Nat'l Pork Producers Council v. United States Envtl. Prot. Agency

• Decision Date: 15 March 2011
• Docket Number: No. 08–61093.,08–61093.
• Citation: 635 F.3d 738
• Court: U.S. Court of Appeals — Fourth Circuit
• Parties: NATIONAL PORK PRODUCERS COUNCIL; American Farm Bureau Federation; Oklahoma Pork Council; United Egg Producers; North Carolina Pork Council; National Chicken Council; U.S. Poultry & Egg Association; Dairy Business Association, Inc.; National Milk Producers Federation, Petitioners,v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent,Natural Resources Defense Council, Inc.; Sierra Club; Waterkeeper Alliance, Intervenors.

635 F.3d 738

NATIONAL PORK PRODUCERS COUNCIL; American Farm Bureau Federation; Oklahoma Pork Council; United Egg Producers; North Carolina Pork Council; National Chicken Council; U.S. Poultry & Egg Association; Dairy Business Association, Inc.; National Milk Producers Federation, Petitioners,

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent,Natural Resources Defense Council, Inc.; Sierra Club; Waterkeeper Alliance, Intervenors.

No. 08–61093.

United States Court of Appeals, Fifth Circuit.

March 15, 2011.

OPINION TEXT STARTS HEREWest CodenotesHeld Invalid40 C.F.R. § 122.23(d)(1) Richard Edward Schwart (argued), Kirsten Louise Nathanson, Crowell & Moring, L.L.P., Washington, DC, Ellen Steen, Amer. Farm Bureau Federation General Counsel, Washington DC, for Petitioners.Brian H. Lynk, Trial Atty. (argued), Dept. of Justice, Environmental Defense Section, Amanda Shafer Berman (argued), Jered Joseph Lindsay (argued), Dept. of Justice, Environment & Natural Resources Div., Scott Fulton, E.P.A., Washington, DC, for Respondent.Transferred from the Judicial Panel on Multi–District Litigation.Before BARKSDALE, STEWART and SOUTHWICK, Circuit Judges.CARL E. STEWART, Circuit Judge:

In 2003, the Environmental Protection Agency (EPA) revised its regulations, implementing the Clean Water Act's (CWA or the Act) oversight of Concentrated Animal Feeding Operations (CAFOs). Several parties challenged the 2003 revisions (hereinafter the 2003 Rule), and the Second Circuit reviewed the challenges in Waterkeeper Alliance, Inc. v. Environmental Protection Agency, 399 F.3d 486 (2d Cir.2005). In 2008, the EPA, responding to Waterkeeper, revised its regulations (hereinafter the 2008 Rule or the Rule). Subsequently, the Farm Petitioners¹ jointly with the Poultry Petitioners² filed petitions for review of the 2008 Rule with this court and the Seventh, Eighth, Ninth, Tenth, and D.C. Circuits. Shortly after the issuance of the 2008 Rule, the EPA sent guidance letters to members of Congress and to a CAFO executive (hereinafter the EPA Letters or guidance letters). The Poultry Petitioners filed a petition for review in this Circuit, challenging the EPA's procedures for issuing rules that the Poultry Petitioners allege were final. These petitions for review were consolidated by the Judicial Panel on Multi-district Litigation (JPML), pursuant to 28 U.S.C. § 2112(a)(3), and this court was randomly selected to review the parties' challenges. Subsequently, the Environmental Intervenors³ filed a motion to intervene in support of the EPA's position. Also, the EPA filed a motion to dismiss the Poultry Petitioners' challenges to the guidance letters. We GRANT the petitions in part, DENY the petitions in part, and GRANT the EPA's motion to dismiss.

I. BACKGROUND

At issue here is the EPA's regulation of animal feeding operations (AFOs). AFOs are facilities that house, raise, and feed animals until they are ready for transport to processing facilities that prepare meat for shipment and, eventually, consumption. Because these facilities house hundreds and sometimes thousands of animals in confined spaces, they produce millions of tons of animal manure every year.⁴ The management of this manure involves the collection, storage, and eventual use of the manure's nutrients as fertilizer.⁵ Following its collection, the manure is typically transported to an on-farm storage or treatment system.⁶ Treated manure effluent or dry litter (chicken waste) is typically applied to cropland as fertilizer.⁷ This fertilizing process is called land application. ⁸

Because the improper management of this waste can pose a significant hazard to the environment, the EPA focuses much of its attention on regulating certain AFOs that meet the EPA's definition of a CAFO.⁹ According to EPA regulations, CAFOs are facilities where “[a]nimals ... have been, are, or will be stabled or confined and fed or maintained for a total of 45 days or more in any 12–month period....” 40 C.F.R. § 122.23(b)(1)(i). Our analysis of the petitioners' challenges to the 2008 Rule necessitates a discussion of the statutory and regulatory scheme underlying the EPA's oversight of CAFOs.

