Opinion ID: 3052381
Heading Depth: 3
Heading Rank: 3

Heading: Ultra Vires Challenge

Text: In their first cause of action, plaintiffs allege that the CWA does not authorize the exemptions of vessel discharges provided in 40 C.F.R. § 122.3(a). According to plaintiffs, the EPA acted ultra vires in promulgating § 122.3(a). See 5 U.S.C. § 706(2)(C) (covering agency actions “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”). If plaintiffs are right, the regulation is invalid. In their second cause of action, plaintiffs allege that the EPA did not act “in accordance with law” when the agency denied the 1999 Petition for Rulemaking asking the EPA to repeal § 122.3(a). See 5 U.S.C. § 706(2)(A). As in their first cause of action, the premise of the second cause of action is that the EPA acted ultra vires in promulgating § 122.3(a). Because both causes of action present a question of law, we start at step one of Chevron and apply the same standard of review. See, e.g., Defenders of Wildlife v. Browner, 191 F.3d 1159, 1162 (9th Cir. 1999) (“On questions of statutory interpretation, we follow the approach from Chevron.”). The EPA makes three arguments. The first is procedural; the second and third are substantive. First, the EPA argues that the 1999 Petition for Rulemaking challenged only the exclusion for ballast water provided by 40 C.F.R. § 122.3(a). Therefore, the EPA argues, plaintiffs are now limited to challenging only this exclusion. Second, the EPA argues that the CWA authorized the EPA to promulgate § 122.3(a), or that at least the statute is ambiguous and therefore this court should defer to the agency’s interpretation of the statute. Third, the EPA argues that even if the CWA did not authorize the promulgation of § 122.3(a) when the CWA was enacted, Congress has now acquiesced in its promulgation. We consider these arguments in turn. 1. Scope of Plaintiffs’ 1999 Petition for Rulemaking The EPA argues that at most we should vacate § 122.3(a) as it applies to ballast water discharges. The agency argues NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA 9047 that we should not address the exemptions for marine engine and graywater discharges or discharges incidental to the normal operation of a vessel other than ballast water because plaintiffs did not object to those exemptions in their 1999 Petition for Rulemaking to the EPA. The district court considered and rejected this argument. See, e.g., Nw. Envtl. Advocates II, 2006 U.S. Dist. LEXIS 69476, at  (“Plaintiffs have consistently made clear that their overall aim is the repeal of the exemptions contained in 40 C.F.R. § 122.3(a).”). We agree with the district court. It is clear that the plaintiffs always have been most concerned with the environmental effects of ballast water discharges, but it is equally clear that they challenged all three exemptions contained in § 122.3(a) when they petitioned the EPA in 1999. For example, Plaintiffs’ Petition for Rulemaking was titled “Petition for Repeal of 40 C.F.R. § 122.3(a).” In that petition, they challenged the exemption in § 122.3(a) of “ballast water discharges and other discharges.” In responding to plaintiffs’ petition, the EPA stated that its decision addressed a “Petition for Rulemaking to Repeal 40 C.F.R. 122.3(a).” The EPA’s denial of plaintiffs’ petition quoted the full text of § 122.3(a) and explicitly noted that plaintiffs sought a repeal of the entire regulation. “The record in this case is replete with evidence” that the plaintiffs’ position was clear to the EPA. ‘Ilio‘Ulaokalani Coal. v. Rumsfeld, 464 F.3d 1083, 1092 (9th Cir. 2006) (as amended). 2. Text of the CWA Our first substantive inquiry is whether § 122.3(a) is invalid under the plain meaning of the CWA. Our inquiry is guided by Chevron. The Court wrote: When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the 9048 NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. 467 U.S. at 842-43. [11] Section 301(a) of the CWA mandates that “the discharge of any pollutant by any person shall be unlawful.” 