# Petitioners Brief — Environmental Protection Agency v. Defenders of Wildlife

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0500%3A16

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petitioners Brief
- **Published:** January 1, 2007
- **Citation:** 549 U.S. 1105

## Text

a
A

Nos. 06-340 and 06-549

(3)

t-

In The
Supreme Court of the Anited States

NATIONAL ASSOCIATION OF
HOME BUILDERS, et ai.,

Vs.

Petitioners,

DEFENDERS OF WILDLIFE, et al.,

S

Respondents.

UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY,

VS.

Petitioner.

DEFENDERS OF WILDLIFE, et a/.,

°

Respondents.

On Writs Of Certiorari To The
United States Court Of Appeals
For The Ninth Circuit

o

OPENING BRIEF OF PETITIONERS NATIONAL
ASSOCIATION OF HOME BUILDERS, et al.

Sd

RUSSELL S. FRYE
Fryt LAW PLLC

3050 K Street NW, Suite 400

Washington, DC 20007-5108
(202) 527-8267

NORMAN D. JAMES

(Counsel of Record)

FENNEMORE CRAIG, P.C.

3003 North Central Avenue,
Suite 2600

Phoenix, AZ 85012-2913

(602) 916-5346

DUANE J. DESIDERIO

THOMAS J. WARD

NATIONAL ASSOCIATION OF
HOME BUILDERS

1201 15th Street. NW

Washington, DC 20005-2800

(202) 266-8200

ite kr LAW RK!
meke \bde

I

, VHRINTING, ¢ ei “iene 95 feted
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QUESTIONS PRESENTED

1. Whether a court can append additional criteria to
Section 402(b) of the Clean Water Act, 33 U.S.C. § 1342(b),
by requiring State NPDES programs to include protections
for endangered species.

2. Whether Section 7(a)(2) of the Endangered
Species Act, 16 U.S.C. § 1536(a)(2), overrides statutory
mandates or constraints imposed on an agency’s discretion
by other Acts of Congress.

3. Whether Section 7(a)(2) of the Endangered
Species Act constitutes an independent source of authority,
requiring federal agencies to take affirmative action to
benefit endangered species even when an agency’s
enabling statutes preclude such action.

4. Whether the court of appeals incorrectly applied
the holding of Department of Transp. v. Public Citizen, 541
U.S. 752 (2004), in concluding that EPA’s approval of
Arizona’s NPDES program was the legally relevant cause
of impacts to endangered species resulting from future
private land use activities.

5. Whether the court of appeals correctly held that
EPA’s decision to transfer permitting authority to Arizona
under Section 402(b) of the Clean Water Act was arbitrary
and capricious because it was based on inconsistent
interpretations of Section 7(a)(2) of the Endangered
Species Act; and, if so, whether the court of appeals should
have remanded to EPA for further proceedings without
ruling on the interpretation of Section 7(a)(2).

il
PARTIES TO THE PROCEEDING

Petitioners are National Association of Home
Builders, Southern Arizona Home Builders Association,
Home Builders Association of Central Arizona, Arizona
Chamber of Commerce, Arizona Mining Association,
Arizona Association of Industries, Greater Phoenix
Chamber of Commerce and American Forest & Paper
Association (“Home Builders”), and the U.S. Environmental
Protection Agency.

Respondents are Defenders of Wildlife, Center for
Biological Diversity and Craig Miller.

Other parties before the court of appeals were the
U.S. Fish and Wildlife Service and the State of Arizona.

iil
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ................sseesssssserereececeseerens i
PARTIES TO THE PROCEEDING ....................000ccceeees il
ee TT cic cehnclaiheiisihienineaicasiecidieninintiieuetgepnansdion 1
ITT ciiesciiisisisem laisse linet ied 1
STATUTORY AND REGULATORY PROVISIONS
a tsasiscainicecieieitdnpeencactontiinnidvidniniilaceisniidiiiniithigtonte 1
TTT TCADA eT LE 1
1. The Clean Water Act and the NPDES program.... 3
2. The States’ authority to administer the NPDES
I sicsccisvitscnsectecresenenncninnnninvnsnensiaiacnvieneds 5
3. The Endangered Species Act and the Section 7
ID ciiteictcnipncnicnessvatniientannsntiaesinti 8
4. EPA’s previous practice in approving State
ee AIR oicinsncsensnniensdinpatucsnestemeposeevens 11
5. The administrative proceedings concerning
Arizona’s NPDES program submission ............. 14
6. The court proceedings below ................:::ccceeeeeeee 20
SUMMARY OF ARGUMENT. ..................cccesseeeeeeeeees a
I ccicieccitcauiaasiahlerpantcpliieinilentisnceuibeaetiicinleciciniehauiininiulibdan 25
I. The plain language of Section 402(b) of the
Clean Water Act precludes the application of
the Endangered Species Act to EPA’s approval
of State NPDES programs ..................::0000ceeeeeees 25-
A. The criteria specified by Congress in
Section 402(b) of the Clean Water Act are
exclusive and EPA must approve State
NPDES programs meeting those criteria... 25

iv

TABLE OF CONTENTS - Continued
Page

B. The court of appeals’ holding violates the
canons of statutory construction and

results in the implied repeal of Section
402(b) of the Clean Water Act .................004 28

II. The court of appeals failed to defer to the
Services’ long-standing interpretation of
Section 7(a)(2) of the Endangered Species Act... 30

III. Section 7(aX2) of the Endangered Species Act
does not grant Federal agencies independent
authority to act for the benefit of listed species.... 35

A. The language of the Endangered Species
Act of 1973 does not support the court of
appeals’ interpretation of Section 7(a)(2)..... 35

B. TVA v. Hill does not support the court of
appeals’ interpretation of Section 7(a)(2)..... 37

C. The 1978 and 1979 amendments to the
Endangered Species Act did not expand

the scope and applicability of Section
SEINE cencideictinisaibinsbiiteniieiledentedidinaiieupenpecvenstesen 39

IV. EPA’s approval of Arizona’s NPDES program
was not the legally relevant cause of future
impacts to listed species resulting from private
PUNT iinet iceapescieiniasiebeetiiatibneibiniietliggnedniieds 42

V. Remand to EPA would not be appropriate
because EPA complied with the Clean Water
Act and the issues before the Court concern
the interpretation of statutory provisions ......... 47

EIT crsnictnsiantenpdsskineceninmnionmampeenetcntodsitiepscsseneconcs 50

Vv
TABLE OF AUTHORITIES
Page
CASES:
American Forest and Paper Ass’n v. EPA, 137 F.3d
Et Ls nnn 26, 27, 33
Arizona Cattle Growers’ Ass’n v. U.S. Fish and
Wildlife, 273 F.3d 1229 (9th Cir. 2001) 0.0... ee eeeeee 9
Arkansas v. Oklahoma, 503 U.S. 91 (1992)..........cccceceeeeee 28
Babbitt v. Sweet Home Ch. of Communities for a
Great Ore., 515 U.S. 687 (1995) ..............cseeeeceeeeerenes 31, 34
Baltimore Gas & Electric Co. v. Natural Res. Def.
Counedl, Ene. GER UD. BF (RBBB occcccvesesovecseteusesonnnnnmunn 42
Bennett v. Spear, 520 U.S. 154 (1997) .....cececcceeeeeteeeeee 2,10
Chevron U.S.A., Inc. v. Natural Res. Def. Council,
Fe, GBT UBD. SEF (RGB ED wccrvasccssscssscsccnsdnsannsannmumnaal 27, 31
Citizens for a Better Env’t v. EPA, 596 F.2d 720 (7th
Cae. BTID acccncecessccccsesesssecssniseinnesesenssenseneninninnnnanannnnnn 27
Defenders of Wildlife v. Flowers, 414 F.3d 1066 (9th
CIR, BGI) cccccccccccescsnsnnssstesoseseossonscneseneseisennennna 9,19
Department of Transp. v. Public Citizen, 541 U.S.
FORD CRO ED 0c 0cecscccsscosensoscccsessiissmnssceneonenienaaiinananal passim
EPA v. California ex rel. State Water Res. Control
BE. , BB UB. BBO (EBPED nccocscescensessccnetsscnimmmnaa 4,6, 26
Flint Ridge Dev. Co. v. Scenic Rivers Ass'n of Okla.,
GBB UB. TIS (2GGD) 00 :cesscsccsccesosesesesssssstninenssenieane 29
Florida Power & Light Co. v. Lorion, 470 U.S. 729
( BBD) ..00crccccccesencessvesncesesesosooucesconsisonsneneninenennleeainaanannn 49
Gonzalez v. Thomas, __ U.S. __, 126 S.Ct. 1613

(BOGE) . .erccscovccovorssonescesesennesosssinncnssnenceaninnieansnnnnialannnnna 49

vi

TABLE OF AUTHORITIES ~ Continued

Page
In re Operation of the Missouri River System
Litigation, 421 F.3d 618 (8th Cir. 2005)................ccc00 o3
INS v. Ventura, 537 U.S. 12 (2002)............ccccceeeeecceceeeeeeees 49
Metropolitan Edison Co. v. People Against Nuclear
Energy, 460 U.S. 766 (1983).............c.ccccceeceeseees 42,43, 44
Morton v. Mancari, 417 U.S. 535 (1974)....0.....cccccccceee 28, 29
National Ass’n of Home Builders v. Norton, 340
I rs carr tninatcccnasensnncs 19
National Cable & Telecomm. Ass’n v. Brand X
Internet Services, 545 U.S. 967 (2005) ................. 31, 34, 50
Natural Res. Def. Council, Inc. v. EPA, 859 F.2d 156
ce, nee 27, 45
Natural Res. Def. Council, Inc. v. EPA, 822 F.2d 104
EE ER eae 4, 45
Olympic Airways v. Husain, 540 U.S. 644 (2004) ............ 44
Platte River Whooping Crane Critical Habitat
Maint. Trust v. FERC, 962 F.2d 27 (D.C. Cir.
iat haiti eetercetadaetiiidinatitoentanonts oe 33
Posadas v. Nat'l City Bank, 296 U.S. 497 (1936) ............. 29
PUD No. 1 of Jefferson Cty. v. Washington Dept. of
I EE CE, WERE @ TTD inncnccdnceceseoseconsosssesssevesosecooes 6
Radzanower v. Touche Ross & Co., 426 U.S. 148
SESE ENTS RSD eer ea aa DT 28
Riverside Irr. Dist. v. Andrews, 758 F.2d 508 (10th
SEES ELE AEN AES OO 33, 46

S.D. Warren Co. v. Bd. of Envtl. Prot.,. US. _,
ER I, aan 6

TABLE OF AUTHORITIES -— Continued

Page
Save the Bay, Inc. v. Admin. of EPA, 556 F.2d 1282

SEED TUN cciiccnseiesnicisitniiialiiniiniaishldalinipdnusiidisininaiimanbieaiaiaudie 7,27
Smiley v. Citibank (South Dakota), N.A., 517 U.S.

Ware Uni Nirrisiniinsecentiinadseitunapininncensidmnnacipatansiineedpinnst 33, 50
Solid Waste Agency of N. Cook Cty. v. U.S. Army

Corps of Engineers, 531 U.S. 159 (2001)........0......... 3, 45
South Fla. Water Mgmt. Dist. v. Miccosukee Tribe of

DP I nee 4
Texas Indep. Prod. and Royalty Owners Ass’n v.

EPA, 410 F.3d 964 (7th Cir. 2005)............cccccccccsscceeesseeees 5
TVA v. Hill, 4387 U.S. 168 (1GTB).....c.cccccccoccccccssesesssees passim
Union Electric Co. v. EPA, 427 U.S. 246 (1976) ............... 26
United States v. Borden Co., 308 U.S. 188 (1939)............ 29
United States v. Fausto, 484 U.S. 439 (1988)................... 29
United States v. Mango, 199 F.3d 85 (2d Cir. 1999)......... 45
United States v. Mead Corp., 533 U.S. 218 (2001)........... 34
Waterkeeper Alliance, Inc. v. EPA, 399 F.3d 486 (2d

SEEE TEUTIE ccinsnscectcisciinentinniinenieniaidiimnniimiinsendsnabnibasuaictibimdedsii 45
Watt v. Alaska, 451 U.S. 259 (1981)...............ccccseeseeeeeeeeees 29
Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982)......... 38
STATUTES:

Clean Water Act
ee aes TE SEEN cccnccanneninnccnnenssnsemantimeadieieusiie 1
ine Oe Pita tindecntntentemnecnnstntenesiiiitniiinnn 3, App. 1

ee es © Pe ccencescsecesesessnnniel 3, 6, 25, 35, 45, App. 2

vill

TABLE OF AUTHORITIES — Continued

Page
ee ee IE inicecchucinibiieiintattiiintiiinmtindaiticinaaities 35, App. 3
EEE Seer aoe 3, App. 4
Ir an Sicha itiiiaiagiedlindaiidindeaaa 6
Se ea Ur ITED acccirserincsnsinsicnanietenntnnioniegentaieentinntegiiontens 6
ERT Sit IIIT vcscinbisiiciagebiitinitenaenirtnemtaaidibiibinaiheaatitiaateiaiibngaais 6
ey er cciecic nscniteinaisinciasscciisiaaiiaadaidibuaia 4, App. 4
Se Oe EE ciieicesesinssiusticticciensiananinnaanidniiiaan 4, App. 5
ee 29, App. 5-11
33 U.S.C. § 1342(b) (§ 402(b)) oe passim, App. 5
SB UBL. | TBEBIR IMD ....cccccccecceseccoscsccscscesessees 6, App. 6
a en Oe I isiicciitiaesilenicinstieniaieitinteabicanisatasi 14, App. 8
ES | ee 7, App. 8
es er I ciiccicicataiiicistsiiusisiaiiseaeanitiiblienecesibibadiialiiamiins 7
I 7, App. 9
33 U.S.C. § 1342(d)(2) .........ceesesseeeeeeees 7, 13, 18, App. 10
a ll
EERE SERIO Ri Mores aN IT TION 5
ENR ee ea ne MT Tee 45
gE NRE STE A ERE Re een: REE Poem 4
RENEE ea TO ERNE NOE 4
a a Ua CITT iccichcehicsisiiniisidiielehilebabiideithiainlilaies 3
EE ISO NIRS SO STR 4
I ai i 3
EER eee TTT 20

ix

TABLE OF AUTHORITIES - Continued

Page
Endangered Species Act
SO OMA. GD WUD inc insesceccsicscensetssineren 1
a ey Se UE ciccisscenuibciciapntuisiniosemenbiciiasiie 39, App. 14
Una s.t AIITITTcessiscsinnnennnsinasinsiinanatanianiintahinananetinsind desi 8
Sas iii cade alice 8
Is TU iciiccictaeiiiciatihiiiaahiaipiiaiapaigaiantaaten 8
es te dics cial 8
a ek esi cceitestesoeibieinnciicnsctlaneeneiieeaiehi 8
eis it MITT sriichscsncsincehaitieiuiaiaiiattehiainiapiaeaitah 8
PG Mn NIT 8
es Ur I isccsiscsieiceiesisnsiieiaehaihceiebiiiaciiiipicaiaiicaiai 8
CR eee 39, App. 14
16 U.S.C. § 1536(a)(2) (§ 7(a)(2))...... ce. passim, App. 14
ee es Oe SE etiiniaitihinciiiinsiocinsssiniiiabinaiaitininnanian 10, App. 15
16 U.S.C. § L536( DM SMA) ......teceeeeeeeeeees 10, App. 16
ER ed MNT mE 10, 11
I taal! 11, 41
I A icici iat etait! 9,11, 41
National Environmental! Policy Act
Is iia als 29
anaes MN RIE saiisleatibccinisieiediolaibbanialieieen citadel sultan 42
Miscellaneous
A ERS RAREST RT ee 49
I i a 1
I 26

TABLE OF AUTHORITIES - Continued

Page
SESSION LAWS AND COMMITTEE REPORTS:
Endangered Species Preservation Act of 1966, Pub.

