# Amicus Curiae Brief — Utility Water Water Act Group Group v. Riverkeeper, Inc. (Nos. 07-597, 07-588, 07-589)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2009

## Text

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Nos. 0785, Ores, e607 [| __ FILED

IN THE

JUL 21 2008

" FICE OF TH
Supreme Court of the Wnited| Sates e oo TE

ENTERGY CORPORATION,

Petitioner,
v.

ENVIRONMENTAL PROTECTION AGENCY, et al.,

Respondents.
PSEG Fossrz LLC, et al.,
Petitioners,
v.
RIVERKEEPER, INC., et al.,
___ Respondents.
Uti.ity WATER GROUP,
Petitioner,
v.
RIVERKEEPER, INC., et al.,
Respondents.

ON WRITs OF CERTIORARI TO THE UNITED STATES
Court OF APPEALS FOR THE SECOND CIRCUIT

Brier or Amici Curtak AMERICAN CHEMISTRY COUNCIL, AMERICAN

Forest & Paper ASsSociATION, AMERICAN IRON AND STEEL

INSTITUTE, CHAMBER OF COMMERCE OF THE UNITED STATES OF
AMERICA, AND NATIONAL ASSOCIATION OF MANUFACTURERS

IN SUPPORT OF PETITIONERS

— —

—_— —— $$

RussELL S. FRYE
Counsel of Record

FryELAW PLLC
1101 30 Street, N.W. Suite 220
Washington, DC 20007-3769
(202) 572-8267

Counsel for Amict Curiae

(Additional Counsel Listed on Signature Page)

42

rp~asia kh

i

TABLE OF CONTENTS

TABLE OF CITED AUTHORITIES .........

INTEREST OF AMICI CURIAE ............

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

BF co OU UUTTTTT TC TTT ELT C CT TT Te

I.

IT.

The Second Circuit’s Interpretation of
Section 316(b) Could Impose Costly,
Unnecessary Requirements on Cooling
Water Intake Structures at Many More
Facilities than Just Electric Utilities. .....

The Second Circuit’s Rejection of Cost and
Benefit Considerations for Implementing
Section 316(b) Is Not Compelled by the
I, bade dda h nes aka eiss onsseeses

A. The Second Circuit Improperly
Ignored the Statutory Language and
EPA’s Reasonable Interpretation of
Ot buseneget ees bdceukesesuutdecae’s

B. Imposing the Factors for Establishing

Effluent Limitations on the Cooling
Water Intake Section of the CWA Is
PS ca cckeuvedeseesebsese bes

oO

11

14

i

Contents

Page
C. Assuming Further that the Most
Stringent Criteria for Establishing
Effluent Limitations Apply Also to
Cooling Water Intakes Is Unjustified.
PPE OE Ce Ce eR RE Oe re oe eee 17
D. The Second Circuit’s Understanding
of EPA’s Discretion to Consider Costs
and Benefits in Setting BAT Effluent
Guidelines for Toxic Pollutants Is
PE eS encksahensiesaasceawsses 22
III. The Second Circuit’s Restrictive
Interpretation of CWA Section 301, if Not
Corrected by the Court, Could Have
Significant Adverse Effects Beyond
Regulation of Cooling Water Intake
i cs. cadeenGhaaedidextaeh awl 27

EES. dad Sivedexdenvsseeyseeel deans 30

iii

TABLE OF CITED AUTHORITIES
Page

CASES

Am. Iron & Steel Imst. v EPA, 526 F.2d 1027 (3rd
Cir. 1975), modified in part on other grounds,
560 F.2d 589 (3rd Cir. 1977), cert. denied, 435
EE Avotoss deen aes werekaanes 15, 16

Am. Tron & Steel Inst. v. EPA, 568 F.2d 284 (8rd
DEE - in Ceca s eee ekaeaietbeekeunt-s 26

Am. Paper Inst., Inc. v. EPA, 660 F.2d 954 (4th
ED darnuced cee uNe See etdededad thee ses 20

Am. Petroleum Inst., 540 F.2d 1023 (10* Cir.
1976), cert. denied, 480 U.S. 922 (1977) ...... 26

Am. Petroleum Inst. v. EPA, 787 F.2d 965
ee oe ed ee eee 23, 24

Ass'n of Pac. Fisheries v. EPA, 615 F.2d 794
ee le Se eS Se ae eae 26, 29

Bankamerica Corp. v. United States, 462 U.S.
CL PS errr ree eee 12

BP Exploration & Oil, Inc. v. EPA, 66 €.3d 784
SED oh ondasnanedsndecyaens 20, 22, 25, 29

Chem. Mfrs. Ass'n v. EPA, 870 F:2d 177 (5th Cir.
1989), cert. denied sub nom. PPG Industries,
Inc. v. EPA, 495 U.S. 910 (1990) .......... passim

iv

Cited Authorities
Page
Chem. Mfrs. Ass'n v. Natural Res. Def Council,
Fig Bee Sek RE CRED hore c beet ccessecens 21

Chevron U.S.A., Inc. v. Natural Res. Def Council,
PSs ee CD 6.0 8s vce ncceesasnces 12

E.I. du Pont de Nemours & Co. v. Train, 430
ei hae eke ens enaeee sd ens 15

EPA v. California, ex rel. State Water Res.
Control Bd., 426 U.S. 200 (1976) ............ 14-15

EPA v. Nat'l Crushed Stone Ass’n, 449 U.S. 64
er ae ea eal 14, 16, 19

FDA v. Brown & Williamson Tobacco Corp. , 529
SE Gk sa daveneen ss as seneueewus 12

MCI Telecomms. Corp. v. AT&T, 512 U.S. 218
doa c edna ewan ebeckaee sebassaeeusans 12

Nat'l Ass’n of Metal Finishers v. EPA, 719 F.2d
624 (3rd Cir. 1983), rev’d on other grounds sub
nom. Chem. Mfrs. Ass’n v. Natural Res. Def
Council, inc., 470 U.S. 116 (1985) ......... 16, 29

Nat'l Wildlife Fed’n v. EPA, 286 F.3d 554 (D.C.
RRM. Web tho dccewdseched ce6 danncus nes 29

Natural Res. Def. Council, Inc. v. EPA, 822
ee ee a GH DED 6 ned nccdsncsudens 16, 25

Vv

Cited Authorities
Page
Natural Res. Def Council, Inc. v. EPA, 863 F.2d
BE RIE GED So. ccccnecevcdvcceenteceas 23

Our Children’s Earth Found. v. U.S. EPA, 527
P.BG OES (0th Cle, BOGS) 2. cc cccccccccccccce 23, 28

Riverkeeper, Inc. v. U.S. EPA, 358 F.3d 174
PE ED gos bc ed aan a eed eet ee 22, 24

Riverkeeper, Inc. v. U.S. EPA, 475 F.3d 83
(2d Cir. 2007) (Pet. App. la-94a) .......... passim

Rybachek v EPA, 904 F:2d 1276 (9th Cir. 1990) . . . 23, 25

Thomas Jefferson Univ. v. Shalala, 512 U.S. 504

bee re er ee 12
TRW Inc. v. Andrews, 534 U.S. 19 (2001) ...... 13
Waterkeeper Alliance, Inc. v. EPA, 399 F.3d 486

