Natural Resources Defense Council, Inc. v. U.S. E.P.A.

• Decision Date: 22 December 1993
• Docket Number: No. 92-2520,92-2520
• Citation: 16 F.3d 1395
• Parties: 24 Envtl. L. Rep. 20,496 NATURAL RESOURCES DEFENSE COUNCIL, INCORPORATED; Environmental Defense Fund, Incorporated; Audubon Naturalist Society of the Central Atlantic States; Maryland Conservation Council; Conservation Federation of Maryland; John Gottschalk; Mark Kovach; Ken Penrod; Glen Peacock; C.L. Fitchett; Louis W. Powers, Plaintiffs-Appellants, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Edwin B. Erickson, Region III Administrator; William Reilly, Administrator, United States Environmental Protection Agency; Westvaco Corporation; The American Paper Institute, Incorporated; Chesapeake Corporation; Union Camp Corporation; The State of Maryland, Department of the Environment, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1395

16 F.3d 1395

24 Envtl. L. Rep. 20,496

NATURAL RESOURCES DEFENSE COUNCIL, INCORPORATED;

Environmental Defense Fund, Incorporated; Audubon

Naturalist Society of the Central Atlantic States; Maryland

Conservation Council; Conservation Federation of Maryland;

John Gottschalk; Mark Kovach; Ken Penrod; Glen Peacock;

C.L. Fitchett; Louis W. Powers, Plaintiffs-Appellants, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Edwin B.

Erickson, Region III Administrator; William Reilly,

Administrator, United States Environmental Protection

Agency; Westvaco Corporation; The American Paper

Institute, Incorporated; Chesapeake Corporation; Union

Camp Corporation; The State of Maryland, Department of the

Environment, Defendants-Appellees.

No. 92-2520.

United States Court of Appeals, Fourth Circuit.

Argued June 9, 1993.

Decided Dec. 22, 1993.

ARGUED: David Sandburg Bailey, Environmental Defense Fund, Washington, D.C., for appellants. John Alan Bryson, United States Department of Justice, Washington, D.C., for appellees. ON BRIEF: Robert W. Adler, Senior Attorney, Natural Resources Defense Counsel, Washington, D.C., for appellants. Myles W. Flint, Acting Assistant Attorney General, Greer S. Goldman, David C. Shilton, United States Department of Justice, Washington, D.C.; Manning Gasch, Jr., Joseph M. Spivey, III, Hunton & Williams, Richmond, Virginia; Roland DuBois, Office of General Counsel, United States Environmental Protection Agency, Washington, D.C.; Andrew Duchovnay, Office of Regional Counsel, United States Environmental Protection Agency, Philadelphia, Pennsylvania, for appellees.

Before HALL and NIEMEYER, Circuit Judges, and BRITT, United States District Judge for the Eastern District of North Carolina, sitting by designation.

OPINION

BRITT, District Judge:

This appeal arises out of consolidated suits brought by the Natural Resources Defense Council ("NRDC") and Environmental Defense Fund ("EDF") to challenge the approval by the United States Environmental Protection Agency ("EPA") of state water quality standards implemented by Maryland and Virginia. ¹ Specifically, NRDC and EDF contest the approval of these state standards as they relate to dioxin. ²

The district court below issued two published opinions regarding this action; Natural Resources Defense Council v. EPA, 770 F.Supp. 1093 (E.D.Va.1991) ("NRDC I "), and Natural Resources Defense Council v. EPA, 806 F.Supp. 1263 (E.D.Va.1992) ("NRDC II ").

In NRDC I, the district court dismissed the original Count One of the Complaint filed in the Maryland action and held that EPA had discretion under the Clean Water Act ("CWA" or "Act"), 33 U.S.C. Secs. 1251 et seq., whether to include numerical criteria for all identifiable effects of dioxin and to revise criteria when the latest available scientific knowledge demanded it. However, the court allowed plaintiff NRDC an opportunity to amend Count One of the Maryland complaint to assert a claim solely under the Administrative Procedure Act ("APA"), 5 U.S.C. Secs. 500 et seq. NRDC I, 770 F.Supp. at 1108-10.

In NRDC II, the district court granted EPA's motions to dismiss and for partial summary judgment. The court held that EPA sufficiently reviewed the Maryland and Virginia dioxin standards in accordance with the CWA and that EPA did not abuse its discretion in determining that Maryland and Virginia relied on scientifically defensible assumptions in setting dioxin standards. The district court also dismissed amended Count One of the Maryland complaint on grounds that NRDC failed to exhaust administrative remedies. NRDC II, 806 F.Supp. at 1277-78.

NRDC and EDF appeal the district court's decisions and make the following assignments of error: (1) that the district court applied an incorrect legal standard in deciding whether EPA properly approved the state water quality standards; (2) that the district court erred in affirming EPA's approval of the state dioxin standards; and (3) that the district court erred in dismissing both the original and amended Count One of the Maryland complaint. Finding no error, we affirm.