L. No. 89-669, 80 Stat. 926 ............ssccccoscssssssssssesenreeneees 36

I eee 36

a Bas Ss THEE ctemneticienscnininsnicnnencineniianenaiasitiiiis 36
Endangered Species Act of 1973, Pub. L. No. 93-205,

es CU sicisiicecseincindeeieeibainceabsiicidabiehiniti 31, 36, 39, 41

Section 2(c), 87 Stat. 885...............ccccsssccserersees 39, App. 44

BORNE FT, BF ORE. GD cccccccecccccscccscssesesssees 39, 41, App. 45
Endangered Species Act Amendments of 1978, Pub.

SS KR 8 ee 31, 41

I a lll 41
Endangered Species Act Amendments of 1979, Pub.

Hes Bn RPE CPCI Bi csccecinsntnecensscscenssecctsennsensssen 31
Endangered Species Act Amendments of 1982, Pub.

Be es Ss EN I: SUI iiccisicenisccsiciesinsciebaioninitiaiainnanatciinnine 31
H.R. Conf. Rep. No. 92-1465 (1972) 0.0... .ceceeeseeeeeeeeeeee 25
ee Gets SE CUI bcciisctidiicinnissiisencincnininvedesienmneisiins 40
es Sa SEE PIE dicieiissnicnsiiosantnnnntninpnininntedeidenseienints 31
H.R. Conf. Rep. No. 95-1804 (1978) ......cccccscccseeseeceeceees 31, 40

H.R. Conf. Rep. No. 96-697 (1979) ...........ceeceeseetsetseeseeeeeees 41

xi

TABLE OF AUTHORITIES — Continued

Page
REGULATIONS:
40 C.F.R.
STITT TI Adeusisibtittesnbeeidiaientaiasinanntntieriadinnaniaiaasin ie iamitmaiiiiaiiniai 6
SUITS ITTIITITIET is cinsiliptininiinennihiintentintdpnenimeaennienniainiepiimdeds 5
I aid aacincanclaientteeieh itt taatenmeananid attain 4
ae a en ee 5
BN MII ccceiniinsasiinsinscntnasiiacaranennainintbiienimmmensiiaiiets 6, App. 20
Se SN AIIE ecncnnssicninpnaniininationaminccnvnsinienineaniins 6
Se eeTInnL EUUTITTUIIT iaisecncnhiecethiiesdirltiehaenibentidipaaaarsdeiniiaiinanatsieeniniual 7
nT TETTIUTIED sichicitctiitsnrssctsdesstesinetniieaiaiasiaadeibanbuniinieanedinnetinaiiasinite, 7
Section 1B3B.G1(B) .....cevrerescessescccccvescscecseces 6, 7, 14, App. 25
nn TITIIITITTNaitciccetcinitetenidicciedetiansiinimiabandieniabemaiamincmaitains 42
50 C.F.R.
SS Ura issictiscansicinnsinicinitisntinasiinniaiceuiiitaiciiiceanmnpsaniaenapeindiiiél 9, 31, 32
Ie eT er 8, 46, App. 26
I GI ccevnnccccsccccscccccccees 10, 18, 32, 43, 46, App. 28
IIIT sscissninctevnienseiinnionssntdnbeinitnanincil passim, App. 33
I i cicaichiseneiesnesiancadecebateniashietesiiniidigiidigtiiniaiitedl 10
8 ne ea ae eee eee 10, 48
an 9, 10, App. 33
I GIR IE Bh Pncerccecccecesicccnnscnnsenceessies 10, 48, App. 33
TE eT Sen rT a 16, App. 35
nN i I iiiteeincosicsitontsenesentcntanenscnsscesscins 10, App. 36
Section 402.14(g)(8)..c.ccccsecsseessesssesssesssecsseseseee 32, App. 38

Se i ictsesccnininccssncusincsienntinnictinninnes 10, App. 38

xii

TABLE OF AUTHORITIES -— Continued

Page
Section 402.14 (H)(3) 0... ceecscecesseeeeesseeeeeeseens 10, App. 38
Section 402.16 ...........ccccssscssessessecseessessseeceesseees 32, App. 42
Se ai icnteternseninsenensedensceresapeesendensersesnenseenceternasenetnnotensetes 8
BE GIT hicnntsteienccncneessniapeepevennstnensseceseneensnseneerectenees 8
SEITE TITIES sibininsennepescncntncesinsverennnssesevessconopennesesneseeseenentee 8
BE SNE wsxicinssnmnnenceenecensesetomnessscomaceteseesseensesteeusunieues 8
AGENCY RULEMAKING AND OTHER NOTICES:
Approval of Application by Florida to Administer
the NPDES Program, 60 Fed.Reg. 25,718 (May
Sse TET Niietbdeinstdirindaciibcibceiiaipitnptnniseitingesasineninenescenennsesoqnenses 12
Approval of Application by Louisiana to Administer
the NPDES Program, 61 soninind 47,932 (Sept.
Ss SI TIIIET SaehntitesicippnaicienetisinineadinaslRiedbipbeisenniienantninesebeinereseceses 12
Approval of Application by Oklahoma to Administer
the NPDES Program, 61 Fed.Reg. 65,047 (Dec.
Sa SII ienceresieteanseriesicinnenianedanadiidnndueiiendbeiabbineseeenesnsecenersseseoes 12
Approval of Application by Maine to Administer the
NPDES Program, 66 Fed.Reg. 12,791 (Feb. 28,
TT daiithctibissansliiahiedatremscnnnegnsaneinidebiantniatadiiagsienvimetenes 12, 48
Approval of Application by South Dakota to
Administer the NPDES Program, 59 Fed.Reg.
Sa I iinet teeters itiglctaates 12

Approval of Application by Texas to Administer the

NPDES Program, 63 Fed.Reg. 51,164 (Sept. 24,
Sunt bcahiisctiliddiitiansainndiciieindeeadseetionmnedniacnesmenenens 11, 12, 13, 48

Xili
TABLE OF AUTHORITIES — Continued

Final Rule to Remove the Arizona Distinct
Population Segment of the Cactus Ferruginous
Pygmy-owl From the Federal List of Endangered
and Threatened Wildlife, 71 Fed.Reg. 19,452

| RR ERS ALE RSE

Interagency Cooperation Regulations; Final Rule,

51 Fed.Reg. 19,926 (June 3, 1986)........cccessseesereres

Interagency Cooperation Regulations; Final Rule,

43 Fed.Reg. 870 (Jan. 4, 1978)...cc.cccssecsesssesseeseeescenes

Memorandum of Agreement Between EPA, FWS
and NMFS Regarding Enhanced Coordination
Under the CWA and ESA; Notice, 66 Fed.Reg.

SF PSE ily HOD sciccnssrcnnscininistscsmseiiinanijiananiness

Notice of Status Review, 70 Fed.Reg. 5,460 (Feb. 2,

IP cexcecscosenssnnvnsseusenssneinnsvensenesnesennnssananseonsenssousqusvees

TREATISE:
Norman J. Singer, 1A Sutherland Statutory

Construction § 22:13 (6th ed. 2007) ..........cccccccec seen ees

ARTICLE:

Terry Rabot, The Federal Role in Habitat
Protection, Endangered Species Bulletin 10
(Nov/Dec. 1999), available at http://www.fws.gov/

endangered/esb/99/11-12/10-11 pdf... eeeeeeeees

Page

a — ee eee lh 4

©

OPINIONS BELOW

The opinion of the court of appeals and the dissent
(Pet. App. 1-68) are reported at 420 F.3d 946. The order
denying the petitions for panel rehearing and rehearing en
banc, the dissents from the denial of rehearing, and the
concurrence (Pet. App. 134-58) are reported at 450 F.3d
394.

JURISDICTION

The court of appeals entered judgment on August 22,
2005, and denied rehearing and en banc rehearing on June
8, 2006. Home Builders timely filed their petition for a
writ of certiorari on September 6, 2006. The USS.
Environmental Protection Agency (EPA) was granted
extensions of the filing deadline, and timely filed its
petition for a writ of certiorari on October 23, 2006. The
Court granted and consolidated the petitions on January
5, 2007. The Court has jurisdiction pursuant to 28 U.S.C.
§ 1254(1).

STATUTORY AND REGULATORY
PROVISIONS INVOLVED

Relevant provisions of the Clean Water Act,
33 U.S.C. §§ 1251-1387, the Endangered Species Act,
16 U.S.C. §§ 1531-1544, and those statutes’ implementing
regulations are set out in an appendix to this brief.

STATEMENT

This case concerns the relationship between two major
environmental laws, the Clean Water Act (CWA) and the
Endangered Species Act (ESA), and the authority of the
agencies that administer those laws, EPA and the U.S.
Fish and Wildlife Service (FWS). On December 5, 2002,

EPA approved the State of Arizona’s application to
administer the National Pollutant Discharge Elimination
System (NPDES) program under Section 402(b) of the
CWA, 33 U.S.C. § 1342(b). Section 402(b) states that EPA
“shall approve each submitted [State] program” unless it
“determines that adequate authority does not exist” for the
State to administer the program in compliance with nine
specified criteria. There was and is no dispute that
Arizona’s program satisfied those criteria and EPA’s
implementing regulations.

Respondents (Defenders) instead contended that EPA
violated Section 7(a)(2) of the ESA, 16 U.S.C. § 1536(a)(2),
because EPA did not sufficiently analyze the effects of the
loss of, nor require a sufficient substitute for, consultation
with FWS when discharge permits are issued. Section
7(aX(2) requires each Federal agency to “insure that any
action authorized, funded or carried out by such agency

. is not likely to jeopardize the continued existence of
_ any endangered species or threatened species or result in
the destruction or adverse modification of [critical]
habitat” designated for such species. See, e.g., Bennett v.
Spear, 520 U.S. 154, 158 (1997) (describing the
consultation process).

A majority of the court of appeals’ panel agreed with
Defenders and vacated EPA’s approval of Arizona’s
program. The court acknowledged that EPA lacked
authority under the CWA to act for the benefit of listed
species in approving State NPDES program submissions.
Pet. App. 53. The court instead redefined and expanded
the obligations of Federal agencies under the ESA,
holding: (1) Section 7(a)(2) grants independent authority
to Federal agencies to act for the benefit of listed species;
(2) such authority overrides any conflicting mandates
imposed by Congress in other statutes; and (3) any
“authorizing action” by Federal agencies creates an

3

obligation to exercise this new-found authority. Jd. at 30-44.
Circuit Judge Kozinski, who dissented with five other
judges from the denial of rehearing, explained: “the
majority treats the ESA as superior to all other laws,
thereby nullifying a crucial ESA regulation and forcing
agencies to violate their governing statutes.” Jd. at 137.

1. The Clean Water Act and the NPDES Program

Congress enacted the CWA to “restore and maintain
the chemical, physical and biological integrity of the
Nation’s waters.” 33 U.S.C. §125l(a). Congress also
stated:

It is the policy of the Congress to recognize,
preserve, and protect the primary responsibilities
and rights of States to prevent, reduce, and
eliminate pollution, [and] to plan the development
and use ... of land and water resources... . Jt is
the policy of Congress that States ... implement
the permit programs under sections 402 and 404
of this Act.

33 U.S.C. § 1251(b) (emphasis supplied); see also Solid
Waste Agency of N. Cook Cty. v. U.S. Army Corps of
Engineers, 531 U.S. 159, 174 (2001) (SWANCC) (the
extension of jurisdiction under the CWA to isolated,
intrastate waters “would result in a_ significant
impingement of the States’ traditional and primary power
over land and water use”).

Section 301 of the CWA provides that “the discharge of
any pollutant by any person shall be unlawful” except as

authorized by one of several regulatory programs
established by the Act. 33 U.S.C. § 1311(a).' One of the

' A “discharge of a pollutant” is defined as “any addition of any
pollutant to navigable waters from any point source.” 33 U.S.C.
§ 1362/12XA); see also id. at § 1362/16). The term “pollutant” is broadly
defined to include, inter alia, solid waste, industrial, municipal and

(Continued on following page)

4

primary regulatory programs established by the CWA is
the NPDES program, under which either EPA or an
authorized State issues permits authorizing “the discharge
of any pollutant, or combination of pollutants” from point
sources. Id. at § 1342(a)(1). “Generally speaking, the
NPDES [program] requires dischargers to obtain permits
that place limits on the type and quantity of pollutants
that can be released into the Nation’s waters.” South Fla.
Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S.
95, 102 (2004) (summarizing the NPDES program); see
also EPA v. California ex rel. State Water Res. Control Bd..,
426 U.S. 200, 202-08 (1976) (describing the Federal Water
Pollution Control Act Amendments of 1972 and the
requirements imposed under the NPDES program);
Natural Res. Def. Council, Inc. v. EPA, 822 F.2d 104, 109-
11 (D.C. Cir. 1987) (NRDC I) (describing CWA water
quality standards). Regardless of whether the issuing
authority is EPA or a State, an NPDES permit must
contain the same terms, conditions and requirements. 33
U.S.C. § 1342(a)(3).

