## F I L E D United States Court of Appeals Tenth Circuit 

### AUG 8 2001 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

AMERICAN WILDLANDS; PACIFIC RIVERS COUNCIL; MONTANA ENVIRONMENTAL INFORMATION CENTER and NORTHERN PLAINS RESOURCE COUNCIL, INC.,

Plaintiffs - Appellants,

v. CAROL BROWNER, in her official capacity as the Administrator of the U.S. Environmental Protection Agency; BILL YELLOWTAIL, in his official capacity as the Regional Administrator of the U.S. Environmental Protection Agency, Region VIII and ENVIRONMENTAL PROTECTION AGENCY, an agency of the United States Government,

Defendants - Appellees. and
WESTERN ENVIRONMENTAL TRADE ASSOCIATION, on behalf of its members and STATE OF MONTANA, Department of Environmental Quality,

Intervenors - Appellees. No. 00-1224* Honorable Thomas M. Reavley, Senior Circuit Judge, United States Court

of Appeals for the Fifth Circuit, sitting by design ation. -2- APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO (D. Ct. No. 98-K-1621)

Kristen L. Boyles, Earthjustice Legal Defense Fund, Seattle, Washington, (Stephen D. Mashuda, Earthjustice Legal Defense Fun d, Seattle, Washington, and James S. Angell, Earthjustice Legal Defense Fund, D enver, Colorado, with her on the briefs), for Appellants. Robert H. Oakley (Lois J. Schiffer, Assistant Attorney General, David A. Carson and Greer S. Goldman, with him on the brief), Unite d States Department of Justice, Environment & Natural Resources Division, Washington, DC, for Appellee Environmental Protection Agency. Claudia L. Massman, Special Assistant Attorney Gene ral, Department of Environmental Quality, Helena, Montana, for Appelle e State of Montana. Rebecca W. Watson, Gough, Shanahan, Johnson & Waterman, Helena, Montana, and John Bloomquist, Doney, Crowley, Bloomquist & U da, Helena, Montana, filed a brief on behalf of Appellee Western Environ mental Trade Association.

Before TACHA , Chief Judge, REAVLEY , * and LUCERO , Circuit Judges.

TACHA , Chief Circuit Judge.

This appeal presents a challenge by Appellant Ameri can Wildlands to the Environmental Protection Agency’s (“the EPA”) appro val pursuant to the Clean Water Act of certain of Montana’s water quality standards. Specifically, two questions are presented to this court for review: ( 1) whether the EPA properly-3-

approved Montana’s statutory exemption from antideg radation review of nonpoint sources of pollution; and (2) whether the EPA properly approved Montana’s mixing zone policies and procedures. The district court held in favor of the EPA. We exercise jurisdiction pursuant to 2 8 U.S.C. § 1291 and affirm. I. Statutory and Regulatory Scheme A. Point and Nonpoint Source Discharges The Clean Water Act (“the Act”) was adopted “to res tore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). To achieve this goal, Congress prohibit ed the discharge from a point source of any pollutant into the waters of the Unit ed States unless that discharge met specific requirements set forth in the Act. 33 U.S.C. § 1311(a). “Point source” is defined by the Act to mean: “any discern ible, confined and discrete conveyance . . . from which pollutants are or may b e discharged.” 33 U.S.C. § 1362(14). Further, a “pollutant” is defined as “ dredged spoil, solid waste, incinerator residue, sewage, garbage, sewage sludge , munitions, chemical wastes, biological materials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt and industrial, municipal, and agricultural waste discharged into water.” 33 U.S.C. § 1362(6). In order for point source discharges to be in compl iance with the Act, such discharges must adhere to the terms of a National P ollutant Discharge-4-