33 U.S.C. § 1311(a). This prohibition is “[t]he ‘cornerstone’ and ‘fundamental premise’ of the Clean Water Act.” Se. Alaska Conservation Council v. U.S. Army Corps of Eng’rs, 486 F.3d 638, 644 (9th Cir. 2007) (citations omitted). Section 402 of the CWA provides that a “point source” can obtain a “permit for the discharge of any pollutant or combination of pollutants.” 33 U.S.C. § 1342(a)(1). “[T]he Act categorically prohibits any discharge of a pollutant from a point source without a permit.” Comm. to Save Mokelumne River v. E. Bay Mun. Util. Dist., 13 F.3d 305, 309 (9th Cir. 1993). The text of the statute clearly covers the discharges at issue here. A “discharge of any pollutant” is “any addition of any pollutant to navigable waters from any point source.” 33 U.S.C. § 1362(12)(A). A “point source” is “any discernable, confined and discrete conveyance, including . . . [a] vessel or other floating craft, from which pollutants are or may be discharged.” Id. § 1362(14). “[N]avigable waters” are “the waters of the United States, including the territorial seas,” which begin near the coast and “extend[ ] seaward a distance of three miles.” Id. §§ 1362(7), (8). “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). The term “biological materials” includes invasive species. See, e.g., Nat’l Wildlife Fed’n v. Consumers Power Co., 862 F.2d 580, 583 (6th Cir. 1988). NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA 9049 The question before us of whether the CWA authorizes the EPA’s regulatory exemptions was answered by the D.C. Circuit more than thirty years ago. See Natural Res. Def. Council v. Costle (“Costle”), 568 F.2d 1369 (D.C. Cir. 1977). The same year that the EPA issued the regulation in our case, the agency promulgated a different but conceptually identical regulation. Costle addressed an ultra vires challenge to that regulation. The regulation entirely exempted several categories of point sources from NPDES requirements: all silviculture point sources; all confined animal feeding operations below a certain size; all irrigation return flows from areas less than 3,000 contiguous acres or 3,000 noncontiguous acres that use the same drainage system; all nonfeedlot, nonirrigation agricultural point sources; and separate storm sewers containing only storm runoff uncontaminated by any industrial or commercial activity. Id. at 1372. In a unanimous opinion by Judge Leventhal, the D.C. Circuit held that the EPA acted ultra vires in promulgating this regulation. Id. at 1377, 1382-83. [12] The analysis of the D.C. Circuit in Costle, with which we agree, is dispositive of our case. The only possible textual source of authority for the exemptions at issue in Costle (and in our case) is section 402 of the CWA. In relevant part, that section provides that the EPA Administrator may, after opportunity for public hearing, issue a permit for the discharge of any pollutant, . . . notwithstanding section 301(a), upon condition that such discharge will meet either (A) all applicable requirements under sections 301, 302, 306, 307, 308, and 403 of this Act, or (B) prior to the taking of necessary implementing actions relating to all such 9050 NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA requirements, such conditions as the Administrator determines are necessary to carry out the provisions of this Act. 33 U.S.C. § 1342(a)(1). [13] Section 402 uses the word “may,” but only in the context of “issu[ing] a permit for the discharge of any pollutant.” The Administrator “may” issue a permit under two circumstances: either on the condition that the discharge meets all of the requirements specified in the section; or, prior to implementation of those statutory requirements, on such conditions “as the Administrator determines are necessary to carry out the provisions of [the] Act.” That is, section 402 allows the Administrator to issue a permit, but it does not provide that the Administrator may entirely exempt certain categories of discharges from the permitting requirement. As