Sack, Circuit Judge:
Because New York City cannot tap the rivers, bays, and ocean that inhabit, surround, or, on occasion, inundate it to slake the thirst of its many millions of residents, it must instead draw water primarily from remote areas north of the City, mainly the Catskill Mountain/Delaware River watershed west of the Hudson River, and the Croton Watershed east of the Hudson River and closer to New York City.
The movement of water from the Schoharie Reservoir through the Shandaken
Historically, the United States Environmental Protection Agency (the "EPA") has taken a hands-off approach to water transfers, choosing not to subject them to the requirements of the National Pollutant Discharge Elimination System ("NPDES") permitting program established by the Clean Water Act in 1972. Some have criticized the EPA for this approach. They argue that like ballast water in ships,
Shortly thereafter, several environmentalist organizations and state, provincial, and tribal governments challenged the Rule by bringing suit against the EPA and its Administrator in the United States District Court for the Southern District of New York. After many entities — governmental, tribal, and private — intervened on either side of the case, the district court (Kenneth M. Karas, Judge) granted summary judgment for the plaintiffs, vacating the Rule and remanding the matter to the EPA. In a thorough, closely reasoned, and detailed opinion, the district court concluded that although Chevron deference is applicable and requires the courts to defer to the EPA and uphold the Rule if it is reasonable, the Rule represented an unreasonable interpretation of the Clean Water Act, and was therefore invalid under the deferential two-step framework for judicial review established in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The court held that the Rule was contrary to the requirements established by the Act.
The Federal Government and the intervenor-defendants timely appealed. Despite the district court's herculean efforts and its careful and exhaustive explanation for the result it reached, we now reverse for the reasons set forth below.
At step one of the Chevron analysis, we conclude — as did the district court — that the Clean Water Act does not speak directly to the precise question of whether NPDES permits are required for water transfers, and that it is therefore necessary to proceed to Chevron's second step. At step two of the Chevron analysis, we conclude — contrary to the district court — that the Water Transfers Rule's interpretation of the Clean Water Act is reasonable. We view the EPA's promulgation of
In 1972, following several events such as the 1969 "burning" of the Cuyahoga River in Cleveland, Ohio that increased national concern about pollution of our nation's waters, Congress enacted the Federal Water Pollution Control Act ("FWPCA") Amendments of 1972, 86 Stat. 816, as amended, 33 U.S.C. § 1251 et seq., commonly known as the Clean Water Act (sometimes hereinafter the "Act" or the "CWA"). Congress's principal objective in passing the Act was "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). Congress also envisioned that the Act's passage would enable "the discharge of pollutants into the navigable waters [to] be eliminated by 1985." Id. § 1251(a)(1). Although time has proven this projection to have been over-optimistic at best, it is our understanding that the Act has succeeded to a significant degree in cleaning up our nation's waters.
"[B]y setting forth technology-based effluent limitations and, in certain cases, additional water quality based effluent limitations[, ]the NPDES permit `defines, and facilitates compliance with, and enforcement of, a preponderance of a discharger's obligations under the [Act].'" Waterkeeper Alliance, Inc. v. EPA, 399 F.3d 486, 492 (2d Cir. 2005) (third brackets in original) (quoting EPA v. California ex rel. State Water Res. Control Bd., 426 U.S. 200, 205, 96 S.Ct. 2022, 48 L.Ed.2d 578 (1976)). Noncompliance with an NPDES permit's conditions is a violation of the Clean Water Act. 33 U.S.C. § 1342(h). Once an NPDES permit has been issued, the EPA, states, and citizens can bring suit in federal court to enforce it. See id. §§ 1319(a)(3), 1365(a).
The Act envisions "cooperative federalism" in the management of the nation's water resources. See, e.g., New York v. United States, 505 U.S. 144, 167, 112 S.Ct. 2408, 120 L.Ed.2d 120 (1992) (referring to the Act as an example of "cooperative federalism"); Arkansas v. Oklahoma, 503 U.S. 91, 101, 112 S.Ct. 1046, 117 L.Ed.2d 239 (1992) (the Act "anticipates a partnership between the States and the Federal Government"). Reflecting that approach, states typically control the NPDES permitting programs as they apply to waters within their borders, subject to EPA approval. See 33 U.S.C. §§ 1314(i)(2), 1342(b)-(c).