The NPDES program allows individual permits issued
on a site-specific basis to permit discharges from sources
such as industrial plants and wastewater treatment
facilities. In cases in which a large number of point source
discharges are expected to be similar in nature, EPA may
authorize such discharges under general permits, which
cover an entire category or group of discharges and
are developed by EPA through notice-and-comment
proceedings similar to rulemaking. See 40 C.F.R. § 122.28.
General permits are used extensively in permitting storm
water discharges produced by various municipal and

agricultural waste; sewage sludge; biological and radioactive materials;
and sand and cellar dirt. Jd. at § 1362(6). A “point source” is “any
discernible, confined and discrete conveyance.” /d. at § 1362(14)
Finally, the CWA defines “navigable waters” as “the waters of the
United States, including the territorial seas.” /d. at § 1362(7).

5

industrial activities, including construction projects larger
than one acre. 33 U.S.C. § 1342(p); 40 C.F.R. § 122.26; see
also Texas Indep. Prod. and Royalty Owners Ass’n v. EPA,
410 F.3d 964, 967-68 (7th Cir. 2005) (describing EPA’s
general permit system for storm water discharges).
Facilities seeking coverage under a general permit must
submit a notice of intent describing the nature of
the facility, where it is located, and why the facility
qualifies for coverage under the general permit, and
must comply with the terms and conditions of the permit.
40 C.F.R. § 122.28(b)(2); see also Texas Indep. Prod., 410
F.3d at 968-69 (discussing EPA’s current general permit
for discharges from construction sites).”

2. The States’ Authority to Administer the NPDES
Program

Under the CWA, each State has the right to
administer the NPDES program if the State’s program
satisfies the criteria in Section 402(b). Section 402(b) of
the CWA provides:

[T]he governor of each State desiring to
administer its own permit program for
discharges into the navigable waters within its
jurisdiction may submit to the Administrator [of
EPA] a full and complete description of the
program it proposes to establish and administer
under State law .... The Administrator shall
approve each such submitted program unless he
determines that adequate authority does not exist

* A large portion of the permits issued in Arizona relate to storm
water discharges from construction sites. Pet. App. 49 n.22. The
“pollutant” is typically loose soil washed from an_ unstabilized
construction site during a period of heavy rain, and the “navigable
water” is a desert wash.

6

[to administer the program in compliance with
nine specific criteria].
33 U.S.C. § 1342(b) (emphasis supplied); see also 40 C.F.R.
§§ 123.1(c), 123.61(b); EPA v. California, 426 U.S. at 208.
Indeed, Congress’ policy statement in 33 U.S.C. § 1251(b)
specifically provides that the States are to implement the
NPDES program.’

The nine criteria in Section 402(b) relate specifically
to administering the NPDES program. For example, the
State’s program must contain adequate authority for the
State to issue permits that meet minimum regulatory
requirements under the CWA; ensure that the public,
affected States and EPA receive notice of permit
applications; provide an opportunity for public comment
and a hearing on permit decisions; and provide adequate
enforcement authority, including authority to impose fines
and penalties for violations. 33 U.S.C. § 1342(b)(1)-(9); see
also 40 C.F.R. §§ 123.21-123.30 (describing the required
elements of a State’s program submission). In addition, the
State program must meet guidelines adopted by EPA
under Section 304(i), 33 U.S.C. §$1314(i), which
“establish|] the minimum procedural and other elements
of-any State program” under Section 402, including
monitoring, reporting, enforcement, funding and
manpower requirements.’

* The States have additional authorities and responsibilities under
the CWA, such as the development of water quality standards and
certifying that discharges resulting from federal licenses and permits
will not violate water quality standards. 33 U.S.C. §§ 1313ic), 1341, see
also S.D. Warren Co. v. Bd. of Envitl. Prot., —§ U.S. ___, 126 S.Ct. 1843,
1846-47 (2006); PUD No. 1 of Jefferson Cty. v. Washington Dept. of
Ecology, 511 U.S. 700, 704-08 (1994)

* EPA has promulgated regulations containing these guidelines (‘as

well as implementing Section 402(b)), which are codified at 40 C_F_R. pt
123.

7

Under CWA Section 402(c), EPA must act on a State’s
application within 90 days of submission and suspend
the issuance of Federal permits unless EPA determines
that the State permit program does not meet the
requirements of Section 402(b) or does not conform to the
Section 304(i) guidelines. 33 U.S.C. § 1342(c)(1). EPA’s
regulation governing the approval process similarly
provides that within 90 days of receiving a complete
program submission, EPA must approve or disapprove the
State’s program. 40 C.F.R. § 123.61(b).

As the foregoing discussion suggests, EPA does
not actually “transfer” or “delegate” authority to the
States. Instead, the States administer their own NPDES
programs, established under each State’s laws, subject to
EPA’s oversight authority. Following approval, the State
must comply with Section 402(b) and EPA’s Section 304(i)
guidelines. 33 U.S.C. § 1342(b). If a State fails to comply,
EPA, after public hearing, may order the State to take
corrective action or withdraw approval of its program. Jd.
at § 1342(c\3). The State also must transmit copies of
each permit application to EPA and provide notice to EPA
of every action taken concerning an application, including
each NPDES permit the State proposes to issue. Jd. at
§ 1342(d)(1); 40 C.FLR. §§ 123.43, 123.44. EPA may veto a
proposed State permit “as being outside the guidelines and
requirements” of the CWA by objecting in writing within
90 days of the date of permit’s transmittal. 33 U.S.C.
§ 1342(d)(2); see also Save the Bay, Inc. v. Admin. of EPA,
556 F.2d 1282, 1284-87 (5th Cir. 1977) (discussing the
legislative history of the Federal Water Pollution Control
Act Amendments of 1972 and the respective roles of EPA
and the States in administering the NPDES program).

8

3. The Endangered Species Act and the Section 7
Consultation Process

The ESA delegates regulatory authority to the
Secretaries of Interior and Commerce. 16 U.S.C.
§ 1532(15). The Secretaries in turn have delegated their
ESA authority so that the ESA is administered by FWS
(for the Interior Department) with respect to terrestrial
and some aquatic species, and by the National Marine
Fisheries Service (NMFS) (for the Commerce Department)
with respect to marine and certain anadromous species.
See 50 C.F.R. §§ 17.2(b), 402.01.°

Under the ESA, protected species of wildlife, fish and
plants are classified as endangered or threatened species
through a notice-and-comment rulemaking process
prescribed by Section 4 of the ESA and are placed on lists
published in the Code of Federal Regulations. 16 U.S.C.
§ 1533(a)(1) & (c); see also 16 U.S.C. § 1532(6), (16) & (20)
(definitions of “endangered species,” “species” and
“threatened species”); 50 C.F.R. pt. 424 (regulations
governing listing and critical habitat designation). A
similar rulemaking process is prescribed under Section 4
for the designation of listed species’ critical habitat. 16
U.S.C. § 1533(a3) & (c); see also 16 U.S.C. § 1532/5)
(definition of “critical habitat”); 50 C.F.R. pt. 424.°

* Home Builders wil! focus on FWS in the following discussion
because that agency was involved in the administrative and court
proceedings below. NMFS’s responsibilities under the ESA and its
implementing regulations are generally identical to those of FWS. In
discussing both agencies, Home Builders will refer to the “Services.”

* The species’ lists are found at 50 C.F R. §§ 17.11 ‘wildlife and
fish) and 17.12 (plants). The statutory process is commonly called
“listing,” and endangered and threatened species are often called “listed
species.” This terminology will be used in Home Builders’ brief.

9

: Section 7(a)(2) of the ESA, 16 U.S.C. § 1536(a)(2),

requires each Federal agency, “in consultation with and
with the assistance of the Secretary,” to ensure that “any
action authorized, funded or carried out” by that agency
“is not likely to jeopardize the continued existence of any
endangered species or threatened species or result in the
destruction or adverse modification of habitat” designated
as critical. The Services’ joint regulations implementing
Section 7, codified at 50 C.F.R. pt. 402, provide that
Section 7 applies “to all actions in which there is
discretionary Federal involvement or control.” 50 C.F.R.
§ 402.03. Thus, discretionary Federal actions are
prohibited if they would jeopardize the existence of a listed
species or destroy or adversely modify designated critical
habitat, unless an exemption is granted under Section
7(h), 16 U.S.C. § 1536(h).’

The process by which Federal agencies satisfy their
obligation to avoid jeopardy is referred to as Section 7
“consultation.” A Federal agency must initially determine
whether its proposed action “may affect” listed species or
critical habitat. See 50 C.F.R. § 402.14(a). If the action will
not affect any listed species or critical habitat, the agency
may proceed without consultation. See Defenders of
Wildlife v. Flowers, 414 F.3d 1066, 1069-70 (9th Cir. 2005)
(affirming “no effect” determinations made by the Army
Corps of Engineers).

If the Federal agency believes that its proposed action
is not likely to adversely affect the listed species or
designated critical habitat, the agency may request that
FWS concur with its evaluation. If FWS concurs, no
additional consultation is required, and no biological

" This prohibition applies only to species’ habitat that has been
formally designated as “critical” under Section 4 of the ESA. See
Arizona Cattle Growers’ Ass'n v. U.S. Fish and Wildlife, 273 F.3d 1229,
1244 (9th Cir. 2001).

10

opinion is prepared. This is known as_ informal
consultation. See 50 C.F.R. §§ 402.13, 402.14(b)(1). If the
proposed Federal action is likely to adversely affect listed
species or designated critical habitat, however, formal
consultation is required, during which a more thorough
evaluation of the proposed action is undertaken. Jd. at
§§ 402.12(k), 402.14(a).*

Following the completion of formal consultation, FWS
provides a biological opinion to the Federal agency. 16
U.S.C. § 1536(b); 50 C.F.R. § 402.14(g) & (h). A biological
opinion “alters the legal regime to which the action agency
is subject,” and exposes the agency (as well as any permit
or license applicant) to potential liability. Bennett, 520
U.S. at 169-70. If a “jeopardy” biological opinion is
proposed, FWS will recommend reasonable and prudent
alternatives to the proposed action. 16 U.S.C.
§ 1536(b)(3)(A); 50 C.F.R. § 402.14(h)(3). To be “reasonable
and prudent,” an alternative must be consistent with the
intended purpose of the action, within the Federal
agency’s legal authority and jurisdiction, and economically
and technologically feasible. 50 C.F.R. § 402.02. When a
“jeopardy” biological opinion is issued, the action agency
can either implement FWS’s reasonable and prudent
alternatives (thereby avoiding jeopardy), terminate the
proposed action altogether, or seek an exemption from the
Endangered Species Committee allowing the proposed
action to proceed.”

* Most consultations are concluded informally. During fiscal year
1999, for example, FWS informally consulted on about 12,000 actions,
while conducting 83 formal! consultations and issuing one “jeopardy”
opinion. Terry Rabot, The Federal Role in Habitat Protection,
Endangered Species Bulletin 10, 11 (Nov./Dec. 1999), available at http://
www. fws.gov/endangered/esb/99/11-12/10-11.pdf (visited Feb. 7, 2007).

* The Endangered Species Committee is chaired by the Secretary
of the Interior, and includes cabinet-level officials and a presidential
appointee representing each State affected by the application. 16 U.S.C.

(Continued on following page)

11

4. EPA’s Previous Practice in Approving State
NPDES Programs

Since the ESA was enacted in 1973, EPA has rarely
consulted with the Services in approving State NPDES
program submissions. Prior to Arizona’s NPDES program
submission in 2002, EPA consulted with the Services on
only six occasions, beginning with the approval of South
Dakota’s application in 1993. Pet. App. 7 n.3. In contrast,
EPA did not consult in approving programs for 39 other
states. Ibid. Moreover, a number of those States have
received multiple program approvals, resulting in more
than 100 opportunities to consult under Section 7(a)(2).
See Approval of Application by Texas to Administer the
NPDES Program, 63 Fed.Reg. 51,164, 51,200 (Sept. 24,
1998) (table listing State NPDES program status)."”

On the occasions when it consulted with the Services,
EPA did not acknowledge it was legally obligated to do so
or that Section 7(a)(2) applied to State NPDES program
approvals. For example, in its notice approving
Oklahoma’s program, EPA explained:

While it may not be clear that the section 7
consultation is specifically required for a program
authorization, ESA and its implementing
regulations do not restrict any agency from

§ 1536(e).. Following a threshold investigation and a hearing, the
committee may grant the exemption if it determines that there are no
reasonable and prudent alternatives available, the benefits of action
outweigh the benefits of alternative courses and are consistent with
conserving the species or its critical habitat; and the action is in the
public interest and is of regional or national importance. /d. at
§ 1536(g) & (h).

* As shown in the table, multiple approvals are the result of States
seeking approval to administer different portions of the NPDES
program at different times. See 33 U.S.C. § 1342(n). The total number
of State program approvals prior to 1993 is 114.

12

voluntarily consulting and conferring with [FWS]
on actions it believes may affect listed species.

Approval of Application by Oklahoma to Administer the
NPDES Program, 61 Fed.Reg. 65,047, 65,051 (Dec. 10,
1996). More recently, in connection with approving Texas’
NPDES program, EPA explained that “even if [it] was not
required by law to consult with the Services, EPA believes
it was within its discretion to do so.” Approval of
Application by Texas, 63 Fed.Reg. at 51,198. As the
foregoing statements suggest, EPA did not have a formal
policy on the applicability of Section 7(a)(2) to State
program approvals prior to acting on Arizona’s NPDES
program submission.

Moreover, formal consultation between EPA and the
Services, resulting in a biological opinion, occurred only
two times before this case." In both instances, the scope of
the consultation was limited to aquatic species, i.e., species
affected by surface water quality. In the case of Maine’s
NPDES program, EPA consulted on two listed species:
with NMFS on the effect of salmon fish farms and
hatcheries on listed, wild Atlantic salmon, and with FWS
on the effect of NPDES permits for six paper mills on bald
eagles. Approval of Application by Maine to Administer the
NPDES Program, 66 Fed.Reg. 12,791, 12,793-94 (Feb. 28,
2001). In the case of Texas’ NPDES program, the

" The consultations on the South Dakota, Florida, Louisiana and
Oklahoma NPDES programs were informal, i.e., the Services concurred
with EPA’s “not likely to adversely affect” determination, and no
biological opinions were prepared. See Approval of Application by South
Dakota to Administer the NPDES Program, 59 Fed.Reg. 1,535, 1,543
(Jan. 11, 1994); Approval of Application by Florida to Administer the
NPDES Program, 60 Fed.Reg. 25,718, 25,719 (May 12, 1995); Approval
of Application by Louisiana to Administer the NPDES Program, 61
Fed.Reg. 47,932, 47,934 (Sept. 11, 1996); Approval of Application by
Oklahoma, 61 Fed.Reg. at 65,053

13

consultation also was limited to species affected by
the enforcement of surface water quality standards.
Approval of Application by Texas, 63 Fed.Reg. at 51,201.
EPA explained that no “obligations, procedural or
otherwise,” were imposed on Texas to protect listed
species: “The State’s only obligation is to issue permits
that comply with the procedural and _ substantive
requirements of the CWA and the State program approved
by EPA.” Jd. at 51,198.

