Amicus Curiae Brief — Entergy Corp. v. Riverkeeper, Inc.

FILED

JUL 1.8 2008

Nos. 07-588, 07-589, and a tS OF ue ae

In The

Supreme Court of the United States

ENTERGY CORPORATION,

Petitioner,

v.

ENVIRONMENTAL PROTECTION

AGENCY, et al.,

Respondents,

PSEG FOSSIL, LLC, et al.,

Petitioner,

v.

RIVERKEEPER, INC., et al.,

Respondents,

UTILITY WATER ACT GROUP,

Petitioner,

v.

RIVERKEEPER, INC., et al.,

Respondents.

On Writs of Certiorari to the United States Court of

Appeals for the Second Circuit

BRIEF OF AMICUS CURIAE NATIONAL ASSOCIATION

OF HOME BUILDERS SUPPORTING PETITIONERS

Duane J. Desiderio Danie] P. Albers*

Thomas J. Ward *Counsel of Record

National Association of Jeffrey S. Longsworth

Home Builders David T. Ballard

1201 15* Street, N.W. Barnes & Thornburg LLP

Washington, D.C. 20005 One North Wacker Drive

(202) 266-8200 Suite 4400

Chicago, IL 60606-2809

(312) 357-1313

LwqaOang

TABLE OF CONTENTS

Page(s)

INTEREST OF THE AMICUS CURIAE................... 1

SUMMARY OF ARGUMENT .....2...............cccceceeeeeeees 2

STII Sicilia cicadas Saaipliiiandiibiasibaabesinidibaiiineia 3

II.

THROUGHOUT THE CLEAN WATER ACT

CONGRESS VARIED TECHNOLOGY

STANDARDS TO CONTROL EFFLUENT,

AND THE DEGREE TO WHICH COST IS

CONSIDERED WHEN ESTABLISHING

THOSE TECHNOLOGIES .......0000.0.... eee 3

A. Varying Technology Standards.................... 3

B. Varying Cost-Benefit Considerations

Relative to Different Technology

ERE EE ER BUS ME eR ~ oA tes A oe 7

THE COURT OF APPEALS’ ANALYSIS OF

COST CONSIDERATIONS REGARDING

THE VARIOUS TECHNOLOGY STANDARDS

Be ee aiiceidiicnicedndacniaticinibisihihinbigtiithehsicinnieee 12

A. The Court of Appeals’ Analysis

Placed Undue Weight on Sections 301

and 306 Which are Far Broader in Scope

Than Section 316, Which Deals Only With

Cooling Water Intake Structures............... 12

i

TABLE OF CONTENTS (cont.)

Page(s)

B. Contrary to the Court of Appeals’

Interpretation, Congress Authorized

Cost- Benefit Analysis to Establish

Technology Standards Under Sections 301,

UN a La i 14

C. The Court of Appeals Misinterpreted This

Court’s Decision in EPA v. Nat’ Crushed

I i 17

D. The Court of Appeals’ Chevron Analysis

NI tchinscecdeenctescncliciea Sachiiiasiibieucctatadsiivn ue 18

a NETTIE TEE RCE Te RET ALE Re TER 20

TABLE OF AUTHORITIES (cont.)

Page(s)

Cases

BP Exploration & Oil, Inc. v. EPA, 66 F.3d 784

I i aan at 8, 16

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

a aus 18, 19

Envtl. Def. v. Duke Energy Corp.,

549 U.S. 561, 127 S. Ct. 1423 (2007)............... 18, 19

EPA v. National Crushed Stone Ass'n,

I ssstuinnnilinsie 17

Nat'l Wildlife Fed’n v. EPA, 286 F.3d 554

I sn icant bniahnndinationeeannnsienedsesiiowene 16

Riverkeeper, Inc. v. EPA, 475 F.3d 83

I i i 2, 12, 13, 18

Riverkeeper, Inc. v. EPA, 358 F.3d 174

ET SNR ee en we 12

Tex. Oil & Gas Ass'n v. EPA, 161 F.3d 923

ead 8, 16, 17

Waterkeeper Alliance, Inc. v. EPA, 399 F.3d 486

TERE AS NSM ee RR Real 8, 16

iv

TABLE OF AUTHORITIES (cont.)

