Amicus Curiae Brief — Environmental Protection Agency v. Defenders of Wildlife

48¥9ol

Nos. 06-340, 06-549

——__ --- — ss 12) ——

In The

Supreme Court of the Anited States

— ¢ —_

NATIONAL ASSOCTATION OF TIOME BUILDERS, e/ a/..

Petitioners,

\

DEFENDERS OF WILDLIFE, e¢ a/..

Respondents.

©

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY.

Petitioner.

\

DEFENDERS OF WILDLIFE, e¢ a/..

Re sponderts.

ome ¢ —

On Writs Of Certiorari To The

United States Court Of Appeals

For The Ninth Circuit

® en

BRIEF FOR AMICI CURIAE AMERICAN

FISHERIES SOCIETY, ASSOCLIATHON OF NORTHWEST

STEELHEADERS, CALIFORNIA SPORTFISHING

PROTECTION ALLIANCE, CALIFORNIA TROUT,

FEDERATION OF FLY FISHERS, INSTITUTE FOR

FISHERIES RESOURCES, MIAMI BEACH ROD & REEL

CLUB, NATIVE FISH SOCIETY, NORTHWEST

SPORTFISHING INDUSTRY ALLIANCE, PACIFIC COAST

FEDERATION OF FISHERMEN’S ASSOCIATIONS,

TROUT UNLIMITED, AND WASHINGTON FLY

FISHING CLUB IN SUPPORT OF RESPONDENTS

o

AAN FE. HASSELMAN JOHN FL Kosryach

Counsel of Record P Maky RANDOLPH SARGENT

Parrt A, GOoLUMAN NATIONAL WILDLIFE FEDERATION

BM ARTILIUSTICR 1400 16th Street. NW. Suite 501

705 Second Avenue, Suite 205 Washington, D.C. 20036

Seattle, WA YS 104 i202) 797-6800

POG) BAS-T540

TABLE OF CONTENTS

Page

I GEE ARID sceiricsenccnessnscsnenimnnninataninnioen 1

INTRODUCTION AND SUMMARY OF ARGU-

SITE ‘icsiinnitiicinpiciieanininatpisieateaiininitiiatiidaliaseniiansnainpetiniminaniieinin 1

I. EPA’S TRANSFER OF CLEAN WATER ACT

Il.

NPDES AUTHORITY IS AN AGENCY “AC-

TION” SUBJECT TO ESA § 7 ............eeeeeeeeees

A. EPA’s Transfer of Clean Water Act Au-

i NI secistnccnssetnnestnsttcaneseiinnpiiads

B. EPA’s Transfer Decision Involves Discre-

Tri nssseeicinnsiiininataiiiiniinneunasilininiieibaipeabieninmetaatite

C. EPA's Transfer Decision Is a Federal

Agency “Action” Within the Meaning of

BNE © sienienieneiiientndbinanniiniianidentmainnainn

|

EPA INCORRECTLY CONCLUDED THAT

THERE IS AN IRRESOLVABLE CONFLICT BE-

TWEEN STATUTORY MANDATES WITH-

OUT FOLLOWING THE ESA'S STEPS FOR

IDENTIFYING AND RESOLVING SUCH

B. EPA Overlooked Virtually All Potential

Water Quality Effects to Species Which

Must Be Analyzed Under ESA § 7 ...........

C. EPA Failed to Utilize the ESA’s Proce-

dures for Resolving Potential Statutory

SED siceitsiccbiacnsonniindtihtcidibeidiianbicindiicnetnpiovaiun

10

13

14

15

ii

TABLE OF CONTENTS -— Continued

Page

D. EPA's “Legal Causation” Argument Is Incon-

sistent with the ESA’s Procedures for Re-

solving Potential Statutory Conflicts ......... 21

Ill. EPA'S ARGUMENTS ARE IMPROPER POST

HOC RATIONALIZATIONS AND DIRECTLY

CONTRADICT POSITIONS IT ADOPTED

THROUGH NOTICE AND COMMENT

III OED cetcencasssonesesesossepesommnmnnnteiaanete 25

GUID cnscctccsenssennsasncsscsomecseseessnmecsentenimngienn 30

il

TABLE OF AUTHORITIES

Page

CASES

Arkansas v. Oklahoma, 503 U.S. 91 (1992)............cccceeeeeeee 8

Branch v. Smith, 538 U.S. 254 (20038) ...........ccccsescceeeseeeeess 4

Defenders of Wildlife v. EPA, 420 F.3d 946 (9th Cir.

Sascha enasithkeeibehtiieidindinpaaiavaienibiialnianenden 8

Department of Transportation v. Public Citizen, 541

PR: DETENTION iscsi tthipieiiteieidehitaneiebaihindtaeeenamciatitinnanas 23, 24

INS v. Cardoza-Fonseca, 480 U.S. 421 (1987)..............00 25

Motor Vehicle Manufacturers Association v. State

Farm Mutual Automobile Ingurance Co., 463

2 EE Veer ene eae 25

National Family Planning and Dhisediettion Health

Association, Inc. v. Sullivan, 979 F.2d 227 (D.C.

STI: SUTTIIID cchiciiindeinsciteeihaiabieceiiasiahiiiglenabiahansdiiteibaiaainiandeiaibnetn 26

National Wildlife Federation v. Norton, 332 F. Supp.

re le Se ecitstestecsniccienescscsnsnnninitoniinnanioninienee 18

Securities and Exchange Commission v. Chenery

I. Be Cas Ce CD cetstitneniciinenisinsanceeiininntieioce 25

Sierra Club v. U.S. Fish and Wildlife Service, 245

ene Cr Ey IE CI Phcrstinccennsniensconinnnianccnnisntnnsiineenscnnenien 11

Skidmore v. Swift & Co., 323 U.S. 134 (1944)... 26

Tennessee Valley Authority v. Hill, 437 U.S. 153

Sarai csiceiicabicielanhinsiihieainiitahiiacinainitendgintncspdieiiiaamadelianinatinbsianisain 24

United States v. Mead, 533 U.S. 218 (2001)..................04. 25

lv

TABLE OF AUTHORITIES — Continued

Page

FEDERAL STATUTES

Tes ea nn ee Le Sen ee passim

IIE Ur nist fat niet deinen i eseeaininncenimnsnnipiininnicnnapenininiiiiniien 5

Se SE TIIO TIT TIIIITT ilies tnchcsiniarhithninnardiepniniiaiecinesapeanenaniiiahiinianmeddiatade 5

UI TTI daisies nl nnertineesicieideh tla 5

gf Ea ne aD 6, 12

| ITS aoe een aT eae ND een passim

FEDERAL REGULATIONS

IIIT UU AITech 5, 8, 9, 10

Sn A TT ssssteccshesieshcebeaiiealebnedaitennadesdiainiaieige 10, 28

I TT onda na ennai baiadalidniciatieauaniniaiia 6, 7

TORII Tit TTI sictscsinarincseinisieiicistiaiiniiuniiehiniaisinianitesiampenaninntiiiniiniininiila 8