In January 201, the Services and EPA entered into a
memorandum of agreement to improve interagency
coordination under the CWA and the ESA. Memorandum
of Agreement Between EPA, FWS and NMFS Regarding
Enhanced Coordination Under the CWA and ESA; Notice,
66 Fed.Reg. 11,202 (Feb. 22, 2001) (Pet. App. 245-317)
(the National MOA). The operative portion of the National
MOA, however, does not address whether Section 7(a)(2)
applies to State NPDES program approvals. See Pet.
App. 268-317. The Federal Register preamble (not the
National MOA itself) states only that EPA’s current
practice is to consult with the Services, that such
consultations are conducted on a case-by-case basis, and
that the National MOA does not place any conditions
on approval of State NPDES programs. Id. at 260, 266.
Instead, the National MOA emphasizes that “EPA's
oversight of State/Tribal permits will continue to be
governed by EPA’s CWA authorities. For example,
EPA may only object to a permit that is ‘outside
the guidelines and requirements’ of the CWA ....” Id.
at 265 (quoting 33 U.S.C. § 1342(d)(2)); see also id. at
308-12 (coordination procedures for State and Tribal
permits).

14

5. The Administrative Proceedings Concerning
Arizona’s NPDES Program Submission

On December 20, 2001, the Governor of Arizona
requested NPDES program approval pursuant to Section
402(b). Id. at 546-47; see also id. at 80-82 (timeline of
events). EPA’s regional office in San Francisco (Region 9),
which is responsible for the administration of the CWA in
Arizona, received the State’s submission package on
January 14, 2002, but determined that Arizona’s
submission did not meet certain requirements. J.A. 10-26;
Pet. App. 547. On June 5, 2002, the Governor of Arizona
requested partial program approval, and a _ revised
program was submitted to EPA. Pet. App. 547. On July 11,
2002, EPA declared that Arizona’s program submission
was administratively complete. J.A. 34; Pet. App. 547. EPA
was required to approve or disapprove Arizona’s program
by October 8, 2002. J.A. 327; see also 33 U.S.C. § 1342(c)
(deadline for acting on State program submissions); 40
C.F.R. § 123.61(b) (same).

On January 23, 2002, EPA contacted FWS’s Arizona
field office and requested initiation of informal
consultation regarding approval of Arizona’s NPDES
program. J.A. 7-10. EPA indicated the permitting activities
that Arizona’s program would cover, and requested a list of
species and critical habitat that those activities would
affect. Jbid. Informal consultation between the agencies
apparently continued into June 2002. See Pet. App. 80,
597.

EPA subsequently prepared a biological evaluation of
the impacts of approving Armzona’s program, and
concluded such action would not adversely affect any listed
species or their c.itical habitat. Jd. at 583-623. EPA
submitted the final evaluation to FWS on June 21, 2002.
Id. at 581. In its biological evaluation, EPA concluded that
no adverse effects would occur and fermal consultation
was unnecessary:

15

The Federal action is an administrative shift of
authority and is not associated with any physical
action that will alter habitat or affect biota. The
substantive CWA protections currently afforded
to Federally-listed species and critical habitat
under the NPDES program will continue under
the [State] permit program. USEPA oversight of
the [State] program, including coordination
pursuant to the National MOA, will provide
added assurance of this continued protection. ...
Therefore, the USEPA concludes that its
proposed approval of the [State] program is not
likely to adversely affect any Federally-listed
species or their designated critical habitat.

Id. at 617-18 (emphasis supplied).

A dispute immediately developed between EPA Region
9 and FWS’s Arizona field office in Phoenix. FWS field
office employees complained that approval of Arizona’s
NPDES program would allow “unchecked” real estate
development to occur, reducing the conservation status of
the cactus ferruginous pygmy-owl, and two plant species,
the Pima pineapple cactus and Huachuca water umbel.
J.A. 46. The FWS employees disagreed with EPA's
determination that approval of Arizona’s program was
merely an administrative shift in authority, asserting
instead that private construction is an “indirect effect” of
NPDES permits and objecting to EPA’s refusal to
“federalize” State permits “where the activity causing the
discharge adversely affects an upland species” or may
cause “decreases in water quantity.” Jd. at 45-46.

On August 20, 2002, the acting supervisor of FWS’s
Arizona field office acknowledged his agency’s receipt of
EPA's biological evaluation and request to initiate formal
consultation, but requested additional information. J.A.

16

55-57. He also informed EPA that the 135-day period for
consulting (see 50 C.F.R. § 402.14(e)) would not begin until
EPA provided this information. Jd. at 56-57. EPA
immediately responded and pointed out that the
information had been provided in EPA’s June 21, 2002
submission. J.A. 59-63.

On September 13, 2002, a meeting took place between
representatives of EPA, FWS and the Arizona Department
of Environmental Quality (ADEQ) to address the
interagency dispute. See J.A. 120. FWS was uncertain
whether formal consultation had been initiated. Jbid. FWS
maintained that the consultation should cover impacts to
upland (terrestrial) species caused by private land uses
and impacts to water quantity resulting from groundwater
pumping. EPA, in contrast, maintained that it lacked
authority to regulate those activities:

We then discussed our concerns with aquatic and
aquatic-dependent species. We all agreed that
the process defined in the [National] MOA would
address aquatic concerns, but we ([FWS]
expressed concerns about issues of water
quantity .... EPA stated that effects from
pumping groundwater to provide water to
housing developments is out of their jurisdiction
and they have no discretion to modify or
condition permits for this type of effect.

At this point, EPA voiced their opinion on
indirect effects from their action. They believe
there are no indirect effects associated with the
delegation [sic] because it is simply an
administrative action. We disagree with their
interpretation ane told them that we have to
evaluate all the effects (direct, indirect,
interrelated and interdependent) regardless of
whether they could do anything about those
effects.

Id. at 121 (emphasis supplied).

17

At this point, the agencies decided to elevate their
dispute to their respective Washington headquarters for
resolution. Jd. at 123. In the October 4, 2002 interagency
elevation document, FWS’s position was summarized as
follows:

FWS is concerned that, following EPA Region 9’s
approval action, endangered species, in
particular, the cactus ferruginous pygmy-owl, the
Pima pineapple cactus, and perhaps other
species, will be adversely impacted in the future
by projects that will require State NPDES
permits issued by the State of Arizona. The
FWS’s concerns involve the indirect effects of
permit issuance from non-water-quality-related
impacts from these. projects, such as
construction, water usage, and similar activities
that affect individuals of the species either
directly or through disturbance of their habitat.
The concerns do not involve water quality issues
related to the discharges thai will be regulated
under the State NPDES permits.

... FWS maintains that EPA needs to ensure
that a consultation process, or alternative
process similar to that which exists, remains in
place following the approval of the State program
to address effects to listed species.

Pet. App. 562-63 (emphasis supplied). EPA, in contiast,
continued to stress its limited authority and the
administrative nature of approving Arizona’s NPDES
program:

EPA Region 9 believes that it does not
have legal authority to regulate’ the
non-water-quality-related impacts associated
with State NPDES-permitted projects that are
of concern to FWS....

18

EPA Region 9 also believes that its approval action,
which is an administrative transfer of authority, is
not the cause of future non-discharge-related
impacts on endangered species from projects
requiring State NPDES permits.

Id. at 564.

The agencies’ headquarters resolved the dispute. On
December 3, 2002, FWS issued its biological opinion,
concluding that EPA’s approval of Arizona’s NPDES
program is not likely to jeopardize listed species or
adversely modify designated critical habitat. Jd. at 77-124.
FWS acknowledged EPA’s jurisdiction under the CWA,
stating that the scope of the consultation was limited to
listed species and critical habitat “in, adjacent to, or
dependent on surface waters in Arizona.” Id. at 77;
see also id. at 108. FWS explained that the proposed
action constituted an administrative shift in authority and
would not cause increases in requests for CWA permits or
real estate development. Jd. at 113-14. FWS also accepted
EPA’s~ description of its regulatory authority under
the CWA, including EPA’s inability to object to NPDES
permits “based on grounds other than guidelines and
requirements of the CWA.” Jd. at 114; see also 33
U.S.C. § 1342(d)\(2). Finally, FWS concluded that the
environmental impacts of future real estate development
in Arizona are speculative, and cannot be considered
reasonably certain to occur. Pet. App. 114-15; see also
50 C.F-.R. § 402.02 (definition of “effects of the action”).

On December 5, 2002, EPA approved Arizona’s
program. J.A. 190-91; Pet. App. 69-76. Approval occurred
nearly two months after the deadline for acting on State
program submissions had passed. Since EPA’s approval
decision, ADEQ has been administering and enforcing the
NPDES program (known as the AZPDES program) in all
nortions of Arizona other than Native American land.

-

19

As both the interagency elevation document and
biological opinion indicate, the two principal species of
concern during the consultation were the cactus
ferruginous pygmy-owl and the Pima pineapple cactus.
See, e.g., Pet. App. 115, 562. The pygmy-owl is an upland
species, and its habitat is not dependent on surface water
quality. See National Ass’n of Home Builders v. Norton,
340 F.3d 835, 838 (9th Cir. 2003). FWS has removed the
Arizona pygmy-ow! population from the list of endangered
and threatened species because the population does
not qualify -s a “distinct population segment” and is
therefore not eligible for listing. Final Rule to Remove the
Arizona Distinct Population Segment of the Cactus
Ferruginous _Pygmy-owl From the Federal List of
Endangered and Threatened Wildlife, 71 Fed.Reg. 19,452
(April 14, 2006); see also Defenders of Wildlife v. Flowers,
414 F.3d at 1070-71 & n.1; National Ass’n of Home
Builders, 340 F.3d at 852. The Pima pineapple cactus is a
species of desert cactus found in southern Arizona and
northern Sonora, and is not associated with wetlands or
watercourses.” The listing status of this cactus is
currently being reviewed to determine whether it is a valid
taxonomic entity. See Notice of Status Review, 70 Fed.Reg.
5,460, 5,461-62 (Feb. 2, 2005)."”

‘See FWS background documents available at http://www. fws.
gov/southwest/es/anizona/pima. htm (visited Feb. 6, 2007).

'* Several other listed species are mentioned in the administrative
record, including fish and other aquatic species. For example, the
Huachuca water umbel, a wetland plant species, was discussed in the
FWS field employees internal briefing statement. See J.A. 49. However,
FWC’s concerns related to water use in the Sierra Vista area rather
than discharges of pollutants impaimng the species’ habitat. /did.,
see also J.A. 121. The record makes clear that EPA and FWS agreed
that approval of Arizona’s program would have no adverse, water
quality-related impacts on those species. See, e.g, Pet. App. 562-63.

20

6. The Court Proceedings Below

On April 2, 2003, Defenders filed a petition with the
court of appeals seeking review of EPA’s approval of
Arizona’s program. See 33 U.S.C. § 1369(b)(1)(D)
(providing for review in the circuit courts of EPA’s
determinations regarding State permitting programs); J.A.
257-69. Defenders never contended that Arizona’s
application or the AZPDES program failed to meet the
nine criteria set forth in CWA Section 402(b). Instead,
Defenders alleged that EPA violated Section 7(a)(2) of the
ESA in approving Arizona’s program. J.A. 258-61; Pet.
App. 13. Home Builders, which consist of industry and
trade associations representing the interests of Arizona
businesses required to obtain NPDES permits, were
granted permission to intervene as respondents. Pet. App.
13; see also J.A. 270-311.

Defenders also filed an amended complaint in a
pending action in district court challenging FWS’s
biological opinion under the Administrative Procedure Act.
Pet. App. 13. The district court determined that it lacked
jurisdiction to decide Defenders’ challenge to the FWS’s
biological opinion, and ordered that the claim be severed
and transferred to the Ninth Circuit. Jbid; see also J.A.
312-20. The court of appeals consolidated the cases and
issued its opinion on August 22, 2005.

A majority of the court of appeals’ panel held that
FWS’s biological opinion was “fatally deficient” and that
EPA “failled) to understand its own authority under
section 7(a)(2) to act on behalf of listed species and their
habitat.” Pet. App. 47-48, 60. The court acknowledged that
CWA Section 402(b) foreclosed EPA's discretion to act for
the benefit of listed species. Jd. at 53. The court held
instead that ESA Section 7(a\2) grants independent
authority to federal agencies to act for the benefit of listed

21

species, that such authority overrides any constraints
imposed by Congress in the CWA, and that any
“authorizing action” creates an obligation to exercise this
authority. Jd. at 38-39, 53.

To support this holding, the court focused on the
phrase “insure that any action ... is not likely to
jeopardize” in Section 7(a)(2), concluding Congress
intended this phrase to grant Federal agencies authority
to act affirmatively to benefit listed species, rather than
prohibiting actions that jeopardize species. /d.
at 30-38. The majority also determined that whenever
a Federal agency authorizes, funds or carries out an
action, Section 7(a)(2) applies: “the EPA had exclusive
decisionmaking authority over Arizona's _ pollution
permitting transfer application. The EPA’s decision
authorized the transfer, thus triggering section 7(a)(2)’s
consultation and action requirements.” /d. at 43-44
(emphasis supplied).

The court concluded that EPA needed to address
“whatever harm may flow from the loss of section
7 consultation” (id. at 47), notwithstanding EPA’s
non-discretionary obligation to approve Arizona’s
NPDES program under CWA Section 402(b). In the court’s
view, EPA could not approve Arizona’s program, even
if that program satisfied CWA Section 402(b), unless
EPA found “sufficient substitutes for section 7's
consultation and mitigation mandates.” /d. at 52. As the
remedy, the court vacated EPA’s approval of Arizona’s
program, relying primarily on future adverse impacts on
the cactus ferruginous pygmy-owl. /d. at 61-63.

