# Petition for Writ of Certiorari — Carlota Copper Co. v. Friends of Pinto Creek (No. 07-1524) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0092%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2009 ## Text oO Supreme ¢ ourt, U.8. Lx A — 071524 JUN 4- 2008 OFFICE OF THE CLERK gn The Supreme Court of the Anited States CARLOTA COPPER COMPANY, Petitioner, FRIENDS OF PINTO CREEK, et al., Respondents. On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Ninth Circuit PETITION FOR WRIT OF CERTIORARI RODERICK E. WALSTON (Counsel of Record) Best Best & KRIEGER LLP 2001 North Main Street, Suite 390 Walnut Creek, CA 94596 Telephone: (925) 977-3300 Facsimile: (925) 977-1870 ! COCKLE LAW BRIEF PRINTING CU (800) 225-6964 OR CALL COLLECT (402) 342-2831 i QUESTION PRESENTED 1. Whether the Ninth Circuit erred in holding — contrary to this Court’s decision in Arkansas v. Ohkla- homa, 503 U.S. 91 (1992), a recent Minnesota Supreme Court decision, and the Environmental Protection Agency’s interpretation and practice — that the Clean Water Act, 33 U.S.C. § 1251 et seg., and an implement- ing regulation, 40 C.F.R. § 122.4(i), prohibit the Envi- ronmental Protection Agency and the states from issuing permits for discharges from “new” sources into “impaired” waters, even though conditions are imposed that reduce net pollution of such waters and improve overall water quality. ii PARTIES TO THE PROCEEDINGS Carlota Copper Company is the petitioner in this Court and was an intervenor in the court of appeals. The United States Environmental Protection was the respondent in the court of appeals. The following parties are respondents in this Court and were petitioners in the court of appeals: Friends of Pinto Creek, Grand Canyon Chapter of the Sierra Club, Maricopa Audubon Society, and Citizens for the Preservation of Powers Gulch and Pinto Creek. CORPORATE DISCLOSURE STATEMENT Petitioner Carlota Copper Company’s parent companies are Carlota Holdings Company (formerly known as Cambior USA, Inc.), a Delaware corpora- tion; Robinson Holdings (USA) Ltd., a Nevada corpo- ration; Robinson Holdings (Canada) Ltd., a British Columbia, Canada, corporation; and Quadra Mining, Ltd., a British Columbia, Canada, corporation. Quadra Mining, Ltd., is a publicly traded company listed on the Toronto Stock Exchange. Carlota Copper Company, Carlota Holdings Company, Robinson Holdings (USA) Ltd., and Robinson Holdings (Can- ada) Ltd., do not issue any shares of stock to the public. ill TABLE OF CONTENTS ) Page I tl 1 "EEF gas a eee er mE ene E 1 STATUTORY AND REGULATORY PROVI- EERE CERNE AUPE srg Ca ee Oe ee ea 1 STATEMENT OF THE CASE ................cccceseeeceeeees 1 1. .Statutory and Regulatory Background....... 1 Be I BN oaks crevecccsescscessesccsesceccosss 5 3. Procedural Background............................. atom REASONS FOR GRANTING THE WRIT.............. . @g I. THE NINTH CIRCUIT DECISION CON- FLICTS WITH A RECENT MINNESOTA SUPREME COURT DECISION ................. 16 Il. THE NINTH CIRCUIT DECISION CON- FLICTS WITH THIS COURT’S DECI- SION IN ARKANSAS v. OKLAHOMA ....... 20 A. The Arkansas Decision..................0..0060 20 B. The Ninth Circuit’s Distinction of Ar- FERS as nose Ne See a ee 23 Ill. THE NINTH CIRCUIT FAILED TO APPLY THE APPROPRIATE STANDARD OF REVIEW BY NOT DEFERRING TO THE ENVIRONMENTAL PROTECTION AGENCY'S INTERPRETATION OF ITS NUIT sccccinncchi:cdenmidticcinenctenesnacedbooovnine “a iV TABLE OF CONTENTS -— Continued Page IV. THE CLEAN WATER ACT AND THE REGULATION AUTHORIZE - AND DO NOT PROHIBIT — THE ISSUANCE OF PERMITS FOR DISCHARGES INTO IM- PAIRED WATERS, SUBJECT TO CONDI- TIONS THAT REDUCE NET POLLUTION AND IMPROVE WATER QUALITY............ 35 —§ tae a ect ercintild icntinibsinetinielvogs 38 I ic iliac ietchasrmiicsinneecenii 40 APPENDIX DOCUMENTS Opinion, U.S. Court of Appeals..................cceeeee App. 1 Order Denying Review, EPA Environmental I isid cinicillibsincaissinisininsicisinciinpibaiietibaiie App. 25 Order Denying Petition for Rehearing SE ciibesinipkdeesilibireutniuiniassonstecninseiuctobieeabell App. 221 Statutes and Regulations.......................seceeees App. 222 v TABLE OF AUTHORITIES Page CASES Arkansas v. Oklahoma, 503 U.S. 91 (1992)....... passim Auer v. Robbins, 519 U.S. 452 (1997)....... 29, 30, 31, 34 Babbitt v. Sweet Home Chapter, 515 U.S. 687 SST SER Oe OF SP EM Oy CORDS Ee PROSENSE: 30 Baltimore Gas & Elec. Co. v. Natural Resources Defense Council, Inc., 462 U.S. 87 (1983) .............. 29 Bowles v. Seminole Rock & Sand Co., 325 U.S. a te 29, 34 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) ............ 30 Christensen v. Harris County, 529 U.S. 576 EIS EEE ee re Rn SO re per Te Ce eee OR: 29 Crutchfield v. State Water Control Board, 45 Va.App. 546, 612 S.E.2d 249 (2005) .....14, 18, 19, 33 Friends of Pinto Creek, et al. v. Environmental Protection Agency, et al., 504 F.3d 1007 (9th ee I iis citaiinasiehanentcninnnincedtemeighdiondiadiattentet siete aiasuiial 8 Gardebring v. Jenkins, 485 U.S. 415 (1988)........ 29, 31 In re Carlota Copper Company, 11 E.A.D. 692 Re I he cacao nintnceieinnicesiailaigehdad lial 7 In re Cities of Annandale, et al., 731 N.W.2d Re Cs TONING P ectesisvinsunddcrivinssseaentghinniibaaenaion passim vi TABLE OF AUTHORITIES - Continued Page In re City of Moscow, 10 E.A.D. 135 (EAB 2001)....... 27 Lyng v. Payne, 476 U.S. 926 (1986)..................008 29, 34 Martin v. Occupational Safety and Health Review Comm’n, 499 U.S. 144 (1991)............... 29, 34 National Ass’n of Home Builders v. Defenders of Wildlife, 127 S.Ct. 2518 (2007)................... 2, 5, 30 Natural Resources Defense Council v. Costle, 568 F.2d 1369 (D.C. Cir. 1977).................... 20, 28, 36 Natural Resources Defense Council v. Envi- ronmental Protection Agency, 915 F.2d 1314 ERR ESR SS ST SS a ETE 26 Pauley v. Director, Office of Worker’s Compensa- tion Programs, 501 U.S. 680 (1991) .......... ee. 30 Robertson v. Methow Valley Citizens Council, EE 29 Sierra Club v. Meiburg, 296 F.3d 1021 (11th EEE EEE ERE COC Ce 26 Sierra Club, et al. v. Clifford, Civ. No. 96-0527 EE ce 31, 32 South Florida Water Management Dist. v. Miccosukee Tribe, 541 U.S. 95 (2004)...............0.0000. 2 Thomas Jefferson University v. Shalala, 512 eee 29, 24 Udall v. Tallman, 380 U.S. 1 (1965).............. 29, 30, 34 United States v. Larionoff, et al., 431 U.S. 864 Tl sciaecetitontagebetcinen 29 a a vil TABLE OF AUTHORITIES - Continued Page STATUTES 5 REESE NENESS Sena ODEN RRE eo 27 ET Ra EE IT 1 tae calannall passim I i epieansnaiiiiaan 11, 37 I i el nhl 1 ES nL RT 2 ESE Ea nr en Ce! 2 A Rs ie GD on cccccscevensecescovseccesenensesenedon 3, 36 NI ee aT TE See IN 3 idl dinhaliai ie ai 3 EE 1 re D .. ccs csnnnsnncessmenematecebebeus 3, 4, 37 sc saiceslenienssiiciaeiniademneniediniiain 3 css cruienaebael ieaiedinnell 26 I eae 6 I acetal 1 EN Se eee me RD re | 2 I i csieiemseeeaianlll 36 EEL TERA OER LCE TE 2, 20 ee esscseonsnsedesmiiaie 2 nc cceconmnusswnionn 2, 20 TS RA RT AE SED IED AIS i 2 vill TABLE OF AUTHORITIES — Continued Page ET ae TRE mR 2 on ceinantsnmininenieninadiadeandl 2 |, ASI ASR 8 FEDERAL REGULATIONS Ne I iinscsecicccntiinnaininnis sich iaiinetaiieddpatiiethi adie 3 SE Te ae a ae Sor 25 ETN ee ALLIEN aR SET passim i sain an dcinmtlalnednuianaiitein 2, 20 LA DOT EE REET EEF Oe EI ocicicicccencncoscnssvecsntccesocctoretiiien 23, 26 I i dc cstshiniemincsiinnaconnabiiognnnil 23, 25 I 0 dinsonesintnenitcasibiebusilnnnnbpnanbianll 3 I 2 clsiediiepeanieienl 3 I rl 4 i sisacitamennniaideenonnntie 4 68 Fed. Reg. 1608 (Jan. 13, 2003)............ cece 33 68 Fed. Reg. 1609-1610 (Jan. 13, 2003)...........00.000.... 33 STATE REGULATIONS State of Virginia, 9 VAC 25-31-50(C)(9)....... eee. 18 ix TABLE OF AUTHORITIES — Continued MISCELLANEOUS Supreme Court Rule 10(a) .................ccccsccseeeseseees 15, 16 EPA, National Water Quality Inventory: Report to Congress, 2002 Reporting Cycle, at ES-2 a sibstenenecoes g U.S. Environmental Protection Agency, Na- tional Pollutant Discharge Elimination Sys- tem, http://c{pub.epa.gov/npdes (last accessed FREES ISIS PRES ae oN Aa 10 U.S. Environmental Protection Agency, Na- tional Pollutant Discharge Elimination Sys- tem, http://cfpub.epa.gov/npdes/statestats.cfm (last accessed Mar. 27, 2008)........................0.c0000- 2-3 1 OPINIONS BELOW The Ninth Circuit’s opinion (App. 1) is reported at 504 F.3d 1007. The opinion of the U.S. Environ- mental Protection Agency Environmental Appeals Board (App. 25) is reported at 11 E.A.D. 692 (EAB 2004). « JURISDICTION The Ninth Circuit issued its judgment on October 4, 2007. App. 1. The Ninth Circuit denied Carlota Copper Company's timely petition for rehearing en banc on March 7, 2008. App. 221. This Court has jurisdiction under 28 U.S.C. § 1254(1). o STATUTORY AND REGULATORY PROVISIONS The relevant provisions of sections 301, 306 and 402 of the Clean Water Act, 33 U.S.C. §§ 1311, 1316, 1342, and 40 C.F.R. § 122.4(i), are set forth in the Appendix. App. 222-226. o STATEMENT OF THE CASE 1. Statutory and Regulatory Background The Clean Water Act (“Act”), 33 U.S.C. § 1251 et seq., prohibits the discharge of pollutants except as 2 authorized by specific provisions of the Act. 33 U.S.C. §§ 1311(a). One such provision, section 402, estab- lishes the National Pollutant Discharge Elimination System (NPDES); the NPDES authorizes the Envi- ronmental Protection Agency (EPA) to issue permits for discharges of effluent from point sources, such as pipes and conduits, into water.' 33 U.S.C. §§ 1342(a), 1362(14); App. 223. The permits must establish effluent limits for the discharges based on technologi- cally-based standards. Id. at § 1311(b)(1)(A). The EPA is required to delegate its NPDES permit authority to a state, if the state submits a program that meets statutory criteria. 33 U.S.C. § 1342(b); National Ass’n of Home Builders v. Defend- ers of Wildlife, 127 S.Ct. 2518, 2525 (2007). These statutory criteria establish requirements similar to those applicable to the EPA-administered program. 33 U.S.C. § 1342(b) 1A); 40 C.FR. § 123.25. The EPA program must, in turn, meet the “same terms, condi- tions, and requirements” applicable to the state programs. 33 U.S.C. § 1342(a\3). Thus, the same statutory requirements apply to both the EPA and state programs. To date, forty-five states have been delegated authority to administer their NPDES permit programs. U.S. Environmental Protection Agency, National Pollutant Discharge Elimination ' More precisely, the NPDES applies to discharges into “navigable waters,” 33 U.S.C. § 1362/12), which is defined as “waters of the United States,” id. at § 1362/7). See South Florida Water Management Dist. v. Miccosukee Tribe, 541 U.S. 95 (2004). 3 System, http://cfpub.epa.gov/npdes/statestats.cfm (last accessed Mar. 27, 2008).’ Although the NPDES focuses on the discharge of pollutants from point sources, the Act also establishes controls for the quality of the receiving waters. Sec- tion 303 requires the states to adopt “water quality standards” for bodies of water, such as rivers and lakes. 33 U.S.C. $ 1313(a). If a water body fails to meet the water quality standards, the state must adopt a “Total Maximum Daily Load” (TMDL) for the water body. Jd. at § 1313(d). A TMDL establishes the maximum “load” of pollutants that a water body can receive from all sources, including both point sources and non-point sources, without violating state water quality standards. 40 C.F.R. §§ 130.2(g)-(i), 130.7(c)(1). Under section 301(b)(1)(C), an NPDES permit must require that the permitted discharges comply with applicable state water quality standards. 33 U.S.C. § 1311(b)(1\C); 40 C.F.R. § 122(d). Another provision, section 306, requires the EPA to adopt “national standards of performance” for “new sources,” that is, sources constructed after adoption of the national performance standards. 33 U.S.C. § 1316(a)(1), -(a)(2); App. 223. The national perform- ance standards must reflect “the greatest degree of effluent reduction” that can be achieved through the * The only states that have not been delegated such author- ity are Alaska, Idaho, Massachusetts, New Hampshire and New Mexico. Jd. 4 best available technology. 33 U.S.C. § 1316(a)(1). The EPA has promulgated national standards of performance for several categories of point sources, including copper-producing mines, which include Carlota Copper Company’s mining project. 40 C.F.R. §§ 440.100 et seg., 440.100(a){1). Pursuant to section 306, the EPA has adopted a regulation authorizing the issuance of NPDES per- mits for discharges by a “new source” or “new dis- charger” into waters that do not meet state water quality standards. 40 C.F.R. § 122.4(i); App. 224.° The first sentence of the regulation prohibits the issuance of a permit if the discharge will “cause or contribute to the violation of water quality standards.” Jd. The second sentence provides that — if a TMDL has been * 40 C.F.R. section 122.4(i) provides in relevant part: No permit may be issued .. . [{) [tlo a new source or a new discharger, if the discharge from its construction or operation will cause or contribute to the violation of water quality standards. The owner or operator of a new source or new discharger proposing to discharge into a water segment which does not meet applicable water quality standards . .. and for which the State or interstate agency has performed a pollutants load al- location for the pollutant to be discharged, must dem- onstrate, before the close of the public comment, that: (1) There are sufficient remaining pollutant load al- locations to allow for the discharge; and (2) The existing dischargers into that segment are subject to compliance schedules designed to bring the segment into compliance with applicable water qual- ity standards. 5 adopted that establishes load allocations for the waters — the discharger must demonstrate that (1) there are “sufficient remaining pollutant load alloca- tions” for its discharge, and (2) “existing dischargers” are subject to “compliance schedules” designed to achieve compliance with water quality standards. /d. 2. Factual Background In 1996, Carlota Copper Company (“Carlota”) applied to the EPA for an NPDES permit authorizing discharges from a copper mine that Carlota planned to build and operate in Arizona. The discharges will consist of storm water runoff, containing detectable amounts of copper, during extreme storms. The discharges will reach Pinto Creek, which does not meet Arizona’s water quality standards for copper. The EPA has adopted a TMDL establishing copper load allocations for Pinto Creek, including specific load allocations for Carlota’s storm water runoff. App. 44, 172. In 2000, four years after Carlota’s application, the EPA issued an NPDES permit to Carlota author- izing the storm water discharges into Pinto Creek.