PTE TT i chiencnibciiminaniinsientdntenipminiiguniemancunnaptilice passim

ee EEN: Tit TTI Da iirctiiiieinnctieeeahehinininiieaienineeeareiiceabdisiniataia 21

I I adel iinet tetera nniicdpmatiitaiditeainietin 21

FEDERAL REGISTER NOTICES

39 Fed. Reg. 26,061 (July 16, 1974)...c.c.cccccccccssecessseseeeeeees 27

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

61 Fed. Reg. 65,047 (Dec. 10, 1996)...............cceceeseseeeeneeeees 11

63 Fed. Reg. 51,164 (Sept. 24, 1998) .....ccccccccecscscecsceseeseee 11

66 Fed. Reg. 11,202 (Feb. 22, 2001)................... 8, 26, 27, 28

TABLE OF AUTHORITIES — Continued

Page

STATE REGULATIONS

ARIZ. ADMBI. CODE R1G-11-106 .....ccesceccscocscccssscvssseccssseccosees 7

ARIZ. ADMIN. CODE RIG-11-106 ....seccessccssesscovsvessescovcesesesoose 7

ADEE. DERE. COU TA BIER ccccctnsecsssceisstcncsnsaniaatinnanaia 7

FLA. ADMIN. CODE r. 62 302.400 (2007)......ccc:cseseseeesesereesees 7

IDAHO ADMIN. CODE 58.01.02.100 (2006) ........cccccccccesseeseees 6

Mass. REGS. CODE tit. 314, § 4.02 (2007)..........cccccccessesseeees 6

Mass. REGS. CODE tit. 314, § 4.05 (2007)......cssesssscssesssseeeee 6

MD. REGS. CODE tit. 26, § 08.02.01 (2005).......sssessseeessseesen 7

N.C. ADMIN. Cope tit. 15A, r. 2B.0110 (Jan., 2006)............ 6

Or. ADMIN. R. 340-041-0004 (2007) .............ccccceeeeeceeeeeeeeeeees 7

Or. ADMIN. R. 340-041-0028 (2007) 2.0.0... ceeeceeseeeeteeeeeeeees 6

30 TEX. ADMIN. CODE § 307.7(b) (2007)............ccceeceseeeeseeees 6

WASH. ADMIN. CODE § 173-201A-200 (2007).............cc0eeeees 6

AUTHORITIES PROPOSED FOR LODGING

Biological Opinion on NPDES transfer to Maine,

from Michael J. Bartlett (FWS) and Patricia A.

Kurkul (NOAA) to Stephen Silva (EPA) (Jan. 12,

FE vcicssertepensanincininnnmeminmma 16

Biological Opinion on NPDES transfer to Texas, _

from David Frederick (FWS) to Gregg Cooke

CEO) Ge, BG, SI cccciccneinssnsessinpscnninsehinnunsaanmmmaanmal 16

vi

TABLE OF AUTHORITIES - Continued

MOA Between the Texas Natural Resource Conser-

vation Commission and the U.S. EPA, Region 6

Concerning the NPDES (May 5, 1998)................004 10, 28

NPDES MOA Between the State of Maine and the

U.S. EPA, Region 1 (Apr. 25, 2000)...............csseeereeeees 10

1

INTERESTS OF AMICI’ __

Amici, American Fisheries Society, Association of

Northwest Steelheaders, California Sportfishing Protec-

tion Alliance, California Trout, Federation of Fly Fishers,

Institute for Fisheries Resources, Miami Beach Rod &

Reel Club, Native Fish Society, Northwest Sportfishing

Industry Alliance, Pacific Coast Federation of Fishermen’s

Associations, Trout Unlimited, and Washington Fly Fish-

ing Club file this brief in support of respondents, Defend-

ers of Wildlife et al. Amici are a diverse coalition of

scientific, commercial, recreational, and conservation

advocacy organizations dedicated to protecting and restor-

ing the nation’s fisheries and the aquatic habitats and

water quality upon which they depend. At stake in this

case is the continued effective functioning of two statutes

designed to protect these resources — the Endangered

Species Act and the Clean Water Act. Amici and their

members depend on these laws for their livelihoods and

recreational opportunities and for the conservation of a

natural legacy for their children and grandchildren.

a

INTRODUCTION AND SUMMARY OF ARGUMENT

This case presents the question whether the Envi-

ronmental Protection Agency (“EPA”) violated the Endan-

gered Species Act (“ESA”) by transferring federal water

pollution permitting authority to Arizona without first

’ Pursuant to S.Ct.R. 37.3(a) and 37.6, the undersigned represent

that (1) all parties consented to the filing of this brief, (2) no counsel for

any party authored this brief in whole or in part, and (3) no person or

entity other than above-named amici curiae and their counsel made a

monetary contribution to the preparation! or submission of this brief.

2

ensuring that the transfer will not threaten the existence

of ESA-listed species. EPA argues that it had no ESA duty

to ensure that its transfer decision would protect imperiled

species because the ESA inherently conflicts with its Clean

Water Act (“CWA”) § 402(b) duties. In this brief, amici

American Fisheries Society et al. demonstrate that there is

no conflict between the two statutes, and that EPA’s

conclusion to the contrary was reached through improper

procedures and incoherent reasoning.

This brief describes the analytical steps that must be

followed in applying the ESA to a CWA § 402(b) transfer

decision, highlighting the discretion EPA exercises in

making transfer decisions. First, as an action “authorized”

and “carried out” by EPA, a transfer of permitting author-

ity is an agency action subject to ESA § 7. See infra § I.

EPA appropriately recognized this fact early in its consid-

eration of Arizona’s transfer request. As EPA recognizes

even now, it must exercise judgment when determining

whether a state meets the CWA criteria for transferring

permitting authority. Moreover, EPA has ample discretion

to limit the scope of the transfer and to impose conditions

on the state as part of the transfer to ensure that it can

effectively oversee state compliance. Thus, ESA § 7 consul-

tation on the effects of this action informs two key deci-

sions by EPA: how it will achieve ESA compliance in

applying the CWA transfer factors, and how it will achieve

ESA compliance in setting the terms of and carrying out

its oversight role. Contrary to EPA’s brief, this is not a case

where there is no discretionary action that can be in-

formed or shaped by an ESA § 7 consultation.

Second, the ESA sets forth detailed procedures for

EPA to ascertain whether compliance with ESA’s prohibi-

tions against jeopardy and adverse modification of critical

3

habitat will collide with the agency's other statutory

mandates. See infra § II. The statute also provides mecha-

nisms for resolving such conflicts in the highly unusual

situations when they arise. EPA and the U.S. Fish &

Wildlife Service (“FWS”) and National Marine Fisheries

Service (“NMFS”) (collectively, the “Services” first identify

the effects of the action on listed|species in the context of

existing environmental conditions and other human

activities.’ The Services render jtheir expert opinion on

whether the action is likely to jeopardize the existence of

listed species or adversely modify |critical habitat. If so, the

Services must propose an alternative within the agency’s

authority that would not cause jeopardy or adverse modifi-

cation. Few consultations result) in jeopardy or adverse

modification findings, and in fewer still are the Services

unable to articulate an alternative that can avoid jeopardy

or adverse modification within the agency’ existing

authorities and goals. It is only after one of the Services

makes a jeopardy or adverse modification finding and

concludes that there are no alternatives to avoid it that

a conflict arises. And even then, the ESA prescribes a

process, involving cabinet-level Executive Branch officials,

to resolve such conflicts and determine how and whether

the action may proceed.

