Texas Mun. Power Agency v. Administrator of U.S. E.P.A.

• Citation: 836 F.2d 1482
• Decision Date: 10 February 1988
• Docket Number: No. 86-4877,86-4877
• Parties: , 56 USLW 2474, 18 Envtl. L. Rep. 20,538 TEXAS MUNICIPAL POWER AGENCY, Petitioner, v. ADMINISTRATOR OF the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and The United States Environmental Protection Agency, Respondents.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1482

836 F.2d 1482

27 ERC 1249, 56 USLW 2474, 18 Envtl.

L. Rep. 20,538

TEXAS MUNICIPAL POWER AGENCY, Petitioner, v. ADMINISTRATOR OF the UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY and The United States Environmental

Protection Agency, Respondents.

No. 86-4877.

United States Court of Appeals,

Fifth Circuit.

Feb. 10, 1988.

Paul G. Gosselink, Leslie E. Barras, Austin, Tex., for petitioner.

Brian Faller, Dept. of Justice, Lee M. Thomas, Adm'r, Pamela E. Savage, E.P.A., Washington, D.C., Jan M. Horn, Dallas, Tex., Edwin Meese, Atty. Gen., U.S. Dept. of Justice, Stephen Lee Samuels, Washington, D.C., for respondents.

Petition for Review of an Order of the Environmental Protection Agency.

Before WISDOM, GEE, and CAROLYN DINEEN KING, ^* Circuit Judges.

WISDOM, Circuit Judge:

This case is part of a dispute over whether it is lawful for the United States Environmental Protection Agency ("EPA") to regulate internal waters which are an integral part of the waste treatment system of the Texas Municipal Power Agency ("TMPA"). The EPA has been doing so for almost nine years. We hold that it may continue for at least two more years.

I.

TMPA, an electric utility, operates a lignite-fired steam generating plant next to the Gibbons Creek Reservoir in Grimes County, Texas. As part of the waste treatment system for the plant, waste water flows through a series of settling ponds and, at the end of this series, discharges into the Gibbons Creek Reservoir. The purpose of the ponds is to allow suspended solids to settle out of the water before it flows into the reservoir. Most of the flow into the settling ponds consists of ash-laden water from TMPA's generating plant. But in addition, at a point known as outfall 301, treated wastewater flows into the ponds from a sewage treatment facility serving the 300 employees at the plant.

Under the Clean Water Act ("CWA"), the EPA regulates TMPA's waste treatment through the terms it includes in the National Pollution Discharge and Elimination System ("NPDES") permit TMPA requires for discharging waste into the Gibbons Creek Reservoir. ¹ Each NPDES permit runs for a fixed term not exceeding five years. ²

Since November 1977, several NPDES permits have regulated TMPA's discharges into the Gibbons Creek Reservoir as well as its discharges into the settling ponds at outfall 301. The EPA last revised its regulations on outfall 301 in March 1984, issuing the current permit, set to expire in April 1989. All this passed without objection from TMPA.

In July 1985, however, over a year after the EPA renewed the relevant permit, TMPA petitioned this court for review of the restrictions for outfall 301, contending that the EPA should have eliminated them. In Texas Municipal Power Agency v. EPA ("TMPA I "), we dismissed this petition because it was not timely filed. ³

TMPA then applied to the EPA under CWA section 402, ⁴ asking the agency to modify the permit to delete the restrictions on outfall 301. The EPA denied the modification in November 1986. Here, TMPA timely petitions for review of that denial and for the second time brings the dispute before this court. ⁵

II.

In TMPA I, we held that TMPA has lost the right to a full review of the permit. In this case, unlike TMPA I, we reach the merits of TMPA's complaint against the EPA. But because this petition is for review of a modification denied by the EPA, our review is more restricted than review of EPA renewal or issuance of an NPDES permit.

Section 701 of the Administrative Procedure Act provides that the action of "authority of the Government of the United States" is subject to judicial review except where there is a statutory prohibition on review or where "agency action is committed to agency discretion by law". ⁶ In the often-cited case of Abbott Laboratories v. Gardner, the Supreme Court said that "judicial review of a final agency action ... will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress". ⁷ In TMPA I, however, we found just such a Congressional purpose in section 509 of the CWA. Our reasoning in that case provides the starting point for our analysis in this one:

Section 509(b)(1) of the Clean Water Act states:

Review of the Administrator's action ... in issuing or denying any permit under section 1342 of this title [NPDES], may be had by any interested person in the Circuit Court of Appeals of the United States for the Federal judicial district in which such person resides or transacts such business upon application by such person. Any such application shall be made within days from the date of such determination, approval, promulgation, issuance or denial, or after such date only if such application is based solely on grounds which arose after such [120th] day." 33 U.S.C. Sec. 1369(b)(1) (emphasis added).

