In January, a divided Second Circuit panel restored the EPA’s 2008 National Pollutant Water Transfer Rule, saying ambiguity within the law means the agency must be given latitude for its own interpretation of the statute. The rule allows water to be transferred between basins without a permit, even if the water is contaminated. A number of states and conservation groups challenged the rule, and a New York federal judge had decided it was unlawful in March 2014.
The Miccosukee Tribe of Indians of Florida, Sierra Club and other groups asked for an en banc rehearing of the matter, however, arguing the panel ruling conflicts with two previous Second Circuit decisions about the rule.
“The court’s prior decisions held that under the plain meaning of the Clean Water Act, artificial transfers of contaminated water from one navigable water to another constitute the ‘addition’ of pollutants to a navigable water and are therefore subject to the statute’s permitting requirements,” the groups said.
They also said the panel’s decision is inconsistent with the Supreme Court’s 1943 decision in Securities and Exchange Commission v. Chenery Corp., which prohibits courts from affirming agency action on bases other than those articulated by the agency at the time the action is taken.
“Although the EPA’s sole articulated rationale for promulgating the rule was its construction of statutory language, the panel majority upheld the EPA rule in part on policy bases on which the agency itself did not rely. By upholding the rule on bases beyond pure statutory construction, the panel’s decision conflicts with Chenery,” the groups said.
In a separate petition, the states of New York, Connecticut, Illinois, Maine, Michigan and Washington, as well as the provincial government of Manitoba, Canada, also asked for en banc review, arguing transfers of polluted water constitute a "major threat" to the integrity of the nation’s waters, and that exempting them from the permit program undermines the Clean Water Act's objective.
"Rehearing en banc is also warranted because the panel’s opinion effectively allows EPA to evade its statutory obligation to protect the environment based on its own determination that compliance with environmental rules would impose excessive burdens on regulated entities," the states said.
They said the Supreme Court has ruled that agencies have no authority to "rewrite" statutes to replace Congress’ objectives with their own policy preferences, citing the high court's 2014 ruling in Utility Air Regulatory Group v. EPA.
And in another petition for en banc review, National Wildlife Federation, Catskill Mountains Chapter of Trout Unlimited and Waterkeeper Alliance echoed the other groups’ two main arguments, and also said the panel’s conclusion that the phrase “addition to navigable waters” could have different meanings in section 402 and section 404 of the CWA is contrary to prior Second Circuit and Supreme Court rulings.
“The panel mistakenly reasoned that an agency can ‘interpret similar, ambiguous statutory language in one section of a statute differently than similar language contained in another, entirely distinct section,’ but overlooked the fact that the language in question is found in only a single section, and is not ‘ambiguous’ insofar as it is part of a defined term,” the groups said.
Second Circuit Judge Robert D. Sack, writing for the majority’s January opinion, said the EPA had reasonably interpreted the CWA and was entitled to deference under the two-part test for courts to review an agency's interpretation of a federal statute outlined by the Supreme Court in the landmark 1984 case Chevron v. Natural Resources Defense Council.
The CWA doesn’t address the specific question of whether National Pollutant Discharge Elimination System permits are required for water transfer, which covers the first part of the Chevron test, Judge Sack wrote. The EPA also satisfied the second part of the test, which was whether the agency reasonably interpreted ambiguous statutes, the judge said.
Friends of the Everglades, Florida Wildlife Federation and Sierra Club are represented by Alisa A. Coe of Earthjustice.
The Miccosukee Tribe of Indians of Florida is represented by Jeffrey B. Crockett of Coffey Burlington.
Catskill Mountains Chapter of Trout Unlimited, Theodore Gordon Flyfishers Inc., Riverkeeper, Waterkeeper Alliance, Trout Unlimited, National Wildlife Federation, Environment America, Environment New Hampshire, Environment Rhode Island and Environment Florida are represented by Karl S. Coplan and Todd D. Ommen of Pace Environmental Litigation Clinic Inc.
The states opposing the rule are represented by their respective attorneys general.
The EPA is represented by U.S. Attorney for the Southern District of New York Preet Bharara and Assistant U.S. Attorneys Robert William Yalen and Benjamin H. Torrance.
The states and local entities that support the rule are represented by their respective attorneys general, general counsels or city attorneys and by Peter D. Nichols of Berg Hill Greenleaf & Ruscitti LLP, Don Baur and Paul Smyth of Perkins Coie LLP, Shawn Draney of Snow Christensen & Martineau PC, Steven E. Clyde of Clyde Snow & Sessions, and Dallin W. Jensen of Parsons Behle & Latimer.
The case is Catskills Mountains Chapter of Trout Unlimited et al. v. Environmental Protection Agency, case number 14-1823, in the U.S. Court of Appeals for the Second Circuit.
--Additional reporting by Keith Goldberg. Editing by Philip Shea.
