NATIONAL ASSOCIATION OF HOMEBUILDERS v. DEFENDERS OF WILDLIFE: IMPLICATIONS BEYOND CLEAN WATER ACT SECTION 402
| Jurisdiction | United States |
Environmental and Water Resources Counsel
City of Greeley, Colorado
1100 10th Street, Suite 401
Greeley, Colorado, 80631
john.kolanz@greeleygov.com
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The United States Supreme Court recently issued an opinion clarifying the interplay between seemingly conflicting mandatory provisions in the Clean Water Act ("CWA")1 and the Endangered Species Act ("ESA").2 The Court in National Association of Home Builders v. Defenders of Wildlife3 addressed the issue of whether the United States Environmental Protection Agency's ("EPA") delegation of permitting authority to a state under CWA Section 402(b)4 triggers the consultation requirement of ESA Section 7.5 Because this is only one of a hand full of United States Supreme Court opinions analyzing the ESA since its enactment 34 years ago, the case drew the attention of ESA practitioners.
While Defenders is known for its holding that EPA need not consult under ESA Section 7 when making such delegation, the lasting significance of the opinion may arise in other contexts. This article reviews the Court's opinion in Defenders and then discusses its implications beyond CWA Section 402(b), particularly those for state assumption of wetland permitting programs under CWA Section 404.6
Background
The issue in Defenders arose after the State of Arizona applied to EPA for authorization to administer its own National Pollutant Discharge
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Elimination System ("NPDES") permit program. The NPDES permit program was established under the CWA to control point source discharges of pollutants to the nation's waters.7 The CWA gave initial authority to EPA to administer the NPDES permitting program for each state, but allows a state to petition EPA to administer its own program in lieu of the federal program. Once EPA grants primacy to a state, that state assumes responsibility for issuing discharge permits, though EPA retains oversight.8
CWA Section 402(b) requires the governor of any state wishing to administer its own discharge permit program to submit to EPA a complete description of the program it proposes to establish and administer, along with a legal opinion certifying that state law provides adequate authority to carry out the proposed program.9 After reviewing the submittal, the Administrator "shall" grant primacy to the state unless he finds that the state lacks adequate authority to carry out the program as measured against nine specific performance criteria.10
Congress passed the ESA of 1973 to, among other things, help protect and conserve threatened and endangered species and the ecosystems upon which they depend.11 ESA Section 412 directs the Secretaries of Commerce and the Interior13 to, based on the best scientific and commercial data available, designate by regulation those species determined to be threatened or endangered along with their critical habitat.14 This designation (or "listing") triggers the protections of the Act.
Section 7(a)(2) contains one of the Act's main protective provisions. It provides that "[e]ach Federal agency shall, in consultation with and with the assistance of the Secretary, insure that any action authorized, funded, or carried out by such agency ... is not likely to jeopardize the continued
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existence of any endangered species or threatened species or result in the destruction or adverse modification of [the designated critical] habitat of such species."15 Regulations issued jointly by the Secretaries of Commerce and the Interior state that "Section 7 and the requirements of this part apply to all actions in which there is discretionary Federal involvement or control."16
If the Section 7 consultation process results in a determination that the proposed agency action will jeopardize a listed species or destroy or adversely modify its designated critical habitat, the Secretary must suggest "reasonable and prudent alternatives" to the proposed action.17 If no reasonable and prudent alternatives exist, or if the action agency or project proponent refuses or fails to implement them, the agency must terminate the action or seek an exemption from the cabinet-level Endangered Species Committee under 16 U.S.C. § 1536(e).18 Such exemptions are rarely granted.19
The State of Arizona applied in February 2002 for EPA authorization to administer its own discharge permit program. EPA then initiated ESA Section 7 consultation with USFWS to evaluate the effect of the transfer on any listed species or designated critical habitat. USFWS determined that the transfer of permitting authority would not directly impact water quality or adversely affect any listed species or designated critical habitat. The Service, however, expressed concern that the transfer could lead to the issuance of more discharge permits, since State authorities would not be subject to Section 7 consultation and could issue permits without having to mitigate impacts to listed species or their habitat. This could spur development and indirectly affect the habitat of certain listed species such as the cactus ferruginous pygmy-owl and the Pima pineapple cactus.20 USFWS therefore requested EPA to evaluate these potential indirect effects in considering the proposed transfer of permitting authority.21
