Team No. 54

C.A. No. 17-000123 and 17-000124

UNITED STATES COURT OF APPEALS

FOR THE TWELFTH CIRCUIT

ENERPROG, L.L.C.,

Petitioner,

and

FOSSIL CREEK WATCHERS, INC.,

Petitioner,

vs.

UNITED STATES ENVIRONMENTAL PROTECTIONS AGENCY,

Respondent.

On Appeal from the Environmental Appeals Board of the United States Environmental

Protection Agency, Washington, D.C. NPDES Appeal No. 17-0123

Brief of Petitioner, Fossil Creek Watchers

TABLE OF CONTENTS TABLE OF AUTHORITIES ...................................................................................................... iv

GLOSSARY.................................................................................................................................. ix

STATEMENT OF JURISDICTION ............................................................................................1

STATEMENT OF ISSUES FOR REVIEW ................................................................................1

STATEMENT OF THE CASE .....................................................................................................2

A. Statement of Facts ..............................................................................................................2

1. Moutard Electric Generating Station (MEGS) Operation ......................................3

2. State Requirements for the Renewal of MEGS’s NPDES Permit ..........................5

3. The Final Rule Impact on MEGS ...........................................................................5

B. Procedural History ..............................................................................................................7

SUMMARY OF THE ARGUMENTS .........................................................................................7

ARGUMENTS................................................................................................................................7

STANDARD OF REVIEW ...........................................................................................................9

I. THE FINAL PERMIT PROPERLY INCLUDED CONDITIONS REQUIRING CLOSURE AND REMEDIATION OF THE COAL ASH POND AS PROVIDED BY THE STATE OF PROGRESS IN THE CWA SECTION 401 CERTIFICATION. .........9

A. The EPA was Required to Include All Such Progress Certification Conditions Because the EPA Does Not Have Jurisdiction to Review the Appropriateness of State Conditions. ............................................................................................................................................9

B. The Ash Pond Closure and Remediation Conditions Constitute “Appropriate Requirements of State Law” but Independently Violate the Requirement for a CWA Section 404 Permit. ..........................................................................................................11

1. The United States Supreme Court has given states broad authority in determining what constitutes “appropriate requirements of State law” and this Court should follow established precedent. ..............................................................................11

2. The ash pond closure and remediation conditions require a CWA section 404 permit. ...................................................................................................................14

II. EPA CANNOT INVOKE SECTION 705 AFTER THE 20l5 ELGS COMPLIANCE DATES. ...................................................................................................................................14

A. The Plain Language of Section 705 Does Not Authorize the Extension of “Compliance Dates, Only Effective Dates.” ..........................................................................................15

B. The EPA Failed to Satisfy the Four-Part Test for an “Indefinite Stay” under 5 U.S.C. § 705. ...................................................................................................................................16

ii

III. EPA REGION XII COULD RELY ON THE BEST PROFESSIONAL JUDGMENT AS AN ALTERNATIVE GROUND FOR REQUIRING ZERO DISCHARGE OF COAL ASH TRANSPORT WASTES. ................................................................................18

IV. NPDES PERMITTING REQUIREMENTS DO APPLY TO ENERPROG’S POLLUTANT DISCHARGES INTO THE MEGS ASH POND, BECAUSE EPA’S JULY 21, 1980 SUSPENSION OF PROVISIONS OF 40 C.F.R. § 122.2 DID NOT FOLLOW THE REQUIREMENTS OF 5 U.S.C. § 553(b)-(d), AND THUS WAS ARBITRARY AND CAPRICIOUS UNDER § 706(2)(A). .................................................20

A. Rescission, and Suspension, of an Agency Rule is Subject to the Same Review as Rule Promulgation. ...................................................................................................................21

B. The Four Statutory Exceptions to § 553 Do Not Apply in this Case. ..............................23

C. The Third Circuit’s Opinion in NRDC v. EPA is Illustrative for the Case at Bar. ..........25

D. EPA Similarly Seeks to Avoid Necessary § 553 Procedures Here by Using the Label “Suspension.”. ..................................................................................................................26

V. THE CLOSURE AND CAPPING OF THE MEGS ASH POND REQUIRES A PERMIT FOR THE DISCHARGE OF FILL MATERIAL PURSUANT TO SECTION 404 OF THE CWA. ................................................................................................................28

A. The Language and Policy of the CWA Support Requiring EnerProg to Obtain a Dredge or Fill Permit. ...................................................................................................................30

CONCLUSION ............................................................................................................................31

iii

TABLE OF AUTHORITIES

United States Supreme Court Cases

Bates v. United States, 522 U.S. 23 (1997) ................................................................................... 15

Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971) ................................ 21, 22

Columbia Broad. Sys., Inc. v. United States, 316 U.S. 407 (1942) .............................................. 23

Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) ....................................................... 17

EPA v. California ex rel. State Water Res. Control Bd., 426 U.S. 200 (1976) ............................. 18

EPA v. California ex rel. State Water Resources Control Bd., 426 U.S. 200 (1976) ................... 12

FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009).................................................... 17, 21

Mass. v. EPA, 549 U.S. 497 (2007) .............................................................................................. 21

Motor Vehicle Mfr.'s Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) .............. 21, 22

PUD No. 1 of Jefferson Cty. v. Wash. Dep’t of Ecology, 511 U.S. 700 (1994) .......... 11, 12, 13, 14

Rapanos v. United States, 547 U.S. 715 (2006)............................................................................ 30

Solid Waste Agency of N. Cook Cty. (SWANCC) v. United States Army Corps of Eng'rs,

531 U.S. 159 (2001) .............................................................................................. 29, 30, 31

United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985) .................................. 30, 31

Winter v. NRDC, 555 U.S. 7 (2008) ............................................................................................. 17

Federal Cases

American Fed’n of Gov’t Emps. v. Block, 655 F.2d 1153 (D.C. Cir. 1981) ........................... 23, 25

American Hosp. Ass’n. v. Bowen, 834 F.2d 1037 (D.C. Cir. 1987). .......................... 23, 24, 25, 28

American Mining Congress v. Mine Safety & Health Admin, 995 F.2d 1106 (D.C. Cir. 1993) ... 24

American Rivers, Inc. v. FERC, 129 F.3d 99 (2d Cir. 1997) ........................................................ 10

Batterton v. Marshall, 648 F.2d 694 (D.C. Cir. 1980) ........................................................... 24, 28

iv

Consumer Energy Council of America v. FERC, 673 F.2d 425 (D.C. Cir. 1982) ........................ 22

Council of the S. Mountains, Inc. v. Donovan, 653 F.2d 573 (D.C. Cir. 1973) ............................ 25

EDF v. Gorsuch, 713 F.2d 802 (D.C. Cir. 1983) .......................................................................... 22

Gibson Wine Co. v. Snyder, 194 F.2d 329 (D.C. Cir. 1952) ......................................................... 23

In re Pub. Serv. Co. of N. H., 1 E.A.D. 389, 1977 WL 45581 (1977) .................................... 17, 22

Jicarilla Apache Nation v. U.S. Dept. of Interior, 613 F.3d 1112 (D.C. Cir. 2010 ...................... 18

Joseph v. FCC, 404 F.2d 207 (D.C. Cir. 1968) ............................................................................ 21

League of Women Voters of U.S. v. Newby, 838 F.3d 1 (D.C. Cir. 2016) .................................... 16

Miccosukee Tribe of Indians of Fla. v. United States, 2008 U.S. Dist. LEXIS 57809 (S.D. Fla.) 23

N.J. Dep’t. of Envtl. Prot. v. EPA, 626 F.2d 1038 (D.C. Cir. 1980) ............................................. 23

Nat'l Sec. Counselors v. CIA, 931 F. Supp. 2d 77 (D.C. Cir. 2013) ............................................. 24

NRDC v. EPA, 683 F.2d 752 (3d Cir. 1982) .......................................................................... passim

NRDC v. SEC, 606 F.2d 1031 (D.C. Cir. 1979) ........................................................................... 21

Pac. Gas & Elec. Co. v. FPC, 506 F.2d 33 (D.C. Cir. 1974) ....................................................... 24

Pursuing America’s Greatness v. FEC, 831 F.3d 500 (D.C. Cir. 2016) ...................................... 17

Richardson v. United States Customs Serv., 47 F.3d 415 (Fed. Cir. 1995) .................................. 21

Roosevelt Campobello Int'l Park Comm'n v. EPA, 684 F.2d 1041 (1st Cir. 1982) ...................... 10

Sharon Steel Corp. v. EPA, 597 F.2d 377 (3d Cir. 1979) ............................................................. 25

Sierra Club v. Jackson, 833 F. Supp. 2d 11 (D.D.C 2012)..................................................... 16, 18

Sierra Club v. Jackson, 833 F. Supp. 2d 11 (D.D.C. 2010).......................................................... 15

Silverman v. Eastrich Multiple Inv’r Fund, L.P., 51 F.3d 28 (3d Cir. 1995) ............................... 15

Southeast Resource Recovery Facility Auth. v. Montenav Int’l Corp., 973 F.2d 711 (9th Cir.

