Court Opinion

ID: 9553294
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:27:18.86486+00
Date Added: 2024-06-11T15:30:39.476653
License: Public Domain

CALLAHAN, Circuit Judge,
dissenting:
I agree with the majority that at step one of the analysis under Chevron v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the plain language of section 402(Z )(2) of the Clean Water Act (“section 402(Z)(2)”), 33 U.S.C. § 1342(Z)(2), as amended by the Energy Policy Act of 2005, does not unambiguously indicate whether Congress intended the exemption from National Pollutant Discharge Elimination System (“NPDES”) permitting to cover storm water discharges contaminated solely with sediment. I further agree that the scant legislative histories for section 402(Z )(2) and the relevant portions of the Energy Policy Act do not elucidate Congress’s clear intent. Therefore, as the majority correctly concludes, this dispute must be resolved at step two of the Chevron analysis, with the question of whether the Environmental Protection Agency (“EPA”) provided a — not the only or the best — permissible interpretation of section 402(Z )(2). It is at this point that I respectfully part course with the majority and accord EPA’s permissible interpretation appropriate deference.
The majority opinion holds that “EPA’s interpretation of the [Clean Water Act] section 402(i )(2), as amended by the Energy Policy Act, is arbitrary and capricious because of the agency’s changed position on what constitutes ‘contamination’ under that section.” Maj. Opinion at 606 (emphasis in original). The main thrust of its reasoning is that before enactment of the Energy Policy Act, EPA required that an oil and gas facility that discharged storm water runoff contaminated only with sediment and resulting in a water quality violation apply for a NPDES permit. After enactment of the Energy Policy Act, EPA’s storm water rule exempts such dis-chargers from seeking a permit. Therefore, the majority concludes that EPA’s “inconsistent and conflicting position regarding the discharge of sediment-laden storm water from oil and gas construction sites” renders its interpretation of section 402(Z)(2) arbitrary and capricious. Maj. Opinion at 607.
The Supreme Court has recognized that “the mere fact that an agency interpretation contradicts a prior agency position is not fatal.” Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 742, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996). In fact, the seminal decision in this context, Chevron, itself accorded deference to EPA’s revised interpretation of statutory language. 467 U.S. at 863-64, 104 S.Ct. 2778. For this reason, the Court “has rejected the argument that an agency’s interpretation ‘is not entitled to deference because it represents a sharp break with prior interpretations’ of *609the statute in question.” Rust v. Sullivan, 500 U.S. 173, 186, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991) (quoting Chevron, 467 U.S. at 862, 104 S.Ct. 2778). “An initial agency interpretation is not instantly carved in stone.” Chevron, 467 U.S. at 863, 104 S.Ct. 2778. Nor should it be, because “an agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.” Id. at 863-64, 104 S.Ct. 2778. Courts will accord Chevron deference to an agency’s revised interpretation of a statute if the agency justifies that revision with “reasoned analysis.” Rust, 500 U.S. at 187, 111 S.Ct. 1759; see Nat. Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981, 1001, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005) (stating that the agency “is free within the limits of reasoned interpretation to change course if it adequately justifies the change”); see also Smiley, 517 U.S. at 742, 116 S.Ct. 1730 (noting that Chevron deference is warranted despite a change in position so long as the agency avoids the “pitfalls” of a “[sjudden and unexplained change,” or “change that does not take account of legitimate reliance on prior interpretations”); Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 417, 113 S.Ct. 2151, 124 L.Ed.2d 368 (1993) (stating that “where the agency’s interpretation of a statute is at least as plausible as competing ones, there is little, if any, reason not to defer to its construction”); New Edge Network, Inc. v. FCC, 461 F.3d 1105, 1112-13 (9th Cir.2006) (rejecting an argument that “an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance”). Acknowledging language from INS v. Cardoza-Fonseca, 480 U.S. 421, 446 n. 30, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987), that an agency’s statutory interpretation that conflicts with an earlier interpretation is entitled to “considerably less deference,” this court has still held that “an agency’s ‘new’ position is entitled to deference ‘so long as the agency acknowledges and explains the departure from its prior views.’ ” Resident Councils of Wash. v. Leavitt, 500 F.3d 1025, 1036 (9th Cir.2007) (quoting Seldovia Native Ass’n v. Lujan, 904 F.2d 1335, 1346 (9th Cir.1990)).
Here, EPA provided a reasoned analysis that adequately explains its revised interpretation of section 402(i)(2). Congress enacted section 402(i)(2) to exempt from NPDES permitting storm water runoff from oil and gas activities — namely, oil and gas exploration, production, processing, or treatment operations or transmission facilities — unless that runoff was contaminated by, or came into contact with, statutorily enumerated substances consisting of “raw material, intermediate product, finished product, byproduct, or waste products located on the site.” Prior to passage of the Energy Policy Act, EPA treated all oil and gas construction activities as falling outside this exemption. 71 Fed.Reg. 33,628, 33,629-33,630 (June 12, 2006). The Energy Policy Act made oil and gas construction activities eligible for exemption under section 402(i)(2), however, which then required EPA to conduct a fresh analysis of how construction activities relate to the permit exemption. See id. at 33,631.
