Iowa League of Cities v. Environmental Protection Agency , 711 F.3d 844 ( 2013 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 11-3412
___________________________
Iowa League of Cities
lllllllllllllllllllllPetitioner
v.
Environmental Protection Agency
lllllllllllllllllllllRespondent
____________
Petition for Review of an Order of the
Environmental Protection Agency
____________
Submitted: November 13, 2012
Filed: March 25, 2013
____________
Before SMITH, BEAM, and GRUENDER, Circuit Judges.
____________
GRUENDER, Circuit Judge.
The Iowa League of Cities (“League”) seeks direct appellate review of two
letters sent by the Environmental Protection Agency (“EPA”) to Senator Charles
Grassley. The League argues that these letters effectively set forth new regulatory
requirements with respect to water treatment processes at municipally owned sewer
systems. According to the League, the EPA not only lacks the statutory authority to
impose these regulations, but it violated the Administrative Procedures Act (“APA”),
5 U.S.C. § 500 et seq., by implementing them without first proceeding through the
notice and comment procedures for agency rulemaking. We find that we have subject
matter jurisdiction over the claims, and we vacate under APA section 706(2)(C), (D).
I. Background
The League previously sought our review in 2010 of six EPA documents,
consisting of letters, internal memoranda, and a Federal Register notice, that allegedly
constituted new regulatory requirements for water treatment processes. The EPA
moved to dismiss, arguing that judicial review was premature because the documents
were part of an ongoing agency decisionmaking process. An administrative panel of
this court granted the EPA’s motion to dismiss for lack of subject matter jurisdiction.
The League continued to perceive a conflict between the agency’s official
written policies and the expectations it was transmitting to the state entities that served
as liaisons between the EPA and municipal wastewater treatment facilities.
Consequently, the League enlisted the assistance of Senator Charles Grassley to obtain
clarification from the EPA. The EPA sent two letters (“June 2011 letter” and
“September 2011 letter”) in response to Senator Grassley’s inquiries. According to
the EPA, these guidance letters merely discuss existing regulatory requirements. The
League disagrees, viewing the letters as contradicting both the Clean Water Act
(“CWA”), 33 U.S.C. § 1251 et seq., and the EPA’s lawfully promulgated regulations.
As it did in 2010, the EPA moved to dismiss for lack of subject matter jurisdiction.
This time an administrative panel denied the motion but requested that the parties
address the merits of all relevant jurisdictional and substantive arguments.1
1
Our ability to make a final decision on jurisdiction is unaffected by the rulings
of either this administrative panel or the 2010 administrative panel. See In re
Rodriquez, 258 F.3d 757, 758-59 (8th Cir. 2001) (per curiam).
-2-
The APA “empowers federal courts to ‘hold unlawful and set aside agency
action, findings, and conclusions’ if they fail to conform with any of six specified
standards.” Marsh v. Or. Natural Res. Council, 490 U.S. 360, 375 (1989) (quoting
5 U.S.C. § 706(2)). Inter alia, a reviewing court may set aside agency action that has
failed to observe those “procedure[s] required by law.” § 706(2)(D). Agencies must
conduct “rule making” in accord with the APA’s notice and comment procedures. 5
U.S.C. § 553(b), (c). However, only new “legislative” rules are required to be created
pursuant to notice and comment rulemaking. See id.; see also Minnesota v. Ctrs. for
Medicare & Medicaid Servs., 495 F.3d 991, 996 (8th Cir. 2007). “Interpretative
rules”2 and “general statements of policy” are statutorily exempt from the procedural
requirements applicable to “rule making.” See § 553(b)(3)(A); see also Shalala v.
Guernsey Mem’l Hosp., 514 U.S. 87, 99 (1995). The crux of the League’s procedural
claim is that the EPA’s letters announced new legislative rules for water treatment
processes at municipally owned sewer systems, thereby modifying the EPA’s existing
legislative rules. The EPA admits it did not engage in notice and comment
procedures, but it insists there has been no procedural impropriety because the letters
should be considered general policy statements or, at most, interpretative rules.
The League asks us to find not only that the EPA’s actions are procedurally
invalid but also to go one step further and set aside the rules as imposing regulatory
requirements that surpass the EPA’s statutory authority. See § 706(2)(C) (authorizing
federal courts to set aside agency action that is “in excess of statutory jurisdiction,
authority, or limitations, or short of statutory right”).
The two areas of regulation addressed in the challenged EPA letters are “mixing
zones” and “blending.” Our analysis first requires a discussion of the CWA’s
regulatory scheme and the water treatment processes at issue.
2
Some courts also use the phrase “interpretive” rules interchangeably with
“interpretative” rules.
-3-
A. The Clean Water Act
The CWA forbids the “discharge of any pollutant”—defined as the “addition
of any pollutant to navigable waters from any point source”3—unless executed in
compliance with the Act’s provisions. 33 U.S.C. §§ 1311(a), 1362(12). A permit
program called the National Pollution Discharge Elimination System (“NPDES”)
plays a central role in federal authorization of permissible discharges. See 33 U.S.C.
§ 1342. The EPA may issue an NPDES permit, but states also are authorized to
administer their own NPDES programs. § 1342(b). The vast majority elect to do so.4
If a state chooses to operate its own permit program, it first must obtain EPA
permission and then ensure that it issues discharge permits in accord with the same
federal rules that govern permits issued by the EPA. § 1342(a); 40 C.F.R. § 122.41.
Many of these rules are in the form of “effluent limitations,” which “restrict the
quantities, rates, and concentrations of specified substances which are discharged from
point sources.” Arkansas v. Oklahoma, 503 U.S. 91, 101 (1992) (citing §§ 1311,
1314). The NPDES permit system “serves to transform generally applicable effluent
limitations . . . into the obligations . . . of the individual discharger.” EPA v.
California ex rel. State Water Res. Control Bd., 426 U.S. 200, 205 (1976). The EPA
applies effluent limitations at the point of discharge into navigable waters, known as
“end-of-the-pipe,” unless monitoring at the discharge point would be “impractical or
3
A “point source” is “any discernible, confined and discrete conveyance,
including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete
fissure, container, rolling stock, concentrated animal feeding operation, or vessel or
other floating craft, from which pollutants are or may be discharged.” 33 U.S.C.
§ 1362(14). This case involves municipal wastewater treatment facilities, which both
parties agree are point sources.
4
Iowa is one of forty-six states approved to administer an NPDES program.
EPA, State Program Status, http://cfpub1.epa.gov/npdes/statestats.cfm (last visited
Feb. 14, 2013).
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infeasible.” 40 C.F.R. § 122.45(a), (h). The baseline effluent limitations are
“technology-based,” § 1311(b); 40 C.F.R. § 125.3(a), in that they set “a minimum
level of effluent quality that is attainable using demonstrated technologies.” EPA,
NPDES Permit Writers’ Manual 5-1 (2010).5 The EPA has interpreted this regime as
“preclud[ing] [it] from imposing any particular technology on a discharger.” In re
Borden, Inc., Decision of the General Counsel on Matters of Law Pursuant to 40
C.F.R. § 125.36(m), No. 78 (Feb. 19, 1980), at *2; see also NPDES Permit Writers’
Manual 5-14, 5-15 (“Therefore, each facility has the discretion to select any
technology design and process changes necessary to meet the performance-based
discharge limitations and standards specified by the effluent guidelines.”). The
technology-based effluent limitations applicable to publicly-owned treatment works
(“POTWs”),6 such as municipal sewer authorities, are based on a special set of rules
known as the “secondary treatment” regulations. § 1311(b)(1)(B); 40 C.F.R.
§ 125.3(a)(1); see generally 40 C.F.R. § 133.102 (describing average monthly and
weekly “minimum level[s] of effluent quality attainable by secondary treatment”).
The secondary treatment regulations also do not mandate the use of any specific type
of technology to achieve their requisite levels of effluent quality. See 48 Fed. Reg.
52,258, 52,259 (Nov. 16, 1983). When technology-based effluent limitations would
fall short of achieving desired water quality levels, the EPA is authorized to devise
additional, more stringent water quality-based effluent limitations for those particular
point sources. 33 U.S.C. § 1312(a).
Thus, the CWA is a program of state and federal cooperation, but state
discretion is exercised against a backdrop of significant EPA authority over state-run
NPDES programs. The EPA dictates the effluent limitations applicable to all permits,
5
Available at http://www.epa.gov/npdes/pubs/pwm_2010.pdf.
6
POTWs are “any devices and systems used in the storage, treatment, recycling
and reclamation of municipal sewage or industrial wastes of a liquid nature” that are
“owned by a State or municipality.” 40 C.F.R. § 403.3(q).
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while states are in charge of categorizing their waterways in terms of designated uses
and setting forth “water quality standard[s]” for each type of waterway. 33 U.S.C.
§ 1313(c)(2). These standards supplement effluent limitations to ensure that overall
water quality remains at an acceptable level. Arkansas, 503 U.S. at 101. A major
component of a state’s water quality standards is “the set of water quality criteria
sufficient to support the designated uses of each waterbody.”7 NPDES Permit
Writers’ Manual 6-4. At least every three years, states must submit their water quality
standards to the EPA for approval. § 1313(c)(1). The EPA must approve the
standards within sixty days or disapprove them within ninety days. 66 Fed. Reg.
11,202, 11,215 (Feb. 22, 2001). States are also required to forward a copy of each
permit application they receive to the EPA, which is afforded an opportunity to block
the issuance of the permit. § 1342(d); 40 C.F.R. § 123.29. In sum, states evaluate
discharge permit applications under a mixture of federal regulations and their own
water quality standards, crafted subject to federal approval.
B. Bacteria Mixing Zones
One element of state water quality standards are policies regarding “mixing
zones.” The EPA has defined mixing zones as “[a] limited area or volume of water
where initial dilution of a discharge takes place and where numeric water quality
criteria can be exceeded.” EPA, Water Quality Handbook Ch. 5.1 (1994)
(“Handbook”); see also NPDES Permit Writers’ Manual 6-15. In effect, a mixing
zone allows the permit holder to create a higher concentration of pollutants in
navigable waters near the immediate point of discharge, as long as the discharge is
sufficiently diffused as it moves through the larger body of water. The requisite water
7
“Water quality criteria are the threshold values against which ambient
concentrations are compared to determine whether a waterbody exceeds the water
quality standard. . . . NPDES permits must establish limits on any pollutant, where
necessary to attain and maintain applicable water quality standards.” 54 Fed. Reg.