Page(s)

STATUTORY AND

REGULATORY PROVISIONS

Clean Water Act

UE 4

33 U.S.C. § 1311(b) -eeceeeeeosee LT EEE 4

ee WP, BPE MIPORIOAD.......<ccccscocsccecevccceccccecoonce 5, 10

33 U.S.C. § 1311(b)(2)(A)..............000000-- 6, 9, 11, 15, 19

33 U.S.C. § 1B311@)ANMC)............0.c.c0.ceccesececescoseee: 6, 11

SE 6, 11

BS U.S.C. § TBD IG II) ..0.....cceccccccccccccccccccces, 6, 10, 15

33 U.S.C. § 1311(b)(2)(F) ..... eee eoevneeeseoeens 6, 11

EES, 5

I . salsnsiineniiaillalials 5

33 U.S.C. § 1314 (b)(1)(B) -...eccecccccceccccccececececsverecees 7, 10

33 U.S.C. § 1314(b)(2)(B)......................0... 8,11, 15, 19

| Ne anes aE 6

33 U.S.C. § 1314(6)(4)(B)......................cccccecee. 7, 10, 16

ei necinansrrieneneecereecaeansisdunes 5

| TT 6, 11

aan a hineeenieiheshebletaiontsumaaindsiadl 6

v

TABLE OF AUTHORITIES (cont.)

Page(s)

Be Seas ©) ID ssessvicssscnesenesnebocsasecsesenetn 8, 15

ee Aes Oy SID oncisnnccvseciscciceseccececcssssnteeeneens 11

I A I ii sc sic sacincnensthvireniamnisienti 4, 9,11, 20

ee RP OF EE NIIIEIOD oxccnscrcncscosesscvessecesnousheeiinenmenonnes 4

Regulations

44 Fed. Reg. 44,501 (July 30, 1979) ...000000.0-oooccccceceeee 5

51 Fed. Reg. 24,974 (July 9, 1986) ................cc0000 7,16

69 Fed. Reg. 41,576 (July 9, 2004)... cceceeeeee 9

Notice of Availability of Final 2006 Effluent

Guidelines Program, 71 Fed. Reg. 76,644

WE eit ndtisicincichidiendindrsncidansbiedite thn iat ere 8

1

INTEREST OF AMICT/S CURIAE

The National Association of Home Builders

(“NAHB”) has received the parties’ written consent to

file this amicus curiae brief supporting Petitioners.!

NAHB represents over 235,000 builder and associate

members throughout the United States, including

individuals and firms that construct and supply

single-family homes, as well as _ apartment,

condominium, multi-family, commercial and

industrial builders, land developers and remodelers.

As part of the construction and development process,

its members commonly obtain Clean Water Act

(“CWA”) permits that must conform to any applicable

effluent limitations and guidelines under sections 301

and 304 of the Act. NAHB has developed

comprehensive familiarity with the CWA’s permitting

requirements and provides compliance advice to its

members.

NAHB frequently participates as a party litigant

and amicus curiae to safeguard the rights and

interests of its members. NAHB was a petitioner in a

CWA case, NAHB v. Defenders of Wildlife, 551 U.S. ---

, 127 S.Ct. 2518 (2007). Attached at Appendix A to

this brief is a list of cases in which NAHB has

participated before this Court as an amicus curiae or

“of counsel,” in a number of matters involving

landowners aggrieved by over-zealous regulation

1 Letters of consent are on file with the Clerk. Pursuant to

Rule 37.6 of this Court, amicus states that their counsel

authored this brief. The brief was not written in whole or part

by counsel for a party, and no one other than amicus made a

monetary contribution to its preparation.

under a wide array of statutes and regulatory

programs.

The question presented rests on interpretation of

CWA section 316(b), concerning the technology that

must be used to control effluent from cooling water

intake structures. In construing section 316(b), the

court of appeals has confused more than 30 years of

case law interpreting other CWA sections that have

more pertinence to the home building process, and

has needlessly exposed those sections to new legal

challenges. NAHB submits this brief to ensure that,

regardless of whether the Court reverses or affirms,

the scope of any decision here is limited to

interpreting only CWA § 316(b), and does not disturb

well-established precedent interpreting other CWA

provisions that more directly regulate construction

and development of housing.

SUMMARY OF ARGUMENT

The issue before the court of appeals was how to

interpret a unique technology standard set forth by

Congress in CWA section 316(b)—the “best

technology available for minimizing adverse

environmental impact” (“BTA”)—for regulating

cooling water intake structures at large, existing

power plants.2 Instead of conducting a proper

Chevron analysis, the Second Circuit interpreted

section 316(b) by borrowing interpretations of sections

301 and 306. In doing so, the Second Circuit wrongly

interpreted sections 301 and 306, finding that those

2 The Second Circuit decision is reported as Riverkeeper, Inc. v.

EPA, 475 F.3d 83 (2d. Cir. 2007).

provisions did not permit EPA to weigh costs and

benefits in analyzing the “best available technology

economically achievable” (“BAT”) for setting effluent

limitation guidelines, and the “best available

demonstrated control technology” (“BADT”) for

setting new source performance standards, for

industrial discharges.

