Texas Ind. Prod., Royalty Owners Assoc. v. E.P.A.

• Decision Date: 13 June 2005
• Docket Number: No. 03-3279.,No. 03-3865.,No. 03-3281.,No. 03-3280.,No. 03-3278.,No. 03-3277.,03-3277.,03-3278.,03-3279.,03-3280.,03-3281.,03-3865.
• Parties: TEXAS INDEPENDENT PRODUCERS AND ROYALTY OWNERS ASSOCIATION, et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

410 F.3d 964

TEXAS INDEPENDENT PRODUCERS AND ROYALTY OWNERS ASSOCIATION, et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.

No. 03-3277.

No. 03-3278.

No. 03-3279.

No. 03-3280.

No. 03-3281.

No. 03-3865.

United States Court of Appeals, Seventh Circuit.

Argued December 7, 2004.

Decided June 13, 2005.

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Janet L. McQuaid (argued), Fulbright & Jaworski, Austin, TX, Barry Sullivan, Jenner & Block, Chicago, IL, for Petitioners.

Alan D. Greenberg (argued), Department of Justice, Denver, CO, Bharat Mathur, Office of the Regional Counsel, Chicago, IL, Ann R. Klee, Office of General Counsel, Washington, DC, for Respondent.

Ellen B. Steen, R. Timothy McCrum, Crowell & Moring, Jeffrey S. Longsworth, Barnes & Thornburg, Washington, DC, for Intervenors.

Isaac Jackson, Jr., Office of the Attorney General, Baton Rouge, LA, David W. Cooney, Jr., Austin, TX, Michael Decker, Oklahoma Corporation Commission, Oklahoma City, OK, for Amicus Curiae.

Before BAUER, MANION, and WILLIAMS, Circuit Judges.

MANION, Circuit Judge.

On July 1, 2003, the Environmental Protection Agency issued its "Final National Pollutant Discharge Elimination System General Permit for Storm Water Discharges From Construction Activities" ("General Permit"). 68 Fed.Reg. 39,087 (July 1, 2003). Several organizations filed petitions for review of this final agency action, and those petitions were consolidated before this court. For the reasons that follow, we hold that the General Permit does not violate the Clean Water Act's requirements for public notice and public hearing. We also hold that in issuing the General Permit, the Environmental Protection Agency complied with the requirements of the Endangered Species Act. However, petitioner Natural Resources Defense Council, Inc., lacks standing to challenge other aspects of the General Permit, and accordingly we dismiss the remainder of its petition. As to the remaining petitioners who represent the interests of the oil and gas industries, we stay consideration of their challenges to the General Permit pending resolution by the Fifth Circuit as to whether those petitioners are required to obtain a permit in the first instance.

I.

Congress enacted the Clean Water Act ("CWA" or "Act")¹ "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). The CWA prohibits the "discharge of any pollutant" except in compliance with the Act's provisions. 33 U.S.C. § 1311(a). Under the Act's provisions, the discharge of pollutants into navigable waters is illegal unless authorized by a permit issued pursuant to § 402 of the Act. 33 U.S.C. § 1342. Section 402 established the National Pollutant Discharge Elimination System ("NPDES"), and requires dischargers to obtain a permit from the Environmental Protection Agency ("EPA") or an authorized state.² 33 U.S.C. § 1342(a)(1), (b).

The NPDES permitting system originally used individual permits, which was feasible for regulating discharges from wastewater facilities or industrial plants. However, by the 1980's it became clear that the individual permitting process was unworkable to regulate storm water discharges which can occur virtually anywhere. 56 Fed.Reg. 40948, 40949-50 (Aug. 16, 1991). Congress responded in 1987 by adding § 402(p) to the CWA. 33 U.S.C. § 1342(p). This section established a two-step phased approach to regulating storm water discharges. See 33 U.S.C. § 1342(p).

In Phase I, Congress required NPDES permits for storm water discharges from "industrial activities," 33 U.S.C. § 1342(p)(3)(A), defined as construction activities involving five or more acres, as well as discharges from certain large municipal storm sewer systems. 55 Fed.Reg. 47990, 48066 (Nov. 16, 1990). To implement the permit requirement for Phase I, the EPA decided to use a general permit system, as opposed to a system requiring individual permits for each construction activity. 55 Fed.Reg. 47,990, 48005-48006 (Nov. 16, 1990). With a general permit, the EPA issues a permit for specific types of activities and establishes specific rules for complying with the permit. Then, rather than apply for an individual permit, operators must file a Notice of Intent ("NOI") stating that they plan to operate under the general permit, and absent a negative ruling by the EPA, discharges that comply with the terms of the general permit are automatically authorized. The EPA uses a general permit system to assure "adequate environmental safeguards ... without the administrative and resource burdens involved in an individual permit issuance." 56 Fed.Reg. at 40961. The EPA issued its first general permit for construction-related storm water discharges in 1992, 57 Fed.Reg. 41176 (Sept. 9, 1992), and proposed a revised general permit in 1997. 62 Fed Reg. 29786 (June 2, 1997). Neither of these general permits is at issue in this case.

