American Paper Institute, Inc. v. U.S. E.P.A., s. 88-1395

• Decision Date: 27 November 1989
• Docket Number: Nos. 88-1395,88-1396,s. 88-1395
• Parties: , 30 ERC 1714, 19 Envtl. L. Rep. 21,361, 20 Envtl. L. Rep. 20,482 AMERICAN PAPER INSTITUTE, INC., James River-Norwalk, Inc., Nekoosa Packaging Corporation, Fort Howard Corporation, and Stone Container Corporation, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 869

890 F.2d 869

30 ERC 1313, 30 ERC 1714, 19 Envtl.

L. Rep. 21,361,

20 Envtl. L. Rep. 20,482

AMERICAN PAPER INSTITUTE, INC., James River-Norwalk, Inc. Nekoosa Packaging Corporation, Fort Howard Corporation, and Stone Container Corporation, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

Nos. 88-1395, 88-1396.

United States Court of Appeals Seventh Circuit.

Argued Nov. 30, 1988.

Decided Aug. 1, 1989.

Revised Nov. 27, 1989. ^*

Charles Kamps, Nancy K. Peterson, Quarles & Brady, Milwaukee, Wis., Russell S. Frye, Chris Montgomery, Chadbourne & Parke, Washington, D.C., David E. Evans, McGuire, Woods, Battle & Boothe, Richmond, Va., Jill A. Well, Smith & Schnacke, Cincinnati, Ohio, for petitioners.

Steven Neugeboren, E.P.A., Washington, D.C., Gary S. Guzy, Dept. of Justice, Land & Natural Resources Div., Washington, D.C., for respondent.

Before WOOD, Jr., and FLAUM, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

HARLINGTON WOOD, Jr., Circuit Judge. ^**

American Paper Institute (API) and four paper and pulp mill owners challenge the federal Environmental Protection Agency's (EPA's) authority to object to permits proposed by the Wisconsin Department of Natural Resources (WDNR) and to promulgate antidegradation regulations under the water pollution control statute, 33 U.S.C. Secs. 1251-1376. The EPA claims that this court lacks subject matter jurisdiction to review API's claims. It argues in the alternative that the claims are not ripe for review. We agree with the EPA that we lack subject matter jurisdiction to hear either of API's claims and do not reach either the question of ripeness or the substantive merits of API's appeal. We therefore dismiss API's petition.

I. BACKGROUND

A. Structure of the Clean Water Act

Disturbed over the ineffectiveness of existing water pollution control, Congress restructured the Federal Water Pollution Control Act (FWPCA) in 1972 "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. Sec. 1251(a). In the 1972 amendments, Congress specifically outlined its goals: to have "fishable and swimmable" waters by 1983 and to eliminate all pollutant discharges into navigable waters by 1985. In 1977 Congress amended the statute again through the Clean Water Act but did not change the primary structure of the program implemented in 1972.

Under the Act, ¹ the primary means of imposing water pollution control on dischargers or "point sources" is a permit system called the National Pollutant Discharge Elimination System (NPDES). Each point source must obtain a NPDES permit before it may emit identified pollutants into American waters. The NPDES permit restricts the quantity, rate, and concentration of pollutants that the point source may emit into the water and provides a schedule for compliance with the water quality standards and effluent limitations applicable to that point source. Any discharge without a NPDES permit is illegal. 33 U.S.C. Sec. 1311(a).

The EPA administers the NPDES program in each state unless the EPA previously authorized a state program to issue NPDES permits. 33 U.S.C. Sec. 1342(b). Thirty-nine states presently have their own permit-issuing programs over which the EPA retains oversight authority. In states with permit programs, the state proposes the NPDES permit it intends to issue to a point source and the EPA has ninety days to object to the permit. The EPA may object if it finds that the state ignored recommendations from another state whose waters could be affected by the emissions from the point source or that the permit is "outside the guidelines and requirements" of the Act. 33 U.S.C. Sec. 1342(d)(2). If the EPA objects, it provides a comment period, and a public hearing when requested by the state or interested parties. 40 C.F.R. Sec. 123.44(e) (1988). The EPA then must modify, withdraw, or reaffirm its objections. 40 C.F.R. Sec. 123.44(g) (1988).

If the EPA reaffirms its objections, the state and the EPA may proceed in either of two ways. The state may modify the terms of its proposed permit within thirty days of EPA's decision to stand by its objections. ² If the state agrees to modify the permit, it must again allow a comment period before issuing the permit. If the state refuses to modify the proposed permit, the EPA may assume exclusive authority to issue the permit. 33 U.S.C. Sec. 1342(d)(1) & (4). Before the EPA can issue its own permit, however, it must again propose a version of the permit, allow a comment period and possibly conduct a hearing. 40 C.F.R. Secs. 124.6, 124.10, 124.12 (1988). Prior to the 1977 amendments, the EPA was not authorized to resolve the impasse in this fashion. Before 1977 the EPA could veto a permit proposed by the state but had no authority to issue a federal permit if the state refused to meet the EPA's objections. No permit would issue under FWPCA if the state and the EPA did not agree on the terms of the permit.