The court below substituted its own interpretation

of the section 316(b) for that of the agency. Under

Chevron, the Second Circuit should have recognized

that section 316(b) is ambiguous and deferred to

EPA’s reasonable interpretation of the phrase “best

technology available for minimizing adverse

environmental impact.”

ARGUMENT

I. THROUGHOUT THE CLEAN WATER ACT

CONGRESS VARIED TECHNOLOGY

STANDARDS TO CONTROL EFFLUENT,

AND THE DEGREE TO WHICH COST IS

CONSIDERED WHEN ESTABLISHING

THOSE TECHNOLOGIES.

A. Varying Technology Standards.

The question presented is whether EPA is

authorized to conduct a cost-benefit analysis under

section 316(b), in determining the applicable

technology for cooling water intake structures.

Section 316 covers “thermal discharges,” and

subsection (b) provides:

Any standard established pursuant to [CWA

sections 301 or 306] ... and applicable to a

point source shall require that the location,

design, construction, and capacity of cooling

water intake structures reflect the best

technology available for minimizing adverse

environmental impact.

33 U.S.C. § 1326(b) (emphasis supplied). The Court

must decide whether the words “best technology

available for minimizing adverse environmental

impact” (“BTA”), confer upon EPA the discretion to

weigh costs and benefits when setting the applicable

effluent control technology for cooling water intake

structures. As discussed below, unlike other

technology-setting provisions in the CWA, section

316(b) nowhere describes, defines, or lists the factors

that EPA should use to define BTA. To flesh-out this

congressional silence regarding water cooling intake

technology, the court of appeals placed too much

reliance on the factors set forth in sections 301, 304

and 306, concerning the effluent technologies for

other types of pollutants and pollutant sources. An

analysis of some of these other technology standards

is instructive.

As a general matter, section 301(a) makes it illegal

to discharge?’ any pollutant except in compliance with

various provisions in the Act. 33 U.S.C. §§ 1311(a).

One of those provisions that makes a discharge

permissible is section 301(b), which sets a timetable

for EPA to establish “effluent limitations” on point

sources. Id. § 1311(b). These effluent limitations are

3 “Discharge of a pollutant” is defined as “(A) any addition of

any pollutant to navigable waters from any point source ....” 33

U.S.C. § 1362(12)(A).

5

afforded regulatory effect through EPA’s adoption and

periodic revision of “effluent limitation guidelines”

(“ELGs”), as provided in section 304(b), which among

other things describes factors for the Agency to

consider when establishing technologies to control

various pollutant discharges. Id. § 1314(b).

Similarly, under section 306, EPA must publish and

periodically revise regulations establishing “national

standards of performance” for certain categories of

industrial sources enumerated in the statute, as well

as new industrial sources that EPA determines

should be regulated. Jd. § 1316. In these various

provisions, Congress used different technological

standards to control effluent depending on whether

the industrial source is new or existing, the type of

pollutant at issue, and the effective date by which

EPA was to promulgate new regulations.

For example, by July 1, 1977, EPA was to

establish effluent limitations based on the “best

practicable control technology currently available”

(“BPT”’) for existing sources discharging pollutants

(other than publicly owned treatment works). Section

301(b)(1)(A); td. § 1311(b)(1)(A). Then, by March 31,

1989, newer technology standards were to govern

depending on whether the pollutant of concern was

conventional, toxic, or non-conventional. By March

31, 1989, existing sources of conventional pollutants‘

were to be subject to effluent limitations applying

4 “Conventional pollutants” include biological oxygen demand,

suspended solids (such as sediment), fecal coliform, and pH, and

additional pollutants that EPA determines are conventional. 33

U.S.C. § 1314(a)(4). For example, EPA designated oil and grease

as an additional conventional pollutant. 44 Fed. Reg. 44,501

(July 30, 1979).

“the best conventional pollutant control technology”

(“BCT”). Section 301(b)(2)(E); id. § 1311(b)(2)(E).5 By

that same date, a different technology standard—the

“best available technology economically achievable”

(“BAT’)—was to govern effluent limitations from

existing sources of toxic and non-conventional

pollutants. Section 301(b)(2)(A) (setting BAT

standard); sections (b)(2)(C), (D) (1989 deadline for

toxics); section (b)(2)(F) (1989 deadline for non-

conventional pollutants). Jd. §§ 1311(b)(2)(A), (©),

(D) & (F).® Effluent limitations set forth pursuant to

the BAT standard “shall require the elimination of

discharges of all pollutants if the Administrator finds,

on the basis of information available to him .. . that

such elimination is technologically and economically

achievable for a category or class of point sources as

determined in accordance with regulations issued by

the Administrator ....” Section 301(b)(2)(A); id. §

1311(b)(2)(A) (emphasis supplied). .

