Special Topics in Environmental Management

Supreme Court Declines to Rule on WTR

The U.S. Supreme Court declined to rule on a January 2017 decision by the U.S. Court of Appeals for the 2nd Circuit, which upheld EPA’s 2008 Water Transfers Rule ((WTR), June 13, 2008, Federal Register).

In a 2-to-1 opinion, the 2nd Circuit reversed a ruling by a U.S. District Court judge, who acknowledged that the EPA was entitled to some leeway under the Chevron deference standard (U.S. Supreme Court, Chevron, U.S.A., Inc. v. NRDC, 1984), but that ultimately, the rule could not survive judicial scrutiny because it was based on an unreasonable interpretation of the Clean Water Act (CWA). The 2nd majority disagreed, stating that the WTR was indeed a reasonable interpretation of the WTR and, therefore, entitled to Chevron deference.

NPDES Permits Not Required

In the WTR, the EPA defined “water transfers” as an activity that conveys or connects waters of the United States without subjecting the transferred water to intervening industrial, municipal, or commercial use. The important provision is that such transfers are not subject to permitting under CWA’s National Pollutant Discharge Elimination System (NPDES). The Agency offered many justifications for the rule, but the primary reason appears to be that subjecting water transfers to NPDES permitting would seriously inhibit the ability of states to allocate water resources within their borders for municipal, agricultural, and safety purposes and would also impede regional or interstate transfers. The Agency emphasized that the CWA recognizes that the states have primary responsibilities with respect to the “development and use (including restoration, preservation, and enhancement) of land and water resources.”

Pollutants Added

Several states and environmental groups challenged the rule. The plaintiffs stated:

“This case presents a question of urgent nationwide importance that has divided the lower courts: whether the Clean Water Act’s permit program applies to inter-basin water transfers, i.e., artificial conveyances of water from one water body to another through a tunnel, pipe, or other point source. Such water transfers can indisputably add pollutants to the receiving water body—for example, by moving salt water into a freshwater stream, conveying water contaminated with fecal coliform into a pristine lake, or pumping invasive species into uninfected water bodies.”

States have options

In its reversal of the district court’s decision, the 2nd Circuit majority took the position that Chevron deference sufficiently covered EPA’s interpretation of the topic of water transfers, which are addressed in the CWA in an ambiguous fashion, at best.

For example, plaintiffs contended that it was unreasonable to conclude that the CWA does not protect waters in downstream states from pollution caused by transfers from upstream states, a concern that Congress did not address in the CWA. The majority answered that downstream states could still protect themselves.

“As to the effect of the Rule on downstream states, even in the absence of NPDES permitting for water transfers, the states can seek to protect themselves against polluted water transfers through other means—for example, through filing a common-law nuisance or trespass lawsuit in the polluting state’s courts—even if the protections provided by such lawsuits are less robust than those that would be available through the NPDES permitting program’s application to transfers,” stated the majority.

Cost Is a Consideration

The majority conceded that the WTR is not perfect, but it does not have to be. The majority stated:

“It may well be that, as the plaintiffs argue, the Water Transfers Rule’s interpretation of the Clean Water Act is not the interpretation best designed to achieve the Act’s overall goal of restoring and protecting the quality of the nation’s waters. But it is nonetheless an interpretation supported by valid considerations: The Act does not require that water quality be improved whatever the cost or means, and the Rule preserves state authority over many aspects of water regulation, gives regulators flexibility to balance the need to improve water quality with the potentially high costs of compliance with an NPDES permitting program, and allows for several alternative means for regulating water transfers. While we might prefer an interpretation more consistent with what appear to us to be the most prominent goals of the Clean Water Act, Chevron tells us that so long as the agency’s statutory interpretation is reasonable, what we might prefer is irrelevant.”

The Supreme Court’s order in New York et al. v. EPA et al. (17-318) is here.