Opinion ID: 184802
Heading Depth: 2
Heading Rank: 2

Heading: What Does Federal Law Allow?

Text: As noted above, under s 1319(g)(8) the standard for reviewing the EPA's finding that a person has violated a permitis whether there is ... substantial evidence in the record, taken as a whole, to support the finding of a violation. Inthis case GM claims there is no substantial evidence that itviolated its permit because the evidence demonstrates thatthe permit was invalid from the outset, but the EPA refusedto hear this attack upon the validity of the permit. Thequestion now before us, therefore, is whether the EPA erredin interpreting the CWA to limit the grounds upon which GMmay challenge the validity and applicability of its permit inthis federal enforcement proceeding. Cf. Hoffman Homes,Inc. v. EPA, 999 F.2d 256, 260-61 (7th Cir. 1993) (reviewingEPA's interpretation of CWA regulations in course of administrative penalty proceeding). As GM suggests, because the EPA is charged with administering s 1319(g)(1), we review its decision per the familiaranalysis of Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). Our first task, using the traditional tools of statutory construction is to determine whether the Congress has spokento the precise question at issue, id. at 843 n.9. If so, thenwe must give effect to the unambiguously expressed intentof Congress. Id. at 842-43. If the Congress has notexpressed itself on that question, then Chevron step tworequires the court to defer to the agency's interpretation if itis reasonable and consistent with the statutory purpose. Ohio v. United States Dep't of Interior, 880 F.2d 432, 441(D.C. Cir. 1989).
In its brief, GM raised two arguments against the EPA'sinterpretation. First, GM claimed that the EPA required itto exhaust its state administrative remedies, despite the lackof an exhaustion requirement in the CWA and in the teeth ofthe Supreme Court's teaching that such a requirement can beimposed only by positive law--that is, by statute or agencyrule. See Darby v. Cisneros, 509 U.S. 137, 154 (1993); seealso Time Warner Entertainment Co. v. FCC, 144 F.3d 75, 79n.5 (D.C. Cir. 1998) ([J]udge made notions of 'common law'[exhaustion] always yield to statutes--particularly in administrative law). An exhaustion requirement, however, is notthe same as a prohibition upon collateral attack. The former refers to administrative or judicial proceedings that must becompleted as a prelude to federal judicial review; in thereviewing forum, of course, such proceedings do not have resjudicata effect. For example, on a petition to review adecision of the NLRB, a federal court will not hear an issuethat was not first raised before the agency; an issue that wasraised before the agency, however, is not res judicata butopen to review. See, e.g., Exxel/Atmos, Inc. v. NLRB, 147F.3d 972, 978 (D.C. Cir. 1998); see also 28 U.S.C.s 2254(b)(1)(A) (federal court shall not grant a state prisoner's petition for writ of habeas corpus unless the applicanthas exhausted the remedies available in the courts of theState). In contrast, the state administrative and judicialproceedings that GM failed to pursue when the MDNR issuedits permit would not have been but a prelude to furtherreview by the EPA. On the contrary, had GM pursued itsstate remedies and prevailed, then there would have been nopermit for the EPA to enforce; had GM done so and lost,then it would have been prevented, under the doctrine of resjudicata, from relitigating the validity of its permit in a laterenforcement proceeding before the EPA. At oral argument, GM in fact acknowledged that the EABhad merely been imprecise, using the language of exhaustionand of prohibition interchangeably; the Board did not purport to require that the Company have exhausted its stateremedies in order to challenge the validity of its permit in theEPA enforcement proceeding. That is, the EAB did not evenimply that it could have heard GM's challenge to the validityof its permit if only GM had previously sought state administrative and judicial review of that permit (and presumablybeen denied relief in those fora). Because the EAB did notinterpret the CWA to require exhaustion of state remediesprior to raising a collateral attack upon the validity of apermit in a federal enforcement proceeding, GM's first argument fails. (For the same reason, the argument made by anumber of Michigan companies appearing as amici--that evenif the EAB correctly imposed an exhaustion requirement, GMnonetheless should be permitted collaterally to attack its permit under the authority of McKart v. United States, 395U.S. 185 (1969)--is irrelevant.) Second, GM (joined by the Michigan amici) argues that theCWA allows a collateral attack upon a state-issued NPDESpermit in an enforcement proceeding because s 1369(b)(2)prohibits only collateral attacks against [a]ction[s] of theAdministrator with respect to which review could have beenobtained under [s 1369(b)(1)], of which one is issuing ordenying any [NPDES] permit. A state-issued NPDES permit, GM points out, is