Further, for appropriate new pollutant sources,

Congress set different technology-based levels to

control effluent. The Act authorizes EPA to set new

source performance standards (“NSPS”) “which

reflect[] the greatest degree of effluent reduction

which the Administrator determines to be achievable

through application of the best available

> 33 U.S.C. § 1311(b)(2)(E) references § 1314(b)(4), which

pertains to conventional pollutants.

® 33 U.S.C. § 1311(b)(2)(A) references subsections (C) and (D)

which pertain to certain toxic pollutants. Subsection (b)(2)(A)

also references subsection (F), for “all” remaining pollutants not

covered elsewhere in subparagraph (2) (i.e., non-conventional

pollutants, which are neither conventional or toxic).

demonstrated control technology’—that is, “BADT.”

Sections 306(a)(1), (2); id. §§ 1316(a)(1), (2).

B. Varying Cost-Benefit Considerations

Relative to Different Technology

Standards.

The extent to which EPA must use economic and

cost considerations, when establishing these different

technology standards to control effluent, varies.

Sometimes Congress explicitly directed EPA to

consider cost; sometimes Congress provided that cost

was a factor EPA may consider; sometimes Congress

said nothing at all about cost. In other words, while

the Act does not specifically define the various

technology standards, it generally (but not always)

enumerated specific factors EPA must consider in

setting effluent limitation guidelines—and sometimes

these include cost.

For example, under the initial BPT standard that

was to be in effect by 1977, the Act directs that

“{flactors” EPA “shall” consider include, among other

things, “the total cost of application of technology in

relation to the effluent reduction benefits to be

achieved from such application.” Section 304(b)(1)(B);

id. § 1314(b)(1)(B). Similarly, for the BCT standard

to be in effect by 1989 regarding existing sources of

conventional pollutants, a “factor[J” EPA “shall

include” in sctting effluent limitation guidelines is

“consideration of the reasonableness of the

relationship between the cost of attaining a reduction

in effluents and the effluent reduction benefits

derived ...."°. Section 304(b)(4)(B); td. § 1314(b)(4)(B).

EPA has adopted regulations describing the “cost-

reasonableness” test it applies to determine BCT

limitations. See 51 Fed. Reg. 24,974 (July 9, 1986).

For BAT regarding existing sources of toxic and

non-conventional pollutants, section 304(b)(2)(B) does

not mandate that EPA compare costs to benefits

related to reductions in effluent discharges. Id. §

1314(b)(2)(B). Rather, that section leaves the

weighing of enumerated factors, including “the cost of

achieving such effluent reduction ...,” to EPA’s

discretion. Id. See Waterkeeper Alliance, Inc. v. EPA,

399 F.3d 486, 516 (2d Cir. 2005); Tex. Oil & Gas Ass’n

v. EPA, 161 F.3d 923, 928 (5th Cir. 1998); BP

Exploration & Oil, Inc. v. EPA, 66 F.3d 784, 796 (6th

Cir. 1995). EPA’s view is that it “retains considerable

discretion in assigning the weight accorded” to the

statutory factors used to evaluate BAT, which

includes the cost of achieving toxic and non-

conventional effluent reductions. 71 Fed. Reg. 76,644,

76,646-47 (Dec. 21, 2006) (“Notice of Availability of

Final 2006 Effluent Guidelines Program”).

Similarly, Congress provided that in establishing

new source performance standards (“NSPS”), EPA

“shall take into consideration the cost of achieving

such effluent reduction...” Section 306(b)(1)(B); id. §

1316(b)(1)(B). As EPA has stated, “[iJn establishing

NSPS, [it] is directed to take into consideration the

cost of achieving the effluent reduction and any non-

water quality environmental impacts and energy

requirements.” 71 Fed. Reg. at 76,647 (Dec. 21,

2006).

CWA § 316(b)—the cooling water intake provision

at issue in the case at bench—is_ significantly

different in scope and intent compared to these other

sections. Section 316(b) includes a cross-reference to

sections 301 and 306, but Congress did not equate or

otherwise compare the disparate technology

standards in these provisions. But it is evident that

the text in section 316(b) is markedly different from

the text in section 301. Section 316(b) requires “best

technology available for minimizing adverse

environmental impact”—language far different from

section 301’s “best available technology economically

achievable” for existing sources of toxic and non-

conventional pollutants. Compare id. § 1326(b) to id.

