Clean Water Action v. U.S. Envtl. Prot. Agency

• Decision Date: 28 August 2019
• Docket Number: No. 18-60079,18-60079
• Citation: 936 F.3d 308
• Parties: CLEAN WATER ACTION; Environmental Integrity Project; Sierra Club; Waterkeeper Alliance, Incorporated; Pennenvironment, Incorporated; Chesapeake Climate Action Network; Physicians for Social Responsibility, Chesapeake, Incorporated; Prairie Rivers Network, Petitioners v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Andrew Wheeler, Acting Administrator, United States Environmental Protection Agency, Respondents
• Court: U.S. Court of Appeals — Fifth Circuit

936 F.3d 308

CLEAN WATER ACTION; Environmental Integrity Project; Sierra Club; Waterkeeper Alliance, Incorporated; Pennenvironment, Incorporated; Chesapeake Climate Action Network; Physicians for Social Responsibility, Chesapeake, Incorporated; Prairie Rivers Network, Petitioners

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Andrew Wheeler, Acting Administrator, United States Environmental Protection Agency, Respondents

No. 18-60079

United States Court of Appeals, Fifth Circuit.

FILED August 28, 2019

Thomas Joseph Cmar, Earthjustice, Chicago, IL, Matthew Gerhart, Sierra Club, Denver, CO, for Petitioner CLEAN WATER ACTION, WATERKEEPER ALLIANCE, INCORPORATED.

Gabriel Paul Clark-Leach, Environmental Integrity Project, Austin, TX, for Petitioners ENVIRONMENTAL INTEGRITY PROJECT, PENNENVIRONMENT, INCORPORATED, CHESAPEAKE CLIMATE ACTION NETWORK, PHYSICIANS FOR SOCIAL RESPONSIBILITY, CHESAPEAKE, INCORPORATED, PRAIRIE RIVERS NETWORK.

Thomas Joseph Cmar, Earthjustice, Chicago, IL, Matthew Gerhart, Casey Austin Roberts, Sierra Club, Environmental Law Program, Denver, CO, Joshua Smith, Sierra Club, Environmental Law Program, Oakland, CA, for Petitioner SIERRA CLUB.

Martin Francis McDermott, Tsuki Hoshijima, U.S. Department of Justice, Washington, DC, Matthew Z. Leopold, Environmental Protection Agency, Washington, DC, for Respondents UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ANDREW WHEELER.

Before HIGGINBOTHAM, JONES, and COSTA, Circuit Judges.

EDITH H. JONES, Circuit Judge:

Through notice-and-comment rulemaking, the Environmental Protection Agency ("EPA") reviewed and decided to revise¹ the earliest compliance dates for new, stringent BAT ("best available technology economically achievable") effluent limitations and PSES ("pretreatment standards for existing source") concerning two waste streams from steam electric power generating point sources that had previously been promulgated in a 2015 Rule.

More specifically, the agency postponed for two years only the earliest compliance dates mandated by the 2015 Rule for flue gas desulfurization (FGD) wastewater and bottom ash transport water, while (a) retaining the 2015 Rule’s BAT limitations and pretreatment standards for other waste streams from such power plants, and (b) not altering either the last date for compliance (December 2023) or, pending reconsideration, the substantive limits required by the 2015 Rule for the two postponed stream modifications. A consortium of environmental groups has challenged the postponement, while EPA and the intervenor, Utility Water Act Group ("UWAG"),² defend the Postponement Rule. We conclude that the EPA had statutory authority to pass this tailored rule, the agency explained its decision adequately, its decision was reasonable, and it was thus neither arbitrary nor capricious. The petition for review is DENIED.

BACKGROUND

The 2015 Rule represented the culmination of ten years’ work by EPA to update steam electric power generating plant standards for compliance with the Clean Water Act, 33 U.S.C. § 1251 et seq ., that had been in place since 1982. In that Rule, the agency, among other things, defined much more stringent BAT limits and pretreatment standards for seven defined wastestreams. Recognizing that power plants would need substantial lead time to plan, fund, and build necessary new facilities, the agency mandated in the 2015 Rule an earliest compliance date of November 2018 and delegated to permitting authorities the flexibility to approve individual point source compliance as feasible over a period extending until the end of 2023.

Four lawsuits challenging the 2015 Rule were soon filed in the federal courts.³ The petitions were consolidated by the Judicial Panel on Multidistrict Litigation and transferred to this court.⁴ During these preliminaries, UWAG, later supplemented by the Small Business Administration’s Office of Advocacy, submitted petitions asking EPA to reconsider the entire 2015 Rule and suspend its approaching deadlines.⁵ Among other things, these petitions raised substantial questions, based on newly discovered information, about the extraordinary costs of implementing the 2015 Rule and the infeasibility of EPA’s proposed technology as applied to certain power plants. Taking these petitions seriously, EPA’s Administrator determined that it was appropriate and in the public interest to reconsider the 2015 Rule.