1992)............................................................................................................................................ 9

v

Southwestern Electric Power Co., et al. v. EPA, No. 15-60821 ..................................................... 7

State Cases

Arnold Irrigation Dist. v. Dep’t of Envtl. Quality, 717 P.2d 1274 (Or. Ct. App. 1986) ............... 12

Federal Statutes

5 U.S.C. § 551 (2012) ................................................................................................................... 21

5 U.S.C. § 553 (2012) ....................................................................................................... 21, 23, 25

5 U.S.C. § 701 (2012) ................................................................................................................... 21

5 U.S.C. § 705 (2012) ................................................................................................................... 16

5 U.S.C. § 706 (2012) ................................................................................................................... 22

33 U.S.C. § 402 (2012) ................................................................................................................. 19

33 U.S.C. § 509 (2012) ................................................................................................................... 1

33 U.S.C. § 1251 (2012) ..................................................................................................... 2, 12, 29

33 U.S.C. § 1311 (2012) ..................................................................................................... 2, 12, 13

33 U.S.C. § 1313 (2012) ............................................................................................................... 12

33. U.S.C. § 1341 (2012) ........................................................................................................ 10, 13

33 U.S.C. § 1342 (2012). .............................................................................................. 2, 18, 19, 32

33 U.S.C. § 1344 (2012) ........................................................................................................... 2, 31

33 U.S.C. § 1362 (2012) ............................................................................................................... 30

33 U.S.C § 1369 (2012) .................................................................................................................. 1

33 U.S.C. § 1370 (2012) ............................................................................................................... 12

Regulations and Administrative Materials

33 C.F.R. § 323 (2008) ................................................................................................................. 30

33 C.F.R. § 323 (2017) ................................................................................................................. 30

vi

33 C.F.R. § 328 (2015) ........................................................................................................... 30, 31

40 C.F.R. §121 (1993) .................................................................................................................. 13

40 C.F.R. § 122 (2015) ................................................................................................................... 4

40 C.F.R. § 124 (2017) ................................................................................................................. 10

40 C.F.R. § 125 (2017) ..................................................................................................... 16, 18, 19

40 C.F.R § 423 (2016) .................................................................................................................... 4

40 C.F.R. § 423 (Sept. 18, 2017) .................................................................................................... 6

Federal Register Notices

45 Fed. Reg. 33, 424 (May 19, 1980) ........................................................................................... 26

45 Fed. Reg. 48,620 (July 21, 1980) ............................................................................................. 26

48 Fed. Reg. 14,153 (April 1, 1983) ............................................................................................. 26

80 Fed. Reg. 37,114 (June 29, 2015). ........................................................................................... 26

80 Fed. Reg. 67,838 (Nov. 3, 2015)............................................................................................ 4, 6

82 Fed. Reg. 19, 005 (Apr. 25, 2017) ..................................................................................... 6, 7, 8

Other Authorities

Black’s Law Dictionary (10th ed. 2014)....................................................................................... 15

Environmental Assessment for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (“Final EA”), Sept. 2015, Docket ID No. EPA-HQ-OW-2009-0819-6427, available at https://www.regulations.gov/document?D=EPA-HQ-OW-2009-0819-6427 ..................... 2

EPA, Steam Electric Power Generating Effluent Guidelines - 2015 Final Rule, Effluent

Guidelines (Sept. 18, 2017), https://www.epa.gov/eg/steam-electric-power-generating-effluent-guidelines-2015-final-rule ..................................................................................... 6

H.R. Conf. Rep. No. 95-830 (1977), U.S. Code Cong. & Admin. News 1977 ............................ 13

Kalen, Commerce to Conservation: The Call for a National Water Policy and the Evolution of Federal Jurisdiction Over Wetlands, 69 N. D. L. Rev. 873 (1993) .................................. 29

vii

S. Conf. Rep. No. 92-1236 (1972) ................................................................................................ 30

United States Nuclear Regulatory Commission: NRC Library (last updated Apr. 10, 2017) https://www.nrc.gov/reading-rm/basic-ref/glossary/maximum-dependable-capacity-gross.html ............................................................................................................................ 4

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GLOSSARY

APA Administrative Procedure Act

Corps Army Corps of Engineers

BAT Best Available Technology Economically Achievable

CWA Clean Water Act

CACA Progress Coal Ash Cleanup Act

EAB Environmental Appeals Board

ELG(s) Effluent Limitations Guidelines

EPA Environmental Protection Agency

MW Megawatts

MGD Million Gallons per Day

MEGS Moutard Electric Generating Station

NPDES National Pollutant Discharge Elimination System

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STATEMENT OF JURISDICTION

This case concerns the application of the Clean Water Act (“CWA”), 33 U.S.C § 1369(b)

(2012). Jurisdiction was proper in the Environment Appeals Board (EAB) of the United States

Environmental Protection Agency (EPA) pursuant to 33 U.S.C. § 509(b) (2012). This Court has

jurisdiction over this appeal from the final order of the EAB. Id.; see also R. at 2.1

STATEMENT OF ISSUES PRESENTED FOR REVIEW

I. Whether the Final Permit properly included conditions requiring closure and remediation of the coal ash pond as provided by the State of Progress in the CWA section 401 certification, including the questions:

A. Whether EPA was required to include all such Progress certification without

regard to their consistency with CWA section 401(d); and B. Assuming the question of the consistency of the conditions with CWA section

401(d) is open to EPA and to this reviewing court, whether the ash pond closure and remediation conditions constitute “appropriate requirements of State law” as required by CWA section 401(d).

II. Whether the April 12, 2017, EPA Notice suspending certain future compliance deadlines

for the 2015 Final Effluent Limitations Guidelines for the Steam Electric Power Generating Industry is effective to require the suspension of the permit compliance deadlines for achieving zero discharge of coal ash transport water.

III. Whether EPA Region XII could rely on Best Professional Judgment as an alternative

ground to require zero discharge of coal ash transport wastes, independent of applicability or effectiveness of the 2015 Steam Electric Power Generating Industry Effluent Limitation Guidelines.

IV. Whether NPDES permitting requirements apply to EnerProg, L.L.C’s pollutant

discharges into the MEGS ash pond, in light of EPA’s July 21, 1980, suspension of the provision of 40 C.F.R. section 122.2 that originally included waste treatment systems formed by impounding pre-existing waters of the United States within the regulatory definition of waters of the United States.

V. Whether the ash pond closure and capping plan requires a permit for the discharge of

fill material pursuant to section 404 of the CWA.

1 The citations “R. at __” refer to pages of the Final Problem, Revised on October 24, 2017.

1

STATEMENT OF THE CASE

This case concerns EPA’s failure to fully protect the people of Progress and the

environment from toxic water pollution as required by the CWA. Although the Act’s primary goal

includes eliminating pollution discharged into our nation’s waterways, EPA Region XII issued a

NPDES permit to EnerProg, L.L.C (“EnerProg”) that allows for the continued pollution of Fossil

Creek. See 33 U.S.C. § 1251(a)(1) (2012).

As a result of EnerProg being an industrial source of water pollution in Fossil Creek2,

Fossil Creek Watchers, Inc. (“FCW”) challenges the NPDES permit because it illegally authorizes

the abandonment and capping of EnerProg’s remaining coal ash pond without a dredge or fill

permit issued. 33 U.S.C. § 1344 (2012).

Additionally, because the ash pond was historically part of Fossil Creek3, the interim

discharge of untreated coal ash waste into the ash pound is itself a violation of the CWA section

301 provisions--requiring technology and water quality based effluent limits – and section 402

provisions – requiring NPDES permitting--for all discharges to waters of the United States. 33

U.S.C. §§ 1311, 1342 (2012).

A. Statement of Facts

FCW’s mission is to practice and promote the responsible use of Fossil Creek’s

ecosystem and resources. Pursuant to that mission, FCW monitors federal NPDES permits

issued to electrical power plants located in Fossil, which includes EnerProg. On January 18,

2 As an industry, power plants discharge more toxic water pollution (defined by EPA as “toxic weighted pound equivalents”) than any other industrial point source category in the United States. Environmental Assessment for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (“Final EA”), Sept. 2015, Docket ID No. EPA-HQ-OW-2009-0819-6427, Table 3-3, available at https://www.regulations.gov/document?D=EPA-HQ-OW-2009-0819-6427. 3 Fossil Creek does not discharge to the Moutard Reservoir, but is a perennial tributary to the Progress River, a navigable-in-fact interstate body of water.

2

2017, EPA Region XII issued a NPDES permit to EnerProg authorizing it to continue water

pollution discharges associated with the operation of its coal-fired steam electric power plant,

the MEGS. R. at 6.