In preparation for Phase II, the EPA, as directed by Congress, studied all remaining storm water discharges and established "procedures and methods to control storm water discharges to the extent necessary to mitigate impacts on water quality." 33 U.S.C. § 1342(p)(5). Then, in 1999, the EPA issued its Phase II storm water rules, designating as Phase II sources small construction sites (one to five acres), smaller municipalities, and additional sources that might be designated on a case-by-case basis. 64 Fed.Reg. 68722 (Dec. 8, 1999); 40 C.F.R. § 122.26(b)(15).

On December 20, 2002, the EPA proposed a third General Permit for storm water discharges from both large and small construction sites.³ 67 Fed.Reg. 78116 (Dec. 20, 2002). The General Permit applies only in those jurisdictions where the EPA has not authorized the State or Indian Tribe to administer its own NPDES permitting program. These jurisdictions include Massachusetts, New Hampshire, Idaho, New Mexico, Alaska, and certain tribal lands. 33 U.S.C. § 1342(c).⁴ After holding a series of public meetings and considering public comments, the EPA published notice of the final General Permit on July 1, 2003. 68 Fed.Reg. 39087.

The final General Permit issued by the EPA requires operators to submit an NOI to be covered by the General Permit, and mandates that a responsible corporate official certify the basis for eligibility for such coverage. General Permit, Appendix G at 11A.1. The General Permit also requires that the operator create, maintain, and implement a site-specific Storm Water Pollution Prevention Plan ("SWPPP"), which must also be certified by a corporate official. General Permit 3.13; General Permit, Appendix G at 11A.1. The discharger must further implement best management practices ("BMP") necessary to comply with water quality standards, assure weekly site inspections, and document those inspections, including detailing weather conditions. See General Permit 4.5A (construction operators must "select, install, and maintain BMPs at your construction site" that minimize pollutants in the discharges as necessary to meet applicable water quality standards); General Permit 3.10.A (detailing requirements for inspections).

Shortly before it published the final regulation for the General Permit, the EPA issued 68 Fed.Reg. 11325 (March 10, 2003). That final rule provided that "[d]ischarges associated with small construction activity at such oil and gas sites will require permit authorization by March 10, 2005." 68 Fed.Reg. at 11330.⁵ On June 9, 2003, several organizations representing business interests in the oil and gas industry ("Oil and Gas Petitioners") filed a petition challenging that regulation in the Fifth Circuit. In their petition, the Oil and Gas Petitioners claimed that the EPA lacks authority to require storm water discharge permits for oil and gas construction activities based on § 402(l)(2) of the CWA. In § 402(l)(2), Congress expressly prohibited the EPA from requiring a § 402 permit for storm water discharges for oil and gas activities unless the discharges were contaminated by contact with materials located on the site of such operations. 33 U.S.C. § 1342(l)(2).⁶ That petition is still pending before the Fifth Circuit. See Indep. Petro v. EPA, No. 03-60506 (5th Cir. oral argument Jan. 31, 2005).

In addition to challenging the EPA's proposed final rule, arguing that they are exempt from the permit requirements, the Oil and Gas Petitioners filed a petition for review of the terms of the General Permit in the Fifth Circuit. The Natural Resources Defense Council ("NRDC"), an environmental advocacy organization, also filed a petition for review of the General Permit. That petition was filed before this court. The Oil and Gas Petitioners' petition was consolidated with the NRDC petition pending in this court, and leave was granted the National Association of Home Builders, the Wisconsin Builders Association, and the Associated General Contractors of America (collectively "Builder Groups"), to intervene in support of the General Permit regulation.

II.

On appeal, petitioner NRDC raises three main arguments. First, the NRDC argues that the General Permit violates the mandates of the CWA by "authorizing the discharge of pollutants without ensuring that the discharge will meet the water quality and technology requirements of the CWA." Second, the NRDC challenges the "General Permit's failure to mandate public availability of the NOI and the SWPPP, as well as its failure to provide the public with the opportunity for a public hearing on the NOI and the SWPPP...." Third, the NRDC claims that the General Permit violates the Endangered Species Act ("ESA"). 16 U.S.C. §§ 1531, et seq.

For their part, the Oil and Gas Petitioners first reiterate their position that the storm water permit requirements do not apply to construction activities in the oil and gas industry. The Oil and Gas Petitioners maintain, however, that in this appeal, they are not challenging the EPA's decision that they...