Court Opinion

ID: 2972476
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:49:41.453174+00
Date Added: 2024-06-11T12:40:53.209617
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                                    Pursuant to Sixth Circuit Rule 206
                                            File Name: 05a0265p.06

                       UNITED STATES COURT OF APPEALS
                                        FOR THE SIXTH CIRCUIT
                                          _________________

 NORTHEAST OHIO REGIONAL SEWER DISTRICT; CITY X
                                                         -
                                                         -
 OF CINCINNATI, on behalf of the Metropolitan Sewer

                                                         -
 District of Greater Cincinnati, Hamilton County,
 Ohio; CITY OF AKRON, Public Utilities Bureau; CITY -
                                                            Nos. 00-4502; 01-3379

                                                         ,
 OF COLUMBUS, Division of Sewerage & Drainage;            >
 CITY OF TOLEDO (00-4502); INDIANA WATER                 -
                                                         -
                                           Petitioners, -
 QUALITY COALITION (01-3379),

                                                         -
                                                         -
                                                         -
             v.
                                                         -
                                                         -
                                                         -
 UNITED STATES ENVIRONMENTAL PROTECTION

                                          Respondent. -
 AGENCY,

                                                         -
                                                        N
                         On Petition for Review of Agency Action by the
                        United States Environmental Protection Agency.
                                  Nos. 40 CFR Part 132; 47864.
                                        Argued: December 1, 2004
                                    Decided and Filed: June 16, 2005
            Before: DAUGHTREY and GILMAN, Circuit Judges; RICE, District Judge.*
                                            _________________
                                                 COUNSEL
ARGUED: David W. Burchmore, SQUIRE, SANDERS & DEMPSEY, Cleveland, Ohio, Fredric
Paul Andes, BARNES & THORNBURG, Chicago, Illinois, for Petitioners. Andrew J. Doyle,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON BRIEF:
David W. Burchmore, Steven C. Bordenkircher, SQUIRE, SANDERS & DEMPSEY, Cleveland,
Ohio, Fredric Paul Andes, BARNES & THORNBURG, Chicago, Illinois, Susan E. Ashbrook,
COLUMBUS CITY ATTORNEY’S OFFICE, Columbus, Ohio, for Petitioners. Andrew J. Doyle,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., Stephen J. Sweeney,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Washington, D.C., Gary
Prichard, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Chicago, Illinois, for
Respondent.

        *
          The Honorable Walter H. Rice, United States District Judge for the Southern District of Ohio, sitting by
designation.

                                                        1
Nos. 00-4502; 01-3379             Northeast Ohio Regional Sewer                                Page 2
                                  Dist. et al. v. EPA