1. Moutard Electric Generating Station (MEGS) Operation

Based on its current operations, the MEGS facility is subject to EPA effluent limitation

guidelines per 40 C.F.R. § 423 - Steam Electric Power Generating Point Source Category. R. at

7. The MEGS plant operates by withdrawing less than 125 MGD of water directly from the

Moutard Reservoir to use for the evaporative losses from the cooling tower, boiler water, ash

transport water, and drinking water needs. After the heat generated by burning coal transforms

boiler water into steam, the steam drives turbines connected to electric generators that produce

a maximum dependable capacity of 745 MW per unit.4

4 “Maximum dependable capacity” is the maximum amount of electricity that the main generating unit of a nuclear power reactor can reliably produce during the summer or winter. The dependable capacity varies during the year because temperature variations in cooling water affect

3

As a result of this process, MEGS produces wastewater in the form of chemical

pollutants and thermal pollution (heated water) from its water treatment, power cycle, ash

handling, air pollution control systems, as well as from coal piles, yard, and floor drainage. See

40 C.F.R § 423 (2016). Wastewater discharged by power plants, like MEGS, can contain toxic

metals such as mercury, arsenic, and selenium, as well as nonconventional pollutants such as

nitrogen and dissolved solids that contaminate drinking water and harm ecosystems. Effluent

Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source

Category, 80 Fed. Reg. 67,838 (Nov. 3, 2015). The pollutants present in wastewater discharged

by power plants can cause several types of cancer, deformities and reproductive harm to fish

and other wildlife, and lower children’s IQs, among other things. Id.

In an attempt to limit the pollution discharge, MEGS operates five separate outfalls for

waste.5 After running several treatment systems to reduce the amount of coal ash6 in the waste,

most of these outfalls discharge directly or indirectly into the Moutard Reservoir, a newly lined

retention basin, or an ash pond created by damming the then free-flowing upper reach of Fossil

Creek in June 1978. R. at 7-8. At this time however, the MEGS coal ash pond contains elevated

the unit's efficiency. Thus, this is the gross electrical output as measured (in watts) at the output terminals of the turbine generator. United States Nuclear Regulatory Commission: Glossary, NRC Library (last updated Apr. 10, 2017) https://www.nrc.gov/reading-rm/basic-ref/glossary/maximum-dependable-capacity-gross.html. 5 An industrial outfall is the point where storm water associated with industrial activity discharges to waters of the United States or a municipal separate storm sewer system (MS4). An outfall does not include conveyances, pipes or tunnels connecting segments of the same system. The facility’s outfall is considered to be the location where the discharges leave the industrial site. See 40 C.F.R. § 122.26(b)(9) (2015). 6 During coal combustion, large amounts of ash are created along with carbon dioxide and other gases. The fine particle ash that rises up with the flue gases is known as fly or flue ash while the heavier ash that does not rise is called bottom ash; collectively these are known as coal ash. See 40 C.F.R. § 423.10 (2016).

4

toxic pollutant levels of mercury, arsenic, and selenium. R. at 9.

2. State Requirements for the Renewal of MEGS’s NPDES Permit

In considering a renewal of the MEGS NPDES permit, the State of Progress issued a

certification pursuant to CWA section 401 and the Progress Coal Ash Cleanup Act (CACA). R.

at 8. CACA is a state-enacted law requiring assessment, closure, and remediation of substandard

coal ash disposal facilities in the State of Progress. Id. The CACA legislation aims to prevent

public hazards associated with the failures of ash treatment pond containment systems, as well as

any leaks from these treatment ponds into ground and surface waters. R. at 8-9. In accordance

with CWA section 401(d), these Progress requirements are incorporated as additional conditions

to a NPDES permit. R. at 9.

The State of Progress determined that the MEGS NPDES permit must contain limits for

toxic pollutants actually present in the discharge based on the Best Available Technology (BAT).

Id. As evident in the 2015 ELGs, the State argues EPA staff determined that dry handling of bottom

ash and fly ash has been in use at existing plants in the industry for many years. Id. Accordingly,

a permit writer in the exercise of his best professional judgment determined that zero discharge of

ash handling wastes by November 1, 2018, constitutes BAT for discharges associated with coal

ash wastes. Id. Therefore, in order to comply with the CACA, EnerProg must cease operation of

its ash pond by November 1, 2018, complete dewatering of the pond by September 1, 2019, and

cover the dewatered ash pond with an impermeable cap by September 1, 2020. R. at 10.

3. The Final ELG Rule Impact on MEGS

In 1982, current regulations for steam electric power plants were last updated, but failed to

adequately address toxic metal discharges. EPA, Steam Electric Power Generating Effluent

Guidelines - 2015 Final Rule, Effluent Guidelines (Sept. 18, 2017),

5

https://www.epa.gov/eg/steam-electric-power-generating-effluent-guidelines-2015-final-rule.

Rather, the 1982 rule focused on settling out particulates rather than treating dissolved pollutants.

Id. As new technologies for generating electric power developed, widespread implementation of

air pollution controls altered existing wastewater streams or created new wastewater streams at

many power plants, particularly coal-fired plants. The 2015 rule addressed these changes in the

industry. Id.

On November 3, 2015, EPA published a notice issuing the final Effluent Limitations

Guidelines Rule for the steam electric industry. 80 Fed. Reg. 67,838. For existing power plants

that discharge directly to a waterbody, each plant’s NPDES permitting authority set the compliance

dates for the BAT limits for fly ash, bottom ash, and flue gas desulfurization (FGD) wastewater.

80 Fed. Reg. 67,854; 40 C.F.R. § 423.13 (Sept. 18, 2017). For MEGS, its compliance date under

federal law was “as soon as possible” beginning November 1, 2018 (similar to the CACA

legislation). § 423.13. At that time, EPA also calculated that the final ELG Rule would prevent 1.4

billion pounds of pollutants from being discharged into our nation’s waterways every year. 80 Fed.

Reg. 67,841.

However, more recently, EPA Administrator, Scott Pruitt, announced the agency’s

“postponement of the compliance dates that have not yet passed” in an ELG Rule under the CWA

on April 12, 2017. Postponement of Certain Compliance Dates for the Effluent Limitations

Guidelines and Standards for the Steam Electric Power Generating Point Source Category, 82 Fed.

Reg. 19, 005, 19,006 (Apr. 25, 2017). Specifically, for existing plants like MEGS, which are direct

and indirect dischargers, EPA postponed the deadlines for meeting the new standards for fly and

bottom ash, FGD wastewater, flue gas mercury control, and gasification wastewater. Id. The EPA

notice cited 5 U.S.C. § 705 as authority for the stay and stated that “the Agency finds that justice

6

requires it to postpone the compliance dates of the Rule that have not yet passed, pending judicial

review.” Id. The notice did not mention the four-part test for a preliminary injunction, nor did the

notice attempt to demonstrate that the four-part test for a preliminary injunction is satisfied. See

id. 19,005-06. Further, the EPA did not provide interested persons with an opportunity to comment

on the indefinite stay of ELG compliance deadlines prior to publishing the notice of the indefinite

stay in the Federal Register on April 25, 2017. See id.

In response to this EPA notice, these regulations have been challenged in the U.S. Court

of Appeals for the Fifth Circuit. Southwestern Electric Power Co., et al. v. EPA, No. 15-60821.

Here, EnerProg asserts that the effect of the suspension notice relieves it from the compliance with

the November 1, 2018 deadline for achieving zero discharge of coal ash-related effluents under

state and federal law. R. at 11.

B. Procedural History

On January 18, 2017, EPA Region X11 issued a NPDES permit to EnerProg pursuant to

CWA section 402. On April 1, 2017, pursuant to 40 C.F.R. § 124, FCW and EnerProg filed

petitions for review of the NPDES permit requesting that the permit be remanded to Region XII

for further consideration. During the Spring Term of 2017, the EAB denied both petitions for

review. Subsequently, pursuant to CWA section 509(b), FCW and EnerProg filed timely petitions

with this Court seeking judicial review of the final decision of the EAB.

SUMMARY OF THE ARGUMENTS

First, state courts have the authority to determine the appropriateness of state conditions

– not the EPA. Moreover, CWA section 401(d) grants states the authority to impose any

limitations needed to maintain acceptable water-quality standards and CWA section 404 requires

permits for any activities involving dredged or fill material. The ash pond closure and

7

remediation conditions involve fill material and have been implemented to help maintain water-

quality standards in the State of Progress. Therefore, although the ash pond closure and

remediation conditions are appropriate requirements of state law, a CWA section 404 permit is

still required.

Second, contrary to EnerProg’s assertions, section 705 does not permit EPA to postpone

future compliance deadlines for the 2015 Steam Electric Power Generating Point Source

Categories ELGS following a rule’s effective date. R. at 11; 82 Fed. Reg. 19005. Specifically,

the plain language of section 705 authorizes postponement of the “effective date,” not

“compliance dates.” Allowing an agency to postpone the 2015 ELG compliance dates after that

rule has gone into effect violates section 705’s purpose of maintaining the regulatory status quo.

EPA also failed to satisfy the four-part test for a stay under 5 U.S.C. § 705.