According to EPA regulations, a "water transfer" is "an activity that conveys or connects waters of the United States without subjecting the transferred water to intervening industrial, municipal, or commercial use." 40 C.F.R. § 122.3(i). Water transfers take a variety of forms. A transfer may be accomplished, for example, through artificial tunnels and channels, or natural streams and water bodies; and through active pumping or passive direction. There are thousands of water transfers currently in place in the United States, including at least sixteen major diversion projects west of the Mississippi River. Many of the largest U.S. cities draw on water transfers to bring drinkable water to their residents. The City of New York's "water supply system ... relies on transfers of water among its [nineteen] collecting reservoirs. The City provides approximately 1.2 billion gallons of ... water a day to nine million people — nearly half of the population of New York State." Letter Dated August 7, 2006, from Mark D. Hoffer, General Counsel, City of New York Department of Environmental Protection to EPA, at 1, J.A. at 331.
The parties and amici tell us that water transfers are of special significance in the Western United States. Because much precipitation in the West falls as snow, water authorities there must capture water when and where the snow falls and melts, typically in remote and sparsely populated areas, and then transport it to agricultural and urban sites where it is most needed. See Western States Br. 1-2; see also State of California Amicus Br. 16 n.5. Colorado, for example, engages in over forty interbasin diversions in order to serve the State's water needs. See Letter Dated July 17, 2006, from Brian N. Nazarenus, Chair, Colorado Water Quality Control Commission, to Water Docket, EPA, at 1, J.A. at 320. California uses the "California State Water Project," a complex water delivery system based on interbasin transfers from Northern California to Southern California, to serve the water needs of 25 million of its 37 million residents. See State of California Amicus Br. 3-10. Water transfers are also obviously crucial to agriculture, conveying water to enormously important farming regions such as the Central and Imperial Valleys of California, Weld and Larimer Counties in Colorado, the Snake River Valley of Idaho, and the Yakima Valley of Washington. See Water Districts Br. 16-19.
At the same time, though, water transfers, like ballast water in ships, see generally Nat. Res. Def. Council, 808 F.3d at 561-62, can move pollutants from one body of water to another, potentially endangering ecosystems, portions of the economy, and public health near the receiving water body — and possibly beyond. Despite these risks, for many years the EPA has taken a
During the 1990s and 2000s, prior to its codification in the Water Transfers Rule, the EPA's position was challenged by, among others, environmentalist groups, which filed several successful lawsuits asserting that NPDES permits were required for some specified water transfers. See, e.g., Catskill Mountains Chapter of Trout Unlimited, Inc. v. City of New York, 451 F.3d 77 (2d Cir. 2006) ("Catskill II"), cert. denied, 549 U.S. 1252, 127 S.Ct. 1373, 167 L.Ed.2d 160 (2007); N. Plains Res. Council v. Fid. Expl. & Dev. Co., 325 F.3d 1155 (9th Cir.), cert. denied, 540 U.S. 967, 124 S.Ct. 434, 157 L.Ed.2d 312 (2003); Catskill Mountains Chapter of Trout Unlimited, Inc. v. City of New York, 273 F.3d 481 (2d Cir. 2001) ("Catskill I"); see also Dubois v. U.S. Dep't of Agric., 102 F.3d 1273 (1st Cir. 1996), cert. denied sub nom. Loon Mountain Recreation Corp. v. Dubois, 521 U.S. 1119, 117 S.Ct. 2510, 138 L.Ed.2d 1013 (1997). None of these decisions classified the EPA's views on the regulation of water transfers as sufficiently formal to warrant Chevron, deference. See, e.g., Catskill II, 451 F.3d at 82 (declining to apply Chevron deference framework); Catskill I, 273 F.3d at 491 (same).
In response, the EPA took steps to formalize its position. In August 2005, the EPA's Office of General Counsel and Office of Water issued a legal memorandum written by then-EPA General Counsel Ann R. Klee (the "Klee Memorandum") that argued that Congress did not intend for water transfers to be subject to the NPDES permitting program. The EPA proposed a formal rule incorporating this interpretation on June 7, 2006, 71 Fed. Reg. 32,887, and then, following notice-and-comment rulemaking proceedings, on June 13, 2008, adopted a final rule entitled "National Pollutant Discharge Elimination System (NPDES) Water Transfers Rule" (the "Water Transfers Rule"), 73 Fed. Reg. 33,697-708 (June 13, 2008) (codified at 40 C.F.R. § 122.3(i)).
The Water Transfers Rule's summary states:
Id. at 33,697.
The Rule states that water transfers "do not require NPDES permits because they do not result in the `addition' of a pollutant."