                                        _________________
                                            OPINION
                                        _________________
        RONALD LEE GILMAN, Circuit Judge. A group of public agencies and private companies
based in Indiana and Ohio have petitioned this court for a review of a final decision issued by the
United States Environmental Protection Agency (EPA) regarding state regulatory schemes
governing toxic discharges into the Great Lakes. For the reasons set forth below, we deny the
petitions for review.
                                        I. BACKGROUND
A.     Factual background
        This litigation arises under the Clean Water Act, the purpose of which is to “restore and
maintain the chemical, physical, and biological integrity of the Nation’s waters.”
33 U.S.C. § 1251(a). Section 402 of the Clean Water Act established the National Pollutant
Discharge Elimination System (NPDES), which obligates polluters to obtain permits for their
discharges. Each permit issued under NPDES must include restrictions on pollution discharge and,
if necessary, water effluent toxicity (WET) limitations. Although the regulations under NPDES
allow a permitting authority to impose a WET limitation whenever a discharge has at least a
“reasonable potential” to lead to a water quality violation, they do not establish a specific procedure
for the permitting authority to follow. The permitting authority is instead required to take into
account certain enumerated factors.
        In the late 1980s, the governors of the eight states surrounding the Great Lakes entered into
an agreement to protect and preserve the environmental integrity of the Great Lakes waters.
Congress followed up by enacting the Great Lakes Critical Programs Act of 1990, which amended
Section 118 of the Clean Water Act. 33 U.S.C. § 1268. In this amendment, Congress instructed the
EPA to promulgate regulations to ensure that water quality procedures in the states around the Great
Lakes would be “no less restrictive” than the already-existing water quality criteria.
33 U.S.C. § 1268(c)(2)(A). Congress also provided that “the Great Lakes States shall adopt water
quality standards, antidegredation policies, and implementation procedures for waters within the
Great Lakes System which are consistent with such guidance.” 33 U.S.C. § 1268(c)(2)(C).
         The EPA set forth these rules in a regulation titled the “Final Water Quality Guidance for
the Great Lakes System” (the Guidance), found at 60 Fed. Reg. 15,366 (Mar. 23, 1995). Specific
provisions of the Guidance govern individual discharges of toxic pollutants into Great Lakes waters.
Following the issuance of the Guidance, the eight Great Lakes states were required to adopt and
submit to the EPA implementation procedures of their own. The states have the flexibility to create
and modify their own regulatory schemes, so long as the net level of protection offered by their
provisions match or exceed those promulgated under the Guidance. See 40 C.F.R. § 132.5(g)(3).
If the states fail to establish regulations consistent with the Guidance, Congress has mandated that
the EPA impose its own standards on the states. 33 U.S.C. § 1268(c)(2)(C).
        Under the Guidance, the procedures for establishing WET limits are roughly as follows:
Samples are taken from a facility’s discharge. Marine organisms are then exposed to these samples
as well as to control samples, and tests are done to determine what percentage of these organisms
die upon exposure. A “toxic unit,” which is a quantitative value, is based upon the percentage of
deaths that occur. The highest daily “toxic unit” value measured in the discharge (or, in some cases,
the highest weekly value) is then multiplied by a predetermined statistical variable, which depends
Nos. 00-4502; 01-3379             Northeast Ohio Regional Sewer                                 Page 3
                                  Dist. et al. v. EPA

upon the number of the data points and the variation in results. If the resulting value is greater than
the EPA’s predetermined criterion, the permitting authority is required to impose a WET limitation.
         Indiana submitted its rules to the EPA in late 1997. The EPA subsequently criticized
Indiana’s proposed procedure because, unlike the Guidance, which used the maximum value from
all of the WET tests during the relevant time period, Indiana’s procedure would use the geometric
mean of all values sampled. In addition, the EPA disapproved of the fact that Indiana’s procedure
did not employ a statistically based multiplier in its analysis. The EPA thus concluded that Indiana’s
proposed procedures were inconsistent with the Guidance and issued a final order to that effect on
August 4, 2000.
        Ohio also submitted its rules to the EPA in late 1997 and, like Indiana, part of its proposal
was rejected as being inconsistent with the Guidance. Unlike the Guidance’s rigid statistical test,
the Ohio test adopted a “weight-of-the-evidence” approach that would require the permitting
authority to look to a variety of factors in deciding whether to impose a WET limit. The EPA found
that this approach granted too much flexibility to the permitting authority, noting that it would
“devalue observed WET test results and would not require a [limit] even where WET test results
show observed levels of unacceptable toxicity.” Approved and Disapproved Elements of the Great
Lakes Guidance Submissions, 65 Fed. Reg. 47864, 47867 (Aug. 4, 2000). It also faulted the fact
that Ohio did not employ a statistically based multiplier. The EPA concluded that the procedures
were inconsistent with the Guidance in the same final order that it issued regarding the Indiana
procedures.
B.      Procedural background
        On December 1, 2000, approximately four months after the final EPA order was issued, a
group of Ohio entities (hereinafter the Ohio petitioners) filed suit in this court challenging the EPA’s
conclusion that the proposed Ohio rules were inconsistent with the Guidance. A similar group of
Indiana petitioners, united under the moniker Indiana Water Quality Coalition (IWQC), filed suit
on December 18, 2000 in the United States Court of Appeals for the Seventh Circuit, challenging
the EPA’s final decision that the Indiana proposed rules were inconsistent with the Guidance.
Pursuant to 28 U.S.C. § 2112(a)(1) and (5), the EPA moved to transfer the case to this court, where
the Ohio petitioners had already filed a similar petition. The Seventh Circuit granted the EPA’s
petition on April 16, 2001. This court accepted the transfer on May 15, 2001, consolidating the two
actions into the present case.
                                           II. ANALYSIS
A.      Standard of review
        This case is governed by the Federal Administrative Procedure Act (APA), 5 U.S.C. § 706.
Under the APA, courts will not set aside a final agency action unless it is found to be “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(a).
         This standard is deferential. “Even when an agency explains its decision with less than ideal
clarity, a reviewing court will not upset the decision on that account if the agency’s path may
reasonably be discerned.” Alaska Dep’t of Envtl. Conservation v. EPA, 124 S. Ct. 983, 1006 (2004)
(quotation marks omitted). In considering whether an agency rule is “arbitrary and capricious,” we
may consider whether
       the agency has relied on factors which Congress has not intended it to consider,
       entirely failed to consider an important aspect of the problem, offered an explanation
       for its decision that runs counter to the evidence before the agency, or is so
Nos. 00-4502; 01-3379             Northeast Ohio Regional Sewer                                Page 4
                                  Dist. et al. v. EPA

