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

figs,

Nos. 06-340, 06-549

IN THE

Supreme Court of the United States

NATIONAL ASSOCIATION OF HOME BUILDERS, et al.,

Petitioners,

Vv.

DEFENDERS OF WILDLIFE, et al.,

Respondents.

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

Petitioner,

v,

DEFENDERS OF WILDLIFE, er a/.,

Respondents.

On Writs OF CERTIORARI TO THE

Unitrep STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

—— ——

_—- = — -—--—

BRIEF OF THE FEDERAL WATER QUALITY

COALITION, AS AMICUS CURIAE IN SUPPORT

OF PETITIONERS

——

a

Danie. P. ALBERS

Counsel of Record

Frepric P. ANDES

Davip T. BALLARD

BARNES & THORNBURG

One North Wacker Drive

Suite 4400

Chicago, Illinois 60606

(312) 357-1313

Counsel for the Federal Water

Quality Coalition

TABLE OF CONTENTS

Page

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

INTEREST OF AMICUS CURIAE ......... i rer |

SUMMARY OF ARGUMENT ................. 2

Ey eer ree ee co 6

I. The Ninth Circuit’s Interpretation Of ESA

§ 7(a)(2) Substantially And Adversely

Undermines The Well-Established NPDES

Program In Direct Conflict With The Plain

Language And Congressional Intent Of The

RP: Whaaduviw wks uduuee oes we aeeeesten 6

ll. ESA § 7(a){2) Does Not Override The

Authority Of Federal Agencies To Perform

Their Mandatory Statutory Duties. ........ 16

POPE TT TTT ETT CT TC Tee 21

li

TABLE OF CITED AUTHORITIES

Page

Cases:

American Forest & Paper Ass'n v. EPA, 137 F.3d 291

Se EE 6 ce ore yales ce ubeneu'sns 6, 8-9, 10

Arkansas v. Oklahoma, 503 U.S. 91 (1992) ....... 7

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

RE Fares ern rne. reer are 2,3, 11

Defenders of Wildlife v. EPA, 450 F.3d 394 (9" Cir.

er ee ee ee 4,5,17

Defenders of Wildlife v. Norton, 257 F. Supp. 2d 53

ED bctueaunkusdeceelkenadesuws 20

Edmond v. United States; 520 U.S. 651 (1997) .... 10

International Paper Co. v. Ouellette, 479 U.S. 481

EET Oe eT ET ee eT Te 7,12

J. E. M. AG Supply, Inc. v. Pioneer Hi-Bred Int'l, Inc.

i re ey ee ae 9

_ Morton v. Mancari, 417 U.S. 535 (1974) ......... 9,21

National Cable & Telecommunications Assoc. v. Gulf

Power Co., 534 U.S. 327 (2002) ............ , 10

Oregon Natural Resources Council v. Hallock,

No. 02-1650-CO, 2006 U.S. Dist. LEXIS 87070

es ee 8 Re eee enews 11, 16

il

Cited Authorities

Page

Platte River Whooping Crane Critical Habitat Maint.

Trust v. FERC, 962 F.2d 27 (D.C. Cir. 1992) .... 6,9

Sierra Club v. Babbitt, 65 F.3d 1502 (9" Cir. 1995)

Sih eela aha ial ee tu aie aia tora ae a Dk Siae ea oie Aa 20

South Florida Water Mgmt. Dist. v. Miccosukee Tribe

of Indians, 541 U.S. 95 (2004) ............... 6-7

Strahan v. Linnon, 967 F. Supp. 581 (D. Mass. 1997)

TR GUEL ONE N OOESERE SENSED EON ORCERE SD OS OSs 20

United States v. Borden Co., 308 U.S. 188 (1939) ... 21

Statutes:

Fis CUED 6 kv 6 dec wseneteeuranes 2, 13, 16

I re ee 20

a ee ee 19

PE TREE CU iis ba dae eines 20

29 U.S.C. § 667(c)( ST eirine dd iewisesa wets 20

Pen cdetsanvhksd 4 o0cia eae oe eee l

a ED Ws + > ne ko he 6004445600404 6,7

og Rg ere ee 3,8, 12

re ee ee ee 9

iv

Cited Authorities

a | ree

URL. FIM «0.52.5 -0000 0500

33 U.S.C. § 1342(b) ...........000008.

ee ee

33 U.S.C. § 1342(c)(2) .... 0. . eee eee

33 U.S.C. § 1342(c)(3) .......0 ec eee ee

42 U.S.C. § 6926(b) . 0.2.2.0. c eee.

Ce)

GUSL.SCIOME «2.66556 666occcs.

42 U.S.C. § 766la(d)(1) ........02.00..

42 U.S.C. § 7661a(d)(3) ..........2.0..

42 U.S.C. § 1661a(i)1) eben ia

42 U.S.C-§ 7661a(i)(2) ......02.0. 00.

GE UDA. | POMUGLED cn vcnvecdcceses

Regulations:

a ek es

recree 18

wrrere 19

Cited Authorities

Other Authorities:

Bills Amending the Federal Water Pollution Control

Act and other Pending Legislation Relating to

Water Pollution Control, Hearings before the

S. Subcomm. on Air and Water Pollution of the

Comm. on Public Works, 92nd Cong. 4356 (1971)

Robert L. Fischman, Cooperative Federalism and

Natural Resources Law, 14 N.Y.U. Envtc. L.J. 179

errr eT errs. e TTT e oT.

