any

of the relevant water quality parameters, it logically follows

that there will not be a ‘quality degradation.’” /d. at

1§2a-1S3a. Thus, EPA interpreted the antidegradation

policy as permitting a discharge upstream from protected

waters so long as that discharge wil! have no detectable im-

pact on water quality parameters in the protected waters. **

This interpretation of the antidegradation provision was

entirely reasonable and consistent with the language of the

Oklahoma standard, the federal regulation on which it was

based, and the policies and purposes of the Clean Water

Act. At least where the effects of a discharge are undetect-

able at the State boundary, the receiving State can have lit-

tle more than a theoretical basis for concluding that tts water

has been degraded. In such circumstances, it 1s at least

reasonable tor ELPA to conclude that the discharge ts not

prohibited.

2. Determining whether a new discharge will degrade

downstream water quality requires identification of the

water quality level to be protected. The parties to this case,

and the §-PA decisionmakers, considered the relevant water

Indeed. Oklahoma took essentially the same position in briefing

before EPA. It there stated, “any detectible {sic] increase in any “wastes,

deiined as ‘fi[pdustrial waste and all other liquid, gaseous or solid

substances which may pollute or tend to pollute any waters of the State,’

will be a violation of the [sceme river] designation” (emphasis added)

\.R. Doc B146, at 4°

quality to be that in existence at the Oklahoma border at

thetime the permit was under consideration. Again, this

“as a reasonable interpretation and application of the anti-

degradation provisions of Oklahoma standard $ 3. That

Provision states only that “[nJo degradation shall be allowed

in high quality waters”; it does not Provide a description

of the water quality to be maintained. Nothing in the

Oklahoma standards provides a general benchmark date,

nor is there in the standards “ny suggestion that there is a

Particular benchmark date tor the Illinois River. In these

circumstances, EPA’, reliance on current water quality at

the boundary as the applicable benchmark Was entirely

reasonable. *'

The court found that the “plain language” of the

Oklahoma beneficial use and antidegradation Provisions

showed that they prohibit discharges of pollutants into a

scenic river if “its water quality has heen deeraded or if the

new source would degrade it.” Pet. App. 53a-S4a. But the

court did not identify the specific regulatory language upon

Which it relied, and in fact no language in the Oklahoma

standards indicates an intent to consider Whether water

quality “has been degraded” from the Standard it had at

some point in the past.

* States must attirmatively designate water bodies to be outstanding

national resource waters Protected trom degradation under Tier If]

Standards. Modern designations often do contain a reference date or

4 description of the water quality to be maintained. The application

vf such an antidegradation Provision could, of COUTSE, Talse Issues not

relevant to this case. In any event. a State is highly unlikely to adopt

as a benchmark date a time substantially antedating the application of

the protective standard to the waterway involved. Compare Okla. Stat.

Ann. tit, 82 § 14S2( bw 1) (West 1990 designation as scenic river) with

id. § 1487 (authorization to IMPose pollution controls on Scenic rivers).

B. The Court of Appeals’ Policy Choices Are Not Required By The

Clean Water Act or Applicable Regulations

The court of appeals’ reading of the EPA-approved state

antidegradation provision was based primarily on two con-

clusions: (1) that “degradation” must be measured from

some historic benchmark date, undefined in the provision

itself, rather than from the current condition of the water-

way, and (2) that if current water quality is adjudged poorer

than it was at that prior time, no further upstream discharges

may be permitted. Taken together, these conclusions

establish a “zero-discharge” requirement once the waters in

question fall below the historic benchmark.** Moreover,

that requirement extends beyond a receiving State’s borders

to preclude any discharges in all upstream tributaries of the

interstate waterway. But the conclusions reflected in the

zero-discharge requirement represent policy choices not re-

quired by the Clean Water Act, EPA’s regulations, or the

federally approved Oklahoma standards. The court's adop-

tion of those conclusions certainly does not suggest that

EPA’s decision in this case, which reflected alternative per-

missible policy choices, was in any way unreasonable. *°

Thus, the court had no authority to impose a zero-discharge

requirement. **

'* It is not entirely clear whether the court intended this requirement

to apply only to “high quality waters” subject to an antidegradation

policy similar to Oklahoma's, or whether it was intended —as Arkan-

sas assumes (Ark. Pet. 20-23)—to apply to any application for a per

mit to discharge into waters upstream from waters not presently in com

pliance with any applicable standard.

Moreover, if the court's zero-discharge requirement was intended

to apply to water quality standards generally (see note 34, supra), the

court ignored EPA's regulation specifically addressing the circumstances

under which a discharge may be allowed into waters that do not cur

rently meet the applicable standards. 40 C.F.R. 122.4()).