Senior Circuit Judge Thompson dissented, stating
that “EPA did not have discretion to deny transfer of the
pollution permitting program to the State of Arizona;
therefore its decision was not ‘agency action’ within the
meaning of Section 7 of the |ESA).” /d. at 66. Judge

22

Thompson explained that prior Ninth Circuit opinions
recognized, in accordance with 50 C.F.R. § 402.03, that
Section 7(a)(2) applies only to actions in which an agency
has discretion to act for the benefit of listed species. Jd.
at 64-66 (citing numerous opinions). The dissent also
pointed out that the majority’s interpretation was in direct
conflict with other circuits’ interpretation of CWA 402(b),
which have held that EPA’s obligation in reviewing
a State’s program submittal under CWA Section 402(b)
is limited to evaluating the statute’s nine criteria. /d.
at 66-67.

Home Builders, EPA and FWS, and the State of
Arizona filed petitions seeking rehearing en banc based on
the intra-circuit and inter-circuit conflicts created by the
majority's opinion. On June 8, 2006, the court of appeals
issued its order denying both panel and en banc rehearing.
Id. at 134-58. Six circuit judges dissented from the denial
of rehearing on multiple grounds. /d. at 135-49. Circuit
Judge Kozinski stated, for example, “the majority
tramples all over the [FWS’s] reasonable interpretation of
the ESA, deliberately creates a square inter-circuit conflict
with the Fifth and D.C. Circuits, and ignores at least six
prior opinions of our own court.” Jd. at 135-36.

SUMMARY OF ARGUMENT

No dispute exists that: (1) Arizona’s NPDES program
submission satisfied the nine requirements specified by
Congress in Section 402(b) of the CWA as well as EPA's
implementing regulations; and (2) the plain language of
Section 402(b) forecloses EPA’s discretion to act for the
benefit of listed species in approving a State’s program.
Nonetheless, the court of appeals held that the ESA
overrides the Congressicnal mandates set forth in the
CWA. That holding is erroneous for several reasons:

23

(1) The court of appeals ignored the plain language
of CWA Section 402(b), which states that EPA “shall
approve” a State’s NPDES program “unless” one or more of
nine specified criteria are not met. Congress’ “shall/unless”
phrasing was deliberate and precludes the consideration of
other criteria, including impacts to listed species. The
court treated ESA Section 7(a)(2) — a statute of general
applicability — as implicitly repealing Congress’ mandatory
direction in the CWA, upsetting the Federal-State balance
struck by the CWA. |

(2) The court of appeals improperly disregarded
the Services’ regulation, 50 C.F.R. § 402.03, limiting
the applicability of Section 7(a)(2) to actions in which
there is discretionary Federal involvement or control.
The Services’ regulation was adopted in 1986 following
notice-and-comment rulemaking, and has been in effect for
over 20 years. Section 7(a)(2) is ambiguous, as shown by
the conflict between the Ninth Circuit and other circuits,
and the Services’ interpretation is reasonable, as shown by
those circuits’ decisions interpreting Section 7(a)(2)’s
application. Nevertheless, the court gave no deference to
50 C.F.R. § 402.03, and improperly substituted its view of
how Section 7(a)(2) should apply.

(3) Rather than following the plain language of CWA
402(b) or deferring to the Services’ long-standing
interpretation of Section 7(a\(2), the court of appeals
erroneously interpreted Section 7(a\(2) as granting
authority to Federal agencies that must be exercised
whenever an agency authorizes, funds or carries out an
activity. To support this holding, the court incorrectly
applied 7VA v. Hill, 437 U.S. 153 (1978), ignoring that
case’s factual context and the narrow questions presented
to this Court. TVA v. Hill involved a discretionary public
works project carried out by a Federal instrumentality,
and there was no dispute that completion of the project
would eradicate a listed species and destroy its designated

24

critical habitat. The court also incorrectly construed the
ESA's legislative history, ignoring Congress’ stated policy
in ESA Section 2(c)(1) that agencies are to “use their
authorities in furtherance of” the Act.

(4) In determining the effects of EPA’s action, the
court of appeals facially adopted but failed to follow
Department of Transp. v. Public Citizen, 541 U.S. 752
(2004), which held that a Federal agency cannot be
considered the legally relevant cause of an environmental
effect that it lacks authority to control. The court
concluded that EPA’s approval of Arizona’s NPDES
program was the “but for” cause of impacts to listed
species resulting from future private land use activities.
That conclusion was based on the court’s erroneous belief
that EPA, when issuing an NPDES permit, has-authority
to regulate how private land is used, which conflicts with
the CWA’s basic framework and EPA’s jurisdiction under
CWA Section 402, which gives EPA authority to regulate
and control discharges of pollutants - not real estate
cevelopment.

(5) The record shows that EPA consistently
maintained that its authority under the CWA is limited
and that EPA complied with that Act in approving
Arizona’s NPDES program. Because the questions before
the Court involve the interpretation of Federal statutes
and their implementing regulations, remand to the EPA
would add nothing to the record, particularly given that
EPA and the Services now have adopted a formal policy
governing approval of State NPDES programs.

25

ARGUMENT

I. THE PLAIN LANGUAGE OF SECTION 402(b)
OF THE CLEAN WATER ACT PRECLUDES
THE APPLICATION OF THE ENDANGERED
SPECIES ACT TO EPA’S APPROVAL OF STATE
NPDES PROGRAMS.

A. The Criteria Specified by Congress in
Section 402(b) of the Clean Water Act Are
Exclusive and EPA Must Approve State
NPDES Programs Meeting Those Criteria.

The plain language of CWA Section 402(b) requires
EPA to approve State NPDES programs if nine specific
criteria are met. None of those criteria mentions protection
of listed species or the ESA. As Judge Kleinfeld explained,
in dissenting from denial of rehearing, this case should
have been simple: “(Section 402(b)| is mandatory. Congress
commands that the agency ‘shall approve’ state programs
‘unless’ one or more of nine conditions are not met. The
‘shall/unless’ formula makes the nine condition list
exclusive, and courts cannot add conditions to the list.”
Pet. App. 149. The mandatory nature of Section 402(b) is
supported by Congress’ express policy “to recognize,
preserve, and protect the primary responsibilities and
rights of States to prevent, reduce, and eliminate
pollution” and, moreover, “that the States manage” the
NPDES program. 33 U.S.C. § 1251(b).

In addition, the legislative history shows that
Congress deliberately chose the mandatory “shall/unless”
phrasing found in Section 402(b)(2). The bills originally
enacted by each house contained different language, with
the ‘Senate’s bill allowing, but not requiring, FPA

~~ to approve State programs. Compare H.R. Conf. Rep. No.
92-1465, at 138 (1972) (“jujnder section 402, the
Administrator can delegate permit authority to a State if
the State program is adequate”; describing Senate Bill

26

2770 (1972) (emphasis supplied)) with id. at 139 (“the
Administrator is required to approve a submitted State
program unless he finds that there is not adequate
authority ... ”; describing House Bill 11896 (1972)
(emphasis supplied)). The Conference Committee
substituted the House of Representatives’ amendment,
resulting in Section 402(b)’s mandatory direction. Id. at
139; see also EPA v. California, 426 U.S. at 208.

This Court interpreted similar statutory language in
Union Electric Co. v. EPA, 427 U.S. 246 (1976), holding
that “shall” means “shall.” There, the Court considered
EPA's obligation to approve state implementation plans
under Section 110(a)(2) of the Clean Air Act, 42 U.S.C.
§ 7410(a)(2):

The provision sets out eight statutory criteria
that [a State’s}) implementation plan must
satisfy, and provides that if these criteria are met
and if the plan was adopted after reasonable
notice and hearing, the Administrator “shall
approve” the proposed state plan. The mandatory
“shall” makes it quite clear that’ the
Administrator is not to be concerned with factors
other than those specified, ... and none of the
eight factors appears to permit consideration of
technological or economic infeasibility.

Union Electric, 427 U.S. at 257 (citation omitted; emphasis
supplied).

In American Forest and Paper Ass’n v. EPA, 137 F.3d
291, 297-99 (Sth Cir. 1998) (AFPA), the Fifth Circuit
squarely addressed the mandatory nature of CWA Section
402(b) in connection with a challenge to EPA's approval of
Louisiana’s NPDES permitting program. As a condition of
approval, EPA required Louisiana to submit proposed
permits to the Services, which EPA would veto if either
FWS or NMFS determined that the permit would
adversely impact listed species. AFPA, 137 F.3d at
293-94. The Fifth Circuit held EPA lacked authority under

27

the CWA to impose conditions to benefit listed species,
explaining:

[Section 402(b)’s] plain language directs EPA to
approve proposed state programs that meet the
enumerated criteria; particularly in light of the
command “shall approve,” § 304(i) cannot be
construed to allow EPA to expand the list of
permitting requirements. Applying Chevron, we
conclude that Congress has spoken directly to the
precise question at issue: EPA’s discretion lies
not in modifying the list of enumerated criteria,
but simply in ensuring that those criteria are
met.

Id. at 298 (following Chevron U.S.A., Inc. v. Natural Res.
Def. Council, Inc., 467 U.S. 837, 842-43 (1984)) (emphasis
in original); see also Natural Res. Def. Council, Inc. v. EPA,
859 F.2d 156, 173-74 (D.C. Cir. 1988) (NRDC II) (Section
402(b) “commands” EPA to “approve the state permit
system” once the statutory requirements are met); Citizens
for a Better Env’t v. EPA, 596 F.2d 720, 722 (7th Cir. 1979)
(“If the state program satisfies the statutory requirements
of section 402(b) ... [EPA] must approve the program.”);
Save the Bay, 556 F.2d at 1285 (“Unless the Administrator
of EPA determines that the proposed state program does
not meet these requirements, he must approve the
proposal.”).

In this case, the court of appeals recognized that “the
Clean Water Act does not grant the EPA authority to make
pollution permitting transfer decisions for the benefit of all
endangered species.” Pet. App. 53. As a matter of statutory
construction, that conclusion should have been controlling.
Chevron, 467 U.S. at 842-43 (“If the intent of Congress is
clear, that is the end of the matter; for the court, as well as
the agency, must give effect to the unambiguously
expressed intent of Congress.”).

28

B. The Court of Appeals’ Holding Violates the
Canons of Statutory Construction and
Results in the Implied Repeal of Section
402(b) of the Clean Water Act.

Instead of following the plain language of CWA
Section 402(b), the court of appeals concluded that EPA
must address “whatever harm may flow from the loss of
section 7 consultation” (Pet. App. 47), and cannot approve
Arizona’s program without “sufficient substitutes for
section 7’s consultation and mitigation mandates” (id. at
52). The court therefore added a tenth criterion to CWA
Section 402(b), effectively holding that States must adopt
and enforce their own version of the ESA to obtain
authority to administer the NPDES program. In so
hoiding, the court violated two cardinal rules of statutory
construction: (1) specific statutes are not controlled by
general statutes; and (2) repeals by implication are
strongly disfavored.

“It is a basic principle of statutory construction that a
statute dealing with a narrow, precise, and specific subject
is not submerged by a later enacted statute covering a
more generalized spectrum.” Radzanower v. Touche Ross
& Co., 426 U.S. 148, 153 (1976); see also Morton v.
Mancari, 417 U.S. 535, 550-51 (1974) (“Where there is no
clear intention otherwise, a specific statute will not be
controlled or nullified by a general one, regardless of the
priority of enactment.”).

In the CWA, “Congress struck a careful balance
among competing policies and interests,” and “protected
certain sovereign interests of the States.” Arkansas v.
Oklahoma, 503 U.S. 91, 106-07 (1992). Congress did so, in
part, through Section 402, which not only created the
NPDES program, but requires EPA to approve State
NPDES programs satisfying detailed criteria, imposes a
strict deadline for State program approval, and establishes

29

specific post-approval oversight requirements. 33 U.S.C.
§ 1342(b)-(f). By contrast, the ESA addresses the general
objective of protecting listed species and habitat critical to
their survival. There is ne evidence that Congress
intended to upset the Federal-State balance struck in the
CWA or modify the detailed program criteria, the deadline
for EPA decisions and other specific requirements imposed
under CWA Section 402 when it enacted the ESA. See
Flint Ridge Dev. Co. v. Scenic Rivers Ass’n of Okla., 426
U.S. 776, 788-91 (1976) (reversing the court of appeals’
determination that the National Environmental Policy Act
(NEPA), 42 U.S.C. §§ 4321-4370f, applies to approval of
registration statements under the Interstate Land Sales
Disclosure Act).

Moreover, “repeals by implication are not favored.”
Morton, 417 U.S. at 549-550 (quoting Posadas v. Nat'l City
Bank, 296 U.S. 497, 503 (1936)); see also Norman J.
Singer, 1A Sutherland Statutory Construction § 22:13 (6th
ed. 2007) (principles of implied repeal apply to implied
amendment). “The intention of the legislature to repeal
must be ‘clear and manifest.’” Watt v. Alaska, 451 U.S.
259, 267 (1981) (quoting United States v. Borden Co., 308
U.S. 188, 198 (1939)). “In the absence of some affirmative
showing of an intention to repeal, the only permissible
justification for a repeal by implication is when the earlier
and later statutes are irreconcilable.” Morton, 417 U.S.
at 550; see also United States v. Fausto, 484 U.S. 439,
452-53 (1988). “The courts are not at liberty to pick and
choose among congressional enactments, and when two
statutes are capable of co-existence, it is the duty of the
courts, absent a clearly expressed congressional intention
to the contrary, to regard each as effective.” Morton, 417
U.S. at 551.

There is no affirmative showing of Congressional
intent to override the plain and specific language of CWA

30

Section 402(b). Thus, the only possible basis for an implied
repeal is that the statutes are irreconcilable. Any
conceivable conflict, however, was eliminated by the
Services’ 1986 rulemaking, discussed below, interpreting
the phrase “actions authorized, funded, or carried out” by
Federal agencies as being limited “to all actions in which
there is discretionary federal involvement or control.” 50
C.F.R. § 402.03. Therefore, the plain language of CWA
Section 402(b) is controlling.

II. THE COURT OF APPEALS FAILED TO DEFER
TO THE SERVICES’ LONG-STANDING
INTERPRETATION OF SECTION 7(a)(2) OF
THE ENDANGERED SPECIES ACT.