See In re: Indeck-Elwood, L.L.C., PSD Appeal

No. 03-04, slip op. (Environmental Appeals Board,

Fe errr ee

John H. Minan, General Industrial Storm Water

Permits and the Construction Industry: What does

the Clean Water Act Require?, 9 Cuapr. L. Rev. 265

Perr re eee

Robert V. Percival, Symposium: Environmental

Federalism: Historical Roots and Contemporary

Models, 54 Mb. L. Rev. 1141 (1995) ..........

S. Comm. ON PusLic Works, FEDERAL WATER POLLUTION

Conrrot AcT AMENDMENTS OF 1972, S. Rep.

Fa. SEM EOUTED 0660660640000

Page

12-13

15

19

13-14

12

INTEREST OF AMICUS CURIAE'

The Federal Water Quality Coalition (the “Coalition’’)

is a group of industrial companies, municipal entities,

agricultural parties, and trade associations that are directly

affected, or which have members that are directly affected,

by regulatory decisions made under the federal Clean Water

Act (33 U.S.C. § 1251, et seg.) (the “CWA”).? Coalition

member entities or their members own and operate facilities

located on or near waters of the United States. These entities

operate pursuant to individual or general National Pollution

Discharge Elimination System (“NPDES”) wastewater or

stormwater permits, which were issued by EPA or, if EPA

has transferred permitting authority pursuant to section

402(b) of the CWA, 33 U.S.C. § 1342(b) (“CWA § 402(b)”),

by state water quality agencies. The Coalition previously filed

a brief in support of the petitions for writs of certiorari in

this case.

' Pursuant to Rule 37.6 of the Rules of this Court, the Coalition

states that no counsel for a party has written this brief in whole or in

part and that no person or entity, other than the Coalition, its

members, or its counsel, have made a monetary contribution to the

preparation or submission of this brief.

? Consent by all of the parties in this case has been given to the

Coalition for filing this brief. Petitioners 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; Respondents Defenders of Wildlife,

Center for Biological Diversity, and Craig Miller: and the State of

Arizona have submitted letters to the Court consenting to the filing

of all amicus curiae briefs in this matter. The United States

Environmental Protection Agency (“EPA”) has provided specific

written consent to the Coalition to file this brief. The Coalition

submits EPA’s consent letter to the Court concurrent with its filing

of this brief.

2

The Ninth Circuit decision below interpreted section

7(a)(2) of the federal Endangered Species Act, 16 U.S.C.

§ 1536(a)(2) (“ESA § 7(a)(2)”), as imposing an additional

requirement on CWA § 402(b) transfer decisions that is not

contained in the CWA. This new requirement, if left to stand,

would directly and adversely affect the administration of the

NPDES permitting program as it is applied to Coalition

members. In light of the substantial impact this case will

have on its members, the Coalition has a direct interest in

maintaining the current, well-established NPDES program,

which will be undermined if the Ninth Circuit decision is

not reversed.

SUMMARY OF ARGUMENT

The Ninth Circuit decision allows ESA § 7(a)(2) to

override EPA’s mandatory duty to transfer NPDES permitting

authority to the states under CWA § 402(b), in direct conflict

with the language and Congressional intent of the CWA.

CWA § 402(b) states that EPA is required to transfer NPDES

permitting authority to a state if that state can demonstrate

that its program will meet the nine criteria contained in CWA

§ 402(b){1)-(9). There is no dispute that the State of Arizona

met the nine required criteria under CWA § 402(b). Defenders

of Wildlife v. EPA, 420 F.3d 946, 963, n. 11 (9® Cir. 2005).

The Ninth Circuit, however, ruled that pursuant to ESA §

7(a)(2), EPA must also insure that any action to transfer

NPDES permitting authority to a state under CWA § 402(b)

is not likely to jeopardize the continued existence of any

endangered species. /d. at 967. In vacating EPA’s transfer

approval, the Ninth Circuit held that EPA failed to comply

with ESA § 7(a)(2) in transferring NPDES permitting

authority to the State of Arizona, as evidenced, according to

the court, by the mere fact that Arizona, as a state agency, 1s

3

not required to comply with the consultation requirement of

ESA § 7(a)(2). /d. at 971.°

The Ninth Circuit decision cannot stand because it writes

a superseding requirement into CWA § 402(b), contrary to

EPA’s obligations under the plain language of that statute.

As a result, the Ninth Circuit decision could have a broad

and unjustified effect on EPA, state agencies, and the entities

they regulate, including Coalition members, without any

indication from Congress that such an effect was intended,

or is warranted. The Congressional intent behind the NPDES

program, as well as the CWA generally, is to allow the states

to take a primary role in the regulation of pollutant discharges

to their waters. 33 U.S.C. § 1251(b). The Ninth Circuit’s

disregard of that intent undermines the well-established

system that has resulted in the mandatory EPA transfer of

NPDES permitting authority to 45 states over the last 33

_ years.“

According to the Ninth Circuit, in order to maintain their

NPDES permitting authority, states must strictly comply with

ESA § 7(a)(2) to insure that state actions are not likely to

jeopardize endangered species. Accordingly, for current state

programs to avoid a withdrawal of NPDES authority, or for

new State applicants to obtain a transfer of authority pursuant

to CWA § 402(b), states would apparently be required to

> The Ninth Circuit specifically held that “the EPA’s transfer

decision will cause whatever harm may flow from the loss of section

7 consultation on the many projects subject to a water pollution

permit, and that harm constitutes an indirect effect of the transfer.”

Defenders of Wildlife, 420 F.3d at 971 (emphasis in original).