Third, the MEGS coal ash pond contains toxic pollutants that were not regulated by the

1982 ELGs. As a result, reliance on a permit writer’s “best professional judgment” is justified

even if this Court finds that the 2015 ELGs were eliminated or vacated.

Fourth, NPDES permitting requirements do apply to EnerProg’s pollutant discharges

into the MEGS ash pond. EPA’s July 21, 1980, suspension--in effect a rescission--of provisions

of 40 C.F.R. § 122.2, which would exempt ash ponds such as the one at the MEGS, did not

follow the rulemaking requirements of the APA § 553(b)-(d). Thus, the suspension was arbitrary

and capricious under § 706(2)(A), and the agency must follow proper § 553 rulemaking

procedure before it can suspend provisions of 40 C.F.R. § 122.2.

Lastly, the closure and capping of the MEGS ash pond requires a permit for the discharge

of fill material pursuant to section 404 of the CWA. The Corps’ broad charge in administering

section 404, as well as the expansive definition and legislative history of “navigable waters”

8

under the CWA, support the inclusion of the closed ash pond within the regulatory reach of

section 404.

ARGUMENTS

STANDARD OF REVIEW

This case presents questions of law involving the extent of the Clean Water Act. Such

questions are subject to de novo review by this Court. Southeast Resource Recovery Facility

Auth. v. Montenav Int’l Corp., 973 F.2d 711, 713 (9th Cir. 1992).

I. THE FINAL PERMIT PROPERLY INCLUDED CONDITIONS REQUIRING CLOSURE AND REMEDIATION OF THE COAL ASH POND AS PROVIDED BY THE STATE OF PROGRESS IN THE CWA SECTION 401 CERTIFICATION.

The ash pond closure and remediation conditions were properly included in the Final

Permit. First, the authority to determine the appropriateness of state conditions lies with the state

courts – not with EPA. Second, under CWA section 401(d), CACA and the ash pond closure and

remediation conditions are “appropriate requirements of State law” because the purpose of their

implementation is to help maintain water quality standards. Last, because compliance with the

conditions will result in the discharge of dredge or fill materials into navigable waters, a CWA

section 404 permit is required.

A. The EPA was Required to Include All Such Progress Certification Conditions Because the EPA Does Not Have Jurisdiction to Review the Appropriateness of State Conditions.

The EPA does not have jurisdiction to determine the appropriateness of the state conditions

in CWA section 401 certifications and, therefore, was required to include all such Progress

certification conditions. Any certification approved under CWA section 401(d) must set forth any

requirements necessary to ensure compliance with CWA sections 1311, 1312, 1316, and 1317, and

any additional “appropriate requirements of State law.” 33. U.S.C. § 1341(d) (2012). If the state’s

9

conditions have anything to do with water quality, the validity of such conditions can only be

challenged in a court of appropriate jurisdiction. American Rivers, Inc. v. FERC, 129 F.3d 99, 106

(2d Cir. 1997).

Moreover, any state conditions “shall become a condition on any Federal license or

permit.” 33. U.S.C. § 1341(d) (emphasis added); see American Rivers, 129 F.3d at 106. Thus, it is

not the EPA Administrator who has the authority to review the appropriateness of the conditions,

but rather the state courts. See § 1341(d). The Administrator only has the authority to approve or

deny the overall application. See Id. Further, the EPA published 40 C.F.R. § 124.55(e) which

provides that “[r]eview and appeals of limitations and conditions attributable to State certification

shall be made through the applicable procedures of the State.” Courts have consistently affirmed

that state court is the appropriate forum for reviewing the appropriateness of a state certification

and that “federal courts and agencies do not have authority to review the validity of the

requirements.” Roosevelt Campobello Int'l Park Comm'n v. EPA, 684 F.2d 1041, 1055–56 (1st

Cir. 1982); see American Rivers, 129 F.3d at 106.

The EAB was correct in concluding that the “EPA has no discretion to reject a condition

included in a State section 401 condition.” R. at 11. The ash pond closure and remediation

conditions fall within the scope of section 401 certifications because they are related to water

quality. When the EPA granted the permit, these Progress conditions became conditions on the

Federal permit. Thus, a Progress court is now the appropriate forum for any review of the CWA

section 401 permit conditions. It is immaterial whether “Progress law does not provide for review

of such certifications in the state’s courts,” because federal statutes and case law dictate that the

authority to review and appeal state conditions in CWA section 401 permits lies with the state

courts. R. at 11. Therefore, the State of Progress has jurisdiction to determine the appropriateness

10

of the conditions of the CWA section 401 certification – not the EPA.

B. The Ash Pond Closure and Remediation Conditions Constitute “Appropriate Requirements of State Law” but Independently Violate the Requirement for a CWA Section 404 Permit.

The ash pond closure and remediation conditions are “appropriate requirements of State

law;” however, a CWA section 404 permit is still required. The conditions at issue are imposed

pursuant to CACA which is a State of Progress law enacted to maintain adequate water quality

standards. While these conditions are “appropriate requirements of State law,” they involve the

discharge of dredge or fill materials into navigable waters and therefore require a CWA section

404 permit.

1. The United States Supreme Court has given states broad authority in determining what constitutes “appropriate requirements of State law” and this Court should follow established precedent.

This Court should follow precedent established by the United States Supreme Court and

grant the State of Progress broad authority in concluding that the ash pond closure and remediation

conditions constitute “appropriate requirements of State law.” When deciding whether a state

condition in a CWA section 401 permit is an “appropriate requirement of State law”, the Supreme

Court has interpreted section 401 broadly. PUD No. 1 of Jefferson Cty. v. Wash. Dep’t of Ecology,

511 U.S. 700 (1994). In PUD No. 1, the question before the Supreme Court was whether a state

imposed minimum stream flow requirement was a permissible condition of a CWA section 401

permit. Id. at 711. The court held that states can impose any necessary limitations to ensure

compliance with state water-quality standards or other “appropriate requirements of State law.”

Id. at 713-14. Further, the court held that the minimum stream flow requirement at issue was

appropriate under State law. Id. at 714. In order to reach these conclusions, the court looked to the

CWA’s statutory and regulatory language. Id.

11

Several enumerated sections of the CWA authorize states to impose water quality-related

conditions. Each state is required, pursuant to CWA section 303 and subject to federal approval,

to implement comprehensive water quality standards related to intrastate waters. 33 U.S.C. § 1313

(2012). The purpose of these standards is to “protect the public health or welfare” and “enhance

the quality of water.” Id.; PUD No. 1, 511 U.S. at 704; see also 33. U.S.C. § 1251(a)(2) (2012).

Further, these stringent state water quality standards provide an additional basis for further

regulation on various point sources despite compliance with other CWA sections. PUD No. 1, 511

U.S. at 704-05; EPA v. California ex rel. State Water Resources Control Bd., 426 U.S. 200, 205

n.12 (1976). The additional regulations help keep water quality at or above acceptable levels. Id.

The CWA lists only the minimum requirements of state water quality standards and states may

impose more stringent water quality regulations. PUD No. 1, 511 U.S. at 705; see 33 U.S.C. §§

1311(b)(1)(C), 1370 (2012).

In a case decided before PUD No. 1, the Oregon Court of Appeals looked to the overall

purpose of the CWA and subsequently granted Oregon broad authority in implementing state

conditions in CWA section 401 permits. Arnold Irrigation Dist. v. Dep’t of Envtl. Quality, 717

P.2d 1274 (Or. Ct. App. 1986). The court acknowledged that a provision is an “appropriate

requirement of State law” even if it is only slightly related to water quality. Id. Thus, the court

recognized that “many uses of land affect water quality even if they do not immediately result in

direct discharges to the state’s waters.” Id.

The court in PUD No. 1 stressed that although CWA section 401(a) relates to the regulation

of discharges, section 401(d) provides that any certification shall set forth any “effluent limitations

and other limitations . . . necessary to assure that any applicant will comply with various provisions

of the Act and any other appropriate requirement of State law.” 33 U.S.C. § 1341(d) (emphasis

12

added); PUD No. 1, 511 U.S. at 711. Thus, the language of section 401(d) expands a state’s

authority to impose conditions on all activities and not just those related to discharges. Id. at 712.

Moreover, this broad interpretation is consistent with EPA’s view of the statute. A state

certification shall include: “a statement that there is reasonable assurance that the activity will be

conducted in manner which will not violate applicable water quality standards,” a statement of

conditions related to any discharge from the activity, and any other important information. 40

C.F.R. §121.2(a)(3) (1993). The fact that the EPA requires a statement relating to discharges in

addition to a statement assuring that the activity will comply with applicable water quality

standards reconciles the interpretation that section 401 permits relate to any activity--not just

discharges. PUD No. 1, 511 U.S. at 712 (emphasis added).

In PUD 1, the United States Supreme Court determined that state limitations imposed

pursuant to CWA section 303 are proper conditions under a section 401 permit. Id. at 713.