* The permit contained an offset condition designed to * Although Arizona, where Carlota’s mine is located, received approval to administer its NPDES program as a result of this Court’s decision in National Ass'n of Home Builders v. Defenders of Wildlife, 127 S.Ct. 2518 (2007), the EPA issued the permit before Arizona received such approval, and has continued to exercise jurisdiction over the permit since then. 6 improve the creek’s water quality and ensure compli- ance with Arizona’s water quality standards. App. 42. The condition requires Carlota to offset the storm water discharges by remediating — that is, removing — copper pollution at an abandoned upstream mine, the Gibson Mine, located on the same creek. App. 42.° The EPA’s Environmental Appeals Board determined that the copper loadings that will be remediated at the abandoned mine “far exceed Carlota’s projected copper loadings” from the storm water runoff, and thus the offset condition will result in a “significant improvement” of the creek’s water quality. App. 122, 124.° The permit also requires that Carlota’s dis- charges comply with Arizona’s water quality stan- dards. App. 42 n. 19. The State of Arizona has certified, pursuant to section 40l(a) of the Act, 33 U.S.C. § 1341(a), that, in light of the offset condition, * Carlota has largely completed construction of its mine pursuant to the EPA permit, and has already remediated pollution at the Gibson Mine. Carlota does not have any owner- ship or operational interest in the Gibson Mine. * The permit authorizes Carlota to discharge from Outfall no. 005 — the outfall involved in this case — only the amount of storm water runoff that exceeds a 100-year, 24-hour storm event, i.e., 6.2 inches of rainfall. App. 119. The EPA determined that the amount of copper pollutants added to Pinto Creek from Carlota’s storm water discharges would be 2.01 kilograms per day (kg/day), compared with the reduction of copper pollutants resulting from remediation of the abandoned Gibson Mine of 83,138 kg/day, App. 122 — a reduction of more than 40,000 times the pollution caused by Carlota’s storm water discharges. 7 Carlota’s discharges will meet Arizona’s water quality standards. App. 42, 44 n. 21. The EPA concluded that Carlota’s discharges will not “cause or contribute” to a violation of water quality standards and are not prohibited by the Act or the regulation, because the offset condition will reduce net pollution in Pinto Creek and Arizona has certified that the discharges will meet its water quality standards. App. 170. Based on these findings, the EPA issued the permit. /d. 3. Procedural Background Friends of Pinto Creek, et al. (“Friends”), filed a petition for review with the EPA’s Environmental Appeals Board, challenging the EPA's issuance of the permit. The Appeals Board, in a 136-page opinion, concluded that the permit had been properly issued under the Act and the regulation, and denied review. In re Carlota Copper Company, 11 E.A.D. 692 (EAB 2004); App. 25.’ ‘ The EPA’s Regional Office [IX had concluded that the second sentence of the regulation — which establishes load allocations and compliance schedules requirements — does not apply to discharges, such as Carlota’s, that do not “cause or contribute” to water quality violations and are not prohibited by the first sentence of the regulation. App. 163 n. 101. The EPA Appeals Board “assume[d], without deciding,” that both sen- tences apply, id., and concluded that Carlota’s discharges comply with both sentences. App 163 n. 101, 164-176. 8 Friends filed a petition for review in the Ninth Circuit pursuant to section 509(b)(1)(F) of the Act, 33 U.S.C. § 1369(b)\(1)(F), again challenging the EPA’s issuance of the permit. The EPA was the respondent and Carlota was granted intervention. The Ninth Circuit held that the permit violates the Act and the regulation, 40 C.FR. § 122.4(i). Friends of Pinto Creek, et al. v. Environmental Protec- tion Agency, et al., 504 F.3d 1007 (9th Cir. 2007); App. 1. The court held that the Act and regulation prohibit new source discharges into “impaired waters” — i.e., waters that do not meet state water quality stan- dards — and that “there is nothing in the Clean Water Act or the regulation that provides an exception for an offset when the waters remain impaired and the new source is discharging pollution into that im- paired water.” App. 10-11. The court concluded, without any citation to authority, that Carlota’s discharges “cause or contribute” to water quality violations, as prohibited by the regulation. Jd. The court also held that Carlota’s discharges do not com- ply with the second sentence of the regulation, which authorizes new source discharges if (1) there are “sufficient remaining pollutant load allocations” and (2) “existing dischargers” are subject to “compliance schedules.” App. 11-12. The court vacated and re- manded the permit to the EPA. App. 24. ¢ 9 REASONS FOR GRANTING THE WRIT This petition raises the question whether the Clean Water Act (“Act”) and an implementing EPA regulation, 40 C.F.R. § 122.4(i), prohibit the EPA and the states from issuing permits for discharges from “new” sources into “impaired” waters — that is, waters that do not meet state water quality standards — if conditions are imposed that reduce net pollution of such waters and improve overall water quality. The Act authorizes the EPA to issue NPDES permits for point source discharges into water, including new sources of discharge, and requires that the discharges comply with state-established water quality stan- dards. The Act also requires the EPA to delegate its NPDES permit authority to a state, if the proposed state program meets the statutory criteria. The question presented is whether the EPA — and states that have NPDES-delegated authority — may properly issue NPDES permits for new source discharges into impaired waters subject to conditions that reduce net pollution and improve water quality. This issue is one of national importance. Accord- ing to the EPA, 45% of the nation’s rivers and streams, and 47% of its lakes, ponds and reservoirs, are considered “impaired or not clean enough to support their designated uses, such as fishing and swimming.” EPA, National Water Quality Inventory: Report to Congress, 2002 Reporting Cycle, at ES-2 (October 2007). If the EPA and the states cannot approve new source discharges into impaired waters, they would be unable to approve the construction and 10 operation of new projects and facilities that discharge into almost one-half of the nation’s waters. These projects and facilities consist of the national infra- structure necessary to accommodate much of the nation’s population growth and economic develop- ment — commercial and residential development projects, public waste treatment facilities, industrial projects, mining projects, agricultural operations, and others.° Thus, this issue has broad national signifi- cance. In administering their NPDES permit programs, the EPA and the states do not categorically prohibit new source discharges into impaired waters. Instead, they determine on a case-by-case basis whether to approve such discharges, depending on whether the discharges will adversely affect water quality and whether conditions can be imposed that would im- prove water quality. This approach allows the EPA and the states to exercise discretion and flexibility in administering their NPDES programs, by approving discharges into impaired waters in individualized * According to the EPA, NPDES permits are typically required for discharges from certain municipal facilities (such as publicly owned treatment works and wastewater systems, and municipal storm sewer systems), industrial and commercial facilities, some agricultural operations (such as animal feeding operations), and construction activities and other land- disturbing activities that involve one acre or more, among others. U.S. Environmental Protection Agency, National] Pollut- ant Discharge Elimination System, http://cfpub.epa.gov/ npdes (last accessed April 11, 2008). ll cases subject to conditions that reduce net pollution and improve overall water quality. The most common example of such a condition is an “offset.” An offset condition requires the discharger to offset its pollu- tion by remediating more pollution from other sources than is caused by discharges from its own source — in effect, to remove more pollutants from the impaired waters than it adds. By requiring remediation of other sources of pollution, an offset condition reduces net pollution and improves overall water quality, and facilitates compliance with water quality standards. Such environmental “tradeoffs” allow the EPA and the states to approve new projects and facilities that discharge into impaired waters while still achieving the Act’s goal, which is to “restore and maintain” water quality. 33 U.S.C. § 125l(a). Such tradeoffs provide a practical solution to the competing de- mands of developing new infrastructure projects and protecting water quality by allowing fulfillment of both within the statutory framework. In this case, the EPA issued an NPDES permit authorizing Carlota to discharge storm water runoff during extreme, 100-year storms into an impaired creek, and imposed an offset condition requiring Carlota to remediate pollution at an abandoned upstream mine that discharges mining waste into the creek. The EPA determined that the permit and condition will greatly improve the creek’s water quality, because the upstream pollution that Carlota is required to remediate greatly exceeds in amount (and occurs more frequently than) the pollution 12 caused by Carlota’s nominal storm water runoff. The permit also requires that Carlota’s storm water discharges comply with Arizona’s water quality standards. Arizona has certified that the discharges will comply. with its water quality standards by improving the creek’s water quality. The Ninth Circuit invalidated the permit on grounds that the Act and the EPA regulation prohibit new source discharges into impaired waters and make no exception for offset conditions that improve water quality. The decision precludes the EPA and the states from determining, on a case-by-case basis, whether specific discharges will adversely affect water quality, and if so, whether conditions can and should be imposed that reduce net pollution and improve water quality. The decision thus precludes the EPA and the states from approving infrastructure projects designed to improve water quality, if the projects discharge into impaired waters. For example, the decision would prohibit a municipal sewage agency from being allowed to replace an old, out-of- date sewage treatment facility with a modern, state- of-the-art facility that produces cleaner effluent. Under the Ninth Circuit decision, the EPA and the states have no discretion to approve discharges into impaired waters, regardless of the water quality effects of the discharges and regardless of whether conditions can be imposed to avoid these effects. No other court has held or suggested that the Act and the regulation impose such stringent restrictions on the 13 permitting agencies’ discretion in administering their NPDES programs. The Ninth Circuit decision conflicts with this Court’s decision in Arkansas v. Oklahoma, 503 U.S. 91 (1992). There, this Court held that the EPA and the states have “broad authority” under the Act’s NPDES provisions to develop “long-range, areawide programs” to prevent water pollution, and that they may approve new source discharges into impaired waters if this would “improve existing conditions.” Arkansas, 503 U.S. at 108. Although the Court did not specifically consider the validity of offset condi- tions, its decision strongly implies that such condi- tions are valid, because offset conditions “improve existing conditions” by reducing net pollution. While Arkansas held that the permitting agencies have “broad authority” under the Act, the Ninth Circuit held that their discretion is very narrow. The Ninth Circuit failed to apply the proper standard of review in interpreting the EPA’s regula- tion, by not deferring to, and instead rejecting, the EPA’s interpretation. The EPA has interpreted its regulation as authorizing the EPA and the states, in their discretion, to approve new source discharges into impaired waters subject to offset conditions that reduce net pollution and improve water quality, and the EPA’s administrative practice has conformed to that interpretation. This Court has held that the courts should defer to an agency’s interpretation of its regulation, unless the “plain language” dictates otherwise — and no such contrary “plain language” 14 appears in the agency regulation here. The Ninth Circuit’s failure to apply the appropriate standard of review in interpreting the EPA regulation provides an additional ground for review of its decision. Most significantly, the Ninth Circuit decision conflicts with recent state court decisions, particu- larly a Minnesota Supreme Court ‘tecision. The Minnesota Supreme Court recently hela that the Act and the regulation authorize Minnesota’s NPDES- permitting agency to approve new source discharges into impaired waters, subject to offset conditions that prevent impairment of water quality. Jn re Cities of Annandale, et al., 731 N.W.2d 502: (Minn. 2007). The Minnesota Supreme Court substantially relied on this Court’s decision in Arkansas, which as noted above held that the EPA and the states may flexibly ap- prove new source discharges into impaired waters if they “improve existing conditions.” Arkansas, 503 U.S. at 108. Similarly, the Virginia Court of Appeals recently held that Virginia’s NPDES-permitting agency can properly approve new source discharges into impaired waters subject to limitations that improve water quality. Crutchfield v. State Water Control Board, 45 Va.App. 546, 612 S.E.2d 249 (2005). The Minnesota and Virginia decisions allow the permitting agencies to flexibly decide on a case- by-case basis whether to approve new source dis- charges into impaired waters, depending on their water quality effects. The Ninth Circuit decision, by contrast, precludes the agencies from approving such discharges regardless of their water quality effects. 