* The first state that EPA transferred NPDES permitting

authority to was California on May 14, 1973. See National Pollution

Discharge Elimination System (NPDES): Specific State Program

Status (last visited February 16, 2007) <http://cfpub.epa.gov/npdes/

statestats.cfm?program_id=45&view=specific>.

4

adopt burdensome mechanisms to implement the

requirements of ESA § 7(a)(2), despite that section’s facial

applicability only to federal agencies. The Ninth Circuit

decision could require EPA to revisit its CWA § 402(b)

transfer decisions, and withdraw approval of state NPDES

programs, regardless of independent state efforts to protect

endangered species, if full state compliance with the

requirements of ESA § 7(a)(2) cannot be demonstrated.

33 U.S.C. § 1342(c). Broad withdrawal of state NPDES

authority would have serious practical implications for

federal and state agencies and the regulated community. For

example, EPA would be burdened by the return of permitting

authority and would have its resources exhausted by the

increased volume of new permitting decisions, potentially

leading to burdensome delays for regulated facilities seeking

permits.

The Ninth Circuit decision would also unreasonably

override the authority of EPA, as well as all other federal

agencies, to satisfy their numerous mandatory obligations

outside of CWA § 402(b). Because there is no indication that

the Ninth Circuit limited its interpretation of ESA § 7(a)(2)

to the NPDES delegation context only, EPA would apparently

be required, by the logic of the decision, to consult with the

Fish and Wildlife Service or the National Marine Fisheries

Service (collectively, the “ESA Services”) before performing

numerous other mandatory duties under the CWA and other

environmental statutes. Moreover, all other federal agencies

would also be ree sired to consult with the ESA Services

before acting under non-environmental statutes, as

recognized by the dissenting opinion on the denial of the

Petition for Rehearing or Rehearing En Banc before the Ninth

Circuit: “If the ESA were as powerful as the majority

contends, it would modify not only EPA’s obligation under

the CWA, but every categorical mandate applicable to every

federal agency.” Defenders of Wildlife v. FPA, 450 F.3d 394,

5

399, n. 4 (9" Cir. 2006) (Kozinski, J., dissenting) (emphasis

in original). The extensive effects of the Ninth Circuit

decision cannot be overstated.

If broadly applied, the Ninth Circuit decision would

cause substantial and unwarranted changes in the

administration of the NPDES program, contrary to the

language of the CWA itself, as well as its underlying

Congressional intent. The Ninth Circuit decision should be

reversed.°

* In granting the petitions for writs of certiorari, the Court

requested that the parties brief and argue an additional set of issucs:

whether the Ninth Circuit correctly found that EPA’s transfer decision

was arbitrary and capricious, and if so, whether the Ninth Circuit

should have remanded on that basis without interpreting ESA

§ 7(a)(2). The Coalition believes that the Ninth Circuit decision was

in error in finding that EPA’s transfer decision was arbitrary and

capricious. However, the Coalition does not think that the Court

should decide this case on that basis. Instead, the Coalition believes

that the issue of the Ninth Circuit’s interpretation of ESA § 7(a)(2)

is ripe for the Court’s review and should be decided at this time. If a

remand to EPA is ordered, EPA would again transfer NPDES

permitting authority to the state of Arizona, as EPA and the ESA

Services both agree that ESA § 7(a)(2) cannot overrride EPA’s

nondiscretionary duties under CWA § 402(b). See EPA App. to Pet.

for Writ of Cert., at 93a-116a. Assuming Respondents again seek

review of EPA’s transfer decision based on an alleged failure to

comply with ESA § 7(a)(2), the Ninth Circuit would likely interpret

the parameters of ESA § 7(a)(2) consistent with its previous decision

below. Again assuming that the non-prevailing parties pursue a

petition for writ of certiorari to the Court after the Ninth Circuit's

second interpretation of ESA § 7(a)(2), the Court would be faced

with the same statutory interpretation issue before it now.

Instead of remanding the case, which would most likely return

to the Court at a later time for an interpretation of ESA § 7(a)(2) in

relation to CWA § 402(b), the Court should review that issue at this

time. If the case were remanded, it would take some time — months

(Cont'd)

6

ARGUMENT

I. THE NINTH CIRCUIT’S INTERPRETATION OF

ESA § 7(a)(2) SUBSTANTIALLY AND ADVERSELY

UNDERMINES THE WELL-ESTABLISHED

NPDES PROGRAM IN DIRECT CONFLICT WITH

THE PLAIN LANGUAGE AND CONGRESSIONAL

INTENT OF THE CWA.

1. The objective of the CWA “is to restore and maintain

the chemical, physical, and biological integrity of the Nation’s

waters.” 33 U.S.C. § 1251(a). In furtherance of this goal, the

CWA prohibits any person from discharging any pollutant

into the waters of the United States from a point source unless

the discharge complies with the CWA’s statutory

requirements. 33 U.S.C. § 1311(a). Section 402 of the CWA

(“CWA § 402”) authorizes EPA to issue NPDES permits for

the discharge of pollutants, provided the discharge meets

particular statutory requirements. 33 U.S.C. § 1342(a). As

described by the Court, “[g]enerally speaking, the

NPDES 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 Florida Water

(Cont'd)

if not years — to return to this Court. During that time period, federal

and state agencies and the regulated community would be left in a

state of confusion as to whether ESA § 7(a)(2) applies to the NPDES

program — and all other EPA-administered programs - as stated by

the Ninth Circuit in Defenders, or whcther it applies as stated by the

Fifth and D.C. Circuits in American Forest & Paver Ass'n v. EPA,

137 F.3d 291 (S" Cir. 1998) and Platte River Whooping Crane

Critical Habitat Maint. Trust v. FERC, 962 F.2d 27 (D.C. Cir. 1992).

