Court Opinion

ID: 195469
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:40:36+00
Date Added: 2024-06-11T13:14:43.094954
License: Public Domain

UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                           

No. 93-1597

                 CARIBBEAN PETROLEUM CORPORATION,

                           Petitioner,

                                v.

          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

                           Respondent.

                                           

            ON PETITION FOR REVIEW OF AN ORDER OF THE

          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                                           

                              Before

                  Selya and Cyr, Circuit Judges,
                                               

               and Pettine,* Senior District Judge.
                                                  

                                           

   Karin G. Diaz-Toro, with whom Goldman, Antonetti & Cordova was on
                                                             
brief for petitioner.
   Alan  D. Greenberg, Attorney, with  whom Lois J. Schiffer, Acting
                                                            
Assistant  Attorney General,  Randolph L.  Hill,  Attorney, and  Meyer
                                                                    
Scolnick, Assistant Regional Counsel, were on brief for respondent.
      

                                           

                           July 7, 1994

                                           

                  

   *Of the District of Rhode Island, sitting by designation.

          CYR,  Circuit Judge.    Petitioner Caribbean  Petroleum
          CYR,  Circuit Judge.
                             

Corporation challenges the discharge permit it was issued by  the

United  States Environmental  Protection Agency  (EPA) under  the

Clean Water  Act.  Relying on  our recent opinion  in Puerto Rico
                                                                 

Sun Oil Co.  v. United  States EPA,  8 F.3d 73  (1st Cir.  1993),
                                  

Caribbean contends that EPA acted arbitrarily and capriciously by

incorporating a water  quality certification issued by  the Envi-

ronmental Quality Board of the Commonwealth  of Puerto Rico (EQB)

which was still undergoing review by the EQB.  Finding no  error,

we deny the petition for review.

                                I

                            BACKGROUND
                                      

          We had occasion, in Puerto  Rico Sun Oil, to survey the
                                                  

regulatory framework controlling the present appeal:  

               The  Clean Water Act,  33 U.S.C.   1251,
          et seq.,  prohibits the  discharge into  pro-
                 
          tected waters of any pollutant by any person,
          id.   1311(a), unless  a discharge permit has
             
          been  secured from  EPA.   Id.    1342.   The
                                        
          permitting regime is  a hybrid  one in  which
          both  EPA and  the  counterpart state  agency
          play a  role.   The precise  role depends  on
          whether  EPA  has  delegated  permit  issuing
          authority  to the state;  but no such delega-
          tion is present here.  Puerto Rico is treated
          as  a state for  purposes of the  Clean Water
          Act, id.    1362(3), and its local  agency is
                  
          the Environmental Quality Board.

                                2

               To obtain  a permit, the  applicant must
          satisfy a variety of substantive requirements
          under the Clean  Water Act but,  in addition,
          no EPA permit  can issue unless the  state in
          which the  discharge will occur gives its own
          approval (called  "certification") or  waives
          its right to do so.   33 U.S.C.   1341(a)(1).
          Further, the  state certification  may impose
          discharge  limitations  or  requirements more
          stringent  than  federal  law  requires,  and
          those more stringent obligations are incorpo-
          rated  into the federal permit as a matter of
          course.  See generally United States v. Mara-
                                                       
          thon Development Corp., 867  F.2d 96, 99 (1st
                                
          Cir. 1989) (describing state role).

Id. at 74-75.
   

          Petitioner  Caribbean  discharges  a  large  volume  of

process and storm  water from its Bayamon,  Puerto Rico, refining

facility into Las Lajas Creek, a protected waterway designated by

EQB as  a drinking  water source.   Caribbean has  been regulated

under the Clean  Water Act National Pollution  Discharge Elimina-

tion System (NPDES) at its  Bayamon operation since it was issued

a  five-year permit in  1983.   The present  controversy surfaced

during the NPDES renewal process, which proceeded as follows:

     10/27/88  Caribbean files NPDES renewal
     10/27/88
               application with EPA.

