Mar 15: In the U.S. Court of Appeals, Fifth Circuit, Case No. 08-61093. This high profile case involves many agricultural associations versus U.S. EPA and intervening Natural Resources Defense Council (NRDC), Sierra Club and Waterkeepers. The parties argued the issue of EPA's regulations relating to Concentrated Animal Feeding Operations (CAFOs).
In 2003, EPA revised its regulations, implementing the Clean Water Act's (CWA) oversight of Concentrated Animal Feeding CAFOs. Several parties challenged the 2003 revisions (the 2003 Rule), and the Second Circuit reviewed the challenges in Waterkeeper Alliance, Inc. v. Environmental Protection Agency, 399 F.3d 486 (2d Cir. 2005). In 2008, EPA, responding to Waterkeeper, and revised its regulations (the 2008 Rule or the Rule). Subsequently, the Farm Petitioners jointly with the Poultry Petitioners filed petitions for review of the 2008 Rule with the Fifth Circuit and the Seventh, Eighth, Ninth, Tenth, and D.C. Circuits.
Shortly after the issuance of the 2008 Rule, EPA sent guidance letters to members of Congress and to a CAFO executive (hereinafter the EPA Letters or guidance letters). The Poultry Petitioners filed a petition for review in the Fifth Circuit, challenging the EPA's procedures for issuing rules that the Poultry Petitioners allege were final. The petitions for review were consolidated by the Judicial Panel on Multi-district Litigation (JPML), pursuant to 28 U.S.C. § 2112(a)(3), and the Fifth Circuit was randomly selected to review the parties' challenges. Subsequently, the Environmental Intervenors filed a motion to intervene in support of the EPA's position. Also, EPA filed a motion to dismiss the Poultry Petitioners' challenges to the guidance letters. In its decision the Fifth Circuit grants the petitions in part, denies the petitions in part, and grants the EPA's motion to dismiss.
At issue in the present petitions for review is the 2008 Rule, the EPA's response to the Second Circuit's decision in Waterkeeper. See 71 Fed. Reg. 37,744 (June 30, 2006). Also at issue are three guidance letters issued by the EPA in response to questions raised by members of Congress and a farm executive about the 2008 Rule. On appeal, the Farm Petitioners primarily challenge the EPA's "duty to apply" for an NPDES permit, imposition of liability for failing to apply for a permit, and the EPA's regulation of a permitted CAFO's land application. On the issue of the guidance letters, the Poultry Petitioners filed petitions for review challenging the EPA Letters. They argue that the EPA Letters constituted "final agency actions" subject to judicial review and, among other things, were required to have undergone notice and comment per the rulemaking procedures articulated in the APA. The Fifth Circuit first analyzes the Farm Petitioners' challenges and grants the petition in part and denies it in part. Secondly, the decision analyzes the Poultry Petitioners' challenge to the EPA Letters and dismisses their petition for lack of jurisdiction per the EPA's motion.
On the "duty to apply" liability, the Appeals Court says, "We conclude that the CWA provides a comprehensive liability scheme, and the EPA's attempt to supplement this scheme is in excess of its statutory authority." The decision states further, ". . .we decline to uphold the EPA's requirement that CAFOs that propose to discharge apply for an NPDES permit." Citing various previous case, the Fifth Circuit says, "These cases leave no doubt that there must be an actual discharge into navigable waters to trigger the CWA's requirements and the EPA's authority. Accordingly, the EPA's authority is limited to the regulation of CAFOs that discharge. Any attempt to do otherwise exceeds the EPA's statutory authority. Accordingly, we conclude that the EPA's requirement that CAFOs that 'propose' to discharge apply for an NPDES permit is ultra vires and cannot be upheld. . . In summary, we conclude that the EPA cannot impose a duty to apply for a permit on a CAFO that 'proposes to discharge' or any CAFO before there is an actual discharge. However, it is within the EPA's province, as contemplated by the CWA, to impose a duty to apply on CAFOs that are discharging."
