# 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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3n the Supreme Court of the United States

ENTERGY CORPORATION, Petitioners,
Vv.

ENVIRONMENTAL PROTECTION AGENCY, ET AL., Respondents.

PSEG FossIiL LLC, £7 AL., Petitioners,
Vv.

RIVERKEEPER, INC., ET AL., Respondents.

LITILITY WATER ACT GROUP, Petitioner,
Vv.

RIVERKEEPER, INC., ET AL., Respondents.

On Writ of Certiorari to the United States
Court of Appeals for the Second Circuit

BRIEF FOR ENVIRONMENT AMERICA AND
THE CENTER FOR BIOLOGICAL DIVERSITY
AS AMICI CURIAE SUPPORTING

RESPONDENTS

CHARLES C. CALDART CHRISTOPHER J. WRIGHT*
JOSEPH J. MANN TIMOTHY J. SIMEONE
NATIONAL ENVIRONMENTAL S. ROBERTS CARTER III

LAW CENTER HARRIS, WILTSHIRE &
1402 Third Avenue GRANNIS LLP
Suite 715 1200 Eighteenth St., N.W.
Seattle, WA 98101 Washington, DC 20036
(206) 568-2853 (202) 730-1300

*Counsel of Record

October 6, 2008
SS

|
|

i
QUESTION PRESENTED

Whether Section 316(b) of the Clean Water Act
authorizes the Environmental Protection Agency to
compare costs with benefits in determining the “best
technology available for minimizing adverse
environmental impact” at cooling water intake
structures.

il

TABLE OF CONTENTS
QUESTION PRESENTED slpeitei cle salsnhanssentdiaienttipaiienaaipaniitl i
A Se CE BN ETE csccerccecescesecescosonenssncenessens iV
ET THEE GET ictinceniiccntinrsevessconemssiioniiinsensiveiis 1
NE sitiitcbiciontineincivanss soctionannneseciniviesinisniil 3
SUMMARY OF ARGUMENT ..................cccsccssssseseeees 7
IE cewtinaiitinnvniibeissinuacininnnsmininiinicviisitet 8

I. EPA Is Not Permitted To Conduct A Cost-
Benefit Analysis To Establish BAT And
TELE PE TRAE eRe ne mE te 10

A. The statutory provisions governing BAT
and BADT do not permit the use of acost- _
i iiinseninnctutiiencieniiniectihealendnnnieningnss 11

1. The statutory language describing the
BAT and BADT standards disallows a
COSE-BOMSTE QNPTORCE ...........ccrccrcsssccvevees 13

2. The structure of the relevant statutory
provisions demonstrates that the BAT
and BADT standards are not to be
based on cost-benefit analysis ............... 19

B. This Court’s decision in National Crushed
Stone Association confirms the conclusion

that the BAT and BADT standards do not
permit the use of a cost-benefit analysis ..... 21

il

Il. The Section 301 And Section 306 Standards
(Including BTA Requirements) Are To Be
Established For Classes And Categories Of

IN 2c cisati seiesdbinsanianeignislonianinnnedeeneties 29
III. There Is Ample Room Under The Statute For
EPA To Avoid Truly Absurd Results ............... 31

TINT seingeinisscdpetenednenvvestitiininennenesvtqneneaniecioons 33

iv

TABLE OF AUTHORITIES
CASES

Alabama Power Co. v. Costle, 636 F.2d 3°3

EERIE Ope Oe a 32
American Iron & Steel Inst. v. EPA, 526 F.2d

I i i cceandasiadiibe 25, 28
American Petroleum Inst. v. EPA, 787 F.2d

SI is coneiinsoednsncconen 27
American Textile Mfrs. Institute, Inc. v.

Donovan, 452 U.S. 490 (1981).............cccccc cece eee 4,7
Association of Pacific Fisheries v. EPA, 615

F.2d 794 (Othe Cir. 19060) ..............0....0.000....0000. 25, 32
BP Exploration & Oil, Inc. v. EPA, 66 F.3d

SO ee cee 24-26
Chemical Mfrs. Ass’n v. EPA, 870 F.2d 177

ERE EI 2 ae ln 5, 27
Chevron U.S.A. Inc. v. NRDC, 470 U.S. 116

SRS arena ON BL Sie aC 23, 24
City of Chicago v. Environmental Defense

Ps Gee Wate ME IID. casicnnicpacedesoetasenmonsecs Y
E.I. du Pont de Nemours & Co. v. Train, 430

I TO i a 4, 15, 29-31
EPA v. National Crushed Stone Ass'n, 449

U.S. 64 (1980).......... 2, 4, 6-8, 12, 19, 21-25, 27, 28

Hughey v. United States, 495 U.S. 411 (1990)....18, 19

International Paper Co. v. Ouellette, 479 U.S.
PTI cadhdctetitc dilelniedhiindetidsnadisinsnieb aplerseiaatalindavewniaiida 28

v

NAHB v. Defenders of Wildlife, 127 S. Ct.

Et CED occcncccnedtenelill udencstiindiinianiiasndiaitinbiieedeiiane 24
NRDC v. EPA, 822 F.2d 104 (D.C. Cir. 1987) ......... 28
NRDC v. EPA, 863 F.2d 1420 (9th Cir. 1988) .... 27-28
NRDC v. EPA, 859 F.2d 156 (D.C. Cir. 1988) ......... 12
NRDC v. Train, 510 F.2d 692 (D.C. Cir.

SU TTUUT<ciisscsiniecicpsnanitnaibesteiaineeiedabiiglhmeaiegcdietentdaiadiiieiiie tcadeca tal cane 31
Our Children’s Earth Found. v. EPA, 527

Pf GS ee sere 27
Riverkeeper, Inc. v. EPA, 358 F.3d 174 (2d

Se STITT sssessisciereiitncieneiatescantienaiintessitedsiningialiadnthdmaatns Alcina 27
Texas Oil & Gas Ass’n v. EPA, 161 F.3d 923

EE TEN. “TRIED cnccnonnnnnespnainsiiantlensieetmbieda tian 16, 25
Waterkeeper Alliance, Inc. v. EPA, 399 F.3d

GS, STD ctnticovnccsnecinnasisnideiissiiiiiiatiaesaiaains 27
Weyerhaeuser Co. v. Costle, 590 F.2d 1011

as GE Cee accrnessecnpicenninssisitinaiiiaalaaues 11, 12, 26, 27, 31

Whitman v. American Trucking Ass’ns, Inc.,
Gt Rk. | een ee 9, 15, 16, 19

v1

CONSTITUTIONAL PROVISIONS

18 U.S.C. § 3580(a) (1982 ed.) .......... cece eee ee eee 18
a csncennnspoosineeess 20
118 Cong. Rec. 33,696 (1976) .................c cece eee 4, 6, 22
Clean Air Act, Section 109(b), 42 U.S.C. §
i cssgucosnaccoes 15, 16
Clean Water Act, 33 U.S.C. § 1251 et seq. .........0....... 1
Section 101(a), 33 U.S.C. § 1251(a) ........0.00..0000.. 12
Section 101(a)(1), 33 U.S.C. § 1251(a)(1)........10,12
Section 101(a)(2), 33 U.S.C. § 1251(a)(2)............ 10
Section 301, 33 U.S.C. § 1311...... 1-3, 9, 10, 29, 30
Section 301(b)(1)(C), 33 U.S.C. §
a secsecsmenonosee 27
Section 301(b)(2)(A), 33 U.S.C. §
RS 1, 7, 13, 14, 20, 21, 29
Section 301(b)(2)(C), 33 U.S.C. §
cecibsnenononos 20
Section 301(b)(2)(D), 33 U.S.C. §
ESS EO vn 21
Section 301(b)(2)(E), 33 U.S.C. §
a ssundsunconce 2, 29
Section 301(b)(2)(F), 33 U.S.C. §
es scicnunenenccns 21
Section 301(c), 33 U.S.C. § 1311(e) ......0.00 en. 32
Section 301(g), 33 U.S.C. § 1311(g)................ 21, 32
Section 301(k), 33 U.S.C. § 1311(k) .....00000. 32