the D.C. Circuit concluded, “The use of the word ‘may’ in § 402 means only that the Administrator has discretion either to issue a permit or to leave the discharger subject to the total proscription of § 301. This is the natural reading, and the one that retains the fundamental logic of the statute.” Costle, 568 F.2d at 1375. The D.C. Circuit confirmed the correctness of its reading of the CWA by consulting the legislative history of the Act. It wrote, “[T]he legislative history makes clear that Congress intended the NPDES permit to be the only means by which a discharger from a point source may escape the total prohibition of § 301(a).” Id. at 1374. Because the statutory language is unambiguous, we do not need to revisit the legislative history. Congress’s intent was clear: “[T]he EPA Administrator does not have authority to exempt categories of point sources from the permit requirements of § 402.” Id. at 1377. [14] We therefore conclude that Congress expressed “a plain . . . intent to require permits in any situation of pollution from point sources.” Id. at 1383; see also N. Plains Res. NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA 9051 Council, 325 F.3d at 1164; Sierra Club v. EPA, 118 F.3d 1324, 1327 (9th Cir. 1997); NRDC 9th Cir. 1992, 966 F.2d at 1305, 1310; Forsgren, 309 F.3d at 1190. In its argument to us, the EPA does not seriously contest this conclusion. Rather, the EPA’s central argument is that Congress has acquiesced in the EPA’s ultra vires action in promulgating § 122.3(a). We now turn to that argument. 3. Acquiescence by Congress The EPA argues that even if the CWA as originally enacted did not authorize the EPA to promulgate § 122.3(a), Congress subsequently acquiesced in the agency’s interpretation of the CWA. This is a heroic argument, for the standard for a judicial finding of congressional acquiescence is extremely high. In Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (“SWANCC”), 531 U.S. 159, 162 (2001), the Court considered a challenge to an expansive definition of “navigable waters” under the CWA. The Army Corps of Engineers had promulgated a regulation containing that definition in 1977. The Corps argued that Congress had acquiesced in the regulation’s definition. Id. at 168-69. The Court responded, “Although we have recognized congressional acquiescence to administrative interpretations of a statute in some situations, we have done so with extreme care.” Id. at 169. The Court continued in a footnote: In Bob Jones Univ. v. United States, 461 U.S. 574, 595, 600-01 (1983), for example, we upheld an Internal Revenue Service (IRS) Revenue Ruling that revoked the tax-exempt status of private schools practicing racial discrimination because the IRS’ interpretation of the relevant statutes was “correct”; because Congress had held “hearings on this precise issue,” making it “hardly conceivable that Congress — and in this setting, any Member of Congress — was not abundantly aware of what was going on”; 9052 NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA and because “no fewer than 13 bills introduced to overturn the IRS interpretation” had failed. Absent such overwhelming evidence of acquiescence, we are loath to replace the plain text and original understanding of a statute with an amended agency interpretation. Id. at 169-70 n.5 (emphasis added); see also Rapanos v. United States, 547 U.S. 715, 749 (2006) (plurality op.) (noting the Court’s “oft-expressed skepticism towards reading the tea leaves of congressional inaction”); Morales-Izquierdo v. Gonzales, 486 F.3d 484, 493 (9th Cir. 2007) (en banc) (finding no acquiescence under SWANCC’s “overwhelming evidence” standard). The EPA points to a number of post-1973 statutes in which Congress has addressed the forms of pollution exempted by § 122.3(a), particularly ballast water. According to the EPA, those statutes satisfy the high standard for acquiescence set forth in SWANCC. For the reasons that follow, we disagree and hold that Congress has not acquiesced in § 122.3(a).