neither an action of the Administratornor otherwise made reviewable under s 1369(b)(1); therefore,the argument goes, the prohibition of collateral attacks ins 1369(b)(2) does not bar its challenge in this federal proceeding to the validity of its state-issued permit. Further, because references to state-issued and EPA-issued permits areso often coupled in the Clean Water Act, see, e.g., 33 U.S.C.ss 1311(i) & (k), 1319(c)-(d) & (g), 1342(p), GM would have usinfer that, by referring in s 1369(b)(2) solely to [a]ction[s] ofthe Administrator, the Congress intended not to bar acollateral attack against a state-issued permit; expressio unius est exclusio alterius. The inference GM would have us draw, however, simplydoes not follow. Section 1369(b)(1) authorizes the federalcourts of appeals to review certain actions of the EPA, not toreview the permitting decisions of the States. The failure ofthe Congress in s 1369(b)(2) expressly to forbid collateralattacks upon state permits is of no import, therefore. Thatis, not having authorized any review of state permits in thefirst place, the Congress simply had no reason to single outand prohibit collateral review of state permits. In sum, neither of GM's arguments persuades us that theCongress resolved the question whether a state permitteemay collaterally challenge the validity of its state-issuedpermit in the course of a federal enforcement proceeding. We must therefore proceed to Chevron step two and determine whether the EPA reasonably interpreted the CWA topreclude such a collateral attack.
Presumably, the EPA would not find a permit violation if apermit holder could demonstrate that a state court hadpreviously decided that the permit was void ab initio; certainly we would not find reasonable an interpretation of theCWA that precluded such a challenge to an EPA enforcementaction. GM can point to no such decision, however, because itdeclined to take advantage of available state procedures tochallenge its permit. Cf. PIRG v. Powell Duffryn TerminalsInc., 913 F.2d 64, 78 & n.27 (3d Cir. 1990) (permittee notdenied due process when denied opportunity collaterally toattack permit because it simply failed to use the processavailable to it). And the EPA persuasively argues that itreasonably interpreted the Act to prevent GM from doing in afederal enforcement proceeding what the Company had declined to do before the MDNR and the Michigan state courts. First, the Clean Water Act assigns to the participatingstates the primary role in administering the NPDES permitting program. See American Paper Inst., Inc. v. EPA, 890F.2d 869, 874 (7th Cir. 1989) (stating it seems beyondargument that we should construe the [Clean Water] Act toplace maximum responsibility for permitting decisions on thestates). As the EPA states, precluding collateral attacksensures that the States [have] the opportunity as a thresholdmatter to address objections to the permits they issue. Moreover, when a permit has been issued by a state agency,it alone will have the information pertinent to an attack uponthe decisionmaking process that led to the issuance of thatpermit. Not only would the EPA have to expend considerable resources to obtain the information from the state agency; it would also be second-guessing that agency, which is inconsistent with the primary role of the States under the Act. Relatedly, the EPA argues that precluding collateral attacks is consistent with Congress' desire to limit the scope ofenforcement proceedings, as evidenced by a committee report on the 1972 Clean Water Act amendments: Enforcement of violations of requirements under this Act should bebased on relatively narrow fact situations requiring a minimum of discretionary decisionmaking or delay. S. Rep. No.92-414, at 64 (1971). While we might not consider such a report indicative of the intent of the whole Congress, we dothink it bolsters the agency's claim to have made a reasonableinterpretation of the Act. If the EPA cannot preclude acollateral attack upon a state-issued permit, then it will findenforcement proceedings burdened by all manner of objections to the state proceedings leading up to issuance of thepermit. Enforcement will become a protracted rather thanan expedited undertaking. Finally, this court, in a dictum in Schramm, noted thatcongressional silence on federal court review of state permitsis consistent with the view that challengers to those permitsshould be relegated to state law remedies in state courts. 631 F.2d at 863 n.15. Certainly the EPA, acting in accordance with this dictum, the division of authority in the Actbetween state and federal permitting agencies, and the Senate Committee's expectation that enforcement proceedingswould be straightforward and speedy, could reasonably interpret the Act to remit to a state forum any attack upon thevalidity of a state permit. Therefore, applying Chevron steptwo, we conclude that the EPA was not unreasonable ininterpreting the CWA to preclude GM from attacking thevalidity of its state permit in this federal enforcement proceeding.