§ 1311(b)(2)(A). The focus of these respective

provisions, on their face, is plainly dissimilar; section

316(b) focuses on environmental impacts, while

section 301 focuses on economic achievability. EPA

recognized the differences in exercising its discretion

for the cooling water intake structure rule at issue,

interpreting the phrase “minimizing adverse

environmental impact” to define what constitutes

“best” and “available” under section 316(b):

Section 316(b) requires that cooling water

intake structures reflect the best technology

available for minimizing adverse

environmental impact. In contrast to the

effluent limitations provisions fof section 301],

the object of the “best technology available” is

explicitly articulated by reference to the

receiving water: To minimize adverse

environmental impact in the waters from

which cooling water is withdrawn.

69 Fed. Reg. 41,576, 41,583 (July 9, 2004).

10

The various technology standards discussed above,

the scope of their application, and pertinent statutory

language regarding cost, are tabulated below:

Acronym | Techiiology'| 5... CWA: “|< Scopé of°3) ‘Cosi

4) Standard }5} Section ;~ | Application?) Considération’,

.BPT Best Section By July 1, EPA “shall include

Practicable 301(b)(1)(A); | 1977, consideration of

Control effluent the total cost of

Technology 33 US.C. § limitations application of

Currently 1311(b)(1)(A) | were to technology in.

Available reflect BPT jrelation to the

for “classes |effluent reduction

and benefits to be

categories of |achieved ....” §

point sources | 304(b)(1)(B); 33

... Thatis, |U.S.C.§

BPT applies {1314(b)(1)(B).

to discharges

of conven-

tional, non-

conventional,

and toxic

pollutants.

BCT. | Best Section By March “Factors” relating

Conventional | 304(b)(2)(E); | 31, 1989, to EPA's

Pollution j effluent assessment of BCT'

Control 33 US.C. § limitations |“shall include

Technology 1311 were to consideration of

(b)(2)(E) reflect BC’ jthe reasonableness

for of the relationship

conventional | between the costs

pollutants. of a attaining a

reduction in

effluents and the

effluent reduction

benefits derived

...-" § 304(b)(4)(B);

33 U.S.C. §

1314(b)(4)(B).

11

‘Acronym || ‘Technology - CWA. bi. ’Scbper of % ‘Cost:

| |: Standard <*>" ee ‘ Appueation, onsiderations

Bes Setar ei ee Considerat CaLRET

‘BAT: * Best Available Sections By March 31, |One “{fJactor”

Technology 301(b)(2)(A), | 1989, effluent] EPA “shall take

Economically (C), (D), (F); [limitations __|into account” is

Achievable were to “the cost of

33 U.S.C. §§ |reflect BAT |achieving such

1311(b)(2)(A), |for toxic effluent

(C),(D),(F) pollutants, reduction ....” §

and for all 304(b)(2)(B), 33

other (i.e., US.C. §

non- 1314(b)(2)(B).

conventional)

pollutants.

.IBADT)..1) Best Available | Sections New source |EPA “shall take

ieee Demonstrated | 306(a)(1), performance |jinto

Control (b)(2)(B); standards _| consideration

Technology (“NSPS”) the cost of

33 U.S.C. § achieving such

1316(a)(1), effluent

(b)(2)(B) reduction ....” §

306(b)(2)(B); 33

U.S.C. §

1316(b)(2)(B).

“BTA ‘| Best Section Location, Not explicit.

Technology 316(b); design and

Available for construction

|| Minimizing 33 U.S.C. § of cooling

| Adverse 1326(b) water

Environmental intake

Impact structures

12

II. THE COURT OF APPEALS’ ANALYSIS OF

COST CONSIDERATIONS REGARDING

THE VARIOUS TECHNOLOGY

STANDARDS IS FLAWED.

A. The Court of Appeals’ Analysis Placed

Undue Weight on Sections 301 and 306

Which are Far Broader in Scope than

Section 316, Which Deals Only With

Cooling Water Intake Structures.

In interpreting section 316(b) to determine if it

authorized EPA to conduct a cost-benefit analysis for

cooling water intake structures, the court of appeals

relied on unnecessary extrapolations of sections 301

and 306. It stated, “[oJur interpretation of section

316(b) is informed by the two provisions it cross-

references, CWA sections 301 and 306.” Riverkeeper,

Inc., 475 F.3d at 90. Indeed, the Second Circuit

assessed the “Cost Analysis Pursuant to Sections 301

and 306,” because section 316(b) “does make specific

reference to CWA sections 301 and 306, which we

have taken previously as ‘an invitation’ to look to

those sections for guidance in ‘discerning what factors

Congress intended the EPA to consider in

determining’ BTA.” Id. at 97 (quoting Riverkeeper,

Inc. v. EPA, 358 F.3d 174, 186 (2d Cir. 2004). The

Second Circuit conducted this analysis, despite the

fact that it also acknowledged that “Section 316(b)

does not itself set forth or cross-reference another

statutory provision enumerating the specific factors

that the EPA must consider in determining BTA.” Id.