Here, EPA postulates an irresolvable conflict between

the mandates of the ESA and CWA before it even starts

the steps described above for identifying impacts to listed

species and resolving potential conflicts with EPA’s under-

lying statutory obligations. Citing this alleged statutory

* Under the ESA, NMFS has jurisdiction over marine and anadro-

mous species. FWS has jurisdiction over all other species. 51 Fed. Reg.

19,926 (June 3, 1986).

4

conflict, EPA asks this Court to excuse it from all ESA

responsibilities in connection with its transfer decisions.

However, under well-established precedent, courts should

refrain from deciding whether one statute impliedly

repeals another unless there is an irreconcilable conflict

between the two statutes. Branch v. Smith, 538 U.S. 254,

273 (2003) (“An implied repeal will only be found where

provisions in two statutes are in ‘irreconcilable conflict,’ or

where the latter Act covers the whole subject of the earlier

one and ‘is clearly intended as a substitute.’”); Watt v.

Alaska, 451 U.S. 259, 267 (1981) (citations omitted) (court

“must read [two] statutes to give effect to each if we can do

so while preserving their sense and purpose”). That

admonition is particularly apt here, where Congress has

created a process for agencies to identify and resolve

conflicts between statutes.

Finally, EPA’s post hoc rationalization for ESA non-

compliance in this case contradicts both its policy guidance

on decisions to transfer CWA permitting authority to

states — adopted pursuant to nouce and comment proce-

dures — as well as its consistent past practice. See infra

§ III.

Because EPA never utilized the ESA’s procedures for

identifying and resolving conflicts, it would be premature

for this Court to reach the court of appeals’ alternative

holding that the ESA gives EPA “additional” authority to

take conservation measures in a hypothetical situation

involving a conflict between the ESA and CWA. Instead,

this Court should remand the transfer decision for EPA

to follow the statutorily prescribed process for assessing

the transfer decision’s effects on threatened and endan-

gered species. This analysis of effects should be used to

achieve compliance with the ESA’s jeopardy and adverse

5

modification prohibitions, to inform EPA’s applicaticn of

the nine CWA § 402(b) transfer criteria and the terms of

its oversight, and to resolve any statutory conflicts in the

unlikely event that they arise.

I. EPA’S TRANSFER OF CLEAN WATER ACT

NPDES AUTHORITY IS AN AGENCY “ACTION”

SUBJECT TO ESA § 7.

A. EPA’s Transfer of Clean Water ant Author-

ity to States.

Congress passed the CWA in 1972 to “restore and

maintain the chemical, physical, and biological integrity of

the Nation’s waters.” 33 U.S.C. §125l(a) (emphasis

added). Critical to achieving this goal is the National

Pollutant Discharge Elimination System (“NPDES”),

which mandates technology- and water quality-based

permits for the discharge of pollutants. Jd. §§ 1312,

1311(b)(1(C). The NPDES program regulates both indus-

trial sources of pollution as well as upland construction

and development activities that impact water quality. See

33 U.S.C. § 1342(p) (regulating industrial and municipal

stormwater runoff).

The CWA allows states to apply to EPA to operate

their own NPDES permit programs. To obtain permitting

authority, a state must demonstrate, using the nine

criteria in CWA § 402(b), that it will operate the program

in a manner consistent with the CWA and that it has the

resources and legal authority to do so. 33 U.S.C. § 1342(b);

40 C.F.R. § 123.25. Among other things, the state must

show that it has the authority to issue permits that will

contribute to the maintenance and attainment of water

quality standards. See 33 U.S.C. § 1342(b)(1)(A). These

6

water quality standards, developed by states with federal

guidance and approval, lie at the heart of the CWA. Id.

§ 1313.° Water quality standards consist of designated

uses of waterways (e.g., protection of fish and wildlife,

drinking water, or recreation), specific criteria that will

ensure protection of designated uses, and measures

designed to prevent degradation of high quality waters.

See 40 C.F.R. §§ 131.10-.12.

States protect ESA-listed species in a variety of ways

through water quality standards. For example, some

states include ESA-listed species among their designated

uses. See, e.g., WASH. ADMIN. CODE § 173-201A-200 (2007)

(designated uses include “salmonid spawning, rearing, and

migration”); IDAHO ADMIN. CODE 58.01.02.100 (2006)

(designated uses include salmonid spawning). Other states

design state water quality criteria to meet the needs of

ESA-listed species. See, e.g., OR. ADMIN. R. 340-041-0028

(2007) (“The purpose of the temperature criteria ... is to

protect designated temperature-sensitive, beneficial uses,

including specific salmonid life cycle stages in waters of

the State”); Mass. REGS. CODE tit. 314, §§ 4.02, 4.05 (2007)

(standards designed to protect aquatic life, which is

defined to include “endangered species”); N.C. ADMIN.

CopE tit. 15A, r. 2B.0110 (Jan., 2006) (requiring special

water quality plans for waters that listed species inhabit).

Others protect fish and wildlife generally among their

designated beneficial uses. See, e.g., 30 TEX. ADMIN. CODE

* States are required to review their water quality standards every

three years and submit any revised or new standard to EPA. 33 U.S.C.

§ 1313(c). EPA may disapprove these standards if they fail to meet CWA

requirements and, if the state fails to correct the problems, EPA may

promulgate its own standards. Jd. § 1313(c)(3).

§ 307.7(b) (2007); FLA. ADMIN. CODE r. 62 302.400 (2007);

Mp. REGS. CODE tit. 26, § 08.02.01 (2005) (designated uses

* include “propagation of fish, other aquatic life, and wild-

life”); OR. ADMIN. R. 340-041-0004 (2007) (anti-degradation

policy specifically incorporates endangered species); see

also 40 C.F.R. §131.12(a) (antidegradation standards

require protection of “existing uses,” which can include

habitat for endangered species); 40 C.F.R. pt. 132, App. F,

Procedure 2.A.2 (prohibiting variances from water quality

criteria that would harm listed species). In Arizona, fish

and wildlife are among the designated uses protected by

the state’s water quality criteria; ARIZ. ADMIN. CopE R18-

11-104(B), and the standards include special provisions for

designating additional water quality standard limits to

protect threatened or endangered species. Jd. at R18-11-

112(D)(4)(b); see also id. at R18-11-108 (narrative water

quality criteria require water quality that protects aquatic

life and is non-toxic to “humans, animals, plants, or other

organisms”).

By reviewing whether a state’s proposed NPDES

permitting program will contribute to the maintenance

and attainment of water quality standards (through

protection of designated uses and meeting criteria and

anti-degradation requirements), EPA helps ensure that

the program will protect ESA-listed fish and other water

quality-dependent species. EPA may not transfer the

NPDES permitting program to a state that lacks authority

to ensure protection of these water quality standards. 33

U.S.C. § 1342(b). EPA also may approve partial transfers,

keeping for itself the authority to issue NPDES permits

8

for the portion of discharges not transferred. 33 U.S.C.