Section 301(n), 33 U.S.C. § 1311(n).........00......... 31

vu

Section 308, 33 U.S.C. § 1912.....................2....... 28
Section 302(b)(2)(A), 33 U.S.C. §

SEAR OI Se ae a RR a 29
Section 304, 33 U.S.C. § 1314.......0000.. 3, 16, 28
Section 304(a)(4), 33 U.S.C. § 1314(a)(4)............ 20
Section 304(b)(1)(B), 33 U.S.C. §
EESTI TLE Ae ae Ae er ae 16, 25
Section 304(b)(2)(B), 33 U.S.C. §
ES RS 13, 14, 16, 17, 19
Section 304(b)(2)(E), 33 U.S.C. §

A Ae ee EE 2
Section 304(b)(4)(B), 33 U.S.C. §

EEE ENED aw ee eae ea 16, 20
Section 306, 33 U.S.C. § 1316............. 1-3, 9, 28-30
Section 306(a)(1), 33 U.S.C. § 1316(a)(1)......... 2,14
Section 306(a)(2), 33 U.S.C. § 1316(a)(2)............ 14
Section 306(b), 33 U.S.C. § 1316(b) .....00..0.. 0... 16
Section 306(b)(1)(A), 33 U.S.C. §

REE a Se 29
Section 306(b)(1)(B), 33 U.S.C. §

REESE ro A Nes eS EE 28, 29
Section 316, 33 U.S.C. S RGB .........0..0..cccccccccceesess 8
Section 316(a), 33 U.S.C. § 1326(a) .................... 26
Section 316(b), 33 U.S.C. §
ESR ee eo EO Ee 1-4, 6-9, 26, 29, 30
Section 502(13), 33 U.S.C. § 1362(13) ..... 10, 20-21

Section 510(1), 33 U.S.C. § 1370(1) ......0. ee. 29

vill
OTHER AUTHORITIES
3 Legislative History of the Clean Water Act

ee IE itis desceihetnteihanisnaminiiniaeiinnisineszences

Nicholas A. Ashford & Charles C. Caldart,
The Use of Cost-Benefit Analysis as a
Means of Evaluating and Designing
Options for Environmental Regulation, in
Environmental Law, Policy, and

Economics (MIT Press 2008).......................2.

Robert W. Hahn & Cass Sunstein, A New
Executive Order for Improving Federal
Regulation? Deeper and Wider Cost-
Benefit Analysis, 150 U. Pa. L. Rev. 1489

IIIT isiinniesdsctcenabiaijaaihinaiualadnibakindeasanidimiibiinie neninmnans

Lisa Heinzerling, The Clean Air Act and the
Constitution, 20 St. Louis U. Pub. L.

ED citiicicadinapatinniiidiitnapstendecinsscssees

Laurence H. Tribe, Ways Not to Think About
Plastic Trees: New Foundations for
Environmental Law, 83 Yale L.J. 1315

GD \acnccitinnbetinsidanisitinnnsnnineunpuniitnaimeonionerscenses

OMB Circular A-94, Guidelines and Discount
Rates for Benefit-Cost Analysis of Federal

Programs, Appendix A (1992).......................

INTEREST OF AMICI

The amici joining this brief (“the Environmental
Amici’) are groups with considerable experience
advocating for positions that will help to achieve
Congress’s goals in enacting the Clean Water Act
(“CWA”).! Section 316(b) of the Act regulates cooling
water intake structures, which are commonly used
by power plants and other large facilities.2 Cooling
water intake structures kill fish and large aquatic
animals by trapping them against grills or screens,
which is known as “impingement,” and kill smaller
creatures by drawing them into the cooling
mechanism, which is known as “entrainment.”
Section 316(b) requires cooling water intake
structures to use the “best technology available for
minimizing adverse environmental impact” (“BTA”),
and directs EPA to include BTA requirements in the
pollution discharge standards it issues under
sections 301 and 306 of the Act. Although the best
guide to the meaning of the BTA standard is the
language used by Congress in section 316(b), the
plain meaning of that language is supported by the
meaning of similar phrases in sections 301 and 306 -
particularly “best available technology” (“BAT”) in
section 301(b)(2)(A) and “best available
demonstrated control technology” (“BADT”’) in

' Petitioners and respondents other than EPA have filed
letters with the Court consenting to the filing of amicus briefs
in this case. and EPA has consented to the filing of this brief.
No one other than counsel for amici wrote this brief, 1n whole or
in part, and no one made a monetary contribution to its
preparation

2 Throughout this brief, we refer te the relevant statutory
provisions by their Clean Water Act section number. The
corresponding U.S. Code section number may be found in the
Table of Authorities

section 306(a)(1).4

The Environmental Amici submit this brief
primarily to rebut inaccurate arguments advanced
by one petitioner and two amici concerning the BAT
and BADT standards. See, e.g., Entergy Br. 38-42
(“Sections 301 And 306 Either Mandate Or Permit
Cost-Benefit Analysis”); NAHB Br. 14-20; American
Chemistry Council et al. (“ACC”) Br. 22-26. In
particular, contrary to their contentions, this Court
concluded in EPA v. National Crushed Stone Ass'n,
449 U.S. 64 (1980), that EPA may not use a cost-
benefit analysis when establishing BAT standards.
While Entergy claims that the Second Circuit's
decision in this case “rests in part on a misreading”
of National Crushed Stone, Entergy Br. 41, it is
Entergy and its amici rather than the Second Circuit
that have misread that decision.

The Environmental Amici fully support the
position of respondents Riverkeeper, Inc. et al., that
a cost-benefit analysis is impermissible under the
BTA standard of section 316(b). The Environmental
Amici also agree that a proper understanding of the
BAT and BADT standards in sections 301 and 306

3 The National Association of Home Builders (“NAHB’), an
amicus supporting petitioners, helpfully included a chart in its
brief (at pages 10-11) that catalogues the relevant standards by
acronym — in addition to BTA, BAT, and BADT, the statute
refers to the “best practicable control technology currently
available” (“BPT”) and the “best conventional pollution control
technology” (‘BCT’). The chart also provides references to the
key statutory provisions relating to each standard. (There is
one error: the entry regarding the CWA provision establishing
the BCT standard erroneously cites section 30@(b)(2)(E) rather
than section 301(b)(2)(E)). The statutory provisions are set forth
in the addendum to the brief filed by petitioners Entergy Corp.,
et al.

3

supports that conclusion. Further, Environmental
Amici believe that an examination of the section 301
and 306 standards demonstrates that Congress did
not, as petitioners argue, intend the BTA standard to
be implemented on a site-by-site basis. See Entergy
Br. 46-47; Utility Water Act Group (““UWAG’”) Br. 50.

But whatever the Court decides concerning the
BTA standard, this Court should not accept
Entergy’s invitation to rewrite the law governing the
BAT and BADT standards, which require an inquiry
into costs but do not permit the use of a cost-benefit
analysis. Entergy’s revisionist interpretation of the
BAT and BADT standards is at odds not only with
the language, structure, and history of sections 301,
304, and 306, but also with the clearly articulated
goals of the Act.

INTRODUCTION

Contrary to the impression given by petitioners
and their amici, the issue in this case is not whether
EPA may consider the costs of implementation in
setting standards under section 316(b) of the Clean
Water Act. It may and it should.