Further, the Fifth Circuit says, "The 2008 Rule provides that a CAFO can be held liable for failing to apply for a permit. The Farm Petitioners contend that the EPA does not have the authority to create this liability. We agree. . . the imposition of 'failure to apply' liability is outside the bounds of the CWA's mandate. . . The CWA simply does not authorize this type of supplementation to its comprehensive liability scheme. Nor has Congress been compelled, since the creation of the NPDES permit program, to make any changes to the CWA, requiring a non-discharging CAFO to apply for an NPDES permit or imposing failure to apply liability. . ."
On the subject of land application, the Farm Petitioners argue that the EPA's requirement that all NMPs [Nutrient Management Plans] address protocols for land application exceeds the EPA's statutory authority. The Appeals Court rules, "The Farm Petitioners' arguments are problematic because they are challenging a requirement promulgated in the 2003 Rule. Thus, the Farm Petitioners' arguments had to be made within the 120-day time period for challenging rules promulgated by an agency. . . Thus, the Farm Petitioners' arguments, regarding NMPs and the protocols for land application, brought almost six years after they were promulgated, are time barred."
On the subject the EPA Letters which state that poultry growers must apply for NPDES permits for the releases of dust through poultry confinement house ventilation fans, the Poultry Petitioners argue that this requirement is a substantive rule because it creates new legal consequences and affects individual rights and obligations. The Appeals Court explains that, "The CWA establishes a bifurcated jurisdictional scheme whereby courts of appeals have jurisdiction over some categories of challenges to EPA action, and the district courts retain jurisdiction over other types of complaints.
As such, the decision states, "Although the guidance letters do, as the Poultry Petitioners note, obligate them to obtain a permit if they discharge manure or litter through ventilation fans or face legal consequences, the EPA Letters neither create new legal consequences nor affect their rights or obligations. Here, the guidance letters merely restate section 1342's prohibition against discharging pollutants without an NPDES permit. Agency actions that have no effect on a party's rights or obligations are not reviewable final actions. . . Accordingly, we grant the EPA's motion to dismiss because we lack jurisdiction to consider the Poultry Petitioners' challenge to the EPA Letters."
In a final conclusion the Fifth Circuit rules, "For the foregoing reasons, the petitions are granted in part, denied in part, and dismissed in part. We hereby vacate those provisions of the 2008 Rule that require CAFOs that propose to discharge to apply for an NPDES permit, but we uphold the provisions of the 2008 Rule that impose a duty to apply on CAFOs that are discharging. We vacate those provisions of the 2008 Rule that create liability for failing to apply for an NPDES permit. Additionally, we uphold the provisions of the 2008 Rule that allow permitting authorities to regulate a permitted CAFO's land application and include these requirements in a CAFO's NPDES permit. Finally, we dismiss the Poultry Petitioners' challenge of the guidance letters for lack of jurisdiction."
The American Farm Bureau Federation (AFBF) and other farm organizations, issued a release saying, ". . .a unanimous federal court of appeals has ruled that the Environmental Protection Agency cannot require livestock farmers to apply for Clean Water Act permits unless their farms actually discharge manure into U.S. waters." The ruling was welcomed by the American Farm Bureau Federation, National Pork Producers Council and several other agriculture groups that filed suit against EPA in the U.S. Court of Appeals for the Fifth Circuit. AFBF President Bob Stallman said, "For the second time, a U.S. Court of Appeals has ruled that EPA's authority is limited by the Clean Water Act to jurisdiction over only actual discharges to navigable waters, not potential discharges. We are pleased that the federal courts have again reined in EPA's unlawful regulation of livestock operations under the Clean Water Act. The court has affirmed that EPA, like other federal agencies, can only regulate where it has been authorized by Congress to do so."
Access the complete opinion (click here). Access a release from AFBF (click here).
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