§ 1342(n).*

Once EPA transfers NPDES authority to a state,

whether full or partial, it retains an important role over-

seeing the state’s program. 40 C.F.R. § 123.41-.46; Arkan-

sas v. Oklahoma, 503 U.S. 91, 105 (1992) (“Congress

preserved for the Administrator broad authority to oversee

state permit programs”) (emphasis added). As part of the

transfer, EPA and the state execute a memorandum of

agreement (“state MOA”) setting forth oversight duties. 40

C.F.R. § 123.24. In a state where authority has been

transferred, the CWA requires that EPA review permit

applications and draft NPDES permits. 33 U.S.C.

§ 1342(d), (e). If a state draft permit is outside CWA

“guidelines and requirements,” EPA has the authority to

object to the permit and stop its issuance. 33 U.S.C.

§ 1342(d)(2); 66 Fed. Reg. 11,202, 11,206 (Feb. 22, 2001).

Contrary to the Ninth Circuit’s erroneous declaration that

neither the Services nor EPA have the authority to “man-

date that the state revise any problematic permits,”

Defenders of Wildlife v. EPA, 420 F.3d 946, 973-74 (9th Cir.

2005), EPA may object to an individual permit that fails to

ensure compliance with water quality standards, which, as

described above, often protect ESA-listed species depend-

ent on water quality. 40 C.F.R. § 123.44(c)(8). If EPA

objects to a state draft permit and EPA’s concerns are not

addressed by the state, authority to issue the permit

passes to EPA. 33 U.S.C. § 1342(d)(4); 40 C.FR.

§ 123.44(h).

* Indeed, only a handful of states have been delegated full author-

ity over all components of the NPDES program. See <http://cfpub1.

epa.gov/npdes/statestats.cfm> (visited March 21, 2007°

9

EPA can withdraw or revise its approval for a state to

operate a NPDES program if it finds that the state is not

administering the program in accordance with the CWA.

33 U.S.C. § 1342(c)(3); 40 C.FR. § 123.62-.64. Possible

grounds for revoking a transfer include failure to exercise

control over regulated activities and repeated issuance of

permits that do not protect water quality standards. EPA

may also revise a state program if there is a change in

state or federal law. 40 C.F.R. § 123.62. Because the EPA

negotiates the state MOA at the time of transfer, the

transfer decision provides a key opportunity for EPA to

facilitate these oversight measures and to tailor its over-

sight role to the particular needs of each state.

B. EPA’s Transfer Decision Involves Discre-

tion.

As even EPA concedes, EPA’s decision to transfer

NPDES permitting authority to a state is not a rote or

ministerial task, but rather involves the “exercise of

judgment” to ensure that the state proposal meets CWA

standards. EPA Br. at 17. Thus, while a NPDES transfer

decision is not completely discretionary in the sense that

EPA cannot freely refuse to transfer permitting authority

to a state that otherwise complies with the nine criteria,

EPA exercises significant discretion in assessing whether

state-issued NPDES permits will meet water quality

standards and other CWA requirements. EPA’s role in a

transfer decision is not to “rubber stamp” the state’s paper-

work, but rather to apply complex statutory standards to

the unique facts of each state’s program and water quality

conditions. This analysis focuses in significant measure on

whether the state program will adequately protect the

habitats of water quality-dependent species in the state.

10

EPA also has substantial discretion over the content of

the state MOA that accompanies the transfer and sets

forth the parameters and procedures for EPA’s oversight.

See, e.g., NPDES MOA Between the State of Maine and

the U.S. EPA, Region 1 (Apr. 25, 2000) (hereinafter “Maine

MOA”) (proposed for lodging); MOA Between the Texas

Natural Resource Conservation Commission and the U.S.

EPA, Region 6 Concerning the NPDES (May 5, 1998)

(hereinafter “Texas MOA”) (proposed for lodging). For

example, the state MOA dictates the number and kind of

permit applications and draft permits that EPA will

review. 40 C.F.R. § 123.24(b)(2). It specifies the frequency

and content of reports which the state must provide to

EPA. Id. § 124.24(b)(3). It identifies the kinds of permits

EPA will review and the kinds for which review will be

waived. 33 U.S.C. § 1342(d)(3); 40 C.F.R. § 123.24(d), (e).

EPA may include any provisions in the state MOA that are

consistent with its CWA authorities relative to the admini-

stration and enforcement of the state program. Id.

§ 123.24(a); see also id. (state MOA cannot restrict EPA’s

statutory oversight responsibility). Thus, for example, EPA

could require the state to provide copies of draft permits

for discharges in particularly sensitive habitats such as

those of ESA-listed species or for discharges that contain a

pollutant that threatens ESA-listed wildlife.

C. EPA’s Transfer Decision Is a Federal

Agency “Action” Within the Meaning of ESA

§ 7.

ESA §7 directs all federal agencies, in consultation

with the Services, to “insure that any action authorized,

funded, or carried out by such agency ... is not likely to

' jeopardize the continued existence of any endangered

11

species or threatened species or result in the destruction

or adverse modification of [critical habitat] of such spe-

cies.” 16 U.S.C. § 1536(a)(2) (emphasis added).’ ESA

regulations broadly define agency actions as including “all

activities or programs of any kind authorized, funded, or

carried out, in whole or in part” by the agency, including

the “granting of licenses, contracts ... [and] permits,” and

“actions directly or indirectly causing modifications to the

land, water, or air.” 50 C.F.R. § 402.02.

Under the ESA’s plain language, the decision to

transfer NPDES permitting authority to Arizona, which

includes both application of CWA § 402(b) transfer criteria

and execution of the state MOA setting forth the terms of

oversight, is an “action” within 'the meaning of ESA § 7.

EPA has long recognized that transfer decisions are

subject to the ESA’s mandatory proscriptions, and has

consulted with the Services to ensure that state programs

do not jeopardize listed species. See, e.g., 63 Fed. Reg.

51,164, 51,198 (Sept. 24, 1998) (approving Texas to admin-

ister NPDES permits and rejecting industry comment that

ESA § 7 does not apply to transfer); 61 Fed. Reg. 65,047,

65,052 (Dec. 10, 1996) (approving Oklahoma to administer

NPDES permits and noting that “EPA’s approval of the

State permitting program under Section 402 of the Clean

Water Act is a federal undertaking subject to [the consul-

tation] requirement”). Throughout the administrative

proceedings in this case, EPA recognized that the transfer -

* ESA §7’s prohibitions on jeopardy to listed species and adverse

modification of their critical habitat are distinct legal duties. Sierra

Club v. U.S. Fish and Wildlife Serv., 245 F.3d 434, 441 n.46 (5th Cir.

2001) (citations omitted). For the sake of brevity, this brief uses the

term jeopardy to encompass both.