A. Statutory Background

In 1948, Congress enacted the Federal Water Pollution Control Act (FWPCA).¹⁰ FWPCA encouraged states to enact uniform laws to combat water pollution, recognizing “that water pollution control was primarily the responsibility of state and local governments.”¹¹ The state-run regulation of discharges “involved a complex process in which the government was required to trace in-stream pollution back to specific discharges, and, given the difficulty of this task, enforcement was largely nonexistent.” ¹² The federal government's power to curtail water pollution was also limited under FWPCA. Thus, federal action against a discharger could only proceed “with the approval of state officials in the state where the discharge originated and after a complicated series of notices, warnings, hearings, and conference recommendations.”¹³ In 1972, FWPCA was amended to replace the state-run regulation of discharges with an obligation to obtain and comply with a federally-mandated National Pollutant Discharge Elimination System (NPDES) permit program.¹⁴ These amendments also transformed FWPCA into what is known today as the CWA.¹⁵

The NPDES permit program, which is primarily articulated in 33 U.S.C. § 1342, allows the EPA to “issue a permit for the discharge of any pollutant, or combination of pollutants....” 33 U.S.C. § 1342(a)(1). To be clear, the CWA prohibits the discharge of pollutants into navigable waters. 33 U.S.C. § 1311. However, if a facility requests a permit, it can discharge within certain parameters called effluent limitations and will be deemed a point source. 33 U.S.C. §§ 1342, 1362(14). Accordingly, the point source will be regulated pursuant to the NPDES permit issued by the EPA or one of 46 States authorized to issue permits.¹⁶ Relevant here, the definition of point source excludes “agricultural stormwater discharges.” Id. § 1362(14). This occurs, for example, when rainwater comes in contact with manure and flows into navigable waters. See, e.g., Fishermen Against Destruction of Env't, Inc. v. Closter Farms, Inc., 300 F.3d 1294, 1297 (11th Cir.2002) (citing Concerned Area Residents for the Env't v. Southview Farm, 34 F.3d 114, 121 (2d Cir.1994) (holding that “agricultural stormwater discharge” exemption applies to any “discharges [that] were the result of precipitation”)).

If a CAFO discharges without a permit, it is strictly liable for discharging without a permit and subject to severe civil and criminal penalties. 33 U.S.C. § 1319. For example, monetary sanctions can accrue at a rate of up to $50,000 per violation, per day, for criminally negligent violations, or up to $100,000 per violation, per day, for repeated, knowing violations. Id. Criminal violators may be subject to imprisonment. 40 C.F.R. § 122.41(a)(2).

B. CAFO's Regulatory Background

The EPA enacted the first set of CAFO regulations in 1976. Since that time, the substance of these regulations, regarding CAFOs, has changed only twice, in 2003 and 2008. We discuss the applicable portions of these regulations below.

1. 1976 Regulations

The 1976 regulations specified that CAFOs that wanted to discharge were required to have a permit primarily based on the number of animals housed in the facility. All large CAFOs, those with 1,000 or more animals, were required to have an NPDES permit to discharge pollutants. 41 Fed.Reg. 11,458, 11,458 (Mar. 18, 1976).¹⁷ Medium CAFOs, those with 300 to 1,000 animals, were required to have a permit if they emitted certain discharges. Id. Finally, most small CAFOs, those with 300 animals or less, generally were not required to have a permit. Id. However, the EPA could determine that a permit was required on a case-by-case basis if a small CAFO emitted certain discharges after an onsite inspection and notice. Id. Under this regulatory scheme, if a discharging CAFO was required to have a permit, but did not have one, it would be subject to civil or criminal liability.

The 1976 regulatory scheme was in place for almost thirty years. However, after being sued for failing to revise the effluent limitations for CAFO operations, the EPA revised its regulations “to address not only inadequate compliance with existing policy, but also the ‘changes that have occurred in the animal production industries.’ ” Waterkeeper, 399 F.3d at 494 (citing 66 Fed.Reg. 2960, 2972 (Jan. 12, 2001)). Subsequently, in the 2003 Rule, the EPA shifted from a regulatory framework that explained what type of CAFO must have a permit to a broader regulatory framework that explained what type of CAFO must apply for a permit.

2. The 2003 Rule & Waterkeeper

Under the 2003 Rule, all CAFOs were required to apply for an NPDES permit whether or not they discharged. 68 Fed.Reg. 7176, 7266 (Feb. 12, 2003). Specifically, every CAFO was assumed to have a “potential to discharge” and had to apply for an NPDES permit. Id. at 7266–67. However, an option built into the Rule permitted a CAFO to request from the EPA a “no potential to discharge” determination. Id. If the CAFO proved that it did not have the potential to discharge, the CAFO was not required to seek a permit. Id. The 2003 Rule also expanded the definition of exempt “agricultural stormwater discharge” to include land application discharge, if the land application comported with appropriate site-specific nutrient management practices. Id. at 7198. However, if the land application was not in compliance with those practices, the land application discharge would be an unpermitted discharge in violation of the CWA. Id. at 7197.

Furthermore, the 2003 Rule created a mandatory duty for all CAFOs, applying for a permit, to develop and implement a site-specific Nutrient Management Plan (NMP). Id. at 7176. An NMP required a CAFO to establish “best management practices” (BMPs). Id. at 7213–14. The BMPs were...