The Supreme Court quietly ended a decade long litigation saga on February 26 when it refused to review a lower court’s decision upholding EPA’s 2008 Water Transfers Rule. The regulation, adopted in the final year of the Bush Administration, represented EPA’s final decision that no NPDES permit was required under §402 of the Clean Water Act when water was moved from one body to another in the absence of any “intervening industrial, municipal or commercial use.” The rule was immediately challenged upon promulgation in several courts before all actions were consolidated in a federal district court New York. The district court rejected the rule as being inconsistent with the CWA. The Court of Appeals for the Second Circuit reversed in January 2017. With the Supreme Court declining further review, the Second Circuit’s decision will stand.
The Second Circuit’s decision is noteworthy for at least three reasons. First, it describes in great detail the litigation which had occurred both in the circuit as well as other courts about the rule. As a practical matter, water transfers tend to be most significant in the Western states where precipitation is captured in reservoirs, moved to different watersheds, and released to support a variety of end uses. Water transfers are also critical in many metropolitan regions as well. Indeed, this is how the case came to be heard in New York. The City of New York has long secured its potable water supplies from reservoirs in the Delaware River watersheds more than 100 miles north of New York. The water flows into the city through a remarkable system of tunnels, creeks, reservoirs, and aqueducts engineered in the 19th Century – a system which likely could never pass environmental muster today.
Second, the court approached the cases with remarkable humility. It analyzed the rule under the familiar principles of the Supreme Court’s 1984 Chevron decision in which a court is required to defer to an agency’s decision if reasonable. Referring to the task before it, the court wrote,
We must defer both to the Legislative Branch by refraining from reviewing Congress’s legislative work beyond determining what the statute at issue means and whether it is constitutional, and to the Executive Branch by using the various principles of deference, including Chevron deference, which we conclude is applicable in the case at bar. For us to decide for ourselves what in fact is the preferable route for addressing the substantive problem at hand would be directly contrary to this constitutional scheme. What we may think to be the best or wisest resolution of problems of water transfers and pollution emphatically does not matter. (Slip Op. at 28-29)
Finally, the court observed more broadly that, “no law pursues its purpose at all costs. . .. We see no reason to think that the Clean Water Act is an exception.” The court recognized that the issue before it was a close one, made more complicated by two prior decisions over the movement of water from the reservoirs to New York, as well as the fact that the CWA embraces multiple objectives, not all of which are wholly consistent. In deferring to the EPA’s regulation, the court acknowledged that,
the Act largely preserves states’ traditional authority over water allocation and use, while according the EPA a degree of policymaking discretion and flexibility with respect to water quality standards both of which might well counsel against requiring NPDES permits for water transfers and instead in favor of letting the States determine what administrative regimen, if any, applies to water transfers. Accordingly, Congress’s broad purposes and goals in passing the Act do not alone establish that the Act unambiguously requires that water transfers be subject to NPDES permitting. (Slip Op. at 46)
One of the themes which runs through the opinion is that the states remain remarkably free to fashion policies affecting the allocation and regulation of waters that are internal to them. After eight years in which EPA sought to federalize environmental policy, it will be interesting to see if the states recognize this freedom.
The article was authored by Blair M. Gardner, Jackson Kelly PLLC.