       implausible that it could not be ascribed to a difference in view or the product of
       agency expertise. The reviewing court should not attempt itself to make up for such
       deficiencies; we may not supply a reasoned basis for the agency’s action that the
       agency itself has not given.
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1982) (quotation
marks omitted). This court has also noted that it will “defer in large part to EPA’s scientific
findings.” BP Exploration & Oil v. EPA, 66 F.3d 784, 792 (6th Cir. 1995). Although the court’s
review is to be “searching and careful, the ultimate standard of review is a narrow one. The court
is not empowered to substitute its judgment for that of the agency.” Citizens to Preserve Overton
Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971), questioned on other grounds by Califano v. Sanders,
430 U.S. 99, 105 (1977).
B.     The scope of petitioners’ challenge
        The EPA asserts at the outset that this consolidated case is nothing more than an attempt by
the petitioners to have this court review the validity of the Guidance itself, as opposed to a review
of the Indiana and Ohio regulatory schemes. Under the Clean Water Act, any petitions for judicial
review of the Guidance, which was enacted in 1995, had to have been filed within 120 days of its
promulgation. 33 U.S.C. § 1369 (b)(1). If the EPA is correct, therefore, then we would have to
dismiss the present case as a result of it being filed nine years too late.
         We find this argument unconvincing. The petitioners have repeatedly conceded that their
challenge is limited to the reasonableness of the EPA’s finding that the Indiana and Ohio
implementation procedures are inconsistent with the Guidance. Although the EPA is correct in
noting that many of the petitioners’ arguments originate in the language of the Guidance, this is
because the Guidance provides the frame of reference to which the Indiana and Ohio procedures
must be compared. That the Guidance is held to some degree of scrutiny does not necessarily make
this action a challenge to its validity. To the contrary, petitioners’ briefs nowhere suggest that they
contest the legitimacy of the Guidance. Dismissing this case on the basis that it is an overbroad
challenge to the Guidance itself would thus be inappropriate.
C.     Res judicata and collateral estoppel arguments
        The EPA further argues that the petitioners are barred by the doctrines of res judicata and
collateral estoppel from challenging the Guidance on account of American Iron & Steel Institute v.
EPA, 115 F.3d 979 (D.C. Cir. 1997), in which the Court of Appeals for the District of Columbia
rejected the claims of various petitioners, including the petitioners in the present case, that the
Guidance was an abuse of the EPA’s authority. It argues that the petitioners should have raised in
that case any challenges they had about the “validity and level of protection afforded” by the
Guidance, and that “issue preclusion” bars the relitigation of any claims in that case. The EPA
concludes that “[o]nly the reasonableness of EPA’s finding that Indiana and Ohio’s implementation
procedures were not as protective to the environment as the Guidance’s corresponding procedure
falls within the scope of this proceeding.”
        The petitioners, however, do not challenge the EPA’s position on the scope of this case.
They admit that the present suit is, indeed, nothing more than a challenge of the narrow
administrative ruling regarding the Indiana and Ohio implementation procedures. The Ohio
petitioners even observe that “[n]ot only do the Ohio Petitioners not seek to ‘revisit’ the holding of
[American Iron], they actually rely upon that case and cite to it in their Opening Brief for one of the
very principles that EPA erroneously claims to be under attack.” Furthermore, as discussed above,
the present suit cannot be appropriately deemed to be a suit against the validity of the Guidance.
Nos. 00-4502; 01-3379            Northeast Ohio Regional Sewer                               Page 5
                                 Dist. et al. v. EPA

