Opinion ID: 1269179
Heading Depth: 1
Heading Rank: 1

Heading: EPA's Reliance on Kentucky's Commitments Regarding Its Regulations When Assessing Their Impact as De Minimus

Text: Finally, Plaintiffs argue that in determining whether Kentucky's exemptions are in fact de minimus, the EPA was not entitled to rely on Kentucky's unenforceable commitments regarding these exemptions, but rather was required to assess the impact of each exemption based solely on the language of the exemption itself. I agree that this conclusion is compelled by the federal regulations. The EPA's CWA implementing regulations require each State to include, as part of its water quality standards submitted to the EPA for review, [a]n antidegradation policy consistent with [40 C.F.R.] § 131.12. 40 C.F.R. § 131.6(d). These federal regulations further require the State to provide [c]ertification by the State Attorney General or other appropriate legal authority within the State that the [submitted] water quality standards were duly adopted pursuant to State law. 40 C.F.R. § 131.6(e). Thus, in reviewing Kentucky's antidegradation rules for compliance with 40 C.F.R. § 131.12, the EPA must consider only the Kentucky water quality regulations that were duly adopted pursuant to State law. 40 C.F.R. § 131.6(e). Commitments by state agencies, such as the Cabinet, regarding the application of Kentucky's antidegradation implementation procedures do not have the force of law in Kentucky. See Ky.Rev.Stat. Ann. § 13A.130(1) (2006) (An administrative body shall not by internal policy, memorandum, or other form of action ... [m]odify... [or][e]xpand upon or limit a statute or administrative regulation.); Hagan v. Farris, 807 S.W.2d 488, 490 (Ky.1991) (An agency must be bound by the regulations it promulgates.... KRS 13A.130 prohibits an administrative body from modifying an administrative regulation by internal policy or another form of action.); Kerr v. Ky. State Bd. of Registration for Prof'l Eng'rs & Land Surveyors, 797 S.W.2d 714, 717 (Ky.Ct.App.1990) (Regulatory agencies are creatures of statute, and have not powers of their own; [their] internally adopted policies are null and void, and of no effect whatsoever.). Accordingly, they may not be considered by the EPA when evaluating whether Kentucky's Tier II review exemptions will have a de minimus impact on the quality of Kentucky's Tier II waters. See Northwest Envtl. Advocates v. EPA, 268 F.Supp.2d 1255, 1268-69 (D.Or.2003) (finding that the EPA was not entitled to rely on unenforceable commitment from the State when approving state-promulgated environmental standards). While the Cabinet's promises or commitments regarding the way in which it will apply Kentucky's antidegradation policies should not be considered when assessing the de minimus effects of the categorical exemptions contained in Kentucky's antidegradation regulations, the Cabinet's interpretations of those regulations may be useful in understanding the effects of their application. Kentucky's duly adopted antidegradation rules and implementation policy are found in 401 Ky. Admin. Regs. 5:029 and 5:030. In interpreting these regulations, the EPA must first look to the plain language of the regulations themselves. See Baptist Physician Hosp. Org., Inc. v. Humana Military Healthcare Serv., Inc., 481 F.3d 337, 344 (6th Cir.2007) (As with all matters of regulatory interpretation, we look first to the plain and unambiguous meaning of the regulation, if any.). If the EPA reasonably concludes that Kentucky's regulations are ambiguous, then it may rely on the Cabinet's interpretation of these regulations, which, if reasonable in light of the regulations' plain language, is entitled to deference. See Auer, 519 U.S. at 462, 117 S.Ct. 905; Defenders of Wildlife v. EPA, 415 F.3d 1121, 1127 (10th Cir.2005) (finding it permissible for the EPA to rely on a state environmental agency's interpretation of the State's antidegradation provisions when reviewing them for compliance with 40 C.F.R. § 131.12); Hagan, 807 S.W.2d at 490 (In most cases, an agency's interpretation of its own regulations is entitled to substantial deference.). However, the EPA may not [permit the Cabinet to] effectively rewrite or amend existing state regulations, nor may it `escape the notice and comment requirements ... by labeling a major substantive addition to a rule a mere interpretation.' Defenders of Wildlife, 415 F.3d at 1127 (citing Riverside Cement Co. v. Thomas, 843 F.2d 1246, 1248 (9th Cir.1988), and quoting Appalachian Power Co. v. EPA, 208 F.3d 1015, 1024 (D.C.Cir.2000)). See also Hagan, 807 S.W.2d at 490 (An agency's interpretation of a regulation is valid, however, only if the interpretation complies with the actual language of the regulation.). Thus, the EPA may rely on the Cabinet's reasonable interpretation of Kentucky's categorical exemptions from Tier II review to the extent that it finds the regulation ambiguous, but it may not rely on the Cabinet's substantive additions to those exemptions when determining their compliance with the requirements of 40 C.F.R. § 131.12. In the instant case, the EPA relied upon unenforceable