Petitioners and their amici contend, however,
that EPA ought to conduct a cost-benefit analysis —
that the agency ought to consider costs in relation to
water quality benefits — and that it should base its
section 316(b) decision-making on the results. They
advance two versions of such an analysis. Petitioners
appear to favor the stricter version, which would
require that all costs and benefits be monetized and
reduced to present value, and would _ permit
requirements designed to reduce environmental
damage only when the resulting dollar value of the

4

benefits outweighs the dollar value of the costs. In
our view, neither section 316(b) nor any other
provision of the Clean Water Act authorizes this
strict cost-benefit approach as a means of setting
technology-based standards. The other version of
cost-benefit analysis permits the use of technology
that is not the best at reducing pollutant discharge
only where the cost of such technology is “wholly out
of proportion” to the marginal level of reduction that
would be achieved by its use. 118 Cong. Rec. 33,696
(1972), quoted in E.I. du Pont de Nemours & Co. v.
Train, 430 U.S. 112, 129 (1977), and National
Crushed Stone, 449 U.S. at 71 n.10. Senator Muskie
described this approach as a “limited cost-benefit
analysis” in a passage twice quoted by this Court. Jd.
The Clean Water Act’s BPT and BCT standards —
which, as further set forth below, are different from
the other standards in critical ways — require the
application of a limited form of cost-benefit analysis.‘

Petitioners’ focus on cost-benefit analysis is
misplaced in this case, which concerns only the BTA
standard of section 316(b). That provision, like the
BAT and BADT standards, calls for a cost feasibility
analysis rather than cost-benefit analysis. As this
Court noted in American Textile Mfrs. Institute, Inc.
v. Donovan, 452 U.S. 490, 509-10 (1981), a cost-
benefit approach is fundamentally inconsistent with
a feasibility approach. Under a cost feasibility
analysis, EPA must determine whether the costs of

4 In the quoted passage, Senator Muskie was describing the
BPT standard. The BCT standard, the statutory delineation of
which is similar to that of the BPT standard regarding
comparison of costs and benefits, was added in the 1977 Clean
Water Act Amendments. Senator Muskie’s explanation of the
reason for that addition 1s addressed below.

reducing or eliminating pollution to the degree
produced by the best technology available “can be
‘reasonably borne’ by the industry.” Pet. App. 26a;5
see also Chemical Mfrs. Ass'n v. EPA, 870 F.2d 177,
262 (5th Cir. 1989) (same). As the Second Circuit |
explained, a technology that cannot be reasonably
borne by the industry “is not ‘available’ in any
meaningfu) sense.” Pet. App. 24a.

The Second Circuit also concluded that EPA may
engage in a “cost-effectiveness analysis” in applying
the BTA standard. Id. at 26a. Relying on guidance
issued by the Office of Management and Budget, the
court described a cost-effectiveness analysis as “[a]
systematic quantitative method for comparing the
costs of alternative means of achieving the same
stream of benefits or a given objective.” Jd. at 23a
n.10, quoting OMB Circular A-94, Guidelines and
Discount Rates for Benefit-Cost Analysis of Federal
Programs, Appendix A (1992). Although petitioners
and their amici belittle the cost-effectiveness
approach, it is an inherent component of the federal
regulatory program for environmental protection.
Most environmental standards — like the cooling
water intake standards at issue in this case — are
what are commonly known as “performance”
standards. They specify a performance goal (such as
a maximum allowable level of a particular pollutant
discharge), but do not specify a particular means for
attaining that goal. The regulated entity thus is free
to employ the most cost-effective (the cheapest)
means of meeting the standard.

5 “Pet. App.” citations are to the appendix filed by petitioner
Entergy Corporation in No. 07-588.

6

While the Second Circuit concluded that EPA
may properly consider both cost effectiveness and
cost feasibility under section 316(b), the court held
that this provision prohibits EPA from conducting a
cost-benefit analysis. The Second Circuit rested that
conclusion in part on this Court’s construction of the
BAT and BPT standards in National Crushed Stone.
In that case, this Court addressed both the BPT
standard that the Clean Water Act required
polluters to meet by 1977, and the more
environmentally protective BAT standard that
applied beginning in 1987.6 Relying on the statement
of Senator Muskie, “the principal Senate sponsor of
the Act,” the Court concluded that the more lenient
BPT standard called for a “limited cost-benefit
analysis” to determine whether an “additional
degree of effluent reduction is wholly out of
proportion to the costs of achieving such marginal
level of reduction.”’’? 449 U.S. at 71 n.10, quoting 118
Cong. Rec. 33,696. The Court also held that, once the
stricter BAT standard took effect, “total cost is no
longer to be considered in comparison to effluent

cae

6 The 1972 Act set a 1983 deadline for implementation of the
BAT standards. This was extended from 1984 to 1987
(depending on the circumstances) in the 1977 Clean Water Act
Amendments, and the Court cited the 1987 deadline in
National Crushed Stone. The BAT deadline was later extended
to 1989 in the 1987 amendments to the Act.

This cost-benefit comparison is “lhmited” not only because it
employs a “wholly a:sproportionate” test, but also because the
benefit component is not the level of environmental
improvement attained through the pollutant reduction (or the
level of societal benefits that flow from that improvement), but
rather simply the level of pollutant reduction itself. In other
words, Congress made the policy determination that any
appreciable level of pollution reduction would be beneficial. As
discussed below, consideration of water quality benefits 1s not a
factor in setting the Act's technology-based effluent standards

7

reduction benefits.” 449 U.S. at 71. The Court
concluded that the more environmentally protective
BAT standard does not contemplate consideration of
costs “in relation to effluent reduction,” id. at 71
n.10, but rather contemplates “eliminating the
discharge of all pollutants” if it is feasible to do so,
id. at 75 n.14, quoting section 301(b)(2)(A).

The Second Circuit concluded that the BTA
standard at issue in this case is more similar to the
BAT standard than it is to the BPT standard, both
because “best technology available” is linguistically
very similar to “best available technology” and
because section 316(b) does not reference any
comparison of costs and benefits. Pet. App. 29a-31a.
“[Blecause ‘Congress itself defined the basic
relationship between costs and benefits,” the Second
Circuit concluded that EPA is not permitted to
perform a cost-benefit analysis under section 316(b).
Id. at 24a-25a, quoting American Textile, 452 U.S. at
509.

SUMMARY OF ARGUMENT

As respondent Riverkeeper has explained, the
Second Circuit ce: rectly concluded that a cost-benefit
analysis is not permissible under section 316(b). But
whatever this Court concludes concerning section
316(b), it should not rewrite the settled law that the
BAT and BADT standards do not permit the use of
cost-benefit analysis. In addition, there is no merit to
petitioners’ contention that CWA standards should
be established on a case-by-case basis rather than by
means of categorical regulations. While leaving room
for variances in certain circumstances, Congress
mandated principal reliance on rules of general
applicability. Finally, there is ample room to avoid

8

the absurd hypothetical results trotted out by
petitioners and their amici. Congress did not require
costly expenditures to achieve truly de minimis
benefits.

ARGUMENT

The Evironmental Amici disagree with the bulk of
the arguments presented by the Solicitor General,
petitioner UWAG, petitioner Entergy, and their
amici. However, while the arguments presented by
the Solicitor General, UWAG, and most of the amici
are largely limited to advancing an erroneous
interpretation of section 316(b), Entergy and two
amici ask the Court to engage in a far more
dangerous overreaching that would undermine not
only the regulation of cooling water intake at issue in
this case, but also the regulation of a wide variety of
potentially deadly pollutants.

The Solicitor General acknowledges National
Crushed Stone and “[a]ssum[es] for the sake of
argument that cost-benefit analysis is not one of the
other factors that EPA may consider in determining
BAT.” EPA Br. 24. According to the Solicitor
General, however, this Court may nevertheless
conclude that a cost-benefit analysis is permissible
under section 316(b), because section 316 “governs
the intake of water, as opposed to the discharge of
pollutants,” and pollutants are a more serious
problem. Jd. at 23. The Solicitor General also
contrasts the description of the BTA standard in
section 316(b) (which runs 46 words) with the
statutory descriptions of the BPT, BCT, BAT, and
BADT standards (which run longer).® On the basis of

* Of course. the relative brevity of statutory language does not

9

these distinctions, the Solicitor General maintains
that EPA has broad discretion to determine whether
(and, presumably, how) to employ cost-benefit
analysis in setting BTA standards. See EPA Br. 20-
23. Like the Solicitor General, UWAG does not
disown Entergy’s argument concerning the BAT and
BADT standards. See UWAG Br. 14 (asserting that
section 306 authorizes EPA to weigh costs and
benefits). But it emphasizes what it calls “the
material differences between § 316(b) and the other
provisions.” Id. at 46.