15 Since the Ninth Circuit decision conflicts with the decision of the Minnesota Supreme Court, which is Minnesota’s “state court of last resort,” this case is appropriate for a grant of certiorari on that ground alone under Supreme Court Rule 10(a). As a result of the conflict between the Minnesota and Virginia decisions and the Ninth Circuit decision, the rules applicable to the states’ NPDES permit programs in Minnesota and Virginia — and in other states that follow the court decisions of those two states — are different from the rules applicable to the EPA’s NPDES permit program under the Ninth Circuit decision. Under the Act, however, the EPA and the state programs are governed by the same re- quirements and cannot properly be subject to differ- ent rules. To date, forty-five states have been authorized to administer their own NPDES pro- grams. Thus, the Ninth Circuit decision has a poten- tially far-reaching effect on state water quality programs throughout the nation. The conflict created by the Ninth Circuit decision will continue to exist regardless of whether the EPA seeks review of the decision. If, for example, the EPA decides no longer to apply offset conditions because of the Ninth Circuit decision, the states’ authority to apply such conditions under the Minnesota and Virginia decisions would remain unaffected. This Court can resolve the conflict concerning the national rules governing the NPDES program, and should do so. 16 I. THE NINTH CIRCUIT DECISION CON- FLICTS WITH A RECENT MINNESOTA SUPREME COURT DECISION. Under Rule 10(a) of the Supreme Court Rules, one of the grounds for granting a writ of certiorari is where “a United States court of appeals ... has decided an important federal question of law in a way that conflicts with a decision by a state court of last resort....” The Ninth Circuit decision directly con- flicts with the Minnesota Supreme Court’s recent decision in In re Cities of Annandale, et al., 731 N.W.2d 502 (Minn. 2007). Under Rule 10(a), this case is appropriate for the grant of a writ of certiorari on that ground. In Annandale, the Minnesota Supreme Court held that the Act and the EPA regulation, 40 C.F.R. § 122.4(i), authorized the Minnesota Pollution Con- trol Agency (MPCA), which administers the NPDES program in Minnesota, to issue permits for new source discharges into impaired waters, subject to offset conditions that prevent impairment of water quality. There, the permit authorized a municipal waste treatment agency to discharge a pollutant (phosphorus) from a new waste treatment facility into impaired waters, and contained an offset condi- tion requiring the agency to remove substantially more phosphorus from an old, out-of-date treatment facility than was added by the new facility. The Court held that — because of the offset condition — the discharges did not “cause or contribute” to water quality violations in the watershed, and therefore 17 were not prohibited by the EPA regulation. 731 N.W.2d at 516-522. This conclusion, the Court stated, was supported by the U. S. Supreme Court’s decision in Arkansas v. Oklahoma, 503 U.S. 91 (1992), which will be discussed in the next part of this petition, and which had held that “nothing in the Act” “prohibit(s] any discharge of effluent that would reach waters in violation of existing water quality standards.” 731 N.W.2d at 520, 524; Arkansas, 503 U.S. at 107. Citing the Arkansas decision, the Minnesota Supreme Court stated that its conclusion is consistent with the Act’s goal of granting “flexibility and broad authority” to the EPA and the states to develop “long-range, area- wide programs” for water quality. 731 N.W.2d at 524. The Court stated: [W]e conclude that, when dealing with a situation like the one presented in this case — two aging wastewater treatment facilities with expired NPDES permits, which are at or near capacity ‘n a region of the state that is experiencing significant growth — it was not unreasonable for the MPCA to allow a 2,200-pound per year (at capacity) increase in phosphorus discharge from a new waste- water treatment facility to be offset by a con- temporaneous 53,500-pound per _ year decrease in a nearby facility that is located in the same watershed. Id. at 524. Thus, the Minnesota Supreme Court decision held that both the Act — as interpreted by this Court's decision in Arkansas — and the regulation authorize the EPA and the states to approve new 18 source discharges into impaired waters subject to offset conditions that improve water quality. The Virginia Court of Appeals followed the same approach in Crutchfield v. State Water Control Board, 45 Va.App. 546, 612 S.E.2d 249 (2005). There, the court held that the Act and a Virginia regulation identical to the EPA regulation’ authorized Virginia’s State Water Control Board, which administers the NPDES program in that state, to issue a permit allowing the discharge of treated effluent from a new waste treatment plant into impaired waters. The permit contained a limitation — described as a “self- sustaining limit” — that protected water quality and required compliance with Virginia’s water quality standards. The limitation required that the concen- tration of the pollutant (dissolved oxygen) in the discharged effluent must be lower than the concen- tration of the pollutant in the river — in effect, that the water quality of the discharges must be higher than the water quality of the river. The court held that since the water quality of the discharges must be higher than that of the river, the discharges will actually improve the river’s water quality and reduce net pollution. The court concluded that the discharges will comply with water quality requirements and that * The Virginia regulation, 9 VAC 25-31-50(C)\(9), contains identical language to that found in the EPA regulation, 40 C.F.R. § 122.4(i). See Crutchfield, 45 Va_App. at 557-558, 612 S.W.2d at 255. 19 the permit did not violate the Act or the regulation. Crutchfield, 45 Va.App. at 557, 612 S.E.2d at 255. The Minnesota and Virginia decisions allow the agencies administering the NPDES program to flexibly decide, on a case-by-case basis, whether specific discharges into impa‘red waters will meet water quality standards, ard if not, whether condi- tions can and should be imposed that will ensure that the standards are met. Although the permit condi- tions in the Minnesota and Virginia cases were differ- ent — one was an offset condition and the other a “self-sustaining limit” — both conditions reduced net pollution and improved water quality, and both facilitated compliance with state water quality stan- dards. Rather than categorically prohibiting the discharges, the Minnesota and Virginia decisions approved the discharges because, as limited by their conditions, they would improve rather than impair water quality. The Ninth Circuit decision, by contrast, prohibits discharges into impaired waters regardless of their water quality effects, and regardless of whether conditions can be imposed to protect water quality. Although the Minnesota and Virginia deci- sions required a case-by-case analysis of water qual- ity effects, the Ninth Circuit adopted a blanket approach that disregards such effects. The Ninth Circuit decision, which greatly cir- cumscribes the discretion of the EPA and the states in administering their NPDES programs, directly con- flicts with the Minnesota and Virginia decisions, which broadly interpret their discretion. Because of 20 the conflict, the rules governing the states’ NPDES programs in Minnesota and Virginia are different from those governing the EPA program under the Ninth Circuit decision. Under the Act, however, the same NPDES permit requirements apply to both the EPA’s program and the states’ programs. 33 U.S.C. §§ 1342(a)(3), -(b)(1A); 40 C.F.R. § 123.25. Other states that administer their NPDES programs -— forty-five states have been granted such authority to date — are apparently free to follow the Minnesota and Virginia decisions, which allow them flexibility in administering their NPDES programs, or instead to follow the Ninth Circuit decision, which precludes the exercise of flexibility. This Court should review this case to resolve the conflict concerning the national rules governing the Act’s NPDES program, which is the “primary means” for achieving the Act’s effluent limit goals. Natural Resources Defense Council v. Costle, 568 F.2d 1369, 1371 (D.C. Cir. 1977). II. THE NINTH CIRCUIT DECISION CON- FLICTS WITH THIS COURT’S DECISION IN ARKANSAS v. OKLAHOMA. A. The Arkansas Decision In Arkansas v. Oklahoma, 503 U.S. 91 (1992), this Court held that the Act authorizes the EPA and the states, in administering their NPDES programs, to issue permits for new source discharges into im- paired watcrs. There, the EPA issued an NPDES permit for a sewage treatment plant in Arkansas, which authorized discharges of effluent into Arkansas 21 waters that reached impaired waters in Oklahoma. The permit contained limitations and conditions requiring that the discharges comply with Okla- homa’s water quality standards. The EPA approved the permit because it would not cause detectable violations of Oklahoma’s water quality standards. The Tenth Circuit reversed the EPA’s approval of the permit, holding that the Act “requires that ‘where a proposed source would discharge effluents that would contribute to conditions currently constituting a violation of applicable water quality standards, such [a] proposed source may not be permitted.” 503 U.S. at 98. This Court reversed the Tenth Circuit, stating: The Court of Appeals construed the Clean Water Act to prohibit any discharge of efflu- ent that would reach waters already in viola- tion of existing water quality standards. We find nothing in the Act to support this read- ing.... [9] [Rlather than establishing the categorical ban announced by the Court of Appeals — which might frustrate the con- struction of new plants that would improve existing conditions — the Clean Water Act vests in the EPA and the States broad au- thority to develop long-range, areawide pro- grams to alleviate and eliminate existing pollution. 503 U.S. at 107, 108. The Court’s above-quoted statement — that the EPA and the states have “broad authority” to develop 22 “long-range, areawide programs to alleviate and eliminate existing pollution” and to allow construc- tion of “new plants” that would “improve existing conditions” — strongly suggests that the EPA and the states have broad authority to approve discharges into impaired waters subject to offset conditions, because offset conditions “improve existing condi- tions” by reducing net pollution. Although the Court did not specifically consider the validity of offset conditions, the Court’s analysis strongly suggests that such conditions are valid. The Arkansas decision, unlike the Ninth Circuit decision here, held that the permitting agencies have broad rather than narrow discretion in deciding whether to approve new source discharges into impaired waters. Indeed, the Minnesota Supreme Court in Annan- dale substantially relied on the Arkansas decision in upholding the validity of the offset condition in that case. Annandale, 731 N.W.2d at 520, 525. The Minne- sota Supreme Court stated that the opposite view — that offset conditions are invalid — would “perpetuate the very outcome the Supreme Court sought to avoid with its decision in Arkansas v. Oklahoma — namely, the adoption of such a rigid approach that construc- tion of new facilities that would improve existing conditions would be thwarted.” Jd. at 525. 23 B. The Ninth Circuit’s Distinction of Arkansas The Ninth Circuit distinguished Arkansas on the ground that Arkansas simply rejected a “categorical ban” on discharges into impaired waters, and the EPA regulation does not impose a categorical ban but instead allows such discharges under limited circum- stances. App. 14-17. As noted earlier, the second sentence of the EPA regulation authorizes discharges into impaired waters if a TMDL establishing load allocations has been adopted for the waters, and if (1) there are “sufficient remaining pollutant load alloca- tions” for the proposed discharge and (2) “compliance schedules” have been adopted for “existing discharg- ers” to achieve compliance with water quality stan- dards. Id.; 40 C.F.R. § 122.4(i)(1), -(i)(2). The Ninth Circuit held that since the regulation authorizes discharges into impaired waters under limited condi- tions, Arkansas does not apply. App. 17." '° Carlota argued in the case below that the second sentence of the EPA regulation does not apply to discharges, such as those involved here, that are not prohibited by the first sentence, which prohibits discharges that “cause or contribute” to water quality violations. Since the purpose of the second sentence is to allow discharges into impaired waters even though they “cause or contribute” to water quality violations and are thus otherwise prohibited by the first sentence, it would be illogical to apply the second sentence to discharges that do not fall within the prohibi- tory scope of the first sentence. In the case below, the Ninth Circuit “assume([d], without deciding,” that both sentences apply to all discharges into impaired waters, because the EPA's Appeals Board had also “assume[d], without deciding,” that both (Continved on following page) 24 The Ninth Circuit’s distinction of Arkansas is misplaced for two main reasons. First, Arkansas did not hold simply that the Act does not impose a “cate- gorical ban” on discharges into impaired waters, as the Ninth Circuit stated. Rather, Arkansas held, more broadly, that the EPA and the states have “broad authority” to develop “long-range, area-wide pro- grams” to accommodate new sources of development in ways that will “improve existing conditions.” 503 U.S. at 108. Thus, Arkansas held that the EPA and the states have broad discretion and flexibility in administering their permit programs, and in deciding whether and under what conditions to approve new source discharges into impaired waters. The decision does not narrowly hold, as the Ninth Circuit sug- gested, that their only discretion is in not categori- cally prohibiting such discharges. Under Arkansas, the agencies’ discretion in administering their NPDES programs is broad and substantial, not, as the Ninth Circuit held, narrow and cramped. Second, the Ninth Circuit interpreted the EPA regulation as imposing such rigid limitations on discharges into impaired waters that the practical effect is to virtually — if not categorically — prohibit all sentences apply. App. 13, 163 n. 101; see note 7, supra. The question whether both sentences of the regulation apply to all new source discharges into impaired waters — even where the discharges do not “cause or contribute” to water quality viola- tions and are not prohibited by the first sentence — is encom- passed within the questions presented for review. 