12

of NPDES authority to Arizona was an agency action

under ESA § 7.°

Upon requesting certiorari, however, EPA shifted its

position, arguing that transfer is not subject to ESA § 7 at

all. According to EPA, the transfer of CWA permitting

authority is not an “action” within the meaning of ESA

§ 7(a)(2) because EPA has “no control whatever” over the

transfer “but instead is directed by Congress” to perform

it. EPA Br. at 25 n.7. However, EPA has extensive discre-

tion in deciding whether and how to transfer NPDES ~

permitting authority. Like virtually every federal agency

action, there are boundaries on the exercise of that discre-

tion, but EPA nonetheless has extensive control, both in

applying the CWA § 402(b) transfer criteria and in setting

the terms of oversight through the state MOA.’

* Prior to the Supreme Court phase of this case, EPA consistently

recognized that a NPDES transfer decision is an agency action under

ESA § 7. See infra § III.

" EPA acknowledges that other actions it performs under the CWA

are subject to ESA § 7. For example, under § 303(c) of the CWA, EPA

has a duty to review and — if certain criteria are met — approve state

water quality standards. See 33 U.S.C. § 1313(c). EPA’s review of water

quality standards and its review of state NPDES programs thus both

require EPA to exercise its discretion within the boundaries imposed by

statute. EPA does not explain why it believes that its approval of state

water quality standards is an agency action subject to ESA § 7, while its

approval of a state’s NPDES transfer application is not.

13

Il. EPA INCORRECTLY CONCLUDED THAT

THERE IS AN IRRESOLVABLE CONFLICT

BETWEEN STATUTORY MANDATES WITH-

OUT FOLLOWING THE ESA’S STEPS FOR

IDENTIFYING AND RESOLVING SUCH CON-

FLICTS.

Petitioners EPA and National Association of Home

Builders (“NAHB”) argue that the ESA and CWA § 402(b)

are in conflict as a matter of law and that EPA’s transfer

decision is therefore exempt from the ESA. However, EPA

never attempted to determine whether it could satisfy the

ESA while complying with CWA § 402(b). Instead, it

prematurely concluded that there is an irreconcilable

conflict between the mandates of the ESA and CWA,

sidestepping the very procedures designed to identify and

resolve such conflicts.

The ESA establishes an interagency consultation

process to identify the effects of proposed actions on listed

species and to determine whether and how those effects

should be addressed consistent with the agencies’ other

statutory duties. Until EPA follows the prescribed proce-

dures for evaluating the effects of transferring. NPDES)

authority to Arizona on listed species that depend on

adequate water quality, it cannot make a reasoned deter-

mination on whether compliance with the ESA’s jeopardy

prohibition would necessitate violating the CWA. Rather

than working through the statutory process for harmoniz-

ing CWA and ESA obligations, EPA seeks to write the ESA

out of the equation. This Court should reject EPA’s invita-

tion to speculate about an irresolvable conflict between the

ESA and CWA when EPA has failed to follow the required

procedures for identifying and resolving any such conflicts.

14

A. The ESA §7 Process for Identifying and

Evaluating an Action’s Effects on Listed

Species.

The first step in the ESA § 7 consultation process is to

identify species that may be impacted by the agency

action. Regulations implementing the ESA require a

federal agency to review its actions “at the earliest possi-

ble time to determine whether any action may affect listed

species....” 50 C.F.R. § 402.14(a). An agency typically

asks the FWS whether any listed species or species pro-

posed to be listed may be present in the area of the pro-

posed action. 16 U.S.C. § 1536(c). The agencies then

determine the extent to which the proposed action will

affect listed species. The agency proposing the action (“the

action agency”) begins this process by conducting a biologi-

cal evaluation of the action’s effects on listed species or

their critical habitat. If the proposed action “may affect”

listed species or critical habitat, the agency must formally

consult with FWS. The action agency typically asks FWS

to initiate formal consultation and transmits its biological

review and effects findings to begin that process. Formal

consultation culminates with FWS’s issuance of a biologi-

cal opinion. 16 U.S.C. § 1536(b); 50 C.F.R. § 402.14(a).

In formulating a biological opinion, FWS is required to

determine whether the effects of the proposed action,

added together with cumulative effects and the environ-

mental baseline, is likely to result in jeopardy. 50 C.F.R.

$§ 402.02, 402.14(g\4).° FWS must provide a “detailed”

* “Cumulative effects are those effects of the future State or private

activities, not involving Federal activities, that are reasonably certain

to occur within the action area of the Federal action subject to consulta-

tion.” “The environmental baseline includes the past and present

(Continued on following page)

15

discussion of the effects of the action on listed species and

their habitat. Id. § 402.14(h)(2). The effects of the action

include “the direct and indirect effects of an action on the

species or critical habitat, together with the effects of

other activities that are interrelated or interdependent

with that action.” Jd. § 402.02. FWS also determines

whether the action will incidentally “take” members of

listed species. If so, FWS may authorize such take, subject

to mandatory conditions to minimize the harm, as long as

the take will not lead to jeopardy. 16 U.S.C. § 1536(b)(4).

B. EPA Overlooked Virtually All Potential

Water Quality Effects to Species Which

Must Be Analyzed Under ESA § 7.

Although EPA and FWS went through the motions of

consulting on the NPDES transfer, they skipped most of

the crucial analytical steps. In this case, FWS identified 60

listed species in Arizona that live in, adjacent to or other-

wise depend on that state’s surface water quality and thus

may be impacted by NPDES permitting. Biological Opin-

ion (“BO”), App. 1, 06-340 Pet. App. 122-24. EPA then

conducted a biological evaluation and found that the

proposed transfer “may affect” these listed species and

their critical habitat, triggering a requirement to engage

in formal consultation. Biological Evaluation (“BE”), 06-

340 Pet. App. 587-88.

impacts of all Federal, State, or private actions and other human

activities in the action area, the anticipated impacts of all proposed

Federal projects in the action area that have already undergone formal

or early section 7 consultation, and the impact of State or private

actions wh.ch are contemporaneous with the consultation in process.”

50 C.F.R. } 402.02 (defining “cumulative effects” and “effects of the

action”).

16

What is unique about this consultation, compared to

others, is the way the agencies then defined the “effects of

the action.” Prior biological opinions issued by FWS and

NMFS confirm that the effects of the action, i.e., the

transfer, are the impacts to listed species of state-issued

water pollution permits. See, e.g., Biological Opinion on

NPDES transfer to Maine, from Michael J. Bartlett (FWS)

and Patricia A. Kurkul (NOAA) to Stephen Silva (EPA)

(Jan. 12, 2001) at 18 (discussing effects of the action of

transfer of NPDES authority to Maine) (proposed for

lodging); Biological Opinion on NPDES transfer to Texas,

from David Frederick (FWS) to Gregg Cooke (EPA) (Sept.

14, 1998) at 30 (“the area affected by the action includes

all aquatic, riparian and terrestrial habitat that are or

may be affected by issuance of TPDES [Texas Pollution

Discharge Elimination System] permits”) (proposed for

lodging). In contrast, EPA’s biological evaluation of the

Arizona transfer fails to analyze or even discuss the

harmful effects of CWA-permitted discharges on any of the

60 Arizona ESA-listed species, many of which (such as the

Gila trout and the desert pupfish) depend entirely on the

health of Arizona’s rivers and streams for their survival.