The EPA relies most heavily on two statutes. The first is the National Defense Authorization Act of 1996 (“NDAA”), Pub. L. No. 104-106, § 325, 110 Stat. 186, 254, codified at 33 U.S.C. §§ 1322(a), (j), (n), 1362(6). The second is the Deep Seabed Hard Mineral Resources Act of 1979 (“DSHMRA”), Pub. L. No. 96-283, 94 Stat. 554, codified at 30 U.S.C. §§ 1419 et seq. [15] In the NDAA, Congress statutorily exempted discharges incidental to the normal operation of United States military vessels from CWA permitting requirements and established discharge controls specifically tailored to those vessels. Congress was well aware of 40 C.F.R. § 122.3(a) when it enacted the NDAA. Indeed, the statute cited the reguNORTHWEST ENVIRONMENTAL ADVOCATES v. EPA 9053 lation as a partial aid in defining what the category “discharge incidental to the normal operation of a vessel” did not include. See 33 U.S.C. § 1322(a)(12)(B)(iii). A Senate Report accompanying the Senate Bill explained that discharges from military vessels, like those from other vessels, already were exempted from NPDES permitting requirements by EPA regulation. But the report went on to explain why, nonetheless, a broader exemption was desirable: The Navy wishes to clarify the regulatory status of certain non-sewage discharges from Navy vessels. Vessels are point sources of pollution under the Clean Water Act. Any discharge of pollutants from a point source, including a vessel, into the waters of the United States is prohibited unless specifically permitted under section 402 or 404 of the Act. . . . Although EPA regulations generally exempt non- sewage discharges from vessels from the permit requirements of the Act, some coastal states have imposed regulations or inspection programs that may have application to these types of discharges. A series of events in the waters of several coastal states prompted concern at the Navy as to state authorities to regulate these discharges. S. Rep. No. 104-113, at 1-2 (1995). The Senate Report explained that § 122.3(a) was the regulatory basis for the exemption of most “non-sewage discharges from vessels.” Id. at 7. The report did not, however, endorse or otherwise indicate approval of regulatory exemptions for entire categories of marine discharges. If anything, the report may be read to suggest the contrary. The report indicated that, but for the statutory exemption contained in the NDAA, the CWA permitting process would have applied to marine discharges from military vessels: “The effect of [the NDAA] is to remove the stat9054 NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA utory requirement for a permit for these point source discharges[.]” Id. at 3. [16] The most that can be said, based on the NDAA, is that Congress was well aware of § 122.3(a) and the exemptions it provided. Congress concluded that the existing statutory provisions and exemptions, including the exemptions provided in § 122.3(a), did not fully address the needs of military vessels. It therefore passed a new statute with provisions specifically tailored to military vessels. In so doing, the NDAA did nothing to endorse § 122.3(a). The NDAA only made § 122.3(a) irrelevant to military vessels except as a definitional tool. In the DSHMRA, Congress required vessels engaged in deep sea mining and drilling operations to comply with the provisions of the CWA. Congress did so by explicitly extending the CWA’s geographical reach over such vessels beyond the otherwise applicable three-mile limit. See 33 U.S.C. § 1362(9), (10), (12)(B). In pertinent part, the DSHMRA provided that: For purposes of this chapter, any vessel or other floating craft engaged in commercial recovery or exploration shall not be deemed to be “a vessel or other floating craft” under section 502(12)(B) of the Clean Water Act [33 U.S.C. § 1362(12)(B)] and any discharge of a pollutant from such vessel or other floating craft shall be subject to the Clean Water Act. 30 U.S.C. § 1419(e) (alterations in original). [17] When it enacted the DSHMRA, Congress noted with approval the final sentence of 40 C.F.R. § 122.3(a). This sentence provides that, despite the regulatory exemptions for three categories of marine discharges, CWA permitting requirements would apply to a range of vessels not being used for transportation: NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA 9055 This exclusion does not apply to . . . discharges when the vessel is operating in a capacity other than as a means of transportation such as when used as an energy or mining facility, a storage facility or a seafood processing facility, or when secured to a storage facility or a seafood processing facility, or when secured to the bed of the ocean, contiguous zone or waters of the United States for the purpose of min- eral or oil exploration or development. 40 C.F.R. § 122.3(a). Plaintiffs do not challenge this part of the regulation because it exempts nothing, but instead recognizes ongoing NPDES requirements. See Nw. Envtl. Advocates II, 2006 U.S. Dist. LEXIS 69476, at -3 nn.1-2. [18] The Senate Report accompanying the DSHMRA noted with approval the refusal of § 122.3(a) to exempt nontransportation vessels from NPDES: [T]he Environmental Protection Agency has con- cluded that the Congress did not intend to exempt pollutant discharges into ocean waters by vessels when engaged in such activities as mining or drilling for oil, etc. Relying on this interpretation [of the CWA], the Environmental Protection Agency amended [its regulations] to indicate that vessels engaged in ocean mineral exploration, extraction and processing activities are not exempt from permit requirements under section 402. The Committee concurs in this interpretation. S. Rep. No. 96-360 at 2-3 (1979); see also id. at 3 (noting that the DSHMRA merely “clarif[ied] the application of section 402” to these vessels). Thus, the most that can be said of the DSHMRA is that Congress was aware of § 122.3(a) and explicitly approved of the EPA’s decision not to exempt from the permitting process marine discharges from nontransportation vessels. 9056 NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA [19] We conclude that neither the NDAA nor the DSH- MRA comes close to satisfying the SWANCC standard of providing “overwhelming evidence of acquiescence” by Congress in § 122.3(a)’s exemption of three categories of marine discharges.
