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Clean Water Action v. United States Environmental Protection Agency

United States Court of Appeals, Fifth Circuit

August 28, 2019

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; ANDREW WHEELER, Acting Administrator, United States Environmental Protection Agency, Respondents

          Petition for Review of an Order of the Environmental Protection Agency

          Before Higginbotham, Jones, and Costa, Circuit Judges.

          Edith H. Jones, Circuit Judge:

         Through notice-and-comment rulemaking, the Environmental Protection Agency ("EPA") reviewed and decided to revise[1] the earliest compliance dates for new, stringent BAT ("best available technology economically achievable") effluent limitations and PSES ("pretreatment standards for existing source") concerning two waste streams from steam electric power generating point sources that had previously been promulgated in a 2015 Rule.

         More specifically, the agency postponed for two years only the earliest compliance dates mandated by the 2015 Rule for flue gas desulfurization (FGD) wastewater and bottom ash transport water, while (a) retaining the 2015 Rule's BAT limitations and pretreatment standards for other waste streams from such power plants, and (b) not altering either the last date for compliance (December 2023) or, pending reconsideration, the substantive limits required by the 2015 Rule for the two postponed stream modifications. A consortium of environmental groups has challenged the postponement, while EPA and the intervenor, Utility Water Act Group ("UWAG"), [2] defend the Postponement Rule. We conclude that the EPA had statutory authority to pass this tailored rule, the agency explained its decision adequately, its decision was reasonable, and it was thus neither arbitrary nor capricious. The petition for review is DENIED.


         The 2015 Rule represented the culmination of ten years' work by EPA to update steam electric power generating plant standards for compliance with the Clean Water Act, 33 U.S.C. § 1251 et seq., that had been in place since 1982. In that Rule, the agency, among other things, defined much more stringent BAT limits and pretreatment standards for seven defined wastestreams. Recognizing that power plants would need substantial lead time to plan, fund, and build necessary new facilities, the agency mandated in the 2015 Rule an earliest compliance date of November 2018 and delegated to permitting authorities the flexibility to approve individual point source compliance as feasible over a period extending until the end of 2023.

         Four lawsuits challenging the 2015 Rule were soon filed in the federal courts.[3] The petitions were consolidated by the Judicial Panel on Multidistrict Litigation and transferred to this court.[4] During these preliminaries, UWAG, later supplemented by the Small Business Administration's Office of Advocacy, submitted petitions asking EPA to reconsider the entire 2015 Rule and suspend its approaching deadlines.[5] Among other things, these petitions raised substantial questions, based on newly discovered information, about the extraordinary costs of implementing the 2015 Rule and the infeasibility of EPA's proposed technology as applied to certain power plants. Taking these petitions seriously, EPA's Administrator determined that it was appropriate and in the public interest to reconsider the 2015 Rule.

         After an initial stay, a formal rulemaking procedure ensued, the notice of which generated thousands of written comments, and the agency conducted a public hearing on July 31, 2017. In the end, EPA decided to adhere to most aspects of the 2015 Rule. EPA left in place the legacy wastewater limitations, which are BAT limitations that apply to each of the regulated wastestreams beginning on the effective dates set out in the 2015 Rule; the new and more stringent limitations and quantitative standards (i.e., the permissible amount of discharges); and the latest compliance date for NPDES permitting authorities to impose those limitations.[6] See generally, Postponement Rule, 82 Fed. Reg. at 43, 494. But the agency also decided it must reconsider the 2015 Rule's regulations governing two wastestreams (FGD wastewater and bottom ash transport water) in light of "new information not contained in the record for the 2015 Rule." Id. at 43, 496. As support for reconsideration, EPA cited "the inherent discretion the Agency has to reconsider past policy decisions consistent with the CWA and other applicable law." Id. EPA's expressed purpose for postponing the earliest effective compliance dates for these wastestreams during reconsideration was to "prevent the potentially needless expenditure of resources during a rulemaking that may ultimately change the 2015 Rule . . . ." Id. The agency, however, specifically declined to forecast whether, after reconsideration, it will substantially revise the 2015 Rule.[7]


         The standard of review here is deferential, focusing on whether the agency action is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). "If the agency's reasons and policy choices conform to minimal standards of rationality, then its actions are reasonable and must be upheld." Tex. Oil & Gas Ass'n v. EPA, 161 F.3d 923, 934 (5th Cir. 1998). The reviewing court may not "substitute its judgment for that of the agency." Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824 (1971).

         EPA must provide a reasoned explanation for its revisions and follow the same process to revise a rule as it used to promulgate it. See Perez v. Mortg. Bankers Ass'n, 135 S.Ct. 1199, 1206 (2015). Even "a decision based on an administrative record of less than ideal clarity will be upheld if the agency's path may reasonably be discerned." United States v. Garner, 767 F.2d 104, 118 (5th Cir. 1985). This court, however, "'may not supply a reasoned basis for the agency's action that the agency itself has not given.'" Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2867 (quoting SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)).


         In this instance, EPA went out of its way to issue a narrow reconsideration decision, leaving intact the bulk of the 2015 Rule, and to substantiate its course of action legally through notice-and-comment rulemaking.[8] According to the Petitioners, that was not enough. Petitioners fault the EPA for issuing the Postponement Rule without legal authority because they argue it is an unauthorized stay or the "functional equivalent" of a stay of the 2015 Rule; for failing to consider mandatory statutory factors before promulgating a revision; and ...

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