Such confusion will lead to uncertainty and inconsistency in

administering water programs under the CWA and other acts

administered by EPA (in addition to other Federal programs

administered by other agencies). Therefore, the Court should address

the ESA § 7(a)(2) interpretation issue now.

7

Memt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95,

102 (2004).

The CWA also recognizes “that the States should have a

significant role in protecting their own natural resources.”

International Paper Co. v. Ouellette, 479 U.S. 481, 489

(1987); see also Arkansas v. Oklahoma, 503 U.S. 91, 101

(1992) (quoting 33 U.S.C. § 1251(a) (“The Clean Water Act

anticipates a partnership between the States and the Federal

Government, animated by a shared objective: ‘to restore and

maintain the chemical, physical, and biological integrity of

the Nation’s waters.’”)). To this end, CWA § 402(b) mandates

that EPA transfer to states the authority to implement and

administer the NPDES permit program, if a state can meet

the nine requirements in sections 402(b)(1)-(9) of the CWA.

33 U.S.C. § 1342(b) (“The Administrator shall approve each

such submitted program unless he determines that adequate

authority does not exist... .”) (emphasis added). If a state

seeks a transfer of NPDES permitting authority from EPA,

the governor of such a state “may submit to the Administrator

[of EPA] a full and complete description of the program it

proposes to establish and administer under State law or under

an interstate compact.” 33 U.S.C. § 1342(b). Once a state

elects to implement its own program, and EPA approves such

“submitted program” under the criteria of CWA § 402(b),

State programs can issue permits that insure compliance with

the CWA. /d. Moreover, once a state permitting program is

established, EPA will cease to administer the NPDES

program in the state’s jurisdiction and “shall suspend the

issuance of permits under subsection (a) of this section as to

those discharges subject to such program unless [EPA]

determines that the State permit program does not meet the

requirements of subsection (b) of this section. . .” 33 U.S.C.

§ 1342(c).

Once EPA transfers NPDES permitting authority to a

state, the state program “shall at all times be in accordance

8

with” section CWA § 402. 33 U.S.C. § 1342(c)(2). Moreover,

state programs are required to implement EPA’s NPDES

regulations. 40 C.F.R. § 123.25(a) (“All State Programs under

this part must have legal! authority to implement each of the

following provisions and must be administered in

conformance with each .. .”). EPA has a continuing duty to

determine whether a state program is in compliance with

CWA § 402. 33 U.S.C. § 1342(c)(3). If EPA determines that

a state is not complying with CWA § 402 in administering

its NPDES program, EPA “shall so notify the State and, if

appropriate corrective action is not taken within a reasonable

time, . . . the Administrator shall withdraw approval of such

program.” /d. (emphasis added). The permitting authority for

that state then reverts to EPA under CWA § 402(a). 33 U.S.C.

§ 1342(a).

Since 1972, when CWA § 402(b) was enacted, 45 states,

including Arizona, have invoked that statute to require EPA

to transfer NPDES permitting authority. See footnote 4,

supra. \n addition, the State of Alaska has indicated in an

amicus curiae brief that it formally applied for a transfer on

June 29, 2006 and is in the process of seeking approval from

EPA as the 46th state to obtain NPDES permitting authority.

In other words, for more than three decades, EPA and the

states have jointly employed CWA § 402(b) to satisfy

“the policy of Congress that the States . . . implement the

permit programs under sections 402 and 404 of [the CWA].”

33 U.S.C. § 1251(b).

2. Despite the clear intent of the CWA, the Ninth Circuit

decision subverts the system that has been implemented by

EPA's repeated transfers of NPDES permitting authority to

the states. Under CWA § 402(b), EPA has a nondiscretionary

duty to transfer its NPDES permitting authority if a state is

able to demonstrate that its permitting program complies with

the nine requirements of CWA § 402(b)(1)-(9). 33 ULS.C.

§ 1342(b); see also, American Forest and Paper Assoc. v.

9 |

EPA, 137 F.3d 291, 297 (5" Cir. 1998) (“The language of

§ 402(b) is firm: It provides that EPA ‘shall’ approve

submitted programs unless they fail to meet one of the nine

listed requirements.”). There is no indication in the plain

language of CWA § 402(b), or the CWA generally, that EPA ~

approval of a transfer is subject to any other requirements.

In interpreting the two statutes at issue, CWA § 402(b) and

ESA § 7(a)(2) should be interpreted to coexist peaceably.

See J. E. M. AG Supply, Inc. v. Pioneer Hi-Bred Int'l, Inc.

534 U.S. 124, 143 (2001) (quoting Morton v. Mancari, 417

U.S. 535, 551 (1974) (“Indeed, ‘when two statutes are capable

of coexistence; it is the duty of the courts, absent a clearly

expressed congressional intention to the contrary, to

\regard each as effective.’”). To coexist with CWA § 402(b),

— § 7(a)(2) cannot be read to expand EPA’s power to deny

permitting authority transfer based on an assessment of

the effect on endangered species, because that power is

expressly limited to the nine criteria enumerated in CWA

§ 402(b)(1)-(9). Instead, ESA § 7(a)(2) should be read to

require consultation regarding endangered species only where

possible within the existing authority of EPA under the CWA.