CL ED 0 06 0s 000<dkk0nee eee 22, 29
Weyerhaeuser Co. v. Costle, 590 F.2d 1011 (1978)

ee ee Mn fer 22
DOCKETED CASES
ConocoPhillips, et al. v. EPA, Fifth Cir. No. 06-
GE, 6.06.66 6 44000%6040 0e8eaees Cee 10

Riverkeeper, et al. v. EPA, S. D. N.Y. No. 1:06-
CPOE, 66 066 ch dn ed0s0as0kdseun ee 10

vi

Cited Authorities

Page
STATUTES
CWA section 101(a)(1), 33 U.S.C. § 1251(a)(1) .... = 16
CWA section 301, 33 U.S.C. §§ 1311 .......... passim
CWA section 301(b), 33 U.S.C. § 1311(b) ........ 15
CWA section 301(b)(1)(A), 33 U.S.C. § 13811(b)(1)(A) vs
CWA section 301(b)(2)(A), 33 U.S.C. § 1311(b)(2)(A)

SE A eee 16, 17, 23
CWA section 301(b)(2)(E), 33 U.S.C. § 1311(b)(2)(E) -
CWA section 301(d), 33 U.S.C. § 1311(d) ........ 28
CWA section 301(g), 33 U.S.C. § 1311(g) ........ 21, 22
CWA section 301(1), 33 U.S.C. § 13811(1) ......... 22
CWA section 304, 33 U.S.C. § 1314 ........... passim

CWA section 304(b), 33 U.S.C. § 1314(b) ..15, 17, 23, 28
CWA section 304(b)(1), 33 U.S.C. § 1314(b)(1) .... 18

CWA section 304(b)(2)(B), 33 U.S.C. § 1314(b)(2)(B)
ee ec a cweeeees's 17, 22, 23

vii

Cited Authorities
Page
CWA section 304(b)(4), 33 U.S.C. § 1314(b)(4).... 20
CWA section 304(m)(1)(A),

ee Cts Oe EEE oc cccccccccccccese 28
CWA section 304(m)(1)(B)-(C),

33 U.S.C. $ 1814(b) (1)(B)-(C) ..........000- 28
CWA section 306, 33 U.S.C. § 13816 ............ 14
CWA section 316(b), 33 U.S.C. § 1826(b) ..... passim
CWA section 402(a)(1), 33 U.S.C. § 1842(a)(1) .. 28
FEDERAL REGULATIONS
ee nibh aes bene eeeeses 28
Pe ED 56k boss tnccedaceconnewe 28
i oil Me een eaee an mee 2
EE 5 6. w cb ccd etcccsseswouces ts 2, 5
CE: OF IED 0 ccs ccececcsavceceesecees 2

PRA ME PORE hin cecescecdceseccctass 28

vili

Cited Authorities

Page

FEDERAL REGISTER NOTICES
63 Fed. Reg. 18,503 (April 15, 1998) ........... 29
67 Fed. Reg. 17,121 (April 9, 2002) ............ 9
69 Fed. Reg. 41,575 (July 9, 2004)

GUE. CEA, TED 6 ccc ce ccevcewcsccece 2, 5, 7,8
69 Fed. Reg. 68,444 (Nov. 24, 2004) ........... 8,9 -
71 Fed. Reg. 35,006 (June 16, 2006) ....... 2, 6, 8, 10

72 Fed. Reg. 37,107 (July 9. 2007) ............. 6

ix

Cited Authorities
Page
LEGISLATIVE MATERIALS

Clean Water Act of 1977, Pub. L. 95-27, § 43, 91
DT i icccteleeheekhhueus dba aee hee 13-14, 21

H.R. Rep. No. 95-830, 95" Cong., 2d Sess. 85
(Dec. 7, 1977), reprinted in 1978 U.S.C.C.A.N.
DL ~65 vies bceCR ED een ee eons ene ak es 21

S. Comm. on Env’t & Pub. Works, 99th Cong.,
2nd Sess., Report 99-1004 to Accompany
S. 1128 (1985 Clean Water Act Amendments)
PE SEIS 6 hen sb nk ec sawennenes 15

117 Cong. Rec. 38800 (1971) (remarks of Sen.
Muskie), reprinted in 2 Legis. Hist. 1262.... 16

123 Cong. Rec. H9133 (daily ed. Oct. 4, 1972)
(remarks of Rep. Clark), reprinted in 1 Legis.
EE iis oo Cuace cease 66a eee O8SReCEeR 19

1

INTEREST OF AMICI CURIAE'

Amici curiae American Chemistry Council,
American Forest & Paper Association, American Iron
and Steel Institute, Chamber of Commerce of the United
States of America, and National Association of
Manufacturers are trade associations and business
organizations that represent the interests of business
and industry in the reasonable implementation of
requirements for cooling v’ater intake structures under
Clean Water Act section 316(b), 33 U.S.C. § 1326(b).

These organizations represent a broad spectrum of
U.S. business and industry. Their members include
companies that withdraw water from rivers, lakes,
estuaries, and the territorial seas for use in their
facilities for cooling purposes. These members may be
affected directly by the Second Circuit’s incorrect
interpretation in the decision below of the requirements
of Clean Water Act section 316(b). Amici also represent
businesses that are large consumers of electric power,
which can expect increased operating costs if less-
flexible, more-expensive requirements under section
316(b) mandated by the decision below are imposed on
electric utilities from which those businesses purchase
their electric power. Also, to the extent that the Second
Circuit’s view of the permissible consideration of costs

' The parties have consented to the filing of this brief.
No counsel for a party authored this brief in whole or in part,
and no counsel or party made a monetary contribution intended
to fund the preparation or submission of this brief. The only
person other than these amici curiae or their members that
made a monetary contribution to its preparation or submission
is the American Petroleum Institute.

2

and benefits in setting effluent limitations under the
Clean Water Act is followed by EPA or individual permit
writers in imposing effluent limitations on point-source
discharges of wastewater, amici’s members will suffer
additional adverse effects as a result of the decision
below.

For the most part, amici’s members do not
operate facilities subject to the Environmental
Protection Agency’s (“EPA’s”) regulation establishing
requirements for cooling water intake structures at
Phase II existing facilities, 69 Fed. Reg. 41,575 (July 9,
2004) (Pet. App. 122a-593a)* (hereinafter the “Phase II
Rule”), which is the subject of the decision below. That
is because the Phase II Rule regulates only existing
facilities whose primary activity is the generation and
transmission or sale of electricity. See 40 C.F-R. $§ 125.90,
125.91(a) (2007). But existing industrial and commercial
facilities (as well as smaller electricity generation plants)
that have cooling water intake structures, which EPA
has designated “Phase III facilities,” are also subject
to requirements implementing Clean Water Act (“CWA”)
section 316(b), established by permit writers on a case-
by-case, “best professional judgment,” basis. 40 C.F-R.
§ 125.90(b) (2007); 71 Fed. Reg. 35,006, 35,008 (June 16,
2006). Thus, amic?’s members will be adversely affected
if those permit writers follow the Second Circuit’s
restrictive view of the permissible consideration of costs
and benefits in establishing requirements under CWA
section 316(b).

* Citations to the Pet. App. refer to the appendix filed with
the petition for writ of certiorari in No. 07-588.