25 such discharges, contrary to the Arkansas decision. The Ninth Circuit rejected the EPA’s position tliat the regulation does not impose these rigid limitations. More specifically, the Ninth Circuit held that the regulation prohibits discharges into impaired waters unless the EPA has issued compliance schedules for both permitted and non-permitted point source dis- chargers. App. 12. The regulation provides that compliance schedules must be issued for “existing dischargers,” 40 C.F.R. § 122.4(i)(2), and the Ninth Circuit construed “existing dischargers” as referring to all point source dischargers, whether permitted or not. App. 12. On the contrary, and as the EPA has concluded, “existing dischargers” refers to permitted point source dischargers, because a “schedule of compliance” is defined under the regulations as a “schedule of remedial measures included in a ‘per- mit.’” App. 174-175, & n. 108; 40 C.F.R. § 122.2 (emphasis added). In holding otherwise, the Ninth Circuit misquoted the regulation — stating that it refers to “existing discharges” rather than “existing dischargers,” App. 12 (emphasis added) — and then relied on its misquotation to extend the regulatory reach to non-permitted dischargers." " The Ninth Circuit stated that the regulation requires that compliance schedules must be adopted for “existing discharges,” App. 12 (emphasis added), although the regulation requires instead that such schedules must be adopted for “existing dischargers.” 40 C.F_.R. § 122.4(iX2) (emphasis added). The court then stated that the misquoted word — “discharges” —- refers to (Continued on following page) 26 Additionally, the Ninth Circuit held that — if com- pliance schedules for permitted point source discharg- ers are insufficient to achieve water quality compliance — compliance schedules must also be adopted for non- point source dischargers. App. 16. Under the Act, how- ever, non-point source dischargers are not subject to regulation under the NPDES, and instead are regu- lated by the states. 33 U.S.C. § 1329; Sierra Club v. Meiburg, 296 F.3d 1021, 1026 (11th Cir. 2002); Natural Resources Defense Council v. Environmental Protection Agency, 915 F.2d 1314, 1316 (9th Cir. 1991). The Ninth Circuit improperly extended NPDES requirements to non-point source dischargers not subject to NPDES regulation, and imposed on EPA a permitting responsi- bility beyond its statutory authority. Finally, the Ninth Circuit held that the regula- tion prohibits discharges into impaired waters unless the EPA determines not only that the TMDL load allocations are “sufficient” for the proposed discharge, as the regulation expressly requires, 40 C.F.R. § 122.4(i1)(1), but also that TMDL load allocations will be “met .. . under existing circumstances,” App. 11-12 — in other words, that other dischargers will meet their own load allocations. The latter requirement does not appear in the regulation.” the “discharge of a pollutant” and therefore the regulation applies to “any” point source discharge, not just “permitted” point source discharges. App. 12. ‘* The EPA's Appeals Board determined that the regulation re- quires only a showing that there are “sufficient” load allocations (Continued on following page) 27 To summarize, the Ninth Circuit held that the EPA — and by extension, the states — are prohibited from approving new source discharges into impaired waters unless the following requirements are met: (1) unpermitted point source dischargers have been identified and contacted, and permits containing compliance schedules have been issued to them —- which, as in Carlota’s case, may take many years, or even be impossible because the discharge may be from an “orphan” source (such as an abandoned mine) with no solvent entity that can be subjected to permit conditions; (2) if necessary, non-point source discharg- ers who are noi subject to NPDES regulation have also been identified and contacted, and compliance schedules have also been issued for them; and (3) the permitting agency has determined not only the suffi- ciency of TMDL load allocations for the discharger but also that other dischargers will meet their own TMDL load allocations. None of the above italicized requirements ap- pears in the regulation. The Ninth Circuit held, for the proposed discharge, as the regulation expressly requires, and that this requirement was satisfied because the Pinto Creck TMDL establishes specific load allocations for Carlota’s proposed discharges. App. 170-174. The Appeals Board concluded that the petitioners were in effect challenging the TMDL and its imple- mentation, and that a TMDL — which is a form of a state water quality standard — and its implementation cannot be challenged in an NPDES permit hearing and can only be challenged in a separate federal court action brought under the Administrative Procedures Act, 5 U.S.C. § 706(2). App. 172, & n. 105; Jn re City of Moscow, 10 E.A.D. 135, 161 (EAB 2001). 28 nonetheless, that all three requirements must be met before the permit can be issued. By imposing these additional requirements, the Ninth Circuit has made it difficult if not virtually impossible for the EPA and the states to approve new source discharges into impaired waters under all but exceptional circumstances. The practical effect of the Ninth Circuit decision is to impose a virtual de facto moratorium on new source discharges into impaired waters. On the contrary, this Court in Arkansas held that the EPA and the states have broad flexibility and discretion in administering their NPDES programs, and in approving new projects that will “improve existing conditions.” 503 U.S. at 108. As the District of Columbia Circuit has stated, where the permitting agency’s authority under the Act is unclear, “we are instructed to afford the administering agency the flexibility to achieve the general objectives of the Act.” Natural Resources Defense Council v. Costle, 568 F.2d 1369, 1382 (D.C. Cir. 1977). The question whether the EPA and the states have such flexibility, as this Court held in Arkansas, or instead whether they lack flexi- bility, as the Ninth Circuit held, is the primary ques- tion presented in this petition. 29 Ill. THE NINTH CIRCUIT FAILED TO APPLY THE APPROPRIATE STANDARD OF RE- VIEW BY NOT DEFERRING TO THE EN- VIRONMENTAL PROTECTION AGENCY’S INTERPRETATION OF ITS REGULA- TION. The standard of review applicable in interpreting an administrative regulation is that deference should be accorded to an agency’s interpretation of its own regulation, unless the “plain language” dictates otherwise. Auer v. Robbins, 519 U.S. 452, 461 (1997); Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994); Martin v. Occupational Safety and Health Review Comm’n, 499 U.S. 144, 150 (1991); Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359 (1989); Gardebring v. Jenkins, 485 U.S. 415, 430 (1988); Lyng v. Payne, 476 U.S. 996, 939 (1986); United States v. Larionoff, et al., 431 U.S. 864, 872 (1977); Udall v. Tallman, 380 U.S. 1, 16-17 (1965); Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 413-414 (1945); see Christensen v. Harris County, 529 U.S. 576, 588 (2000). “(T]he agency’s interpretation of its own regulation must be given ‘controlling weight unless it is plainly erroneous or inconsistent with the regulation.’” Thomas Jefferson University, 512 U.S. at 512, quoting from Bowles, 325 U.S. at 414. Such deference is particularly appropriate where the regulation involves technical or scientific matters within the agency’s expertise. Baltimore Gas & Elec. Co. v. Natural Resources Defense Council, 462 U.S. 87, 103 (1983). “When the construction of an adminis- trative regulation rather than a statute is in issue, 30 deference is even more clearly in order.” Udall, 380 U.S. at 16." The EPA regulation prohibits the issuance of NPDES permits for new source discharges into im- paired waters if the discharges “cause or contribute” to violations of water quality standards. 40 C.F.R. § 122.4(i). The EPA has interpreted this language as not prohibiting new source discharges into impaired waters subject to conditions that improve water quality, and the EPA’s administrative practice has conformed to this interpretation. The EPA’s Appeals Board adopted that interpretation in this case, App. 164-170, and stated that this interpretation is “con- sistent with prior Agency interpretation of that section.” App. 165. In earlier proceedings, the EPA has taken the position that new source discharges into impaired waters may be approved if (1) the discharges do not contain the pollutant causing the impairment, (2) the effluent limits for the discharge meet water quality standards, or (3) the discharges are subject to offset conditions that prevent water ‘* Under the principle established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), deference should be accorded to an agency’s interpretation of a statute that it is responsible for enforcing, if the statute is ambiguous and the agency interpretation reasonable. Chevron, 467 U.S. at 842-843; National Ass'n of Home Builders v. Defend. ers of Wildlife, 127 S.Ct. 2518, 2534 (2007); Auer, 519 U.S. at 457; Babbitt v. Sweet Home Chapter, 515 U.S. 687, 703 (1995); Pauley v. Director, Office of Workers’ Compensation Programs, 501 U.S. 680, 696 (1991). ~ ee ee ee oe 31 quality impairment. Describing the third category — involving offset conditions — the EPA stated: [I]t is possible for a discharger to be issued a permit where it is demonstrated that other pollutant source reductions (such as non- point source reductions implemented by the discharger) will offset the discharge in a manner consistent with water quality stan- dards. The ultimate result of this type of “offset” or “trade” may be a net decrease in the loadings of the pollutant of concern in the CWA § 303(d) listed water, and, there- fore, EPA, by practice has considered a dis- charge which has been offset in accordance with permit requirements not to “cause or contribute to a violation of water quality standards.” In re Cities of Annandale, et al., 731 N.W.2d 502, 521 ‘Minn. 2007). According to the EPA, whether a dis- charge will “cause or contribute” to a violation of water quality standards must be determined on a “case-by-case basis” and not by application of “per se” ’ This EPA interpretation was set forth in the EPA's Response Memorandum in Sierra Club, et al. v. Clifford, at 50- 54, Civ. No. 96-0527 (E.D. La. 1999), which was referred to by the EPA’s Appeals Board below. App. 165. This Court has deferred to an agency’s interpretation of a regulation expressed in litigation — even the instant litigation — if the interpretation was not a “post hoc rationalization” advanced to defend a past position and reflects the agency’s “fair and considered judg- ment.” Auer v. Robbins, 519 U.S. 452, 462 (1997); see Gardebring v. Jenkins, 485 U.S. 415, 430 (1988). 32 or “categorical” standards.” Applying the “case-by- case” analysis here, the EPA’s Appeals Board deter- mined that “rather than ‘causing or contributing’ a degradation, Carlota will be improving Pinto Creek’s water quality, or at the very least maintaining water quality.” App. 170. The EPA’s interpretation of its regulation is consistent with its Water Quality Trading Policy, which states: Finding solutions to these complex water quality problems requires innovative ap- proaches that are aligned with core water programs. Water quality trading is an ap- proach that offers greater efficiency in achieving water quality goals on a watershed basis. It allows one source to meet its regula- tory obligations by using pollutant reduc- tions created by another source that has lower pollution control costs. Trading capital- izes on economies of scale and the control cost differentials among and between sources. [4] The United States Environmental Protection Agency (EPA) believes that market-based approaches such as water quality trading provide greater flexibility and have potential to achieve water quality and environmental benefits greater than would otherwise be achieved under more traditional regulatory approaches. '* See EPA brief filed in Sierra Club, et al. v. Clifford, at 52, note 14, supra. 33 68 Fed. Reg. 1608, 1609 (Jan. 13, 2003); see In re Cities of Annandale, et al., 731 N.W.2d 502, 522 (Minn. 2007). The trading policy establishes several objectives, one of which to encourage water quality trading where trading “[o]ffsets mew or increased discharges resulting from growth in order to maintain levels of water quality that support all designated uses.” 68 Fed. Reg. at 1609-1610. The EPA’s interpretation of the regulation does not contravene its “plain language” and is entitled to deference. As the EPA’s Appeals Board concluded, discharges subject to offset conditions do not “cause or contribute” to water quality violations because they improve rather than impair water quality. App. 164- 170. The EPA’s interpretation is also consistent with the Minnesota Supreme Court’s decision in the An- nandale case, which held that the EPA regulation does not prohibit discharges into impaired waters subject to offset conditions that improve water qual- ity. In re Cities of Annandale, et al., 731 N.W.2d 502, 521 (Minn. 2007); see also Crutchfield v. State Water Control Board, 45 Va.App. 546, 612 S.E.2d 249, 557- 558 (2005). The Minnesota Supreme Court stated that the regulation is, at a minimum, “ambiguous,” and therefore deference should be accorded to the Minnesota water quality agency’s interpretation, which was the same as the EPA interpretation. Annandale, 731 N.W.2d at 519. The Ninth Circuit did not defer to the EPA’s interpretation of its regulation, nor even mention this Court’s decisions requiring such deference. The Ninth 34 Circuit instead adopted the opposite interpretation, holding that offset conditions are invalid regardless of their water quality effects. App. 10-11. The Ninth Circuit failed to apply the appropriate standard of review in construing the regulation, which requires deference to the agency’s interpretation unless the “plain language” dictates otherwise — and no such contrary “plain language” appears in the EPA regula- tion here. The Ninth Circuit’s failure to apply the appropriate review standard provides an additional ground for review of its decision. Although this case raises questions concerning the interpretation of both a statute and a regulation, this Court has reviewed cases involving solely the interpretation of a regulation." In one such case, Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994), this Court resolved a conflict between two federal circuit courts in interpreting a regulation. In ** As stated earlier, this Court has held in several cases that deference should be accorded to an agency's interpretation of its regulation unless the “plain language” dictates otherwise. See, e.g., Auer v. Robbins, 519 U.S. 452, 461 (1997); Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994); see page 29, supra. Although some of the cited cases involved interpretations of both a statute and a regulation, such as Auer, others involved solely the interpretation of a regulation, such as Thomas Jefferson University. Other cases involving solely the interpretation of a regulation are Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144 (1991), Lyng v. Payne, 476 U.S. 926 (1986), Udall v. Tallman, 380 U.S. 1 (1965), and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). 