23,868, 23,872 (June 2, 1989).
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quality criteria, then, need not be met at the end of the pipe. It is undisputed that in
at least some instances, states are allowed to approve discharge permit applications
that incorporate mixing zones. See 40 C.F.R. § 131.13 (“States may, at their
discretion, include in their State standards, policies generally affecting their
application and implementation, such as mixing zones . . . .”). But as one of its water
quality standards, a state’s policy on mixing zones remains subject to the triennial
review of the EPA. See § 1313(c)(1). In addition, the EPA has the authority to veto
any permit application incorporating what it views as an inappropriate mixing zone.
See § 1342(d)(2).
Mixing zones are addressed in one of the EPA’s regulations, 40 C.F.R.
§ 122.44(d)(1). Subparagraph (ii) of that regulation describes the procedures a state
should apply when determining whether a discharge would cause—or contribute to
causing—a body of water to deviate from the state’s water quality criteria, thereby
necessitating the imposition of water-quality based effluent limitations on that
discharge (in addition to the default technology-based effluent limitations already in
effect). See 54 Fed. Reg. 23,868, 23,872 (June 2, 1989). In particular, state
permitting authorities should consider “any dilution of the effluent in the receiving
water, after considering mixing zones if applicable.” Id. Although some
commentators responded to the proposal of subparagraph (ii) by requesting that the
EPA prohibit mixing zones, the EPA subsequently reiterated that the “use of mixing
zones raises issues that are more appropriately addressed in the state water quality
standards adoption process,” and therefore it would retain “the reference to mixing
zones in paragraph (d)(1)(ii).” Id. The League portrays 40 C.F.R. § 122.44(d)(1)(ii)
as channeling any federal objections to mixing zones, including mixing zones for
bacterial effluents (“bacteria mixing zones”), through the EPA’s process of approving
or rejecting state water quality standards.
The June 2011 letter admits that, pursuant to 40 C.F.R. § 131.13, states “may,
at their discretion, include mixing zone policies in their state water quality standards.”
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Citing a 2008 memorandum from the Director of the EPA’s Office of Science and
Technology to a regional EPA director (“the King memorandum”), however, the June
2011 letter then recites “the EPA’s long-standing policy” that all bacteria mixing
zones in waters designated for “primary contact recreation” carry potential health risks
and flatly states that they “should not be permitted.” The letter further acknowledges
that the EPA “does not have additional regulations specific to mixing zones,” but it
then refers the reader to the additional “recommendations regarding the use of mixing
zones” in policy guidance such as the Handbook. The Handbook encourages states
to incorporate a “definitive statement” into their water quality standards regarding
“whether or not mixing zones are allowed” and, if they are, to “utilize a holistic
approach to determine whether a mixing zone is tolerable.” Ch. 5.1, 5.1.1. The
Handbook cautions, however, that mixing zones must be utilized in ways that
“ensure . . . there are no significant health risks, considering likely pathways of
exposure.” Ch. 5.1. Additionally, mixing zones “should not be permitted where they
may endanger critical areas,” such as “recreational areas.” Id. From the League’s
perspective, states are able to approve bacteria mixing zones, even in waters
designated as “primary contact recreation,” so long as site-specific factors create
scenarios in which there are no health risks and recreational areas are not endangered.
The EPA argues that the June 2011 letter is consistent with the Handbook, which
explicitly envisioned limitations on mixing zones in recreational areas.
C. Blending
The second contested regulatory area involves “blending.” POTWs typically
move incoming flows through a primary treatment process and then through a
secondary treatment process. Most secondary treatment processes are biological-
based, but the secondary treatment regulations do not “specify the type of treatment
process to be used to meet secondary treatment requirements nor do they preclude the
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use of non-biological facilities.”8 68 Fed. Reg. 63,042, 63,046 (Nov. 7, 2003). At
many POTWs, primary treatment capacity exceeds secondary treatment capacity.
Biological-based processes in particular are sensitive to deviations in volume of flow
and pollutant level. Correspondingly, during periods of rain and snow, large influxes
of stormwater can overwhelm a facility’s standard biological secondary treatment
processes, potentially rendering them inoperable. Id. Blending can prevent this, by
channeling a portion of “peak wet weather flows” around biological secondary
treatment units and through non-biological units, recombining that flow with its
counterpart that traveled through the biological units, and then discharging the
combined stream. Id. at 63,045. Just like non-blended streams, the combined output
must still comply with all applicable effluent limitations, including the water quality
levels specified in the secondary treatment regulations. Id. at 63,047.
Some members of the League wish to incorporate a method of treatment called
ACTIFLO into the secondary treatment procedures at their wastewater treatment
facilities. ACTIFLO units employ non-biological processes and are used as auxiliary
secondary treatment units for peak wet weather flows.9 The parties disagree on the
circumstances in which the CWA and EPA regulations permit the use of ACTIFLO.
The League views ACTIFLO as a permissible technology within a POTW facility, as
long as the overall output from the secondary treatment phase meets the effluent
8
Biological-based systems use microorganisms to treat incoming flows. A
facility can be designed to use non-biological treatment processes, such as chemical
additives or physical filtration equipment, instead of or in conjunction with biological
facilities.
9
ACTIFLO is a physical/chemical process that uses ballasted flocculation. “In
ballasted flocculation or sedimentation, a metal salt coagulant is added to the excess
wet weather flows to aggregate suspended solids. Then, fine-grained sand, or ballast,
is added along with a polymer. The polymer acts like glue which bonds the
aggregated solids and sand. The process increases the particles’ size and mass which
allows them to settle faster.” EPA, Report to Congress: Impacts and Control of CSOs
and SSOs 2 (2004).
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limitations imposed by the secondary treatment regulations. The EPA, on the other
hand, views ACTIFLO as an impermissible “diversion” from traditional biological
secondary treatment facilities.
All issued permits must comply with federal regulations regarding “bypass,”
which is the “intentional diversion of waste streams from any portion of a treatment
facility.” 40 C.F.R. § 122.41(m)(1). Bypass is generally prohibited unless there are
“no feasible alternatives.” § 122.41(m)(4). The bypass rule “is not itself an effluent
standard,” but instead it “merely ‘piggybacks’ existing requirements.” 53 Fed. Reg.
40,562, 40,609 (Oct. 17, 1988). The rule’s purpose is to “ensure that users properly
operate and maintain their treatment facilities . . . [pursuant to applicable] underlying
technology-based standards,” by requiring incoming flows to move through the
facility as it was designed to be operated. Id. Like the more general secondary
treatment regulations, the bypass rule does not require the use of any particular
treatment method or technology. Id.; see also NRDC. v. EPA, 822 F.2d 104, 123
(D.C. Cir. 1987).
In 2003, the EPA offered “a proposed interpretation of the bypass provision (40
CFR [§] 122.41(m)) as it applies to . . . blending.” 68 Fed. Reg. at 63,049. Prior to
this proposal, the EPA had “not established a national policy (either through
rulemaking or through non-binding guidance to assist in the interpretation of the
bypass regulation) regarding whether and under what circumstances wet weather
blending at a POTW plant would not constitute a bypass.” Id. at 63,052. The 2003
proposed policy would have “provide[d] guidance to EPA Regional and State
permitting authorities . . . on how EPA intends to exercise its discretion in
implementing the statutory and regulatory provisions related to discharges from
POTWs where peak wet weather flow is routed around biological treatment units and
then blended with the effluent from the biological units prior to discharge.” Id. at
63,051. Going forward, blending “would not be a prohibited bypass and could be
authorized in an NPDES permit” so long as certain enumerated conditions were met.
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Id. at 63,049-50. These conditions primarily focused on ensuring that the discharge
met all applicable effluent limitations and water quality standards, that it passed
through a primary treatment unit prior to discharge, and that a “portion of the flow
[w]ould only be routed around a biological or advanced treatment unit when the
capacity of the treatment unit is being fully utilized.” Id. The EPA posted the
proposed policy on its website and declared its consistency with the CWA. Implicitly,
the 2003 policy seemed to view the secondary treatment phase as encompassing both
traditional biological secondary treatment units and auxiliary non-biological
treatments for peak wet weather flows, such as ACTIFLO. Accordingly, flows sent
through ACTIFLO were not being intentionally “diverted” from a process they should
have gone through; instead, these excess flows were simply designated to receive a
different type of secondary treatment. The focus was on whether the water quality of
the resulting combined discharge at the end of the secondary treatment phase met all
applicable effluent limitations.
Two years later, the EPA abandoned the 2003 proposal. 70 Fed. Reg. 76,013,
76,015 (Dec. 22, 2005). The EPA acknowledged recent “confusion regarding the
regulatory status of peak wet weather flow diversions around secondary treatment
units at POTW treatment plants” and observed that they were treated only
intermittently as bypasses. Id. at 76,015. The 2005 policy announced that this type
of “diversion” was now considered a bypass and would be allowed only if there were
“no feasible alternatives.” Id. at 76,016. As of the creation of the EPA letters in 2011,
the 2005 policy had not been finalized or otherwise officially adopted. As late as June
2010, the EPA continued to solicit input on the 2005 policy through notices in the
Federal Register. See 75 Fed. Reg. 30,395, 30,401 (June 1, 2010).
During the spring of 2011, the League asked the EPA whether it could use
“physical/chemical treatment processes, such as Actiflo . . . to augment biological
treatment and recombine the treatment streams prior to discharge, without triggering
application of [the bypass rule].” The June 2011 letter responded by summarizing the
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EPA’s 2005 proposed policy without specifically addressing how the application of
that policy would impact the use of ACTIFLO or similar processes. The League
sought additional clarification on whether this response meant that ACTIFLO could
be used only if there were no feasible alternatives, which the September 2011 letter
answered in the affirmative. According to the EPA, ACTIFLO units fail to “provide
treatment necessary to meet the minimum requirements provided in the secondary
treatment regulations at 40 CFR 133.” Because ACTIFLO by itself is not considered
a satisfactory secondary treatment unit, the EPA views the practice of intentionally
routing flows away from a facility’s traditional biological secondary treatment units
and through ACTIFLO as a bypass that would only be allowed upon a showing of no
feasible alternatives.