Elimination System (“NPDES”) permit issued pursuantto the Act. 33 U.S.C. § 1342. NPDES permits are issued by the EPA or, in certain jurisdictions, by state agencies authorized to do so by the EPA. 33 U.S.C. § 1342(a)-(d). Unlike point source discharges, nonpoint source discharges are not defined by the Act. One court has described nonpoint source pollution a s “nothing more that a [water] pollution problem not involving a discharge from a point source.” Nat’l Wildlife Found. v. Gorsuch , 693 F.2d 156, 166 n.28 (D.C. Cir. 1982) (internal quotation marks omitted). Rather than vest the EPA with authority to control nonpoint source discharges through a permitting process, Congress r equired states to develop water quality standards for intrastate waters. 33 U.S.C. § 1313. Water quality standards consist of three elements: first, each water body must be given a “designated use,” such as recreation or the protect ion of aquatic life; second, the standards must specify for each body of water the amounts of various pollutants or pollutant parameters that may be present withoutimpairing the designated use; and finally, each state must adopt an antidegradati on review policy which will allow the state to assess activities that may lowerthe water quality of the water body. 33 U.S.C. § 1313(c)(2)(A); 40 C.F.R. §§ 130. 3, 130.10(d)(4), 131.6, 131.10, 131.11. Further, each state is required to identify all of the waters within its borders not meeting water quality standards andestablish “total maximum-5-

daily loads” (“TMDL”) for those waters. 33 U.S.C. § 1313(d). A TMDL defines the specified maximum amount of a pollutant which c an be discharged into a body of water from all sources combined. Dioxin/Or ganochlorine Ctr. v. Clarke , 57 F.3d 1517, 1520 (9th Cir. 1995). B. The EPA’s Approval Role Whenever a state revises or adopts a water qualitystandard, the state must submit the standard to the EPA’s Regional Administr ator for a determination as to whether the new standard is consistent with the Act. 33 U.S.C. § 1313(c)(2); 40 C.F.R. § 131.21(a). The EPA must either approve the standard within sixty days of submission or—if the EPA determines that th e standard is inconsistent with the Act—disapprove the standard and notify the state of any changes necessary to gain the EPA’s approval. 33 U.S.C. § 1313(c)(3). If the state fails to make the changes required by the EPA, the agency must promptly promulgate and impose replacement standards upon the state. 3 3 U.S.C. § 1313(c)(3)-(4)(A).

“‘ [S]tates have the primary role, under § 303 of the CWA (33 U.S.C. § 1313), in establishing water quality standards. EPA’s sole function, in this respect, is to review those standards for approval. ’” City of Albuquerque v.
Browner , 97 F.3d 415, 425 (10th Cir. 1996) (quoting Natura l Res. Def. Council,
Inc. v. EPA , 16 F.3d 1399, 1401 (4th Cir. 1993)). Therefore, the EPA has a limited role in reviewing water quality standards. Id. (“Congress clearly intended-6-

the EPA to have a limited, non-rulemaking role in the establishment of water quality standards by states . . . .”). C. Antidegradation The antidegradation review policies adopted by the states as a part of their water quality standards must be consistent with the federal antidegradation policy. 40 C.F.R. § 131.12. The EPA’s regulations establish three levels of water quality protection: Tier I, Tier II, and TierIII. Tier I protection establishes the minimum water quality standard for all waters and requires that “[e]xisting instream water uses and the level of water quality necessary to protect the existing uses shall be maintained and protected.” 40 C.F.R. § 131.12(a)(1). Tier II protection provides that, where the water quality of a water body exceeds that necessary to support aquatic life and recreation, t hat level of water quality shall be maintained unless the state determines that “all owing lower water quality is necessary to accommodate important economic or soci al development in the area in which the waters are located.” 40 C.F.R. § 131. 12(a)(2). Tier III protection provides that, where a water body “constitute[s] an outstanding National resource, such as waters of National and State park s and wildlife refuges and waters of exceptional recreational or ecological si gnificance, that water quality shall be maintained and protected.” 40 C.F.R. § 13 1.12(a)(3). D. Mixing Zones-7-