In addition to its duties under the NPDES program, the EPA must develop and oversee state promulgation of water quality standards for the waters of the United States. 33 U.S.C. Sec. 1313(c). In accordance with its interpretation of this authority, the EPA has created an antidegradation policy, which requires the states to promulgate antidegradation plans. Under the antidegradation policy outlined in EPA regulations, 40 C.F.R. Sec. 131.12 (1988), the individual states must design antidegradation plans that address how the state will maintain existing water quality once a desired water quality standard is reached. The EPA antidegradation policy stipulates the following standards: at a minimum, the states must devise antidegradation plans that maintain existing water quality if the water quality is below the "fishable and swimmable" goal. Where "fishable and swimmable" water quality has been reached, the state can reduce water quality only if "an important social and economic development" in the area in which the waters are located justifies the reduction. The state must prevent water constituting an "outstanding national resource" from being degraded. Finally and more specifically, the state may relax stringent limitations on thermal pollution of certain conditions are met.

B. The Present Challenge

The EPA, in February 1974, authorized WDNR to issue permits to point sources in Wisconsin. Pursuant to that authority, WDNR proposed to issue thirteen permits to paper and pulp mills in Wisconsin.

On September 10, 1986, the EPA notified WDNR that it objected to the thirteen permits that WDNR had proposed. The EPA spelled out its objections more specifically on November 28, 1986, allowed comments on the objections, and, at the request of WDNR and other interested parties, provided a public hearing on the objections. In response to comments made, the EPA modified some of its objections, but on November 4, 1987, the EPA reaffirmed its remaining objections with regard to eleven of the permits. ³ The EPA stated that the eleven proposed permits failed to properly monitor and limit the discharge of toxic pollutants as required by federal and state law and five of the eleven permits violated federal and state antidegradation policies. The EPA gave WDNR thirty days to modify the permits.

On December 3, 1987, WDNR modified the permits to meet the EPA's objections. American Paper Institute and four paper and pulp mill owners petitioned this court to review the EPA objections and the antidegradation policy supporting the objections. For the sake of clarity we will refer to all petitioners as American Paper Institute or API. ⁴

II. DISCUSSION

American Paper Institute challenges the EPA's authority to object to the WDNR-proposed permits. API contends that the EPA exceeded its authority when it objected to proposed permits that, API argues, were within the guidelines and requirements of the Act. Furthermore, API claims that nowhere in the Act is the EPA authorized to promulgate an antidegradation policy for the states.

Arguing a lack of subject matter jurisdiction, the EPA asserts that the merits of API's claims are not reviewable in this court. The EPA contends that its actions are not reviewable because 33 U.S.C. Sec. 1369(b)(1), the provision of the Act granting the federal court of appeals subject matter jurisdiction over a limited set of EPA actions, does not cover the actions challenged by API. The EPA also claims that the issues raised by API are moot because the state has agreed to the terms of the EPA's objections and issued modified permits. Finally, the EPA argues that the doctrine of ripeness precludes our review.

Because we find that we lack subject matter jurisdiction to hear this appeal, we do not reach any of the EPA's or API's other arguments.

A. The EPA Objections to the State-proposed Permits

When the EPA objected to the permits proposed by WDNR, American Paper Institute asserts that, in effect, the EPA "denied a permit" within the meaning of 33 U.S.C. Sec. 1369(b)(1)(F). ⁵ Under that statute this court has jurisdiction to review EPA "denials" of permits. API argues that subsection 1369(b)(1)(F) applies to permits in both their proposed and final forms. According to API, the objections were "denials" because the EPA gave WDNR no choice but to accept the EPA objections if WDNR wanted to retain control over the permit program. Following the Supreme Court's practical approach to jurisdiction under subsection 1369(b)(1), see Crown Simpson Pulp Co. v. Costle, 445 U.S. 193, 100 S.Ct. 1093, 63 L.Ed.2d 312 (1980); Natural Resources Defense Council v. EPA, 656 F.2d 768, 776 (D.C.Cir.1981), we hold that we lack jurisdiction to review the EPA's objections.

The Third Circuit has advocated a liberal interpretation of subsection 1369(b)(1). See Modine Mfg. Corp. v. Kay, 791 F.2d 267, 269-71 (3d Cir.1986). It noted that the Supreme Court has encouraged liberal interpretation of statutory provisions providing judicial review...