The League argues that by prohibiting the use of ACTIFLO internally, as one
element of a facility’s secondary treatment procedures, the EPA is effectively dictating
treatment design, despite the agency’s acknowledgment that the bypass rule and
secondary treatment regulations do not allow for such determinations at the federal
level. The League also claims that the EPA is effectively applying secondary
treatment effluent limitations within a treatment facility; that is, it is applying effluent
limitations to the individual streams exiting peak flow treatment units, instead of at
the end of the pipe. The EPA responds that using ACTIFLO to process peak wet
weather flows diverts water from biological secondary treatment units, and therefore
subjecting its use to a no-feasible-alternatives analysis comports with the plain
language of the bypass rule.
II. Jurisdiction
A. Direct appellate review
The League challenges the EPA’s positions on bacteria mixing zones and
blending, as set forth in the two letters, as new rules promulgated in violation of APA
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notice and comment requirements and as in conflict with the CWA. The APA waives
sovereign immunity for suits seeking judicial review of an “[a]gency action made
reviewable by statute.”10 5 U.S.C. § 704. “The CWA establishes a bifurcated
jurisdictional scheme whereby courts of appeals have jurisdiction over some
categories of challenges to EPA action, and the district courts retain jurisdiction over
other types of complaints.” Nat’l Pork Producers Council v. EPA, 635 F.3d 738, 755
(5th Cir. 2011). The League invokes CWA section 509(b)(1)(E), which vests the
courts of appeals with exclusive jurisdiction to review the EPA’s “action . . . in
approving or promulgating any effluent limitation or other limitation under section
1311, 1312, 1316, or 1345.” 33 U.S.C. § 1369(b)(1)(E). The EPA counters that we
have no jurisdiction to review guidance letters and that, in any event, its positions are
consistent with the CWA.
“The existence of subject-matter jurisdiction is a question of law that this court
reviews de novo.” ABF Freight Sys., Inc. v. Int’l Bhd. of Teamsters, 645 F.3d 954,
958 (8th Cir. 2011). In order to be timely filed, interested parties must file for review
within 120 days from the date of the promulgation. § 1369(b)(1). The 120-day
window to challenge promulgations begins two weeks after a document is signed. 40
C.F.R. § 23.2. Here, the letters were signed on June 30, 2011, and September 14,
2011, and therefore the time period to challenge the letters—should they be found to
be promulgations—began on July 14, 2011, and September 28, 2011, respectively.
The League filed for review on November 4, 2011, and thus its petition is timely.
10
The APA does not create federal subject matter jurisdiction. Preferred Risk
Mut. Ins. Co. v. United States, 86 F.3d 789, 792 (8th Cir. 1996). Rather, a federal
court has federal question jurisdiction under 28 U.S.C. § 1331 over challenges to
federal agency action. Ochoa v. Holder, 604 F.3d 546, 549 (8th Cir. 2010); see also
Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 56 (1993).
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We must consider, then, whether the act of sending the letters constituted an
action “promulgating any effluent limitation or other limitation.”11 The EPA urges us
to dismiss the case for lack of subject matter jurisdiction, disputing the factual basis
for the League’s characterization of the letters. Because the EPA raises a factual
challenge to our jurisdiction under Federal Rule of Civil Procedure 12(b)(1), “no
presumptive truthfulness attaches to the [League’s] allegations, and the existence of
disputed material facts will not preclude [us] from evaluating . . . the merits of the
jurisdictional claims.” Osborn v. United States, 918 F.2d 724, 729-30 & n.6 (8th Cir.
1990) (quoting Mortenson v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir.
1977)).
1. “[P]romulgating”
Neither the Supreme Court nor this court has defined the circumstances in
which an agency action can be considered a promulgation. Black’s Law Dictionary
defines “promulgate” as “(Of an administrative agency) to carry out the formal
process of rulemaking by publishing the proposed regulation, inviting public
comments, and approving or rejecting the proposal.” (8th ed. 2004). This narrow
interpretation would allow direct appellate review only of rules formally promulgated
through notice and comment procedures. Yet, the Supreme Court has recognized a
preference for direct appellate review of agency action pursuant to the APA. See, e.g.,
Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 745 (1985) (“Absent a firm
indication that Congress intended to locate initial APA review of agency action in the
district courts, we will not presume that Congress intended to depart from the sound
policy of placing initial APA review in the courts of appeals.”); see also Nat’l Auto.
Dealers Ass’n v. FTC, 670 F.3d 268, 305 (D.C. Cir. 2012); Jaunich v. Commodity
11
The League did not contend that the EPA’s letters were
“actions . . . approving” effluent or other limitations, rather than promulgating them,
and therefore we did not consider the matter.
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Futures Trading Comm’n, 50 F.3d 518, 521 (8th Cir. 1995). Moreover, the Supreme
Court has interpreted broadly the direct appellate review provision in CWA section
509(b)(1)(F), which authorizes review of agency “action . . . in issuing or denying a
permit.” The Court viewed an EPA veto of a state-issued permit to be “functionally
similar” to a direct denial of a permit application by the EPA itself, and therefore held
that the petitioner could bring his challenge directly to a court of appeals under section
509(b)(1)(F). Crown Simpson Pulp Co. v. Costle, 445 U.S. 193, 196 (1980) (per
curiam). By analogy, we are persuaded that it would be more appropriate to interpret
“promulgating” to include agency actions that are “functionally similar” to a formal
promulgation. See Modine Mfg. Corp. v. Kay, 791 F.2d 267, 271 (3d Cir. 1986)
(finding jurisdiction to review directly “the agency’s interpretation of pretreatment
standards applicable to indirect dischargers” because they constituted an action
“promulgating any effluent . . . pretreatment standard” under CWA section
509(b)(1)(C)); see also NRDC v. EPA, 673 F.2d 400, 405 (D.C. Cir. 1982) (“Our
decision . . . follows the lead of the Supreme Court in according section 509(b)(1) a
practical rather than a cramped construction.”).
In considering jurisdictional statutes similar to section 509(b)(1)(E), our
colleagues on the District of Columbia Circuit have adopted a practical conception of
whether an agency action constitutes a promulgation. That court has explained, “To
determine whether a regulatory action constitutes promulgation of a regulation, we
look to three factors: (1) the Agency’s own characterization of the action; (2) whether
the action was published in the Federal Register . . . .; and (3) whether the action has
binding effects on private parties or on the agency.” Molycorp, Inc. v. EPA, 197 F.3d
543, 545 (D.C. Cir. 1999) (internal citation omitted). Molycorp identifies the third
factor as the “ultimate focus” of this test, and we agree that whether an agency
announcement is binding on regulated entities or the agency should be the touchstone
of our analysis. To place any great weight on the first two Molycorp factors
potentially could permit an agency to disguise its promulgations through superficial
formality, regardless of the brute force of reality. See also Cement Kiln Recycling
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Coal. v. EPA, 493 F.3d 207, 227-28 (D.C. Cir. 2007) (holding that it lacked
jurisdiction to consider a purported agency “promulgation” because the document was
not binding).
“[A]n agency pronouncement will be considered binding as a practical matter
if it either appears on its face to be binding or is applied by the agency in a way that
indicates it is binding.” Gen. Elec. Co. v. EPA, 290 F.3d 377, 383 (D.C. Cir. 2002)
(citations omitted). Thus, our functional analysis of whether an agency action
constitutes a promulgation encompasses those words and deeds that bind legally or as
a practical matter. Cf. South Dakota v. Ubbelohde, 330 F.3d 1014, 1028 (8th Cir.
2003) (“Agency statements can be binding upon the agency absent notice-and-
comment rulemaking in certain circumstances.”); Appalachian Power Co. v. EPA, 208
F.3d 1015, 1021 (D.C. Cir. 2000) (“[W]e have also recognized that an agency’s other
pronouncements can, as a practical matter, have a binding effect.”). This includes
statements prospectively restricting the agency’s discretion, see Am. Mining Cong. v.
Mine Safety & Health Admin., 995 F.2d 1106, 1111 (D.C. Cir. 1993), or having a
“present-day binding effect” on regulated entities, thereby “conclusively disposing of
certain issues,” see McLouth Steel Prods. Corp. v. Thomas, 838 F.2d 1317, 1321 (D.C.
Cir. 1988).12
12
The EPA argues that no federal court has jurisdiction over this claim because
these letters are not “final agency actions.” Even if there were an implicit finality
requirement applicable to “[a]gency actions made reviewable by statute,” this would
not affect federal jurisdiction; the APA’s requirements are part of a party’s cause of
action and are not jurisdictional. Air Courier Conference v. Am. Postal Workers
Union, 498 U.S. 517, 523 n.3 (1991) (“The judicial review provisions of the APA are
not jurisdictional.”); see also Ochoa, 604 F.3d at 549 (8th Cir. 2010); Trudeau v. FTC,
456 F.3d 178, 183-84 (D.C. Cir. 2006). In this case, analyzing whether an agency
pronouncement is binding evokes considerations of finality. However, they arise not
from the APA, but rather from the conditions placed on the CWA’s grant of direct
appellate jurisdiction. The APA allows judicial review in two situations: “Agency
action made reviewable by statute and final agency action for which there is no other
adequate remedy in a court . . . .” 5 U.S.C. § 704. The word “final” modifies the
-16-
Here, the letters can be considered “promulgations” for the purposes of
establishing our jurisdiction under section 509(b)(1)(E) because they have a binding
effect on regulated entities. “If an agency acts as if a document issued at headquarters
is controlling in the field, if it treats the document in the same manner as it treats a
legislative rule, if it bases enforcement actions on the policies or interpretations
formulated in the document, if it leads private parties or State permitting authorities
to believe that it will declare permits invalid unless they comply with the terms of the
document, then the agency’s document is for all practical purposes ‘binding.’”