While Entergy embraces those arguments, it also
advances the more far-reaching argument that EPA
should be allowed to conduct cost-benefit analyses
even under the BAT and BADT standards. See
Entergy Br. 38-42. Essentially, Entergy argues that
if sections 301 and 306 were rewritten by the Court
to allow cost-benefit analysis, then EPA could
likewise conduct such analyses under section 316(b),
even if the Court finds the BTA standard more
linguistically similar to the BAT and BADT
standards than to the BPT and BCT standards.
Entergys argument is_ incorrect and would
undermine the “national goal” of the Clean Water
Act — eliminating the discharge of pollutants into the

prevent it from expressing Congress's intention. See, e.g.,
Whitman v. American Trucking Ass'ns, 531 U.S. 457, 465-69
(2001) (rejecting, based largely on clear meaning of terms
“public health,” “adequate margin,” and “requisite,” industry's
interpretation of 60-word provision in Clean Air Act setting
forth requirements for national primary ambient air quality
standards): City of Chicago v. Environmental Defense Fund, 511
U.S. 328. 339 (1994) (rejecting. based largely on provision’s use
of term “facility” instead of “wastestream,” EPA's interpretation
of household hazardous waste exemption in RCRA)

10

navigable waters of the United States. See Section
101(a)(1).

I. EPAIS NOT PERMITTED TO CONDUCT
A COST-BENEFIT ANALYSIS TO
ESTABLISH BAT AND BADT
STANDARDS.

Entergy’s contention that EPA may conduct a
cost-benefit analysis in establishing BAT and BADT
standards would lead to serious environmental
harm. Entergy and its amici seek to expand this case
involving harm to aquatic animals resulting from
water intake by existing facilities — a _ serious
environmental problem in its own right — to rewrite
settled law governing pollution involving toxic
chemicals and new facilities. Their arguments in
support of that position are entirely without merit.

® As discussed below, the majority of pollutants subject to
section 301's BAT standard are toxic pollutants, many of which
can cause disease or death in humans at relatively low levels.
In attempting to downplay the harm caused by intake
structures, however, the Solicitor General and petitioners
wrongly suggest that Congress considered impacts on wildlife to
be comparatively unimportant. In drafting the CWA, Congress
made protection of fish and other aquatic hfe a clear national
priority. Not only does the Act establish the goal of achieving
water quality levels that provide “for the protection and
propagation of fish, shellfish, and wildlife,” but it defines “toxic
pollutant” as one that, inter alia, causes “death ... or physical
deformations” to “any organism, Sections 101(a)(2) and
502(13). Cooling water intake structures (though they do not
discharge pollutants) kill and maim fish and other aquatic
animals on a daily basis.

11

A. The Statutory Provisions Governing

BAT And BADT Do Not Permit The Use
Of Cost-Benefit Analysis.

As the D.C. Circuit explained in 1978, Congress
did not apply the “optimal pollution theory” when
enacting the Clean Water Act. Weyerhaeuser Co. uv.
Costle, 590 F.2d 1011, 1041 n.41 (D.C. Cir. 1978).
That theory “contends that there is a level or type of
pollution that, while technologically capable of being
controlled, is uneconomic to treat because the benefit
from treatment is small and the cost of treatment is
large.” Id. If Congress had been using the optimal
pollution theory, it would have required EPA to use a
strict cost-benefit analysis to set all standards under
the Act because cost-benefit analysis targets an
“optimal” level of pollution. !°

10 Petitioners and several of their amici assert that cost-benefit
analysis is the equivalent of “common sense,” and note that
people use it for household decisions such as buying a car. But
establishing regulatory policy is not like buying a car, and cost
benefit analysis often is a difficult tool to apply to
environmental standard-setting. See Nicholas A. Ashford &
Charles C. Caldart, The Use of Cost-Benefit Analysis as a Means
of Evaluating and Designing Options for Environmental
Regulation, in Environmental Law, }»licy, and Economics 147-
69 (MIT Press 2008) (cost-benefit aseiysis tends to undervalue
benefits, understate impacts on future generations, overvalue
costs, and ignore potential for technological change). The D.C.
Circuit noted in Weyerhauser that the optimal pollution theory
is “premised on a view that we have both adequate information
about the effects of pollution to set an optimal test, and
adequate political and administrative flexibihty to keep
polluters at that level once we allow any pollution to go
untreated,” and concluded that Congress doubted the validity of
those premises. 590 F.2d at 1041 n.41. Distinguished scholars
argued in the 1970s (and continue to argue today) that reliance
on quantitative analysis tends to “squcez[e] out ‘soft’ but crucial
information merely because it seems difficult to render
commensurable with the ‘hard’ data in the problem.” Laurence
Tribe, Ways Not to Think About Plastic Trees: Neu Foundations

12

Congress rejected the optimal pollution theory in
favor of establishing the ambitious national goal that
“the discharge of pollutants into the navigable
waters be eliminated” in order “to restore and
maintain the chemical, physical, and _ biological
integrity of the Nation’s waters.” Sections 101(a) and
(a)(1). Congress enacted “stiff penalties to force each
industry ... to develop the technology necessary to
achieve the Act’s aspiring goal.” Weyerhaeuser, 590
F.2d at 1025. In doing so, “Congress foresaw and
accepted the economic hardship, including the
closing of some plants, that effluent limitations
would cause.” National Crushed Stone, 449 U.S. at
79.

Congress also anticipated — correctly, as it turns
out — that the Act’s strict requirements would create
a strong economic incentive for industry to develop
newer, cleaner technology. See NRDC v. EPA, 859
F.2d 156, 208-09 (D.C. Cir. 1988) (in drafting Clean
Water Act, Congress had “firm conviction of need for
technology-forcing measures’). To this end, the Act's
technology-based standards have largely been
written as performance standards; they establish a
goal on the basis of what is deemed attainable

for Environmental Law, 83 Yale U..J. 1315, 1318-19 & n.25
(1974); Lisa Heinzerling, The Clean Air Act and the
Constitution, 20 St. Louis U. Pub. L. Rev. 121, 149 (2001)
(“Cost-benefit analysis tends to underrate those things that
cannot be so quantified and monetized”) Thoughtful
proponents of cost-benefit analysis recognize these problems.
Robert W. Hahn & Cass R. Sunstein, A New Executive Order for
Improving Federal Regulation? Deeper and Wider Cost-Benefit
Analysis, 150 U. Pa. L. Rev. 1489, 1499-1500 (2002) (“Of course,
it 1s possible that in practice, quantitative cost-benefit analysis
will have excessive imfluence on government § decisions,
drowning out ‘soft variables.’’).

13

through the application of a particular technology,
but they do not require the use of that technology.
The regulated entity thus remains free to develop
and employ a more efficient technology that attains
(or exceeds) the goal at a lower cost.

1. The Statutory Language Describing
The BAT And BADT Standards
Disallows A Cost-Benefit Approach.

Consistent with Congress's overriding goal of
eliminating the discharge of pollutants, the language
of the BAT and BADT standards rejects cost-benefit
analysis. The BAT standard for existing sources
requires “the best available technology economically
achievable for [a] category or class [of facilities],
which will result in reasonable further progress
toward the national goal of eliminating the discharge
of all pollutants.” Section 301(b)(2)(A). At the same
time, Congress did not ignore costs — it directed EPA,
in establishing BAT standards, to include “the cost of
achieving such effluent reduction” among the factors
to be considered. Section 304(b)(2)(B). A
straightforward reading of the BAT standard thus
demonstrates that it is to be established with
reference to the use of the available technology that
best reduces or eliminates the discharge of
pollutants, so long as that goal is “economically
achievable.” The language Congress adopted cannot
reasonably bear a reading permitting the use of a
cost-benefit analysis because such an analysis would
result in a retreat from “the national goal of
eliminating the discharge of all pollutants.” Plainly,
Congress did not give EPA authority to use cost-
benefit considerations to override its determination
to eliminate the discharge of pollutants when

14

technology is available to do so at a cost the industry
can bear. Any doubt on this question is dispelled by
section 301(b)(2)(A), which requires EPA to set the
BAT standard at zero — “the elimination of all
discharges of all pollutants” - where “such
elimination is technologically and economically
achievable.” This is the language of feasibility, not
cost-benefit.