Pursuant to the EPA’s regulations, a state may, at its discretion, include within its water quality standards “policies genera lly affecting . . . mixing zones.” 40 C.F.R. § 131.13. Mixing zones are “areas where an effluent discharge undergoes initial dilution and are extended to cove r the secondary mixing in the ambient water body. A mixing zone is an allocated impact zone where acute and chronic water quality criteria can be exceeded as l ong as a number of protections are maintained.” Environmental Protection Agency, Water Quality Standards Handbook§ 5.1.1, at 5-5 (2d ed.1994) (hereinafter Handbook ). The protections that must be maintained include the absence of “tox ic conditions to aquatic life,” “objectionable deposits,” “floating debris,” “objec tionable color, odor, taste, or turbidity,” and substances resulting in “a dominanc e of nuisance species.” Id. at 5-5 to 5-6. Mixing zones are allowable as a practi cal necessity because “[i]t is not always necessary to meet all water quality crit eria within the discharge pipe to protect the integrity of the water body as a who le. Sometimes it is appropriate to allow for ambient concentrations above the crite ria in small areas near outfalls.” Id. § 5.1, at 5-1. Should a state decide to include “ policies generally affecting . . . mixing zones” within their water qu ality standards, those policies are subject to review and approval by the EPA. 40 C.F.R. § 131.13. E. Montana’s Policies 1. Montana’s Exemption of Nonpoint Source Pollution from Antidegradation Review-8-

In drafting its water quality standards, the Montan a legislature exempted “existing activities that are nonpoint sources of p ollution as of April 29, 1993” from antidegradation review with respect to Tier II waters. Mont. Code Ann. § 75-5-317(2)(a). Further, nonpoint sources initiated after April 29, 1993 are exempted from antidegradation review with respect t o Tier II waters “when reasonable land, soil, and water conservation pract ices are applied and existing and anticipated beneficial uses will be fully prote cted.” Mont. Code Ann. § 75- 5-317(2)(b).

2. Montana’s Mixing Zone Policies and Procedures Montana’s antidegradation rules provide that, where degradation to a water body at the edge of a mixing zone is not significan t, no antidegradation review of the mixing zone itself is required. Mont. Admin. R . § 17.30.715(1)(c), 17.30.505(1)(b). Montana does, however, impose a n umber of other requirements on mixing zones designed to limit thei r impact on the receiving water body. Montana requires that mixing zones hav e “(a) the smallest practicable size, (b) a minimum practicable effect on water uses, and (c) definable boundaries.” Mont. Code Ann. § 75-5-301( 4). A mixing zone may not “threaten or impair existing beneficial uses.” Mon t. Admin. R. § 17.30.506(1). A discharge permit may not be renewed if “there is evidence that the previously allowed mixing zone will impair existing or anticip ated uses.” Mont. Admin. R.-9-

§ 17.30.505(1)(c). The Montana Department of Envir onmental Quality is required to consider various factors in deciding wh ether or not to grant a mixing zone, such as the toxicity and persistence of the s ubstance being discharged and the cumulative effects of multiple mixing zones. M ont. Admin. R. § 17.30.506(2). Finally, the water quality within the mixing zone itself is regulated to prohibit discharge from blocking passa ge of aquatic organisms or from causing the death of organisms passing through the mixing zone. Mont. Admin. R. § 17.30.602(14). II. Proceedings Below American Wildlands filed this lawsuit in 1998, alle ging that the EPA had failed to take timely action under section 303(c) o f the Act to approve or disapprove Montana’s new and revised water quality standards. The original complaint alleged that the EPA violated the Act by: (1) failing to approve or disapprove Montana’s new and revised water quality standards; and (2) by failing to promptly prepare and promulgate replacement stan dards for those Montana standards that failed to meet the requirements of t he Act. In October 1998, American Wildlands moved for summary judgment. The parties stayed briefing of that motion, however, when the EPA stipulated th at it would complete its review of Montana’s water quality standards by Janu ary 15, 1999. On December 24, 1998, the EPA disapproved some of M ontana’s revised-10-

standards and approved others. The EPA addressed t he remaining standards on January 26, 1999, again disapproving some and appro ving others. On March 31, 1999, American Wildlands amended its complaint to c hallenge the EPA’s approval of several of Montana’s standards. The di strict court affirmed each of the EPA’s actions. Am. Wildlands v. Browner , 94 F. Supp. 2d 1150 (D. Colo. 2000). This appeal followed. Specifically, Americ an Wildlands appeals the district court’s conclusion that: (1) the EPA prope rly approved Montana water quality standards that exempt nonpoint source pollu tion from antidegradation review; and (2) the EPA properly approved Montana m ixing zone policies and procedures exempting the areas within the mixing zo ne from antidegradation review.
III. Standard of Review “Our standard of review of the lower court’s decisi on in an APA case is de novo.” N.M. Cattle Growers Ass’n v. United States Fish & Wildlife Serv. , 248 F.3d 1277, 1281 (10th Cir. 2001). We will not overturn an agency action unless it “fails to meet statutory, procedural or constitu tional requirements, or unless it is arbitrary, capricious, an abuse of discretion, o r otherwise not in accordance with law.” Sac & Fox Nation v. Norton , 240 F.3d 1250, 1260 (10th Cir. 2001) (citing 5 U.S.C. § 706(2)(A)-(D)). Specifically, w e review the EPA’s decision to approve state water quality standards under the arb itrary and capricious standard.-11-