Appalachian Power Co., 208 F.3d at 1021. In particular, the court in Appalachian
Power found that the contested agency guidance before it was binding because it
reflected “a position [the EPA] plans to follow in reviewing State-issued permits, a
position it will insist State and local authorities comply with in settling the terms and
conditions of permits issued to petitioners, a position EPA officials in the field are
second use of “agency action,” but not the first. While some courts have interpreted
the phrase “[a]gency action made reviewable by statute” as including an implied
finality requirement, see, e.g., Appalachian Energy Grp. v. EPA, 33 F.3d 319, 322 (4th
Cir. 1994); Carter/Mondale Presidential Comm., Inc. v. Fed. Election Comm’n, 711
F.2d 279, 285 n.9 (D.C. Cir. 1983), we decline to conjure up a finality requirement for
“[a]gency actions made reviewable by statute” where none is located in the text of the
APA, particularly where the Supreme Court has implied that the two phrases
incorporate distinct requirements, see Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 882
(1990) (“When, as here, review is sought not pursuant to specific authorization in the
substantive statute, but only under the general review provisions of the APA, the
‘agency action’ in question must be ‘final agency action.’”); id. at 891 (“Some statutes
permit broad regulations to serve as the ‘agency action,’ and thus to be the object of
judicial review directly, even before the concrete effects normally required for APA
review are felt.”); see also Yankton Sioux Tribe v. Podhradsky, 606 F.3d 994, 1012
(8th Cir. 2010) (“[T]he ‘cardinal canon’ of statutory interpretation is ‘that a legislature
says in a statute what it means and means in a statute what it says there.’” (quoting
Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992))). The CWA expressly
makes specified agency actions reviewable, and our task therefore is to determine
whether the asserted agency action falls within the statutory terms.
-17-
bound to apply.” Id. at 1022. This reasoning persuades us that the June 2011 and
September 2011 letters are binding as well.
First, the June 2011 letter reflects a binding policy with respect to bacteria
mixing zones. In response to the League’s 2010 challenge to the EPA’s policy on
mixing zones, the EPA submitted to this court a motion to dismiss, which described
the King memorandum as nothing but “one office director’s view of a regulatory
requirement.” But in the June 2011 letter to Senator Grassley, the EPA characterized
the King memorandum as reflecting “the EPA’s position.” Although the EPA coyly
continues to insist that the letter is the “consummation of nothing,” something
apparently was consummated between 2010 and June 2011. Furthermore, the
language used to express “the EPA’s position”—“should not be permitted”—is the
type of language we have viewed as binding because it “speaks in mandatory terms.”
Ubbelohde, 330 F.3d at 1028; see also Gen. Elec. Co., 290 F.3d at 383 (“[T]he
mandatory language of a document alone can be sufficient to render it binding . . . .”);
cf. Catawba Cnty., N.C. v. EPA, 571 F.3d 20, 34 (D.C. Cir. 2009) (per curiam)
(finding that an agency memo was not binding because it “‘encouraged’ states to
address all nine factors EPA identified, but did not require them to do so”). The
League’s appendix includes several affidavits from representatives of municipal
wastewater treatment facilities and the Iowa Department of Natural Resources, the
state permitting authority.13 These individuals averred that they indeed have taken the
13
The League provided these affidavits in an unopposed appendix
supplementing the EPA’s administrative record. After oral argument, the League filed
a motion to further supplement the record with additional affidavits from the Iowa and
Kansas water permitting authorities. The EPA objects to the League’s attempt to
further supplement the record at this stage. The Supreme Court has explained that
when applying the arbitrary and capricious standard of review under APA section
706(2)(A), “the focal point for judicial review should be the administrative record
already in existence.” Camp v. Pitts, 411 U.S. 138, 142 (1973). Therefore, if “there
is a contemporaneous administrative record and no need for additional explanation of
the agency decision,” we will permit supplementation of the administrative record
-18-
June 2011 letter at face value, interpreting it as establishing a new prohibition on
bacteria mixing zones, one by which they must abide in the permit application
process. We agree that private parties have “reasonably [been] led to believe that
failure to conform will bring adverse consequences,” which tends to make the
document binding as a practical matter. See Gen. Elec. Co., 290 F.3d at 383 (quoting
Robert A. Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals and
the Like—Should Federal Agencies Use Them to Bind the Public?, 41 Duke L.J. 1311,
1328 (1992)).
The EPA asks us to believe that the June 2011 letter did not flatly prohibit the
use of bacteria mixing zones in waters designated for primary contact recreation
because although it intoned that states “should not” permit bacteria mixing zones in
primary contact recreation areas, it nonetheless mentioned that under 40 C.F.R.
§ 131.13, states “may, at their discretion, include mixing zone policies in their state
water quality standards.” With respect to bacteria mixing zones in primary contact
recreation areas, we struggle to spot the surviving state discretion. The letter instructs
state permitting authorities to reject certain permit applications, regardless of the
state’s water quality standards. The EPA’s protestations to the contrary are
particularly unavailing where, as here, Iowa’s water permitting authority has received
only where there is a “strong showing of bad faith or improper behavior.” Newton
Cnty. Wildlife Ass’n v. Rogers, 141 F.3d 803, 807 (8th Cir. 1998) (quoting Citizens
to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971)). The rationale for
this rule is that judicial review of the reasonableness of an agency’s actions should
concentrate upon the evidence available to the agency when making its decision. See
Robinette v. Comm’r, 439 F.3d 455, 459 (8th Cir. 2006). But where, as here,
rulemaking masquerading as explication is alleged, the informality of the agency’s
decisionmaking process makes the possibility of a sparse “contemporaneous
administrative record” more likely. While we question whether the Camp standard
would necessarily apply to such challenges under APA section 706(2)(D), we need
not decide the matter because we reached our conclusions without resort to the
League’s proposed supplementary materials. Therefore, we deny the League’s motion
to supplement the record.
-19-
communications from the EPA indicating that it would object to any permits that were
inconsistent with the policy outlined in the EPA letters. In effect, the EPA asks us to
agree that when it couches an interdiction within a pro forma reference to state
discretion, the prohibition is somehow transformed into something less than a
prohibition. We decline to accept such Orwellian Newspeak.
Second, the September 2011 letter presents a binding policy on blending.
Although the June 2011 letter describes the “2005 draft Policy” on blending as merely
“a viable path forward” that “has not been finalized,” the September 2011 letter
applies the 2005 policy to the League’s proposed use of ACTIFLO.14 In requiring
ACTIFLO to pass a no-feasible-alternatives analysis, the EPA made clear that it
14
League Question: “Is the permitted use of ACTIFLO or other similar peak
flow treatment processes to augment biological treatment subject to a ‘no feasible
alternatives’ demonstration?” EPA Response: “Yes.” The EPA insists that this
challenge is time-barred because the proper time to raise the challenge was in 2005.
We find this contention unpersuasive because prior to the September 2011 letter, the
EPA never indicated that the 2005 policy became final. For example, the June 1, 2010
Federal Register notice explained that the EPA was continuing to “solicit[] input from
the general public concerning the impact of the proposed rule.” 75 Fed. Reg. 30,395,
30,401 (June 1, 2010). Even the June 2011 letter explained that the agency was
“continu[ing] to consider whether the 2005 Policy should be finalized or incorporated
into the EPA’s other potential wet weather rulemaking effort announced June 1, 2010
in the Federal Register.” In contrast, the September 2011 letter simply applies the
2005 Policy to the regulated entities as if it had already been finalized. The EPA’s
approach to the period for seeking appellate review would eviscerate the direct
appellate review provisions of the CWA by enabling an agency to announce
consideration of a proposal and then wait 121 days before treating the proposal as
binding. Cf. CropLife Am. v. EPA, 329 F.3d 876, 884 (D.C. Cir. 2003) (refusing to
find that the petitioners’ claim was time-barred “because the new rule clearly
represents the first time that the agency has adopted an unequivocal, wholesale ban”).
The time to seek direct appellate review begins to run not when the agency first floats
its proposal to the public, but rather when the agency promulgates that
announcement—in other words, when they make its substance binding.
-20-
“plans to follow [the 2005 policy] in reviewing State-issued permits,” and “it will
insist State and local authorities comply with [the 2005 policy] in settling the terms
and conditions of permits issued to petitioners.” See Appalachian Power Co., 208
F.3d at 1022. Just as it did in Appalachian Power, the EPA dissembles by describing
the contested policy as subject to change. See id. at 1022-23. Yet, all regulations are
susceptible to alteration. Hedging a concrete application of a policy within a
disclaimer about hypothetical future contingencies does not insulate regulated entities
from the binding nature of the obligations and similarly cannot serve to innoculate the
agency from judicial review.
Accordingly, we hold that the June 2011 and September 2011 letters were
promulgations for the purposes of CWA section 509(b)(1)(E).
2. “[A]ny effluent limitation or other limitation”
The CWA defines effluent limitations as “any restriction established by a State
or the [EPA] on quantities, rates, and concentrations of chemical, physical, biological,
and other constituents which are discharged from point sources into navigable
waters.” 33 U.S.C. § 1362(11). The Supreme Court has referred to effluent
limitations as “direct restrictions on discharges.” EPA v. California ex rel. State
Water Res. Control Bd., 426 U.S. 200, 204 (1976). Other circuits have held that the
expansiveness of the phrase “any restriction” encompasses both numerical and non-
numerical effluent limitations. See, e.g., Waterkeeper Alliance, Inc. v. EPA, 399 F.3d
486, 502 (2d Cir. 2005) (“[W]e believe that the terms of the nutrient management
plans constitute effluent limitations”); NRDC v. EPA, 656 F.2d 768, 775 (D.C. Cir.
1981) (finding an effluent limitation where, “[a]s a practical matter,” agency action
“restrict[s] the discharge of sewage by limiting the availability of a variance to a class
of applicants”).
-21-
The phrase “other limitation” leaves much to the imagination. The Fourth
Circuit explained that it “construe[s] that term as a restriction on the untrammeled
discretion of the industry . . . [as it existed] prior to the passage of the [CWA].” Va.
Elec. & Power Co. (VEPCO) v. Costle, 566 F.2d 446, 450 (4th Cir. 1977). VEPCO
found jurisdiction under section 509(b)(1)(E) because although the challenged
regulations involved “structures,” rather than “discharges of pollutants into the water,”
and therefore were not “effluent limitations,” they were nonetheless “other
limitations” because they “refer[red] to information that must be considered in
determining the type of intake structures that individual point sources may employ.”
Id. at 449-50. Many of our sister circuits have adopted the VEPCO approach. See,
e.g., Friends of the Everglades v. EPA, 699 F.3d 1280, 1287 (11th Cir. 2012) (finding
no jurisdiction under section 509(b)(1)(E) because challenged rule did the opposite
of restricting industry discretion, by “free[ing] the industry from the constraints of the
permit process”); Nw. Envtl. Advocates v. EPA, 537 F.3d 1006, 1015-16 (9th Cir.