Nothing in the briefs of the petitioners suggests otherwise. Because the EPA has little support for
its conclusion that the petitioners are, in fact, challenging the legitimacy of the Guidance as was
done in American Iron, we decline to dismiss the case under the theories of either res judicata or
collateral estoppel.
D.     The Indiana and Ohio WET tests
        IWQC and the Ohio petitioners argue that the EPA erred when it concluded that their
regulatory schemes were inconsistent with the Guidance. All of the parties agree that to be
“consistent with” the Guidance, the regulatory scheme in question must be at least as protective of
the environment as the Guidance. See 40 C.F.R. 132.5(g)(3) (“The Great Lakes State[s] . . . may
adopt provisions that are more protective than those contained in this part.”); American Iron, 115
F.3d at 988 (deferring to the EPA’s assessment that to be “consistent with” the Guidance, the
regulatory regime in question must be “as protective as” the Guidance itself). Accordingly, both
IWQC and the Ohio petitioners assert that the proposals submitted by their respective states are at
least as protective of the environment as the Guidance, if not more so. Because of variations
between the Indiana and Ohio regulations, each will be examined in turn.
       1.      Indiana’s regulatory scheme
        Indiana’s proposed scheme differs from the Guidance in two key ways. First, under
Indiana’s proposal, “toxic unit levels” required to assess water toxicity are measured using a
geometric mean of tested values. The EPA’s Guidance, by contrast, uses a maximum tested value
to ascertain toxicity, a value that is, by mathematical definition, greater than the geometric mean.
Under Indiana’s system, then, a facility’s effluent would have to be consistently higher than the
mean before a permitting authority would impose a WET limit. Second, the Indiana scheme does
not employ the statistical multiplier called for by the Guidance, using instead its own independently
derived factor. IWQC asserts that Indiana’s scheme is more protective of the environment than the
Guidance.
        The EPA, however, observed in its final decision that Indiana’s procedure, which calls for
using a mean value of toxicity, “lessens the impact of observed toxicity on the [limitation]
calculation and fails to account for the reasonable possibility that effluent may exceed the level
observed in the test because sampling did not coincide with periods of maximum toxicity.”
Approved and Disapproved Elements of the Great Lakes Guidance Submissions, 65 Fed. Reg.
47864, 47868 (Aug. 4, 2000). A maximum value taken from a sample will necessarily be greater
than the geometric mean of the sample.
        IWQC also argues that the EPA erred because its “analysis was based on a review of only
one small part of Indiana’s WET procedures: the use of a geometric mean of the measured effluent
values.” In reviewing the EPA’s analysis, IWQC “see[s] no indication that EPA has conducted a
holistic review of Indiana’s WET procedures and compared them to EPA’s procedure, as the EPA
Guidance contemplates.” IWQC then points to numerous provisions in the proposed Indiana rules
that, according to its brief, make the scheme more protective than the Guidance.
        But there is no reason to believe that the EPA acted in an arbitrary or capricious manner in
evaluating the Indiana regulatory scheme. The EPA points to a long list of correspondence in which
it considered and commented on various aspects of Indiana’s proposal. It noted, for example, the
fact that Indiana would “require multiple failures” of a toxicity test before a WET limit could be
imposed. EPA’s Analysis of Steps Taken By Indiana in Response to EPA’s 90-Day Letter 9 (July
31, 2000). The EPA also considered, and rejected, the argument that Indiana’s catch-all rule, which
would allow a permitting authority to “exercise best professional judgment” to enact WET limits,
Nos. 00-4502; 01-3379             Northeast Ohio Regional Sewer                                 Page 6
                                  Dist. et al. v. EPA