35 the sarae vein, this case involves a conflict between a federa. circuit court (Ninth Circuit) and a state’s highest court (Minnesota Supreme Court) in inter- preting a regulation. Additionally, the case presents issues of national importance; the Ninth Circuit’s interpretation restricts the EPA’s and the states’ discretion in administering their NPDES programs, and conflicts with this Court’s decision in Arkansas v. Oklahoma, 503 U.S. 91 (1992). Because of the con- flicts and the nationally-important issue, this case would be worthy of review even if the sole question concerned the interpretation of the regulation. IV. THE CLEAN WATER ACT AND THE REGULATION AUTHORIZE - AND DO NOT PROHIBIT - THE ISSUANCE OF PERMITS FOR DISCHARGES INTO IM- PAIRED WATERS, SUBJECT TO CONDI- TIONS THAT REDUCE NET POLLUTION AND IMPROVE WATER QUALITY. On the merits, the Act and the EPA regulation authorize — and do not prohibit — the issuance of NPDES permits for discharges into impaired waters subject to conditions, such as offset conditions, that reduce net pollution and improve water quality. A. The Statute The Act grants “broad authority” to the EPA and the states to develop NPDES programs “to alleviate and eliminate existing pollution” and “improve existing 36 conditions,” as this Court held in Arkansas v. Ohla- homa, 503 U.S. 91, 102 (1992). This “broad authority” allows the NPDES permitting agencies to flexibly decide, on a case-by-case basis, whether discharges into impaired waters will violate water quality stan- dards, and whether conditions can and should be imposed to prevent such violations. Nothing in the statute precludes the permitting agencies from exer- cising such broad authority. The conclusion that the Act grants such broad authority is supported by the statutory language. Section 402(a)(1) authorizes the EPA to issue NPDES permits for point source discharges subject to “such conditions as the Administrator [of the EPA] deter- mines necessary to carry out the provisions of this chapter.” 33 U.S.C. § 1342(a)(1); App. 224. Section 301(b)(1XC) provides that NPDES permits must include effluent limitations necessary to “implement any applicable water quality standard” established by a state under section 303. 33 U.S.C. § 1311(b\(1)(C); App. 222-223. Thus, the statute specifically requires that NPDES permits implement state “water quality standard[s],” and specifically authorizes “conditions” to achieve such standards. Accordingly, the statute by its terms authorizes offset conditions, because offset conditions are intended to achieve compliance with water quality standards. Cf. Natural Resources Defense Council v. Costle, 568 F.2d 1369, 1375 (D.C. Cir. 1977) (Under section 402, “the [EPA] Administra- tor has discretion either to issue a permit or to leave 37 the discharges subject to the total proscription of [section] 301.”). . Section 306 of the Act requires the EPA to adopt “national standards of performance” for new sources that “reflect[] the greatest degree of effluent reduc- tion” achievable through available technology. 33 U.S.C. § 1316(a)(1); App. 223. An offset condition necessarily achieves “the greatest degree of effluent reduction,” as required by the statute, because it reduces net pollution caused by discharges of efflu- ents. Section 101(a) declares that the Act’s goal is to “restore and maintain” the nation’s water quality. 33 U.S.C. § 1251(a). An offset condition that reduces net pollution and improves water quality necessarily furthers the statutory goal of “restor[ing] and main- tain{ing]” water quality. By contrast, the Ninth Circuit’s all-or-nothing approach to the attainment of water quality standards obstructs the statutory goal. The Ninth Circuit decision imposes a virtual de facto moratorium on the issuance of NPDES permits for new source discharges into impaired waters, thus reducing incentives for dischargers to clean up such waters through the NPDES permit process — and limiting the discretion of permitting agencies to offer such incentives. The decision, for example, would make it difficult for permitting agencies to authorize municipal sewage agencies to replace out-of-date sewage facilities with modern ones that produce cleaner effluent, as the municipal agency did in the Annandale case decided by the Minnesota Supreme 38 Court. In re Cities of Annandale, et al., 731 N.W.2d 502, 524 (Minn. 2007). The Ninth Circuit. decision impedes the development of infrastructure projects that would further the statutory goal of improving the nation’s water quality. B. The Regulation The EPA regulation prohibits the issuance of NPDES permits for new source discharges into im- paired waters that will “cause or contribute to the violation of water quality standards.” 40 C.F.R. § 122.4(i); App. 224. The regulation, on its face, does not prohibit a// discharges into impaired waters, regardless of their effects on water quality. Instead, the regulation facially prohibits only discharges that will “cause or contribute” to water quality violations. A discharge subject to an offset condition requiring remediation of other sources of pollution does not, by definition, “cause or contribute” to water quality violations; although the permit authorizes the dis- charge of pollutants, the condition requires the re- moval of more pollutants than are discharged, and thus improves overall water quality. Rather than “caus([ing] or contribut[ing]” to water quality viola- tions, an offset condition causes a reduction of such violations. The EPA regulation prohibits discharges that impair water quality, not improve it. The regula- tion plainly does not prohibit offset conditions. 39 The Ninth Circuit’s observation that the Act and the regulation make no “exception” for offset condi- tions, App. 10-11, is beside the point. A discharge subject to an offset condition that reduces net pollu- tion does not “cause or contribute” to water quality violations and thus does not fall within the scope of the regulatory prohibition. A prohibition that does not apply by its own terms does not require an “excep- tion” to render it non-applicable. In sum, the Act and the regulation grant broad authority to the EPA and the states to adopt meas- ures to protect and improve water quality, and to impose conditions in NPDES permits that further this goal. This grant of authority includes the discre- tion to impose offset conditions that improve the quality of impaired water bodies. Nothing in the Act or the regulation prohibits the EPA and the states from imposing such conditions. The Ninth Circuit decision, by reading requirements into the statute and the regulation that do not appear on their face, greatly restricts the EPA’s and the states’ discretion in administering their NPDES programs. The deci- sion makes it difficult for the EPA and the states to approve new development projects necessary to accommodate the nation’s demographic and economic growth, even though conditions are imposed that achieve the Act’s goal of improving water quality. This Court should grant review and reverse. e 40 CONCLUSION The petition for writ of certiorari should be granted. Respectfully submitted, RODERICK E. WALSTON Attorney for Carlota Copper Company App. 1 FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT FRIENDS OF PINTO CREEK; GRAND CANYON CHAPTER OF THE SIERRA CLUB, MARICOPA AUDU- BON SOCIETY AND CITIZENS FOR THE PRESERVATION OF POWERS GULCH AND PINTO CREEK, Petitioners, CARLOTA COPPER COMPANY, Intervenor, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ENVIRON- MENTAL APPEALS BOARD; STEPHEN L. JOHNSON, Acting Administrator, United States Environmental Protection Agency, Respondents. No. 05-70785 OPINION On Petition for Review of an Order of the Environmental Protection Agency Argued amd Submitted November 13, 2006 — San Francisco, California Filed October 4, 2007 App. 2 Before: Procter Hug, Jr., A. Wallace Tashima, and Ronald M. Gould, Circuit Judges. Opinion by Judge Hug COUNSEL Roger Flynn, Western Mining Action Project, Lyons, Colorado, for the petitioners. D. Judith Keith, United States Department of Jus- tice, Environmental Defense Section, Washington, DC; John S. Most, United States Department of Justice, Natural Resources Section, Washington, DC, for the respondents. Amy R. Porter, Lewis and Roca LLP, Phoenix, Ari- zona, for the intervenor. OPINION HUG, Circuit Judge: In this case, we determine whether the Environ- mental Protection Agency (“EPA”) properly issued a National Pollution Discharge Elimination System (“NPDES”) permit under the Clean Water Act to Carlota Copper Company (“Carlota”). The permit allows mining-related discharges of copper into Arizona’s Pinto Creek, a waterbody already in excess of water quality standards for copper. Based upon provisions of the Clean Water Act, the implementing regulations, and their applicability to the factual scenario of this case, we vacate the permit and re- mand. App. 3 I. FACTUAL BACKGROUND Pinto Creek is a desert river located near Miami, Arizona, approximately 60 miles east of Phoenix. It has been listed by the American Rivers Organization as one of the country’s most endangered rivers due to threats from proposed mining operations. Pinto Creek and its riparian environs are home to a variety of fish, birds, and other wildlife, some of which are specially protected. Due to excessive copper contami- nation from historical mining activities in the region, Pinto Creek is included on Arizona’s list of impaired waters under § 303(d) of the Clean Water Act, 33 U.S.C. § 1313(d), as a water quality limited stream due to non-attainment of water quality standards for dissolved copper. Carlota proposed to construct and operate an open-pit copper mine and processing facility approxi- mately six miles west of Miami, Arizona, covering over 3000 acres while extracting about 100 million tons of ore. Part of the operation plan includes con- structing diversion channels for Pinto Creek to route the stream around the mine, as well as groundwater cut-off walls to block the flow of groundwater into the mine. In compliance with the National Environmental Policy Act (“NEPA”), 42 U.S.C. §§ 4321 et seq., the U.S. Forest Service prepared an Environmental Impact Statement (“EIS”), after determining the project would potentially have a significant impact on the environment, and later finalized the document as App. 4 its Final EIS (“Forest Service FEIS”). The Army Corps of Engineers also prepared an Environmental Assessment (“Corps EA”) covering the physical con- struction of proposed diversion channels redirecting water from Pinto Creek and the Powers Gulch stream around the mine and into Pinto Creek. Because the proposed action would involve the discharge of pol- lutants into Pinto Creek, Carlota applied to the EPA for an NPDES permit under § 402 of the Clean Water Act, 33 U.S.C. § 1342, in 1996. The EPA ultimately issued the permit, and the Environmental Appeals Board (“Appeals Board”), the internal appellate board of the EPA, denied review. Il. ISSUES A. Whether the issuance of the permit to discharge a pollutant, dissolved copper, into Pinto Creek, which already ex- ceeded the amount of dissolved copper allowed under the Section 303(d) Water Quality Standard, is in violation of the Clean Water Act and the applicable regulations. B. Whether the EPA’s failure to include and regulate all discharges from the Carlota Copper Mine in the NPDES permit vio- lates the Clean Water Act and the appli- cable regulations. C. Whether the EPA complied with the re- quirements of the National Environ- mental Policy Act (“NEPA”). App. 5 Ill. PROCEDURAL BACKGROUND The EPA published for public comment a draft NPDES permit for Carlota in 1998. To fulfill its information-gathering requirements under NEPA, 42 U.S.C. §§ 4321-4370f, the EPA adopted the Forest Service FEIS and the Corps EA. In response to com- ments received on its draft NPDES permit, the EPA amended the draft permit by adding two new condi- tions -— (1) requiring additional groundwater dis- charges to augment the stream flow into Pinto Creek, and (2) an offset provision whereby Carlota would be required to remediate sources of copper loading from an upstream inactive mine site called the Gibson Mine. On June 30, 2000, the Arizona Department of Environmental Quality (“Arizona DEQ”) certified the final permit with the two new conditions as meeting state water quality standards under § 401 of the Clean Water Act, 33 U.S.C. § 1341, and on July 24, 2000, the EPA issued an NPDES permit to Carlota, as well as a Record of Decision formally adopting the Forest Service FEIS and the Corps EA for the current permit. On August 24, 2000, the Petitioners filed their first Petition for Review of the NPDES permit and the NEPA documents with the Appeals Board. The Petitioners argued that: (1) because Pinto Creek is an impaired water under the Clean Water Act, the EPA should establish a Total Maximum Daily Load (“TMDL”) for copper discharges into Pinto Creck App. 6 before issuing Carlota’s permit, (2) the EPA did not provide public notice of and a public comment period for the two new permit conditions, (3) Carlota needed an additional NPDES permit for discharges from the Gibson Mine site, and (4) the Forest Service FEIS and Corps EA documents did not consider environ- mental impacts of the two new permit conditions. The EPA did not respond and, instead, withdrew portions of the challenged NPDES permit stating that the permit was not severable from the contested conditions and that the permit should be stayed pending final agency action. The EPA then prepared a supplemental environmental assessment (“EPA’s supplemental EA”) analyzing only the two new condi- tions. In response to the Petitioners’ contention of the necessity to establish a TMDL, the EPA completed a TMDL for dissolved copper in Pinto Creek. The EPA then provided a public comment period, but only for the two new permit conditions and the EPA's supple- mental EA. The Arizona Department of Environ- mental Quality issued a second certification under § 401 of the Clean Water Act in February 2002. In accordance with its new analysis, the EPA issued a Finding of No Significant Impact on February 27, 2002, determining it would not have to prepare a new EIS, and issued the permit. On April 1, 2002, the Petitioners filed a second Petition for Review with the Appeals Board challeng- ing the EPA’s decision to issue the Carlota permit. The principal challenges were that: (1) the permit should have covered the diversion channels that App. 7 discharged into Pinto Creek, (2) the EPA must regu- late all project discharges, (3) the permitted discharges violated Arizona anti-degradation requirements and water quality standards, and (4) the EPA violated NEPA in several ways. The Appeals Board entered its order denying review on September 30, 2004. The EPA issued the final NPDES permit to Carlota, and