Legislation The EPA also relies on four additional statutes. They are the Nonindigenous Aquatic Nuisance Prevention and Control Act of 1990 (“NANPCA”), Pub. L. No. 101-646, 104 Stat. 4761, codified at 16 U.S.C. §§ 4701 et seq.; the National Invasive Species Act of 1996 (“NISA”), Pub. L. No. 104-332, 110 Stat. 4073 (amending NANPCA); the Act to Prevent Pollution from Ships (“APPS”), Pub. L. No. 96-478, 94 Stat. 2297 (1980), codified at 33 U.S.C. §§ 1901 et seq.; and a statute regulating discharges by Alaska cruise ships, enacted as part of the Consolidated Appropriations Act of 2001, Pub. L. No. 106-554, § 1(a)(4), 114 Stat. 2763, 2763A-209 (enacting Title XIV of Division B of H.R. 5666, §§ 1401-1414, as introduced Dec. 15, 2000) (see 33 U.S.C. § 1901 Note for the text of the statute). [20] NANPCA and NISA address the problem of invasive species released in ballast-water-related discharges. For example, these statutes authorize the Coast Guard to develop voluntary guidelines and regulations for a Great Lakes ballast water program. See 16 U.S.C. § 4711(a)-(b). The statutes also require national guidelines for ballast-water-related discharges of nonindigenous species, id. § 4711(c), (f)(2)(A)(ii), and establish an Aquatic Nuisance Species Task Force, of which the EPA is a member, id. § 4721. Savings clauses provide that the Great Lakes regulations “shall . . . . not affect or supersede any requirements or prohibitions pertaining to the discharge of ballast water” under the CWA, and that the national guidelines “shall . . . . not affect or supercede any requirements or prohibitions pertaining to the discharge of NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA 9057 ballast water” under the CWA. Id. §§ 4711(b)(2)(C) and (c)(2)(J). These statutes do not demonstrate SWANCC’s “overwhelming evidence of [congressional] acquiescence” in the exemptions contained in § 122.3(a). They merely demonstrate a congressional intent to address the serious national problem of ballast water discharges of invasive species, and to do so on multiple, nonexclusive fronts. The Supreme Court recently came to similar conclusions regarding Congress’s overlapping mandates to combat greenhouse gas emissions. See Massachusetts v. EPA, 127 S. Ct. 1438, 1448-49, 146062, 1461 n.27 (2007). The APPS implemented the International Convention for the Prevention of Pollution from Ships of 1973 and the Protocol of 1978 (known collectively as “MARPOL 73/78”). The APPS applies to all U.S.-flagged ships worldwide and foreign-flagged ships in the navigable waters of the United States. 33 U.S.C. § 1902(a). The six annexes to MARPOL 73/ 78 address vessel discharges of oil, noxious bulk liquid substances, harmful packaged substances, sewage, garbage, and air pollution. The APPS’s savings clause provides that “requirements of this [Act] supplement and neither amend nor repeal any other provisions of law, except as expressly provided in this [Act].” 33 U.S.C. § 1907(f). The APPS contains no indication of congressional intent to acquiesce in § 122.3(a). Finally, the Alaska cruise ship legislation authorizes the EPA to regulate sewage and graywater discharges from cruise ships in specified Alaskan waters. A savings clause provides that “[n]othing in this title shall be construed as restricting, affecting, or amending any other law or the authority of any department, instrumentality, or agency of the Unites States.” 33 U.S.C. § 1901 Note § 1411(a); see H.R. 5666, § 1411(a). This legislation, too, contains no indication of congressional intent to acquiesce in § 122.3(a). 9058 NORTHWEST ENVIRONMENTAL ADVOCATES v. EPA