Natural Res. Def. Council v. U.S. Envtl. Prot. Agency, Docket Nos. 13–1745(L)

• Decision Date: 05 October 2015
• Docket Number: 13–2757(CON).,Docket Nos. 13–1745(L),13–2393(CON)
• Citation: 808 F.3d 556
• Parties: NATURAL RESOURCES DEFENSE COUNCIL, Northwest Environmental Advocates, Center for Biological Diversity, and National Wildlife Federation, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, Lake Carriers' Association and Canadian Shipowners Association, Intervenors.
• Court: U.S. Court of Appeals — Second Circuit

808 F.3d 556

NATURAL RESOURCES DEFENSE COUNCIL, Northwest Environmental Advocates, Center for Biological Diversity, and National Wildlife Federation, Petitioners,

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent,Lake Carriers' Association and Canadian Shipowners Association, Intervenors.

Docket Nos. 13–1745(L)

13–2393(CON)

13–2757(CON).

United States Court of Appeals, Second Circuit.

Argued: Jan. 30, 2015.

Decided: Oct. 5, 2015.

Amended: Dec. 18, 2015.

Allison M. Laplante, Earthrise Law Center, Lewis & Clark Law School, Portland, Oregon, and Deborah A. Sivas, Matthew J. Sanders, Environmental Law Clinic, Mills Legal Clinic at Stanford Law School, Stanford, CA, for Petitioners Northwest Environmental Advocates and Center for Biological Diversity.

Rebecca J. Riley, Natural Resources Defense Council, Chicago, IL, for Petitioner Natural Resources Defense Council.

Neil S. Kagan, National Wildlife Federation, Ann Arbor, MI, for Petitioner National Wildlife Federation.

Martin Francis McDermott (Sam Hirsch, Acting Assistant Attorney General, on the brief), Environmental Defense Section, Environmental & Natural Resources Division, United States Department of Justice, Washington, D.C., and Dawn M. Messier, Office of General Counsel, United States Environmental Protection Agency, Washington, D.C., for Respondent United States Environmental Protection Agency.

Matthew D. Melewski, The Boutique Firm PLC, Minneapolis, MN, for Intervenors Lake Carriers' Association and Canadian Shipowners Association.

Before: SACK, CHIN, and CARNEY, Circuit Judges.

CHIN, Circuit Judge:

This case arises from the efforts of the Environmental Protection Agency ("EPA") pursuant to section 402(a) of the Clean Water Act (the "CWA"), 33 U.S.C. § 1342(a), to regulate the discharge of ballast water from ships.¹ A ship takes on and discharges ballast water to compensate for changes in its weight caused by activities such as loading and unloading cargo or consuming fuel or supplies. The amount of water can range from hundreds of gallons to as much as 25 million gallons—enough to fill thirty-eight Olympic-sized swimming pools. More than 21 billion gallons of ballast water are released in the United States annually. See Nw. Envtl. Advocates v. EPA, 537 F.3d 1006, 1013 (9th Cir.2008).

When a ship takes on ballast water, it can inadvertently pick up organisms and their eggs and larvae, as well as sediment and pollutants. When the ship discharges ballast water, often in a new place, these organisms and pollutants are ejected into the surrounding waterbody, enabling these organisms to establish new, non-native populations. As a result, ships have become one of the primary ways that invasive species are spread from one waterbody to another. Id. at 1012–13 ("All told, more than 10,000 marine species each day hitch rides around the globe in the ballast water of cargo ships." (quoting Nw. Envtl. Advocates v. EPA, No. C 03–05760 SI, 2006 WL 2669042, at *3 (N.D.Cal. Sept. 18, 2006) )).

Invasive species cause severe economic and ecological harm, including by destroying native fish species and shellfish industries, creating algae blooms, and devastating tourism. Zebra mussels are a particularly destructive example. They were first introduced to Lake Erie in the 1980s by a freighter from Europe that discharged ballast water containing mussels. ²

These mussels have wreaked havoc in the Midwest and Northeast by blocking water intake and outtake at power plants and other industrial facilities, causing nearly $70 million in damage between 1989 and 1995. Nw. Envtl. Advocates, 537 F.3d at 1013. One study estimates the damage caused by invasive species collectively at "about $137 billion a year—more than double the annual economic damage caused by all natural disasters in the United States." Id. (quoting Nw. Envtl. Advocates, 2006 WL 2669042, at *4 ).³

Ballast water discharge is particularly problematic in the Great Lakes. Vessels that sail exclusively in the Great Lakes, known as "Lakers," account for over ninety-five percent of ballast water volumes transferred in the Great Lakes. Unfortunately, Lakers are more likely than oceangoing vessels to spread invasive species because the short duration of their voyages allows organisms to survive in their ballast.