2008) (finding no jurisdiction under section 509(b)(1)(E) because the challenged
regulations created “categorical and permanent exemptions” from “any limit imposed
by” CWA permit requirements); NRDC, 673 F.2d at 402, 405 (finding jurisdiction
under section 509(b)(1)(E) to review “a complex set of procedures for issuing or
denying NPDES permits” that restricted industry discretion). We agree that an agency
action is a “limitation” within the meaning of section 509(b)(1)(E) if entities subject
to the CWA’s permit requirements face new restrictions on their discretion with
respect to discharges or discharge-related processes.
Applying this definition, we find that the contested letters involve “effluent or
other limitations.” The EPA’s position that bacteria mixing zones in waters
“designated for primary contact recreation . . . should not be permitted” is a restriction
that directly affects the concentration of discharge from a point source and therefore
is an effluent limitation. See Am. Iron & Steel Inst. v. EPA, 115 F.3d 979, 986 (D.C.
Cir. 1997) (per curiam) (finding jurisdiction under CWA section 509(b)(1)(E) to
review “the prohibition in Guidance Procedure 3.C against using mixing zones for
-22-
new and existing BCC discharges”). The rule regarding the use of blending is an
“other limitation” because, as in VEPCO, it restricts the discretion of municipal sewer
treatment plants in structuring their facilities.
As a result, both requirements for direct appellate review are satisfied here.15
B. Ripeness
The judicially created doctrine of ripeness “flows from both the Article III
‘cases’ and ‘controversies’ limitations and also from prudential considerations for
refusing to exercise jurisdiction.” Neb. Pub. Power Dist. v. MidAm. Energy Co., 234
F.3d 1032, 1037 (8th Cir. 2000) (citing Reno v. Catholic Soc. Servs., Inc., 509 U.S.
43, 57 n.18 (1993)). “‘Ripeness is peculiarly a question of timing’ and is governed
by the situation at the time of review, rather than the situation at the time of the events
under review.” Id. at 1039 (quoting Anderson v. Green, 513 U.S. 557, 559 (1995) (per
curiam)). A party seeking review must show both “the fitness of the issues for judicial
decision and the hardship to the parties of withholding court consideration.” Pub.
Water Supply Dist. No. 10 of Cass Cnty. v. City of Peculiar, 345 F.3d 570, 572-73 (8th
Cir. 2003) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967)). Both of
these factors are weighed on a sliding scale, but each must be satisfied “to at least a
minimal degree.” Neb. Pub. Power Dist., 234 F.3d at 1039.
Fitness rests primarily on whether a case would “benefit from further factual
development,” and therefore cases presenting purely legal questions are more likely
15
The EPA insists that as a result of finding its conduct here reviewable, there
will be a chilling effect on the informal channels of communication between agencies
and regulated entities. We acknowledge the great value in such modes of
communication and encourage agencies to continue to utilize them. However, when
agencies veer from merely advisory statements or interpretations into binding
proclamations, they become susceptible to judicial review.
-23-
to be fit for judicial review. Pub. Water Supply, 345 F.3d at 573. The hardship factor
looks to the harm parties would suffer, both financially and as a result of uncertainty-
induced behavior modification in the absence of judicial review. Neb. Pub. Power
Dist., 234 F.3d at 1038. We do not require parties to operate beneath the sword of
Damocles until the threatened harm actually befalls them, but the injury must be
“certainly impending.” Pub. Water Supply, 345 F.3d at 573 (quoting Paraquad, Inc.
v. St. Louis Hous. Auth., 259 F.3d 956, 958-59 (8th Cir. 2001)). “The immediacy and
the size of the threatened harm” will also affect the interplay of these factors. Neb.
Pub. Power Dist., 234 F.3d at 1038.
This case hinges upon whether the EPA’s letters constitute legislative rules.
We agree with our colleagues who have commented that “whether [a] Guidance
Document is a legislative rule is largely a legal, not a factual, question,
turning . . . primarily upon the text of the Document.” Gen. Elec. Co. v. EPA, 290
F.3d at 380; see also Warder v. Shalala, 149 F.3d 73, 79 (1st Cir. 1998); Chief
Probation Officers of Cal. v. Shalala, 118 F.3d 1327, 1330 (9th Cir. 1997). As
primarily legal questions, such challenges tend to present questions fit for judicial
review. On the other hand, postponing a procedural challenge to an agency guidance
document may be appropriate where further factual development regarding the
agency’s application of the document would aid our decision. Nat’l Park Hospitality
Ass’n v. Dep’t of Interior, 538 U.S. 803, 812 (2003). This is so because the purpose
of the ripeness doctrine is to prevent courts “from entangling themselves in abstract
disagreements over administrative policies.” Abbott Labs., 387 U.S. at 148.
In this case, we are not wading into the abstract because the disagreements
before us are quite concrete. Nothing about the proclamation that “the EPA’s
position, as stated in the [King] memorandum, is that [bacteria mixing zones in
primary contact recreation waters] should not be permitted” indicates that the EPA’s
posture will vary based on each applicant’s specific factual circumstances. Similarly,
when asked if the use of “peak flow treatment processes” such as ACTIFLO would
-24-
be subject to a “no feasible alternatives” demonstration, the EPA responded “Yes.”16
The question is whether the statements are simply reminders of preexisting regulatory
requirements or whether they create new regulatory obligations. Because such
inquiries do not implicate contingent factual circumstances, this controversy is ripe
for our review. See CropLife Am. v. EPA, 329 F.3d 879, 884 (D.C. Cir. 2003) (finding
that petitioners presented a “purely legal question” that was ripe for review where “the
EPA directive states unequivocally that the agency will not consider any third-party
human studies”).
The second ripeness factor, hardship to parties, is also present. Although the
EPA portrays the harm as lurking, if at all, on the distant horizon, the threatened harm
is more immediate, and it is certainly not speculative. League members must either
immediately alter their behavior or play an expensive game of Russian roulette with
taxpayer money, investing significant resources in designing and utilizing processes
that—if these letters are in effect new legislative rules—were viable before the
publication of the letters but will be rejected when the letters are applied as written.
See Neb. Pub. Power Dist., 234 F.3d at 1039 (“Delayed judicial resolution would only
increase the parties’ uncertainty, and would require [petitioners] to gamble millions
of dollars on an uncertain legal foundation.”). Postponing our review until the EPA
has denied a permit application in accord with the letters renders a hardship on
16
The September 2011 letter acknowledged that if ACTIFLO independently met
secondary treatment requirements, then flows moving through ACTIFLO units instead
of the facility’s biological secondary treatment units would not be considered a
bypass. However, the letter also stated that ACTIFLO failed to meet these
requirements and that the EPA would “continue to explore in what circumstances use
of [ACTIFLO-type] technologies is consistent with a determination that there are ‘no
feasible alternatives.’” During oral argument, counsel for EPA informed us that the
use of newer, modified versions of ACTIFLO units “may well satisfy the secondary
treatment regulations.” This type of belated backpedaling is insufficient to render
these challenges so intertwined with hypothetical future conditions that they are
unripe for review.
-25-
municipal water authorities, who already would have invested irretrievable funds into
their applications. Cf. Toilet Goods Ass’n, Inc. v. Gardner, 387 U.S. 158, 164 (1967)
(finding a challenged agency action not ripe for review where “no irremediable
adverse consequences [would] flow from requiring a later challenge to this
regulation”). Therefore, we find that denying judicial review would be a hardship to
the parties and that this case evinces the requisite degree of ripeness. See Abbott
Labs., 387 U.S. at 153 (“Where the legal issue presented is fit for judicial resolution,
and where a regulation requires an immediate and significant change in the plaintiffs’
conduct of their affairs with serious penalties attached to noncompliance, access to the
courts under the Administrative Procedure Act . . . must be permitted, absent a
statutory bar or some other unusual circumstance . . . .”); Pac. Gas & Elec. Co. v.
State Energy Res. Conservation & Dev. Comm’n, 461 U.S. 190, 201-02 (1983)
(finding a challenge to an as-yet unimplemented statute ripe because “requir[ing] the
industry to proceed without knowing whether the moratorium is valid would impose
a palpable and considerable hardship”); see also Sackett v. EPA, 566 U.S. ---, 132 S.
Ct. 1367, 1374 (2012) (“[T]here is no reason to think that the Clean Water Act was
uniquely designed to enable the strong-arming of regulated parties into ‘voluntary
compliance’ without the opportunity for judicial review . . . .”).
C. Article III Standing
If a litigant lacks Article III standing to bring his claim, then we have no subject
matter jurisdiction over the suit. Miller v. Redwood Toxicology Lab., Inc., 688 F.3d
928, 934 (8th Cir. 2012). “To show standing under Article III of the U.S.
Constitution, a plaintiff must demonstrate (1) injury in fact, (2) a causal connection
between that injury and the challenged conduct, and (3) the likelihood that a favorable
decision by the court will redress the alleged injury.” Young Am. Corp. v. Affiliated
Computer Servs. (ACS), Inc., 424 F.3d 840, 843 (8th Cir. 2005) (citing Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Because the League, rather than
an individual permit applicant, is filing suit, it also must prove associational standing.
-26-
“An association has standing to bring suit on behalf of its members when its members
would otherwise have standing to sue in their own right, the interests at stake are
germane to the organization’s purpose, and neither the claim asserted nor the relief
requested requires the participation of individual members in the lawsuit.” Friends
of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 181 (2000). The
League need not establish that all of its members would have standing to sue
individually so long as it can show that “any one of them” would have standing. See
Ward v. Seldin, 422 U.S. 490, 511 (1975). The EPA concedes that the League meets
the second and third elements of the associational standing test, and we agree. The
only remaining element is whether any individual member would have standing to sue
in its own right, which requires any League member to satisfy the three components
that encompass the “irreducible constitutional minimum of standing.” See Am.
Library Ass’n v. FCC, 406 F.3d 689, 696 (D.C. Cir. 2005) (quoting Lujan, 504 U.S.
at 560).