commitments made by the Cabinet in determining whether the exemptions at issue would have an insignificant effect on the quality of Kentucky's Tier II waters. The language of Kentucky's antidegradation implementation regulation clearly provides that the Tier II review process specified in the regulation shall not apply to certain specified dischargers. See 401 Ky. Admin. Regs. 5:030 §§ 1(2)(b)(1)(a)-(e), (3)(b)(1)(a)-(e). The regulation does not, on its face, provide for an exception to these exemptions in cases where the exempted discharge would cause a significant lowering of water quality. Nevertheless, in approving these exemptions, the EPA relied on the Cabinet's commitments that it would not issue discharge permits under these exemptions for discharges that would cause a significant lowering of water quality. For example, the EPA approved Kentucky's exemption for discharges subject to storm water general permits, in part, because of Kentucky's indication that the Commonwealth has determined that it will ... assure that such permits only allow discharges that will not cause a significant lowering of water quality. J.A. at 191 (EPA Approval Document). Likewise in approving the exemption for domestic sewage dischargers who accept certain pollutant limits, the EPA noted: Kentucky has represented that these default [pollutant] limits will prevent any [significant lowering of water quality]. In those rare instances where these default limits are not protective of water quality, [the Kentucky Department of Water (KDOW)] has required more stringent options for permit applicants in the form of more stringent limits or a prohibition on discharge. The effect of this provision and its implementation by KDOW is to prevent any significant lowering of water quality. J.A. at 215 (EPA Approval Document). Finally, in approving the exemptions for CAFO discharges and discharges pursuant to KPDES permit renewals that result in less than a twenty percent pollution expansion, the EPA explicitly stated that it was relying on the Cabinet's assurances that it would not allow such exemptions to cause a significant lowering of water quality without applying Tier II review. See J.A. at 206 (EPA Approval Document) (By providing that antidegradation review is not required for discharges from CAFOs, Kentucky has represented that it will assure that these KPDES permits (both individual and general permits) will authorize only those new or increased discharges that will not cause significant lowering of water quality. Based on that understanding, EPA approves these provisions as revisions to Kentucky's water quality standards.); J.A. at 209 (EPA Approval Document) (EPA's analysis shows that it is possible that, in limited situations, a 20% expansion could use more than 10% of the available assimilative capacity of the receiving water, or could leave little assimilative capacity after the expansion. However, Kentucky stated in its April 11, 2005, letter that if such situations arise, the Commonwealth would require an antidegradation review. In light of EPA's analyses and Kentucky's assurances, EPA is approving this provision.). These commitments made by the Cabinet cannot reasonably be construed as mere interpretations of 401 Ky. Admin. Regs. 5:030, and the EPA was not entitled to rely upon them in evaluating the de minimus impact of the regulation on the quality of Kentucky's Tier II waters. In my view, the EPA acted contrary to law by relying on these unenforceable commitments. Accordingly, I would find this last contention by Plaintiffs to be a third reason to reverse the district court's grant of summary judgment to Defendants with respect to the EPA's approval of Kentucky's six categorical exemptions from Tier II review and to remand the matter to the EPA. In determining, on remand, whether Kentucky's regulatory exemptions to Tier II review only exempt discharges that have an insignificant effect on Tier II water quality, I would require the EPA to focus primarily on the language of 401 Ky. Admin. Regs. 5:030. In particular, I would prohibit the EPA from relying on unenforceable commitments from the Cabinet concerning its methods for implementing that regulation.
For the reasons expressed in parts I, II, and III-A of this opinion as well as for the reasons expressed in Judge Cook's concurring opinion below, we AFFIRM in part and REVERSE in part the opinion and order of the district court. We AFFIRM the district court's grant of summary judgment to Defendants on Plaintiffs' challenge to the EPA's approval of Kentucky's selection of Tier II waters. However, we REVERSE the district court's grant of summary judgment to Defendants with respect to Plaintiffs' challenge to the EPA's approval of Kentucky's categorical exemption of six types of pollution discharges from Tier II review. We thus VACATE that portion of the EPA's decision approving Kentucky's categorical exemption of certain discharges from Tier II review, and REMAND this matter to the EPA so that it may review this aspect of Kentucky's antidegradation implementation procedures in a manner that is consistent with Judge Cook's concurring opinion.