More than 20 years ago, the Services promulgated
regulations interpreting and implementing ESA Section 7,
including 50 C.F.R. § 402.03, governing the applicability of
Section 7(a)(2) to Federal agency actions. The court of
appeals disregarded that regulation, variously describing
50 C.F.R. § 402.03 as a “gloss” on, and as being
“congruent” and “coterminous with” the statutory phrase
“authorized, funded, or carried out.” The court instead
substituted its own view of how the statute should be read.
Pet. App. 39-42. This violated settled law:

[A]mbiguities in statutes within an agency's
jurisdiction to administer are delegations of
authority to the agency to fill the statutory gap
in reasonable fashion.... If a _ statute is
ambiguous, and if the implementing agency’s
construction is reasonable, Chevron requires a
federal court to accept the agency’s construction
of the statute, even if the agency’s reading differs
from what the court believes is the best statutory
interpretation.

31

National Cable & Telecomm. Ass’n v. Brand X Internet
Services, 545 U.S. 967, 980 (2005) (following Chevron, 467
U.S. at 843-44 & n.11, 865-66). This Court previously
recognized that “[wjhen it enacted the ESA, Congress
delegated broad administrative and interpretative power
to the Secretary.” Babbitt v. Sweet Home Ch. of
Communities for a Great Ore., 515 U.S. 687, 708 (1995)
(upholding FWS’s regulation defining “harm”). The court
of appeals ignored Chevron and Sweet Home, and
erroneously afforded no deference to the agencies’
interpretation of Section 7(a)(2).

The Services’ current rules have their genesis in
the original version of Section 7, which consisted of a
two-sentence paragraph and contained a number of
undefined terms and no description of the consultation
process. Endangered Species Act of 1973, Pub. L. No.
93-205, $7, 87 Stat. 884, 892. The following year, the
Services began providing guidance to other Federal
agencies and, in early 1976, issued guidelines governing
Section 7. See Interagency Couperation Regulations; Final
Rule, 43 Fed.Reg. 870 (Jan. 4, 1978). The Services’
guidelines were revised and, after notice-and-comment
rulemaking, were issued as formal regulations in 1978 and
codified in 50 C.F.R. pt. 402. Jd. at 873-76.

The ESA was subsequently amended by Congress, and
Section 7 was divided into subsections and expanded."
Nevertheless, certain key terms (including, for example,
“jeopardize” and “destruction or adverse modification”)

‘* See Endangered Species Act Amendments of 1978, Pub. L. No.
95-632, 92 Stat. 3751, Endangered Species Act Amendments of 1979,
Pub. L. No. 96-159, 93 Stat. 1225; Endangered Species Act Amendments
of 1982, Pub. L. No. 97-304, 96 Stat. 1411. The legislative history shows
that Congress was aware that the Services had promulgated
regulations implementing Section 7 and creating the consultation
process. See H.R. Rep. 95-1625, at 12 (1978) (Pet. App. 491-92), HLR.
Conf. Rep. No. 95-1804, at 18 (1978) (Pet. App. 486-87).

32

were left undefined, and aspects of the consultation
process remained unclear. Consequently, in 1986, the
Services promulgated new regulations governing Section 7
implementing the amendments. /nteragency Cooperation
Regulations; Final Rule, 51 Fed.Reg. 19,926 (June 3, 1986)
(codified at 50 C.F.R. pt. 402) (Pet. App. 318-480). The
Services’ regulations fill in definitional and interpretive
gaps in the statute and provide a uniform process for
Section 7 consultation.

In their 1986 rulemaking, which began in 1983 and
involved public notice and comment, the Services
expressly recognized that an agency’s obligations under
Section 7(a)(2) are limited by its existing legal authority.
See, e.g., id. at 19,937 (“a Federal agency’s responsibility
under section 7(a)(2) permeates the full range of
discretionary authority held by that agency”) (Pet. App.
365). In addition to 50 C.F.R. § 402.03, other regulations
recognize that a federal agency’s duties under Section
7(a)(2) are limited by its existing authorities. 50 C.F.R.
§ 402.16 requires the re-initiation of consulta. x “where
discretionary Federal involvement or control over the
action has been retained.” Similarly, 50 C.F.R. $§ 402.02
and 402.14(g)(8) require that reasonable and prudent
alternatives suggested by the Services to avoid jeopardy be
“consistent with the scope of the Federal agency’s legal
- authority and jurisdiction.””

* In the preamble, the Services, discussing the regulatory
definition of “reasonable and prudent alternatives,” acknowledged
that they “should be mindful of the limits of a Federal agency's
jurisdiction and authority when prescribing a reasonable and prudent
alternative. An alternative, to be reasonable and prudent, should be
formulated in such a way that it can be implemented by a lederal
agency consistent with the scope of its legal authority and jurisdiction.”
Interagency Cooperation Regulations, 51 Fed Reg. at 19,937 ‘Pet.
App. 365) Under the court of appeals’ interpretation of ESA Section
7iav2), however, an alternative is always within the agency's legal

(Continued on following page)

33

The Services’ interpretation of the applicability
of Section 7(a)(2) is consistent with judicial interpretations
of the statute. Prior to the completion of the Services’
1986 rulemaking, the Tenth Circuit stated:

The [ESA] does not, by its terms, enlarge the
jurisdiction of the Corps of Engineers under the
|CWA].... The question in this case is how
broadly the Corps is authorized to look under the
[CWA] in determining the environmental impact
of the discharge fof pollutants) that it is
authorizing.
Riverside Irr. Dist. v. Andrews, 758 F.2d 508, 512 (10th
Cir. 1985); see also In re Operation of the Missouri
River System Litigation, 421 F.3d 618, 630 (8th Cir. 2005)
(“the ESA does not apply where an agency has no
statutory authority to act with discretion”); APPA, 137
F.3d at 299 (Section 7(a)(2) directs “agencies to channel
their existing authority in a particular manner” (emphasis
in original)); Platte River Whooping Crane Critical
Habitat Maint. Trust v. FERC, 962 F.2d 27, 34 (D.C. Cir.
1992) (Section 7 “directs agencies to ‘utilize their
authorities’ to carry out the ESA’s objectives” and does
not allow agencies to exceed their statutory authority).

The court of appeals, in contrast, interpreted Section
7(aX(2) as applying whenever an agency exercises
any “decisionmaking authority,” regardless of the
constraints on that authority. Pet. App. 42-44. The
court further determined that an inter-circuit conflict
already existed regarding the applicability of Section
7(aX(2) to mnon-discretionary actions. Jd. at 44-47.
Conflicting judicial interpretations of statutory terms —
demonstrate the existence of ambiguity. See Smiley
v. Citibank (South Dakota), N.A., 517 U.S. 735, 739 (1996).

authority and jurisdiction because Section 7(a2) independently grants
authority to agencies.

34

The Services’ regulatory interpretation of the
applicability of Section 7(a)(2) to Federal actions
appropriately harmonizes the obligations imposed by
Section 7(a)(2) with EPA’s obligations under CWA Section
402, and prevents the imposition of conflicting statutory
duties. Consequently, 50 C.F.R. § 402.03 is entitled to
deference under Chevron. See, e.g., Brand X, 545 U.S.
at 980; United States v. Mead Corp., 533 U.S. 218, 229
(2001) (A reviewing court “is obliged to accept the agency’s
position if Congress has not previously spoken to the
point at issue and the agency’s interpretation is
reasonable”). “When Congress has entrusted the Secretary
lof the Interior] with broad discretion, we are especially
reluctant to substitute our views of wise policy for his.”
Sweet Home, 515 U.S. at 708. The court of appeals
erred by dismissing 50 C.F.R. § 402.03 because it “is a
regulation, not a statute.” Pet. App. 43 n.19 (emphasis in
original).

The court of appeals also suggested that 50 C_FR. § 402.03 was
not relevant to its analysis because EPA: (1) elected to initiate
consultation with FWS, and (2) refused to take a position below on
whether it was required to consult. Pet. App. 43 n.19. But EPA never
formally determined that its action was subject to Section 7ia2), i.e,
that EPA could disapprove Arizona's NPDES program despite finding
that the program satisfied the CWA’s criteria. Moreover, EPA's
reluctance to take a position did not prevent the State of Arizona and
Home Builders from arguing, as they did, that the applicability of
Section 7(a\(2) is governed by 50 C.F R. § 402.03. As the dissenting
judges recognized, this is a legal issue involving the interpretation of
statutes and agency regulations. See Pet. App. 64-67 & n.1, 1d. at 142
ns.1 & 2.

35

Ill. SECTION 7(a)(2) OF THE ENDANGERED
SPECIES ACT DOES NOT GRANT FEDERAL
AGENCIES INDEPENDENT AUTHORITY TO
ACT FOR THE BENEFIT OF LISTED SPECIES.

Rather than following the plain language of CWA
Section 402(b), the court of appeals reinterpreted Section
7, holding that Section 7 grants additional power to
Federal agencies to act for the benefit of listed species, and
creates an affirmative obligation to exercise that power
whenever a Federal agency authorizes, funds or carries
out an activity. See, e.g., Pet. App. 30-44. The court of
appeals thus held that Section 7 augments EPA's
authority, allowing EPA, in issuing an NPDES permit, to
control how private !and is used and how State water
rights are exercised. Yet Congress limited EPA’s authority
to regulating discharges of pollutants into the navigable
waters and, further, expressly recognized and preserved
the rights of each State to “plan the development and use
...0f land and water resources” and to “allocate quantities
of water within its jurisdiction” (33 U.S.C. § 1251(b) & (g)).
No court has previously interpreted Section 7(a)(2) in this
manner. As shown below, the court of appeals’ expansive
reading of ESA Section 7 is not supported by TVA v. Hill or
by the Act’s the legislative history.

A. The Language of the Endangered Species
Act of 1973 Does Not Support the Court of
Appeals’ Interpretation of Section 7(a)(2).

Section 7, as enacted in 1973, consisted of a single
paragraph and provided:

The Secretary shall review other programs
administered by him and utilize such programs
in furtherance of the purposes of this Act. All
other Federal departments and agencies shall, in
consultation with and with the assistance of the

36

Secretary, utilize their authorities in furtherance
of the purposes of this Act by carrying out
programs for the conservation of [listed species]
and by taking such action necessary to insure
that actions authorized, funded, or carried out by
them do not jeopardize the continued existence of
such [listed species] or result in the destruction
or modification of [critical] habitat.

Endangered Species Act of 1973, Pub. L. No. 93-205, § 7,
87 Stat. 892. Thus, as originally enacted, Section 7
imposed two obligations on federal agencies: (1) to carry
out programs for the conservation of listed species; and (2)
to ensure that actions they authorize, fund, or carry out do
not jeopardize the continued existence of listed species or
destroy critical habitat. Both obligations were qualified by
the phrase “utilize their authorities.” /bid. This version of
Section 7 was applied by the Court in TVA v. Hill.

This statute (as well as the 1973 Act generally)
significantly increased Federal protection for wildlife.
The Endangered Species Preservation Act of 1966, Pub. L.
No. 89-669, 80 Stat. 926 (repealed 1973), for example,
contained language similar to Section 7, but the
obligations of Federal agencies were vague and heavily
qualified. The Secretary of the Interior was required to
review and utilize other programs administered by him in
furtherance of the Act “to the extent practicable.” Jd. at
.§ 2(d), 80 Stat. 927. The Secretary was also required to
“encourage” other Federal agencies to “utilize, where
practicable, their authorities in furtherance of the
purposes of this Act” and to “consult with and assist such
agencies in carrying out [the] endangered species
program.” /bid. Federal agencies were required to “seek
to” protect wildlife species and to preserve the habitat of
such species “on lands under their jurisdiction,” but only
“insofar as is practicable and consistent with |their}
primary purposes.” /d. at § 1\b), 80 Stat. 926; see also TVA
v. Hill, 437 U.S. at 174-76 (discussing prior legislation).

37

As this Court indicated in TVA v. Hill, 437 U.S. at
174, the 1973 Act and its legislative history must be read
against this backdrop. Thus, for example, Representative
Dingell explained, “|Section 7] substantially amplifie(s]
the obligation of [federal agencies] to take steps within
their power to carry out the purposes of this act.” 437
U.S. at 183 (emphasis supplied). There is nothing in the
1973 legislative history indicating that Congress intended,
in enacting Section 7, to grant additional authority
to Federal agencies or to override non-discretionary
mandates in other statutes. And, as explained below, TVA
v. Hill does not support a contrary interpretation.

B. TVA v. Hill Does Not Support the Court of
Appeals’ Interpretation of Section 7(a)(2).

The panel majority’s principal authority for its
interpretation of Section 7(a)(2) was TVA v. Hill. Pet.
App. 32-38. In that case, the Court did not consider
whether Section 7 grants additional authority to agencies.
Instead, the Court addressed two questions: (1) whether
the ESA requires a court to enjoin the operation of a
virtually completed Federal dam - a discretionary public
works project — where the Interior Secretary had
“determined that operation of the dam would eradicate an
endangered species"; and (2) whether continued
appropriations for the project constituted an implied.
repeal of the ESA. TVA v. Hill, 437 U.S. at 156. No dispute
existed that the dam’s operation would not only violate
the ESA, but would directly cause the extirpation
of a listed species. Jd. at 171 (“We begin with the premise
that operation of the Tellico Dam will either eradicate
the known population of snail darters or destroy
their critical habitat.”). Consequently, the Court held,
based on those facts, that Congress had foreclosed the

38

exercise of equitable discretion and affirmed the court of
appeals’ injunction preventing operation of the dam. /d. at
193-96.

On the second question, the Court held that a line
item in an appropriations act failed to evidence a clear and
manifest intent by Congress to override the ESA, relying
on the rule that repeals by implication are disfavored. Jd.
at 189-93. The Court explained that “le)xpressions of
committees dealing with requests for appropriations
cannot be equated with statutes enacted by Congress,” and
that “there is no indication that Congress as a whole was
aware of TVA’s position.” Jd. at 191-92. The Court also
explained that until 1978, the Appropriations Committee
was unaware of the possible applicability of Section 7 to
the project, and that funds had been appropriated to allow
the snail darter to be transplanted, potentially avoiding
any conflict. Jd. at 192-93. The Court’s analysis did not
address the obligation of a Federal agency faced with a
non-discretionary statutory mandate.

In short, the Court did not hold that ESA Section 7
granted additional powers to federal agencies, nor did the
Court need to do so given the questions presented and the
indisputable violation of the statute’s prohibition against
jeopardizing listed species. See Weinberger v. Romero-
Barcelo, 456 U.S. 305, 313-17 (1982) (discussing and
distinguishing TVA v. Hill in the context of an alleged
CWA violation). The excerpts of legislative history
discussed by the Court, while showing that Congress
intended to strengthen the protections afforded listed
species relative to the ESA’s predecessor statutes, do not
demonstrate that Congress intended to grant agencies
independent authority to act for the benefit of listed
species.

