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Food and Water Watch v. United States Environmental Protection Agency

United States District Court, District Circuit

December 13, 2013

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and BOB PERCIASEPE, Acting Administrator Defendants. Re Document Nos. 35, 36



Granting Defendants’ Motions to Dismiss


The plaintiffs in this action challenge the Environmental Protection Agency’s (“EPA”) “authorization” of pollution trading and offsets outlined in its 2010 Chesapeake Bay Total Maximum Daily Loads (“Bay TMDL”). They allege that the “authorization” of pollution trading and offsets is contrary to the Clean Water Act, and arbitrary and capricious in violation of the Administrative Procedure Act (“APA”). They also allege that the “authorization” of pollution trading and offsets violates the APA’s requirement for Notice and Comment Rulemaking. The defendants and defendant-intervenors[1] moved to dismiss the Complaint for lack of subject matter jurisdiction because, they allege, the plaintiffs do not have standing. In addition, the defendants moved to dismiss the Complaint for failure to state a claim because, they allege, the plaintiffs do not challenge a final agency action in this case. For the reasons that follow, the Court will grant the defendants’ motions to dismiss on both grounds.


A. Statutory Background

The Clean Water Act (“CWA”) was implemented to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251 (a). The Act contemplates collaborative efforts between the Federal Government, through the EPA, and State governments “to develop comprehensive solutions to prevent, reduce, and eliminate pollution in concert with programs for managing water resources.” Id. § 1251(g).

The CWA specifies that “the discharge of any pollutant by any person shall be unlawful.” 33 U.S.C. § 1311(a). The CWA recognizes two types of pollutant sources: point and nonpoint. Point sources are defined in the CWA as “any discernible, confined, and concrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure . . . from which pollutants are or may be discharged.” 33 U.S.C. § 1362(14). Nonpoint sources are not defined in the CWA, but in the regulations promulgating it, and are defined as “not traceable to a discrete identifiable origin, but [as] generally result[ing] from land runoff, precipitation, drainage, or seepage.” 40 C.F.R. § 35.1605-4.

There are two main ways the CWA controls the discharge of these two sources into navigable waters of the United States: through technology-based controls and through water quality standards. See, e.g., Bravos v. Green, 306 F.Supp.2d 48, 50-51 (D.D.C. 2004). The main technology-based regulation implemented by the CWA is the National Pollutant Discharge Elimination System (“NPDES”). That system only regulates point sources, and does so by allowing the EPA Administrator, and/or the States, to issue permits for the discharge of a point source pollutant. 33 U.S.C. § 1342. The regulations implementing the NPDES system specify that “no permit may be issued [w]hen the conditions of the permit do not provide for compliance with the applicable requirements of CWA, or regulations promulgated under CWA.” 40 C.F.R. § 122.4(a). States are authorized to adopt programs for issuing permits to point sources, but the EPA retains the authority to object to an inadequate State permit and to issue a federal permit instead. 33 U.S.C. § 1342(d). The anti-backsliding provision of the permit system provides that “a permit may not be renewed, reissued, or modified on the basis of effluent guidelines . . . to contain effluent limitations[2] which are less stringent than the comparable effluent limitations in the previous permit.” 33 U.S.C. § 1342(o).

The other main way the CWA seeks to control the discharge of pollutants, point source and nonpoint source alike, is through the water quality standards (“WQS”) process outlined in Section 303 of the CWA, and codified in 33 U.S.C. § 1313. Section 1313 specifies that “each State shall identify those waters within its boundaries for which the effluent limitations . . . are not stringent enough to implement any water quality standard applicable to such waters.” 33 U.S.C. § 1313(d)(1)(A). “Each State shall [also] establish for the waters identified in paragraph (1)(A) . . . the total maximum daily load (“TMDL”), for those pollutants which the Administrator identifies . . . as suitable for such calculation.” Id. § 1313(d)(1)(C). The regulations implementing the CWA specify that States are to “identify those water quality-limited segments (“WQLS”)[3] still requiring TMDLs within its boundaries for which technology-based effluent limitations . . . are not stringent enough to implement any water quality standards applicable to such waters.” 40 C.F.R. § 130.7(b)(1)(i)-(iii).

Under § 1313(d)(2), the State shall submit to the Administrator the waters identified and the loads established in sections (1)(A), (1)(B), and (1)(C), and the Administrator shall either approve those identifications and loads, or if the Administrator does not approve the identifications and loads, the Administrator “shall identify such waters in such State and establish such loads for such waters as he determines necessary to implement the water quality standards applicable to such waters, ” and then the State shall incorporate them into its “continuing planning process, ” as codified in § 1313(e). See 33 U.S.C. § 1313(d)(2). Each State is to “have a continuing planning process” to ensure that it comports with the TMDL that either it, or the EPA sets. See 33 U.S.C. § 1313(e).

Though there is no NPDES analogue for nonpoint sources, the EPA can use federal grants to encourage states to address nonpoint source pollution and implement the load allocations established in a TMDL. See 33 U.S.C. § 1329(h). See also Chesapeake Bay TMDL ES-8 (“nonpoint sources are not covered by a similar federal permit program; as a result, financial incentives, other voluntary programs and state-specific regulatory programs are used to achieve nonpoint source reductions”).

