El Dorado Chem. Co. v. U.S. Envtl. Prot. Agency

• Decision Date: 15 August 2014
• Docket Number: No. 13–1936.,13–1936.
• Citation: 763 F.3d 950
• Parties: EL DORADO CHEMICAL COMPANY, Plaintiff–Appellant v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Gina McCarthy, Administrator, United States Environmental Protection Agency; Ron Curry, Regional Administrator, United States Environmental Protection Agency Region 6, Defendants–Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

763 F.3d 950

EL DORADO CHEMICAL COMPANY, Plaintiff–Appellant

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Gina McCarthy,¹ Administrator, United States Environmental Protection Agency; Ron Curry, ² Regional Administrator, United States Environmental Protection Agency Region 6, Defendants–Appellees.

No. 13–1936.

United States Court of Appeals,

Eighth Circuit.

Submitted: Jan. 13, 2014.

Filed: Aug. 15, 2014.

Charles R. Nestrud, Little Rock, AR, for Plaintiff–Appellant.

John Luther Smeltzer, David S. Shilton, Washington, DC, for Defendants–Appellees.

Before GRUENDER, BRIGHT, and KELLY, Circuit Judges.

KELLY, Circuit Judge.

El Dorado Chemical Company (EDCC) operates a chemical manufacturing plant in El Dorado, Arkansas. As a byproduct of its operation, the plant discharges dissolved minerals, including sulfate and chloride, into two unnamed tributaries (UTA and UTB); these tributaries reach downstream to Flat Creek and Haynes Creek. In 2004, Arkansas imposed more stringent limits on the dissolved minerals EDCC could discharge into these bodies of water, and granted EDCC three years to comply. In response, EDCC initiated a Third Party Rulemaking to increase the levels of dissolved minerals permitted in both UTA and UTB. Arkansas adopted these revisions and submitted them to the U.S. Environmental Protection Agency (EPA) for approval. The EPA rejected the changes, citing concerns that the revisions did not adequately protect the aquatic life in Flat Creek and Haynes Creek. EDCC moved for judicial review, and the district court ³ upheld the EPA's decision, granting summary judgment in favor of the EPA. EDCC now appeals, arguing the EPA overstepped its authority in considering the effects on aquatic life in the two creeks. Because we find the EPA had the authority to look at downstream effects, and because EDCC failed to adequately demonstrate the affected waters would be protected, we affirm.

I. Background

A. Statutory and Regulatory Framework

Since 1972, the states and the federal government have worked together “to restore and maintain the chemical, physical, and biological integrity of the Nation's waters,”in a partnership governed by the Clean Water Act (CWA).⁴33 U.S.C. § 1251(a). With this goal in mind, the CWA authorizes states to establish water quality standards for bodies of water within its borders. 33 U.S.C. § 1313(a)- (c). Water quality standards “define[ ] the water quality goals of a water body, or portion thereof, by designating the use or uses to be made of the water and by setting criteria necessary to protect the uses.” 40 C.F.R. § 131.2. They comprise (1) the designated use(s) of the waters (e.g., water supply, propagation of fish, or recreation), 40 C.F.R. § 131.10; (2) the water quality criteria necessary to safely permit those designated uses, 40 C.F.R. § 131.11; and (3) antidegradation requirements to protect waters whose quality is better than required, 40 C.F.R. § 131.12. 40 C.F.R. § 131.6. States must review their water quality standards at least every three years. 33 U.S.C. § 1313(c)(1). And under the CWA, each state must create a “continuing planning process” (CPP) to, among other things, govern the process for revising its water quality standards. 40 C.F.R. § 130.5(a). “In designating uses of a water body and the appropriate criteria for those uses, the State shall take into consideration the water quality standards of downstream waters and shall ensure that its water quality standards provide for the attainment and maintenance of the water quality standards of downstream waters.” 40 C.F.R. § 131.10(b).

Although states assume the primary role in determining water quality standards, 40 C.F.R. § 131.4, states must submit proposed standards and revisions to the EPA for approval. 33 U.S.C. § 1313(c)(2); 40 C.F.R. §§ 131.5, 131.21. The EPA must ensure proposed water quality standards meet the requirements of the CWA. 33 U.S.C. § 1313(c)(3). Designated uses must be “consistent with the requirements of the [CWA],” and water quality criteria must “protect the designated water uses.” 40 C.F.R. § 131.5(a)(1)-(2). The EPA is empowered to issue its own water quality standards if a state does not make appropriate adjustments to its proposed standards, and the EPA may also promulgate revised or new standards “when necessary to meet the requirements of the [CWA].” 33 U.S.C. § 1313(c)(3)-(4).