The BADT standard for new sources!'! similarly
mandates “the greatest degree of effluent reduction
which the Administrator determines to be achievable
through application of the best available
demonstrated control __ technology, processes,
operating methods, or other alternatives, including,
where practicable, a standard permitting no
discharge of pollutants.” Section 306(a)(1). As with
the BAT standard, Congress directed EPA to
consider a number of factors including “the cost of
achieving such effluent reduction,” but did not call
for any comparison of costs with benefits. Section
304(b)(2;{(B). A straightforward reading of the
language of the BADT standard shows that, as with
the BAT standard, Congress directed EPA to require
that discharges be reduced to the level achieved by
the available technology that is best at reducing or
eliminating the discharge of pollution, provided the
industry can afford it.'? The language of the statute

1! Generally speaking, a “new source” is one that is constructed
after the relevant new source standard has been promulgated.
Section 306(a)(2).

‘2 In practice, the BADT standards will tend to be more
stringent than the BAT standards, for two reasons. First, the
cost of utilizing particular technologies may be higher at
existing plants than at new plants. because of the need to
retrofit. Second, individual firms are authorized to seek certain
variances from the BAT standards, while no such variance 1s

15

does not authorize EPA to invoke cost-benefit
analysis to conclude that it is preferable to permit
the discharge of a pollutant even though technology
is available to prevent such discharge at a price the
industry can bear.

This Court’s decision in Whitman is instructive.
The Clean Air Act (“CAA”) provision at issue there,
section 109(b), 42 U.S.C. § 7409(b), requires EPA to
set ambient air quality standards at a level
“requisite to protect the public health” with “an
adequate margin of safety.” Regulated entities
argued that these terms could be read to allow EPA
to consider implementation costs in setting such
standards. In rejecting this argument, the Court
found it salient that other provisions in the CAA
“explicitly permitted or required economic costs to be
taken into account in implementing the air quality
standards,” and concluded that it could not
reasonably read into the statute “an authorization to
consider costs that has elsewhere, and so often, been
expressly granted.” 531 U.S. at 471. Thus, the Court
concluded, “[t}he text of § 109(b), interpreted in its
statutory and _ historical context and _ with
appreciation for its importance in the CAA as a
whole, unambiguously bars cost considerations.” Jd.
at 471.

Whitman is not an outlier case involving a
“presumption” against considering costs, EPA Br. 33,
or a case pertaining only to whether, but not how,
costs may be considered, see id.'* Nor is its reasoning

available from the BADT standards. See du Pont, 430 U.S. at
137-39.

13 Contrary to the Solicitor General's assertion, cost-benefit
analysis is not a “form” or ‘manner’ of cost consideration. EPA

16

limited to the precise language of CAA section
109(b). See Entergy Br. 28. Rather, Whitman is a
straightforward exercise in reading a_ statutory
provision carefully, mindful of the context in which it
sits, and determining what Congress wanted. The
resulting analysis applies with equal force to the
Clean Water Act’s BAT and BADT provisions.

Congress specified in CWA sections 304(b)(2)(B)
and 306(b) that “the cost of achieving such effluent
reduction” should be considered in setting BAT and
BADT standards. Had Congress wanted EPA to
compare costs with benefits in setting these
standards, it would have said so, as it did twice
elsewhere in section 304. See Sections 304(b)(1)(B)
(directing EPA to consider “the total cost” of
pollution reduction technology “in relation to the
effluent reduction benefits” of such technology when
setting BPT standards) and 304(b)(4)(B) (directing
EPA to consider “the reasonableness of the
relationship” between costs and effluent reduction
benefits in setting BCT standards). Moreover, the
CWA’'s technology-based standards, like the air
quality standards at issue in Whitman, are “the
engine that drives” the Act. 531 U.S. at 468. In such

Br. 33. It is a different inquiry altogether. See Texas Oil & Gas
Ass'n v. EPA, 161 F.3d 923, 936 (5th Cir. 1998) (cited at EPA
Br. 39, Entergy Br. 42) (“The benefit to be achieved from
adopting a particular pollution control technology is not an
element of that technology's cost. ... Reinjection technology, for
example, costs the same regardless of whether it reduces
pollutant discharge by three million pounds per year or three
pounds per vear.’). Entergy similarly conflates these concepts
in trying to explain away this Court's holding in Whitman. See
Entergy Br. 28 (noting that other provisions in the CAA allow
EPA to ‘consider costs ... even though those provisions did not
expressly provide for cost-benefit analysis’).

17

instances, one would think that Congress was
especially deliberate in choosing its words.

Nonetheless, Entergy points to the residual
clause in section 304(b)(2)(B), which permits EPA to
consider “such other factors as the Administrator
deems appropriate” in setting BAT standards.
Entergy Br. 39-40.'4 But this residual discretion does
not permit the agency to interpose cost-benefit
analysis — or any other policy metric of its choosing —
in derogation of the choices already made by
Congress. Section 304(b)(2)(B)’s residual clause is
necessarily cabined by that subsection’s list of “such”
factors that EPA “shall” consider — namely, “the age
of equipment and facilities involved, the process
employed, the engineering aspects of the application
of various types of control techniques, process
changes, the cost of achieving such _ effluent
reduction, [and] non-water quality environmental
impact (including energy requirements).” The
specification of treatment “cost” (but not in relation
to benefits), combined with the specification of “non-
water quality” environmental impact (but not water
quality impact), indicates that Congress did not
intend EPA to weigh treatment costs against water
quality benefits in setting BAT standards. Surely,
Congress did not intend the general language of the
residual clause to override the more specific terms
that precede it, especially in a way that would
undermine the congressional policy apparent in the
use of those terms.

'4 Other industry amici join in this argument, see ACC Br. 22-
23, although the Solicitor General stops short of embracing it,
see EPA Br. 24.

18

This Court construed a_ strikingly similar
statutory provision in Hughey v. United States, 495
U.S. 411 (1990). The question in Hughey was
whether the Victim and Witness Protection Act of
1982 allowed a court to award restitution for acts
other than those underlying a criminal sentence,
where the statute provided that the sentencing court
“shall consider the amount of the loss sustained by
any victim as a result of the offense, the financial
resources of the defendant, the financial needs and
earning ability of the defendant and the defendant’s
dependents, and such other factors as the court deems
appropriate.” Id. at 416-17, quoting 18 U.S.C. §
3580(a) (1982 ed.) (emphases added). Focusing on
“the language of the statute itself,” id. at 415, the
Court determined that the explicit reference to “the
offense” precluded a reading of the residual clause
that would allow a sentencing judge to look beyond
that offense in awarding restitution. See id. at 418
(‘[HJad Congress intended to permit a victim to
recover for losses stemming from all conduct
attributable to the defendant, ... Congress would
likely have chosen language other than ‘the offense’
...).5 Furthermore, the Court held, since the
enumerated items preceding the catchall phrase
were designed to limit the scope of any restitution
order, the canon of ejusdem generis required that the
residual phrase not be read to expand a defendant's
liability. See id. at 418-19. Accordingly, the Court
“reject(ed] as implausible the Government's
contention that the ‘such other’ language in §
3580(a)'s catchall phrase imports into the restitution

'S The Court made clear that its analysis was not based on the
principle of lenity extended in criminal cases. See Jd. at 422.

19

provisions a wholly new substantive dimension not
otherwise evident in the statute.” Jd. at 420.