Instead, EPA summarily concludes that any harmful

effects of such discharges would be “insignificant and/or

discountable” because CWA protections under Arizona’s

administration of the program would be identical to those

under federal administration. BE, 06-340 Pet. App. 616.

FWS’s biological opinion, like EPA’s biological evalua-

tion, ignores most of the effects of -the CWA-permitted

discharges on the listed species and critical habitat of

Arizona. It lacks virtually all of the critical elements

required by the ESA and its regulations. Regarding the

environmental baseline, nowhere does the biological

17

opinion assess current extinction threats facing any of the

60 listed species in Arizona. Instead, the baseline analysis

briefly discusses just two listed species, the pygmy ow] and

Pima pineapple cactus. BO, 06-340 Pet. App. 108-11.

Similarly, the cumulative effects analysis briefly mentions

that such effects could lead to jeopardy to listed species,

but then fails to elaborate. Jd. at 115-16.

Regarding direct and indirect effects of the action, the

biological opinion lacks any analysis of the biological

effects of state NPDES permits on listed species. It never

discusses what types of pollution will be discharged into

rivers and streams occupied by listed species. Nor does it

assess the measures that Arizona will employ to ensure

that listed fish species will not be exposed to contaminated

water. FWS admits that “there will likely be indirect

effects stemming from water quality issues,” without

describing these water quality issues and indirect effects.

Id. at 113. Instead of analyzing the biological effects of the

transfer, FWS offers a /egal conclusion that the loss of ESA

consultations resulting from the transfer is not an effect

covered by the ESA and its regulations. Jd. at 114-15.

In failing to analyze the biological effects of the action

on ESA-listed species in the context of existing conditions

and other activities affecting water quality, FWS not only

violated its own regulations, see 50 C.F.R. § 402.14, it left

itself and EPA incapable of evaluating whether these

species would be jeopardized by the proposed transfer.

Without such an evaluation, EPA could not legitimately

conclude that complying with its ESA duty to avoid jeop-

ardy required violating the CWA.

18

If FWS and EPA had properly analyzed the biological

effects of transfer, EPA would have had a basis for decid-

ing whether Arizona’s program was adequate to protect

the water quality upon which listed species rely. If the

program was deemed inadequate, EPA potentially could

have denied the transfer, in whole or in part, consistent

with its CWA duty to ensure that state proposals meet the

CWA’s minimum criteria. Even if EPA were required by

the CWA to transfer authority to Arizona, it could have

ensured against jeopardy to ESA-listed species using its

CWA oversight authority by recommending changes to

draft permits and if necessary, vetoing them and issuing

its own. By the same token, EPA could have ensured

against jeopardy by using its discretionary authority to

revoke a state transfer where the state repeatedly issues

permits that are not sufficiently protective of water

quality-dependent species. 33 U.S.C. § 1342(c).

Finally, EPA broadly asserts that ESA §7 does not

require action agencies to protect listed species from

harms caused by other actors. EPA Br. at 22. However, the

ESA requires agencies to ensure that “any” action that

- they “authorize” or “fund” is not likely to jeopardize listed

species. 16 U.S.C. § 1536(a)(2). Agency permits, which

authorize activities by others, are among the agency

actions that must comply with ESA § 7. 50 C.F.R. § 402.02

(“action” defined as including “granting of ... permits”).

Thus, the federal permitting agency must ensure that

activities authorized by the permit, even if carried out by

private parties, will not cause jeopardy. See, e.g., Nat'l

Wildlife Fed’n v. Norton, 332 F. Supp. 2d 170 (D.D.C. 2004)

(biological opinion analyzed impacts of activities by mining

permittee, not just permitting agency). The ESA has never

19

been read to limit § 7(a)(2) to those instances where the

federal agency is the entity discharging the pollutant.

Cc EPA Failed to Utilize the ESA’s Proce-

dures for Resolving Potential Statutory

Conflicts.

As noted above, the ESA prescribes a process for

ascertaining whether there is a conflict between an agency

action and the ESA, and if so, for resolving any such

conflict. Had EPA and FWS followed this process, any

effects of transferring NPDES authority to Arizona that

cause jeopardy would likely have been identified and

mitigated pursuant to EPA’s CWA authority as part of the

application of the CWA § 402(b) transfer criteria and the ~

development of the accompanying state MOA.

The first step in the conflict resolution process is for

FWS and EPA to perform a meaningful effects analysis

and determine whether the proposed action would lead to

jeopardy. If no jeopardy is found, then EPA’s § 7(a)(2)

obligations with respect to the proposed action are com-

plete. Having ensured that jeopardy will not occur, EPA

can proceed with the transfer and there is no potential for

conflict with its CWA § 402(b) obligations. The picture

changes if consultation results in a determination that the

transfer of NPDES authority to Arizona would jeopardize

the existence of any listed species. In a jeopardy situation,

the ESA requires FWS to propose a “reasonable and

prudent alternative” (“RPA”) that would enable EPA to

avoid violating ESA § 7(a)(2) but that also is within the

scope of EPA’s CWA authority. 16 U.S.C. § 1536(3)(A).

RPAs are alternatives to proposed actions that do not

cause jeopardy to a species, are consistent with the in-

tended purpose of the action, and “can be implemented

20

consistent with the scope of the Federal agency’s iegal

authority and jurisdiction.” 50 C.F.R. § 402.02. Thus, in

situations where specific components of an agency’s action

are truly nondiscretionary, a valid RPA could allow those

components to proceed but require the agency to take

other mitigating actions within its authority to remove the

jeopardy to listed species. —

In this case, because FWS and EPA never performed

an adequate analysis of the transfer’s effects on ESA-listed

species, neither agency assessed whether jeopardy would

occur. Even if jeopardy had been found, FWS and EPA

would likely have been able to craft an RPA allowing the

transfer to proceed but ensuring against jeopardy. For

example, an RPA could have been designed to enable EPA

to scrutinize, object to, or federalize individual state-

issued permits that present significant risks to listed

species by undermining water quality. Having never even

investigated the possibilities of jeopardy and RPAs, how-

ever, EPA could not rationally conclude that the specific

conservation measures needed to avoid violating ESA

§ 7(a)(2) would violate CWA § 402(b).

Finally, in cases where FWS concludes that jeopardy

will occur, and the agencies are unable to identify an RPA

that would avoid this result while allowing the agency to

proceed in a manner consistent with its authorities, the

ESA prescribes a process for resolving this statutory

conflict. Under ESA § 7(g), a federal agency may apply to a

Cabinet-level “Endangered Species Committee” for an

exemption from ESA § 7(a)(2), i.e., for permission to

proceed with an action that will jeopardize a listed species.

16 U.S.C. § 1536(g). The Committee is authorized to grant

an exemption only upon a showing of-several substantive

criteria. Jd. § 1536(h)(1)(A). In contrast to an RPA, which

21

by definition must be consistent with the agency’s authori-

ties, in deciding whether to grant an exemption, the

Committee may consider alternative courses of action that

are “beyond original project objectives and acting agency

jurisdiction.” 50 C.F.R. §§ 450.01, 453.03(a)(1)(ii).