See Platte River Whooping Crane Critical Habitat

Maintenance Trust v. FERC, 962 F.2d 27, 34 (D.C. Cir. 1992)

(“As the Commission explained, the statute directs agencies

to ‘utilize their authorities’ to carry out the ESA’s objectives;

it does not expand the powers conferred on an agency by its

enabling act.) (emphasis in original); American Forest and

Paper Assoc. , 137 F.3d at 299 (“We agree that the ESA serves

not as a font of new authority, but as something far more

modest: a directive to agencies to channel their existing

authority in a particular direction.”) (emphasis in original).

This is the only sensible interpretation of the two statutory

provisions, because any other reading would prevent

EPA from carrying out its nondiscretionary duties consistent

with the plain language of the CWA, which EPA is required

to do unless expressly provided otherwise by the CWA.

See 33 U.S.C. § 1251(d) (“Except as otherwise expressly

10

provided in this Act, the Administrator of the Environmental

Protection Agency . . . shall administer this Act.”). As the

Fifth Circuit aptly observed:

There is no hint that Congress intended to grant

EPA authority to erect additional hurdles to the

permitting process beyond those expressly noted

in § 402(b) .... The statute’s plain language

directs EPA to approve proposed state programs

that meet the enumerated criteria; particularly in

light of the command ‘shall approve,’ [the CWA]

cannot be construed to allow EPA to expand the

list of permitting requirements.

American Forest and Paper Assoc., 137 F.3d at 298. The

Ninth Circuit decision should not stand, because it does not

allow EPA to satisfy its mandatory duties under the plain

terms of the CWA.°

3. There is no indication in the legislative structure or

history of the CWA that Congress intended for ESA § 7(a)(2)

to overridé EPA’s nondiscretionary duties under CWA

§ 402(b). Under the CWA, EPA is required to withdraw

NPDES permitting authority from a state if that state is not

in compliance with CWA § 402(b)(1)-(9). 33 U.S.C.

§ 1342(c)(3). The Ninth Circuit decision, however, imposes

* Even if the Court finds that the language of CWA § 402(b)

and ESA § 7(a)(2) conflict, the mandatory language of CWA § 402(b)

controls, because it more specifically describes EPA’s obligations to

transfer NPDES permitting authority to the states, and therefore

prevails over the more general obligations set forth in ESA § 7(a)(2).

National Cable & Telecommunications Assoc. v. Gulf Power Co.,

534 U.S. 327, 335 (2002) (“It is true that specific statutory language

should control more general language when there ts a conflict

between the two.”); Edmond v. United States, 520 U.S. 651, 657

(1997) (“Ordinarily, where a specific provision conflicts with a

gencral one, the specific governs.”).

11

the additional requirement that a state would have to comply

with ESA § 7(a)(2), otherwise NPDES authority could not

be delegated to the state. Defenders of Wildlife, 420 F.3d at

971. As a result of the Ninth Circuit’s interpretation of the

CWA and ESA, EPA could be required to withdraw approval!

of state programs that are not in compliance with the

requirements of ESA § 7(a)(2) (even though those

requirements apply only to federal agencies), because EPA

is required to withdraw its approval of noncompliant state

programs pursuant to CWA § 402(c)(3). See 33 U.S.C. §

1342(c)(3) (In order to approve withdrawal of a noncompliant

state program, EPA “shall so notify the State and, if

appropriate corrective action is not taken within a reasonable

time .. . the Administrator shall withdraw approval of such

program.”) Thus, under the Ninth Circuit decision, if EPA

does not insure ongoing state consultation with the ESA

Services, EPA could be violating the ESA if it delegates

NPDES authority to or fails to withdraw such authority from

the state.’

’ The Coalition does not concede that EPA’s determination of

whether to withdraw permitting authority under CWA § 402(c) is an

“action” for purposes of ESA § 7(a)(2). However, as explained in section

II, infra, claims are being made that EPA’s determination of whether to

withdraw permitting authority is an action that requires ESA § 7(a)(2)

consultation. See, e.g., Oregon Natural Resources Council v. Hallock,

No. 02-16504CO, 2006 U.S. Dist. LEXIS 87070, *1-2 (D. Or. Nov. 29,

2006); National Wildlife Federation, et a/., Notice of Intent to Sue for

Violation of Endangered Species Act — Failure of EPA to Consult on

Effect of NPDES Delegation to the Washington State Dept of

Ecology and Oversight on Threatened Puget Sound Chinook Salmon,

at 29 (Apr. 19, 2006), <http://www.ccy.wa.gov/programs/

wq/links/educate/attachments to noi/Nofl001.pdf>. If claims such as

these succeed and a court decides that EPA’s withdrawal determination

under CWA § 402(c) is a federal action for purposes of ESA § 7(a)(2),

then the logic of the Ninth Circuit decision seems to indicate that EPA

would be required to withdraw NPDES permitting authority from state-

administered programs based on noncompliance with ESA § 7(a)(2).

12

Such an interpretation of ESA § 7(a)(2) is inconsistent

with the CWA’s “policy of the Congress to recognize,

preserve, and protect the primary responsibilities and rights

of States to prevent, reduce, and eliminate pollution. . .” such

that “[i]t is the policy of Congress that the States ...

implement the permit programs under sections 402 and 404

of this Act.” 33 U.S.C. § 1251(b); see also Ouellette, 479

U.S. at 489 (The states have a “strong voice in regulating

their own pollution,” and should play a major role in

protecting and preserving their own natural resources.);

Robert V. Percival, Symposium: Environmental Federalism:

Historical Roots and Contemporary Models, 54 Mp. L. Rev.