City of Albuquerque , 97 F.3d at 426 (reviewing the EPA’s approval of w ater quality standards proposed by an Indian tribe treat ed as a state under the Clean Water Act under the arbitrary and capricious standard); accordNatural Res. Def. Council, Inc. , 16 F.3d at 1403-04 (reviewing the EPA’s approval of state water quality standards under the arbitrary and capriciou s standard); Natural Res. Def. Council, Inc. v. Fox , 909 F. Supp. 153, 161 (S.D.N.Y. 1995) (same). American Wildlands argues, however, that due to the unique approval role played by the EPA, any approval decision by the EPA necessarily implicates purely legal questions of when water quality standards are consistent with the Act which we must review with no deference to the agenc y. We disagree. In Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 842-43 (1984), the Supreme Court created a two-step approach to judicial review of agency interpretations of acts of Congress. Fir st, if a statute is clear and unambiguous, the language of the statute controls. Id. However, “if the statute is silent or ambiguous with respect to the specific issue,” then “the question for the court is whether the agency’s answer is based o n a permissible construction of the statute.” Id. at 843. Before granting the EPA’s approval determ ination Chevron deference, however, we must ask whether “Congress delegated authority to the agency generally [to make such determination s] carrying the force of law,” and whether “the agency interpretation claiming def erence was promulgated in-12-

the exercise of that authority.” United States v. Mead Corp. , — U.S. —, 121 S. Ct. 2164, 2171 (2001). It is clear that Congress delegated authority to th e EPA to make determinations as to when water quality standards are consistent with the Act. 33 U.S.C. § 1313. As if presaging the Meadrefinement of the traditional Chevron analysis, this court specifically held in City of A lbuquerque that the EPA has been charged by Congress with the authority to admi nister and interpret the Act. 97 F.3d at 422 (“The EPA . . . is entitled to consi derable deference in its interpretation of the Clean Water Act because it is charged with administering the Act”); see also Arkansas v. Oklahoma , 503 U.S. 91, 112 (1992) (criticizing this court for failing to afford the EPA’s interpretatio n of the Act “an appropriate level of deference”); id. at 107 (holding that Congress delegated to the EPA “substantial statutory discretion” under the Act). Further, it is clear that the EPA’s action in this case was taken in the exercise of that authority. Thus, the Meadthreshold requirements are met. We therefore cond uct a Chevron analysis. The Act is silent on the specific questions of stat utory interpretation raised by this case. Thus, we will accord Chevron deference to the EPA’s interpretation of the Act when it makes decisions to approve state water quality standards. We therefore review the agency action at issue here un der the arbitrary and capricious standard and, in conjunction, will ask only whetherthe EPA’s interpretation of-13-

the Act implicit in its action is a permissible con struction of the statute. “This standard of review is a narrow one, and we are not empowered to substitute our judgment for that of the EPA.” City of Albuquerque , 97 F.3d at 424. IV. The EPA’s Approval of Montana’s Water Quality St andards A. Montana’s Standard Exempting Nonpoint Source Pollution from Antidegradation Review It is the position of American Wildlands in this ca se that Montana’s Tier II antidegradation policy, which does not consider non point source pollution, is not consistent with the Act and must be disapproved by the EPA. The EPA maintains that the Act does not grant it authority to regulat e nonpoint sources of pollution, and therefore, it is powerless to disapprove state antidegradation review policies on the basis of how those policies deal with nonpoi nt source pollution. The district court, ruling in favor of the EPA, hel d that “nothing in the CWA demands that a state adopt a regulatory system for nonpoint sources.” Am. Wildlands , 94 F. Supp. 2d at 1161. We agree. In the Act, C ongress has chosen not to give the EPA the authority to regulate nonpoint source pollution. See Kennecott Copper Corp. v. EPA , 612 F.2d 1232, 1243 (10th Cir. 1979) (holding that the EPA lacks authority to regulate nonpoint s ources of pollution); Appalachian Power Co. v. Train , 545 F.2d 1351, 1373 (4th Cir. 1976) (“Congress consciously distinguished between point source and nonpoint source discharges, giving EPA authority under the [Clean Water] Act to regulate only the former.”).-14-