the Petitioners filed for review in this court. IV. ANALYSIS A. Objective of the Clean Water Act. It is important to consider the objectives and purpose of the 1972 revisions of the Clean Water Act, which are presently applicable to the considerations involved here. 33 U.S.C. § 1251 (1987) provides: The objective of this chapter is to restore and maintain the chemical, physical, and biologi- cal integrity of the nation’s waters. In order to achieve this objective it is hereby declared that, consistent with the provisions of this chapter — (1) it is the national goal that the discharge of pollutants into the navigable waters be eliminated by 1985... . (3) it is the national policy that the discharge of toxic pollutants in toxic amounts be prohibited. Under the 1972 revisions of the Clean Water Act, there is direct federal regulation of the discharge of pollutants from po.nt sources. Pronsolino v. Nastri, 291 F.3d 1123, 1126 (9th Cir. 2002). “[P]Joint sources of App. 8 pollution are those [where the pollutant flows] from a discrete conveyance, such as a pipe or tunnel. Non- point sources of pollution are non-discrete sources” and are the responsibility of the states, with certain federal oversight. Jd. at 1125-27. An example of a non-discrete source is runoff from a farmland or timber harvesting. Our Pronsolino opinion provides a detailed description of the operation of the Clean Water Act. We here summarize the provisions pertinent to this case. Under § 303 of the Clean Water Act, 33 U.S.C. § 1313, the states are required to set water quality standards for all waters within their boundaries, regardless of the sources of the pollution entering the waters. Pursuant to § 303(d)(1), 33 U.S.C. § 1313(d)(1), each state is required to identify those waters that do not meet the water quality standard which is fre- quently called the “§ 303(d)(1) list.” For impaired waters identified in the § 303(d)(1) list, the states must establish a TMDL for pollutants identified by the EPA. A TMDL specifies the maximum amount of pollutant that can be discharged or loaded into the waters from all combined sources, so as to comply with the water quality standards. Each state is required to submit its § 303(d)(1) list and its TMDL to the EPA for its approval or disapproval. If the EPA disapproves either of those documents, the EPA is responsible for preparing that document. The state then incorporates its § 303(d)(1) App. 9 list and its TMDL or the EPA’s approved document into its continuing planning process as required by § 303(e), 33 U.S.C. § 1313(e). . In this case, the state had prepared the § 303(d)(1) list, but it had not prepared a TMDL. Therefore, in response to the Petitioners’ objection, the EPA prepared the TMDL utilized in its awarding of the permit. B. Carlota’s Discharge into an Impaired Waterway. The Petitioners contend that as a “new dis- charger” Carlota’s discharge of dissolved copper into a waterway that is already impaired by an excess of the copper pollutant violates the intent and purpose of the Clean Water Act. Under the NPDES permitting program, 40 C.F.R. § 122.4(i) addresses the situation where a new source seeks to permit a discharge of pollutants into a stream already exceeding its water quality standards for that pollutant. Section 122.4 states in relevant part: No permit may be issued: (i) To a new source or a new discharger if the discharge from its construction or opera- tion will cause or contribute to the violation of water quality standards. The owner or op- erator of a new source or new discharger proposing to discharge into a water segment which does not meet applicable water quality App. 10 standards or is not expected to meet those standards ... and for which the State or in- terstate agency has performed a pollutants load allocation for the pollutant to be dis- charged, must demonstrate, before the close of the public comment period, that: (1) There are sufficient remaining pollutant load allocations to allow for the discharge; and . (2) The existing dischargers into that seg- ment are subject to compliance schedules de- signed to bring the segment into compliance with applicable water quality standards. 40 C.F.R. § 122.4 (2000). The plain language of the first sentence of the regulation is very clear that no permit may be issued to a new discharger if the discharge will contribute to the violation of water quality standards. This corre- sponds to the stated objectives of the Clean Water Act “to restore and maintain the chemical, physical, and biological integrity of the nation’s waters.” 33 U.S.C. § 1251(a) (1987). And that “it is the national policy that the discharge of toxic pollutants in toxic amounts be prohibited.” 33 U.S.C. § 1251(a)(3) (1987). The EPA contends that the partial remediation of the discharge from the Gibson Mine will offset the pollution. However, there is nothing in the Clean Water Act or the regulation that provides an excep- tion for an offset when the waters remain impaired >. rns | ; - App. 11 and the new source is discharging pollution into that impaired water.’ The regulation does provide for an exception where a TMDL has been performed and the owner or operator demonstrates that before the close of the comment period two conditions are met, which will assure that the impaired waters will be brought into compliance with the applicable water quality stan- dards. The plain language of this exception to the prohibited discharge by a new source provides that the exception does not apply unless the new source can demonstrate that, under the TMDL, the plan is designed to bring the waters into compliance with applicable water quality standards. The EPA argues that under the requirements of clause (1), there are sufficient remaining load alloca- tions to allow for the discharge because the TMDL provides a method by which the allocations could be established to allow for the discharge. There is no contention, however, that these load allocations represent the amount of pollution that is currently discharged from the point sources and nonpoint sources, and there is no indication of any plan that will effectuate these load allocations so as to bring Pinto Creek within the water quality standards. The TMDL merely provides for the manner in which Pinto Creek could meet the water quality standards if all of ' It is questionable whether there really is an offset. See discussion in the next section. App. 12 the load allocations in the TMDL were met, not that there are sufficient remaining pollutant load alloca- tions under existing circumstances. With regard to the requirements of clause (2), the EPA argues that the requirement of “compliance schedules” pertains only to point sources for which there is a permit. This does not correspond to the plain language of clause (2), which provides “the existing discharges into that segment [of Pinto Creek] are subject to compliance schedules designed to bring the segment into compliance with applicable water quality standards.” 40 C.F.R. § 122.4(i)(2) (2000). We examine that language utilizing the defini- tions provided in the regulation. The term “discharge” is defined to mean “the discharge of a pollutant.” 40 C.F.R. § 122.2 (2000). The term “discharge of a pollut- ant,” is defined as any addition of any “pollutant” or combination of pollutants to “waters of the United States” from “any point source.” Id. at § 122.2(a) (emphasis added). Thus, under the plain language of the regulation, cornpliance schedules are not confined only to “permitted” point source discharges, but are applicable to “any” point source. The EPA contends that this would amount to a complete ban of the discharge of pollution to impaired waters. This is based on its misreading of the plain language of the regulation to state that the remedia- tion has to be completed before Carlota’s discharge. The plain language of clause (2) of the regulation, instead, provides that existing discharges into that App. 13 segment (of the waters) are “subject to compliance schedules designed to bring the segment into compli- ance with applicable water quality standards.” 40 C.F.R. § 122.4(i)(2) (2000) (emphasis added). This is not a complete ban but a requirement of schedules to meet the objective of the Clean Water Act. Here the existing discharges from point sources are not subject to compliance schedules designed to bring Pinto Creek into compliance with water quality standards. Thus, Carlota has not demonstrated that clause (2) of 40 C.F.R. § 122.4(i) has been met. This is the regulation upon which Carlota and the EPA rely for issuance of the permit. Initially, Carlota and the EPA contended that the first and second sentences of § 222.4(i) could be construed to apply independently, thus not requiring compliance with clauses (1) and (2) when an offset would result in a substantial net reduction of pollu- tion to the impaired waters. The Petitioners, on the other hand, maintained that the two sentences must be read together, not independently. However, the EPA subsequently asked the Appeals Board to as- sume, for purposes of this decision, that clauses (1) and (2) do apply. See In re Carlota Copper Co., 11 E.A.D. 692, 766 (EAB 2004). Thus, we are concerned in this case with whether the EPA required Carlota to fulfill all of the requirements of § 122.4(i), including clauses (1) and (2), in order to issue a permit to it as a new discharger. App. 14 The Respondents and Carlota rely on Arkansas v. Oklahoma, 503 U.S. 91 (1992) in support of their contentions. That case involved the issuance of a permit for a city in Arkansas to discharge effluent into a stream in Arkansas that entered a river that eventually flowed into Oklahoma. Oklahoma chal- lenged the permit before the EPA, alleging that the discharge violated Oklahoma Water Quality Stan- dards. In that case, the EPA found that the discharge would not lead to a “detectable change in water quality,” which the Supreme Court held was sup- ported by substantial evidence. Arkansas, 503 U.S. at 112. In the opinion, the Court stated that “the parties have pointed to nothing that mandates a complete ban on discharges into a waterway that is in violation of those standards. The statute does, however, con- tain provisions designed to remedy existing water quality violations and to allocate the burden of reduc- ing undesirable discharges between existing sources and new sources. See, e.g. §1313(d).” Id. at 108. Section 1313(d) of the Clean Water Act, referred to by the Court, is the one that provides for the establish- ment of water quality standards and TMDLs. The Supreme Court in Arkansas v. Oklahoma also referred to § 1288(b)(2), which provides for the development of area-wide programs to eliminate existing pollution in the context of area-wide waste treatment management. /d. That section provides details required of any plan to eliminate the pollu- tion, including schedules, time lines, identification of App. 15 agencies, and identification of measures necessary to carry out the plan. The Appeals Board stated that prior Agency pronouncements “confirm our position that, rather than completely banning new source discharges, § 122.4(i) provides new sources with the opportunity to obtain a permit if the requirements specified in that section are met.” Jn re Carlota Copper Co., 11 E.A.D. 692, 765 (EAB 2004). The prior Agency posi- tion quoted states: A new source or new discharger may, how- ever, obtain a permit for discharge into a wa- ter segment which does not meet applicable water quality standards by submitting in- formation demonstrating that there is suffi- cient loading capacity remaining in waste load allocations (WLAs) for the stream seg- ment to accommodate the new discharge and that existing dischargers to that segment. are subject to compliance schedules designed to bring the segment into compliance with the applicable water quality standards. Id. (emphasis added). The language quoted by the Appeals Board from the prior agency action requires compliance schedules designed to bring the water segment into compliance with the applicable water quality standards. In Carlota’s case, there are no plans or compli- ance schedules to bring the Pinto Creek segment “into compliance with applicable water quality stan- dards,” as required by § 122.4(i)(2), which Carlota App. 16 and the EPA both acknowledge is the applicable section with which Carlota must comply. The error of both the EPA and Carlota is that the objective of that section is not simply to show a lessening of pollution, but to show how the water quality standard will be met if Carlota is allowed to discharge pollutants into the impaired waters.’ The EPA has the responsibility to regulate dis- charges from point sources and the states have the responsibility to limit pollution coming into the waters from non-point sources. If point sources, other than the permitted point source, are necessary to be scheduled in order to achieve the water quality standard, then the EPA must locate any such point sources and establish -ompliance schedules to meet the water quality standard before issuing a permit. If there are not adequate point sources to do so, then a permit cannot be issued unless the state or Carlota agrees to establish a schedule to limit pollution from a nonpoint source or sources sufficient to achieve water quality standards. * The only step the EPA or Carlota has taken to meet the requirements of § 122.4(i)(2) is the partial remediation of the Gibson Mine discharge. The following statement illustrates the Appeals Board's erroneous view of the objective of § 122.4(i)(2): The goal of the proposal is not, as Petitioners and other commenters seemed to believe, the restoration of the entirety of Pinto Creek to water quality stan- dards. While desirable, this is not the intent of the proposed action. In re Carlota Copper Co., 11 E.A.D. 692, 784 (EAB 2004). App. 17 The EPA contends that it cannot be judicially compelled to act against point sources that are ille- gally discharging into Pinto Creek. The EPA notes that while it has the authority to act against viola- tors, its decision to do so in ordering its priorities is a matter that is typically committed to its absolute discretion, citing Sierra Club v. Whitman, 268 F.3d 898, 903 (9th Cir. 2001) and Heckler v. Chaney, 470 U.S. 821, 831-32 (1985). In Carlota’s case, there is nothing in § 122.4(i) that compels the EPA to act against point sources that are violating the Clean Water Act by their dis- charges into Pinto Creek or requiring judicial review of the EPA’s ordering of priorities in any failure to act. The requirement of § 122.4(i)(2) is simply a condition that must be met before a permit can be issued to a new discharger into impaired waters. There is no compulsion on the EPA to act against point source violators, as in Sierra Club or Heckler. The EPA remains free to establish its priorities; it just cannot issue a permit to a new discharger until it has com- plied with § 122.4(i)(2). In this case, the Petitioners do not argue for an absolute ban on discharges into a waterway that is in violation of the water quality standards. Rather, the Petitioners point to the § 122.4(i) exception by which a new discharger can comply with the Clean Water Act requirements. Those requirements simply were not met. Thus, no conflict exists with the Supreme Court’s opinion in Arkansas v. Oklahoma. F App. 18 C. Pollution From the Diversion Chan- c nels. Carlota proposed to construct two diversion channels that would divert surface and groundwater » around the mine facilities. The Pinto Creek diversion channel would extend approximately 5250 feet and then into Pinto Creek. The Powers Gulch stream diversion channel would extend approximately 7900 feet into the Powers Gulch stream, which eventually connects to Pinto Creek. Both channels will eventu- ally add pollutants, including copper, into Pinto Creek especially from the groundwater that Carlota will be directing into the channels for discharge into Pinto Creek. In order to block groundwater from entering the main Carlota Mine pit, Carlota will construct a cutoff wali down to bedrock that will divert the groundwa- ter to the surface and into the Pinto Creek diversion channel. The Forest Service FEIS stated: “The cutoff wall would be an impermeable barrier extending from the surface down through the alluvium and into the bedrock. The cutoff wall would be designed to prevent water from moving toward the pit and would encour- age the alluvial flow to surface into the diversion channel to be routed around the pit.” Fed. Envtl. Impact Statement for Carlota Copper Project, Vol. 1, Ch. 2, p. 16 (1997). The Forest Service FEIS also noted that the alluvial groundwater that will enter the diversion channel contains dozens of pollutants, including copper, that will be added to Pinto Creek. According to the Forest Service FEIS, the amount of App. 19 dissolved copper in this groundwater would be sig- nificant. In addition to the groundwater directed into Pinto Creek via the Pinto Creek diversion channel, a similar cutoff wall is proposed to direct groundwater into the Powers Gulch stream diversion channel and ultimately into Pinto Creek. Like the groundwater added to the Pinto Creek via the Pinto Creek diver- sion channel, the groundwater added to the Powers Gulch stream contains elevated levels of copper and other pollutants. The EPA did not consider the copper contributions from the use of the proposed diversion channels and groundwater cutoffs. The Appeals Board refused to consider these additional sources of copper pollution because it was not raised in the first comment period for the permit. In the Petitioners’ first Petition for Review of the NPDES permit and ihe NEPA documents before the Appeals Board, the Petitioners contended, among other things, that the EPA had not allowed a com- ment period on the two new conditions added to the permit and that the EPA should establish a TMDL for copper discharges into Pinto Creek before issuing Carlota’s permit. The EPA did not respond and, instead, withdrew portions of the challenged NPDES permit stating that the permit was not severable from the contested conditions and that the permit should be stayed until pending final agency action. After establishing a TMDL for copper in Pinto Creek, Carlota then pursued a renewal of the permit based upon 40 C.F.R. § 122.4(i). Carlota has conceded App. 20 that for the purpose of this decision § 122.4(i), includ- ing clauses (1) and (2), is applicable. Carlota was thus proceeding on the basis that a TMDL had been issued and that it was required to comply with clauses (1) and (2). Section 122.4(i) requires that a new dis- charger into impaired waters for which a pollutant’s load allocation for the pollutant to be discharged “must demonstrate, before the close of the comment period,” the compliance with clauses (1) and (2). 40 C.F.R. § 122.4(i) (2000) (emphasis added). The com- ment period referred to could not have been the initial comment period before a TMDL was sought or established. The comment period had to relate to the new basis for Carlota’s permit under § 122.4(i). All of the claims that the Petitioners now rely upon were raised during the comment period after the TMDL was performed. They could not have been raised in the first comment period. These claims were made known to the EPA not only in the second com- ment period but also at the time of the preparation of the TMDL by a letter that raised the point, a copy of which was furnished directly to the EPA. Thus, the claim with regard to the copper discharge from the diversion channels and the cutoff walls was timely raised and should not have been deemed forfeited, but it should have been considered by the Appeals Board. This would be important in determin- ing whether the requirement for compliance sched- ules set out in § 122.4(i2) had been met and also it would be important in determining the extent of the App. 21 pollutants contributed by Carlota that would be offset by the Gibson Mine remediation. D. The State of Arizona’s Requirements. In addition to violating 40 C.F.R. § 122.4(i), the Petitioners contend that the permit also violates the provisions of 40 C.F.R. § 122.4(d), which provides that no permit may be issued “[wJhen the imposition of conditions cannot ensure compliance with the appli- cable water quality requirements of all affected States.” 40 C.F.R. § 122.4(d) (2000). This must be considered in connection with § 122.4(a), which states that no permit may be issued “when the conditions of the permit do not provide for compliance with the applicable requirements of the Clean Water Act or regulations promulgated under the Clean Water Act.” Id. at § 122.4(a). Thus, the requirements of § 122.4(d) are in addition to complying with all of the require- ments of the Clean Water Act and the regulations promulgated under the Clean Water Act. Since we here hold that the permit does not comply with § 122.4(i), the additional requirement of § 122.4(d) need not be considered at this time. It would be appropriate to consider the requirements of § 122.4(d) if a permit is properly issued under § 122.4(i). App. 22 E. Compliance With the Requirements of NEPA. NEPA requires agencies to examine potential environmental effects of any proposed action, and to inform the public of its studies and resulting con- cerns. If any agency determines that its action may have a significant impact on the environment, the agency is required to prepare an EIS describing the impacts of the action and possible alternatives. 42 U.S.C. § 4332(2)(C) (1975). To determine if the action will require an EIS, the agency may first prepare an environmental assessment (“EA”). 40 C.F.R. § 1508.9 (1998). If the EA indicates that there will not be a significant impact on the environment, the agency may issue a Finding of No Significant Impact, in which case an EIS is not required. 40 C.F.R. § 1508.13 (1998). In the first appellate review before the Appeals Board, the Petitioners challenged the EPA’s failure to allow comments on the two new permit conditions and also the failure to conduct a TMDL prior to issuing the permit. The supplemental EA issued by the EPA addressed only the environmental effect of the two new conditions, not the effect of a permit issued to a new discharger under § 122.4(i), including clauses (1) and (2). There is nothing wrong with incorporating and relying upon the Forest Service FEIS because it had discussed the effect on waters by the proposed Carlota Mine. However, the EA pro- duced by the EPA should have discussed the revised App. 23 permit issued under § 122.4(i), including clauses (1) and (2). The Petitioners argued that the EPA failed to take a “hard look” at its failure to consider the dis- charges from the two diversion channels, including the walls to be established to prevent groundwater from reaching the mine facilities, which would con- tribute alluvial water, including copper pollution, to Pinto Creek. The Appeals Board refused to consider this argument because it contended that it had not been raised during the first comment period. As we have previously explained, it was not possible to comment upon the request for a permit based upon the TMDL and the requirements of § 122.4(i) until after the TMDL had been issued. Thus, for the rea- sons we expressed in the prior section, it was error for the Appeals Board not to consider additional dis- charges from the diversion channels. The Petitioners also raised other questions concerning the compliance with NEPA, such as rea- sonable alternatives to the proposed action. Because we have held that the permit was improperly issued under the provisions of § 122.4(i), including clauses (1) and (2), these NEPA issues need not be considered at this time. Vv. CONCLUSION Because the issuance of the NPDES Permit to Carlota Copper Mine was based on errors of law under the Clean Water Act, 40 C.F.R. § 122.4(i), and App. 24 the NEPA, we vacate and remand the permit to the EPA for further proceedings consistent with this opinion. VACATED and REMANDED. App. 25 BEFORE THE ENVIRONMENTAL APPEALS BOARD UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. In re: Carlota Copper Company ) bag a ~— NPDES Permit No. AZ0024112 ‘ [Decided September 30, 2004] ORDER DENYING REVIEW Before Environmental Appeals Judges Scott C. Fulton, Edward E. Reich, and Kathie A. Stein. NPDES Appeal Nos. 00-23 & 02-06 ORDER DENYING REVIEW Decided September 30, 2004 Before Environmental Appeals Judges Scott C. Fulton, Edward E. Reich, and Kathie A. Stein. Opinion of the Board by Judge Stein: I. INTRODUCTION In July 2000, U.S. Environmental Protection Agency (“EPA” or “Agency”) Region [X (the “Regidn”) App. 26 issued a National Pollutant Discharge Elimination System (“NPDES”)' permit decision (the “Permit”), number AZ0024112 (the “Permit”), to the Carlota Copper Company (“Carlota”). The Permit authorizes Carlota to discharge from its proposed open-pit copper mine project located near Miami, Arizona (the “Project”). On August 25, 2000, Friends of Pinto Creek, the National Wildlife Federation, the Arizona Wildlife Federation, Grand Canyon Chapter of the Sierra Club, Mineral Policy Center, Maricopa Audu- bon Society, and Citizens for the Preservation of Powers Gulch and Pinto Creek (collectively the “Peti- tioners”) timely filed a petition requesting that the Environmental Appeals Board (“EAB” or “Board”) review the Permit.’ See Petition for Review of NPDES Permit (Aug. 24, 2000) (“First Petition”). Thereafter, the Region withdrew two conditions of the Permit and asked the EAB to stay its consid- eration of the First Petition.’ See Notification to ' Under the Clean Water Act (“CWA”), persons who dis- charge pollutants from point sources into waters of the United States must have a permit in order for the discharge to be lawful. CWA § 301, 33 U.S.C. § 1311. The National Pollutant Discharge Elimination System is one of the principal permitting programs under the CWA. See CWA § 402, 33 U.S.C. § 1342. * On September 7, 2000, Carlota filed a motion to intervene and requested leave to file a responsive pleading and otherwise participate in this proceeding, which request the EAB granted by order dated September 11, 2000. * The Region withdrew Permit Condition I.11.a (“Reclama- tion Work Required Prior to Discharging into Pinto Creek”) and Permit Condition I.11.b (“Wellficld Mitigation Program”). App. 27 Board and Interested Parties of Withdrawal of Permit Conditions and Request for Stay of Petitions (Nov. 9, 2000). The EAB granted the Region’s request for a stay.’ Order Staying Proceedings in Part (Dec. 5, 2000). The Region then opened a new public comment period on the withdrawn conditions. On February 27, 2002, the Region reissued the Permit. The reissued Permit contained the two conditions previously withdrawn, supported this time by an Amended Record of Decision (“ROD”) and a Finding of No Significant Impact (“FONSI”). Thereafter, on April 1, 2002, the Petitioners filed a second petition, this time seeking review of the Region’s February 27, 2002 decision to reissue the two withdrawn conditions of the Permit. See Petition for Review of NPDES Permit (Mar. 29, 2002) (“Second Petition”). * At the time of the Board’s Order, the Board had before it two petitions for consideration — the First Petition described above, and a petition by the Hopi Tribe (“Hopi Tribe Petition”) — both seeking review of the Region’s decision to issue Permit AZ0024112 to Carlota. In its November 9, 2000 request, the Region asked the Board to stay both petitions. See Notification to Board and Interested Parties of Withdrawal of Permit Conditions and Request for Stay of Petitions (Nov. 9, 2000). The Board stayed the First Petition but declined to stay considera- tion of the Hopi Tribe Petition, thereby staying the proceedings in part. See Order Staying Proceedings In Part (Dec. 5, 2000). The Board in a separate order denied review of the Hopi Tribe Petition. See In re Carlota Copper Co., Order Denying Hopi Tribe Petition for Review, NPDES Appeal No. 00-24 (EAB Dec. 5, 2000). App. 28 For the reasons described below, we deny review of the Permit. Il. BACKGROUND A. Statutory and Regulatory Background 1. The Clean Water Act The CWA prohibits any person from discharging any pollutant into waters of the United States from a point source,’ unless the discharge complies with the statutory requirements. CWA §30l1(a), 33 U.S.C. § 1311(a). Section 402 of the CWA authorizes the EPA Administrator to issue permits for the discharge of pollutants, provided the discharge meets certain statutory requirements. CWA § 402(a), 33 U.S.C. § 1342(a). Section 402, in turn, provides that permit- ted discharges must, among other things, comply with sections 301 and 306. CWA § 402(a)(1), 33 U.S.C. § 1342(a)(1). CWA section 301 provides for the inclusion in NPDES permits of two different kinds of effluent limits for point sources: those based on the technol- ogy available to treat a pollutant, and those neces- sary to protect the designated and existing uses of * The CWA defines a point source as “any discernable, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.” CWA § 502, 33 U.S.C. § 1362. a 4 4 . J App. 29 the receiving water body. The first type, known as technology-based limits, reflect a specified level of pollutant-reducing technology required for the type of facility that is seeking a permit. CWA § 301(b)(1)(A), 33 U.S.C. § 1311(b)(1)(A). The second type, known as water quality-based effluent limits, apply when technology-based effluent limits are insufficient to meet the applicable state water quality standards. Under the CWA, states must develop water quality standards for all water bodies