3
SUMMARY OF ARGUMENT

The Second Circuit erroneously concluded that EPA
effectively is precluded from considering the relationship
of costs to benefits when establishing requirements for
cooling water intake structures under Clean Water Act
section 316(b). This conclusion, which is at odds with
long-standing EPA practice and decisions of other
courts, would produce serious adverse impacts for many
more facilities than just large electric generating plants.
The Second Circuit’s interpretation of section 316(b) will
no doubt be considered, and perhaps followed, in
applying section 316(b) to a large universe of industrial
and commercial facilities that withdraw water for cooling
purposes. Moreover, because the wide diversity among
those industrial and commercial facilities makes
flexibility in applying section 316(b) even more important
to avoid imposing excessively costly requirements for
little benefit, the extreme, rigid view of section 316(b)
in the Second Circuit’s decision has the potential to have
a proportionately more severe effect on those facilities
than on the electric utilities represented by petitioners.

Additionally, since the Second Circuit based its
restrictive view of EPA's discretion in establishing
requirements for cooling water intake structures under
CWA section 316(b) on its interpretation of CWA section
301 and section 304 requirements for limitations on
wastewater discharges, 33 U.S.C. §§ 1311 and 1314, the
adverse effects of the decision below may be felt much
more broadly than by just those facilities that operate
cooling water intake structures. The Second Circuit’s
view that EPA cannot reject a wastewater treatment
technology option that has far greater costs but only

4

minimal additional pollution reduction benefits would,
if applied to the thousands of facilities with wastewater
discharges, impose serious financial burdens on society
for little benefit.

These unproductive, rigid technology-selection
requirements the Second Circuit found in the Clean
Water Act are a product of improper statutory
interpretation. The Second Circuit failed to give
deference to PA's long-standing interpretation of CWA
section 316(b). It based its own interpretation on a
selective analysis of provisions of the Clean Water Act
addressing effluent limitations for wastewater
discharges under CWA sections 301 and 304, an analysis
that also ignored essential differences in wording and
purpose between those sections and CWA section 316(b).

Moreover, the Second Circuit relied on an unduly
restrictive view even of those portions of CWA sections
301 and 304 that it did focus on. Its conclusion that EPA
lacks discretion to give almost any consideration to the
reasonableness of the relationship between the cost of
wastewater control technology options and the pollution
reduction benefits those options produce is contrary to
the plain language of CWA sections 301 and 304 anc to
virtually every other appellate decision interpreting
those sections.

5
ARGUMENT

I. The Second Circuit’s Interpretation of Section
316(b) Could Impose Costly, Unnecessary
Requirements on Cooling Water Intake
Structures at Many More Facilities than Just
Electric Utilities.

The Phase II Rule that is the subject of the decision
below affects hundreds of c!ectric utility generating
plants. If EPA is forced by the decision below to impose
requirements based on tue most effective technology
for cooling water intake structures that the utility sector
can financiaily bear, that could impose billions of dollars
of compliance costs on the utility sector. See 69 Fed. Reg.
at 41,605 (Pet. App. 255a-257a). Much of those costs can
be expected to be passed on to purchasers of electricity,
such as those represented by the amici. Amici would
also be adversely affected by the power plant downtime
and loss of generating capacity predicted to occur.
See 69 Fed. Reg. at 41,605 (Pet. App. 257a-259a).

The impact of the Second Circuit’s decision may be
even wider, however, because of its potential effect on
the implementation of CWA section 316(b) at the Phase
III industrial and commercial facilities and small utilities.
Under 40 C.ER. § 125.90(b) (2007), Phase III facilities
and other facilities for which EPA has not promulgated
nationwide categorical standards “must meet
requirements under section 316(b) of the CWA
determined by the [state or EPA permit writer] on a

6

case-by-case, best professional judgment (BPJ) basis.”*
See also 71 Fed. Reg. at 35,008.

In the decision below, the Second Circuit has
interpreted CWA section 316(b) as dictating that, at least
when developing national standards for a category of
sources, EPA must choose the most effective technology
for minimizing the impact of cooling water intake
structures that the category as a whole “can reasonably
bear.” Ri~erkeeper, Inc. v. U.S. EPA, 475 F.3d 83, 99-
100 (2nd Cir. 2007) (Pet. App. 26a-27a). EPA may not
consider whether the costs of that technology
significantly outweigh the benefits, even if the costs are
wholly disproportionate to the benefits, but may only
consider relative costs when two technologies “produce
essentially the same benefits.” Pet. App. 28a. In fact,
the decision suggests that, faced with a technology that
costs 50 percent more but assures that one additional
fish will be saved from impingement on or entrainment
in the cooling water intake structure, EPA may be
obligated to impose requirements based on the more
costly technology. /d. at 26a-28a (EPA could not reject,
“on cost considerations,” a technology that “saves” at
least 102 fish if electric utilities could afford it, even if it
is 50 percent more expensive than a technology “saving”
99-101 fish).

Although the decision below was in the context of
national, categorical requirements for Phase II facilities
and does not apply directly to case-by-case, “best

3’ While other portions of the Phase II Rule have been
suspended by EPA, that section remains in effect. 72 Fed. Reg.
37,107, 37,108 (July 9, 2007).

7

professional judgment” permit requirements for intake
structures at the remaining universe of existing facilities
(Phase III facilities), permit writers now must decide,
in considering whether to impose additional
requirements for cooling water intake structures at
individual Phase III facilities, whether to adopt the
flexible interpretation of section 316(b)’s requirements
followed by EPA and other courts, or the extreme view
of the limits of EPA’s discretion under CWA section
316(b) provided by the Second Circuit in the decision
below.

If the permit writers choose to follow the Second
Circuit’s view that “best technology available for
minimizing environmental impact” means the
technology that produces the least impingement and
entrainment of aquatic organisms, no matter how high
the cost in comparison to the incremental reduction of
impingement and entrainment, then the many Phase
III facilities represented by amici and others will be
adversely affected, and society will suffer large costs with
little incremental benefit.

This is not just a theoretical concern. In looking at
the large electric generating plants that were the subject
of the Phase II Rule, EPA identified a suite of
technologies that, when used in the best configuration
for local conditions, are capable of controlling
impingement and entrainment at cooling water intake
structures to an extent approaching that of closed-cycle
cooling (the available technology EPA found to have the
best performance in reducing entrainment and
impingement mortality), but at one-ninth the cost.
69 Fed. Reg. at 41,605-606, 41,650 (Pet. App. 255a-257a,

8

260a-261la, 450a-4452a). The Second Circuit apparently
would have EPA issue regulations requiring electric
utilities to install controls with performance identical
to closed-cycle cooling, which would impose billions of
dollars of additional costs on electric utilities, for only a
small increment of impingement and entrainment
reduction.