Because this action arises specifically from the EPA’s establishment of the Chesapeake Bay TMDL, it is useful to describe what, exactly, a TMDL is. A TMDL is the “total maximum daily load” of a given pollutant that can be added into a navigable water of the United States on a given day. It essentially “identifies the maximum amount of a pollutant that can be added to a body of water consistent with attaining applicable water quality standards.” EPA’s Mot. to Dismiss 4, ECF No. 36. The way this number is calculated is defined in 40 C.F.R. § 130.2(i), and it turns largely on the amount of point and nonpoint sources of pollution in that particular body of water. “The portion of a receiving water’s loading capacity that is allocated to one of its existing or future point sources of pollution” is known as the wasteload allocation (“WLA”). 40 C.F.R. § 130.2(h) (emphasis added). “The portion of a receiving water’s loading capacity that is attributed either to one of its existing or future nonpoint sources of pollution” is known as the load allocation (“LA”). Id. § 130.2(g) (emphasis added). The TMDL is the sum of the LA and the WLA, plus a “margin of safety.” Id. § 130.2(i); 33 U.S.C. §§ 1313(d)(1)(C), (d)(1)(D). See also Chesapeake Bay TMDL 1-2.

B. The Chesapeake Bay TMDL

The Chesapeake Bay is the largest estuary in the United States and one of the largest and most biologically productive estuaries in the world. See Chesapeake Bay Protection and Restoration, 74 Fed. Reg. 23, 099, 23, 099 (May 12, 2009). Unfortunately, and despite decades-long efforts by federal and state regulators, the Bay remains widely polluted, which has prevented “the attainment of existing State water quality standards and the ‘fishable and swimmable’ goals of the Clean Water Act.” See Id . The main pollutants in the Bay are nitrogen, phosphorus and sediment. See Chesapeake Bay TMDL 2-7, ECF No. 36-1.[4] These pollutants generally come from point sources such as municipal wastewater facilities and industrial discharge facilities; and from nonpoint sources such as agricultural lands and other runoff. See Id . at 4-1.

On December 29, 2010, the EPA established the Chesapeake Bay TMDL because the State TMDLs were not achieving the water quality standards mandated by the CWA. See Chesapeake Bay TMDL ES-1. The TMDL establishes final load allocations (from both point and nonpoint sources of pollution) for the entire Chesapeake Bay and it “identifies the necessary pollution reductions of nitrogen, phosphorus, and sediment across Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, and the District of Columbia and sets pollution limits necessary to meet applicable water quality standards in the Bay and its tidal rivers and embayments.” Chesapeake Bay TMDL ES-1.

Because the finality and legality of the TMDL are in dispute in this case, it is helpful to outline several of its key provisions. The Executive Summary of the TMDL explains EPA’s process in establishing the numbers set out in the TMDL. See Chesapeake Bay TMDL ES-1‒5. EPA collaborated with the Chesapeake Bay jurisdictions (Delaware, Maryland, Virginia, Pennsylvania, New York, West Virginia, and the District of Columbia) to arrive at the various loading allocations. Each State submitted its own Watershed Implementation Plan (“WIP”) that details how each State will implement the TMDL in its own State to achieve its jurisdiction-specific pollutant loading allocations. The EPA and the Bay jurisdictions went back-and-forth exchanging drafts of loading allocations, and the draft TMDL was published for a 45-day public comment period. The EPA then evaluated each State’s WIP, along with all the public comments to arrive at the TMDL it finally published on December 29, 2010. Id. at ES-5. The WIPs “are the roadmap for how the jurisdictions, in partnership with federal and local governments, will achieve and maintain the Chesapeake Bay TMDL nitrogen, phosphorus, and sediment allocations.” Id. at 7-6.

Section 10 of the TMDL, whose provisions are most in dispute in this case, outlines EPA’s expectations for how States will keep pollution levels down despite future population growth. Section 10 begins by discussing offsets, which “[f]or purposes of the Chesapeake Bay TMDL, means . . . compensating for the loading of a pollutant of concern from a point or nonpoint source with a reduction in the loading from a different source or sources, in a manner consistent with meeting WQS.” Chesapeake Bay TMDL, Appendix S-2. Section 10.1.2 notes that the “EPA expects that new or increased loadings of nitrogen, phosphorus, and sediment in the Chesapeake Bay that are not specifically accounted for in the TMDL’s WLA or LA will be offset by loading reductions and credits generated by other sources . . . .” Id. at 10-1 (emphasis added). The EPA also states that it “encourages and expects that the jurisdictions will generally develop and implement programs for offsetting new and increased loadings consistent with the definitions and common elements described in Appendix S . . . .” Id. (emphasis added).

Section 10.2 covers water quality trading. The EPA has defined trading as an approach that “allows one source to meet its regulatory obligations by using pollutant reductions created by another source that has lower pollution control costs. Trading capitalizes on economies of scale and the control cost differentials among and between sources.” See United States Environmental Protection Agency, Final Water Quality Trading Policy 1, January 13, 2003 (“Final Water Quality Trading Policy”).[5] With respect to water quality trading, “EPA recognizes that a number of Bay jurisdictions already are implementing water quality trading programs. EPA supports implementation of the Bay TMDL through such programs, as long as they are established and implemented in a manner consistent with the CWA, its implementing regulations and the EPA’s Water Quality Trading Policy and 2007 Water Quality Trading Toolkit for NPDES Permit Writers.” Id. at 10-3 (emphasis added). The EPA also states that “an assumption of this TMDL is that trades may occur between sources contributing pollutant loadings to the same or different Bay segments, provided such trades do not cause or contribute to an exceedance of WQS in either receiving segment or anywhere else in the Bay watershed.” Id. (emphasis added). In addition, EPA notes that it “does not support any trading activity that would delay or weaken implementation of the Bay TMDL that is inconsistent with the assumptions and requirements of the TMDL.” Id.

Appendix S of the TMDL outlines the common elements from which the EPA “expects” the jurisdictions to develop and implement offset programs. See Id . at S-1‒S-2. Appendix S goes on to note that, “[t]hose common elements are not presented here as regulatory requirements. However, EPA believes that in the aggregate, they will help to ensure that offsets are achieved through ...

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