1141, 1174-75 (1995) (citing the CWA as an example of

“cooperative federalism,” whereby the states have been

granted the primary responsibility of administering and

enforcing the permit program in a way that fits their

objectives). The legislative history of the CWA confirms

Congress’ expectation that the states would be the primary

administrators of the NPDES permitting program. S. Comm.

ON PusBLic Works, FEDERAL WATER POLLUTION CONTROL ACT

AMENDMENTS OF 1972, S. Rep. No. 92-414, at 71 (1971) (“It

is expected that the States will play a major role in the

administration of this program.”). Congress accurately

recognized that states possess the expertise to administer their

own permit systems. /d. at 8 (“Talents and capacities of those

States whose own programs are superior are to be called upon

to administer the permit system within their boundaries.”).

During hearings before the Subcommittee on Air and Water

Pollution of the Committee on Public Works, EPA Assistant

Administrator John R. Quarles, Jr. stated:

We are proceeding with the program that is based

on trying to relate it to the existing structure of

the Federal-State partnership established under the

|CWA\| and that structure places in the States the

primary firing line responsibility for dealing with

polluters, gathering information as to water quality

13

conditions in the State, and prescribing levels of

treatment that should be required. The Federal role

is a backup role and we are trying to be more

vigorous In pursuing our own responsibilities but

not distort them into a fundamentally different

level of responsibility.

Bills Amending the Federal Water Pollution Control Act and

other Pending Legislation Relating to Water Pollution

Control, Hearings before the S. Subcomm. on Air and Water

Pollution of the Comm. on Public Works, 92nd Cong. 4356

(1971). The conflict between the express policy and the

Congressional intent of the CWA, and the Ninth Circuit

decision demonstrates the unwarranted impact that the

decision could have on the administration of the NPDES

program and the CWA

4. If the Ninth Circuit decision is left to stand, there

will be significant practical impacts on the current NPDES

program. For example, in order to avoid a denial of new

applications for a transfer (such as for the currently pending

application submitted by State of Alaska), or a possible

withdrawal of EPA’s approval of current NPDES programs,

states could be required to develop permitting programs that

implement the provisions of ESA § 7(a)(2), despite the fact

that the plain language of ESA § 7(a)(2) applies only to

federal agencies. 16 U.S.C. § 1536(a)(2); see also, John H.

Minan, General Industrial Storm Water Permits and the

Construction Industry: What does the Clean Water Act

wastttthnth 9 Cuap. L. Rev. 265, 288 (2006) (In light of Ninth

* There is also no enannian' in ESA § 7(a)(2) that would support

the Ninth Circuit's imposition of that statute’ S requirements on the

states. The unambiguous language of FSA § 7(a)(2) only applies to

“{eJach Federal agency,” and not to a state or state agency. 16 U.S.C.

§ 1536(a)(2). As a result, the Ninth Circuit decision is inconsistent

with the intent of FSA § 7(a)(2).

14

Circuit decision, “[t]o the extent that the EPA does not

comply with the federal consultation provisions of the ESA

in deciding to approve an NPDES permitting transfer to the

state, such a transfer may be in legal jeopardy.”). This

required revision could have a sweeping effect on state

NPDES programs, because states could be required to consult

with the ESA Services on all actions under the NPDES

program, including decisions on individual wastewater or

stormwater permits. The imposition of a direct ESA § 7(a)(2)

consultation requirement on the states would drastically

hamper the states’ ability to issue timely NPDES permits,

because states would now be required to wait for assessments

from the ESA Services, which would be burdened with

handling consultation requests from 45 states, before issuing

permits. Such delays will adversely affect the regulated

community; increased delays will cause more uncertainty in

planning to meet future discharge requirements, particularly

if a renewed permit imposes more stringent discharge limits.

Systematic delays in the NPDES system will substantially

affect entities constructing new facilities or modifying

existing facilities, because such facilities may not be able to

begin discharging wastewater or stormwater (and as a result,

in many cases, not be able to begin operations at all) until

EPA or a delegated state agency issues a permit. Morcover, a

lengthier development period for an NPDES permit will lead

to increased transaction costs (such as for additional meetings

with permitting agencies and possibly ESA Services, and

additional data collection and assessments regarding

endangered species) for obtaining a permit renewal.

In addition, as a result of the Ninth Circuit decision, EPA

could now be required to determine whether state NPDES

programs follow ESA § 7(a)(2), leading to EPA withdrawing

its approval of the programs based on impacts to endangered

species. Once EPA withdraws its approval of a state NPDES

program under CWA § 402(c)(3), the permitting authority

15

for dischargers in that state would revert to EPA under CWA

§ 402(a). 33 U.S.C. § 1342(a). The withdrawal of approval

for a state program and transfer of the NPDES permitting

authority back to EPA would significantly affect the

permitting process, because EPA would be required to shift

its resources to handle a substantial increase in NPDES

permitting applications and decisions currently handled

primaiily by the states. This result - centralizing permitting

decisions with EPA - is exactly the result that Congress sought

to avoid in passing CWA § 402(b), and EPA’s resources could

then be exhausted on permitting decisions, due to the

comprehensive and time-consuming analysis that is required

for NPDES permits. It is unlikely that EPA would be able to

match the volume and timeliness of issuing NPDES permits

that are now being issued by the 45 states, leading to longer

administrative processes for issuing discharge permits and

an increase in the backlog of outdated permits. Robert L.

Fischman, Cooperative Federalism and Natural Resources

Law, 14.N.Y.U. Envtc. L.J. 179, 192, n. 37 (2005) (“Threat

of revocation, however, may be weakened by the EPA’s lack

of capacity to actually run permit programs in the states.”).