In April 2013, EPA issued a Vessel General Permit (the "2013 VGP"), pursuant to section 402 of the CWA, 33 U.S.C. § 1342, to regulate the discharge of ballast water from ships. In response, four environmental groups filed three Petitions for Review ("PFRs") alleging that EPA acted arbitrarily and capriciously in issuing the 2013 VGP: petitioner Natural Resources Defense Council ("NRDC") filed a PFR on May 3, 2013 in this Court; petitioners Northwest Environmental Advocates ("NWEA") and the Center for Biological Diversity jointly filed a PFR on May 3, 2013 in the United States Court of Appeals for the Ninth Circuit; and petitioner National Wildlife Federation ("NWF") filed a PFR on July 3, 2013 in the United States Court of Appeals for the D.C. Circuit.⁴ In an order dated May 24, 2013, the Judicial Panel on Multidistrict Litigation issued a Consolidation Order and assigned final venue for the first two petitions, and any subsequently filed petition, to this Court.

On May 31, 2013, the Lake Carriers' Association and the Canadian Shipowners Association (the "CSA") filed a motion to intervene, which was granted on October 7, 2013. On January 1, 2014, the CSA filed a PFR in this case. EPA and the CSA jointly moved to sever the CSA PFR from this case and hold it in abeyance; the motion was granted on May 23, 2014.

We find that EPA acted arbitrarily and capriciously in issuing parts of the 2013 VGP, and therefore remand this matter to the EPA for further proceedings.

BACKGROUND

A. The CWA

Congress created the CWA to limit pollution in the waters of the United States. See 33 U.S.C. § 1251(a) (objective of CWA is to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters"); S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe of Indians, 541 U.S. 95, 102, 124 S.Ct. 1537, 158 L.Ed.2d 264 (2004) (same); Waterkeeper All., Inc. v. EPA, 399 F.3d 486, 490–91 (2d Cir.2005) (same). The CWA thus prohibits the "discharge of any pollutant" from a "point source" to the "navigable waters" of the United States, except as permitted by the CWA. 33 U.S.C. §§ 1311(a), 1362 (emphasis added). The "discharge of a pollutant" includes "any addition of any pollutant to navigable waters from any point source." Id. § 1362(12)(A). A "pollutant" includes solid, industrial, agricultural, and biological waste. Id. § 1362(6). A "point source" is "any discernible, confined and discrete conveyance, including but not limited to any ... vessel or other floating craft, from which pollutants are or may be discharged." Id. § 1362(14). "Navigable waters" is defined as "the waters of the United States, including the territorial seas." Id. § 1362(7). The discharge of polluted water from a vessel ballast tank is a point source discharge covered by the CWA. See Nw. Envtl. Advocates, 537 F.3d at 1021.

A key component of the statute is the establishment of water quality standards. Water quality standards are set by states for waters within their boundaries and are then reviewed for approval by EPA. See 33 U.S.C. § 1313 ; 40 C.F.R. §§ 131.4, 131.10 –.11 ; see also NRDC v. EPA, 279 F.3d 1180, 1183 (9th Cir.2002) ("Under the CWA, each state sets its own water quality standards, subject to review and approval by the EPA."). EPA must ensure that the standard proposed by the state will comply with the requirements of the CWA before approving it. See 33 U.S.C. §§ 1311(b)(1)(C), 1313(a)1342(a)(1) ; 40 C.F.R. § 122.4(d).

1. National Pollutant Discharge Elimination System Permits

An entity seeking to discharge a pollutant is required to obtain and comply with a permit that limits the amounts and kinds of pollutants being discharged. See NRDC v. EPA, 822 F.2d 104, 108 (D.C.Cir.1987) ; see also Waterkeeper All., 399 F.3d at 498 (discharge allowed "where ... permits ensure that every discharge of pollutants will comply with all applicable effluent limitations and standards"). This permit, known as a National Pollutant Discharge Elimination System ("NPDES") permit, establishes enforceable effluent limitations, as well as monitoring and reporting requirements.

NPDES permits, which are issued either by EPA or a state in a federally approved permitting system, see 33 U.S.C. § 1342, may be individual (issued to a specific entity to discharge pollutants at a specific place) or general (issued to an entire class of dischargers in a geographic location), see 40 C.F.R. §§ 122.21, 122.28(a)(2), 124.1 –.21, 124.51 –.66. The permit here is a general permit.

Permits can impose two different types of standards on discharges: (1) technology-based standards and (2) water quality-based standards. See 33 U.S.C. §§ 1311(b)(1)(C) and (b)(2)(A), 1313, 1342(a). The 2013 VGP imposes both.

a. Technology–Based Effluent Limits

Technology-based effluent limits ("TBELs") set effluent limitations on a point source based on how effectively technology can reduce the pollutant being discharged. See 33 U.S.C. §§ 1311(b), (e), 1314(b) ; see also PUD No. 1 of Jefferson Cty. v. Wash. Dep't of Ecology, 511 U.S. 700, 704, 114 S.Ct. 1900, 128 L.Ed.2d 716 (1994) (holding that, to achieve goals of CWA, EPA is required to "establish and enforce technology-based limitations on individual discharges into the country's navigable waters from point sources"). Congress designed this standard to be technology-forcing, meaning it should force agencies and permit applicants to adopt technologies that achieve the greatest reductions in pollution. See NRDC, 822 F.2d at 124 (holding that CWA seeks "not only to stimulate but to press development of new, more efficient and effective technologies," which is "essential purpose of this series of progressively more demanding technology-based standards").⁵

In determining the...