In the Water Transfers Rule, the EPA justified its interpretation of the Act in an explanation spanning nearly four pages of the Federal Register, touching on the text of Section 402, the structure of the Act, and pertinent legislative history. See Water Transfers Rule, 73 Fed. Reg. at 33,700-03. The EPA explained that its "holistic approach to the text" of the statute was "needed here in particular because the heart of this matter is the balance Congress created between federal and State oversight of activities affecting the nation's waters." Id. at 33,701. The agency also responded to a wide variety of public comments on the proposed Rule. See id. at 33,703-06.
On June 20, 2008, a group of environmental conservation and sporting organizations filed a complaint against the EPA and its Administrator (then Stephen L. Johnson, now Gina McCarthy) in the United States District Court for the Southern District of New York. The States of New York, Connecticut, Delaware, Illinois, Maine, Michigan, Minnesota, Missouri, and Washington, and the Province of Manitoba, Canada (collectively, the "Anti-Rule States") did the same on October 2, 2008. In their complaints, the plaintiffs requested that the district court hold unlawful and set aside the Water Transfers Rule pursuant to Section 706(2) of the Administrative Procedure Act (the "APA"), 5 U.S.C. § 706(2).
At about the same time these actions were filed, five parallel petitions for review of the Water Transfers Rule were filed in the First, Second, and Eleventh Circuits. On July 22, 2008, the United States Judicial Panel on Multidistrict Litigation consolidated these petitions and randomly assigned
On January 30, 2013, the district court granted multiple applications on consent to intervene as plaintiffs and defendants under Federal Rule of Civil Procedure 24. This added as intervenor-plaintiffs the Miccosukee Tribe of Indians of Florida, Friends of the Everglades, the Florida Wildlife Federation, and the Sierra Club, and as intervenor-defendants the States of Alaska, Arizona (Department of Water Resources), Colorado, Idaho, Nebraska, Nevada, New Mexico, North Dakota, Texas, Utah, and Wyoming, and various municipal water providers from Western states. The parties filed multiple motions and cross-motions for summary judgment.
On March 28, 2014, the district court granted the plaintiffs' motions for summary judgment and denied the defendants' cross-motions. Catskill Mountains Chapter of Trout Unlimited, Inc. v. EPA, 8 F.Supp.3d 500 (S.D.N.Y. 2014). At the first step of the Chevron analysis, the district court decided that the Clean Water Act is ambiguous as to whether Congress intended the NPDES program to apply to water transfers. Id. at 518-32. The district court then proceeded to the second step of the Chevron analysis, at which it struck down the Water Transfers Rule as an unreasonable interpretation of the Act. Id. at 532-67.
The defendants and intervenor-defendants other than the Northern Colorado Water Conservancy District (hereinafter "the defendants") timely appealed.
"On appeal from a grant of summary judgment in a challenge to agency action under the APA, we review the administrative record and the district court's decision de novo." Bellevue Hosp. Ctr. v. Leavitt, 443 F.3d 163, 173-74 (2d Cir. 2006). We conclude that the Water Transfers Rule is a reasonable interpretation of the Clean Water Act and is therefore entitled to Chevron deference. Accordingly, we reverse the judgment of the district court.
This framework has been fashioned as a means for the proper resolution of administrative-law disputes that involve all three branches of the Federal Government, seriatim.
First, the Legislative Branch, Congress, passes a bill that reflects its judgment on the issue — in the case before us, the Clean Water Act. After the head of the Executive Branch, the President, signs that bill, it becomes the law of the land.
Second, the Executive Branch, if given the authority to do so by legislation, may address the issue through its authorized administrative agency or agencies, typically although not necessarily by regulation — in this case the EPA through its Water Transfer Rule. In doing so, the executive agency must defer to the Legislative Branch by following the law or laws that it has enacted and that cover the matter.
Only last, in case of a challenge to the Legislative Branch's authority to pass the law, or to the Executive Branch's authority to administer it in the manner that it has chosen to adopt, may we in the Judicial Branch become involved in the process. When we do so, though, we are not only last, we are least: We must defer both to the Legislative Branch by refraining from reviewing Congress's legislative work beyond determining what the statute at issue means and whether it is constitutional, and to the Executive Branch by using the various principles of deference, including Chevron deference, which we conclude is applicable in the case at bar. For us to decide for ourselves what in fact is the preferable route for addressing the substantive problem at hand would be directly contrary to this constitutional scheme. What we may think to be the best or wisest resolution of problems of water transfers and pollution emphatically does not matter.