* As this Court explained in discussing judicial interpretations of

Che practical difficulties occasioned by such judicial in-

(rusion into EPA’s responsibilities are vividly illustrated by

this case. The ruling of the court of appeals —that no

discharge may be permitted upsiream if the pollutants in

the effluent would reach a degraded downstream

waterway — would create serious problems of implementa-

tion.*” It may be nigh unto impossible to demonstrate that

pollutants in an upstream discharge will never reach a point

downstream. While modelling or other available predictive

techniques may persuasively demonstrate that pollutants are

unlikely to survive in ihe Waler system, so that only a de

minimis amount would reach protected Waters, it may be

Statistically impossible to show that no amount of pollu-

tant will ever pass into those waters. The court’s zero-

discharge standard does not consider whether there is an

the requirements of ‘he Clean Air Act in ¢ hevron, 467 US. at SOS:

ludges are not experts in the field, and are not part of either

political branch of the Gov ernment. Courts must, in some Cases,

reconcile competing political interests, but not on the basis of the

judges’ personal Policy preterences. In contrast, an agency to which

Congress has delegated policymaking responsibilities may, within

the limits of that delegation, properly rely upon the incumbent ad-

ministration’s views of Wise policy to inform its judgements.

’ Moreover, the court of appeals’ analysis leaves no room for con-

sidering whether a discharge will actually dilute, and thereby improve,

the ambient concentration Of pollutants in the affected stream. For most

pollutants, the effect of a discharge on ambient w ater quality is a func

tion of the relative concentration of the stream and the discharge. If

the discharge has a lower concentration of pollutants than the stream,

it will dilute, and thereby improve, the ‘ream. Thus, logically even

where a stream is in violation of a numerical water quality standard,

a high volume discharge containing the pollutant of concern may

nonetheless not only not exacerbate the violation, but it may even

mitigate or cure that violation, if the voncentration of the pollutant:

in the discharge is low enough.

exception for de minimis amounts of pollutants. ** If there

is to be such an exception, it must be defined; under the

court's ruling, the standard must be somewhere below the

level of detectability, which poses obvious problems for en-

forcement. If there is to be no exception for de minimis

amounts of pollutants, then the consequences of a state

designation of high quality waters to be subject to the sug-

vested federal antidegradation policy are substantially dit-

ferent from those anticipated by EPA (and, most likely, the

States that have adopted EPA’s model standards).

More generally, the Agency’s responsibility for approv-

ing state standards would be gravely undermined if its

reasonable interpretations of those standards could be iet-

tisoned on judicial review. This is of fundamental practical

importance, because EPA’s ability to perform effectively

its statutory role in resolving interstate disputes over the

issuance of NPDES permits requires the Agency to rely on

its own reasonable construction of a state standard. Indeed,

if reviewing courts may substitute their own interpretations

of an EPA-approved state standard, then simiiarly worded

standards of various States may well have different mean-

ings in different circuits, or even within the same circuit.

The resulting uncertainty and contusion —especially in

lengthy river systems involving several receiving States —

would lead to precisely the situation that Congress sought

to avoid by enacting the comprehensive Clean Water Act

‘* Compare Ark. Pet. App. 128a-132a (AL Js findings that maximum

permissible daily effluent trom the Fayetteville plant would result in

inerease Of six pounds of phosphorus per day at Oklahoma boundary,

although other Arkansas entities currently discharge 750 pounds ot

phosphorus per day into Ihnois River in Arkansas) with Pet. App

73a-76a (court determination that sufficient phosphorus will reach the

Ihnow line from the bavetteville plant to violate antidegradation stand

ard). See note 10, supra

Amendments to replace the former case-by-case approach

of the federal common law. See Milwaukee I], 45| U.S.

at 324-325.

Ill. THE COURT OF APPEALS SHOULD HAVE CONSIDERED

WHETHER THE RECORD SUPPORTED ISSUANCE OF

THE PERMIT UNDER THE INTERPRETATION OF THE

OKLAHOMA STANDARDS ADOPTED BY EPA

Because the court of appeals rejected the standard EPA

used in determining that the Fayetteville discharge would

be in compliance with Oklahoma water quality standards.

the court did not consider whether the agency’s factual find-

ings were based on substantial evidence in the administrative

record. See Pet. App. 89a.3® Nor did the court remand to

EPA to reconsider the Propriety of issuing a permit to

Fayetteville under the legal standards the court thought

proper. Instead, the court undertook a totally inappropriate

and unjustified inquiry into whether the record compiled

at the administrative hearing supported the issuance of a

permit to Fayetteville under the legal standards the court

set out. This displacement of EPA’s fact-finding and deci-

sionmaking authority constituted clear error.

Firmly established Principles of administrative law re-

quired the court to remand to EPA for further proceedings

once it determined (again, erroneously, in our view) that

the original agency decision was in error. This is fundamen-

tal: It is for the administrative agency, not the court, to

evaluate different permissible courses of action and ulti-

—_.

'* The court there Stated:

EPA and the Arkansas parties urge that the Fayetteville discharge

should be permitted because its individual impact on IIlinois River

Water quality will not be detectable. While this may prove true (and

we pass no judgment thercon). we reject the argument because of

its unavoidable results.

mately to make a choice. K/eppe v. Sierra Club, 427 U.S.

390, 410 n.21 (1976); Citizens to Preserve Overton Park,

Inc. v. Volpe, 401 U.S. 402, 416 (1971). This Court stated

the “guiding principle” iearly forty years ago in FPC v.