Further, EPA lacks the local expertise and knowledge of the

state agencies regarding their own waterways and dischargers,

and would therefore need to conduct additional analysis to

gain such knowledge, further delaying the NPDES permitting

process. The unjustified impact on EPA, state agencies,

regulated entities and other stakcholders of transferring state

NPDES programs back to EPA further demonstrates that the

Ninth Circuit decision is inconsistent with the CWA.

16

Il. ESA § 7(a)(2) DOES NOT OVERRIDE THE

AUTHORITY OF FEDERAL AGENCIES TO

PERFORM THEIR MANDATORY STATUTORY

DUTIES.

1. Because the Ninth Circuit held that ESA § 7(a)(2)

effectively overrides the mandatory duties of EPA, without

a limitation that its decision applies only to CWA § 402(b),

it appears that ESA § 7(a)(2) could override mandatory

actions by any federal agency under other statutes. ESA

§ 7(a)(2) states that “[e]ach federal agency shall . . . insure”

that its actions are not likely to jeopardize the continued

existence of an endangered species “in consultation with and

with the assistance of the” ESA Services. 16 U.S.C.

§ 1536(a)(2). As to CWA § 402(b), the Ninth Circuit decision

would impose an ongoing ESA § 7(a)(2) consultation

responsibility in addifion to the nine elements of CWA

§ 402(b). The additional ESA § 7(a)(2) requirement, if

enforced, will undermine state authority to administer the

NPDES program. Indeed, there are already indications that

the Ninth Circuit decision is eroding the NPDES permitting

program as administered by the states; multiple challenges

to NPDES decisions have been raised based on alleged

noncompliance with ESA § 7(a)(2). See Oregon Natural

Resources Council v. Hallock, No. 02-1650-CO, 2006 U.S.

Dist. LEXIS 87070, *1-2 (D. Or. Nov. 29, 2006) (“Plaintiffs

filed this citizen suit. . . alleging that defendants are violating

the Endangered Species Act .. . by failing to initiate and

complete formal consultation with the U.S. Fish and Wildlife

Service (USFWS) in connection with the issuance of a

National Pollutant Discharge Elimination System (NPDES)

permit.”); National Wildlife Federation, e¢ a/., Notice of

Intent to Sue for Violation of Endangered Species Act —

Failure of EPA to Consult on Effect of NPDES Delegation

to the Washington State Dept of Ecology and Oversight on

Threatened Puget Sound Chinook Salmon, at 29 (Apr. 19,

17

2006), <http://www.ecy.wa.gov/programs/wq/links/educate/

attachments _to_ noi/Nofl001.pdf> (“Specifically, the lawsuit

will allege that you and EPA have failed to initiate or complete

formal consultation with NMFS regarding the effects of

EPA’s delegation of NPDES permit program authority to the

State of Washington Department of Ecology and EPA’s

ongoing oversight, involvement, and funding of that program

as required by the ESA.”).

2. There is no indication that the Ninth Circuit decision

will be limited to EPA’s duties under CWA § 402(b) or the

CWA generally. The opinivn dissenting from the denial of

the Petition for Rehearing or Rehearing En Banc before the

Ninth Circuit recognized the breadth of the decision below

as potentially applying to “. .. every categorical mandate

applicable to every federal agency.” Defenders of Wildlife v.

EPA, 450 F.3d 394, 399, n. 4 (9" Cir. 2006) (Kozinski, J.,

dissenting) (emphasis in original). For example, under the

federal Resource Conservation and Recovery Act (“RCRA”)

(42 U.S.C. §§ 6901, ef seqg.), a state may seek “to administer

and enforce a hazardous waste ...program ...” by

submitting an application to EPA. 42 U.S.C. § 6926(b). EPA

then decides whether the application satisfies three criteria.

ld. \f EPA approves a state application for administering a

RCRA permitting program, then “[a]ny action taken by a

State under a hazardous waste program authorized under this

section shall have the same force and effect as action taken

by the Administrator under” RCRA. 42 U.S.C. § 6926(d).

Further, EPA has a continuing duty to determine whether a

state is properly administering and enforcing a hazardous

waste permitting program. 42 U.S.C. § 6926(c). If a state is

not properly administering a program and corrective action

is not taken, EPA “shall withdraw authorization of such

program and establish a Federal program ... .” /d. In light

of the Ninth Circuit decision, EPA could be required to insure

ongoing state consultation with the ESA Services under ESA

§ 7(a)(2) compliance before EPA can delegate RCRA

18

permitting authority to a state. As with NPDES authority

under the CWA, a state could be required to demonstrate to

EPA that its RCRA permitting programs comply with ESA

§ 7(a)(2) in order to maintain such a permitting program.

Likewise, EPA could be required to withdraw its approval of

a RCRA permitting program if a state does not implement

procedures to demonstrate to EPA that it is in compliance

with ESA § 7(a)(2). Currently, EPA has delegated RCRA

permitting programs to 48 states, plus the District of

Columbia, (see <http://www.epa.gov/epaoswer/hazwaste/

state/stats/maps/keychrt.pdf>), all of which could revert to

EPA if the Ninth Circuit decision 1s upheld.

Another example of a statute that could be affected by

the Ninth Circuit’s ruling is the federal Clean Air Act

(“CAA”) (42 U.S.C. §§ 7401, et seq.). Under the CAA, states

were required to develop and submit to EPA a permit program

within three years after the enactment of the CAA. 42 U.S.C.