     11/10/88  EPA requests EQB certification. 
     11/10/88

     02/01/89  EQB issues draft certification,
     02/01/89
               instructing EPA that it "shall be
               incorporated into [Caribbean's]
               NPDES permit."

     04/07/89  Caribbean submits comments to EQB
     04/07/89
               on draft certification, contending
               that its pollutant concentration
               standards are unreasonable,
               impractical, and unfeasible.

                                3

     05/10/89  EQB issues (substantially
     05/10/89            
               unmodified) final certification.
                                              

     06/30/89  Caribbean requests EQB 
     06/30/89
               reconsideration of certification
               issued 5/10/89.

     08/07/89  EPA issues draft NPDES to Caribbean
     08/07/89
               incorporating the 5/10/89 final
               certification.

     09/06/89  EPA receives comments on draft
     09/06/89
               NPDES from Caribbean. 

     10/13/89  EQB notifies EPA that it is
     10/13/89                             
               reviewing the 5/10/89 certification
                                                  
               and requests that EPA delay is-
               suance of final NPDES pending re-
               view. 

     09/28/90  EPA issues final NPDES, incorpora-
     09/28/90
               ting 5/10/89 certification.

          At the time the final NPDES was issued on September 28,

1990, EPA considered  the May 10, 1989  certification appropriate

for  incorporation into  the final  NPDES  because EQB  had never

stayed its certification and it therefore remained in effect as a

matter of  law.  Now, more than five  years later, EQB has yet to

act on  Caribbean's request  for reconsideration  of the  "final"

certification issued May 10, 1989. 

                                II

                            DISCUSSION
                                      

          Caribbean attempts to  rest its challenge to  the final

NPDES on the coattails of Puerto Rico Sun Oil, by posing the same
                                             

generic question involved there:  Is it  arbitrary and capricious

                                4

for EPA to incorporate a water quality certification into a final

NPDES  while the certification ostensibly is undergoing review by

the local agency?  In Puerto Rico Sun Oil, we held that there was
                                         

no procedural  bar to the  incorporation of an  EQB certification
             

which had  not been  stayed until after  the final  NPDES issued.

Id. at 77.  In a similar  vein, we perceive no serious procedural
   

obstacle in the  present case.1   We went on  to hold,  neverthe-

less, that in the circumstances presented in Puerto Rico Sun Oil,
                                                                

EPA's decision "made  no sense,"  and amounted  to arbitrary  and

capricious agency action  absent explanation.  Id.   By contrast,
                                                  

however,  here the  only colorable  rationality  claim raised  by

Caribbean rests on a far less substantial basis.  

          "The  scope  of   review  under   the  'arbitrary   and

capricious' standard is  narrow and a court is  not to substitute

its judgment for  that of the agency." Motor  Vehicle Mfrs. Ass'n
                                                                 

v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983).  Agency
                                

actions are not to be set  aside as arbitrary and capricious, see
                                                                 

Administrative Procedure Act,  5 U.S.C.   706(2)(a),  unless they

                    

     1Caribbean  raises two  lackluster  procedural claims  which
warrant but brief consideration.  First, a request from the local
certifying agency that  EPA delay issuance  of its NPDES  pending
reconsideration  of the  local agency  certification  is not  the
equivalent of  a formal stay  suspending the legal effect  of the
certification,  such as  EPA issued  in the  Puerto Rico  Sun Oil
                                                                 
proceedings,  see Puerto Rico  Sun Oil,  8 F.3d  at 80.   Second,
                                      
since  the original certification  was never stayed,  EPA was not
obliged to resort  to the procedures in 40  C.F.R.   122.44(d)(3)
to compel EQB  either to issue a new certification within 60 days
or waive certification. See Puerto Rico Sun Oil, 8 F.3d at 80.
                                               

                                5

lack  a rational  basis.   See, e.g.,  Rhode Island  Higher Educ.
                                                                 