Had EPA and the Services concluded that NPDES

transfer to Arizona would have caused jeopardy to any

species, and had they been unable to identify any RPA

within EPA’s authority to avoid jeopardy, the ESA would

have required EPA to seek an exemption from the Com-

mittee before proceeding with the transfer. Indeed, Con-

gress established this exemption process to address the

very situation EPA claims to find itself in here — an ir-

resolvable conflict between the ESA and a proposed action.

Congress’s creation of this elaborate conflict resolution

mechanism demonstrates that it did not intend to exempt

actions that only theoretically pose a statutory conflict

from compliance with the ESA.

D. EPA’s “Legal Causation” Argument Is In-

consistent with the ESA’s Procedures for

Resolving Potential Statutory Conflicts.

EPA seeks to circumvent the ESA’s process for identi-

fying and resolving statutory conflicts by arguing that

Congress, not EPA, is the legal cause of any harmful effect

of the proposed transfer. EPA argues that it is not the

“legal cause” of any effects to listed species as a conse-

quence of the proposed transfer, and therefore the transfer

decision is not subject to ESA § 7. EPA Br. at 23. This

approach suffers from several analytical flaws.

22

As a threshold matter, EPA’s “cause” argument is

simply a variant of its flawed “lack of discretion”. argu-

ment. EPA argues that any effects must have been caused

by Congress since they flow from a transfer which Con-

gress dictated must occur. The premise underlying this

argument is incorrect. As discussed in §1.B. supra, EPA

has discretion under the CWA to make multiple judgment

calls in applying the nine CWA § 402(b) transfer criteria —

which specifically incorporate the protection of fish and

wildlife — and in setting the conditions of the state MOA.”

Moreover, EPA’s causation argument confuses two

fundamentally separate questions: (1) is a transfer of

_ NPDES authority an “action” that is “authorized, funded,

or carried out” by EPA?; and, (2) if so, what effects must be

analyzed in a consultation on that action? In its “causa-

tion” argument, EPA promotes a theory under which the

second question subsumes the first, such that an action

that allegedly causes no effects is no longer an “action”

subject to the ESA. However, ESA § 7 applies to any action

authorized, funded or carried out by a federal agency, and

the consultation process is the mechanism for evaluating

the action’s effects. The concept of “legal causation” plays

no role in determining whether the transfer or any other

agency action constitutes an “action” within the meaning

of § 7(a)(2). Rather, since the transfer is plainly an action

subject to ESA § 7, EPA and FWS must proceed to analyze

its direct and indirect effects in the context of current

* EPA argues that it was “undisputed” that the CWA § 402(b)

criteria had al] been satisfied. EPA Br. at 11. However, respondents

never conceded that the CWA criteria had been met. Their case focused

solely on EPA’s ESA noncompliance.

23

conditions and other activities in an ESA consultation. See

supra § II.A. This analysis never took place.

EPA’s argument that Congress is the cause of any

effects (and that the ESA is therefore inapplicable to this

action) relies almost exclusively on Department of Trans-

portation v. Public Citizen, 541 U.S. 752 (2004). A com-

parison of Department of Transportation to this case

reveals that it lends little support to EPA’s sweeping legal

causation argument. First, the Department of Transporta-

tion (“DOT”) acknowledged (and no party or reviewing

court disputed) that the issuance of its regulations consti-

tuted an “action” subject to the National Environmental

Policy Act (“NEPA”), the statute at issue. 541 U.S. at 761.

Thus, EPA’s proposed interpretation of “action” under the

ESA finds no support in Department of Transportation.

Second, NEPA, like the ESA, prescribes a process for

an agency to evaluate the effects of its actions. DOT

followed this process and assessed the effects of the motor

carrier safety regulations along with the impacts of the

entry of Mexican trucks entering the United States as a

result of the President’s lifting of a moratorium. Jd. at 761,

769-70. The Court in Department of Transportation ruled

on DOT's discretion and authority only after DOT devel-

oped the facts through the NEPA process. It did not invite

the courts to make judgments about the discretion and

authority of federal agencies where, as here, statutorily-

mandated procedures have not yet been followed and the

facts therefore have not yet been developed.

Third, NEPA and the ESA differ in that NEPA merely

imposes procedural obligations to disclose and analyze an

action’s environmental impacts, while the ESA contains

substantive prohibitions against certain detrimental

24

impacts on listed species. See Tennessee Valley Auth. v.

Hill, 437 U.S. 153, 188 n.34 (1978) (refusing to extend

NEPA precedent to ESA case as two statutes “serve differ-

ent purposes”). Accordingly, mere disclosure and consid-

eration of the action’s effects against the backdrop of

current conditions and other activities is the end point

under NEPA, but not under the ESA. If the result will

jeopardize a listed species, the ESA goes further than

NEPA and seeks to eliminate or minimize that impact, and

the ESA administrative process has additional steps to

achieve that result.

Finally, the statutory mandates of EPA and DOT

differ in that DOT has an obligation to register all motor

carriers that are willing and able to comply with safety

and financial responsibility requirements. The agency has

no authority to act on the basis of environmental impacts

of the truck traffic. In contrast, before EPA can transfer

NPDES permitting authority to a state, it must determine

that certain criteria pertaining to water quality are

satisfied, and it has the authority to condition the transfer

to aid in exercising its oversight to achieve water quality

goals. EPA is incorrect in suggesting that its authority to

prevent harm to listed species is as constrained as the

DOT’s authority to act to prevent environmental harm.

In the end, the transfer is an “action,” just as the

safety regulations were an action in Department of Trans-

portation. In each situation, the agencies had a duty to

analyze the action’s effects in accordance with statutorily

mandated processes. While DOT did so, EPA did not and

therefore EPA has not worked through the administrative

process to identify any legal causation or conflict issues to

be resolved by the courts.

25

Ill. EPA’S ARGUMENTS ARE IMPROPER POST HOC

RATIONALIZATIONS AND DIRECTLY CONTRA-

DICT POSITIONS IT ADOPTED THROUGH NO-

TICE AND COMMENT RULEMAKING.

In its petition for a writ of certiorari, EPA argued for

the first time in this litigation that ESA § 7 does not apply

to CWA § 402(b) transfer decisions. Accompanying the

petition was a recent, hasty exchange of letters with the

Services, in which the agencies adopt this new legal

position in the context of an otherwise dormant Alaska

NPDES transfer proposal.” Because these rationalizations

for ESA noncompliance were articulated outside the scope

of the administrative record, fundamental precepts of

administrative law require that they be disregarded. See

Sec. and Exch. Comm’n v. Chenery Corp., 318 U.S. 80,

92-95 (1943).

In addition, this Court owes little deference to EPA’s

newly-constructed interpretations of the interplay of the

ESA and CWA because they were developed informally,

without the benefit of public notice and comment. See U.S.

uv. Mead, 533 U.S. 218, 230-31 (2001). Deference is particu-

larly unwarranted because EPA reversed course and

abandoned interpretations that it adopted in 2001 through

rulemaking procedures. JNS v. Cardoza-Fonseca, 480 U.S.