Although section 303 is not a statutory provision listed under section 401(d), section 301 is a

statutory listed provision. 33 U.S.C. § 1341(d). Additionally, section 303 is always incorporated

by reference within section 301. PUD No. 1, 711 U.S. at 713; see 33 U.S.C. § 1311(b)(1)(C)

(2012); see also H.R. Conf. Rep. No. 95-830, p. 96 (1977), U.S. Code Cong. & Admin. News

1977, pp. 4326, 4471 (“Section 303 is always included by reference where section 301 is listed”).

Therefore, conditions imposed pursuant to section 303 are among the other limitations which the

state has authority to incorporate in a section 401 permit. PUD No. 1, 711 U.S. at 713.

The State of Progress has enacted CACA, which requires “assessment, closure, and

remediation of substandard coal ash disposal facilities in the State of Progress.” R. at 8. Progress

enacted CACA to “prevent public hazards associated with the failures of ash treatment pond

containment systems, as well as leaks from these treatment ponds into ground and surface waters.”

13

R. at 8-9. In order to be an appropriate requirement of State law, CACA need only be minimally

related to water quality protection. PUD No. 1, 711 U.S. at 704-05. Here, CACA is an additional

regulation whose purpose is to help maintain water quality standards of both ground and surface

waters at or above acceptable levels. Thus, CACA is an “appropriate requirement of State law.”

Moreover, EnerProg’s assertions that CACA requirements are not based on achieving state

water quality standards pursuant to CWA section 303 nor related to achieving effluent limitations,

do not hold muster under the Supreme Court’s holdings in PUD No. 1. In PUD No. 1, the Court

heavily emphasized the “effluent limitations and other limitations” and “any other appropriate

requirement of State law” phrases contained within CWA section 401(d). First, the inclusion of

“other limitations” dictates that states can impose limitations beyond those that are directly related

to achieving effluent limitations. Second, the inclusion of “any other appropriate requirement of

State law” dictates that states are not constricted to only imposing limitations that relate to the

statutorily-listed provisions (sections 1311--which incorporates 1313, 1312, 1316 and 1317). Thus,

EnerProg’s limited reading of CWA section 401(d) is in conflict with precedent established by the

United States Supreme Court.

2. The ash pond closure and remediation conditions require a CWA section 404 permit.

Abandonment and capping of the remaining coal ash pond as contemplated by the closure

plan are illegal without a dredge or fill permit issued pursuant to CWA section 404. Please refer

to section V of this brief for further briefing on the necessity of a CWA section 404 permit.

II. EPA CANNOT INVOKE SECTION 705 AFTER THE 20l5 ELGS COMPLIANCE DATES.

Contrary to EnerProg’s assertions, section 705 does not permit EPA to postpone future

compliance deadlines for the 2015 Steam Electric Power Generating Point Source Categories

14

ELGs following the rule’s effective date. R. at 11; 82 Fed. Reg. 19005 (Apr. 25, 2017). First, the

plain language of section 705 authorizes postponement of the “effective date,” not “compliance

dates.” Allowing an agency to postpone the 2015 ELG compliance dates after that rule has gone

into effect violates section 705’s purpose of maintaining the regulatory status quo. Second, the

EPA failed to satisfy the four-part test for a stay under 5 U.S.C. § 705.

A. The Plain Language of Section 705 Does Not Authorize the Extension of “Compliance Dates, Only Effective Dates.”

Ordinarily, courts “resist reading words or elements into a statute that do not appear on

its face.” Bates v. United States, 522 U.S. 23, 29 (1997). Largely because, allowing an agency to

postpone a rule’s compliance date after that rule has gone into effect violates section 705’s

purpose of maintaining the regulatory status quo. See Sierra Club v. Jackson, 833 F. Supp. 2d 11,

28 (D.D.C. 2010). A rule’s effective date is the initial point where the regulatory status quo takes

on a new meaning. Thus, the effective date is the only date relevant to the purpose of section 705.

Further, “compliance date” and “effective date” have distinct meanings. See Silverman v.

Eastrich Multiple Inv’r Fund, L.P., 51 F.3d 28, 31 (3d Cir. 1995) (a “compliance date should not

be misconstrued as the effective date.”). A rule’s effective date is defined as the date upon which

the rule becomes enforceable and adherence to it is required. See Effective Date, Black’s Law

Dictionary (10th ed. 2014) (defining “effective date” as “the date on which a statute . . . becomes

enforceable or otherwise takes effect”); NRDC v. EPA, 683 F.2d 752, 762 (3d Cir. 1982) (an

effective date serves to “implement, interpret, or prescribe law or policy”). Alternatively, a

compliance date is the deadline by which a specific requirement of a regulation must be

completed. See 40 C.F.R. § 125.3(i)(c) (2017).

Here, the EPA and EnerProg argue that section 705 gives the April 12, 2017 Notice

authority to require suspension of compliance deadlines. R. at 3. However, both parties ignore

15

that the only power granted by Section 705 is to postpone an effective date. 5 U.S.C. § 705 (2012).

Even though the agency’s conception of “justice so requires” may be broad, section 705 permits

do not provide additional relief, such as postponing a “compliance date.” See Id. While section

705 allows the postponement of the effective date of a broader range of agency actions than a

complete rule, such as a part of a rule or a license, that does not alter the plain meaning of

‘effective date.’” R. at 11. Thus, the agency would still need to take such action prior to the

effective date of that rule or license, under the plain language of section 705.

B. The EPA Failed to Satisfy the Four-Part Test for an “Indefinite Stay” under 5 U.S.C. § 705.

Under this provision of the APA, an agency “may postpone the effective date of action

taken by it, pending judicial review” when it “finds that justice so requires.” 5 U.S.C. § 705. As

previously held in the District of Columbia Appeals Court, “the standard for stay at the agency

level is the same as the standard for a stay at the judicial level: each is governed by the four-part

preliminary injunction test applied in this Circuit.” Sierra Club v. Jackson, 833 F. Supp. 2d 11,

30 (D.D.C 2012). Thus, an agency must base any postponement of the effective date of a rule

under 5 U.S.C. § 705 on specific findings that (1) legal challenges to the agency action are likely

to succeed on the merits; (2) there will be irreparable harm absent a stay; (3) this irreparable harm

outweighs the denial of the rule’s benefits during the stay; and (4) the public interest is served by

a stay. Id.; See also League of Women Voters of U.S. v. Newby, 838 F.3d 1, 6 (D.C. Cir. 2016)

(“A party seeking a preliminary injunction must make a ‘clear showing that four factors, taken

together, warrant relief: likely success on the merits, likely irreparable harm in the absence of

preliminary relief, a balance of the equities in its favor, and accord with the public interest.’”

(quoting Pursuing America’s Greatness v. FEC, 831 F.3d 500, 505 (D.C. Cir. 2016)).

In addition, a former EPA Administrator in a previous EAB decision, announced that EPA

16

had to meet the same test as a court to stay a rule under 5 U.S.C. § 705. In re Pub. Serv. Co. of

N. H., 1 E.A.D. 389, 1977 WL 45581 (1977). Under EPA’s past practice of applying the four-

part preliminary injunction test to requests for stays under 5 U.S.C. § 705, EPA was required to

acknowledge and justify its departure from the agency’s past practice in order to lawfully issue

an Indefinite Stay without meeting this standard. See Encino Motorcars, LLC v. Navarro, 136 S.

Ct. 2117, 2126 (2016) (when an agency departs from its prior position, “the agency must at least

‘display awareness that it is changing position’ and ‘show that there are good reasons for the new

policy’” (quoting FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009))).

Here, EPA’s notice of the Indefinite Stay does not mention or consider any of the

preliminary injunction factors by which seeking a preliminary injunction must establish that it is

“likely to succeed on the merits, that the company is likely to suffer irreparable harm in the

absence of preliminary relief, and that an injunction is in the public interest.” Winter v. NRDC,

555 U.S. 7, 20 (2008). Thus, the EPA notice of the Indefinite Stay fails to make any of the four

findings necessary to stay a rule under 5 U.S.C. § 705. The notice ignores both judicial precedent

in Sierra Club v. Jackson, as well as the agency’s well-established practice in other rules, that

EPA must find that the four preliminary injunction factors are satisfied in order to stay a rule

under 5 U.S.C. § 705. Further, EPA’s Indefinite Stay notice “provides no justification whatsoever

– much less reasoned decision making – for its departure from prior precedents, and the courts in

this Circuit ‘have never approved any agency’s decision to completely ignore relevant

precedent.’” Sierra Club v. Jackson, 833 F. Supp. 2d at 32 (quoting Jicarilla Apache Nation v.

U.S. Dept. of Interior, 613 F.3d 1112, 1120 (D.C. Cir. 2010). Nor does anything else in EPA’s

administrative record satisfy this standard.

Having failed to make findings in the Indefinite Stay notice that the four preliminary

17

injunction factors are met, EPA lacked authority to stay the ELG Rule under 5 U.S.C. § 705.