Abiding by this constitutional scheme, we begin at Chevron Step One. We conclude, as did the district court, that Congress did not in the Clean Water Act clearly and unambiguously speak to the precise question of whether NPDES permits are required for water transfers. It is therefore necessary to proceed to Chevron Step Two, under which we conclude that the EPA's interpretation of the Act in the Water Transfers Rule represents a reasonable policy choice to which we must defer. The question is whether the Clean Water Act can support the EPA's interpretation, taking into account the full
At Chevron Step One, "the [reviewing] court must determine `whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.'" City of Arlington v. FCC, ___ U.S. ___, 133 S.Ct. 1863, 1868, 185 L.Ed.2d 941 (2013) (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778). To determine whether a statute is ambiguous, we employ "traditional tools of statutory construction" to ascertain if "Congress had an intention on the precise question at issue" that "must be given effect." Chevron, 467 U.S. at 843 n.9, 104 S.Ct. 2778.
The issue before us at this point, then, is whether the Act plainly requires a party to acquire an NPDES permit in order to make a water transfer. We agree with the district court that the Clean Water Act does not clearly and unambiguously speak to that question. We will begin, however, by addressing the plaintiffs' argument that we previously held otherwise in Catskill I, 273 F.3d 481 (2d Cir. 2001), and Catskill II, 451 F.3d 77 (2d Cir. 2006).
The plaintiffs argue that this case can be resolved at Chevron Step One because we held in Catskill I and Catskill II that the Clean Water Act unambiguously requires NPDES permits for water transfers. We disagree with the plaintiffs' reading of those decisions because our application there of the deference standard set forth in Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944), and United States v. Mead Corp., 533 U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) — so-called "Skidmore" or "Skidmore/Mead" deference — and the reasoning underlying the decisions make clear that we have not previously held that the statutory language at issue here is unambiguous, such that we cannot defer under Chevron to the EPA's interpretation of the Clean Water Act in the Water Transfers Rule.
In Catskill I, we held that that the City of New York
In both Catskill I and Catskill II, we applied the Skidmore deference standard to informal policy statements by the EPA that interpreted the same provision of the Act at issue here not to require NPDES permits for water transfers. See
Although the Chevron and Skidmore deference standards differ in application, they are similar in one respect: As with Chevron, deference, we will defer to the agency's interpretation under the Skidmore standard only when the statutory language at issue is ambiguous. See, e.g., Riegel v. Medtronic, Inc., 552 U.S. 312, 326, 128 S.Ct. 999, 169 L.Ed.2d 892 (2008) (suggesting that it is "unnecessary" to engage in Skidmore analysis if "the statute itself speaks clearly to the point at issue"); Exxon, Mobil Corp. & Affiliated Cos. v. Comm'r of Internal Revenue, 689 F.3d 191, 200 n.13 (2d Cir. 2012) (explaining that Skidmore analysis applies to "an agency's interpretation of an ambiguous statute"); Wong v. Doar, 571 F.3d 247, 258 (2d Cir. 2009) (concluding that "Congress did not speak directly to the issue" before proceeding to apply Skidmore deference); see also Gen. Dynamics Land Sys., Inc. v. Cline, 540 U.S. 581, 600, 124 S.Ct. 1236, 157 L.Ed.2d 1094 (2004) ("[D]eference to [an agency's] statutory interpretation is called for only when the devices of judicial construction have been tried and found to yield no clear sense of congressional intent."); High Sierra Hikers Ass'n v. Blackwell, 390 F.3d 630, 638 (9th Cir. 2004) ("If the statute is clear and unambiguous, no deference is required and the plain meaning of Congress will be enforced."). As commentators have noted, although the Supreme Court has not explicitly stated "that Skidmore necessarily includes a `step one' inquiry along the lines of Chevron [S]tep [O]ne[,] ... in practice, Skidmore generally does include a `step one,'" in which a court "first review[s] the statute for a plain meaning [to] determin[e] [whether] the statute [is] ambiguous." Kristin E. Hickman & Matthew D. Krueger,
But as the dissent correctly notes, see Dissent at 541-42, it does not follow that a particular application of the Skidmore framework implies a threshold conclusion that the relevant statutory language is ambiguous. Although a court could first conclude that the text is unambiguous — and therefore that Skidmore deference is inappropriate or unnecessary
Our application of the Skidmore deference standard in Catskill I and Catskill II makes clear that we did not decide and have not decided that the statutory language at issue in this case — "addition ... to navigable waters" — is unambiguous. Although we did not explicitly conclude in those cases that the statutory text was ambiguous, we made clear that we did not intend to foreclose the EPA from adopting a unitary-waters reading of the Act (i.e., waters of the United States means all of those waters rather than each of them) in a formal rule; indeed, we stated in Catskill I that "[i]f the EPA's position had been adopted in a rulemaking or other formal proceeding, [Chevron] deference ... might be appropriate." Catskill I, 273 F.3d at 490-91 & n.2. This statement implies that we thought the relevant statutory text was at least possibly ambiguous.