Although Phase III facilities collectively only
withdraw about 10 percent as much cooling water as
the large electric utility plants covered by Phase II, 71
Fed. Reg. at 35,017, there are thousands of industrial,
commercial, and institutional facilities that use cooling
water. See 69 Fed. Reg. 68,444, 68,455 n.4 (Nov. 24, 2004)
(almost 700 Phase III facilities have intake structures
withdrawing 2 million gallons or more per day). If only
large Phase III facilities (those withdrawing over 50
million gallons a day for cooling, of which there are about
150) were subject to regulations imposing stringent
requirements for cooling water intake structures similar
to those the Phase II Rule imposed on large electric
utilities, EPA estimates that compliance costs would be
on the order of $40 million per year. 71 Fed. Reg. at
35,031-32. Because of the nature of Phase III facilities,
EPA estimates that such expenditures would produce
only about one-fourth of the benefit per dollar spent as
the Phase II Rule.‘

* Jd. at 35,018. Existing industrial facilities present a wider
range of locational and process constraints for application of
uniform technology requirements than do existing utility
generating stations. Cf. 69 Fed. Reg. at 41,605-606, 41,608
(Pet. App. 256a-259a, 270a-271a). Industrial facilities are more
likely to be located in close proximity to other properties, and it

(Cont'd)

9

Industrial facilities regulated under Phase III on
average withdraw far less cooling water than the large
utilities covered by Phase II. Even on a flow-weighted
basis, however, EPA estimated that the number of
organisms impinged and entrained by Phase III
facilities is approximately one third the number of
organisms impinged and entrained by Phase II facilities
withdrawing the same volume. 69 Fed. Reg. at 68,463
col. 3. This reflects in part the fact that the smaller Phase
III facilities are less likely to withdraw a significant
portion of the source water body, and a smaller
percentage of the overall cooling water flow withdrawn
by Phase III facilities comes from more-sensitive tidal
river, estuary, and ocean environments than for
Phase I] facilities. See id. col. 1. If, as the Second Circuit
concluded, section 316(b) requires even more stringent
provisions than those imposed by the Phase II Rule on
electric utilities, then applying that same approach to
the remainder of existing facilities (Phase III facilities)
would impose even more-disproportionate costs with
even lower cost-effectiveness.

The Second Circuit decision at issue here will, at a
minimum, create uncertainty and confusion about what
factors may be considered by permit writers in the

(Cont'd)

is not unusual for them to have been operated and expanded
over half a century or more. Installation of certain technologies
to reduce impingement and entrainment mortality may be
physically impossible due to site constraints. In addition, the
generally smaller scale of cooling water usage at industrial
facilities (compare 67 Fed. Reg. 17,121, 17,130, 17,135 (April 9,
2002) with 69 Fed. Reg. at 68,455-56 and 68,502) can make some
technologies impracticably costly and cost-ineffective.

10

application of section 316(b) on a case-by-case basis to
the many facilities with cooling water intake structures
outside of the electric utility sector. Additionally, if permit
writers choose or are required, to use the Second
Circuit’s very restrictive view of section 316(b), the
Second Circuit’s decision will impose a large financial
burden on society for measures at these additional
facilities that are not cost-effective and may have
incremental costs far greater than their benefits.°

® A group of environmental advocacy groups with
essentially the same members as respondents in the instant
case are pursuing litigation, currently stayed, seeking to
overturn EPA’s decision to continue to regulate Phase III
existing facilities on a case-by-case basis. ConocoPhillips, et al.
v. EPA, Fifth Cir. No. 06-60662; Riverkeeper, et al. v. EPA,S. D.
N.Y. No. 1:06-ev-12987-PKC. If that litigation was successful,
then the impact of the Second Circuit’s decision—-which
requires that nationwide categorical section 316(b)
requirements be based on “the optimally best performing”
facilities in the country, Pet. App. 264, rather than on
technologies that can be applicd to an individual facility—could
be even greater. In the Phase III rulemaking, EPA has already
found that imposing a uniform categorical set of requirements
for all Phase III existing facilities would, given the highly
diverse nature of such facilities and their setting, impose costs
on the sector wholly disproportionate to the benefits. 71 Fed.
Reg. at 35,017-18.

11

II. The Second Circuit’s Rejection of Cost and
Benefit Considerations for Implementing
Section 316(b) Is Not Compelled by the Statute.

A. The Second Circuit Improperly Ignored the
Statutory Language and EPA’s Reasonable
Interpretation of It.

The rigid, restrictive view of CWA section 316(b)
offered by the Second Circuit, with its great potential
for imposition of costly and unnecessary regulatory
burdens, is not compelled by the only reasonable
interpretation of the statute. To the contrary, the
Second Circuit rejected EPA’s’ permissible
interpretation and substituted its own reading of the
statute: an arbitrary reading that ignores critical
provisions of the statutory language.

As petitioners have explained in their briefs, the
Second Circuit’s conclusion that EPA is so constrained
in implementing CWA section 316(b) is contrary to
EPA’s consistent interpretation of the statute since the
1$70s and is contrary to the interpretation adopted by
other courts. See, e.g., merits brief for the Federal
Parties at 27-28. The opinion below 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.” Pet. App. 20a. Since section 316(b)
says nothing specific about the weight that EPA should
accord costs and benefits in determining the “best
technology available for minimizing adverse
environmental impact,” the Second Circuit should have
deferred to EPA’s long-standing, reasonable

12

interpretation of section 316(b). See, e.g., Chevron
U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837, 842-45 (1984); FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 132-33 (2000); Thomas
Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994);
Bankamerica Corp. v. United States, 462 U.S. 122, 130-
32 (1983). But instead of determining whether EPA's
interpretation is a permissible one, the Second Circuit
unabashedly substituted its own view of how the
statutory language is “more properly understood.”
Pet. App. 28a.

Beyond that lack of deference to EPA’s
interpretation, though, the Second Circuit’s
interpretation simply fails to reflect the language of the
Clean Water Act. First, the Second Circuit effectively
gives no consideration to what Congress intended by
the terms “minimize” and “adverse environmental
impact” in section 316(b). In the Second Circuit’s view,
a technology that “saves” 102 fish minimizes adverse
environmental impacts, while one that “saves” 101 fish
does not—without consideration of whether the cooling
water intake structure as-is causes adverse
environmental impact, or whether one less fish impinged
on or entrained through the cooling water intake
structure will have any impact at all on the environment,
i.e., the health of the aquatic community in the source
water body. See p. 6, supra.

In the absence of any reason to the contrary, words
in statutes should be given their ordinary, dictionary
meaning. See, e.g., MCI Telecomms. Corp. v. AT&T, 512
U.S. 218, 225-28 (1994). In common usage “minimize”
does not mean “eliminate,” but rather incorporates the

13

notion of reducing to the extent practicable.
See American Heritage Dictionary of the English
Language, Fourth Ed. (2000), usage note for “minimal.”
“Adverse” means “harmful or unfavorable.” /d. The
Second Circuit’s view of what is required by section
316(b)—elimination of any impact if affordable
technology is available to do so—is inconsistent with the
ordinary meanings of those terms. Moreover, it
effectively reads “adverse” out of the statute, violating
the basic principle of statutory interpretation that
statutory language should not be interpreted so that
one or more of the words Congress used become “mere
surplusage.” See, e.g., TRW Inc. v. Andrews, 534 U.S.
19, 31 (2001).