I. FACTS

A full account of the facts can be found in NRDC I, 770 F.Supp. at 1094-96, and NRDC II, 806 F.Supp. at 1266-72. For ease of reference, this court summarizes the facts as follows: On 11 September 1989, the Maryland Department of the Environment ("MDE") sought to revise Maryland's water quality standards to allow its waters to contain dioxin in the amount of 1.2 parts per quadrillion ("ppq"), an amount indisputably less protective than EPA's own guidance criterion of .0013 ppq. ³ However, MDE chose this 1.2 ppq criterion because it had been based on the Food and Drug Administration's ("FDA") less conservative cancer potency factor and because MDE felt that EPA's cancer potency factor overestimated the carcinogenic potential of dioxin. ⁴ After public hearings were held on the matter, Maryland adopted the 1.2 ppq standard and submitted it to EPA for review and approval.

Similar events took place in Virginia. On 11 December 1989, the Virginia State Water Control Board ("VSWCB") proposed to revise its water quality standards to include the 1.2 ppq dioxin standard. After public hearings were held, VSWCB submitted its proposal to EPA for review and approval on 27 September 1990.

EPA approved the Maryland standard on 12 September 1990, and approved the Virginia standard on 25 February 1991. Accompanying each approval, a Technical Support Document ("TSD") was issued by EPA and set out in detail EPA's scientific review of MDE's and VSWCB's analysis in deriving the 1.2 ppq standard. EPA concluded that Maryland's and Virginia's use of the 1.2 ppq standard for dioxin was scientifically defensible, protective of human health, and in full compliance with the CWA.

Plaintiffs then initiated this suit in the district court to challenge EPA's 1984 dioxin criteria document and EPA's approval of the Maryland and Virginia water quality standards. As noted above, the district court dismissed original Count One of the Maryland complaint on grounds that Sec. 304(a) of the CWA does not impose a mandatory duty on EPA to develop numeric criteria for dioxin or to update its 1984 dioxin criteria document. NRDC I, 770 F.Supp. at 1107. After giving NRDC an opportunity to amend Count One, the district court dismissed the amended count for lack of finality and failure to exhaust administrative remedies. NRDC II, 806 F.Supp. at 1278. The district court also granted summary judgment to EPA on the remaining claims, holding that EPA had not acted arbitrarily or capriciously in approving the state water quality standards. Id. at 1277. This appeal followed.

II. STATUTORY SCHEME

The main purpose of the CWA is to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters" by reducing, and eventually eliminating, the discharge of pollutants into these waters. 33 U.S.C. Sec. 1251(a) (Supp.1993). While the states and EPA share duties in achieving this goal, primary responsibility for establishing appropriate water quality standards is left to the states. See id. Secs. 1251(b) (1982); Chevron U.S.A., Inc. v. Hammond, 726 F.2d 483 (9th Cir.1984), cert. denied sub nom. Chevron U.S.A. Inc. v. Sheffield, 471 U.S. 1140, 105 S.Ct. 2686, 86 L.Ed.2d 703 (1985); District of Columbia v. Schramm, 631 F.2d 854 (D.C.Cir.1980). EPA sits in a reviewing capacity of the state-implemented standards, with approval and rejection powers only. 33 U.S.C. Sec. 1313(c) (1982 & Supp.1993). Water quality standards are a critical component of the CWA regulatory scheme because such standards serve as a guideline for setting applicable limitations in individual discharge permits.

In an effort to meet the CWA's primary goal, section 402 of the Act (33 U.S.C. Sec. 1342) establishes the National Pollutant Discharge Elimination System ("NPDES") permit program. ⁵ Under this program, permits are issued by either the EPA or by states that have been allocated NPDES permitting authority. ⁶ Id. Sec. 1342 (1982 & Supp.1993). However, a state's exercise of NPDES permitting authority is subject to EPA approval. Id. Secs. 1342(c), (d) (1982 & Supp.1993). All NPDES permits must take into account technology-based effluent limitations that reflect the pollution reduction achievable based on specific equipment or process changes, without reference to the effect on the receiving water, and, where necessary, more stringent limitations representing the level of control necessary to ensure that the receiving waters attain and maintain state water quality standards. Id. Secs. 1311(b) (1982), 1313(c) (1982 & Supp.1993).

Additionally, the CWA requires each state to adopt water quality standards for all waters of that state and to review them at least every three years. Id. Secs. 1313(a), (b), (c)(1) (1982 & Supp.1993). To adopt these standards, states must first classify the uses for which the water is to be protected, such as fishing and swimming, and then each state must determine the level of water quality necessary to protect those uses. Thus, the following three factors are considered when adopting or evaluating a water quality standard: (1) one or more designated uses of the state waters involved; (2) certain water quality criteria, expressed as numeric pollutant concentration levels or narrative statements representing a quality of water that supports a particular designated use; and (3) an antidegradation policy to protect existing uses and high quality waters. Id. Sec. 1313(c)(2)(A) (Supp.1993); 40 C.F.R. Sec. 131.

States are directed to adopt numerical water quality criteria for specific toxic pollutants, such as dioxin, for which EPA has published numerical criteria guidance under 33 U.S.C. Sec. 1314(a), if that pollutant can reasonably be expected to interfere with the designated uses of the states' waters. Id. Sec. 1313(c)(2)(B) (Supp.1993). As mentioned previously, states must submit their new or revised water quality...