Assistance Auth. v.  Department of Educ., 929 F.2d  844, 855 (1st
                                        

Cir. 1991).   Like other executive  agencies acting within  their

respective  bailiwicks,  EPA  is  due  substantial  deference  in

interpreting and implementing the Clean  Water Act -- "so long as

[its] decisions do not collide directly with substantive statuto-

ry  commands  and  so  long as  procedural  corners  are squarely

turned." Puerto Rico Sun Oil, 8 F.3d at 77; see generally Chevron
                                                                 

U.S.A. v. Natural  Resources Defense Council,  467 U.S. 837,  843
                                            

(1984).   We  therefore inquire  whether,  in the  vernacular  of

Puerto Rico Sun Oil, the challenged EPA action    its issuance of
                   

a  final NPDES notwithstanding  EQB's request that  EPA forestall

its  processes in anticipation  of further action  on Caribbean's

request for review of the EQB certification    makes sense. 

          First,  surface  appearances   aside,  several  factors

plainly reflect  that this case is  not of a  feather with Puerto
                                                                 

Rico Sun Oil.  Not least  important is the fact that EPA  delayed
            

its issuance of  the Caribbean NPDES  for almost a year  at EQB's
                                                       

request; whereas in Puerto Rico  Sun Oil EPA incorporated the EQB
                                        

certification   within   two  weeks   after  learning   that  the
                                   

certification was  being reconsidered by EQB.   Thus, whereas the

timing of  the EPA  action in  Puerto Rico  Sun Oil  lent to  the
                                                   

impression that an  administrative trap had been  hastily snapped

shut, there is nothing in the present record to indicate that the

                                6

eleven and one-half  month period EPA afforded EQB  to review its

certification was either unreasonable or arbitrary. 

          Second,  the  significance  of the  timing  of  the EPA

action  in Puerto  Rico Sun  Oil was  magnified by  a substantive
                                

Clean Water Act monitoring issue not implicated in these proceed-

ings.  As a consequence  of EPA's precipitous action, the permit-

tee  in Puerto Rico  Sun Oil was  left to cope  with a monitoring
                            

methodology unequivocally  disavowed by EQB.2  We found that this

whipsaw  certification procedure "made no sense." Puerto Rico Sun
                                                                 

Oil, 8 F.3d at 77.3  
   

                    

     2The late 1980s witnessed an abortive effort by EQB to alter
its  water quality  monitoring methodology.   For many  years EQB
Water Quality  Standards had used  a "mixing zone"  method, which
calls for pollutant concentrations to be measured in the protect-
ed waters  into which the  permitted discharge occurs.   In 1989,
however, EQB  issued a draft  document that  adopted an  "end-of-
pipe"  (or effluent)  approach, whereby  pollutant concentrations
are measured  at the discharge  source, prior to dilution  in the
receiving waters.  Although this  draft document was withdrawn in
1990, the  permittee in  Puerto Rico Sun  Oil had  been certified
                                             
during the  brief reign of the new  "effluent monitoring" policy,
and this  (presumably more  exacting) monitoring methodology  had
been written into the certification EQB provided EPA.

     3"EQB  had used a mixing  zone analysis in  the past and was
proposing  to do so in the future . .  . .  Yet just as [Sun Oil]
moved  to  correct the  EQB  certification, EPA  moved  even more
swiftly to adopt a final permit based on the EQB certificate that
omitted  a mixing zone analysis." Puerto  Rico Sun Oil, 8 F.3d at
                                                      
76.  
     In sharp contrast, no such ambivalent EQB monitoring method-
ology  was at work in this case.   Effluent monitoring, see supra
                                                                 
note 2, was  the pre-1990 baseline  for Caribbean, which,  unlike
the permittee in Puerto Rico Sun Oil, discharges into a designat-
                                    
ed drinking water  source.  This much  is clear from the  face of
the 1983 permit: "Samples taken in compliance with the monitoring
requirements set out  above shall be taken  at the outfall .  . .
prior   to  discharge  to   Las  Lajas  Creek."     Additionally,