Looking beyond the language of section 316(b) itself
(or, more accurately, overlooking it), the Second Circuit
concluded that section 316(b)’s reference to point
sources subject to standards issued wnder CWA section
301 necessarily incorperated into section 316(b) the
criteria EPA must apply in developing effluent
limitations guidelines for point source discharges under
Clean Water Act sections 301 and 304. See Pet. App. 20a,
23a. Moreover, as explained below, the Second Circuit,
without explanation, decided that the relevant criteria
to be incorporated into section 316(b) are those that
applied post-1984 to discharges of toxic pollutants.®

® Case law discussing the Best Available Technology level

of control for wastewater discharges sometimes refers to “the
1983 standards,” “the 1984 standards,” or “the 1987 standards.”
The Federal Water Pollution Control Act of 1972 originally
required compliance with limitations based on the Best
Available Technology by July 1, 1983. The Clean Water Act of
(Cont'd)

14

Even then, the Second Circuit’s extrapolation of
requirements for intake structures relied on its incorrect
assertion that EPA has virtually no discretion to
consider the relationship between costs and benefits
when setting Best Available Technology (“BAT”)
effluent limitations for toxic pollutants.

B. Imposing the Factors for Establishing
Effluent Limitations on the Cooling Water
Intake Section of the CWA Is Unjustified.

The Second Circuit’s conclusion that section 316(b)
incorporates criteria for decision-making identical to
those for effluent guidelines under sections 301 and 304
cannot be squared with the facts that: (1) section 316(b)
does not say anything about incorporating the criteria
used to set effluent limitations, (2) section 316(b)
contains distinctly different language from sections
301 and 304, and (3) the two sets of provisions have
different goals. The technology-based effluent
limitations in sections 301 and 304 (and section 306, for
new sources) were Congress’ response to difficulties
that had been experienced in trying to limit wastewater
discharges based solely on predictions of what was
necessary to assure a healthy population of aquatic life
in the receiving waters. See EPA v. California, ex rel.
State Water Res. Control Bd., 426 U.S. 200, 203-205

(Cont'd)
1977 changed that deadline to July 1, 1984 fur most industry
categories, with compliance at the latest required by July 1,
1987. See EPA v. Nat'l Crushed Stone Ass'n, 449 U.S. 64, 70 n.9
(1980). (It also substituted Best Conventional Technology for
Best Available Technology for “conventional” pollutants. /d.)

15

(1976). Congress chose, as one of the centerpieces of
the new legislation adopted in 1972, an approach that
set effluent limitations based initially solely on the
capability of available wastewater treatment technology,
without regard to whether that level of treatment was
necessary to meet water quality standards in the
receiving waters. /d.; see also S. Comm. on Env’t & Pub.
Works, 99th Cong., 2nd Sess., Report 99-1004 to
Accompany S. 1128 (1985 Clean Water Act Amendments)
(Comm. Print 1985) 3-4. In contrast, the language of
Section 316(b) directs EPA to establish requirements
_ for cooling water intake structures that will “minimize
adverse environmental impact.” Congress deliberately
took a different approach in section 316(b) than the
approach it adopted for effluent limitations in sections
301 and 304, where the wastewater treatment
technology requirements were disconnected from any
finding of ad. erse environmental impact.’ See, e.g., EJ.
du Pont de Nemours & Co. v. Train, 430 U.S. 112, 129-
30 (1977); Am. Iron & Steel Inst. v. EPA, 526 F.2d 1027,
1044 (3rd Cir. 1975), modified in part on other grounds,
560 F.2d 589 (3rd Cir. 1977), cert. denied, 435 U.S. 914
(1978) (guidelines to be uniform rather than varying with
location and nature of receiving water).

? In addition to not specifying the factors to be considered
in imposing conditions on intake structures, section 316(b)
differs as well from CWA provisions that are aimed at controlling
wastewater discharges in that it does not contain deadlines for
implementation or compliance and does not direct EPA to
develop guidelines for implementation with respect to
categories of sources. Cf. CWA §§ 301(b) and 304(b), 33 U.S.C.
§§ 1311(b) and 1314(b).

16

Moreover, the Clean Water Act requirements for
technology-based effluent limitations were expressly
intended to move dischargers on a path towards a goal
of eliminating pollutant discharges (not just eliminating
adverse environmental impacts), and the case law
interpreting effluent limitations guidelines that the
Second Circuit relied upon is explicitly based in part on
the courts’ consideration of what interpretation would
be consistent with this ultimate goal of eliminating
discharges.* See CWA §§ 101(a)(1) and 301(b)(2)(A), 33
U.S.C. §§ 1251(a)(1) and 1311(b)(2)(A); Natl Crushed
Stone, 449 U.S. at 69-70, 74 (1980); Natural Res. Def
Council, Inc. v. EPA, 822 F.2d 104, 123 (D.C. Cir. 1987)
(viewing technology-based limitations “[i]n the context
of a statute which seeks the elimination of pollution”);
Chem. Mfrs. Ass’n v EPA, 870 F:2d 177, 250 (5th Cir.
1989), cert. denied sub nom. PPG Industries, Inc. v.
EPA, 495 U.S. 910 (1990). See also, e.g., Am. Iron & Steel,
526 F.2d at 1051-52; Nat’l Ass’n of Metal Finishers v.
EPA, 719 F.2d 624, 664 (3rd Cir. 1983), rev’d on other
grounds sub nom. Chem. Mfrs. Ass’n v. Natural Res.
Def Council, Inc., 470 U.S. 116 (1985). Nowhere in the
CWA is there a similar series of increasingly stringent
steps leading towards elimination of cooling water intake
structures or their effects.

The Second Circuit decision simply ignored these
critical distinctions between section 316(b) and sections

8 The zero discharge goal was intended as “a policy
objective. It is not locked in concrete. It is not enforceable.” 117
Cong. Rec. 38800 (1971) (remarks of Sen. Muskie), reprinted in
2 A Legis. Hist. of the Water Pollution Control Act Amendments
of 1972, 93d Cong., 1* Sess., Senate Comm. on Public Works
Serial No. 93-1 (Jan. 1973) (“Legis. Hist.”) 1262.

17

301 and 304. Then the Second Circuit compounded the
error by focusing solely on requirements for BAT
effluent limitations addressing toxic pollutants (sections
301(b)(2)(A) and 304(b)(2)(B), 33 U.S.C. $§ 1311(b)(2)(A)
and 1314(b)(2)(B)), as explained in the following section.
Again, the decision ignored clear congressional
directives that for other types of limitations EPA must
balance costs against effluent reduction benefits—the
type of comparison that the Second Circuit says is
precluded when EPA establishes cooling water intake
structure requirements under section 316(b).

C. Assuming Further that the Most Stringent
Criteria for Establishing Effluent
Limitations Apply Also to Cooling Water
Intakes Is Unjustified.

The Second Circuit’s rejection of EPA’s
interpretation of section 316(b) rests on the lower
court’s comparison of section 301’s Best Practicable
Technology (“BPT”) level of control, in which EPA is
specifically required, through reference to section
304(b), to consider the relationship of costs to benefits,
and the BAT level, for which such a cost-benefit balancing
is not required.’ “This shift from BPT to BAT
fundamentally altered the way in which the EPA could
factor cost into its CWA determinations.” Pet. App. 21a.

9 See CWA § 304(b)(2)(B) (effluent reduction benefits not
listed as a factor the Administrator “shall take into account"—
although “such other factors as the Administrator deems
appropriate” is). (In a further leap, the Second Circuit asserts
that cost-benefit analysis not Unly is not required, it is “no longer
permitted.” Pet App. 23a.)