“[S]tanding is to be determined as of the commencement of the suit.” Lujan,
504 U.S. at 570 n.5. The party seeking judicial review bears the burden of persuasion
and must support each element “with the manner and degree of evidence required at
the successive stages of litigation.” Id. at 561. Therefore, at the pleading stage a
petitioner can move forward with “general factual allegations of injury,” whereas to
survive a summary judgment motion, he “must set forth by affidavit or other evidence
specific facts.” City of Clarkson Valley v. Mineta, 495 F.3d 567, 569 (8th Cir. 2007)
(quoting Lujan, 504 U.S. at 561). The Supreme Court has not addressed “the manner
and degree of evidence required” when a petitioner is seeking appellate review of an
administrative action, nor has this circuit addressed the matter. The District of
Columbia Circuit has equated such a petition with a motion for summary judgment,
in that both request a final judgment on the merits. Sierra Club v. EPA, 292 F.3d 895,
899 (D.C. Cir. 2002). Accordingly, parties seeking direct appellate review of an
agency action must prove each element of standing as if they were moving for
summary judgment in a district court. Id. Our colleagues on the Seventh Circuit have
-27-
also taken this approach. See Citizens Against Ruining the Env’t v. EPA, 535 F.3d
670, 675 (7th Cir. 2008). This reasoning is sound; because parties in the League’s
position seek the type of relief available on a motion for summary judgment, they
correspondingly should bear the responsibility of meeting the same burden of
production, namely “specific facts” supported by “affidavit or other evidence.” See
Lujan, 504 U.S. at 561.
The EPA raises a factual challenge to our subject matter jurisdiction by
attacking the facts asserted by the League with respect to standing, and therefore the
League must establish standing “without the benefit of any inferences in [its] favor.”
Defenders of Wildlife, Friends of Animals & Their Env’t v. Lujan, 911 F.2d 117, 120
(8th Cir. 1990), rev’d on other grounds, 504 U.S. 555 (1992). Parties seeking to
litigate in federal court “have the burden of establishing jurisdiction,” including
standing, “by a preponderance of the evidence.” Yeldell v. Tutt, 913 F.2d 533, 537
(8th Cir. 1990). But see Sierra Club, 292 F.3d at 899 (imposing a burden of proof to
establish elements of standing to a “substantial probability” (quoting Am. Petroleum
Inst. v. EPA, 216 F.3d 50, 63 (D.C. Cir. 2000))). The League seeks to assert both a
procedural and a substantive challenge to the letters. We address separately its
standing to make each claim. See Int’l Bhd. of Teamsters v. Pena, 17 F.3d 1478,
1483-84 (D.C. Cir. 1994).
With respect to the substantive challenges, as the foregoing discussion
regarding hardship has indicated, the League members’ affidavits evince the type of
“concrete” and “actual or imminent” harm necessary to establish an injury in fact. See
Thomas v. Anchorage Equal Rights Comm’n, 220 F.3d 1134, 1138-39 (9th Cir. 1999)
(en banc) (“[I]n many cases, ripeness coincides squarely with standing’s injury in fact
prong.”). At least some members are currently operating under permits that allow
them to utilize blending and bacteria mixing zones in circumstances inconsistent with
the EPA letters, which they must imminently rectify. Cf. CropLife Am., 329 F.3d at
884 (“The disputed directive concretely injures petitioners, because it unambiguously
-28-
precludes the agency’s consideration of . . . studies that petitioners previously have
been permitted to use to verify the safety of their products.”). Moving into
compliance will be costly. The League has therefore articulated an injury in fact. See
City of Waukesha v. EPA, 320 F.3d 228, 234 (D.C. Cir. 2003) (per curiam) (“The
administrative record shows that the City of Waukesha would face substantial costs
if it was required to comply with the . . . regulations. EPA has not disputed that record
evidence. This is sufficient for injury-in-fact.”). Causation for standing purposes
requires that the harm asserted be “fairly traceable to the challenged action of the
defendant.” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 591 (8th Cir. 2009)
(quoting Lujan, 504 U.S. at 560). The EPA disputes causation because it argues that
the letters are not binding. Because we have ruled otherwise, we find that the League
has established causation. Finally, the League has shown that it is “‘likely,’ as
opposed to merely ‘speculative,’ that the injury will be redressed by a favorable
decision.’” Lujan, 504 U.S. at 561 (quoting Simon v. E. Ky. Welfare Rights Org., 426
U.S. 26, 38, 43 (1976)). If the rules were vacated as substantively unlawful, it is
indeed likely that the members’ injuries would be redressed.
With respect to the procedural challenge, namely that the EPA dodged the
APA’s notice and comment procedures and de facto implemented new legislative
rules regulating members’ activities under the CWA, the violation of a procedural
right can constitute an injury in fact “so long as the procedures in question are
designed to protect some threatened concrete interest of [the petitioner] that is the
ultimate basis of his standing.” Lujan, 504 U.S. at 573 n.8; see also Sierra Club v.
Glickman, 156 F.3d 606, 616 (5th Cir. 1998). The League’s members have a concrete
interest not only in being able to meet their regulatory responsibilities but in avoiding
regulatory obligations above and beyond those that can be statutorily imposed upon
them. Notice and comment procedures for EPA rulemaking under the CWA were
undoubtedly designed to protect the concrete interests of such regulated entities by
ensuring that they are treated with fairness and transparency after due consideration
and industry participation. See, e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 316
-29-
(1979) (“In enacting the APA, Congress made a judgment that notions of fairness and
informed administrative decisionmaking require that agency decisions be made only
after affording interested persons notice and an opportunity to comment.”). Thus, the
League has established an injury in fact related to the EPA’s purported procedural
deficiencies.
Causation and redressability, and therefore standing to assert this procedural
challenge, follow from these conclusions. Where a challenger is the subject of agency
action, “there is ordinarily little question that the action . . . has caused him injury, and
that a judgment preventing . . . the action will redress it.” Lujan, 504 U.S. at 561-62.
This is particularly true for individuals asserting violations of procedural rights. Id.at 572 n.7 (“The person who has been accorded a procedural right to protect his
concrete interests can assert that right without meeting all the normal standards for
redressability and immediacy.”). If a petitioner “is vested with a procedural right, that
litigant has standing if there is some possibility that the requested relief will prompt
the injury-causing party to reconsider the decision that allegedly harmed the litigant.”
Massachusetts v. EPA, 549 U.S. 497, 518 (2007); see also Sierra Club v. EPA, 699
F.3d 530, 533 (D.C. Cir. 2012) (“Having shown its members’ redressable concrete
interest, [a petitioner association] can assert violation of the APA’s notice-and-
comment requirements, as those procedures are plainly designed to protect the sort of
interest alleged. As to such requirements, [the petitioner association] enjoys some
slack in showing a causal relation between its members’ injury and the legal violation
claimed.”). Correspondingly, redressability in this context does not require petitioners
to show that the agency would alter its rules upon following the proper procedures.
Sugar Cane Growers Coop. of Fla. v. Veneman, 289 F.3d 89, 95 (D.C. Cir. 2002) (“If
a party claiming the deprivation of a right to notice-and-comment rulemaking under
the APA had to show that its comment would have altered the agency’s rule, section
553 would be a dead letter.”); see also Minard Run Oil Co. v. U.S. Forest Serv., 670
F.3d 236, 247 n.4 (3d Cir. 2011) (“Even if the [U.S. Forest Service is correct on the
merits], the Agreement nevertheless establishes—in violation of appellees’ notice and
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comment rights—a new substantive rule . . . . This suffices for standing purposes.”);
Pye v. United States, 269 F.3d 459, 471 & n.7 (4th Cir. 2001). The League’s
remaining burden as to standing is met because “there is some possibility that the
requested relief,” namely remanding to the EPA for application of notice and
comment procedures, would “prompt the [EPA] to reconsider the decision that
allegedly harmed” League members. See Massachusetts, 549 U.S. at 518.
We conclude that the League has standing to assert its claims. Having resolved
all jurisdictional questions, we now turn to the merits of the League’s petition for
review.
III. Merits of Procedural Challenge
A. Standard of Review
The parties disagree over the appropriate standard of review to be applied
where, as here, an appellate court reviews challenges to agency procedural compliance
under § 706(2)(D). The League urges us to follow the Ninth Circuit, which “reviews
de novo the agency’s decision not to follow the APA’s notice and comment
procedures . . .[,] because complying with the notice and comment provisions when
required by the APA ‘is not a matter of agency choice.’” Reno-Sparks Indian Colony
v. EPA, 336 F.3d 899, 909 n.11 (9th Cir. 2003) (quoting Sequoia Orange Co. v.
Yeutter, 973 F.2d 752, 757 n.4 (9th Cir. 1992)). The EPA argues its characterization
of the letters is entitled to a deferential abuse of discretion review. Our prior decisions
have not clearly announced a standard of review, other than to note that the agency’s
characterization of its rule as legislative or interpretative, “while not dispositive, is
entitled to deference.” Drake v. Honeywell, Inc., 797 F.2d 603, 607 (8th Cir. 1986).
But see United States v. Hacker, 565 F.3d 522, 524 (8th Cir. 2009) (stating in dicta
that challenges to procedural compliance under the APA present “a question of law,
which we review de novo”), abrogated on other grounds by Bond v. United States,
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564 U.S. ---, 131 S. Ct. 2355 (2011); South Dakota v. Ubbelohde, 330 F.3d 1014,
1028 (8th Cir. 2003) (“Where a policy statement purports to create substantive
requirements, it can be a legislative rule regardless of the agency’s characterization.”).
We agree with our colleagues on the Ninth Circuit that much of the rationale
for granting deference to administrative decisions is simply not applicable where the
topic of our review—compliance with APA procedural requirements—is not a matter
that Congress has committed to the agency’s discretion. In other words, whether and
when an agency must follow the law is not an area uniquely falling within its own
expertise, and thus the agency’s decision is less deserving of deference. Cf.
Campanale & Sons, Inc. v. Evans, 311 F.3d 109, 120 n.14 (1st Cir. 2002) (“We are
unaware of any line of cases that allows an agency to make a binding determination
that it has complied with specific requirements of the law. . . . As to the so-called
‘specialized experience’ of the agency, it would appear that it is the courts that qualify
for such a title on an issue of legislative interpretation.”). Furthermore, because the
categorization of an agency’s action as a legislative or interpretative rule is largely a
question of law, a de novo standard of review is consistent with the standard of review
we generally apply to questions of law in similar contexts. See Qwest Corp. v. Minn.