Statutory time limits on petitions for review of agency actions are jurisdictional in nature such that if the challenge is brought after the statutory time limit, we are powerless to review the agency's action.... These time limitations impart finality to the administrative process, thus conserving administrative resources.... The requirements show a congressional decision to impose statutory finality on agency actions that we, as a court, may not second-guess.... The statutory time limitations have been strictly enforced. ⁸

We held that Congress intended that anyone wishing to challenge the terms of an NPDES permit must do so within the period prescribed by section 509(b)(1) or " 'lose forever the right to do so, even though that action might eventually result in the imposition of severe civil or criminal penalties' ". ⁹ 9] The rule is "now or never". ¹⁰ If no timely challenge is filed, the permit stands until its expiration--at most, five years.

It follows from this scheme that Congress did not intend petitions for modification to provide a second chance for full review of an NPDES permit after the statute of limitation has run from the issue or renewal of the permit. This conclusion is buttressed by the laws and legislative history concerning petitions for modification. CWA section 402 gives the EPA discretion to modify permits "for cause". ¹¹ Section 402 gives three examples of causes for modification; all are reasons to tighten limitations on effluents. ¹² EPA regulations appearing at 40 C.F.R. Sec. 122.62 list in greater detail the permissible grounds for modification "for cause". These grounds are narrower than the permissible grounds for a challenge to the issuance or renewal of an NPDES permit. ¹³

Thus, our review here is narrow in scope. In particular, TMPA petitioned the EPA for modification on the basis of 40 C.F.R. Sec. 122.62(a)(16): "[t]o correct technical mistakes, such as errors in calculation, or mistaken interpretations of law made in determining permit conditions". Accordingly, we review the permit regulating outfall 301 for "technical mistakes" or "mistaken interpretations of law".

Further, our review of a denial of a modification is more deferential to EPA than review of an issuance of an NPDES permit. Although the denial of modification is reviewable agency action, ¹⁴ it is action at one remove from the issuance of the permit and entrusted to broad EPA discretion. Congress clearly did not view modification as a vehicle which dischargers could freely use to relax or eliminate effluent limitations. ¹⁵ Rather, it intended modification to give the EPA flexibility to alter permits in response to changed circumstances or to correct routine errors. The language of both CWA section 402 and 40 C.F.R. Sec. 122.62 make it clear that the EPA is not required to modify any NPDES permit. ¹⁶ Rather, the EPA may do so at its discretion. In keeping with the goal of limiting challenges to the permit after the period for full review has passed, the regulations twice state that only actual modification of an NPDES permit reopens the matter. ¹⁷ A mere request for modification does not. The EPA's broad discretion to accept or deny a proposed modification places a heavy burden on TMPA to show that the denial requires reversal. ¹⁸

A.

We now address whether the NPDES permit regulating outfall 301 is based upon "mistaken interpretations of law". The EPA is charged with regulating pollution of the "waters of the United States". ¹⁹ To do so, it is usually necessary only that the EPA regulate direct discharges into those waters; the EPA does not generally regulate waters internal to a waste processing system. But the EPA's "internal waste stream rule", first promulgated in 1979, provides:

(1) When permit effluent limitations or standards imposed at the point of discharge are impractical or infeasible, effluent limitations or standards for discharges of pollutants may be imposed on internal waste streams or cooling water streams.

(2) Limits on internal waste streams will be imposed only when [EPA notice to the polluter] sets forth the exceptional circumstances which make such limitations necessary, such as when the final discharge point is inaccessible ..., the wastes at the point of discharge are so diluted as to make monitoring impracticable, or the interferences among pollutants at the point of discharge would make detection analysis impossible. ²⁰

This rule is the legal basis for EPA regulation of outfall 301.

TMPA's principal contention is that the internal waste stream rule exceeds EPA authority. TMPA argues that internal waste streams are not "waters of the United States" and that therefore the EPA has no right to regulate discharges into them. Thus, TMPA concludes, the regulation of outfall 301 is rooted in a mistaken interpretation of law and must be modified.

Even if modification to correct mistakes of law were mandatory, we find no such limit on EPA powers. The CWA does not define "waters of the United States". Rather, the EPA promulgated 40 C.F.R. Sec. 122.2 to define the term:

Waters of the United States or waters of the U.S. means:

(a) All...