18

In the lower court’s view, “[t]he shift from the BPT
standard to the more stringent BAT one clearly signaled
Congress’s intent to move cost considerations under the

CWA from a cost-benefit analysis to a cost-effectiveness
one.” /d. at 22a.!°

But in fact, the “shift” from BPT to BAT clearly did
not reflect a congressional decision to abandon
consideration of benefits for Clean Water Act programs
generally after 1984, nor even for effluent limitations
generally. As an initial matter, the Second Circuit did
not provide sufficient justification for ignoring the
criteria for BPT effluent limitations in sections 301 and
304 and focusing solely on BAT. Cf. “et. App. 21a-23a.
There is no obvious reason why cross-referencing section
301 would implicate only the criteria for BAT and not
those for BPT. For one thing, section 316(b) was included
in the 1972 Federal Water Pollution Control Act
Amendments, and so for the first 12 years that section
316(b) was in effect the only applicable criteria for
establishing effluent guidelines were those for BPT in
sections 301(b)(1)(A) and 304(b)(1).'! If, as the Second
Circuit suggests, the cross-reference to section 301 in
section 316(b) means that EPA must look to BAT, rather
than BPT, for guidance in establishing requirements

— —_ oe ——_ me —s —— -_

'°The opinion below offers no explanation for its
extrapolation from criteria for setting effluent limitations in
section 304(b) to “CWA determinations” and “cost
considerations under the CWA” generally.

'"! Initially, BAT was to be required as of 1983; the effective
date for BAT was changed to 1984 in 1977 amendments to the
act. See n. 6, supra.

19

under 316(h) because section 316(b) contains the word
“available” but not the word “practicable,” see Pet. App.
3la, then one must also assume that Congress intended,
by using those words, that for the first 11-12 years of
the CWA cooling water intake structures would be
subject to a more stringent performance criterion than
wastewater discharges. There is no evidence that
Congress intended such an illogical result.

Moreover, the Second Circuit seems to assume that
BPT is no longer relevant after 1984, but in fact EPA
has continued to establish BPT effluent limitations
guidelines, with court approval. Compare Pet App. 2la
(BAT “replaced” BPT) and 30a (BPT is “obsolete”) with
Chem. Mfrs. Ass’n, 870 F.2d at 206-207 (Best
Conventional Technology intended “to supplement,
rather than to replace, BPT” for conventional pollutants,
and Congress in 1987 enacted “a stricter BPT” that
applies to “all BPT regulations for all pollutants”
promulgated after 1981). The Second Circuit had no
more reason for assuming that the cross-reference in
section 316(b) to section 301 incorporated the BAT
factors than assuming that the BPT factors under
section 301 apply, which “do not require an industrial
category to commit the maximum economic resources
possible to pollution control, even if affordable.” *

% See Natl Crushed Stone, 449 U.S. at 75. See also Remarks
of Rep. Clark during House consideration of Conference Report
on S. 2770 (Fed. Water Pollution Control Act Amendments of
1972), 123 Cong. Rec. H9133 (daily ed. Oct. 4, 1972), reprinted
in 1 Legis. Hist. 273-74 (section 316 must be read with several
other sections of the bill, including “{sJimilar language . .
contained in section 304 concerning factors to be considered in
assessing ‘best practicable’ and ‘best available’ technology”).

20

Even considering the types of technology-based
effluent limitations under section 301 that first began
to apply in 1984, however, does not lead to the conclusion
that Congress intended that EPA avoid consideration
of the benefits to be achieved for Clean Water Act
programs generally, or even for effluent limitations. The
Second Circuit failed to mention at all Congress’
enactment of the Best Conventional Technology
(“BCT”) level of control for “conventional pollutants,”
in CWA sections 301(b)(2)(E) and 304(b)(4), 33 U.S.C.
§§ 1311(b)(2)(E) and 1314(b)(4). Congress adopted the
BCT provisions precisely to avoid the type of “treatment
for treatment’s sake”—requiring additional technology
that is affordable but will not produce significant
effluent reduction benefits—that the Second Circuit now
claims Congress intended to incorporate by implication
into section 316(b). See Am. Paper Inst. v. EPA, 660 F.2d
954, 957-58 (4 Cir. 1981); BP Exploration & Oil, Inc. v
EPA, 66 F.3d 784, 790 (6th Cir. 1995) (Congress
recognized that “stringent BAT standards might require
unnecessary treatment” of conventional pollutants and
“intended for BCT to prevent the implementation of
technology for technology’s sake”); Chem. Mfrs. Ass’n,
870 F.2d at 205 (additional technology may be required
only where additional “cheap pounds” of conventional
pollutants can be removed). Thus, the Second Circuit’s
reliance on its assertion that a “shift from BPT to BAT
fundamentally altered the way in which the EPA could
factor cost into its CWA determinations,” Pet App. 2la—
without acknowledging that Congress acted directly to
avoid additional treatment costs unless they would
produce clear effluent reduction benefits when it
enacted BCT—represents an arbitrary focus on one
aspect of CWA section 301 and its legislative history,
and not another.

21

Moreover, Congress has acted to avoid requiring
additional technology that will not produce significant
benefits even in the BAT provisions of the Act. For
certain “nonconventional” pollutants (not designated
“conventional” pollutants covered by BCT and not listed
toxic pollutants), Congress adopted a provision allowing
relaxation of requirements based on BAT, to a level (not
less than that required by BPT) that will not cause
unacceptable water quality in the receiving waters. CWA
§ 301(g), 33 U.S.C. § 1311(g) (added by § 43 of the Clean
Water Act of 1977, Pub. L. 95-27, 91 Stat. 1583); see
Chem. Mfrs. Ass’n v. Natural Res. Def Council, Inc.,
470 U.S. 116, 122-23, 127 (1985). Again, Congress acted
to avoid unnecessary incremental wastewater treatment
technology, because the BPT step had “proven more
stringent in many instances than anticipated” and so
“will result in a larger measure of progress toward the
achievement of the goals of the Act.” See H.R. Rep. No.
95-830, 95'" Cong., 2d Sess. 85 (Dec. 7, 1977), reprinted
in 1978 U.S.C.C.A.N. 6668. Again, the Second Circuit
failed even to mention this contradiction to its conclusion
that Congress has decided to require the most effective
technology that a category of discharger can afford,
without regard to the incremental benefits or lack
thereof from employing that technology."®

'S Cf Chem. Mfrs. Ass'n, 870 F.2d at 196 (in establishing

effluent limitations guidelines, “cost factor is accorded less
weight ... for discharges more harmful to the environment”).

22

D. The Second Circuit’s Understanding of EPA’s
Discretion to Consider Costs and Benefits in
Setting BAT Effluent Guidelines for Toxic
Pollutants Is Flawed.