The few references to "plain meaning" in Catskill I and Catskill II do not compel a different conclusion. The crucial interpretive question framed by Catskill I — which we identified as the "crux" of the appeal — was "the meaning of `addition,' which the Act does not define." Id. at 486. As the dissent points out, see Dissent at 543-44, we concluded in Catskill I that, based on the "plain meaning" of that term, the transfer of turbid water resulted in "an `addition' of a `pollutant' from a `point source'[
Nor did we make any such statement in Catskill II. There, we began by succinctly summarizing Catskill I as "concluding that the discharge of water containing pollutants from one distinct water body into another is an `addition of [a] pollutant' under the CWA." Catskill II, 451 F.3d at 80 (brackets in original) (citing Catskill I, 273 F.3d at 491-93). We then again rejected the City's arguments in favor of reconsidering Catskill I, including its argument in favor of the "unitary-water theory of navigable waters," essentially for the reasons stated in Catskill I — most importantly, that these arguments "simply overlook[ed]" the "plain language" and "ordinary meaning" of the term "addition." Id. at 81-84. We also noted that in the then-recent Miccosukee decision, the Supreme Court noted the existence of the unitary-waters theory and raised possible arguments against it, providing further support for our rejection of the theory in Catskill I. Catskill II, 451 F.3d at 83 (citing Miccosukee, 541 U.S. at 105-09, 124 S.Ct. 1537). Nowhere did we state that the phrase "addition ... to navigable waters" was unambiguous such that it would preclude Chevron deference in the event that the EPA adopted a formal rule. We held only that the EPA's position, as expressed in an informal interpretation, was unpersuasive under the Skidmore framework. Id. at 83 & n.5 (noting that under Skidmore "[w]e ... defer to the agency interpretation according to its `power to persuade'" and "declin[ing] to
The best interpretation of Catskill I and Catskill II, we think, is that those decisions set forth what those panels saw as the most persuasive reading of the phrase "addition ... to navigable waters" in light of how the word "addition" is plainly and ordinarily understood. Catskill I and Catskill II did not hold that "addition ... to navigable waters" could bear only one meaning, such that the EPA could not interpret the phrase differently in an interpretive rule. Therefore, as the district court concluded, neither Catskill I nor Catskill II requires us to resolve this appeal at Chevron Step One.
Having determined that the meaning of the relevant provision of the Clean Water Act has not been resolved by prior case law, we turn to the overall statute and its context. In evaluating whether Congress has directly spoken to whether NPDES permits are required for water transfers, we employ the "traditional tools of statutory construction." Li v. Renaud, 654 F.3d 376, 382 (2d Cir. 2011) (quoting Chevron, 467 U.S. at 843 n.9, 104 S.Ct. 2778). We examine the statutory text, structure, and purpose as reflected in its legislative history. See id. If the statutory text is ambiguous, we also examine canons of statutory construction. See Lawrence + Mem'l Hosp., 812 F.3d at 264; see also Am. Farm Bureau Fed'n v. EPA, 792 F.3d 281, 301 (3d Cir. 2015), cert. denied, ___ U.S. ___ 136 S.Ct. 1246, 194 L.Ed.2d 176 (2016); Heino v. Shinseki, 683 F.3d 1372, 1378 (Fed. Cir. 2012); EEOC v. Seafarers Int'l Union, 394 F.3d 197, 203 (4th Cir. 2005).
"As with any question of statutory interpretation, we begin with the text of the statute to determine whether the language at issue has a plain and unambiguous meaning." Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 108 (2d Cir. 2012). The statutory language at issue is found in Sections 301, 402, and 502 of the Clean Water Act. Section 301(a) states that "[e]xcept as in compliance with [the Act], the discharge of any pollutant by any person shall be unlawful." 33 U.S.C. § 1311(a). Section 402(a)(1) states that the EPA may issue an NPDES permit allowing the "discharge of any pollutant, or combination of pollutants, notwithstanding [Section 301(a)]," so long as the discharge meets certain requirements specified by the Clean Water Act and the permit. See id. § 1342(a)(1). Section 502 defines the term "discharge of a pollutant," in relevant part, as "any addition of any pollutant to navigable waters from any point source." Id. § 1362(12). Section 502 also defines the term "navigable waters" as "the waters of the United States, including the territorial seas." Id. § 1362(7). But nowhere do these provisions speak directly to the question of whether an NPDES permit may be required for a water transfer.