After an initial stay, a formal rulemaking procedure ensued, the notice of which generated thousands of written comments, and the agency conducted a public hearing on July 31, 2017. In the end, EPA decided to adhere to most aspects of the 2015 Rule. EPA left in place the legacy wastewater limitations, which are BAT limitations that apply to each of the regulated wastestreams beginning on the effective dates set out in the 2015 Rule; the new and more stringent limitations and quantitative standards (i.e. , the permissible amount of discharges); and the latest compliance date for NPDES permitting authorities to impose those limitations.⁶ See generally, Postponement Rule, 82 Fed. Reg. at 43,494. But the agency also decided it must reconsider the 2015 Rule’s regulations governing two wastestreams (FGD wastewater and bottom ash transport water) in light of "new information not contained in the record for the 2015 Rule." Id. at 43,496. As support for reconsideration, EPA cited "the inherent discretion the Agency has to reconsider past policy decisions consistent with the CWA and other applicable law." Id. EPA’s expressed purpose for postponing the earliest effective compliance dates for these wastestreams during reconsideration was to "prevent the potentially needless expenditure of resources during a rulemaking that may ultimately change the 2015 Rule ...." Id. The agency, however, specifically declined to forecast whether, after reconsideration, it will substantially revise the 2015 Rule.⁷

STANDARD OF REVIEW

The standard of review here is deferential, focusing on whether the agency action is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). "If the agency’s reasons and policy choices conform to minimal standards of rationality, then its actions are reasonable and must be upheld." Tex. Oil & Gas Ass’n v. E.P.A. , 161 F.3d 923, 934 (5th Cir. 1998). The reviewing court may not "substitute its judgment for that of the agency." Citizens to Pres. Overton Park, Inc. v. Volpe , 401 U.S. 402, 416, 91 S. Ct. 814, 824, 28 L.Ed.2d 136 (1971).

EPA must provide a reasoned explanation for its revisions and follow the same process to revise a rule as it used to promulgate it. See Perez v. Mortg. Bankers Ass’n , ––– U.S. ––––, 135 S. Ct. 1199, 1206, 191 L.Ed.2d 186 (2015). Even "a decision based on an administrative record of less than ideal clarity will be upheld if the agency’s path may reasonably be discerned." United States v. Garner , 767 F.2d 104, 118 (5th Cir. 1985). This court, however, " ‘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, 103 S. Ct. 2856, 2867, 77 L.Ed.2d 443 (quoting SEC v. Chenery Corp. , 332 U.S. 194, 196, 67 S.Ct. 1760, 91 L.Ed. 1995 (1947) ).

DISCUSSION

In this instance, EPA went out of its way to issue a narrow reconsideration decision, leaving intact the bulk of the 2015 Rule, and to substantiate its course of action legally through notice-and-comment rulemaking.⁸ According to the Petitioners, that was not enough. Petitioners fault the EPA for issuing the Postponement Rule without legal authority because they argue it is an unauthorized stay or the "functional equivalent" of a stay of the 2015 Rule; for failing to consider mandatory statutory factors before promulgating a revision; and for failing to comply with what they take to be a three-year ELG compliance deadline in the CWA. We address each of these arguments in turn.

A. Whether the Postponement Rule effects a "stay" or its "functional equivalent" concerning the 2015 Rule.

Petitioners do not challenge EPA’s statutory authority to revise the 2015 Rule’s ELGs because the CWA explicitly authorizes EPA to revise previously-promulgated rules. See 33 U.S.C. §§ 1311(d), 1314(b), (g)(1), (m)(1)(A), 1317(b)(2). Instead, they contend that the Postponement Rule was not a revision, but either a stay or the functional equivalent of a stay of the earlier Rule.

The Postponement Rule is not a stay. In so characterizing it, Petitioners misstate the agency’s position and rely on inapposite legal authority.⁹ EPA has consistently justified the Postponement Rule as a revision under both its inherent authority to reconsider past decisions and as an action authorized under the Clean Water Act. See Postponement Rule, 82 Fed. Reg. at 43,496 ("Agencies have inherent authority to reconsider past decisions and to revise, replace or repeal a decision to the extent permitted by law and supported by a reasoned explanation ... Particularly relevant here, the CWA expressly authorizes EPA to revise effluent limitations and standards.") (citations omitted). Petitioners chiefly cite cases discussing administrative stays under the APA. But, as they admit, although EPA’s earlier stay relied on Section 705 of the APA, EPA did not cite the APA as authorizing this Postponement Rule. EPA at all times claimed to be revising the prior rule. Consequently, cases like Clean Air Council v. Pruitt , 862 F.3d 1, 9 (D.C. Cir. 2017) and Air Alliance Houston v. EPA , 906 F.3d 1049 (D.C. Cir. 2018) (per curiam), cited by Petitioners, are inapposite because they interpreted the stay provision in the Clean Air Act and the APA, neither of which is germane to this case.¹⁰

EPA correctly surmised that, in addition to its statutory authority to revise rules under the CWA, administrative agencies possess the inherent authority to revise previously-promulgated rules, so long as they follow the proper administrative...