Even the BAT standard for listed toxic pollutants
(for which the adjustment allowed by CWA section 301(g)
is not available, see CWA section 301(1), 33 U.S.C.
§ 1311(1)) does not preclude consideration of the costs
in comparison to the benefits, as the Second Circuit
claims. In fact, in other decisions, the Second Circuit
has acknowledged that “cost is only one of the factors
that EPA is supposed to consider in establishing BAT
standards,” and the statute also specifies “that the EPA
should consider” “the cost of achieving such effluent
reduction” along with a number of other factors,
including “such other factors as the Administrator
deems appropriate.” Waterkeeper Alliance, Inc. v EPA,
399 F.3d 486, 516 (2nd Cir. 2005), quoting CWA section
304(b)(2)(B). “However, the Clean Water Act ‘does not
state what weight should be accorded to the relevant
factors; rather, the Act gives EPA the discretion to make
those determinations.” /d., quoting BP Exploration,
66 F.3d at 802; accord, Weyerhaeuser Co. v. Costle, 590
F.2d 1011, 1045 (D. C. Cir. 1978). In fact, the Second
Circuit has even suggested in a previous opinion that it
would be illogical for EPA not to take into account, when
establishing requirements under section 316(b), a
situation where expensive technology produces
relatively little incremental benefit. Riverkeeper, Inc. v.
U.S. EPA, 358 F.3d 174, 194 n.22 (2nd Cir. 2004)
(“Riverkeeper I”) (“We think it is logical for the EPA to
compare the improvements that both dry cooling
and closed-cycle cooling offer over once-through

23

cooling. ... [I]t is undeniably relevant that [dry cooling]
represents a relatively small improvement over closed-
cycle cooling at a very significant cost.”).

Other courts have also reached the obvious
conclusion that the language of sections 301(b)(2)(A) and
304(b)(2)(B) is broad enough to allow EPA to base BAT
effluent limitations in part on its assessment of the costs
versus the benefits of candidate technologies.
“The courts of appeals have consistently held that
Congress intended Section 304(b) to give the EPA broad
discretion in considering the cost of pollution abatement
in relation to its benefits. .. .” Chem. Mfrs. Ass’n, 870
F.2d at 204 (citations omitted); zd. at 207. See also, « 7.,
Natural Res. Def Council, Inc. v. EPA, 863 F.2d 1429,
1426 (9th Cir. 1988) (“EPA has considerable discretion
in weighing the costs of BAT.”) (citations omitted).
The cases cited by the Second Circuit, and indeed most
if not all of the decisions addressing the issue, have said
that EPA is not required to do a cost-benefit balancing
for BAT, but not that EPA is preclvded from doing so.
See, e.g., Rybachek v. EPA, 904 F.2d 1276, 1290-91 (9th
Cir. 1990) (“. .. EPA must consider the ‘cost’ of meeting
BAT limitations, but need not compare such cost with
the benefits of effluent reduction. ... The Agency
measures costs on a ‘reasonableness standard’; it has
considerable discretion in weighing the technology’s
costs...”) (emphasis added, citations omitted); Am.
Petroleum Inst. v. EPA, 787 F.2d 965, 972 (5th Cir. 1986);
Our Children’s Earth Found. v. U.S. EPA, 527 F:3d 842,
849 n.5 (9th Cir. 2008) (EPA has “discretion” to consider
other factors, “including harm or risk-based factors’).

24

The Second Circuit’s analysis does not even make
sense on its face: The Second Circuit views EPA’s proper
role is determining whether the cost of wastewater
treatment technology—and therefore also the cost of a
candidate cooling water intake technology—” could not
be reasonably borne by the industry.” Pet App. 33a;
see also id. at 24a-26a. Yet the question of whether a
cost is “reasonable” cannot be resolved in a vacuum.
Whether it is reasonable to buy an automobile for
$50,000 may depend on a number of things in addition
to whether one has more than $50,000 in the bank;
certainly a key consideration is what you are getting
for the money—a 10-year-old minivan or a new luxury
sports car?—and how it compares to what you could buy
for less money.'* The Second Circuit’s notion that an
industry can “reasonably bear” the costs of additional
technology so long as a significant portion of the industry
will not be forced out of business is not “reasonable” at
all.'° Nor is it a sensible description of the “best”

' The Second Circuit recognized this in Riverkeeper I, 358
F.3d at 194 n. 22 (“when noting how much more expensive dry
cooling is than closed-cycle cooling, it is only fair to note how
much more effective it is as well....{I]t is undeniably relevant
that that difference represents a relatively small improvement
over closed-cycle cooling at a very significant cost.”).

'© See Pet. App. 27a-28a (equating “economically feasible”
with “reasonable”). Cf. Am. Petroleum Inst., 787 F.2d at 972-73
(implying it would not be “reasonable” for EPA to “tilt at
windmills by imposing BAT limitations which removed de
minimis amounts of polluting agents from our nation’s waters,
while imposing possibly disabling costs upon the regulated
industry.”). '

25

technology for minimizing adverse environmental
impact.'®

The only example the Second Circuit offers of when
the Clean Water Act would allow EPA to consider costs
and benefits in establishing requirements for
wastewater discharges under section 301 or cooling
water intake structures under section 316(b) is
nonsensical: If there are two or more economically
feasible technologies “that produce essentially the same
benefits but have markedly different costs,” EPA may
“choose a less expensive technology that achieves
essentially the same results as the benchmark.” But
EPA promulgates effluent limitations or other permit
conditions, based on what the available technology or
technologies it identifies can achieve, rather than
mandating that a facility install any particular
technology. See, e.g., Rybachek, 904 F.2d at 1298;
Natural Res. Def Council, 822 F.2d at 122-23. Thus, if

‘6 The Second Circuit’s view that a technology option is
“best,” even .f it results in only a slight improvement in
environmenta! performance at far higher costs, not only is not
the only “permissible” reading of the statutory language, it is
not even a facially reasonable one. See BP Exploration, 66 F:3d
at 796 (“[T]he CWA’s requirement that EPA choose the ‘best’
technology does not mean that the chosen technology must be
the best pollutant removal. Obviously, BAT . . . must be
acceptable on the basis of numerous factors, only one of which
is pollution control.”)

'7 Pet. App. 26a-28a. See also id. at 23a (“cost-effectiveness
considerations, like BAT, determine which means will be used
to reach a specified level of benefit that has already been
established.” (footnote omitted)).

26

EPA, when developing BAT effluent requirements or
BTA cooling water intake structure requirements,
“chooses,” as the identified technology basis for the rule,
a less-expensive technology that achieves the same
result, that would not make any difference in the
wastewater discharge limitations or cooling water intake
structure permit conditions that the permitted facility
would be required to meet.

This “cost-effectiveness analysis” that the Second
Circuit concluded EPA may engage in, Pet. App. 26a-
28a, not only is essentially meaningless as the Second
Circuit described it, it is vague and undefined. Although
the Second Circuit says its test is completely different
from a “cost-benefit analysis” that EPA performs in
setting BPT effluent limitations, id. 24a-26a, 29a, EPA
and other courts have used “cost-effectiveness” analysis
to denote such a comparison of costs and benefits used
in setting BPT, as well as the analysis used in setting
BCT limits.'’* By substituting EPA broad discretion to
weigh costs and benefits with an unclear standard that
uses the term “cost-effectiveness” differently from how
it has been used by EPA and other courts, the Second
Circuit is inviting yet more litigation about how EPA
may go about setting not only cooling water intake
structure requirements, but effluent limitations as well.