Because the Act nowhere gives the EPA the authorityto regulate nonpoint source discharges, the EPA’s determination—that Mon tana’s water quality standards exempting nonpoint source discharges from antidegradation review are consistent with the Act—is a permissible constructi on of the Act. It is true that states are required to “assure that there shall be achieved . . . cost-effective and reasonable best management practices for nonpoint s ource control.” 40 C.F.R. § 131.12(a)(2). It is also true that the standard- setting process in 33 U.S.C. § 1313 applies generally to waters polluted by both point source and nonpoint source pollution. 33 U.S.C. § 1313 (making no dist inction between pollution from point and nonpoint sources). However, this do es not mean, as American Wildlands argues, that states are required to regul ate nonpoint sources at the antidegradation stage. Rather, the effect of nonpo int source discharges on water bodies will be diminished by state adoption of TMDL s for water bodies not meeting state water quality standards. Consequentl y, we find that the EPA did not act arbitrarily or misinterpret the Act when itapproved Montana’s antidegradation review rules. B. Montana’s Mixing Zone Policies and Procedures American Wildlands argues that Montana’s mixing zon e policy allowing point source discharges to degrade water quality wi thin the mixing zone so long as the discharge does not degrade the water quality outside the zone is-15-

inconsistent with the Act because it allows point s ource pollution to escape antidegradation review within certain areas of Mont ana’s water bodies. The EPA maintains that the Act’s antidegradation requiremen ts apply to the waterbody as a whole, not specifically to the mixing zone. We fin d the EPA’s interpretation of the Act to be permissible. The use of mixing zones is widespread. Indeed, the water quality regulations specifically allow for their use. 40 C .F.R. § 131.13. “Practically every state and Puerto Rico have adopted mixing zone criteria . . . .” P.R. Sun Oil Co. v. EPA , 8 F.3d 73, 75 (1st Cir. 1993). As noted above, mixing zones are allowable as a practical necessity because “[i]t is not always necessary to meet all water quality criteria within the discharge pipe to protect the integrity of the water body as a whole. Sometimes it is appropriate to allow for ambient concentrations above the criteria in small areas ne ar outfalls.” Handbook§ 5.1, at 5-1. While “the entire extent of the water bodyis not required to be given full existing use protection,” all effects “on the exist ing use must be limited to the area of the regulatory mixing zone.” Id. § 4.4.4, at 4-6. Moreover, courts have previously recognized that th e reality of mixing zones makes measuring water quality standards at th e edge of the zone a necessity. P.R. Sun Oil Co. , 8 F.3d at 75 (“[M]easuring pollutants at the edge of the mixing zone is widespread in the application of the Clean Water Act.”);1 Western Environmental Trade Association’s “Motion to Supplement the

Administrative Record, or, alternatively, to have J udicial Notice taken of EPA Guidance Document Excerpts” is denied. -16- Marathon Oil Co. v. EPA , 830 F.2d 1346, 1349 (5th Cir. 1987) (“By definiti on, the effluent itself [within the mixing zone] does n ot meet water quality standards . . . . It necessarily follows, then, that the edg e or outer circumference of the mixing zone is defined as the boundary at which wat er quality standards are first met.”). Finally, as mentioned above, Montana has p rovided a number of safeguards to ensure that mixing zones do not damage the water q uality of the entire water body. Consequently, we find that the EPA did not act arbitrarily or misinterpret the Act when it approved Montana’s mix ing zone policies.
V. Conclusion In sum, we hold that the EPA’s approval of Montana’ s water quality standards was not done arbitrarily or capriciously. Furthermore, the EPA’s interpretation of the Clean Water Act implicit in i ts decision to approve those standards is permissible. 1 Therefore, we AFFIRM.