Water quality standards in Arkansas are developed by the Arkansas Pollution Control and Ecology Commission (the Commission). Ark.Code Ann. § 8–4–201(b). The Arkansas Department of Environmental Quality administers and enforces the state's water quality standards.⁵Ark.Code Ann. § 8–4–203(a). It does so through a permitting program, the National Pollutant Discharge Elimination System (NPDES).⁶See33 U.S.C. § 1342. Under the NPDES program, a point source ⁷ cannot discharge a pollutant unless the discharge is authorized by an NPDES permit. See id.; see also33 U.S.C. § 1311. These permits contain, inter alia, numerical discharge limits. Like water quality standards, NPDES permits must first be submitted to the EPA for approval, unless the EPA waives this requirement. 33 U.S.C. § 1342(d)- (e); Arkansas v. Oklahoma, 503 U.S. 91, 102, 112 S.Ct. 1046, 117 L.Ed.2d 239 (1992) (“[The EPA] retains authority to block the issuance of any state-issued permit that is outside the guidelines and requirements of the [CWA].”).

B. EDCC's Third Party Rulemaking

EDCC's chemical manufacturing facility discharges its wastewater into UTB, which flows into UTA. UTA, in turn, reaches downstream to Flat Creek. Flat Creek then flows into Haynes Creek. Arkansas has designated UTA, Flat Creek, and Haynes Creek for use as, among other things, perennial gulf coastal fisheries, and UTB as a seasonal gulf coastal fishery. This case involves Arkansas' attempt to revise the water quality criteria for UTA and UTB in response to EDCC's Third Party Rulemaking.

In June 2004, EDCC renewed its NPDES permit. This new permit contained more stringent limits on the dissolved minerals EDCC could discharge than the previous permit. EDCC had until June 1, 2007, to comply with the new limits. On August 31, 2006, before the new limits became effective, EDCC filed a petition for a Third Party Rulemaking with Arkansas, seeking to modify Arkansas' water quality standards.⁸ Specifically, EDCC sought to make two changes. First, EDCC wanted to remove the “domestic water supply” designated uses of UTA, UTB, and parts of Flat Creek and Haynes Creek. Second, EDCC wanted to increase the maximum permissible concentrations of chloride, sulfate, and total dissolved solids (“TDS”) for those same bodies of water.

Arkansas approved both of EDCC's proposed changes on June 22, 2007, and submitted them to the EPA for approval. Because these four bodies of water were not currently used as sources for the domestic water supply, in November 2007 the EPA approved the removal of the domestic water supply designated uses for all four bodies of water.

The EPA did not, however, approve the revised water quality criteria-i.e., the proposed sulfate, chloride, and TDS limits. In January 2008, the EPA informed Arkansas that it lacked adequate supporting evidence, so Arkansas supplemented its documentation. Again in April 2009, the EPA rejected the proposed rule regarding the higher mineral concentrations and identified additional information necessary to make a determination. In response, EDCC conducted another study and submitted further documentation, which it argued was substantially more comprehensive than what the EPA had accepted and approved in a prior Third Party Rulemaking. Nevertheless, the EPA emphasized its concern that the proposed revisions would have negative effects on aquatic life in Flat Creek and Haynes Creek. Toxicity testing submitted by EDCC had indicated reproductive problems to the water flea in the creeks when exposed to the maximum proposed mineral concentrations.

After receiving the EPA's latest concerns, EDCC did not run any additional tests or commission further studies on the impact to aquatic life in Flat and Haynes Creek. Instead, EDCC petitioned Arkansas to re-open the Third Party Rulemaking. This time, EDCC rescinded its proposed changes to the water quality criteria for Flat Creek and Haynes Creek; the sulfate, chloride, and TDS limits would thus revert back to the more strict levels. However, EDCC sought to re-adopt its proposed—and less strict—sulfate, chloride, and TDS limits for UTA and UTB. Arkansas agreed. As a result, on December 3, 2010, Arkansas rescinded the previously approved changes to the sulfate, chloride, and TDS limits in Flat and Haynes Creeks, and re-adopted the proposed criteria for UTA and UTB.

Arkansas submitted this new rule to the EPA for approval. The EPA again requested more information before making a determination, particularly with regard to the potential effects of the revised criteria for UTA and UTB on Flat and Haynes Creeks. EDCC, communicating through and to Arkansas, responded by explaining that because it removed Flat and Haynes Creeks from the Rulemaking, it would not address questions concerning those two bodies of water. EDCC no longer wanted to change the sulfate, chloride, and TDS concentrations for the creeks. On August 31, 2011, the EPA issued a final decision letter disapproving the revised water quality criteria. As the EPA explained, it “determined that supporting documentation remains insufficient to demonstrate that the site-specific minerals criteria for the waterbodies associated with EDCC are appropriately protective of aquatic life.” The EPA highlighted its concerns that EDCC failed to consider how the revised criteria for UTA and UTB would affect the downstream water quality in Haynes and Flat Creeks and that its supporting evidence was scientifically flawed.

In October 2011, EDCC filed a complaint in the Western District of Arkansas seeking judicial review of the EPA's decision to disapprove...