8 See, e.g., Am. lron & Steel Inst. v. EPA, 568 F.2d 284, 297
(3rd Cir. 1977); Chem. Mfrs. Ass’n, 870 F.2d at 206; Am. Petroleum
Inst., 540 F.2d 1023, 1037-38 (10% Cir. 1976), cert. denied, 430
U.S. 922 (1977) (EPA refers to its analysis for setting BPT
limitations as a “cost-effectiveness analysis”); cf. Ass’n of Pac.
Fisheries v. EPA, 615 F.2d 794, 809 (9" Cir. 1980) (BPT balancing
of costs and benefits considers both improved water quality
and “amount of pollutants discharged”).

27

III.The Second Circuit’s Restrictive Interpretation
of CWA Section 301, if Not Corrected by the Court,
Could Have Significant Adverse Effects Beyond
Regulation of Cooling Water Intake Structures.

Because the Second Circuit turned to section 301
for “guidance” as to the factors Congress intended EPA
to consider in developing requirements for cooling water
intake structures under section 316(b), the decision
below provides the Second Circuit’s interpretation of
how costs and benefits may be considered in the
establishment of requirements for wastewater
discharges under section 301 (through “effluent
limitations guidelines”). In so doing, the Second Circuit
rejected EPA’s interpretation of the statute, and that
of other Circuits as well, to find that EPA has only very
limited discretion to consider how the costs of
wastewater treatment technology relate to incremental
reductions in pollutant discharges. See Pet. App. 20a-
23a.

Because the Second Circuit offered this
interpretation of CWA section 301 in the context of
determining what factors EPA may consider in assessing
best technology available for minimizing adverse
environmental impact under CWA section 316(b), rather
than in reviewing any effluent limitations imposed by
EPA or state authorities under CWA section 301, the
decision below may not technically be binding on EPA
or state authorities issuing such effluent limitations.
Nevertheless, respondents and other advocacy groups
likely will claim that the decision below is binding
precedent on the extent to which costs and benefits may
be taken into account when establishing effluent

28

limitations, and EPA also might choose to follow the
unequivocal language of the Second Circuit’s
interpretation of section 301.

EPA has already applied section 301 in issuing
effluent limitations guidelines under CWA section
304(b), 33 U.S.C. § 1314(b), for dozens of categories of
discharges covering a large swath of industrial and
commercial activities. See 40 C.F.R. pts. 405-471 (2007).
The Second Circuit’s incorrect view of section 301 could
nevertheless have substantial adverse effects on
businesses in the future, in a number of ways. EPA is
required to consider, “at least annually,” whether it is
appropriate to revise its effluent limitations guidelines
regulations. CWA § 304(b); § 304(m)(1)(A), 33 U.S.C.
§ 13814(m)(1)(A); see also § 301(d), 33 U.S.C. § 1311(d)
(review and, if appropriate, revision of effluent
limitations every five years). Additionally, EPA must
identify and develop effluent limitations guidelines for
additional categories of sources which the
EPA Administrator determines have non-trivial
discharges of toxic or nonconventional pollutants.
CWA § 304(m)(1)(B)-(C), 33 U.S.C. § 1314(m)(1)(B)-(C);
Our Children’s Earth, 527 F.3d at 848-52. Moreover,
individual wastewater discharge permits may impose
case-by-case, best professional judgment effluent
limitations implementing section 301 when they
are issued or renewed. See CWA § 402(a)(1), 33 U.S.C.
§ 1342(a)(1); 40 C.FR. § 125.3(a)(2), (c)(2) (2007).

Past experience has shown that it is not unusual for
determinations of available technology under section
301 to involve selection among technologies with vastly
different, and huge, costs, but little difference in results.

29

For example, in developing BAT effluent limitations
guidelines for bleached pulp and paper mills, EPA
considered but ultimately rejected a technology option
that cost twice as much—about a billion dollars more—
while providing only a slight improvement in toxic
pollutant discharges and no difference in monetized
water quality benefits. See Nat'l Wildlife Fed’n v. EPA,
286 F.3d 554, 559 (D.C. Cir. 2002); 63 Fed. Reg. 18,503,
18,551, 18,544-45 (April 15, 1998). In considering BAT
effluent limitations for offshore oil drilling platforms,
EPA relied on several considerations to reject (with the
Sixth Circuit’s approval) a wastewater reduction
technology that, while probably technically available and
economically achievable, would have imposed over six
billion dollars of additional costs. See BP Exploration,
66 F:3d at 796-97. In setting wastewater limits for cattle
feedlots, EPA considered an approach that would have
caused almost six times as many of those facilities to
shut down than the case-by-case regulation EPA
ultimately chose, but would have produced only about
one percent more reduction in nitrogen loading.
Waterkeeper Alliance, 399 F.3d at 515. As technology
inevitably progresses, and there are smaller and smaller
remaining amounts of pollutants to be treated, the
potential for high-cost treatment technologies that
produce little benefit will be even greater in the future.’

'§ See, e.g.. Ass’n of Pac. Fisheries, 615 F.2d at 818
(acknowledging that “at some point, extremely costly more
refined treatment will have a de minimis effect on the receiving
waters”); Chem. Mfrs. Ass’n, 870 F.2d at 205 (discussing “point
at which costs escalate rapidly in relation to benefits”), 207 (EPA
has discretion to select “the point of diminishing returns”). See
also Nat'l Ass’n of Metal Finishers, 719 F.2d at 664 (industry
says setting electroplating BPT effluent guidelines just five
percent higher would cut compliance costs in half).

30

The Second Circuit’s erroneous interpretation of
CWA section 301 therefore has the potential to affect
many more facilities than just those that have cooling
water intake structures. The potential large adverse
financial impact on businesses and, ultimately, the
American public if the Second Circuit’s restrictive
reading of section 301 is applied in developing effluent
limitations for wastewater discharges makes it all the
more important that the Court correct that erroneous
statutory interpretation.

CONCLUSION

For the reasons set forth above, amici curiae urge
the Court to reverse the decision of the Second Circuit
and find that EPA has the discretion to weigh the costs
and the pollution reduction or environmental benefits
achieved, when considering technology options as the
basis for effluent limitations under CWA section 301(b)
and cooling water intake structure requirements under
CWA section 316(b).

31
Respectfully submitted,

RUSSELL S. FRYE

Counsel of Record

FrvELaw PLLC

1101 30% Street, N.W. Suite 220
Washington, DC 20007-3769
(202) 572-8267

Counsel for Amici Curiae
American Chemistry Council,
American Forest & Paper
Association, American Iron
and Steel Institute, Chamber of
Commerce of the United States
of America, and National
Association of Manufacturers

Dated: July 21, 2008

Of Counsel:

LESLIE A. HULSE

Assistant General Counsel
American Chemistry Council
1300 Wilson Boulevard
Arlington, VA 22209

RICHARD S. WASSERSTROM

American Forest & Paper Association
1111 19th Street, N.W., Suite 800
Washington, DC 20036

32

Rosin S. ConrRAD

Amar D. SARWAL

National Chamber Litigation Center, Inc.
1615 H Street, N.W.

Washington, DC 20062

JAN S. AMUNDSON

Senior Vice President & General Counsel

QUENTIN RIEGEL

Vice President, Litigation & Deputy General Counsel
National Association of Manufacturers

1331 Pennsylvania Avenue, N.W.

Washington, DC 20004-1790

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0048%3A23. Public record. Not legal advice.