In response, EPA determined that the link between its administrative act of granting permitting authority to Arizona and the potential adverse impacts to the habitat of certain listed species from increased development
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was too tenuous. EPA then decided that the mandatory nature of CWA Section 402(b) precluded it from refusing to transfer permitting authority to Arizona for any reason other than Arizona's failure to meet one or more of the nine factors listed in Section 402 (b).22
EPA and the Service resolved their disagreement at the headquarters level pursuant to a memorandum of understanding23 between the agencies. USFWS then issued a Biological Opinion24 concluding that the transfer of permitting authority would not jeopardize any listed species or adversely impact any designated critical habitat. Rather, the Service concluded that any loss of protection to listed species or designated critical habitat following the transfer of permitting authority directly resulted from Congressional intent that a state administer its own permitting program if it meets the nine requirements of CWA Section 402(b). USFWS further determined that EPA's retained oversight of the Arizona permitting program would adequately protect listed species and designated critical habitat after the program transfer.25
Two days later EPA approved Arizona's application to administer its own discharge permitting program.26 Shortly thereafter, the Defenders of Wildlife petitioned the Ninth Circuit Court of Appeals27 to review EPA's decision. The National Association of Home Builders intervened as a respondent in the appeal. The Ninth Circuit rejected EPA's position that the Section 7(a)(2) consultation requirement only applies to discretionary agency actions and therefore not to the transfer of NPDES permitting authority once a State meets the nine conditions of CWA Section 402(b). The Supreme Court granted certiorari to resolve a conflict among various federal circuits28 regarding the application of ESA Section 7(a)(2).29
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Supreme Court Opinion
The Supreme Court first considered the issue of whether EPA's transfer decision was arbitrary and capricious, as the Ninth Circuit had held, on the premise that, during the administrative proceedings, the Agency relied on legally contradictory positions regarding its Section 7 obligations. Specifically, the Ninth Circuit found inconsistent the two underlying bases for EPA's action -- that EPA must consult under ESA Section 7 on transfers of CWA permitting authority, but that, as a matter law, CWA Section 402(b) prevented the Agency from accounting for the impact on listed species or critical habitat in evaluating such transfers.30 The Supreme Court dismissed this issue fairly quickly. The Court characterized the issue as an agency change-of-mind, which it found quite acceptable "as long as appropriate procedures were followed."31
The Court then considered the substantive statutory issue, which required it to reconcile two seemingly conflicting Congressional mandates: the requirement in ESA Section 7 that an agency "shall" insure that its actions do not adversely impact listed species or their critical habitat, and the requirement in CWA Section 402(b) that EPA "shall" approve a delegation of permitting authority to a state unless it determines that the state lacks authority to perform nine specified functions.32
The Court agreed with the Ninth Circuit's observation that applying ESA Section 7 to a CWA Section 402(b) permit authority delegation analysis essentially adds another criterion to the nine specified.33 The Court characterized this as a repeal of the mandatory and exclusive Section 402(b) list of criteria.34 The Court further observed that such a reading of ESA Section 7 would implicitly repeal otherwise categorical commands in many other statutes by adding a further condition that such mandatory action poses no jeopardy to listed species. The Court rejected such an interpretation, noting that it has not historically favored, and will not presume, implied repeals absent clear legislative intent.35
The Court noted that the agencies charged with administering the ESA have attempted to resolve the conflict of competing commands between ESA Section 7 and mandatory provisions in other statutes through implementing regulations. In 50 CFR § 402.03, the agencies have
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determined that "Section 7 ... appl[ies] to all actions in which there is...
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