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LEGAL LINES
Decision in 1984 Chevron Case Plays Crucial Role in Two Water Rulings
By Beth Card, NEIWPCC
If you have ever heard the phrase “Chevron deference” with regard to a legal matter, you might surmise that it means deference is given to someone else due to something Chevron did. Not a bad guess, but in environmental law, the actual meaning is precise and significant—and currently very relevant. More on that in a moment, but first, a little bit about the origins of the term.
In 1984, the U.S. Supreme Court opined on a case called “Chevron USA, Inc. v. Natural Resources Defense Council, Inc.,” which dealt with an EPA decision on permitting air emissions under the Clean Air Act. The court described how it must review an agency’s method for carrying out a statute, and that two questions are considered:
1. Whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter. If the statute is silent, or there is ambiguity, the Court must then move on to the next question.
2. Whether the agency’s answer is based on a permissible construction of the statute.
In reflecting on a earlier case, the Supreme Court said, “The power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.” The justices added that regulations used to “elucidate” a specific provision of a statute are “given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” So deference is given to an agency, unless the Court deems the agency to be way off base.
The reason for bringing this up now, some 25 years after the decision in Chevron, is that decisions in two important water cases in 2009 hinged on a matter of deference to an agency regulation or policy.
Friends of the Everglades v. South
Florida Water Management District
11th Circuit Court of Appeals
Water transfers and whether permits are needed for them is not a new issue, and indeed in this case before the 11th Circuit, a familiar question was on appeal: Is the transfer of a pollutant from one navigable body of water to another a “discharge of a pollutant” under Section 402 of the Clean Water Act? But there was also a twist. During the course of litigation, EPA adopted a regulation specific to this issue and as a result another question emerged: Does the court owe deference to that EPA regulation?
The story starts in Lake Okeechobee where the Hoover Dike was built in the 1930s, and where a flood control system failed in the late 1940s, leading to the installation of a complex system of pumps, gates, and canals. In the land south of the lake, known as the Everglades Agricultural Area, canals collect rain and runoff from sugar fields and neighboring residential and industrial areas. Three powerful pump stations operated by the South Florida Water Management District move this polluted canal water about 60 feet uphill to the lake.
Two main plaintiff groups, Friends of the Everglades and Fishermen Against Destruction of the Environment, sought an injunction to force the water district to get a permit for the pumping. Initial discussions focused on possible 11th Amendment immunity for the water district or its executive director, but the court dismissed that issue and moved on to the heart of the argument—whether the pumps require NPDES permits and more specifically whether moving an existing pollutant from one navigable water to another is an addition of that pollutant.
The water district cited the unitary waters theory, which contends that additions of pollutants to navigable waters occur only when pollutants enter waters from a point source, not when they are moved between waters. But without a controlling precedent on the unitary waters theory, the 11th Circuit was not buying it. The appeals court determined there was an addition to a meaningfully distinct navigable water, and it appeared a permit would be required. But here is where deference came into the story.
On June 13, 2008, EPA had issued a final rule exempting water transfers from the NPDES program under Clean Water Act §402. The rule defines a transfer as an activity that conveys or connects waters without subjecting the transferred water to intervening industrial, municipal, or commercial uses. In such a case, as determined by Chevron, EPA’s regulation is entitled to deference if it is a reasonable construction of an ambiguous statute.
The 11th Circuit concluded there is ambiguity in §402, despite the plantiffs argument that the statute makes it clear a permit is needed. The court also found that EPA’s construction of the water transfer rule is reasonable— in other words, not arbitrary, capricious, or meaningfully contrary to the statute. In the end, the 11th Circuit reversed the district court’s decision that operating the pumps without a permit violates the Clean Water Act.
This was the first time EPA’s rule had been upheld in litigation, and the decision marked a departure from Catskill Mountains Chapter of Trout Unlimited v. City of New York, in which the 2nd Circuit Court of Appeals determined a permit was required. In that case, however, the 2nd Circuit did not have to consider EPA’s rule and the issue of deference. In the fall of 2009, environmental advocacy groups petitioned the 11th Circuit for a rehearing in the Everglades case, and in the meantime, a decision is still pending in the 11th Circuit over a consolidated challenge to EPA’s water transfer rule. One final note: In an interesting change of pace, the Justice Department under President Obama has said that EPA will reconsider the transfer rule. No word yet on when EPA will issue its decision.