Entergy’s suggestion that the residual clause of
section 304(b)(2)(B) be read expansively fails along
the same lines. That clause may not be read to
obliterate the explicit limitations articulated in the
terms immediately preceding it. Rather, the residual
clause is an interstitial provision designed to give
EPA leeway to consider “such other” (i.¢., similar)
factors as those enumerated. It certainly may not be
read as an invitation to countermand a substantive
legislative choice as to the proper risk management
tool in favor of the agency’s own policy preferences,
for “Congress ... does not alter the fundamental
details of a regulatory scheme in vague terms or
ancillary provisions.” Whitman, 531 U.S. at 468. In
arguing to the contrary, Entergy seeks to puli the
proverbial “elephant[]” out of a “mouseholef[].” Id.
Moreover, as discussed below, permitting EPA to
conduct a_ cost-benefit analysis in setting BAT
standards would not only override Congress's
determinations but also this Court's authoritative
construction of the statute in National Crushed
Stone.

2. The Structure Of The Relevant
Statutory Provisions Demonstrates
That The BAT And BADT Standards
Are Not To Be Based On Cost-Benefit
Analysis.

Like the statutory language of these provisions,
the structure of the statute confirms that the BAT
and BADT standards do not permit the use of a cost-
benefit analysis. It is undisputed that the BAT and
BADT standards are intended to be more

20

environmentally protective than the BPT or BCT
standards. The BPT standard is more relaxed
because it is largely an interim standard designed to
ensure initial progress toward achievement of the
ultimate elimination of pollutants required by the
BAT standard. The BCT standard, added in 1977, is
more relaxed because it governs only a small subset
of five “conventional” pollutants — so named because
they can be treated by long-available (conventional)
pollution control technology - whose wholesale
elimination generally is not necessary to ensure
water quality.'© The more stringent BAT standard
governs the bulk of the other pollutants discharged
from existing sources, including 129 chemical
compounds designated as “toxic” pollutants and a
host of other pollutants designated as neither “toxic”
nor “conventional.”!? See Sections 301(b)(2)(A), (C),

'6 The designated “conventional pollutants” (see Section
304(a)(4)) are not specific pollutants so much as they are
aquatic conditions that tend to vary with the level and nature of
pollution discharges. Three of the four specifically named in the
statute — biological oxygen demand, total suspended solids, and
pH — can be affected by a wide variety of pollutants (many of
which may be separately regulated as toxic or nonconventional),
and the fourth, fecal coliform, encompasses a variety of
different bacteria. (EPA has since added oil and grease —
another broad category — to the list.) In setting BCT standards,
EPA 1s directed to “compare the cost and level of reduction of
such pollutants” attainable by the subject industrial category
with that attainable by public sewage treatment plants (as
these have traditionally been the primary pollutants that such
plants are designed to treat). Section 304(b)(4)(B).

'7 Although EPA and its amici contend, to varying degrees of
emphasis, that BAT applies only to a small subset of highly
toxic chemicals that may harm humans, this characterization is
strikingly inaccurate. First, 65 chemicals (comprising 129
chemical compounds) have been designated as toxic pollutants.
See 40 C_F_R. § 401.15. Second, as noted above, the list is not
limited to chemicals that are dangerous to humans: “toxic
pollutant” 1s defined as a substance exerting a toxic effect on

21

(D), & (F). The BADT standard is the most
demanding because it applies to new sources of
pollution, which do not face the retrofitting problems
encountered at existing sources.

In short, the structure of the Act plainly requires
that the BAT and BADT standards be given a more
environmentally protective meaning than the BPT
and BCT standards. The BPT and BCT standards
direct EPA to compare costs and benefits. The BAT
and BADT standards do not. The obvious conclusion
is that Congress intended EPA to perform a (limited)
cost-benefit analysis under the BPT and BCT
standards but not under the BAT and BADT
standards.

B. This Court’s Decision In National
Crushed Stone Confirms The Conclusion
That The BAT And BADT Standards Do
Not Permit The Use Of Cost-Benefit
Analysis.

As the Second Circuit concluded, this Court's
decision in National Crushed Stone confirms that the
BAT standard does not permit the use of a cost-
benefit analysis. The issue in that case was whether
EPA must consider “the economic capability of an
individual discharger” when deciding whether to
issue a variance from the BPT requirements. 449
U.S. at 72. The Court examined “the basic structure

“any organism.” Section 502(13) Third, while an individual
discharger is authorized to apply for a relaxation of the BAT
standard for certain “nonconventional” (and _ nontoxic)
pollutants, see Section 301(g), the BAT standard remains the
presumptively applicable standard for the class. of
nonconventional pollutants, see Sections 301(b)(2)(A) & (F).

22

of the Act” in holding that EPA is not required to
consider individual economic capability. Jd. at 69.

The Court relied heavily on a key structural
aspect of the Act — that BPT imposes less stringent
requirements than BAT. Specifically, the Court
wrote that, unlike BAT, “BPT limitations do not
require an industrial category to commit the
maximum economic resources possible to pollution
control, even if affordable.” Jd. at 75. As noted
previously, the Court concluded that the BPT
standard required what Senator Muskie called a
“limited cost-benefit analysis,”” one that examined
only whether costs are “wholly out of proportion” to
the marginal level of pollution reduction attained. Id.
at 71 n.10, quoting 118 Cong. Rec. 33,696. However,
under the stricter BAT standard, the Court stated,
“total cost is no longer to be considered in
comparison to effluent reduction benefits.” 449 U.S.
at 71. A cost-benefit analysis cannot be conducted
without costs being “considered in comparison to”
benefits.

Despite the clarity of this language, and of the
logic on which it is based, Entergy argues that
National Crushed Stone stands for the proposition
that EPA is free to use cost-benefit analysis to set
the BAT standards. Entergy Br. 42. Entergy bases
this contention on the Court’s statement that “the
BAT provision“ 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 42, quoting 449 U.S. at 71 n.10. “In other
words,” Entergy opines, “Congress made cost-benefit
analysis mandatory for BPT but only optional for
BAT.” Id. at 42. These are not simply “other words” —

23

they are words with a fundamentally different
meaning, and they cannot be squared with this
Court’s opinion.

The Court in National Crushed Stone recognized
that the BAT standard, which requires industry to
commit the maximum economic resources possible to
pollution control, is more protective than BPT. It
credited Senator Muskie’s statement that Congress
intended a limited cost-benefit analysis under the
BPT standard. And it concluded that Congress
intended there to be no comparison of costs to
benefits under the BAT standard. Entergy’s
suggestion that EPA may nonetheless conduct a cost-
benefit analysis to determine BAT standards
contravenes this Court's understanding of the
structure of the Act. BAT standards would be no
more protective than the corresponding BPT
standards if EPA used a cost-benefit analysis to
determine BAT standards. And they would be even
less protective if EPA conducted a strict cost-benefit
analysis to set BAT standards, as Entergy argues it
may, rather than the limited cost-benefit analysis
applicable under the BPT standard.

This Court authoritatively construed the BAT
standard in National Crushed Stone and concluded
that it does not permit the comparison of costs and
benefits required to conduct a cost-benefit analysis.
The Court's recognition of cost as a factor to be
considered under the BAT standard means what the
Second Circuit concluded it means — that cost must
be considered, but not as part of a cost-benefit
analysis.

Entergy also attempts to dismiss National
Crushed Stone as a “pre-Chevron” case. Entergy Br.