Nor is the meaning of the relevant statutory text plain. The question, as we have indicated above, is whether "addition of any pollutant to navigable waters" — or, "addition of any pollutant to the waters of the United States" — refers to all navigable waters, meaning all of the waters of the United States viewed as a singular whole, or to individual navigable waters, meaning one of the waters of the United States. The term "waters" may be used in either sense: As the Eleventh Circuit observed, "[i]n ordinary usage `waters' can collectively refer to several different bodies of water such as `the waters of the Gulf coast,' or
Unfortunately, placing this statutory language in the broader context of the Act as a whole does not help either. A statutory provision's plain meaning may be "understood by looking to the statutory scheme as a whole and placing the particular provision within the context of that statute." Louis Vuitton, 676 F.3d at 108 (quoting Saks v. Franklin Covey Co., 316 F.3d 337, 345 (2d Cir. 2003)). "It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme." Sturgeon v. Frost, ___ U.S. ___, 136 S.Ct. 1061, 1070, 194 L.Ed.2d 108 (2016) (internal quotation marks omitted) (quoting Roberts v. Sea-Land Servs., Inc., 566 U.S. 93, 132 S.Ct. 1350, 1357, 182 L.Ed.2d 341 (2012)). Examination of the other uses of the terms "navigable waters" and "waters" elsewhere in the Clean Water Act does not establish that these terms can bear only one meaning. The Clean Water Act sometimes regulates individual water bodies and other times entire water systems.
As the plaintiffs and the dissent point out, several other provisions in the Clean Water Act suggest that "navigable waters" refers to any of several individual water bodies, specifically the Act's references to:
But this pattern of usage does not establish that "navigable waters" cannot ever refer to all waters as a singular whole because it also suggests that when Congress wants to make clear that it is using "navigable waters" in a particular sense, it can and sometimes does provide additional language as a beacon to guide interpretation. Cf. Rapanos, 547 U.S. at 732-33, 126 S.Ct. 2208 (holding that "[t]he use of the definite article (`the') and the plural number (`waters')" made clear that § 1362(7) is limited to "fixed bodies of water," such as "streams, ... oceans, rivers, [and] lakes,"
We thus see nothing in the language or structure of the Act that indicates that Congress clearly spoke to the precise question at issue: whether Congress intended to require NPDES permits for water transfers.
Inasmuch as the statutory text, context, and structure have yielded no definitive answer to the question before us, we conclude the first step of our Chevron analysis by looking to whether Congress's purpose in enacting the Clean Water Act establishes that the phrase "addition ... to navigable waters" can reasonably bear only one meaning. See Gen. Dynamics, 540 U.S. at 600, 124 S.Ct. 1236 (using both statutory purpose and history at Chevron Step One). Beginning with the name of the statute, it seems clear enough that the predominant goal of the Clean Water Act is to ensure that our nation's waters are "clean," at least in the sense of being reasonably free of pollutants. The Act itself states that its main objective is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). The plaintiffs and the dissent argue that exempting water transfers from the NPDES permitting program could frustrate the achievement of this goal by allowing unmonitored transfers of polluted water from one water body to another. Cf. Catskill II, 451 F.3d at 81 (observing that a unitary-waters interpretation of navigable waters would allow for "the transfer of water from a heavily polluted, even toxic, water body to one that was pristine").
As the Supreme Court has noted, however, "no law pursues its purpose at all costs." Rapanos, 547 U.S. at 752, 126 S.Ct. 2208. We see no reason to think that the Clean Water Act is an exception. To the contrary, the Clean Water Act is "among the most complex" of federal statutes, and it "balances a welter of consistent and inconsistent goals," Catskill I, 273 F.3d at 494, establishing a complicated scheme of federal regulation employing both federal and state implementation and supplemental state regulation, see, e.g., 33 U.S.C. § 1251(g) (federal agencies must cooperate with state and local governments to develop "comprehensive solutions" for pollution "in concert with ... managing water resources"). In this regard, the Act largely preserves states' traditional authority over water allocation and use, while according
Even careful analysis of the Clean Water Act's legislative history does not help us answer the interpretive question before us. Although we are generally "reluctant to employ legislative history at step one of Chevron analysis," legislative history is at times helpful in resolving ambiguity; for example, when the "`interpretive clues [speak] almost unanimously,' making Congress's intent clear `beyond reasonable doubt.'" Mizrahi v. Gonzales, 492 F.3d 156, 166 (2d Cir. 2007) (quoting Gen. Dynamics, 540 U.S. at 586, 590, 124 S.Ct. 1236). But here Congress has not left us a trace of a clue as to its intent. The more than 3,000-page legislative history of the Clean Water Act appears to be silent, or very nearly so, as to the applicability of the NPDES permitting program to water transfers. See generally Comm. on Env't. & Pub. Works, 95th Cong., 2d Sess., A Legislative History of the Clean Water Act of 1977 & A Continuation of the Legislative History of the Federal Water Pollution Control Act (1978); Comm. on Pub. Works, 93rd Cong., 1st Sess., A Legislative History of the Water Pollution Control Act Amendments of 1972 (1973). As we noted in Catskill I, the legislative history does not speak to the meaning of the term "addition" standing alone, 273 F.3d at 493, suggesting that the history is similarly silent as to the meaning of the broader phrase that includes this term, "addition... to navigable waters."