421, 446, n.30 (1987) (“An agency interpretation of a

relevant provision which conflicts with the agency’s earlier

interpretation is ‘entitled to considerably less deference’

than a consistently held agency view.”); Motor Vehicle

*° Because EPA had previously rejected Alaska’s transfer proposal

as incomplete, there was no apparent reason for the agencies to address

EPA’s ESA duties as to the Alaska transfer other than to buttress EPA’s

position in this litigation.

26

Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,

42 (1983) (courts impose presumption “against changes in

current policy that are not justified by the rulemaking

record.”); Skidmore v. Swift & Co., 323 U.S. 134, 140

(1944).”

In 2001, the EPA, NOAA Fisheries, and FWS entered

into a national agreement regarding enhanced coordina-

tion under the CWA and ESA. See Memorandum of

Agreement Between the EPA, FWS, and NMFS Regarding

Enhanced Coordination Under the Clean Water Act and

Endangered Species Act, 66 Fed. Reg. 11,202 (Feb. 22,

2001) (“Coordination Agreement”). In this Coordination

Agreement, adopted after public notice and comment, EPA

reaffirmed its long-held view that the objectives and

structure of the CWA are “compatible and complementary”

with those of the ESA. See id. at 11,208. EPA recognized

that water-dependent ESA-listed species are “an impor-

tant component of the aquatic environment that the CWA

is designed to protect,” id. at 11,206, and that the CWA “is

a powerful vehicle for improving the quality of the aquatic

environment on which many endangered and threatened

species depend.” Jd. at 11,203.

The Coordination Agreement acknowledges that

“EPA’s current practice is to consult with the Services

" See also Nat'l Family Planning and Reprod. Health Ass’n, Inc. v.

Sullivan, 979 F.2d 227, 231 (D.C. Cir. 1992) (“When an agency promul-

gates a legislative regulation by notice and comment directly affecting

the conduct of both agency personnel and members of the public, whose

meaning the agency announces as clear and definitive to the public and,

on challenge, to the Supreme Court, it may not subsequently repudiate

that announced meaning and substitute for it a totally different

meaning without proceeding through the notice and comment rulemak-

ing normally required for amendments of a rule.”).

27

where EPA determines that approval of a State’s or Tribe’s

application to administer the NPDES program may affect

federally listed species.” Jd. at 11,205.” The focus of the

Coordination Agreement is not on how EPA might deny

transfer requests, but rather how EPA will oversee state

permits once the state has assumed permitting authority.

Although the Coordination Agreement acknowledges that

EPA can object only to those permits that are outside the

“guidelines and requirements of the CWA,” it affirms that

the CWA’s “authorities are sufficiently broad . . . fo address

the broad range of situations that arise in the NPDES

program.” Jd. at 11,206.

EPA has authority and responsibility for oversee-

ing the operation of State/Tribal NPDES pro-

grams through, among other means, review of

State/Tribal NPDES permits where appropriate.

EPA’s oversight includes consideration of the im-

pact of permitted discharges on waters and spe-

cies that depend on those waters. EPA does this

by among other things, determining whether

State and Tribal permits indeed attain water

quality standards.... Where EPA determines

that the exercise of its objection authority is ap-

propriate to protect endangered and threatened

“ NAHB argues that EPA did not consult on the majority of its

transfer decisions made before 1993. NAHB Br. at 11. However, this

was not based on any argument that ESA § 7 is inapplicable to transfer

decisions. Many state transfer decisions occurred early in the imple-

mentation of the ESA, prior to most ESA listings, 39 Fed. Reg. 26,061

(July 16, 1974) (approval of transfer requests from 15 states). No

consultation is required where state-issued permits will not affect a

listed species. See 50 C.F.R. § 402.14(a). Neither NAHB nor EPA cite to

any occasion prior to the Supreme Court phase of this case where EPA

has asserted that ESA §7 does not apply to CWA § 402(b) transfer

decisions. E

28

species, the Agency will act pursuant to its exist-

ing authorities under the CWA, (i.e., where the

proposed permit would be “outside the guidelines

and requirements” of the CWA).

Id. 11,215 (emphasis added). Where a state permit is likely

to result in jeopardy to a listed species, EPA will “use the

full extent of its CWA authority to object” to the permit. Jd.

The Coordination Agreement also confirms that,

under existing regulations, states with transferred

NPDES programs are required to provide draft permits to

the federal fish and wildlife agencies, and respond to any

concerns that they raise. See id. at 11,206 (citing 40 C.F.R.

§ 124.10(c)iv),(e); § 124.11, § 124.17, § 124.59(b),(c)). While

the Coordination Agreement does not purport to alter any

agency's existing authorities, it seeks to “ensure[{] that

EPA has the full benefit of the Service’s views on potential

impacts to Federally listed species and designated critical

habitats in determining whether CWA requirements are

met.” Jd. Of course, if EPA federalizes a permit because of

unresolved objections and issues a permit on its own, EPA

must consult pursuant to ESA § 7 on that action to ensure

compliance with the ESA’s no-jeopardy mandate. Jd. at

11,215.

The Coordination Agreement’s approach is embodied

in various state MOAs that EPA has executed at the time

of transferring CWA § 402(b) authority. In the Maine

MOA, for example, EPA and the state agree that state

permits would protect ESA-listed species by ensuring

compliance with state water quality standards, and that

EPA would object to any permit that risks harm to a listed

species by threatening water quality. Maine MOA at 4; see

also Texas MOA at 32-33 (describing mechanism for

ensuring that Texas permits do not harm listed species — if

29

concern is raised and state does not resolve, EPA “shall”

assume jurisdiction and issue the permit). See also § LC.

supra (describing other transfer decisions where EPA

successfully integrated the ESA and CWA).

In summary, in 2001 EPA decided, after a full notice

and comment procedure and careful deliberation, that the

ESA and CWA are easily harmonized and that compliance

with CWA § 402(b) does not preclude compliance with ESA

§ 7. Its consistent practice across the states has been to

harmonize the two statutes and acknowledge its ESA § 7

duties. This Court should reject EPA’s improper attempt to

put forth a contradictory position in the late stages of this

litigation and instead should require that EPA undergo

ESA consultation on its proposed Arizona transfer decision

and set forth its conclusions and rationale in the adminis-

trative record.

30

CONCLUSION

For the reasons stated above, this case should be

remanded to EPA to consult with FWS on the biological

effects of its proposed transfer decision consistent with the

CWA and ESA.

Respectfully submitted,

JAN E. HASSELMAN, Counsel of Record

Patt! A. GOLDMAN

EARTHJUSTICE

705 Second Avenue, Suite 203

Seattle, WA 98104

(206) 343-7340

JOHN F. KOSTYACK

MARY RANDOLPH SARGENT

NATIONAL WILDLIFE FEDERATION

1400 16th Street, NW, Suite 501 -

Washington, D.C. 20036

(202) 797-6800

Counsel for Amici Curiae