would correct what the EPA viewed as the deficiencies in the rest of the scheme. Id. at 10. This
catch-all provision, the EPA noted, “is not a substitute for having a reasonable potential procedure
that is as protective” as the Guidance. Id. IWQC’s charge that the EPA failed to view the proposed
regulatory scheme in its entirely is therefore unpersuasive and does not demonstrate that the EPA
acted arbitrarily or capriciously.
         In sum, the EPA acted rationally and on the basis of considerable evidence when it rejected
Indiana’s regulatory scheme. Given that Indiana’s averaging of toxicity will call for fewer WET
limits than a system using maximum values, the EPA’s conclusion that the state’s scheme would be
less protective of the environment was far from being arbitrary or capricious. Because the “agency’s
path may reasonably be discerned,” Alaska Dep’t of Envtl. Conservation, 124 S. Ct. at 1006, there
is no basis for us to grant IWQC’s petition for review.
       2.      Ohio’s regulatory scheme
        Under Ohio’s proposed regulations, the permitting authority must take into account a variety
of data on the toxicity of the discharge before issuing a permit or establishing a WET limit. The
factors to be considered under this “weight of the evidence” standard include the “magnitude of
discharge,” the “degree and type of effects,” the “quality and quantity of each type of data,” and
“[o]ther relevant factors.” Only if the discharge in question meets a variety of criteria will WET
limits be imposed. The Ohio petitioners argue that this system, with its comprehensive approach
to water quality, is more protective of the environment than the imposition of the statistical
multiplier required by the Guidance.
        Adopting Ohio’s “weight of the evidence” approach, however, necessarily grants the
permitting authority wide discretion not afforded by the Guidance. The EPA can rationally read
Ohio’s rule as failing to provide the permitting authority with guidance on how to weigh the various
factors. This discretion arguably makes the Ohio regulatory scheme less protective than the
Guidance, in which a statistically determined multiplier is used to determine toxicity.
        Ohio’s regulatory scheme further limits the permitting authority from imposing a WET limit
in the absence of “biological data,” except where “[1] the maximum observed toxicity value is at
least three times greater than the expected toxicity limit, [2] the average toxicity exceeds one third
the expected effluent limit, [3] and more than 30 percent of the test results exceed a projected
wasteload allocation.” Approved and Disapproved Elements of the Great Lakes Guidance
Submissions, 65 Fed. Reg. 47864, 47867 (Aug. 4, 2000). The Ohio petitioners concede that this
provision may produce results that are “less restrictive than the Guidance.” But this fact, they argue,
is balanced out because “if the data set is large, . . . Ohio’s procedure will require a WET limit where
the [Guidance] would not.” They further point out that “the [Guidance] will not require a limit
even if the average values are much higher than those that Ohio considers to be significant.”
Ultimately, they argue, the EPA’s rejection of this scheme was arbitrary and capricious because the
“[a]doption of a more protective element in one provision may be used to offset a less protective
element in the same provision.” 40 C.F.R § 132.5(g)(3).
        The Ohio petitioners concede, however, that their proposed scheme would allow certain toxic
discharges to go unregulated in instances where no “biological data” was available. “Ohio’s
procedure,” the EPA concluded, “would not require a reasonable potential finding even where
testing has shown actual, observed toxicity. This is clearly inconsistent with [the Guidance.]”
Approved and Disapproved Elements of the Great Lakes Guidance Submissions, 65 Fed. Reg.
47864, 47867 (Aug. 4, 2000). Because this provision allows pollution where the Guidance would
not, the EPA’s final action disapproving the regulatory scheme can hardly be considered arbitrary
or capricious.
Nos. 00-4502; 01-3379             Northeast Ohio Regional Sewer                                 Page 7
                                  Dist. et al. v. EPA