III. EPA REGION XII COULD RELY ON THE BEST PROFESSIONAL JUDGMENT AS AN ALTERNATIVE GROUND FOR REQUIRING ZERO DISCHARGE OF COAL ASH TRANSPORT WASTES.

Both national and state effluent standards are enforced through the NPDES permit

program. 40 C.F.R. § 125.3(2)(c)(ii) (2017). “Under the NPDES, it is unlawful for any company

to discharge a pollutant without obtaining a permit and complying with its terms.” EPA v.

California ex rel. State Water Res. Control Bd., 426 U.S. 200, 205 (1976). The NPDES permits

thus “transform generally applicable effluent limitations and other standards” into obligations for

an individual discharger. Id. Accordingly, there are two general approaches for developing

technology-based effluent limits for industrial facilities: (1) using national effluent limitations

guidelines (ELGs) and (2) using Best Professional Judgment (BPJ) on a case-by-case basis when

ELGs are inapplicable. 40 C.F.R. § 125.3(c)(3)(2017).

Technology-based effluent limits for municipal facilities (POTWs) originate from

secondary treatment standards. Id. The intent of a technology-based effluent limitation is to require

a minimum level of treatment for industrial sources based on currently available treatment

technologies while allowing the discharger to use any available control technique to meet the

limitations. See Id. All dischargers are required to obtain a permit, which is issued after public

notice and an opportunity for public hearing. 33 U.S.C. § 1342(a)(1) (2012). Permits are issued as

long as a power plant meets all applicable effluent limitations. Id.

When no national ELG standards are set, a permit writer is authorized to use, on a case-by-

case basis, his “best professional judgment” to impose “such conditions as the permit writer

determines are necessary to carry out the provisions of [the CWA.]” Id. Thus, compliance with a

permit is generally deemed to constitute compliance with the CWA's requirements. See 33 U.S.C.

18

§ 1342(k) (2012). BPJ authorizes the EPA Administrator to issue a permit containing “such

conditions as the Administrator determines are necessary to carry out the provisions of this Act”

prior to establishing ELGs for a point source. 33 U.S.C. § 402(a)(1) (2012).

In setting BPJ limitations, the NPDES regulations state that permits developed on a case-

by-case basis under section 402(a)(1) of the CWA must consider (1) the appropriate technology

for the category class of point sources of which the applicant is a member, based on all available

information, and (2) any unique factors relating to the applicant. 40 C.F.R. § 125.3(d) (2017).

These factors are the same factors required to be considered by EPA in the development of ELGs

and, therefore, are often referred to as the section 304(b) factors. They include: the total cost of

application of technology in relation to the effluent reduction benefits to be achieved from such

application, the age of equipment and facilities involved, the process employed, the engineering

aspects of the application of various types of control techniques, and among the other factors. Id.

Since BPJ contains an element of discretionary authority, a permit writer should establish BPJ

conditions in permits that are both technically sound and reasonable. See Id.

Here, the MEGS coal ash pond contains toxic pollutants that were not regulated by the

1982 ELGs. As a result, reliance on BPJ is justified even if this Court finds that the 2015 ELGs

were eliminated or vacated. First, the MEGS coal ash pond was created in 1978 by damming the

free-flowing upper reach of Fossil Reach. R. at 7. At that time, EPA lacked any national ELG

standards, so the use of a permit writer exercising his “best professional judgment” was appropriate

to carry out the CWA provisions. Because EnerProg does not dispute that the MEGS coal ash pond

contains toxic pollutants, such as mercury, arsenic, and selenium that are not regulated by the 1982

ELGs, these pollutants are appropriately subject to BPJ limits.

Second, EPA’s permit writer properly exercised his discretion in this case. The record

19

reveals that an expert was consulted on the MEGS permit and that various technologies were

assessed and reviewed. R. at 9-10. For example, the permit writer based his decision on the fact

that MEGS is sufficiently profitable to adopt dry handling of these wastes with zero liquid

discharges at no more than a twelve cents per month increase in the average consumer’s electric

bill. R. at 9. Further, the permit writer determined that the MEGS permit must contain limits for

toxic pollutants actually present in the discharge based on the BAT, independent of the 2015 ELGs.

R. at 9. Because dry handling of bottom ash and fly ash have been in use at existing plants in the

industry for many years, the permit writer’s best professional judgment in determining that zero

discharge of ash handling wastes by November 1, 2018, for MEGS seemed reasonably sound and

technically appropriate.

Thus, both federal and state NPDES permit discharge limitation requirements are

applicable to the MEGS permit program.

IV. NPDES PERMITTING REQUIREMENTS DO APPLY TO ENERPROG’S POLLUTANT DISCHARGES INTO THE MEGS ASH POND, BECAUSE EPA’S JULY 21, 1980 SUSPENSION OF PROVISIONS OF 40 C.F.R. § 122.2 DID NOT FOLLOW THE REQUIREMENTS OF 5 U.S.C. § 553(b)-(d), AND THUS WAS ARBITRARY AND CAPRICIOUS UNDER § 706(2)(A).

NPDES permitting requirements do apply to EnerProg’s pollutant discharges into the

MEGS ash pond, because EPA’s July 21, 1980, suspension of provisions of 40 C.F.R. § 122.2

did not follow the requirements of 5 U.S.C. § 553(b)-(d), and thus was not a valid suspension.

Section 553 of the APA lays out the procedural requirements for all federal agency rulemaking.

"’[R]ule making’ means agency process for formulating, amending, or repealing a rule.” 5 U.S.C.

§ 551(5) (2012). This section requires notice of a proposed rule be published in the Federal

Register, 5 U.S.C. § 553(b) (2012), followed by an opportunity for public comment in the form

“of written data, views, or arguments.” Id. § 553(c). In adopting and publishing the final rule,

20

“the agency shall incorporate in the rules adopted a concise general statement of their basis and

purpose.” Id. In following these steps, the agency must base the final rule on the “whole record”

and must not ignore any “relevant factors,” Citizens to Preserve Overton Park, Inc. v. Volpe, 401

U.S. 402 (1971), nor “rel[y] on factors which Congress had not intended it to consider.” Motor

Vehicle Mfr.'s Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); see Mass. v. EPA,

549 U.S. 497 (2007) (using the Overton Park “relevant factors” test). Review of these steps will

be applied equally to initial agency action or later revision of the prior action, though an agency

must give a valid explanation for a change in policy. Fox Television Stations, Inc., 556 U.S. 502.

Under APA section 701, federal agency actions are subject to judicial review except

where there is a statutory prohibition on review or where "agency action is committed to agency

discretion by law.” 5 U.S.C. § 701 (2012). The exception for action "committed to agency

discretion" is a “very narrow” one. Richardson v. United States Customs Serv., 47 F.3d 415, 421

(Fed. Cir. 1995); see Citizens to Preserve Overton Park, 401 U.S. 402. Judicial "[r]eview of an

agency's procedural compliance with statutory norms is an exacting one," NRDC v. SEC, 606

F.2d 1031, 1048 (D.C. Cir. 1979), which “contrasts with the deferential standard applicable to

substantive challenges to agency action. NRDC v. EPA, 683 F.2d at 760 (citing SEC, 606 F.2d at

1049). Additionally, sudden changes of agency course are danger signals which a reviewing court

must be alert to. Joseph v. FCC, 404 F.2d 207, 212 (D.C. Cir. 1968). Upon review, if a court

finds an agency’s action did not follow the above outlined procedural requirements, then the

action will be found to be arbitrary and capricious and remanded to the agency. See 5 U.S.C. §

706(2)(A) (2012); Citizens to Preserve Overton Park, 401 U.S. 402.

A. Rescission, and Suspension, of an Agency Rule is Subject to the Same Review as Rule Promulgation.

The Supreme Court has held that rescission of an agency rule is subject to the same

21

standard of review as promulgation of a rule. Motor Vehicle Mfr.’s Ass’n, 463 U.S. 29. In previous

cases, courts have made clear that the re-examination of a rule is meant to be assisted by the

notice-and-comment process. See NRDC v. EPA, 683 F.2d at 767 (“Had EPA complied with the

APA in connection with the initial postponement, EPA might have made this discovery earlier

than it did, and the public and the regulated community would have been able to benefit from the

amendments all the sooner.”); Consumer Energy Council of America v. FERC, 673 F.2d 425,

445-46 (D.C. Cir. 1982) (“The value of notice and comment prior to repeal of a final rule is that

it ensures that an agency will not undo all that it accomplished through its rulemaking without

giving all parties an opportunity to comment on the wisdom of repeal.”).

