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Three Lessons to Consider in Choosing Your Court for CWA Cases

The environmental world has waited with baited breath for jurisdictional certainty in defining regulated waters under the federal Clean Water Act (CWA). While we wait, two interesting CWA procedural decisions may play into how the substantive issue gets to the U.S. Supreme Court.

These decisions combine to teach three lessons. The first and second lessons originate in the Supreme Court’s decision in National Association of Manufacturers v. Department of Defense. The third comes from a Maryland district court decision in Blue Water Baltimore, Inc. v. Pruitt. They are:

  1. Courts are to apply procedural statutes as written, even if Congress drafted them unclearly and potentially illogically. Statutory language controls.
  2. In the context of review provisions and in contrast to substantive determinations, the government’s choice of forum is entitled to no degree of deference.
  3. The third lesson – from Blue Water – is that not every decision the EPA makes can be brought to court under the statute giving rise to the decision.

National Association of Manufacturers v. Department of Defense, Supreme Court Case No. 16-299 (Jan. 22, 2018)

National Association of Manufacturers (NAM) v. Department of Defense, Supreme Court Case No. 16-299, held that parties wishing to challenge the EPA’s action defining the term “waters of the United States” under the CWA needed to do so in district – not appellate – courts. The Court reasoned that the relevant statute, 33 U.S.C. § 1369, only granted jurisdiction to courts of appeals reviewing EPA actions “in issuing or denying any permit under [CWA] section 1342.”

NAM resulted from a consolidated case involving various petitions filed in courts of appeals around the country challenging the validity of the “Clean Water Rule” published by the EPA and U.S. Army Corps of Engineers. The agencies argued for a functional construction of the statute outlining where its actions could be reviewed to “avoid an irrational would avoid an irrational bifurcated judicial-review scheme” and under which circuit courts would have jurisdiction over EPA actions issuing or denying permits, “whereas district courts would review broader regulations governing those actions.” To be accepted, this approach requires courts to essentially allow broader classes of claims to be initially reviewed in the courts of appeals.

The Supreme Court explicitly rejected jurisdiction. Because the Court was reviewing an EPA action defining the term “waters of the United States” and not anything dealing with issuance of a permit, the Supreme Court rejected the government’s preference to have the issue (one having far greater national implications than issuance of most permits) in the appellate courts.  The Supreme Court specifically noted:

Congress easily could have drafted subparagraph (F) in that broad manner. Indeed, Congress could have said that subparagraph (F) covers EPA actions “relating to whether a permit is issued or denied,” or, alternatively, EPA actions “establishing the boundaries of EPA’s permitting authority.” But Congress chose not to do so. The Court declines the Government’s invitation to override Congress’ considered choice by rewriting the words of the statute.

Blue Water Baltimore, Inc. v. Scott Pruitt, Case No. GLR-17-1253 (D. Md. Feb. 5, 2018)

The second notable decision was issued on February 5 by a federal district judge in Maryland.  In this case., three non-governmental organizations (NGOs) in the environmental sector sought to appeal their petition to determine whether storm water discharges emitted by certain commercial, institutional, and industrial water users contribute to a violation of a federal water quality standard in Baltimore’s Back River Watershed under 40 C.F.R. § 122.26(f)(2). Plaintiffs filed their action originally in the U.S. Court of Appeals for the Fourth Circuit, but immediately moved to hold the case in abeyance under the belief that the case should be filed in district court. Over the EPA’s opposition, the Fourth Circuit agreed to hold the case in abeyance and the NGOs filed their action in district court.  Plaintiffs’ complaint had three claims: one under the CWA, and two claims under the federal Administrative Procedure Act (APA), 5 U.S.C. § 706(2). Under APA § 706(2)(A), a court shall “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

After the case was filed, the EPA moved to dismiss the NGOs’ claims based on a lack of subject matter jurisdiction. The court agreed with the EPA regarding the CWA claim, but not the APA claims, which the court found appropriately before it. The court dispatched the CWA claim, because under relevant precedent, parties may only sue the EPA where they demonstrate that it failed to perform a “non-discretionary duty.” The CWA itself imposes no duty to respond to petitions.  The regulation the NGOs’ relied upon – 40 C.F.R. § 122.26(a)(9)(i)(D) – imposed a duty on operators – parties who discharge – to get NPDES p permits where the EPA determined that relevant categories of discharge “contribute to a violation of a water quality standard” or are “significant contributor[s] of pollutants to waters of the U.S.

As in NAM, the EPA argued that the APA claims should be addressed initially in the courts of appeals. The district court rejected this argument, noting that there were neither statutory nor process-focused reasons to favor initial jurisdiction in the courts of appeals in contrast to district courts. Unlike permit-focused regulatory clams which have broad, prospective effect, the court noted that the NGOs asked “EPA to make a discrete decision pursuant to an existing regulation,” and the EPA declined to do so, with the denial amounting “to a non-binding statement of the agency’s views at the time” related to the involved site. District court review provides sufficient certainty in this context.

© 2018 Schiff Hardin LLP

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J. Michael Showalter, Litigator, Schiff Hardin LLP
Associate

Mike Showalter is a litigator whose practice is focused on resolving complex disputes. Mr. Showalter's past clients span diverse industries including manufacturing, mining, power generation and transmission, oil and gas, the financial and insurance sectors, and process outsourcing.

Mr. Showalter's practice has focused on distilling complicated technical information into a format where it can be understood by decision makers. He has worked with experts in fields including medicine, economics, history, physical sciences, industrial hygiene, toxicology, environmental engineering and...

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