The court of appeals recognized that in 1989, when

the BPT standard was replaced by the BAT standard,

13

section 301(b)(2)(A) authorized EPA to consider “the

cost of achieving such effluent reduction” in

determining BAT. Riverkeeper, 475 F.3d at 97

(quoting 33 U.S.C. § 1314(b)(2)(B)). The lower court

further stated that in contrast to the older BPT

standard, “[i]Jn determining BAT ... the EPA may

consider cost as a factor to a limited degree, ... but

only as to whether the cost of a given technology could

be reasonably borne by the industry and not the

relation between that technology’s cost and the

benefits it achieves.” Jd. at 98. Thus, the Second

Circuit held that EPA could only conduct a “cost-

effectiveness” analysis for determining BAT. Id. at

98.

The lower court also briefly examined section 306.

It recognized that new source performance standards

under that section must reflect BADT. Jd. It further

found that “Congress provides that in establishing

standards of performance, the EPA ‘shall take into

consideration the cost of achieving such effluent

reduction,’ ... but did not require the EPA to conduct

cost-benefit analysis.” Jd. (quoting 33 U.S.C. §

1316(b)(1)(B)). Thus, the Second Circuit held that for

both sections 301 and 306, “after 1989, cost is a

lesser, more ancillary consideration in determining

what technology the EPA _ should require for

compliance under those sections.” Jd. The court of

appeals concluded that “[t]he shift from the BPT

standard to the more stringent BAT one clearly

signaled Congress's intent to move cost consideration

under the CWA from cost-benefit analysis to a cost-

effectiveness one.” Id. The Second Circuit thus found

that its analysis “strongly suggests” that EPA is not

14

authorized to conduct a cost-benefit analysis under

sections 301 and 306. Id.

The court of appeals drew questionable inferences

from section 301 (which pertains broadly to existing

sources across the spectrum of conventional, non-

conventional, and toxic pollutants) and from section

306 (which pertains generally to new sources of

effluent discharge). However, the only provision

before it to consider was section 316(b), which

imposes a technology standard uniquely applicable to

cooling water intake structures. As shown below, it

was erroneous for the court of appeals to use sections

301 and 306 to conclude that EPA was precluded from

conducting a cost-benefit analysis in determining

BADT.

B. Contrary to the Court of Appeals’

Interpretation, Congress Authorized

Cost-Benefit Analysis to Establish

Technology Standards Under Sections

301, 304 and 306.

Under sections 301, 304, and 306, EPA is plainly

authorized to evaluate cost considerations for BAT

and BADT. The court of appeals was wrong to state

otherwise.

As noted, in attempting to divine the meaning of

section 316(b) for BTA regarding cooling water intake

structures, the court of appeals stated that sections

301 and 306 “informed” its analysis. Riverkeeper, 475

F.3d at 90. The CWA’s very language in section

301(b)(2)(A), which sets forth the BAT standard

applicable to existing sources of toxic and non-

15

conventional pollutants, explicitly provides that EPA

take costs and economic feasibility into account for

assessing the “best available technology economically

achievable.” 33 U.S.C. § 1311(b)(2)(A) (emphasis

added). On its face, the very premise of the BAT

standard depends on whether the technology can be

achieved at all, in light of cost; the text does not

predicate BAT on cost efficiencies, and does not

describe BAT as the “best available and most

efficient” method to control toxic or non-conventional

effluent. Further, Congress expressly provided that

EPA can consider numerous factors for BAT,

including “the cost of achieving such effluent

reduction ...,” as well as “such other factors as the

Administrator deems appropriate ....” Id. §

1314(b)(2)(B). And in similar language for new source

performance standards, section 304(b)(1)(B) likewise

states that EPA can consider “the cost of achieving

such effluont reduction ...” 33 U.S.C. § 1316(b)(1)(B).

Thus, under the plain text of the provisions to

which the lower court turned for guidance, it was

inappropriate to conclude that EPA may not conduct

cost-benefit analyses for the BAT and BADT

standards. Moreover, the lower court was selective in

the statutory sections it chose to examine. While it

said it would look to section 301 and went on to

consider subsection (b)(2)(A), it totally ignored

subsection (b)(2)(E), which sets the BCT standard for

existing sources of conventional pollutants. See id. §

1311(b)(2)(E). And, Congress indisputably directed

EPA to weigh costs against when establishing BCT

effluent guidelines. The Act directs that “[flactors”

relating to EPA’s assessment of BCT “shall include

consideration of the reasonableness of the

16

relationship between the costs of a attaining a

reduction in effluents and the effluent reduction

benefits derived ....” See id. § 1314(b)(4)(B) (emphasis

supplied). Indeed, EPA has adopted regulations

describing the “cost-reasonableness” test it uses when

establishing BCT limitations for industrial point

sources discharging conventional pollutants. See 51

Fed. Reg. 24,974 (July 9, 1986).