Further, multiple Courts of Appeals have held that actions which an agency characterizes

as suspending or postponing a rule can be equivalent to rescission, similarly requiring notice and

comment rulemaking. Pub. Citizen v. Steed, 733 F.2d 93 (D.C. Cir. 1984) (holding an agency

characterization of its action as a temporary suspension rather than a permanent revocation is not

controlling, and is subject to judicial review under 5 U.S.C. § 706 and cannot be sustained if

arbitrary or capricious); EDF v. Gorsuch, 713 F.2d 802, 816 (D.C. Cir. 1983) (“an agency

decision which effectively suspends the implementation of important and duly promulgated

standards . . . constitutes rulemaking subject to notice and comment requirements of 5 U.S.C. §

553”); NRDC v. EPA, 683 F.2d at 763 n.23 (“an indefinite postponement which is never

terminated is tantamount to a revocation”); Miccosukee Tribe of Indians of Fla. v. United States,

2008 U.S. Dist. LEXIS 57809, at *46 (S.D. Fla.) (citing Miccosukee Tribe, 1998 U.S. Dist.

LEXIS 15838, at *16 (S.D. Fla.) (holding compliance schedule was a de facto suspension of, and

therefore a change in, water quality standards, and finding suspension arbitrary and capricious).

How an agency labels its action “is not necessarily conclusive, for it is the substance of what the

22

[agency] has purported to do and has done which is decisive.” Columbia Broad. Sys., Inc. v.

United States, 316 U.S. 407, 416 (1942).

B. The Four Statutory Exceptions to § 553 Do Not Apply in this Case.

Section 553 of the APA also outlines four exceptions to notice and comment procedures,

for 1) “interpretative rules;” 2) “general statements of policy;” 3) “rules of agency organization,

procedure, or practice;” or 4) “when the agency for good cause finds (and incorporates the finding

and a brief statement of reasons therefor in the rules issued) that notice and public procedure

thereon are impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. § 553(b)(A)-

(B). “Any claim of exemption from APA rulemaking requirements ‘will be narrowly construed

and only reluctantly countenanced.’" American Fed’n of Gov’t Emps. v. Block, 655 F.2d 1153,

1156 (D.C. Cir. 1981) (quoting N.J. Dep’t. of Envtl. Prot. v. EPA, 626 F.2d 1038, 1045 (D.C. Cir.

1980)).

The function of the "interpretive rules" exemption “is to allow agencies to explain

ambiguous terms in legislative enactments without having to undertake cumbersome

proceedings. American Hosp. Ass’n. v. Bowen, 834 F.2d 1037, 1045 (D.C. Cir. 1987).

“[I]nterpretive rules are statements as to what [an] administrative officer thinks the statute or

regulation means," whereas "substantive . . . or 'legislative rules' are those which create law,

usually implementary to an existing law.” Id. (quoting Gibson Wine Co. v. Snyder, 194 F.2d 329,

331 (D.C. Cir. 1952). Ultimately, “[d]etermining whether a given agency action is interpretive or

legislative is an extraordinarily case-specific endeavor.” American Hosp. Ass’n., 834 F.2d at

1045. The second, “general statement of policy”, exemption allows agencies “to announce their

‘tentative intentions for the future,’ without binding themselves. Id. at 1046 (citing Pac. Gas &

Elec. Co. v. FPC, 506 F.2d 33, 38 (D.C. Cir. 1974)). “A general statement of policy . . . does not

23

establish a ‘binding norm.’ It is not finally determinative of the issues or rights to which it is

addressed. The agency cannot apply or rely upon a general statement of policy as law because a

general statement of policy only announces what the agency seeks to establish as policy.” Id.

Acknowledging the blurry line between substantive rules and both the “interpretive” and

“general statement of policy” exceptions, the D.C. Circuit in American Mining Congress v. Mine

Safety & Health Admin. announced a four-factor test to determine in which category an agency

action falls:

“(1) whether in the absence of the rule there would not be an adequate legislative basis for enforcement action or other agency action to confer benefits or ensure the performance of duties, (2) whether the agency has published the rule in the Code of Federal Regulations, (3) whether the agency has explicitly invoked its general legislative authority, or (4) whether the rule effectively amends a prior legislative rule. If the answer to any of these questions is affirmative, we have a legislative, not an interpretive rule.”

995 F.2d 1106, 1112 (D.C. Cir. 1993); see also Nat'l Sec. Counselors v. CIA, 931 F. Supp. 2d 77,

105 n.18 (D.C. Cir. 2013) (“D.C. Circuit’s four-factor test in . . . American Mining Congress

addressed the distinction between legislative rules . . . “interpretive rules” and “general statements

of policy”).

The third exemption—"rules of agency organization, procedure or practice,"—ensures

"that agencies retain latitude in organizing their internal operations," covering “agency actions

that do not themselves alter the rights or interests of parties, although it may alter the manner in

which parties present themselves or their viewpoints to the agency.” American Hosp. Ass’n., 834

F.2d at 1047 (quoting Batterton v. Marshall, 648 F.2d 694, 707 (D.C. Cir. 1980)). For this

exemption, courts “inquir[e] . . . broadly whether the agency action . . . encodes a substantive

value judgment or puts a stamp of approval or disapproval on a given type of behavior. Id.

The final exception is when an agency finds “good cause . . . that notice and public

procedure thereon are impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. §

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553(b)(B). "The APA's exception for good cause is to be narrowly construed," Sharon Steel Corp.

v. EPA, 597 F.2d 377, 379 (3d Cir. 1979), and “will be accepted only after the court has

‘examine[d] closely proffered rationales justifying the elimination of public procedures." Council

of the S. Mountains, Inc. v. Donovan, 653 F.2d 573, 580 (D.C. Cir. 1973) (quoting American

Fed’n of Gov’t Emps., 655 F.2d at 1157 n.6). Finally, the invocation of this exception must be

explicitly stated and incorporated into the issued rule. 5 U.S.C. § 553(b)(B).

C. The Third Circuit’s Opinion in NRDC v. EPA is Illustrative for the Case at Bar.

The case of NRDC v. EPA is illustrative of how these procedures are reviewed in the

context of a rule suspension. There, the agency indefinitely postponed the effective date of rule

amendments which “had undergone notice and comment procedures, been published in final form

. . . and had become final for purposes of judicial review.” 683 F.2d at 761.

“By postponing the effective date of the amendments, EPA reversed its course of action up to the postponement. That reversal itself constitute[d] a danger signal. Where the reversal was accomplished without notice and an opportunity for comment, and without any statement by EPA on the impact of that postponement on the statutory scheme pursuant to which the amendments had been promulgated, [the Court said they] must scrutinize that action all the more closely to insure that the APA was not violated.”

Id. at 760-61. The court found this indefinite postponement could have operated as a repeal as it

had "'palpable effects' upon the regulated industry and the public in general." Id. at 763. “Because

the indefinite postponement of the effective date of a final rule fits the APA definition of ‘rule’

where . . . the postponement has a substantial impact upon the public and upon the regulated

industry, [the Court concluded] that the postponement challenged in this case was subject to the

rulemaking procedure of the APA.” Id. at 764. “To allow the indefinite postponement of a rule

without compliance with the APA, when a repeal would require such compliance, would allow

an agency to do indirectly what it cannot do directly.” Id. at 763 n.23.

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D. EPA Similarly Seeks to Avoid Necessary § 553 Procedures Here by Using the Label “Suspension.”

EPA’s July 21, 1980, suspension of provisions of 40 C.F.R. section 122.2 did not follow

the requirements of the APA section 553(b)-(d), and thus was arbitrary and capricious under

section 706(2)(A). The final definition of “waters of the United States” promulgated on May 19,

1980, followed the notice and comment requirements of section 553. Hazard Waste and

Consolidated Permit Regulations, 45 Fed. Reg. 33, 424 (May 19, 1980). However, that definition

was then challenged in several Courts of Appeals, leading to EPA suspending the sentence

contained within it beginning “This exclusion applies . . . ” on July 21, 1980. In 1983, a further

EPA publication in the Federal Register maintained that suspension, again without following

procedures of § 553, See 48 Fed. Reg. 14,153 (April 1, 1983), while a 2015 rule simultaneously

ended and reinstated the suspension. Clean Water Rule: Definition of “Waters of the United

States,” 80 Fed. Reg. 37,114 (June 29, 2015).

In the 1980 suspension, EPA stated its intention to “promptly . . . develop a revised

definition and to publish it as a proposed rule for public comment. At the conclusion of that

rulemaking, EPA will amend the rule, or terminate the suspension.” 45 Fed. Reg. 48,620 (July

21, 1980) . As the Environmental Appeals Board noted, this suspension language has been in

effect for over 35 years. R. at 7. While they describe it as a “longstanding policy judgment”, it is

more accurately an ongoing evasion of the statutory requirements of the APA. Id.

While EPA continues to characterize this sentence of the “waters of the United States”

definition as suspended, the indefinite suspension, much like in NRDC v. EPA, operates as a

rescission. As admitted in the July 1980 action, industry groups and EPA were concerned about

the definition being overly broad. While that may have been a valid concern, the fact that the

definitional change would have “palpable” effects on those represented by the industry groups

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and the public at large (by exempting a large category of pollution emissions from NPDES permit

requirements – a positive for industry profitability and a negative for the public) should trigger

the procedural requirements of section 553. EPA choosing to fully ignore those requirements,

despite its declared intention to follow them in the July 1980 suspension, constitutes an arbitrary

and capricious action under section 706(2)(A).