Finally and tellingly, neither the parties nor amici have pointed us to any legislative history that clearly addresses the applicability of the NPDES permitting program to water transfers. What few examples from the legislative history they have cited — such as the strengthening of the permit requirements in Section 301(b)(1)(C) to include water quality-based limits in addition to technology-based limitations, see William L. Andreen, The Evolution of Water Pollution Control in the United States — State, Local, and Federal Efforts, 1789-1972: Part II, 22 Stan. Envtl. L.J. 215, 270, 275-77 (2003), and broad aspirational statements about the elimination of water pollution and the need to regulate every point source by the report of the Senate's Environment and Public Works Committee, S. Rep. No. 92-414, at 3738, 3758 (1971), provide at most keyhole-view insights into Congress's intent. They do not speak to the issue before us with the "high level of clarity" necessary to resolve the textual ambiguity before us at Chevron Step One. Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 120 (2d Cir. 2007). The question is whether Congress has "directly spoken," Chevron, 467 U.S. at 842, 104 S.Ct. 2778, to whether NPDES permits are required for water transfers — not whether it has made a stray or oblique reference to that issue here and there.
The traditional canons of statutory construction also provide no clear answer to the question whether Congress intended that the NPDES permitting system apply to water transfers.
First, the dissent asserts that the Water Transfers Rule violates the principle that "`[w]here Congress explicitly enumerates certain exceptions to a general
Second, the plaintiffs invoke the canon of construction that a "statute should be interpreted in a way that avoids absurd results." SEC v. Rosenthal, 650 F.3d 156, 162 (2d Cir. 2011) (quoting United States v. Venturella, 391 F.3d 120, 126 (2d Cir. 2004)). They again underscore their arguments concerning statutory purpose in arguing that by allowing for the unpermitted transfer of polluted water from one water body to another, the Water Transfers Rule is contrary to the Act's principal stated objective: "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). Additionally, the plaintiffs argue that the Water Transfers Rule may undermine the ability of downstream states to protect themselves from the pollution generated by upstream states.
The simplicity of the plaintiffs' approach helps cloak their arguments with considerable force. But we are ultimately not persuaded that they establish that the Clean Water Act unambiguously forecloses the EPA's interpretation in the Water Transfers Rule. Indeed, it is unclear to us how one can argue persuasively that the Water Transfers Rule leads to a result so absurd that the result could not possibly have been intended by Congress, while asserting at the same time that it codifies the EPA's practice of not issuing NPDES permits that has prevailed for decades without Congressional course-correction of any kind. In light of the immense importance of water transfers, it seems more likely that Congress has contemplated the very result that the plaintiffs argue is foreclosed by the Act, and acquiesced in that result.
Furthermore, as the plaintiffs would have it, the EPA and the States could not, consistent with the Clean Water Act, select any policy that does not improve water quality as much as is possible. But the Clean Water Act is more flexible than that. Far from establishing a maximalist scheme under which water quality must be pursued at all costs, the Act leaves a considerable amount of policymaking discretion in the hands of both the EPA and the States — entirely understandably in light of its "welter of consistent and inconsistent goals." Catskill I, 273 F.3d at 494. We cannot say that the Act could not reasonably be read to permit water transfers to be exempt from the NPDES permitting program, in light of the possibility that other measures will do. Although the
We think that the legislative compromises embodied in the Act counsel against the application of the absurdity canon here. We generally apply that canon only "where the result of applying the plain language would be, in a genuine sense, absurd, i.e., where it is quite impossible that Congress could have intended the result and where the alleged absurdity is so clear as to be obvious to most anyone." Pub. Citizen v. U.S. Dep't of Justice, 491 U.S. 440, 470-71, 109 S.Ct. 2558, 105 L.Ed.2d 377 (1989) (Kennedy, J., concurring in the judgment) (citation omitted). Exempting water transfers from the NPDES program does not, we conclude, lead directly to a result so absurd it could not possibly have been contemplated by Congress.