Coeur Alaska v. Southeast Alaska
Conservation Council
Supreme Court of the United States (on
appeal from the 9th Circuit)
Mining is not a big part of everyday life in the Northeast, so you might wonder why a case about regulating mining waste and discharges is in Legal Lines. But here again, the key is deference to a permitting agency, and that is something of importance to all environmental practitioners.
The details: A mining company, Coeur Alaska, plans to reopen the long-closed Kensington Gold Mine in southeast Alaska, and instead of discharging the slurry from the mining operations into a tailings pond, Coeur proposes to discharge into Lower Slate Lake, a navigable water. Over the expected life of the mine, that discharge would amount to roughly 4.5 million tons. The U.S. Army Corps of Engineers issued Coeur Alaska a permit for the lake discharge, but opponents fought the plan in court. The case wound a long road to the U.S. Supreme Court, where two questions came into focus.
1. Does the Clean Water Act give authority to the Corps or to EPA to issue a permit for the discharge of mining waste?
2. When the Corps issued the permit, did it act in accordance with the law?
With regard to the first question, Section 404 of the CWA does indeed grant the Corps power to issue permits for the discharge of fill material, whereas EPA has permitting authority under the CWA for any discharge of a pollutant except those covered in §404. The Supreme Court concluded the slurry is fill material so the permit was properly obtained from the Corps.
Things got more interesting with the issues raised by the second question. EPA had the authority to veto the Corps permit if certain adverse effects were to result, but EPA did not use its veto power; hence, the permit was issued in accordance with the judgment of the Corps. But EPA did issue a permit of its own, a CWA Section 402 permit for the discharge from the lake into a downstream creek. EPA’s authority to do that came from CWA Section 306(b). This is a new source performance standard that forbids mines from discharging process wastewater into navigable waters. The permit contained strict monitoring and treatment requirements.
The Southeast Alaska Conservation Council (SEACC) argued that Coeur needed a similar permit from EPA for the initial discharge into the lake, and that in not getting such a permit, Coeur violated the new source performance standard for so-called froth-flotation gold mines. That argument had failed in district court, but on appeal, the 9th Circuit had found an EPA §402 permit was required, and ordered the Corps permit vacated. That essentially handed the permitting authority from the Corps to EPA. So, how did the Supreme Court rule?
The justices said the 9th Circuit was wrong, and that the Corps did have authority to determine whether Coeur was entitled to the permit. As for the SEACC’s argument that the Corps was not authorized to permit the discharge if the material was subject to an EPA new source performance standard, the Supreme Court said that §404 refers to all fill material, that the regulations are clear, and that the statute does not indicate Congress intended to split this permitting authority. While Congress had not directly spoken on this precise issue, the Supreme Court found that “agency interpretation and agency application of the regulations are instructive and to the point.”
Importantly, the Supreme Court also cited a memo written by Diane Regas, then director of EPA’s Office of Wetlands, Oceans, and Watersheds to Randy Smith, director of EPA’s regional Office of Water with responsibility over the mine. In the memo, Regas wrote that EPA’s performance standard applied only to the discharge of water from the lake into the downstream creek, and not to the initial discharge of slurry into the lake. While the Supreme Court said the memo was not sufficiently official to merit full Chevron deference, the court deferred to it because it was not “plainly erroneous or inconsistent with the regulations.” So, as a result of a memo from one EPA staff person to another, the judgment of the 9th Circuit was reversed and the case remanded for further proceedings.
Now, just because the Supreme Court found that deference should be given in this instance does not mean this story is over. A variety of potential next actions remain on the table. Since the EPA memo went out, leadership at EPA has dramatically changed, and it is possible that with Administrator Lisa Jackson in charge, the Regas memo could be rescinded. The new faces at EPA also make it possible that the agency will now use its veto power over the Corps permit. Lastly, Congress may have its say; U.S. Representative Pallone (D-NJ) has drafted a bill that provides a definition of fill material. Maybe Chevron and the Supreme Court justices will not have the last word after all.
Beth Card (bcard@neiwpcc.org) is NEIWPCC’s director of water quality programs and a licensed attorney in Massachusetts. She also serves as co-chair of ASIWPCA’s Legal Affairs Task Force.