Idaho Power Co., 344 U.S. 17, 20 (1952):

[T]he function of the reviewing court ends when an

error of law is laid bare. At that point the matter once

more goes to the [agency] for reconsideration.

See also FCC v. Pottsville Broadcasting Co., 309 U.S. 134,

140-146 (1940). And the Court has recently reaffirmed the

principle, noting that the agency’s task on remand remains

“infused with judgment and discretion, requiring the accom-

modation of conflicting policies that were committed to the

agency’s care.” Department of the Treasury v. FLRA, 110

S.Ct. 1623, 1629 (1990) (internal quotation marks omitted).

“It is not a task [courts] ought to undertake on the agency's

behalf in reviewing its orders.” /d. at 1630.

In undertaking its own inquiry into whether an NPDES

permit should be issued, the court of appeals fundamen-

tally misapplied ‘the “substantial evidence” standard of

review of agency action. The “substantial evidence” test re-

quires only “such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.”

American Textile Mfrs. Inst. v. Donovan, 452 U.S. 490,

§22 (1981). The proper inquiry for the court is whether the

administrative agency’s findings are supported by substan-

tial evidence, and “[t]he possibility of drawing two incon-

sistent conclusions from the evidence does not prevent an

administrative agency’s finding from being supported by

substantial evidence.” Consolo v. Federal Maritime Com-

mission, 383 U.S. 607, 620 (1966). Adherence to the substan-

tial evidence test, when properly applied, “frees the review-

ing courts of the time-consuming and difficult task of

Weighing the evidence. it gives proper respect to the exper-

tise of the administrative tribunal and it helps promote the

uniform application of the Statute.” hid.

Che court of appeals turned this test on its head, search-

ing the voluminous administrative record to determine

whether there was “substantial evidence” to Support its Own,

independent factual determinations. The court openly

acknowledged that it Was taking such an approach:

The record contains substantial evidence from which

the ALJ could have Jound that the water quality of

the Iiinois scenic river has been degraded and that

Water quality standards were being violated prior to the

onset of Favetteville’s discharge to the river * * *

Pet. App. 6la (emphasis added). Similarly, the court stated

that its review of the record indicated that there « as substan-

tial evidence that the Illinois River had been degraded by

the same types of Pollutants that would be contained in

Fayetteville’s effluent, and that Fayetteville’s effluent will

be transported downstream to Oklahoma. Pet. App. 8la.

With this de novo review of the record, the court of ap-

Peals substituted itself for the agency as the primary fact-

tinder in determining the scientific effects of issuing the

Favetteville permit.

Not content with displacing EPA as fact-finder, the court

Of appeals went further and flatly “reversed” the issuance

of the Fayetteville permit without remanding to EPA, Pet.

App. 9Sa. But the Clean Water Act, 33 U.S.C. 1341(a)(2),

places the duty on the permit-issuing authority to “condi-

tion such * * * permit in such manner as may be necessary

(O insure compliance” with water quality standards. Only

if the permitting authority determines that “the imposition

of conditions cannot insure such compliance” is the agency

to deny the permit. Section 401(a)(2), 33 U.S.C. 1341(a)(2).

EPA, the Permitting agency, has, never made any such deter-

mination. Prior to the court of appeals’ decision, the agen-

cy had no occasion to determine the effects on Oklahoma

water quality of placing further conditions in the Fayetteville

permit. Accordingly, even if, contrary to our contention,

the court of appeals’ decision were otherwise to be upheld,

the court’s refusal to remand the case to the agency was In-

consistent with the governing statute.

In sum, the court of appeals usurped EPA’s statutorily

prescribed functions. The court independently determined

the legal standards applicable to the issuance of the Fayette-

ville NPDES permit; it determined the facts from ihe record

de novo; and it issued a remedial order independent of the

statutory prescription. Indeed, but for the development of

the record by the administrative agency, the court’s actions

in this case closely mirrored the judicial role in a suit based

on the federal common law of nuisance. In such cases, the

federal court determines the applicable legal standards,

serves as fact-finder, and develops a remedy. But, as this

Court stated in Milwaukee I/, 451 U.S. at 325, Congress

vested decisionmaking authority in interstate water disputes

“in administrative agencies possessing the necessary exper-

tise” and displaced the federal common law authority

formerly exercised by the federal courts. With this decision,

the court of appeals came full circle, reasserting plenary

authority under the guise of judicial review of agency action.

CONCLUSION

The judgment of the court of appeals should be reversed

as to the questions presented in Petition No. 90-1266.

Respectfully submitted.

KENNETH W. STARR

Solicttor General

RICHARD Bo SIEWARI

Assistant Attorney ( reneral

LAWRENCE G. Wary ac Ib

Deputy Solicitor General

HAKRIET S. SHAPIRG

Issystunt fo the Solicitor General

Mic Hath AL MeCorp

ANNE SO ALALY

GiARY S. Guy

iforne)

b. DONALD ELtior:

General Counsel

CATHERINE A. WINER

PAT RANKIN

Attorneys

Environmental Protection

Agency

May 199]

HUOVEHMNMENT PRINTitG, OFF CE 199) — 262 061/205705

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.