24

41. See generally Chevron U.S.A. Inc. v. NRDC, 467
U.S. 837 (1984). But the Court in National Crushed
Stone determined that Congress had addressed how
EPA is to consider costs in setting the BPT and BAT
standards. Its conclusion that the BAT standard
prohibits a comparison of costs and benefits leaves
no gap in the statutory language for EPA to purport
to fill by requiring a cost-benefit analysis. In Chevron
terms, Congress has spoken to the issue — the
statutory language leaves no room for an agency
“interpretation” allowing cost-benefit analysis. '*

The other cases cited by Entergy do not support a
retreat from National Crushed Stone. Entergy relies
on a Sixth Circuit decision, BP Exploration & Oil,
Inc. v EPA, 66 F.3d 784 (1995), Entergy Br. 41, but
the Sixth Circuit plainly erred. It based its
conclusion that EPA may conduct a cost-benefit
analysis in setting BAT standards on Senator
Muskie’s statement that Congress established a
“limited’ balancing test,” 66 F.3d at 796, a statement
that was made with respect to the BPT standard, not
the BAT standard. As this Court held in National

'8 The Solicitor General appears to suggest that a statute
should be considered “silent” or “ambiguous” on a topic if it does
not address that topic in so many words. EPA Br. 12 The
function of the Chevron inquiry, however, is to determine the
meaning of the words Congress does use. This Court has made
clear that, under the first step of the Chevron analysis, it is
important to review statutory language in context and not in
isolation. See, ¢.g., NAHB v. Defenders of Wildlife, 127 S. Ct.
2518, 2534 (2007) (“{i]t 1s a fundamental canon of statutory
construction that the words of a statute must be read in their
context and with a view to their place in the overall statutory
scheme” (quotation marks omitted)). In National Crushed Stone
the Court did just that, examining “the basic structure of the
Act” to conclude that the BPT standard requires a cost-benefit
analysis and the BAT standard does not permit one. 449 U.S. at
69.

25

Crushed Stone, the BAT standard is’' more
environmentally protective than the BPT standard
and does not call for a comparison of costs and
benefits, but instead for the achievement of the goals
established by Congress. !9

'9 In a footnote, Entergy cites a handful of decisions from lower
courts in support of the statement that “no court has ever held
that [a cost-benefit] analysis is forbidden” in sctting BAT
standards. Entergy Br. 41 & n. 18. To the contrary, in one of
those cases the court rejected an industry petitioner's argument
that certain BAT regulations were faulty because of EPA's
failure to weigh costs against benefits, noting that “{t}he
conspicuous absence of the comparative language contained in
section 304(b)(1)(B) leads us to the conclusion that Congress did
not intend the Agency or this court to engage in marginal cost-
benefit comparisons” in setting BAT standards. Association of
Pacific Fisheries v. EPA, 615 F.2d 794, 818 (9th Cir. 1980).
Although the court also noted later that the benefits of the
regulations “justified the costs,” it is clear that the court was
simply confirming that the effluent reduction benefit was not de
minimis. See id. (The de minimis principle is discussed more
fully below.) In another of the cases Entergy cites, the court
concluded that “Senator Muskie intended that the type of
assessment [used in setting BAT standards} should be basically
the same [as the BPT determination], except that there should
be no cost-benefit analysis.” American Iron & Steel Inst. v. EPA,
526 F.2d 1027, 1051 (3d Cir. 1975) (emphasis added). No court
has squarely held, after this Court's decision in National
Crushed Stone, that EPA is permitted to conduct a cost-benefit
analysis in setting BAT or BADT standards, other than the
Sixth Circuit in the flawed BP Exploration decision. And while,
as Entergy notes, the Fifth Circuit upheld a BAT standard
against an industry challenge to the manner in which EPA had
weighed pollution reduction benefits against costs, the court
concluded that this cost-benefit exercise had been irrelevant to
the BAT determination. See Texas Oil, 161 F.3d at 936
(‘Whatever value such benefit estimates may have, they are not
a required part of the BAT determination.”). If the court had
viewed this as a permissible exercise in setting BAT standards,
surely it would have evaluated the substance of the agency's
cost-benefit comparison in response to industry's “arbitrary or
capricious’ challenge.

26

As did the Sixth Circuit in BP Exploration,
Entergy also relies on the D.C. Circuit’s decision in
Weyerhauser. See Entergy Br. 39-40. That case,
which includes a thoughtful discussion of the
legislative history of the 1972 Act, offers no solace to
Entergy. As discussed above, the Weyerhauser court
observed that Congress had rejected the “optimum
pollution” theory and its reliance on cost-benefit
analysis. Thus, while the interim BPT standard
requires a limited balancing of costs and benefits, in
the more stringent BAT standard “fa]ll factors,
including costs and benefits, are consideration
factors, and no factors are separated out for
comparison.” Weyerhauser, 590 F.2d at 1045.

When the Weyerhauser court speaks here of
“benefits,” it refers not to the in-stream water quality
benefits of applying such technology (as Entergy
would have it), but simply to the degree of pollutant
reduction attained (1.e., how well the technology
works). See id. at 1044 n.49 (“The phrase ‘effluent
reduction benefits’ avoids any suggestion that
receiving water quality is an issue. Effluent
reduction occurs whenever less effluent is discharged

. and the same degree of reduction occurs whether
the discharge is into a small stream or the Pacific
Ocean.”). In fact, the primary holding in Weyerhauser
is that Congress “intended to exclude consideration
of receiving water quality completely” in crafting the
Act's technology-based standards.*° Jd. at 1053 n.68,

20 “In only one limited instance, thermal pollution, is receiving
water capacity to be considered in relaxing [technology-based]
standards, and the section allowing such consideration was
drafted as a clear exception.” Id. at 1043 (referencing CWA
section 316(a) (emphases added)). It is telling that the
Weverhauser court did not include section 316(b) in this
statement.

27

id. at 1041-44 (EPA, in setting BPT standards, is
forbidden from considering water quality benefits).?!
Further, as the D.C. Circuit noted, in 1977 Congress
specifically considered whether to “rewrite” the BAT
requirement “in order to continue the cost-benefit
balancing” done under BPT, but decided instead to
retain the original formulation, under which BAT
does not include cost-benefit balancing. Jd. at 1046.22
Indeed, as Senator Muskie noted at the time,
Congress added the BCT standard to the Act in 1977,
thus permitting a _ cost-benefit balancing for
designated conventional pollutants, precisely
because the BAT standard is “not subject to ... any
form of cost-benefit analysis.” 3 Legislative History
of the Clean Water Act of 1977, at 427 (1975).

21 This answers UWAG'’s assertion that “until Riverkeeper II,
no court had suggested that Congress intended to bar EPA from
considering water quality in setting discharge controls.” UWAG
Br. 46. Of course, a source is ultimately required to meet a
discharge limit more stringent than the applicable technology-
based standard if that is necessary to attain in-stream water
quality standards. See Section 301(b)(1)(C).

22 To the extent that any loose language in Weyerhauser might
be read to suggest in dicta that EPA may perform a cost-benefit
analysis in establishing BAT standards, such statements must
give way to this Court’s later authoritative analysis in National
Crushed Stone.

23 ACC cites several additional cases for the proposition that
BAT allows a full cost-benefit analysis, ACC Br. 22-23, but none
supports this position. Two of those cases, Chemical Mfrs.
Ass'n, 870 F.2d at 204, 207, and Our Children’s Earth Found. v.
EPA, 527 F.3d 842, 849 n.5 (9th Cir. 2008), involved the BPT
(not BAT) standard, under which (as all parties agree) a certain
form of balancing costs and benefits is allowed. Three others,
American Petroleum Inst. v. EPA, 787 F.2d 965, 972 (5th Cir.
1986), Riverkeeper, Inc. v. EPA, 358 F.3d 174, 194 n.22 (2d Cir.
2004), and Waterkeeper Alliance, Inc. v. EPA, 399 F.3d 486, 516
(2d Cir. 2005), involved an application of the de minimis
principle and did not endorse the use of cost-benefit analvsis in
setting the BAT standard. The final case, NRDC v. EPA, 863

28

With regard to the BADT standard, all agree that
it is to be at least as environmentally protective as
the BAT standard. See, e.g., Entergy Br. 40 n.16,
quoting American Iron, 526 F.2d at 1059 (referring to
“a ‘virtually identical’ structure for BADT standards
under §306”). Accordingly, the reference to the “cost
of achieving such effluent reduction” in section
306(b)(1)(B), like the similar reference to cost under
the BAT standard, permits EPA to consider whether
the industry can bear the costs at issue and whether
less costly methods can produce essentially the same
environmental results — but does not permit the use
of a cost-benefit analysis.24

F.2d ‘1420 (9th Cir. 1988), says outright that “BAT should
represent ‘a commitment of the maximum _ resources
economically possible to the ultimate goal of eliminating all
polluting discharges,” td. at 1426, quoting National Crushed
Stone, 449 U.S. at 74) (emphasis added), and “the greatest
attainable level of effluent reduction which could be achieved,”
id. at 1431, quoting NRDC v. EPA, 822 F.2d 104, 115 n.12 (D.C.
Cir. 1987) (emphasis added), which 1s the language of
feasibility, not cost-benefit analysis.