within the state. CWA § 303, 33 U.S.C. $1313. These water quality standards, which states promulgate and then submit to EPA for approval, have three components: (1) one or more “designated uses” of each water body or water body segment; (2) water quality “criteria” specifying the amounts of various pollutants that the water may contain without impairing designated uses; and (3) an antidegradation provision. CWA § 303(c 2A), 33 U.S.C. § 1313(c\2A); 40 C.F.R. §§ 131.10-.12. The first part, designated uses, basi- cally classifies water bodies based on the expected beneficial uses of those water bodies and sets goals for the water body segment.” The second component, water quality criteria, are numeric or narrative criteria “expressed as constituent concentrations, levels or narrative statements” and designed to attain * In re Teck Cominco Alaska Inc., NPDES Appeal No. 03-09, slip op. at 10 (EAB June 15, 2004), 11 EAD. __ (citing US. EPA Office of Water, NPDES Permit Writers’ Manual § 6.1.1, at 89 (1996)). App. 30 and maintain each designated use. 40 C.FR. § 131.3(b). The third part, the state’s antidegradation policy, focuses on protecting “existing uses” by gener- ally prohibiting degradation of water quality below that necessary to maintain existing uses. Existing uses are those uses actually attained in the water body on or after November 28, 1975. Id. § 131.3(e). Each state’s antidegradation policy must comply with the federal antidegradation regulations codified at 40 C.F.R. § 131.12° and identify the methods to imple- ment such policy. The federal antidegradation policy establishes three tiers to protect water quality. The first tier consists of a minimum floor that protects all waters of the United States,’ and it applies to Pinto Creek, the water body of interest in this case. See infra Part IlI.B.1.a. This tier requires maintaining and protect- ing all existing uses of a water body as well as the level of water quality mecessary to preserve those uses. See 40 CFR. § 131.12(a\(1). This means that the water quality in the water body may be lowered "US. EPA Office of Water, NPDES Permit Writers’ Manual § 6.1.1, at 89 (1996). "U.S. EPA Office of Water, NPDES Permit Writers’ Manual § 6.1.1, at 90 (1996). * The EPA has described this provision as the “absolute floor of water quality in all waters of the United States.” Water Quality Standards Regulation, 48 Fed. Reg. 51,400, 51,403 (Nov. 8, 1983); see also Water Quality Standards Regulation, 63 Fed. Reg. 36,742, 36,781 (July 7, 1998) (Advance Notice of Proposed Rulemaking); Teck Cominco, slip op. at 11, 11 E.A.D. at ___. App. 31 but only to the point where all existing uses are maintained and protected, and that it is not permis- sible to lower water quality such that existing uses are impaired.” Note that the first tier focuses on existing rather than designated uses.'' The second and third tiers focus on protecting and maintaining “high quality” and “outstanding” water bodies, re- spectively. See id. § 131.12(a)(2)-(3). We will not concern ourselves here with the second and third tiers because it is undisputed that the State of Ari- zona has placed Pinto Creek in the first tier, rather than in these latter two categories. The CWA also requires states to identify those water segments where technology-based effluent limits are insufficient to achieve the applicable water "© See Proposed Water Quality Guidance for the Great Lakes System, 58 Fed. Reg. 20,802, 20,886 (Apr. 16, 1993). " The EPA has explained the difference between these two concepts as follows: Designated uses are defined as those uses specified in water quality standards for each water body or seg- ment whether or not they are being attained. EPA in- terprets existing uses as those uses actually attained in the water body on or after November 28, 1975 (the date of EPA’s initial water quality standards regula- tion), whether or not they are included in water qual- ity standards. 40 C.F.R. § 131.3(e). Designated uses focus on the attainable condition while existing uses focus on the past or present condition. Teck Cominco, slip op. at 12, 11 E.A.D. at __ (citing Water Quality Standards Regulation, 63 Fed. Reg. 36,742, 36,748 (July 7, 1998) (Advance Notice of Proposed Rulemaking)). . ; App. 32 quality standards, and which are therefore “water quality limited.” CWA § 303(d)(1)(A), 33 U.S.C. § 1313(d)(1)(A). Once a state identifies a segment as water quality limited, the statute requires the state to develop total maximum daily loads (“TMDLs”) for that segment.” CWA § 303(d)(1)(C), 33 U.S.C. § 1313(d)(1(C). A TMDL sets forth the total amount of a pollutant from point sources, nonpoint sources, and natural background that a water-quality limited segment can tolerate without violating water quality standards. 40 C.F.R. § 130.24). TMDLs consist of waste load allocations (“WLAs”)” for point sources discharging into the impaired segment and load * In the instant case, Region IX, in collaboration with the Arizona Department of Environmental Quality (“ADEQ”), developed a TMDL for Pinto Creek. Generally, if a state fails to submit TMDLs for its impaired waters, the EPA may initiate the process of developing applicable TMDLs. In some cases, EPA may be obligated to develop federally created TMDLs in light of a state’s lack of action to create its own. A few federal circuit courts, including the Ninth Circuit, have found such an obliga- tion when a state “constructively submits” no TMDLs. Because this is not an issue in the instant case, we will not concern ourselves with the subtleties of the “constructive submission doctrine.” For a discussion of the doctrine see Ala. Ctr. for the Env’t v. Reilly, 762 F. Supp. 1422 (W.D. Wash. 1991); Ala. Ctr. for the Env’t v. Reilly, 796 F.Supp. 1374 (W.D. Wash. 1992), aff'd sub nom. Ala. Ctr. for the Env’t v. Browner, 20 F.3d 981 (9th Cir. 1994). " The regulations define the term “waste load allocation” as “(tlhe portion of a receiving water’s loading capacity that is allocated to one of its existing or future point sources of pollu- tion. WL.As constitute a type of water quality-based effluent limitation.” 40 C.F.R. § 130.2(h). : : App. 33 allocations (“LAs”) for nonpoint sources and natural background. Section 306 establishes additional limitations that apply only to “new sources.” CWA § 306, 33 U.S.C. § 1316. The CWA defines the term “new source” as “any source, the construction of which is commenced after the publication of proposed regula- tions prescribing a standard of performance, which will be applicable to such source,” if such standard is promulgated in accordance with CWA section 306. CWA § 306(a)(2), 33 U.S.C. § 1316(a)(2); see also 40 C.F.R. § 122.2 (regulatory definition of “new source”). EPA has promulgated such standards for a wide array of point source categories, including ore mining and the subcategory of copper, lead, zinc, gold, silver, and molybdenum ore mines applicable to Carlota’s proposed project. See 40 C.F.R. pt. 440, subpt. J. The parties here do not dispute that Carlota’s proposed open-pit copper mine would be a “new source” within the meaning of section 306(a)(2) of the CWA and 40 C.FR. § 122.2. As discussed more fully belov’, the CWA and its implementing regulations also provide that, in cer- tain circumstances, the EPA must comply with the National Environmental Policy Act (“NEPA”), 42 “ The term “load allocation” means “the portion of a receiving water's loading capacity that is attributed either to one of its existing or future nonpoint sources of pollution or to natural background sources.” 40 C.F.R. § 130.2(g). App. 34 U.S.C. §§ 4321-4370e, when issuing an NPDES permit. See CWA § 51lic)(1), 33 U.S.C. § 1371(c\(1); see also 40 C.F.R. § 122.29(c). More specifically, when the Agency issues an NPDES permit to a “new source,” as defined in CWA section 306, the Agency must comply with NEPA’s procedural requirements. See CWA § 511(c)\(1), 33 U.S.C. § 1371(c)(1); see also 40 C.F.R. § 122.29(c)(1)(). 2. The National Environmental Policy Act NEPA is an “action-forcing” statute,” intended to “promote efforts which will prevent or eliminate damage to the environment and biosphere and stimu- late the health and welfare of man” and “enrich the understanding of the ecological systems and natural resources.” NEPA § 2, 42 U.S.C. § 4321. NEPA’s requirements are procedural, in that they call upon federal agencies to examine the environmental conse- quences of possible agency actions. See In re Dos ‘* See Marsh v. Or. Natural Res. Council, 490 U.S. 360, 371 n.14 (1989) (“The term ‘action forcing’ was introduced during the Senate’s consideration of NEPA, * * * and refers to the notion that preparation of an [environmental impact statement) ensures that the environmental goals set out in NEPA are ‘infused into the ongoing programs and actions of the Federal Government,’ 115 Cong. Rec. 40416 (1969) (remarks of Sen. Jackson).”); see also Kleppe v. Sierra Club, 427 U.S. 390, 409 n.18 (1976); 40 C.F.R. § 1500.1(a) (1987) (stating that NEPA § 102(2XC) is an action-forcing provision intended to assure that all agencies consider the environmental impact of their actions in decisionmaking). App. 35 Republicas Res. Co., 6 E.A.D. 643, 647 (EAB 1996). Accordingly, NEPA does not mandate any particular substantive results. Robertson v. Metiiow Valley Citizens Council, 490 U.S. 332, 350-51 (1989). As the Court stated in Robertson: “Although these proce- dures are almost certain to affect the agency’s sub- stantive decision, it is well settled that NEPA itself does not mandate particular results, but simply prescribes the necessary process. * * * NEPA merely prohibits uninformed — rather than unwise — agency action.” Jd. By focusing the agency’s attention on the environmental consequences of possible agency action, “NEPA ensures that important effects will not be overlooked or underestimated only to be discovered after resources have been committed.” Id. at 349. NEPA’s action-forcing procedures require agencies to take a “hard look”” at environmental consequences and to broadly disseminate relevant environmental information. Jd. at 350. The environmental impact statement (“EIS”) requirement comprises the heart of NEPA. This provision mandates that federal agencies compile and consider detailed information on the environmental impact of the proposed federal action, adverse envi- ronmental effects that cannot be avoided if the pro- posal is implemented, alternatives to the proposed action, the relationship between local short-term uses of the human environment and the maintenance and '* See discussion infra Part III.C.2.b. App. 36 enhancement of long-term productivity, and any irreversible and irretrievable commitments of re- sources that would be involved in the proposed action if it is implemented. NEPA § 102(2\C)(i)-(v), 42 U.S.C. § 4332(2\C)\i)-(v); see 40 C.F.R. pts. 1502, 1508 (NEPA EIS regulations and definitions promulgated by the Council on Environmental Quality (“CEQ”), which apply to all federal agencies); 40 C.F.R. pt. 6 (EPA- specific NEPA regulations); see also In re Phelps Dodge Corp., 10 E.A.D. 460, 473 (EAB 2002). Each agency action does not necessarily require the preparation of an EIS. Under NEPA, a federal agency must prepare an EIS only when the proposed action is a “major federal action significantly affecting the quality of the human environment.” NEPA § 102(2)(C), 42 U.S.C. § 4332(2)(C) (emphasis added). B. Factual and Proce”rai Background 1. Overview Carlota has proposed to construct, operate, and reclaim an open-pit copper mine and associated "In enacting NEPA, Congress created the CEQ in the Executive Office of the President. The CEQ is a three-member body composed of persons the President appoints, with the advice and consent of the Senate. Congress envisioned that the CEQ would be “exceptionally well qualified to analyze and interpret € avironmental trends and information of all kinds * * * and to formulate and recommend national policies to promote the improvement of the quality of the environment.” NEPA § 202, 42 U.S.C. § 4342. App. 37 processing facilities on private land near the town of Miami in Gila and Pinal Counties, Arizona, and on lands the Globe Ranger District of the Tonto National Forest administers. The Tonto National Forest man- agement determined that the proposed Project poten- tially would result in significant environmental impact, and thus it required an EIS. The U.S. Forest Service served as the lead agency and prepared a final EIS (the “FEIS”). The U.S. Army Corps of Engi- neers (“ACOE”) and the Arizona Department of Environmental Quality (“ADEQ”) participated as cooperating agencies.” The U.S. EPA played a role by filing comments on the draft EIS. See FEIS App. 2 G (Letter 1). Because the Project contemplates discharg- ing pollutants into waters of the United States, that is, the Pinto Creek watershed, Carlota applied for an individual NPDES permit that would allow the discharges. 2. The Project Three water drainage systems currently exist within the Project area: Pinto Creek, Haunted Can- yon, and Powers Gulch. NPDES Permit Fact Sheet at " As explained more fully below, the Project contemplates constructing two diversion channels which, under CWA § 404, fall under the jurisdiction of the ACOE. See CWA § 404, 33 U.S.C. § 1344. The ACOE developed a supplemental environ- mental impact assessment (“ACOF’s SEA”) in January 1998 to address additional ACOE regulatory responsibilities that the FEIS did not cover. Ps a ew “ Ne be 4 App. 38 3 (Sept. 1998) (“Fact Sheet”). Powers Gulch drains into Haunted Canyon, which in turn drains into Pinto Creek north of the Project area. Pinto Creek ulti- mately drains into Roosevelt Lake. Jd. Carlota’s proposed Project would impact Pinto Creek and Powers Gulch. More specifically, Carlota contemplates creating two diversion channels that would divert surface and ground water away from the main mining pit in Pinto Creek and away from a sulfuric acid heap leach facility in Powers Gulch. The Pinto Creek diversion channel would eliminate approximately 5,300 feet of the existing Pinto Creek stream, while the Powers Gulch diversion channel would eliminate approxi- mately 7,300 feet of Powers Gulch stream. /d. at 2. Carlota has obtained a permit under section 404 of the CWA that allows and governs the creation of the two diversion channels. See Carlota Copper Project 404 Permit, Permit No. 944-0899 (Jan. 23, 1998). The proposed Project, as the Region described it in the Fact Sheet, “would consist of open pits, a solvent extraction/electrowinning (SX/EW) plant, heap leach pad, process solution ponds, waste rock disposal areas, and ancillary facilities.” Fact Sheet at 2. Carlota’s plans call for the mine pits to drain internally so that “there wil [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0092%3A01. Public record. Not legal advice.