39

C. The 1978 and 1979 Amendments to the
Endangered Species Act Did Not Expand
the Scope and Applicability of Section
7(a)(2).

The court of appeals also relied on the 1978 and 1979
ESA amendments, which divided Section 7 _ into
subsections and added the Endangered Species Committee
exemption process, as evidencing Congress’ intent to grant
additional power to agencies. Pet. App. 34-38. Again, the
court simply read too much into these amendments, which
did not alter the obligations of Federal agencies.

The court cited the different language found in ESA
Sections 7(a)(2) and 7(a)(1) as supporting its statutory
interpretation. Jd. at 34. Section 7(a)(1), 16 U.S.C.
§ 1536(a)(1), directs agencies to “utilize their authorities in
furtherance of the purposes of this chapter by carrying out
programs for the conservation of species.” Since Section
7(a)(1) refers to agencies’ “authorities” while Section
7(a)(2) does not, the court concluded Congress intended to
grant additional authority to federal agencies in Section
7(aX(2). Id. at 34-35. This conclusion was erroneous for
several reasons.

Section 2(c) of the original statute (which survives in
the current Act) declares Congress’ policy that all federal
agencies “shall seek to conserve ... species and shall use
their authorities in furtherance of this. chapter.”
Endangered Species Act of 1973, Pub. L. No. 93-205, § 2(c),
87 Stat. 885 (currently at 16 U.S.C. § 1531(c)(1))
‘emphasis supplied). As shown above, Section 7, as
originally enacted, contained the same _ qualifying
language. Jd. at §7, 87 Stat. 892. The court of appeals
cited a 1973 committee report to show that Section 7
contained two distinct obligations, which later became
separate subsections. Pet. App. 34-35. But that report
simply paraphrased without explanation the language in

40

the original version of Section 7. See H.R. Rep. No. 93-412,
at 14 (1973). The same report also explained, in discussing
the purpose of the ESA, that “the bill declares a policy that
Federal agencies are to use the authorities that are
available to them in carrying out the objectives of this bill.”
Id. at 6 (emphasis supplied); see alsw id. at 10 (discussing
ESA Section 2(c)).

Moreover, Congress explained that its amendments to
Section 7 merely restated “existing law”:

The conferees adopted Senate language creating
a new Section 7(a), which essentially restates
section 7 of existing law, and outlines the
responsibilities of the Secretary and other
Federal agencies for protecting endangered
species.... The Conferees felt that the Senate
provision by retaining existing law, was
preferable since regulations governing section 7
are now familiar to most Federal agencies... .

H.R. Conf. Rep. No. 95-1804, at 18 (emphasis supplied)
_(Pet. App. 487); see also Pet. App. 36 (“The 1978
amendment did not change section 7’s_ substantive
provisions.”). Under “existing law,” an agency’s obligation
under Section 7 is limited by its authorities.

The court of appeals also failed to consider that
Sections 7(a)(l) and 7(a)\(2) have different language
because those provisions impose different requirements,
neither of which grants Federal agencies additional legal
authority. Section 7(a)(1) affirmatively directs all Federal
agencies to act for the benefit of listed species, but limits
that obligation to actions within each agency's existing
authority under its governing statutes. Section 7(a)(2),
in contrast, prohibits agencies from jeopardizing listing
species or destroying their critical habitat when
“authorizi[ng], fund{ing] or carrl|ying] out” an action,
which necessarily means that agency is acting (or
proposing to act) within the scope of its authority under its

41

governing statutes. In other words, the limitation in
Section 7(a)(1) would be redundant in Section 7(a)(2)
because an agency does not authorize, fund or carry out an
activity without being authorized to do so in the first
place. Nothing in Section 7(a)(2) suggests that Congress
intended to authorize Federal agencies to ignore
non-discretionary mandates imposed by other statutes.”

The court of appeals also claimed support for its
interpretation of Section 7 from ESA Sections 7(g) and (h),
16 U.S.C. § 1536(g) & (h), which were enacted in the wake
of TVA v. Hill and created a process under which projects
can be exempted from Section 7(a)(2). Pet. App. 36-37. The

-exemption process, however, deals with irreconcilable
conflicts presented after the consultation has concluded,
when, as in TVA v. Hill, a discretionary Federal action
would jeopardize a listed species. See, e.g., H.R Conf. Rep.
No. 96-697, at 14 (1979) (“The exemption process was
designed to resolve endangered species conflicts after
other administrative remedies, including consultation
have been exhausted. It makes no sense to initiate an
exemption process before it has been determined that
there is a need for an exemption in the first place.”) (Pet.
App. 514-15). The enactment of the exemption process
is irrelevant to whether Section 7(a)(2) applies to
EPA’s approval of State NPDES programs and other
non-discretionary actions.

In sum, there is simply nothing that supports the
court of appeals’ interpretation of Section 7(a)(2). While

In the 1978 amendments, Congress separated the second
sentence of Section 7 into two sentences and eliminated the phrase “by
taking action necessary” from the stutute. Compare Endangered
Species Act of 1973, Pub. L. No. 93-205, §7. 87 Stat. 892, with
Endangered Species Act Amendments of 1978, Pub. L. No. 95-632, § 3,
92 Stat. 3752. This amendment also indicates that Section 7/a)2) is
intended to prohibit Federal agencies from jeopardizing listed species
when acting pursuant to their existing authorities, rather than
requiring agencies to take affirmative action to benetit species

42

Congress strengthened the protection afforded species of
fish and wildlife when it enacted the ESA in 1973,
Congress did not enact a law that generally requires
Federal agencies to violate their governing statutes
whenever they authorize, fund or carry out an activity.
This Court did not interpret Section 7 in this manner in
TVA v. Hill, and the legislative history does not support
such an illogical result.

IV. EPA'S APPROVAL OF ARIZONA’S NPDES
PROGRAM WAS NOT THE LEGALLY RELEVANT
-CAUSE OF FUTURE IMPACTS TO LISTED
SPECIES RESULTING FROM PRIVATE LAND
USES.

In Public Citizen, this Court addressed the obligations
of federal agencies under NEPA, an_ analogous
environmental statute. NEPA “is our basic national
charter for protection of the environment.” 40 C.F.R.
§ 1500.1(a). It applies to Federal actions “to the fullest
extent possible,” 42 U.S.C. § 4332, and “places upon an
agency the obligation to consider every significant aspect
of the environmental impact of a proposed action.”
Baltimore Gas & Electric Co. v. Natural Res. Def. Council,
Inc., 462 U.S. 87, 97 (1983).

The central issue in Public Citizen was the scope of
analysis required under NEPA. The Court explained that
“NEPA requires ‘a reasonably close causal relationship’
between the environmental effect and the alleged cause,”
not simply an attenuated “but for” causal relationship. 541
U.S. at 767 (following Metropolitan Edison Co. v. People
Against Nuclear Energy, 460 U.S. 766, 774 (1983)). Thus,
the Federal Motor Carrier Safety Administration
(FMCSA), in adopting regulations imposing inspection and
safety requirements on Mexican-domiciled motor carriers
operating in the United States, was required to evaluate

43

only those environmental impacts resulting from activities
that Congress authorized the agency to regulate. Jd. at
768-69. The Court concluded:

We hold that where an agency has no ability to-
prevent a certain effect due to its limited
statutory authority over the relevant actions, the
agency cannot be considered a legally relevant
“cause” of the effect. Hence, under NEPA and the

' implementing CEQ regulations, the agency need
not consider these effects in its [environmental
assessment] when determining whether its
action is a “major Federal action.”

Id. at 770.

In this case, the court of appeals, noting the similarity
between the regulations defining the effects of an agency’s
action under NEPA and the ESA, adopted the Court’s
Public Citizen standard for determining whether a
proposed action is the legally relevant cause of adverse
effects to listed species under Section 7(a)(2). Pet. App.
29-30. The court of appeals explained that a causal
relationship must exist between the proposed action and
impacts on listed species, and that such a relationship
depends on the agency’s lega! authority. Jd. at 29 (“a
negative impact on listed species is the likely direct or
indirect effect of an agency’s action only if the agency has
some control over that result” (emphasis supplied)). The
court nevertheless held, purporting to apply Public Citizen,
that EPA’s approval of Arizona’s NPDES program “will
cause whatever harm may flow from the loss of section 7
conservation benefits” on future projects requiring an
NPDES permit to discharge pollutants, and this “harm” is
an “indirect effect” of EPA’s action. See id. at 47-48.

“Indirect effects” are fcaused by the proposed action,
are later in time, but are still reasonably certain to occur.”
50 C.F.R. § 402.02 (definition of “effects of the action”).
Indirect effects “include the effects on listed species and

44

critical habitat of future activities that are induced by
the action subject to consultation and that occur after
the action is completed.” Jnteragency Cooperation
Regulations, 51 Fed.Reg. at 19,932 (Pet. App. 344). Real
estate development is not induced by a change in the
permit-issuing authority. As FWS explained in the
biological opinion, “/djevelopments are driven by any
number of factors, including but not limited to demand,
supply, economics, political decisions, zoning regulations,
and financial market stability. Based upon the best
available information, development in the action area will
not be caused by EPA’s proposed approval.” Pet. App. 113.”
The majority summarily rejected this reasoning as
“implausible,” concluding instead that future real estate
development and CWA permits are links in the same “‘but
for’ causal chain.” Jd. at 27-28. If this strained reasoning
were applied to FMCSA’s rulemaking in Public Citizen, the
President’s decision to lift the moratorium and the
agency’s promulgation of safety rules for Mexican motor
carriers would likewise constitute “but for” links in the
same causal chain. FMCSA thus would have been required
to extend the scope of its NEPA analysis to impacts over
which the agency had no control — a result this Court
expressly rejected.”

'* FWS employees initially were confused about what type of causal
relationship is needed for an impact to be considered an “indirect effect”
under the Services’ definition. See J.A. 328-30. As one FWS emplovee
complained, “there is a basic lack of understanding throughout the
Service as to what indirect effects are.” Jd. at 329.

* The court of appeals cited as authority for this point Olympic
Airways v. Husain, 540 U.S. 644 (2004), which dealt with the
interpretation of the term “accident” in the context of Article 14 of the
Warsaw Convention. In Public Citizen, in contrast, this Court
analogized NEPA’s causation requirement to the tort concept of
proximate cause. Public Citizen, 541 U.S. at 767 (following Metropolitan
Edison, 460 US. at 774 & n.7).

45

The court of appeals’ causation construct was based on
its erroneous belief that EPA, when issuing CWA permits,
has the authority to control how private land is used. In
rejecting Home Builders’ argument on this point, the court
stated that NPDES permits “relate to the construction
itself, not to a discrete discharge during construction.” Jd.
at 49 n.22. No authority was cited for this statement, and
it cannot be reconciled with the CWA’s basic framework,
which recognizes the paramount right of states to regulate
land uses. 33 U.S.C. § 1251(b); see also SWANCC, 531 U.S.
at 174. The NPDES program authorizes EPA (or a State
with an approved program) to regulate discharges of
pollutants from point sources, but does not authorize EPA
to regulate the activity from which the discharge results.
For example, in striking down EPA _ regulations
authorizing the imposition of non-water quality related
conditions in NPDES permits, the District of Columbia
Circuit explained that “EPA’s jurisdiction under the |CWA|
is limited to regulating the discharge of pollutants. Thus,
just as EPA lacks authority to ban construction of new
sources pending permit issuance, so the agency is
powerless to impose permit conditions unrelated to the
discharge itself.” NRDC II, 859 F.2d at 170. For the same
reason, that court held in NRDC I that EPA lacks
authority to impose a ban on the construction
of a new facility that, when operating, will require
an NPDES permit to discharge pollutants. 822 F.2d at
127-31. In short, “the Clean Water Act gives the EPA
jurisdiction to regulate and control only actual discharges
— not potential discharges, and certainly not point sources
themselves.” Waterkeeper Alliance, Inc. v. EPA, 399 F.3d
486, 505 (2d Cir. 2005) (emphasis in original); accord
United States v. Mango, 199 F.3d 85, 93 & n.7 (2d Cir.
1999) (conditions imposed in permits issued under CWA
Section 404, 33 U.S.C. § 1344, must be related to the
discharge).

46

The court of appeals also justified its causation
analysis by contending that home building and other
private land uses are “activities that are interrelated or
interdependent with [the Federal] action,” ie., the
issuance of NPDES permits. Pet. App. 50 (citing 50 C.F.R.
§ 402.02 (definition of “effects of the action”)). The court,
however, ignored the remainder of this definition, which
provides: “Interrelated actions are those that are part of a
larger action and depend on the larger action for their
justification. Interdependent actions are those that have
no independent utility apart from the action under
consideration.” 50 C.FR. §402.02. A _ real estate
development, obviously, does not depend on a NPDES
permit for its justification and has utility separate and
apart from the permit — the purpose of the development is
to build and sell homes, not discharge pollutants.

Consequently, when EPA consults with FWS under
ESA Section 7(a)(2) in connection with issuing an NPDES
permit, the consultation must be limited to effects on the |
water body receiving the discharge and the waters
downstream thereof (i.e., the “action area”). See 50 C.F.R.
§ 402.02 (defining “action area”); Riverside Irr. Dist., 758
F.2d at 512 (the relevant “action area” relating to a CWA
permit for the construction of a dam included downstream
aquatic habitat). Real estate development and other
private land uses are not an “effect” of the action because
private land uses are not caused by the issuance of a
NPDES permit. Thus, under Public Citizen’s causation
analysis, EPA is not required by Section 7(a)(2) to ensure
that future land uses do not jeopardize listed species or
adversely modify their critical habitat. See 16 U.S.C.
§ 1536(a)(2); 50 C.FLR. §§ 402.01, 402.03.

47

V. REMAND TO EPA WOULD NOT BE
APPROPRIATE BECAUSE EPA COMPLIED
WITH THE CLEAN WATER ACT AND THE
ISSUES BEFORE THE COURT CONCERN THE
INTERPRETATION OF STATUTORY PROVISIONS.

The court of appeals’ determination that EPA took
contradictory positions regarding its obligations under
Section 7(a)(2) (see Pet. App. 23-28) was misplaced and, in
any event, does not support a remand to EPA under the
current posture of the case.