§ 7661a(d)(1). If a state program was not approved within

two years, EPA was required to administer a permitting

program for that state. 42 U.S.C. § 766' (d)(3). If a state

has delegated permitting authority, EPA is then charged with

a continuing duty to determine whether “a permitting

authority is not adequately administering and enforcing a

program, co portion thereof, in accordance with the

requirements of” the CAA. 42 U.S.C. § 7661a(i)(1) & (2). If

EPA determines a state is not properly administering a

permitting program, EPA is required to issue a notice to the

state. 42 U.S.C. § 7661a(i)(1). If the state has not come into

compliance with the CAA within 18 months after the notice

is issued, EPA is required to impose sanctions. 42 U.S.C. §

766 1a(i)(2) (*. . . the Administrator shall apply the sanctions

under section 7509(b).”) Under the Ninth Circuit decision,

states could be subject to sanctions under the CAA for

19

noncompliance with ESA § 7(a)(2).° In addition, EPA is

required to object to a proposed permit from a state “[ijf any

permit contains provisions that are determined by the

Administrator as not in compliance with the applicable

requirements of [the CAA], including the requirements of

an applicable implementation plan ....” 42 U.S.C.

§ 7661d(b)(1) (“the Administrator shall . . . object to its

issuance.”) (emphasis added). Under the Ninth Circuit

rationale, EPA could be required to object to CAA permits

that are not issued in compliance with the provisions of ESA

§ 7(a)(2)."°

Another example of a statutory provision that may be

overridden by the Ninth Circuit decision is the state plan

provision of the Occupational Safety and Health Act

(“OSHA”). 29 U.S.C. § 667. Under that provision, a state

that “desires to assume responsibility for development and

enforcement therein of occupational safety and health

standards relating to any occupational safety or health issue

with respect to which a Federal standard has been

promulgated under section 6 shall submit a State plan for

the development of such standards and their enforcement.”

° To date, 16 Clean Air Act programs have been fully approved

by EPA, and the remaining 34 state programs have been approved

on an interim basis. See <http://www.epa.gov/oar/oaqps/permits/

approval. html>. ;

As with the CWA, there is also evidence that ESA § 7(a)(2)

is affecting the CAA permitting program. A challenge has been

brought against a Prevention of Significant Deterioration (“PSD”)

permit based on alleged noncompliance with ESA § 7(a)(2). See Jn

re: Indeck-Elwood, L..L.C., PSD Appeal No. 03-04, slip op. at 18-19

(Environmental Appeals Board, Sept. 27, 2006) (Petitioners

challenged the Illinois Environmental Protection Agency's issuance

of a PSD permit in part on the ground that the state agency failed to

comply with the federal agency consultation requirements contained

in ESA § 7.).

20

29 U.S.C. § 667(b). Once a state submits a proposed plan,

the Secretary of Labor “shall approve the plan . . . if such

plan in his judgment” meets eight criteria. 29 U.S.C.

§ 667(c)(1)-(8)."' Like the other statutes provided above, if

the Ninth Circuit decision is left to stand, the Secretary of

Labor may have to disapprove a proposed state OSHA plan

based on the effects that the plan would have on endangered

species, despite the lack of any language in OSHA indicating

that a plan could be denied on such a basis.

There are numerous other examples of mandatory

statutory obligations that could be affected by the Ninth

Circuit decision. See e.g., Sierra Club v. Babbitt, 65 F.3d

1502, 1509-11 (9" Cir. 1995) (The court held that ESA

§ 7(a)(2) consultation was not required for the approval of a

logging road project because a right-of-way agreement

between the Bureau of Land Management and timber

company left no discretion to deny a permit to protect

endangered species); Defenders of Wildlife v. Norton, 257

F. Supp. 2d 53, 66-69 (D.D.C. 2003) (The district court found

that the Bureau of Reclamation had certain nondiscretionary

duties to build and-operate dams under the Colorado River

Compact of 1922, and, thus, was not required io consult under

ESA § 7(a)(2) in performing those duties); Strahan v. Linnon,

967 F. Supp. 581, 607-608 (D. Mass. 1997) (Coast Guard’s

issuance of Certificates of Documentation and Inspection was

a nondiscretionary duty, and, therefore, did not trigger ESA

§ 7(a){2)).

If Congress had intended for ESA § 7(a)(2) to prevail

over mandatory EPA duties, it could have explicitly stated

so in the language of the CWA or the ESA. Absent such

Like the CWA, one of the purposes of OSHA is to encourage

“the States to assume the fullest responsibility for the administration

and enforcement of their occupational safety and health laws .. .”

29 U.S.C. § 651(b)(11).

21

statutory language, ESA § 7(a)(2) should not be interpreted

to effectively repeal mandatory EPA duties under the CWA.

Morton v. Mancari, 417 U.S. 535, 551 (1974) (quoting United

States v. Borden Co., 308 U.S. 188, 198 (1939)) (“The

intention of the legislature to repeal ‘must be clear and

manifest.’”). The Ninth Circuit decision impermissibly

ignores the language and intent of the CWA and ESA, creating

a sweeping and unwarranted effect on the regulated

community, including Coalition members, that should not

be left to stand.

CONCLUSION

For the foregoing reasons, the judgment below should

be reversed.

Respectfully submitted,

Danitt P. ALBERS

Counsel of Record

Frepric P. ANDES

Davip T. BALLARD

BARNES & THORNBURG

One North Wacker Drive

Suite 4400

Chicago, lilinois 60606

(312) 357-1313

Counsel for the Federal Water

Quality Coalition