Other courts have not taken the selective or

restrictive approach used here by the court of appeals.

They have found that EPA has the discretion to (and

does) evaluate costs in setting technology standards

under sections 301 and 306. See BP Exploration &

Oil, 66 F.3d at 796 (“NRDC is wrong to contend that

EPA is not permitted to balance factors such as cost

against effluent reduction benefits”); Waterkeeper

Alliance, 399 F.3d at 516 (“if the EPA determines,

with adequate support in the record, that a given set

of costs cannot reasonably be borne by a given

industry, courts must defer to that determination”);

Natl Wildlife Fed’n v. EPA, 286 F.3d 554, 570 (D.C.

Cir. 2002) (“appellate courts give EPA considerable

discretion to weigh and balance the various factors

required by statute to set NSPS”); Tex. Oil & Gas, 161

F.3d at 928 (5th Cir. 1998) (“The EPA .. . has

considerable discretion in evaluating the relevant

factors and determining the weight to be accorded to

each in reaching its ultimate BAT determination.”).

Thus, under sections 301, 304 and 306, EPA is

afforded wide discretion to place significant weight to

cost considerations. The agency is authorized, but not

required, to assess those costs in relation to benefits

when determining BAT and BADT. The court of

17

appeals’ decision that EPA is prohibited from

assessing costs for these technologies is

unprecedented and should be reversed.

C. The Court of Appeals Misinterpreted

This Court’s Decision in EPA v. Nat'l

Crushed Stone Ass’n.

The court of appeals relied on EPA v. Nat'l

Crushed Stone Ass'n, 449 U.S. 64 (1980), to assert

that EPA is prohibited from conducting a cost-benefit

analysis for BAT. But its interpretation of that case

was erroneous. In examining the factors that EPA

can evaluate for BPT and BAT, this Court first found

that EPA must consider the various factors for

adopting effluent limitation guidelines under section

304(b)(1)(B). Jd. at 70. The Court then decided that

the factors under section 304(b)(2)(B) to determine

BAT do not mandate that EPA conduct a cost-benefit

assessment, as is required for BPT. Jd. at 71. The

Court stated that “Section 304(b)(2)(B) lists ‘cost’ as a

factor to consider in assessing BAT, although it does

not state that costs shall be considered in relation to

effluent reduction.” Id. at 71, n.10 (emphasis added).

The court of appeals, however, misinterpreted

National Crushed Stone, by construing the lack of a

mandate to compare costs and benefits under section

304(b)(2)(B) as a blanket prohibition against such

analysis. The lower court should have followed the

Fifth Circuit’s opinion in the Texas Oil & Gas case,

which correctly explained that National Crushed

Stone stands only for the proposition that “EPA is not

obligated to evaluate . . . the relationship between

costs and benefits.” Tex. Oil & Gas, 161 F.3d at 936

18

(citing Natl Crushed Stone, 449 U.S. at 71) (emphasis

added).

D. The Court of Appeals’ Chevron Analysis

was Incorrect.

In the end, the court of appeals should have

conducted a proper Chevron analysis of section 316(b)

and deferred to EPA’s reasonable interpretation of

that provision. As it admitted, “Section 316(b) does

not itself set forth or cross-reference another

statutory provision enumerating the specific factors

that the EPA must consider in determining BTA.”

Riverkeeper, 475 F.3d at 97. Under a correct Chevron

analysis, the Second Circuit’s admission that the

language of the statute was silent should have

mobilized it to move on to “Step 2,” and assess

whether EPA’s interpretation of section 316(b), a

statute that the agency administers, was reasonable.

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

842-43 (1984) (If a “statute is silent or ambiguous

with respect to the specific issue, the question for the

court is whether the agency’s answer is based on a

permissible construction of the statute”). Moreover,

section 316(b)’s cross-reference to sections 301 and

306, at best, creates an ambiguity which should have

triggered deference to EPA’s interpretation. Envtl.

Def. v. Duke Energy Corp., 549 U.S. 561, 127 S. Ct.

1423, 1433 (2007) (a “cross-reference alone is

certainly no unambiguous congressional code for

eliminating the customary agency discretion to

resolve questions about a statutory definition ....”)

The lower court opinion guts the bedrock

principle that where a statute is silent as to the

question at issue, “a court may not substitute its own

19

construction of a statutory provision for a reasonable

interpretation made by the administrator of an

agency.” Chevron, 476 U.S. at 844. Instead of

deciding whether EPA's interpretation of section

316(b) was a permissible construction of the statute,

it leaped to sections 301 and 306—provisions with

different language, purposes, and far broader

purviews than cooling water intake structures. As

thoroughly discussed by the other parties’ briefs,

EPA’s construction of section 316(b) was reasonable,

and thus, the Second Circuit should have deferred to

that fair construction.