24 Entergy’s reliance on International Paper Co. v. Ouellette.
479 U.S. 481 (1987), which involved the interplay between state
nuisance law and the CWA, is misplaced. See Entergy Br. 40-41
n.17. The Court there determined that a “downstream” state's
nuisance law may not be invoked to upset any “weighing of the
costs and benefits” conducted in setting technology-based or
water quality-based effluent limits in the source state's
discharge permits. See Ouellette, 479 U.S. at 494-96 (citing
Sections 304, 302). The Court did not hold, however, that every
permit limit devolves from a cost-benefit analysis. Obviously,
Congress “weighs costs and benefits” in a holistic sense when it
specifies which technology-based standards should apply to
certain classes of dischargers, even where the standards it
chooses do not themselves involve a cost-benefit analysis. EPA’s
establishment of some technology-based and water-quality
based effluent limits may involve a “weighing of costs and

29

II. THE SECTION 301 AND SECTION 306
STANDARDS (INCLUDING BTA
REQUIREMENTS) ARE TO BE
ESTABLISHED FOR CLASSES AND
CATEGORIES OF DISCHARGERS.

Petitioners and some amici argue that section
316(b) should be implemented on a case-by-case
basis rather than by means of categorical
regulations. See, eg., Entergy Br. 46-47.
Unquestionably, each facility has its own set of site-
specific physical and technological characteristics,
and each facility owner has its own set of financial
capabilities and constraints. Congress thus could
have directed EPA to set the Act’s’ various
technology-based limitations on a site-by-site basis.
Instead, the CWA directs that the BAT, BCT, and
BADT limitations be established for “categories” of
point sources. Sections 301(b)(2)(A) & (b)(2)(E);
306(b)(1)(A) & (b)(1)(B). EPA took a= similar
categorical approach to the establishment of the BPT
limitations, and the Court held in du Pont that this
approach is consistent with the language, structure,
and history of the statute. See, 430 U.S. at 129 (“In
sum, the language of the statute supports the view

benefits,” but only where Congress has explicitly permitted this
analysis (as it did for BPT and BCT, but not BAT or BADT). See
also Section 302(b)(2)(A) (modification of EPA water-quality
based effluent limit allowed where permittee shows “no
reasonable relationship between the economic and social costs
and the benefits to be obtained”). And a source state may
permissibly “weigh costs and benefits” in setting permit terms
based on state law, so long as those terms are more stringent
than what federal law requires. See Section 510(1). (For this
last reason, a state's application of its nuisance law against its
own water pollution sources is not preempted by the CWA )

30

that § 301 limitations are to be adopted by the
Administrator, that they are to be based primarily on
classes and categories, and that they are to take the
form of regulations.”).

Section 316(b) mandates that “[aJny standard
established pursuant to section 1311 of this title or
section 1316 of this title [CWA sections 301 or 306]

. shall require” BTA for cooling water intake. In
other words, the section 316(b) BTA requirements
are to be established as part of the section 301 and
section 306 standards, and thus are to be “based
primarily on classes and categories,” and to “take the
form of regulations,” as well. Indeed, in du Pont the
Court relied, in part, on section 316(b)’s use of the
term “standard” in holding that Congress intended
EPA to promulgate categorical effluent limitations
for existing sources under section 301. 430 U.S. at
133 n.24. The contention that section 316(b) must be
implemented on a case-by-case basis thus cannot be
squared either with the plain language of the statute
or with this Court’s analysis in du Pont.

Moreover, as the Court noted in du Pont, a case-
by-case approach “would place an impossible burden
on EPA,” requiring the agency “to give individual
consideration” to each of the numerous facilities to be
regulated across the country, and would
unseasonably delay the issuance of the required
restrictions. 430 U.S. at 132-33. A case-by-case
approach would also countermand the_ general
congressional mandate to “assure that similar point
sources with similar characteristics ...will meet
similar effluent limitations” insofar as possible, both
to prevent a ‘race to the bottom’ among states eager
to attract business and as a matter of basic fairness.

31

NRDC uv. Train, 510 F.2d 692, 709-10 (D.C. Cir.
1974) (quoting Senator Muskie). Thus, as noted by
Senator Muskie in the debates over the 1972 Act,
Congress chose “to avoid imposing on_ the
Administrator any requirement to consider the
location of sources within a_ category ,
Weyerhaeuser, 590 F.2d at 1045 n.52 (citation
omitted).

Ill. THERE IS AMPLE ROOM UNDER THE
STATUTE FOR EPA TO AVOID TRULY
ABSURD RESULTS.

Interspersed throughout the briefs of petitioners
and their amici are variations of the following
argument: if cost-benefit analysis is not used for
regulatory decision-making, absurd policy results
will ensue. The short answer to this argument, of
course, is that the Constitution assigns Congress the
job of policy-making, and Congress is free to select
policy alternatives with which some or all of the
parties to this case may vehemently disagree.
Moreover, the Clean Water Act’s technology-based
standards do not leave industry (or the environment)
prey to truly absurd results. As the Court noted in
du Pont, the use of national categorical standards
necessitates that variances be _ available for
individual facilities at which the _ relevant
technological features are fundamentally different
from those on which the _ (technology-based)
standards were established.25 See 430 U.S. at 128.
Further, delays in the implementation of the BAT
and BCT standards are available for firms choosing

25 EPA had promulgated such a variance for the BPT standard
by regulation, and Congress has since added such a variance for
the BCT and BAT standards. See Section 301(n).

32

to develop innovative technologies for meeting them,
see Section 301(k), and firms may seek relaxation of
the BAT standard for nonconventional pollutants on
cost or water quality grounds, see Sections 30l(c) &

(g).

Finally, EPA need not require costly effluent
reductions (or cooling water intake adjustments)
where the real-world benefit will be no more than de
minimis. See, e.g., Association of Pacific Fisheries,
615 F.2d at 818. However, this does not permit the
agency to impose a cost-benefit framework in
derogation of congressional policy. As the D.C.
Circuit has noted:

Unless Congress has been extraordinarily
rigid, there is likely a basis for an implication
of de minimis authority to provide exemption
when the burdens of regulation yield a gain of
trivial or no value. That implied authority is
not available for a _ situation where the
regulatory function does provide benefits, in
the sense of furthering the regulatory
objectives, but the agency concludes that the
acknowledged benefits are exceeded by the
costs. For such a situation any implied
authority to make cost-benefit decisions must
be based not on a general doctrine but on a
fair reading of the specific statute, its aims
and legislative history.

Alabama Power Co. v. Costle, 636 F.2d 323, 360-61
(D.C. Cir. 1979) (discussing the CAA).

33

CONCLUSION

The judgment of the court of appeals should be
affirmed.

Respectfully submitted.

CHARLES C. CALDART CHRISTOPHER J. WRIGHT

JOSEPH J. MANN Counsel of Record

NATIONAL TIMOTHY J. SIMEONE
ENVIRONMENTAL S. ROBERTS CARTER III
LAW CENTER HARRIS, WILTSHIRE &

1402 Third Avenue, GRANNIS LLP

Suite 715 1200 18th Street, N.W.

Seattle, WA 98101 Washington, DC 20036

(202) 730-1300

OCTOBER 6, 2008

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0048%3A29. Public record. Not legal advice.