Although EPA noted that the Energy Policy Act did not specifically mention sediment, it reasoned that “that pollutant naturally falls within the newly created exemption from NPDES permitting.” 71 Fed.Reg. at 33,630-33,631. The agency determined that “[t]he presence of sediment in a discharge from a construction site is not itself indicative of contact with” the materials listed in the exemption provision (ie., raw materials, intermediate product, final product, byproduct, and *610waste products). Id. at 33,631. EPA further stated that sediment is the pollutant most commonly associated with construction activities. Id. (citing 69 Fed.Reg. 22,-475 (Apr. 26, 2004), and 67 Fed.Reg. 42,654 (June 24, 2004)). As an example of the association of sediment discharge and construction, EPA pointed to its 2003 construction general permit, which focused “primarily on limiting discharges of sediment.” Id. It concluded that it would be inconsistent with the Energy Policy Act’s amendments to the Clean Water Act to codify a permit exemption for oil and gas construction activities but not to exempt discharges of sediment, the pollutant most commonly associated with construction. Id. Once Congress included construction activities within the exemption, EPA promulgated the rule at issue here based on what it perceived to be Congress’s intent.
Additionally, EPA had signaled before passage of the Energy Policy Act that it had not committed to a rigid position regarding sediment discharges related to oil and gas construction activities. EPA indicated during the two “deferral” periods that it intended to further consider the effect of its regulations on the oil and gas industry, that it needed to further consider the effect of the section 402(i)(2) exemption on other Clean Water Act provisions, and that it still needed to determine the “appropriate NPDES requirements, if any, for small construction of oil and gas exploration and production facilities.” 68 Fed. Reg. 11,325, 11,326, 11,328 (Mar. 10, 2003); 71 Fed.Reg. at 33,629-33,630. The Clean Water Act authorized EPA to consider all of these factors in creating a comprehensive NPDES permit system. See 33 U.S.C. § 1342(p)(5), (6). Under these circumstances, EPA made a reasonable policy choice within its authority, and, therefore, the court should defer to that choice. See Brand X Internet Servs., 545 U.S. at 986, 125 S.Ct. 2688 (citing Chevron, at 467 U.S. at 845, 104 S.Ct. 2778).
The majority opinion contends that EPA’s explanation is weakened by the fact that the Energy Policy Act does not mention the word “sediment,” and that EPA had taken a “long-standing position that discharges of storm water runoff from oil and gas activities, contaminated with sediment and which contribute to a violation of a water quality standard, require a NPDES permit.” Maj. Opinion at 606-07 (emphasis in original.) First, there appears to be no authority that would compel EPA to stay its hand until Congress specifically amended the ambiguous exemption at section 402(0(2) to include the word “sediment.” Second, the mere fact that EPA revisited the exemption after passage of the Energy Policy Act does not render the results of its analysis arbitrary. See Brand X Internet Servs., 545 U.S. at 1001-02, 125 S.Ct. 2688 (finding that the FCC’s “fresh analysis” of its treatment of cable providers in light of changed market conditions was not arbitrary). In Chevron, the Supreme Court took no issue with the fact that EPA had promulgated a rule after a new administration “initiated a ‘Government-wide reexamination of regulatory burdens and complexities.’ ” See 467 U.S. at 857, 104 S.Ct. 2778 (quoting 46 Fed.Reg. 16,281). In Rust, the Court found that the Secretary of Health and Human Services permissibly revised the agency’s interpretation of a statute in order to provide clear and operational guidance to recipients of government family planning grants consistent with the original intent of the statute. 500 U.S. at 179, 187, 111 S.Ct. 1759. In New Edge Network, this court deferred to an agency’s revised interpretation of an ambiguous statutory provision where the revision was prompted by review of the practical function and results of the previous interpretation. 461 F.3d at 1109. Here, EPA acted *611within its authority to revisit its interpretation of section 402(Z )(2). Not only was EPA’s interpretation in flux at the time it promulgated the storm water discharge rule, but it was guided by its interpretation of Congress’s intent in the Energy Policy Act to provide greater exemptions with regard to the discharge of sediment from oil and gas construction activities. Therefore, because EPA’s “interpretation is at least as plausible as competing ones,” this court should defer to its construction. Good Samaritan Hosp., 508 U.S. at 417, 113 S.Ct. 2151.
Accordingly, I respectfully dissent and would deny the petition.