The court of appeals’ overly-heavy reliance ‘on

sections. 301 and 306, when interpreting section

316(b), was certainly misplaced. Even though these

sections must by their very nature share some of the

same words, the Court has recognized that the same

words can have different meanings when used in

different contexts of the same statute:

[M]Jost words have different shades of meaning

and consequently may be variously construed,

not only when they occur in different statutes,

but when used more than once in the same

statute or even in the same section.

Envtl. Def., 127 S. Ct. at 1432 (2007) (citation

omitted). Indeed, although BTA and BAT share

similar words, those words appear in different

contexts. Section 304’s BAT standard refers to the

“best available technology economically achievable” in

section 301. 33 US.C. §§ 1314)(2)(B) &

1311(b)(2)(A) (emphasis added). In contrast, section

316(b) provides for standards that reflect the “best

technology available for minimizing adverse

20

environmental impact.” 33 U.S.C. § 1326(b). Based

on the plain language of the provisions, section 301’s

terms focus on technological and economic feasibility,

while section 316(b)’s terms focus on minimizing

adverse impacts—two dissimilar goals.

Because the Second Circuit rendered a decision

that is inconsistent with prior case law, failed to

conduct a proper Chevron analysis, and failed to

recognize the differences in language between

statutory provisions, this Court should reverse.

CONCLUSION

For the foregoing reasons, the judgment below

should be reversed.

Respectfully submitted,

July 18, 2008

Duane J. Desiderio Daniel P. Albers

Thomas J. Ward Counsel of Record

NATIONAL Jeffrey S. Longsworth

ASSOCIATION OF David T. Ballard

HOME BUILDERS BARNES &

1201 15th Street, N.W. THORNBURG LLP

Washington, D.C. 20005 One North Wacker Drive

(202) 266-8200 Suite 4400

Chicago, IL 60606-2809

(312) 357-1313

App. 1

APPENDIX A

Cases in which NAHB has appeared as an amicus

curtae or “of counsel” before this Court include:

Agins v. City of Tiburon, 447 U.S. 255 (1980); San

Diego Gas and Elec. Co. v. City of San Diego, 450 U.S.

621 (1981); Williamson County Regl Planning

Comm'n v. Hamilton Bank, 473 U.S. 172 (1985):

MacDonald, Sommer & Frates v. Yolo County, 477

U.S. 340 (1986); First English Evangelical Lutheran

Church v. Los Angeles County, 482 U.S. 304 (1987);

Nollan v. Cal. Coastal Comm'n, 483 U.S. 825 (1987):

Pennell v. City of San Jose, 485 U.S. 1 (1988); Yee v.

City of Escon lido, 503 U.S. 519 (1992); Lucas v. S.C.

Coastal Council, 505 U.S. 1003 (1992); Dolan v. City

of Tigard, 512 U.S. 374 (1994); Babbitt v. Sweet Home

Chapter of Cmtys. for a Greater Ore., 515 U.S. 687

(1995); Suitum v. Tahoe Reg'l Planning Agency, 520

U.S. 725 (1997); City of Monterey v. Del Monte Dunes

at Monterey, Ltd., 526 U.S. 687 (1999); Solid Waste

Agency of N. Cook County v. U.S. Army Corps of

Eng’rs, 531 U.S. 159 (2001); Palazzolo v. Rhode

Island, 533 U.S. 606 (2001); Franconia Assocs. v.

United States, 536 U.S. 129 (2002); Tahoe-Sierra Pres.

Council, Inc. v. Tahoe Reg Planning Agency, 535

U.S. 302 (2002); Borden Ranch P’ship v. U.S. Army

Corps of Eng’rs, 537 U.S. 99 (2002); City of Cuyahoga

Falls v. Buckeye Cmty. Hope Found., 538 U.S. 188

(2003); S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe

of Indians, 541 U.S. 95 (2004); San Remo Hotel, L.P.

v. City and County of San Francisco, 545 U.S. 323

(2005); Lingle v. Chevron U.S.A., Inc., 544 U.S. 528

(2005); Kelo v. City of New London, 545 U.S. 469

(2005); S.D. Warren Co. v. Me. Bd. of Envtl. Prot., 547

App. 2

U.S. 370 (2006); Rapanos v. United States, 547 U.S.

715 (2006); John R. Sand and Gravel Co. v. United

States, 128 S.Ct. 750 (2008); and Summers v. Earth

Island Inst., No. 07-463, cert. granted, 128 S.Ct. 1118

(2008).