                                7

          Third, at no time did EQB stay its Caribbean certifica-

tion.  In Puerto Rico Sun Oil, however, EQB issued a formal stay,
                             

albeit after EPA had issued its NPDES incorporating the  certifi-

cation.   Although this court held that the  ex post EQB stay was
                                                    

ineffective, as a matter of  procedure under the Clean Water Act,

id.  at 80  ("We agree  with EPA  that the  [post-NPDES issuance]
   

decision of  EQB to  re-characterize its  certification order  as

non-final cannot affect the procedural validity of EPA's decision

to grant the permit."), the fact remains that EQB, by staying the

certification in  Puerto Rico Sun  Oil, took far more  timely and
                                      

definitive action than was ever  taken during the eleven and one-

half  months (not  to mention  the ensuing  four years)  that EPA

awaited EQB's promised review of the Caribbean certification.  

          Finally, moving beyond the precedential shadow  cast by

Puerto Rico  Sun Oil, Caribbean  has not identified (nor  can we)
                    

any other  potential manifestation  of  arbitrary and  capricious

agency conduct on EPA's part.  Rather, our review evinces reason-

able agency  adherence to  appropriate procedures  and reasonable

                    

Caribbean's  April 7, 1989, comments on EQB's draft certification
requested "interim effluent standards," a further indication that
                           
the substantive standards contained in the certification, not the
monitoring methodology, were driving  the conflict between Carib-
bean and EQB.  In sum, there is no evidence that the EQB certifi-
cation  issued  to Caribbean  was the  product of  a bureaucratic
snafu such as infected the  permitting process in Puerto Rico Sun
                                                                 
Oil, 8  F.3d at  76 (noting that  EQB's certification  "must have
   
appeared  a  probable  candidate for  administrative  or judicial
revision"  as it incorporated effluent standards that had already
been abandoned).

                                8

accommodation  of Caribbean's legitimate interests.  We note as a

significant further consideration that should EQB issue Caribbean

a revised certification, EPA may amend its NPDES. See 40 C.F.R.  
                                                     

124.55(b); Puerto Rico Sun Oil, 8 F.3d at 80.4   The availability
                              

of   contingency   procedures   for   considering   post-issuance

modifications to EQB's  certification further  reduces the  like-

lihood of "arbitrary" EPA action in these circumstances. 

                               III

                            CONCLUSION
                                      

          Our conclusion that  the challenged EPA action  was not

"arbitrary and  capricious" is firmly  rooted in the  record evi-

dence that (1) EPA stayed its hand for more than eleven months to

permit EQB to reconsider its Caribbean certification; (2) yet EQB

neither issued a new certification, nor stayed its original cert-

ification;  and (3)  the EQB  certification  incorporated in  the

NPDES  essentially comported with  the effluent monitoring policy

to  which Caribbean  had been  subject  ever since  it was  first

permitted under the Clean Water Act.   We decline to visit on EPA

                    

     4We need  not address  the complex issue  as to  whether any
such changes  to Caribbean's NPDES  would run afoul of  the Clean
Water Act "anti-backsliding" provisions. See 33 U.S.C.   1342(o).
                                            
We do note, however, that EPA represents that anti-backsliding is
"unlikely to be  an issue in this case"  because the modification
of a NPDES  to reflect changes in the  local agency certification
likely would  come within  one of  several exceptions to  section
1342(o).  See 33 U.S.C.   1342(o)(2) (prescribing five exceptions
             
to section 1342(o)).

                                9

the  responsibility for  unexplained,  if not  inexplicable,  EQB

delays in undertaking or completing its promised reconsideration,

nor to compromise in the meantime the important public  interests

served by the Clean Water Act. 

          The petition for review is denied.  
                                     denied
                                           

                                10