Pub. Utils. Comm’n, 427 F.3d 1061, 1064 (8th Cir. 2005).
At least two circuits in addition to the Ninth Circuit have expressly announced
a de novo standard of review when distinguishing between legislative rules and other
types of agency action. See Meister v. Dep’t of Agric., 623 F.3d 363, 370 (6th Cir.
2010); Warder, 149 F.3d at 79. We adopt a de novo standard of review as well. This
is not to say that the agency’s label is to be ignored. As discussed above, an agency’s
characterization of its rule is a relevant component of our review and is a factor
entitled to some deference. Our posture in this regard mirrors similar comments made
by other courts of appeals. See Gen. Motors Corp. v. Ruckelshaus, 742 F.2d 1561,
1565 (D.C. Cir. 1984) (“[T]he agency’s own label, while relevant, is not dispositive.”)
(en banc); accord Prof’ls & Patients for Customized Care v. Shalala, 56 F.3d 592,
-32-
595 (5th Cir. 1995); La Casa Del Convaleciente v. Sullivan, 965 F.2d 1175, 1178 (1st
Cir. 1992); Metro. Sch. Dist. of Wayne v. Davila, 969 F.2d 485, 489 (7th Cir. 1992);
Friedrich v. HHS, 894 F.2d 829, 834-35 (6th Cir. 1990); Lewis-Mota v. Sec’y of
Labor, 469 F.2d 478, 481-82 (2d Cir. 1972).
The critical distinction between legislative and interpretative rules is that,
whereas interpretative rules “simply state what the administrative agency thinks the
statute means, and only ‘remind’ affected parties of existing duties,” a legislative rule
“imposes new rights or duties.” Nw. Nat’l Bank v. U.S. Dep’t of the Treasury, 917
F.2d 1111, 1117 (8th Cir. 1990) (quoting Jerri’s Ceramic Arts, Inc. v. Consumer
Prod. Safety Comm’n, 874 F.2d 205, 207 (4th Cir. 1989)). When an agency creates
a new “legal norm based on the agency’s own authority” to engage in supplementary
lawmaking, as delegated from Congress, the agency creates a legislative rule. Syncor
Int’l Corp. v. Shalala, 127 F.3d 90, 95 (D.C. Cir. 1997). Expanding the footprint of
a regulation by imposing new requirements, rather than simply interpreting the legal
norms Congress or the agency itself has previously created, is the hallmark of
legislative rules. See Ubbelohde, 330 F.3d at 1028; Martin v. Gerlinkski, 133 F.3d
1076, 1079 (8th Cir. 1998); Syncor Int’l Corp., 127 F.3d at 94-95. It follows from this
distinction that interpretative rules do not have “the force of law.”17 Shalala v. St.
Paul-Ramsey Med. Ctr., 50 F.3d 522, 527 n.4 (8th Cir. 1995). Whether or not a
binding pronouncement is in effect a legislative rule that should have been subjected
to notice and comment procedures thus depends on whether it substantively amends
17
The EPA insists the letters are neither legislative nor interpretative rules but
rather constitute policy statements. Policy statements are not binding, either as a legal
or practical matter. See NRDC v. EPA, 643 F.3d 311, 321 (D.C. Cir. 2011) (“To begin
with, because the Guidance binds EPA regional directors, it cannot, as EPA claims,
be considered a mere statement of policy; it is a rule.”). Because we have determined
that the letters evince binding rules regarding bacteria mixing zones and blending,
neither can be characterized as a policy statement.
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or adds to, versus simply interpreting the contours of, a preexisting rule. See U.S.
Telecom Ass’n v. FCC, 400 F.3d 29, 34-35 (D.C. Cir. 2005).
Identifying where a contested rule lies on the sometimes murky spectrum
between legislative rules and interpretative rules can be a difficult task, but it is not
just an exercise in hair-splitting formalism. As agencies expand on the often broad
language of their enabling statutes by issuing layer upon layer of guidance documents
and interpretive memoranda, formerly flexible strata may ossify into rule-like rigidity.
An agency potentially can avoid judicial review through the tyranny of small
decisions. Notice and comment procedures secure the values of government
transparency and public participation, compelling us to agree with the suggestion that
“[t]he APA’s notice and comment exemptions must be narrowly construed.” Prof’ls
& Patients for Customized Care, 56 F.3d at 596 (quoting United States v. Picciotto,
875 F.2d 345, 347 (D.C. Cir. 1989)); see also City of New York v. Permanent Mission
of India to United Nations, 618 F.3d 172, 201 (2d Cir. 2010).
B. Bacteria Mixing Zones
Since at least 1994, the EPA’s long-standing policy toward bacteria mixing
zones has been that states should exercise their “discretion”—as set forth in 40 C.F.R.
§ 131.13—to adopt a “definitive statement” in their water quality standards “on
whether or not mixing zones are allowed.” Handbook Ch. 5.1, 5.1.1. States are
authorized to consider mixing zones in determining the types of standards necessary
to preserve water quality. 40 C.F.R. § 122.44(d)(1)(ii). States do not enjoy complete
discretion in creating a mixing zone policy because they operate within the shadow
of EPA-crafted effluent limitations. The Handbook interprets certain instances of
mixing zones as inconsistent with EPA regulations: states should not draft water
quality standards that allow point source dischargers to utilize mixing zones in ways
that “may endanger critical areas,” such as recreational areas, or pose “significant
health risks.” Ch. 5.1. Notably, no preexisting regulation establishes that all bacteria
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mixing zones in recreational areas necessarily “may endanger critical areas” or create
“significant health risks.”18 In fact, under the Handbook, whether a mixing zone
causes such a state of affairs was to be determined based on a “holistic approach.” Id.Yet, when now asked if a state “[m]ay . . . approve a bacteria mixing zone for
waters designated for body contact recreation,” the EPA flatly proclaims that such
mixing zones “should not be permitted.” The June 2011 letter tells state permitting
authorities that mixing zones in primary contact recreation areas are necessarily
inconsistent with achieving the water quality levels required by federal regulations.
The EPA eviscerates state discretion to incorporate mixing zones into their water
quality standards with respect to this type of body of water. In effect, the EPA has
created a new effluent limitation: state permitting authorities no longer have discretion
to craft policies regarding bacteria mixing zones in primary contact recreation areas.
Instead, such mixing zones are governed by an effluent limitation that categorically
forbids them. To be sure, in 1994 the EPA stated that as its “understanding of
pollutant impacts on ecological systems evolves, cases could be identified where no
mixing zone is appropriate.” Handbook Ch. 5.1.1. It seems that the EPA’s
understanding of pollutant impacts has so evolved, and it has now identified an entire
class of cases “where no mixing zone is appropriate.” However, the effect of the EPA
applying its more developed understanding of pollutant impacts is to promulgate a
new effluent limitation that state permitting authorities must follow. See Nat’l Family
Planning & Reprod. Health Ass’n v. Sullivan, 979 F.2d 227, 235 (D.C. Cir. 1992)
18
The EPA’s own guidance also belies any interpretation of its preexisting
legislative rules as categorically prohibiting the use of mixing zones in waters
designated for primary recreational contact. See EPA, Guidance: Coordinating CSO
Long-Term Planning with Water Quality Standards Reviews 5 (2001) (describing how
states may alter their water quality standards to apply bacteria water quality criteria
“at the beach or at the point of contact rather than at the end-of-pipe or at the edge of
the mixing zones”); EPA, Guidance on Application of State Mixing Zone Policies in
EPA-Issued NPDES Permits 1 (1996) (“Thus, individual state law and policy
determine whether or not a mixing zone is permitted.”).
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(“Thus, a rule is legislative if it attempts ‘to supplement [a statute,] not simply to
construe it.’”) (alteration in original). In short, the June 2011 letter creates a new
legal norm for bacteria mixing zones based on the EPA’s authority to promulgate
effluent limitations.
The hallmark of an interpretative rule or policy statement is that they cannot be
independently legally enforced. It is the underlying legislative rules that drive
compliance, and thus when an agency applies a newly announced interpretative rule
or policy statement, there must be some external legal basis supporting its
implementation. See St. Paul-Ramsey Med. Ctr., 50 F.3d at 528 n.4; Prof’ls &
Patients for Customized Care, 56 F.3d at 596. The EPA has not cited any preexisting
effluent limitation or lawfully promulgated legislative rule that supplies the basis for
the prohibition on bacteria mixing zones in primary contact recreation areas. This
reinforces our conclusion that this new legal norm is a legislative rule and that the
EPA violated the APA when it bypassed notice and comment procedures.
Accordingly, we vacate the EPA’s new rule banning bacteria mixing zones in all
waters designated for primary contact recreation as promulgated “without observance
of procedure required by law.” 5 U.S.C. § 706(2)(D).
C. Blending
The EPA contends that the letters simply reflect an interpretation of the bypass
rule, which it has been considering since 2005. See 70 Fed. Reg. at 76,015 (describing
the 2005 policy as “the Agency’s interpretation” of the bypass rule). To be sure, a
legislative rule is not created simply because an agency “supplies crisper and more
detailed lines than the authority being interpreted.” Am. Mining Cong. v. Mine Safety
& Health Admin., 995 F.2d 1106, 1112 (D.C. Cir. 1993). Nevertheless, the EPA’s
new blending rule is a legislative rule because it is irreconcilable with both the
secondary treatment rule and the bypass rule. See Nat’l Family Planning & Reprod.
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Health Ass’n, 979 F.2d at 235 (“If a second rule repudiates or is irreconcilable with
[a prior legislative rule], the second rule must be an amendment of the first; and, of
course, an amendment to a legislative rule must itself be legislative.” (alteration in
original) (quoting Michael Asimow, Nonlegislative Rulemaking and Regulatory
Reform, 1985 Duke L.J. 381, 396 (1985))).
The September 2011 letter simply applies the 2005 draft Policy to the proposed
use of ACTIFLO as if the 2005 draft were an existing obligation of regulated entities.