Further, EPA’s indefinite suspension does not fit, nor was it ever asserted to fit, within

any of the narrow statutory exceptions to section 553 notice and comment procedures. Following

the D.C. Circuit’s four-factor test from American Mining Congress, neither of the first two

exceptions apply. Regarding factor one of that test, it is unclear whether the absence of the

indefinite suspension would inhibit enforcement actions, conference of benefits, or performance

of duties. Factor two is a clear affirmative, as the indefinite suspension has been published in the

Federal Register three times since 1980. Factor three is also met by the 1980 suspension, which

cites to EPA’s authority under the CWA. Finally, factor four is met, as the suspension does

effectively amend the properly-promulgated May 1980 “waters of the United States” definition

which does not exempt ash ponds such as EnerProg’s from NPDES permit requirements. As the

American Mining Congress test requires only one affirmative answer to find a legislative, or

substantive, rule, EPA’s July 1980 suspension does not fit within either the “interpretive rule” or

the “general statement of policy” exceptions.

Similarly, EPA’s suspension does not fit within the third exception for “rules of agency

organization, procedure or practice." Whether ash ponds such as EnerProg’s are included in the

definition of “waters of the United States” has nothing to do with EPA’s “internal operations.”

American Hosp. Ass’n., 834 F.2d at 1047 (quoting Batterton, 648 F.2d at 707). Additionally,

EPA’s suspension does “alter the rights or interests of parties,” by relieving EnerProg of NPDES

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permit requirements and allowing further unregulated pollution discharges into the ash pond, and

“puts a stamp of approval” on those discharges, contrary to the exception language in American

Hospital Association. Id.

Finally, as EPA did not in statement or effect demonstrate a good cause exception, the

July 1980 rule suspension should have followed notice and comment procedures. In the rule

suspension at issue here, EPA stated “that the regulation should be carefully re-examined and that

it may be overly broad . . . EPA intends promptly to develop a revised definition and to publish

it as a proposed rule for public comment.” 45 Fed. Reg. 48,620 (July 21, 1980). There was no

indication by EPA, however, that the possibility of the definition being “overly broad” met the

narrow good cause exception, thus none of the statutory exceptions are present and section 553

notice and comment procedures do apply to the July 1980 rule suspension.

As EPA’s 35-year suspension of a portion of its “waters of the United States” definition

is in effect a rescission, the notice and comment procedures of APA section 553 do properly

apply. Since those procedures were not followed, EPA’s action was arbitrary and capricious

under section 706(2)(A) and must be remanded to the agency for rulemaking consistent with

section 553. Until EPA does so, the language beginning “This exclusion applies . . . ” still has

full legal force, and thus NPDES permit requirements do apply to EnerProg’s pollutant discharges

into the MEGS ash pond.

V. THE CLOSURE AND CAPPING OF THE MEGS ASH POND REQUIRES A PERMIT FOR THE DISCHARGE OF FILL MATERIAL PURSUANT TO SECTION 404 OF THE CWA.

As argued above, FCW asserts that the July 21, 1980, suspension of language which

would have included the ash pond created by the impoundment of Fossil Creek within EPA’s

“waters of the United States” definition is not valid. Thus, as a “water of the United States,” the

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closure and capping of the ash pond does require a § 404 permit from the Corps.

Alternatively, the policy and language of the CWA require a section 404 permit before

the MEGS ash pond may be closed and capped. The passage of section 404, and the CWA

generally, represented a shift in the goals of federal water regulation “away from an exclusive

focus on protecting navigability and toward a concern for preventing environmental

degradation.” Solid Waste Agency of N. Cook Cty. (SWANCC) v. United States Army Corps of

Eng'rs, 531 U.S. 159, 178 (2001) (Stevens, J., dissenting) (citing Kalen, Commerce to

Conservation: The Call for a National Water Policy and the Evolution of Federal Jurisdiction

Over Wetlands, 69 N. D. L. Rev. 873, 877-79 (1993)). “In § 13 of the Rivers and Harbors

Appropriation Act of 1899 (RHA), 33 U.S.C. § 407, Congress had assigned to the Corps the

mission of regulating discharges into certain waters in order to protect their use as highways for

the transportation of interstate and foreign commerce; the scope of the Corps' jurisdiction under

the RHA accordingly extended only to waters that were ‘navigable.’” SWANCC, 531 U.S. at 175

(Stevens, J., dissenting). “Congress [then] passed the CWA for the stated purpose of "restoring

and maintaining the chemical, physical, and biological integrity of the Nation's waters."” Id. at

166 (majority) (quoting 33 U.S.C. § 1251(a)). Within that context, “Congress broadened the

Corps' mission to include the purpose of protecting the quality of our Nation's waters for aesthetic,

health, recreational, and environmental uses.” SWANCC, 531 U.S. at 175 (Stevens, J., dissenting).

Thus, the broad definition given to “navigable waters” in the CWA: “the waters of the United

States, including the territorial seas.” 33 U.S.C. § 1362(7) (2012); see Rapanos v. United States,

547 U.S. 715, 731 (2006) (“[T]he meaning of ‘navigable waters’ in the Act is broader than the

traditional understanding of that term.”) (quoting SWANCC, 531 U.S. at 167; United States v.

Riverside Bayview Homes, Inc., 474 U.S. 121, 133 (1985)). Senate Conference Reports convey

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an intent this definition “be given the broadest possible constitutional interpretation[.]” SWANCC,

531 U.S. at 168 n.3 (quoting S. Conf. Rep. No. 92-1236, p. 144 (1972)).

A. The Language and Policy of the CWA Support Requiring EnerProg to Obtain a Dredge or Fill Permit.

With the above as background, two further definitions are instructive to the issue at bar:

“fill material,” and the “waste treatment system” exclusion within the definitions of “waters of

the United States.” 33 C.F.R. § 323.2 (2008); 33 C.F.R. § 328.3(b)(1) (2015). “Fill material

means material placed in waters of the United States where the material has the effect of: (i)

replacing any portion of a water of the United States with dry land; or (ii) changing the bottom

elevation of any portion of a water of the United States.” 33 C.F.R. § 323.2 (2017). Here,

EnerProg would entirely replace the waters of the ash pond, which occupies the streambed of

Fossil Creek, with an impermeable cap. This would meet the requirements of subsections (i) and

(ii) by replacing the entirety of the pond with dry land and raising the bottom elevation of the

pond/streambed.

“Waste treatment systems, including treatment ponds or lagoons designed to meet the

requirements of the Clean Water Act” are not waters of the United States. 33 C.F.R. § 328.3(b)(1).

While at first glance this would seem to exempt the MEGS ash pond from section 404 permit

requirements even after closure, FCW argues that this exemption should be read narrowly and

only in the present tense, to give the above policy background of the CWA its truest enactment.

First, the fact that the ash pond has been permitted under the NPDES permit system has no direct

bearing on the necessity of a section 404 permit, as EPA and Corps individually administer each

of those permit systems. See 33 U.S.C. §§ 1342, 1344 (2012). Second, the Corps’ definition of

“waters of the United States” begins, “[a]ll waters which are currently used, were used in the past,

or may be susceptible to use in interstate or foreign commerce.” 33 C.F.R. § 328.3(a)(1). In the

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past, Fossil Creek was a free-flowing perennial tributary of an interstate navigable river, the

Progress River, which at least suggests the possibility of its prior use in interstate or foreign

commerce. R. at 2. Likewise, Fossil Creek could be susceptible to future use, if its perennial

streambed is not further buried by EnerProg in a closing and capping operation, but instead

remediated to its original functionality as a free-flowing “water of the United States.”

In United States v. Riverside Bayview Homes, Inc., the Supreme Court “found that

Congress' concern for the protection of water quality and aquatic ecosystems indicated its intent

to regulate wetlands "inseparably bound up with the 'waters' of the United States."” SWANCC,

531 U.S. at 167 (quoting Riverside Bayview Homes, 474 U.S. at 134). Similarly, we urge the

Court to find that perennial tributaries such as Fossil Creek, which are inseparably bound up with

the waters of the United States, be regulated by section 404, despite Fossil Creek being

impounded and exempted from CWA protections during the time of its NPDES-permitted use as

an ash pond.

Based on the clear and expansive goals of the CWA, we ask the Court to hold that, once

the ash pond—constructed by impounding Fossil Creek—is no longer being used as a “waste

treatment system,” 33 C.F.R. § 328.3(b)(1), it no longer fits within that exclusion from section

404 permitting. Based on the Court holding this, EnerProg must secure a section 404 permit from

the Corps in order to close and cap the MEGS ash pond.

CONCLUSION

For the foregoing reasons, Petitioner Fossil Creek Watchers respectfully requests that this

Court reverse the Environmental Appeal Board’s holding regarding EnerProg’s NPDES permit.

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Respectfully Submitted,

___________________

Attorneys for Petitioner

November 27, 2017 Fossil Creek Watchers, Inc.

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