The court of appeals stated that EPA determined that
it was required to consult with FWS but was “not
permitted, as a matter of law, to take into account the
impact on listed species” in acting on Arizona’s NPDES
program submission under CWA Section 402(b). Pet. App.
26-27. The court concluded that because’ both
requirements cannot be correct, EPA’s ultimate decision,
i.e., approval of Arizona’s NPDES program, “was not the
result of reasoned decisionmaking.” Jd. at 27.” This
reasoning was superficial and conflicts with the record,
which shows that EPA’s position on its CWA authority was
consistent, not arbitrary and capricious.

EPA consistently maintained that approval of Arizona’s
NPDES program under CWA Section 402(b) merely
constituted a shift in administrative responsibility for issuing
and enforcing permits under the NPDES program. See id. at
114, 564, 615. EPA also maintained it lacked authority

“ The court of appeals also concluded that EPA’s (and FWS's)
position, that future impacts on listed species resulting from private
land use are not caused by the approval of Arizona’s program, was
implausible. Pet. App. 27-28. As discussed in part IV, supra, the court's
conclusion was the result of erroneously applying Public Citizen and
incorrectly assuming that EPA regulates upland land uses when issuing
CWA permits, rather than discharges of pollutants into navigable
waters.

48

under the CWA to regulate non-water-quality-related
impacts resulting from private land use activities. See,
e.g., id. at 114, 564-65. EPA’s position was consistent with
the two prior consultations between EPA and the Services,
which were also limited to species affected by surface
water quality. Approval of Application by Maine, 66
Fed.Reg. at 12,793-94; Approval of Application by Texas,
63 Fed.Reg. at 51,201. Moreover, the local FWS employees
agreed that approval of Arizona’s NPDES program would
have no adverse water quality-related impacts on listed
species or critical habitat. See, e.g., Pet. App. 563. At that
point, the consultation should have concluded informally,
without a biological opinion. See 50 C.F.R. §§ 402.13,
402.14(b)(1).

Instead, local FWS employees quarreled with EPA's
interpretation of EPA’s legal authority under the CWA,
and contended “all the effects” of EPA’s action must be
evaluated “regardless of whether [EPA] could do anything
about those effects,” notwithstanding FWS’s own confusion
over what constitutes an “indirect effect.” J.A. 121, 328-30.
This dispute was elevated to the agencies’ headquarters
(id. at 123), and FWS issued a biological opinion
containing the reasoning characterized as contradictory by
the court. That reasoning, however, was premised on the
plain language of CWA Section 402(b), which required EPA
to approve Arizona’s NPDES program if the nine statutory
criteria are satisfied, and EPA’s authority to regulate
discharges of pollutants — not private land use activities.

The court of appeals acknowledged that EPA had
“complied with its obligations under the |CWA|” (Pet. App.
47), and therefore its decision was neither arbitrary nor
capricious. The court instead concluded that EPA
mistakenly relied on FWS’s biological opinion, which “was
flawed in its basic legal premise.” /d. at 48. The court of
appeals’ “legal premise” was that Section 7ia"2) grants
additional authority to Federal agencies and that this

49

authority overrides all non-discretionary mandates
imposed by the CWA. Whether the court of appeals’
interpretation of these statutes was correct is a legal
question that this Court should decide. See 5 U.S.C. § 706
(“when presented, the reviewing court shall decide all
relevant questions of law [and] interpret constitutional
and statutory provisions”); see also Pet. App. 64-66 & n.1
(Thompson, J., dissenting); id. at 142 ns.1 & 2 (Kozinski,
J., dissenting from denial of rehearing).

Remand to the agency is normally required “[iJf the
record before the agency does not support the agency
action, if the agency has not considered all relevant
’ factors, or if the reviewing court simply cannot evaluate
the challenged agency action on the basis of the record
before it ....” Florida Power & Light Co. v. Lorion, 470
U.S. 729, 744 (1985). Thus, remand is appropriate when
additional factual development or clarification is required.
See, e.g., Gonzalez v. Thomas, __ U.S. ___, 126 S.Ct. 1613,
1615 (2006) (remanding the case to the agency because
“(tlhe matter required determining the facts and deciding
whether the facts as found fall within a statutory term”);
INS v. Ventura, 537 U.S. 12, 16-17 (2002) (same). Here, in
contrast, the questions before the Court turn on the
interpretation of the CWA and the ESA (and those
statutes’ implementing regulations), which does not
require further development of a factual record.

As Home Builders and the State of Arizona argued
below, EPA was not required to consult with FWS prior to
approving Arizona’s NPDES program: EPA has no
discretion to act for the benefit of listed species when
approving State programs under CWA Section 402(b), and
the Services’ regulation, 50 C.F.R. § 402.03, should have
been controlling. To the extent that the positions of EPA
and the Services on the applicability of Section 7/a\2) to
State NPDES program approvals under CWA Section

: 50

402(b) require clarification, the agencies now have
authoritatively spoken on this issue and have determined
Section 7(a)(2) does not apply in this context. See EPA Pet.
App. 93a-102a (App. C), 103a-110a (App. D), 1lla-1l6a
(App. E). “[I]f the agency adequately explains the reasons
for a reversal of policy, ‘change is not invalidating, since
the whole point of Chevron is to leave the discretion
provided by ambiguities of a _ statute with the
implementing agency.’” Brand X, 545 U.S. at 981 (quoting
Smiley, 517 U.S. at 742). Remand under these
circumstances would add nothing to the record and,
instead, would delay resolution of the significant legal
questions presented in this case.

CONCLUSION

For the foregoing reasons, the decision by the United
States Court of Appeals for the Ninth Circuit should be
vacated.

DATED: February 20, 2007.

Respectfully submitted,
RUSSELL S. FRYE NORMAN D. JAMES
FRYE LAW PLLC (Counsel of Record)

3050 K Street NW, Suite 400 FENNEMORE CRAIG, P.C.

Washington, DC 20007-5108 3003 North Central Avenue,
(202) 527-8267 Suite 2600

: Phoenix, AZ 85012-2913

(602) 916-5346 -

DUANE J. DESIDERIO

THOMAS J. WARD

NATIONAL ASSOCIATION OF
HOME BUILDERS

1201 15th Street, NW

Washington, DC 20005-2800

(202) 266-8200

App. 1

STATUTES

33 U.S.C. § 1251. Congressional declaration of goals
and policy

(a) Restoration and maintenance of chemical,
physical and biological integrity of Nation’s
waters; national goals for achievement of
objective

The objective of this chapter is to restore and
maintain the chemical, physical, and biological 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;

(2) it is the national goal that wherever attainable,
an interim goal of water quality which provides for the
protection and propagation of fish, shellfish, and wildlife
and provides for recreation in and on the water be
achieved by July 1, 1983; _

(3) it is the national policy that the discharge of toxic
pollutants in toxic amounts be prohibited;

(4) it is the national policy that Federal financial
assistance be provided to construct publicly owned waste
treatment works;

(5) it is the national policy that areawide waste
treatment management planning processes be developed
and implemented to assure adequate control of sources of
pollutants in each State;

App. 2

(6) itis the national policy that a major research and
demonstration effort be made to develop technology
necessary to eliminate the discharge of pollutants into the
navigable waters, waters of the contiguous zone, and the
oceans; and

(7) it is the national policy that programs for the
control of nonpoint sources of pollution be developed and
implemented in an expeditious manner so as to enable the
goals of this chapter to be met through the control of both
point and nonpoint sources of pollution.

(b) Congressional recognition, preservation, and
protection of primary responsibilities and rights
of States
It is the policy of the Congress to recognize,

preserve, and protect the primary responsibilities and

rights of States to prevent, reduce, and eliminate
pollution, to plan the development and use (including
restoration, preservation, and enhancement) of land and
water resources, and to consult with the Administrator
in the exercise of his authority under this chapter. It is
the policy of Congress that the States manage the
construction grant program under this chapter and

implement the permit programs under sections 1342

and 1344 of this title. It is further the policy of the

Congress to support and aid research relating to the

prevention, reduction, and elimination of pollution, and

to provide Federal technical services and financial aid to

State and interstate agencies and municipalities in

connection with the prevention, reduction, and

elimination of pollution.

* * *

App. 3

(d) Administrator of Environmental Protection
Agency to administer chapter

Except as otherwise expressly provided in this
chapter, the Administrator of the Environmental
Protection Agency (hereinafter in this chapter called
“Administrator”) shall administer this chapter.

(e) Public participation in development, revision,
and enforcement of any regulation, etc.

Public participation in the development, revision, and
enforcement of any regulation, standard, effluent
limitation, plan, or program established by the
Administrator or any State under this chapter shall be
provided for, encouraged, and assisted by _ the
Administrator and the States. The Administrator, in
cooperation with the States, shall develop and publish
regulations specifying minimum guidelines for public
participation in such processes.

(f) Procedures utilized for implementing chapter

It is the national policy that to the maximum extent
possible the procedures utilized for implementing this
chapter shall encourage the drastic minimization of
paperwork and interagency decision procedures, and the
best use of available manpower and funds, so as to prevent
needless duplication and unnecessary delays at all levels
of government.

(g) Authority of States over water

It is the policy of Congress that the authority of each
State to allocate quantities of water within its jurisdiction-
shall not be superseded, abrogated or otherwise impaired
by this chapter. It is the further policy of Congress that
nothing in this chapter shall be construed to supersede or

App. 4

abrogate rights to quantities of water which have been
established by anv State. Federal agencies shall co-operate
with State and local agencies to develop comprehensive
solutions to prevent, reduce and eliminate pollution in
concert with programs for managing water resources.

33 U.S.C. § 1311. Effluent limitations

(a) legality of pollutant discharges except in
compliance with law

Except as in compliance with this section and
sections 1312, 1316, 1317, 1328, 1342, and 1344 of this
title, the discharge of any pollutant by any person shall
be unlawful.

33 U.S.C. § 1342. National pollutant discharge
elimination system

(a) Permits for discharge of pollutants

(1) Except as provided in sections 1328 and 1344 of
this title, the Administrator may, after opportunity for
public hearing issue a permit for the discharge of any
pollutant, or combination of pollutants, notwithstanding
section 131l{a) of this title, upon condition that such
discharge will meet either (A) all applicable requirements
under sections 1311, 1312, 1316, 1317, 1318, and 1343 of
this title, or (B) prior to the taking of necessary
impiementing actions relating to all such requirements,
such conditions as the Administrator determines are
necessary to carry out the provisions of this chapter.

(2) The Administrator shal! prescribe conditions for
such permits to assure compliance with the requirements

App. 5

of paragraph (1) of this subsection, including conditions on
data and information collection, reporting, and such other
requirements as he deems appropriate.

(3) The permit program of the Administrator under
paragraph (1) of this subsection, and permits issued
thereunder, shall be subject to the same terms, conditions,
and requirements as apply to a State permit program and
permits issued thereunder under subsection (b) of this
section.

(b) State permit programs

At any time after the promulgation of the guidelines
required by subsection (i)(2) of section 1314 of this title,
the Governor of each State desiring to administer its own
permit program for discharges into navigable waters
within its jurisdiction may submit to the Administrator a
full and complete description of the program it proposes to
establish and administer under State law or under an
interstate compact. In addition, such State shall submit a
statement from the attorney general (or the attorney for
those State water pollution control agencies which have
independent legal counsel), or from the chief legal officer
in the case of an interstate agency, that the laws of such
State, or the interstate compact, as the case may be,
provide adequate authority to carry out the described
program. The Administrator shall approve each such
submitted program unless he determines that adequate
authority does not exist:

App. 6

(1) To issue permits which —

(A) apply, and insure compliance with, any
applicable requirements of sections 1311, 1312, 1316,
1317, and 1343 of this title;

(B) are for fixed terms not exceeding five years;
and

(C) can be terminated or modified for cause
including, but not limited to, the following:

(i) violation of any condition of the permit;

(ii) obtaining a permit by misrepresentation, or
failure to disclose fully all relevant facts;

(iii) change in any condition that requires
either a temporary or permanent reduction or
elimination of the permitted discharge;

(D) control the disposal of pollutants into wells;

(2A) To issue permits: which apply, and insure
compliance with, all applicable requirements of section
1318 of this title; or

(B) To inspect, monitor, enter, and require reports to
at least the same extent as required in section 1318 of this
title;

(3) To insure that the public, and any other State the
waters of which may be affected, receive notice of each
application for a permit and to provide an opportunity for
public hearing before a ruling on each such application;

(4) To insure that the Administrator receives notice
of each application (including a copy thereof) for a permit;

App. 7

(5) To insure that any State (other than the
permitting State), whose waters may be affected by the
issuance of a permit may submit written recommendations
to the permitting State (and the Administrator) with
respect to any permit application and, if any part of such
written recommendations are not accepted by the
permitting State, that the permitting State will notify
such affected State (and the Administrator) in writing of
its failure to so accept such recommendations together
with its reasons for so doing;

(6) To insure that no permit will be issued if, in the
judgment of the Secretary of the Army acting through the
Chief of Engineers, after consultation with the Secretary
of the department in which the Coast Guard is operating,
anchorage and navigation of any of the navigable waters
would be substantially impaired thereby;

(7) To abate violations of the permit or the permit
program, including civil and criminal penalties and other
ways and means of enforcement;

(8) To insure that any permit for a discharge from a
publicly owned treatment works includes conditions to
require the identification in terms of character and volume
of pollutants of any significant source introducing
pollutants subject to pretreatment standards under
section 1317(b) of this title into such works and a program
to assure compliance with such pretreatment standards by
each such source, in addition to adequate notice to the
permitting agency{of (A) new introductions into such
works of pollutants from any source which would be a new
source as defined in section 1316 of this title if such source
were discharging polttutants, (B) new introductions of
pollutants into such works from a source which would be

App. 8

subject to section 1311 of this title if it were discharging
such pollutants, or (C) a substantial change in volume or
character of pollutants being introduced into such works
by a source introducing pollutants into such works at the
time of issuance of the permit. Such notice shall include
information on the quality and quantity of effluent to be
introduced into such treatment works and any anticipated
impact of such change in the quantity or quality of effluent
to be discharged from such publicly owned treatment
works; and

(9) To insure that any industrial user of any publicly
owned treatment works will comply with sections 1284(b),
1317, and 1318 of this title.

(c) Suspension of Federal program upon
submission of State program; withdrawal of
approval of State program; return of State
program to Administrator

(1) Not later than ninety days after the date on
which a State has submitted a program (or revision
thereof) pursuant to subsection (b) of this section, the
Administrator shall suspend the issuance

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0500%3A16. Public record. Not legal advice.