However, the record indicates that prior to 2005, the EPA had not viewed the use of
a process such as ACTIFLO as an inevitable trigger of a no-feasible-alternatives
requirement. The 2005 draft Policy characterized itself as “significantly different”
from the EPA’s 2003 proposal on blending. 70 Fed. Reg. at 76,014. The 2003
proposal, in turn, corresponds to what the record indicates is the reality on the ground:
widespread use by POTWs of blending peak wet weather flows. The 2005 draft
Policy acknowledges that blending previously had been “permitted at [POTWs]
without consideration of the bypass regulation criteria.” 70 Fed. Reg. at 76,015. In
a response to a 2002 Freedom of Information Act (“FOIA”) request, the EPA admitted
to “the use of federal funds under the Construction Grants Program to build facilities
that were designed to blend effluent from primary treatment processes with effluent
from biological treatment processes during peak wet weather events.”19 In a 2004
report to Congress, the EPA praised the use of blending processes like ACTIFLO to
deal with peak wet weather flows with no reference to a no-feasible-alternatives
requirement. Various Iowa municipal water authorities have averred that the Iowa
Department of Natural Resources has approved permits—with no objection from the
EPA and no imposition of a no-feasible-alternatives requirement—allowing cities to
construct facilities utilizing non-biological peak flow secondary treatment processes.
19
FOIA request submitted by John Hall to the EPA on October 25, 2001;
response dated April 5, 2002, No. HQ-RIN-00459-02.
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Municipalities chose to use ACTIFLO and analogous blending methods as an
exercise of their discretion under the bypass rule, see 53 Fed. Reg. at 40,609, and
secondary treatment rule, see 48 Fed. Reg. at 52,259, to select the particular
technologies they deemed best suited to achieving the applicable secondary treatment
requirements. However, the September 2011 letter severely restricts the use of
“ACTIFLO systems that do not include a biological component” because the EPA
does not “consider[] [them to be] secondary treatment units.” The effect of this letter
is a new legislative rule mandating certain technologies as part of the secondary
treatment phase. If a POTW designs a secondary treatment process that routes a
portion of the incoming flow through a unit that uses non-biological technology
disfavored by the EPA, then this will be viewed as a prohibited bypass, regardless of
whether the end of pipe output ultimately meets the secondary treatment regulations.
The EPA’s new blending rule further conflicts with the secondary treatment
regulations because the EPA has made clear that effluent limitations apply at the end
of the pipe unless it would be impractical to do so. 40 C.F.R. § 122.45(h). There is
no indication that the secondary treatment regulations established situations in which
it would be impractical to apply effluent limitations at the end of the pipe or otherwise
altered the application of this default rule. See 40 C.F.R. § 133.100-102. But the
blending rule applies effluent limitations within facilities’ secondary treatment
processes. The September 2011 letter rejected the use of ACTIFLO because these
units “do not provide treatment necessary to meet the minimum requirements provided
in the secondary treatment regulations at 40 CFR 133.” If streams move around
traditional biological secondary treatment processes and through a non-biological unit
that “is itself a secondary treatment unit,” then the system would not need to meet the
restrictive no-feasible-alternatives requirement. In other words, under the September
2011 blending rule, if POTWs separate incoming flows into different streams during
the secondary treatment phase, the EPA will apply the effluent limitations of the
secondary treatment regulations to each individual stream, rather than at the end of the
pipe where the streams are recombined and discharged.
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Because the September 2011 letter had the effect of announcing a legislative
rule with respect to blending peak wet weather flows, the EPA violated the APA’s
procedural requirements by not using notice and comment procedures. We also vacate
this new rule because it is “without observance of procedure required by law.” 5
U.S.C. § 706(2)(D).
IV. Merits of substantive challenge
Even if the EPA’s legislative rules had been promulgated through the proper
procedural channels, the League argues they nonetheless should be “set aside . . . [as]
in excess of statutory jurisdiction, authority, . . . or short of statutory right.” 5 U.S.C.
§ 706(2)(C). This subsection of the APA authorizes courts to strike down as ultra
vires agency rules promulgated without valid statutory authority. United States ex rel.
O’Keefe v. McDonnell Douglas Corp., 132 F.3d 1252, 1257 (8th Cir. 1998). The
League urges us to find that the EPA exceeded its statutory authority under the CWA
by prohibiting mixing zones outside the state water quality standard adoption process
and by using the blending prohibition to dictate facility treatment design and apply
effluent limitations internally, rather than at the end of the pipe. Appellate review
under APA section 706(2)(C) proceeds under the familiar Chevron framework. See
Clark v. U.S. Dep’t of Agric., 537 F.3d 934, 939 (8th Cir. 2008). We first “conduct
an independent review of the statute and of its legislative history.” Ark. AFL-CIO v.
FCC, 11 F.3d 1430, 1441 n.9 (8th Cir. 1993) (en banc). “Deference to the agency is
appropriate only when a court finds the statute to be ambiguous.” Id.; see also
Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 843 n.9 (1984) (“[T]he judiciary is the
final authority on issues of statutory construction and must reject administrative
constructions which are contrary to clear congressional intent.”). If confronted with
an ambiguous statute, we look to whether the agency’s construction of the statute is
reasonable. Ark. AFL-CIO, 11 F.3d at 1441. Agency rules will survive ultra vires
allegations so long as we can “reasonably conclude that the grants of authority in the
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statutory provisions cited by the government contemplate the issuance.” O’Keefe, 132
F.3d at 1257.
We find our circuit in the same position as the District of Columbia Circuit,
which recently observed that its “case law provides little direction on whether, having
determined to vacate on procedural grounds, we should nonetheless address
substantive claims.” NRDC v. EPA, 643 F.3d 311, 321 (D.C. Cir. 2011); cf. U.S. Steel
Corp. v. EPA, 649 F.2d 572, 577 (8th Cir. 1981). The decision implicates competing
tensions, both compelling. If we choose to vacate solely on procedural grounds,
regulated entities who have already spent considerable time crossing the hot shoals of
regulatory uncertainty must continue to do so. On the other hand, should we move to
the merits of whether the EPA’s legislative rules reflect an arbitrary and capricious
interpretation of the CWA, we short-circuit the APA’s notice and comment
procedures and preclude interested parties from participating in the agency’s analytic
process. Cf. Smiley v. Citibank, N.A., 517 U.S. 735, 741 (1996) (“[T]he notice-and-
comment procedures of the Administrative Procedure Act [are] designed to assure due
deliberation.”).
In a recent case, the District of Columbia Circuit found the “interest in
preserving the integrity of the notice and comment process” outweighed “concern[s]
about delay” where the EPA’s rule was not “obviously preclude[d]” by the relevant
enabling act. See NRDC, 643 F.3d at 321. Here, too, we conclude that the EPA’s new
mixing zone rule is not obviously precluded by the plain meaning of any applicable
CWA provisions. Therefore, should the EPA wish to institute this rule, it may seek
to do so using the appropriate procedures.
However, the blending rule clearly exceeds the EPA’s statutory authority and
little would be gained by postponing a decision on the merits. As discussed above,
the September 2011 letter applies effluent limitations to a facility’s internal secondary
treatment processes, rather than at the end of the pipe. The CWA permits the EPA to
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set “effluent limitations based upon secondary treatment.” 33 U.S.C. § 1311(b)(1)(B).
But effluent limitations are restricted to regulations governing “discharges from point
sources into navigable waters.” 33 U.S.C. § 1362(11). The EPA is authorized to
administer more stringent “water quality related effluent limitations,” but the CWA
is clear that the object of these limitations is still the “discharges of pollutants from
a point source.” 33 U.S.C. § 1312(a). In turn, “discharge of pollutant” refers to the
“addition of any pollutant to navigable waters.” § 1362(11). The EPA would like to
apply effluent limitations to the discharge of flows from one internal treatment unit
to another. We cannot reasonably conclude that it has the statutory authority to do so.
See also Am. Iron & Steel Inst. v. EPA, 115 F.3d 979, 996 (D.C. Cir. 1997) (“The
statute is clear: The EPA may regulate the pollutant levels in a waste stream that is
discharged directly into the navigable waters of the United States through a ‘point
source’; it is not authorized to regulate the pollutant levels in a facility’s internal waste
stream.”). Therefore, insofar as the blending rule imposes secondary treatment
regulations on flows within facilities, we vacate it as exceeding the EPA’s statutory
authority.
V. Conclusion
For the foregoing reasons, we deny the EPA’s motion to dismiss and grant the
League’s petition for review. We vacate both the mixing zone rule in the June 2011
letter and the blending rule in the September 2011 letter as procedurally invalid.
Further, we vacate the blending rule as in excess of statutory authority insofar as it
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would impose the effluent limitations of the secondary treatment regulations
internally, rather than at the point of discharge into navigable waters. We remand to
the EPA for further consideration.20
______________________________
20
The League also requested attorneys’ fees under CWA section 509(b)(3),
which authorizes courts, “whenever . . . appropriate,” to award litigation costs to any
“prevailing or substantially prevailing party.” To be a prevailing party entitled to
attorneys’ fees, a plaintiff must achieve at least some relief on the merits that
effectuates a “material alteration of the legal relationship of the parties.” Buckhannon
Bd. & Care Home, Inc. v. West Va. Dep’t of Health & Human Res., 532 U.S. 598, 604
(2001) (quoting Tex. State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782,
792-93 (1989)); see also Sierra Club v. City of Little Rock, 351 F.3d 840, 845 (8th Cir.
2003) (applying Buckhannon to a claim for attorneys’ fees under the CWA). The
League is clearly a prevailing party, even on the basis of its procedural challenge
alone. See Chem. Mfrs. Ass’n v. EPA, 885 F.2d 1276, 1279 (5th Cir. 1989)
(describing “substantive significance” of a remand on procedural grounds). An award
of litigation costs under section 509(b)(3) must also be “appropriate.” Statutory
provisions authorizing an award of litigation costs often serve to incentivize the
achievement of statutory objectives, and therefore “an award is usually ‘appropriate’
when a party has advanced the goals of the statute invoked in the litigation.” Id.; see
also Saint John’s Organic Farm v. Gem Cnty. Mosquito Abatement Dist., 574 F.3d
1054, 1061 (9th Cir. 2009); NRDC v. EPA, 512 F.2d 1351, 1357 (D.C. Cir. 1975).
The CWA’s goals involve the restoration and maintenance of the “chemical, physical,
and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). The League,
however, was largely vindicating its own rights, rather than the purposes of the CWA,
and it has neglected to brief us on why an award of attorneys’ fees would otherwise
be “appropriate.” Therefore, we decline to award litigation costs under CWA section
509(b)(3).
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