        Moreover, the Ohio petitioners’ argument that their “weight of the evidence” approach might
be more protective than the Guidance in certain hypothetical situations is unpersuasive. The fact
remains that Ohio’s scheme “fail[s] to require a limit even in cases of observed toxicity.” Id. In its
final ruling, the EPA identified this weakness as a significant and determinative flaw in the
regulatory scheme. It therefore had little need to address the hypothetical situations where the Ohio
scheme might be marginally more protective than the Guidance.
        The Ohio petitioners are correct in their observation that there is no discussion of the Ohio
scheme’s more protective elements in the EPA’s final disapproval. But this fact alone does not
make the EPA’s final agency decision arbitrary or capricious. To the contrary, the tone of the EPA’s
final decision indicates that the Ohio procedure allowing toxic discharges is so antithetical to the
very goal of the Guidance that the more protective provisions would have been insufficient to
neutralize its effects.
        In sum, we find nothing in the record indicating that the EPA acted in an arbitrary or
capricious manner in rejecting Ohio’s proposed scheme as inconsistent with the Guidance. The
Ohio petitioners have simply not met their burden of establishing sufficient grounds to set aside the
EPA’s final action.
E.     The “scientifically indefensible” exception
       The Guidance provides that
       [f]or any pollutant . . . for which the State or Tribe demonstrates that a methodology
       or procedure in this part is not scientifically defensible, the Great Lakes States and
       Tribes shall: (1) Apply an alternative methodology or procedure acceptable under 40
       CFR part 131 when developing water quality criteria; or (2) Apply an alternative
       implementation procedure that is consistent with all applicable Federal, State, and
       Tribal laws.
40 C.F.R. § 132.4(h). IWQC and the Ohio petitioners contend that the system of WET testing
espoused by the Guidance is “not scientifically defensible” because of the huge variation introduced
by taking only maximum tested values and by utilizing an independent statistical multiplier. They
argue that their schemes are appropriate alternatives sanctioned by the Guidance.
       The EPA responds by submitting that the petitioners are in effect making a wholesale
challenge to the Guidance, a position that is barred both by the statute of limitations and by
American Iron & Steel Institute v. EPA, 115 F.3d 979 (D.C. Cir. 1997). We again find the EPA’s
argument unpersuasive. The petitioners do not challenge the applicability of the Guidance
generally; they instead argue that § 132.4(h) allows them to adopt an alternative scheme should they
be able to prove that the WET-testing provision provided by the Guidance is scientifically
indefensible.
        But the EPA makes a compelling argument when it points out that the provision allowing
alternative schemes was developed because “there may be pollutants identified in the future for
which some of the methodologies or procedures [in the Guidance] may not be technically
appropriate. Under these circumstances, EPA wishes to provide sufficient flexibility for permitting
to address these pollutants on a case-by-case basis.” Proposed Water Quality Guidance, 58 Fed.
Reg. 20802, 20843 (Apr. 16, 1993) (emphasis added); see also EPA, Water Quality Guidance for
the Great Lakes System: Supplementary Information Document, EPA-820-B-95-001 58 (Mar. 1995)
(“The reason for this exclusion is that there may be pollutants identified in the future for which some
of the methodologies or procedures in the final Guidance may not be technically appropriate.”)
Nos. 00-4502; 01-3379             Northeast Ohio Regional Sewer                               Page 8
                                  Dist. et al. v. EPA

Moreover, the EPA notes that this exception for scientific indefensibility was intended to be
“applied to a specific situation,” id., in one or more sites, not to a sweeping alternative regulatory
scheme.
        WET discharges, which have concerned the EPA for decades, do not fall under the category
of “pollutants identified in the future.” The “scientific indefensible” exception was not designed to
apply to such run-of-the-mill discharges, but rather only on a case-by-case basis if, for whatever
reason, applying the Guidance would be inappropriate. This exception to the Guidance is therefore
inapplicable to the petitioners’ regulatory schemes.
                                       III. CONCLUSION
       For all of the reasons set forth above, we deny the petitions for review.