As to the effect of the Rule on downstream states, even in the absence of NPDES permitting for water transfers, the States can seek to protect themselves against polluted water transfers through other means — for example, through filing a common-law nuisance or trespass lawsuit in the polluting state's courts, see, e.g., Int'l Paper Co. v. Ouellette, 479 U.S. 481, 497-98, 107 S.Ct. 805, 93 L.Ed.2d 883 (1987) — even if the protections provided by such lawsuits are less robust than those that would be available through the NPDES permitting program's application to transfers.
Third, arguing to the contrary, the defendants and amicus curiae State of California argue that we should reject the plaintiffs' preferred interpretation of Section 402 of the Clean Water Act (i.e., that permits are required for water transfers) based on a clear-statement rule and principles of federalism derived from the Supreme Court's decisions in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159, 121 S.Ct. 675, 148 L.Ed.2d 576 (2001) ("SWANCC"), and Rapanos, as well as the Tenth Amendment. If that were so, it would make our task much easier. But we think it is incorrect. To the extent that SWANCC and Rapanos establish a clear-statement rule, it does not apply here.
In SWANCC, the Supreme Court addressed the "Migratory Bird Rule" issued by the U.S. Army Corps of Engineers (the "Corps") under which the Corps asserted jurisdiction pursuant to Section 404(a) of the Clean Water Act to require permits for the discharge of dredged or fill material into intrastate waters used as habitat by migratory birds. SWANCC, 531 U.S. at 163-64, 121 S.Ct. 675. The Rule applied even to small, isolated ponds located entirely within a single state, such as those located in the abandoned sand and gravel pit there at issue. See id. at 163-65, 121 S.Ct. 675. The Court reasoned that, "[w]here an administrative interpretation of a statute invokes the outer limits of Congress' power, [it] expect[s] a clear indication that Congress intended that result," and that "[t]his concern is heightened where the administrative interpretation alters the federal-state framework by permitting federal encroachment upon a traditional
In Rapanos, a plurality of the Supreme Court rejected the EPA's interpretation of the Clean Water Act as providing authority to regulate isolated wetlands lying near ditches or artificial drains that eventually empty into "navigable waters" because the wetlands are adjacent to "waters of the United States." Rapanos, 547 U.S. at 723-24, 729, 739, 126 S.Ct. 2208. The plurality rejected the interpretation because it "would authorize the Corps to function as a de facto regulator of immense stretches of intrastate land," which was impermissible because a "`clear and manifest' statement from Congress" is required "to authorize an unprecedented intrusion" into an area of "traditional state authority" such as the regulation of land use. Id. at 738, 126 S.Ct. 2208 (citation omitted). Citing SWANCC, the Court also noted that "the Corps' interpretation stretches the outer limits of Congress's commerce power and raises difficult questions about the ultimate scope of that power," which further counseled in favor of requiring a clear statement from Congress in order to authorize such jurisdiction. Id. (citing SWANCC, 531 U.S. at 173, 121 S.Ct. 675).
The clear-statement rule articulated in SWANCC and Rapanos does not apply here. The case at bar presents no question regarding Congress's authority under the Commerce Clause, inasmuch as it is undisputed that Congress has the power to regulate navigable waters and to delegate its authority to do so. SWANCC and Rapanos both involved attempts by the Army Corps of Engineers to extend the scope of the phrase "navigable waters" to include areas not traditionally understood to be such. They were therefore treated as attempts by the Corps to stretch the limits of its delegated authority vis-à-vis the States. Here, the EPA is not seeking to expand the universe of waters deemed to be "navigable." The question before us is not whether the EPA has the authority to regulate water transfers; it is whether the EPA is using (or not using) that authority in a permissible manner.
The Clean Water Act was designed to alter the federal-state balance with respect to the regulation of water quality. Congress passed the Act precisely because it found inconsistent state-by-state regulation not up to the task of restoring and maintaining the integrity of the nation's waters. See S. Rep. No. 95-370, at 1 (1977) (the Act is intended to be a "comprehensive revision of national water quality policy"). True, as the defendants point out, water allocation is an area of traditional state authority. But again, we are concerned here not with water allocation, but with water quality. We know of no authority or accepted principle that would require a "clear statement" by Congress before
Fourth, and finally, several of the defendants raise the related argument that requiring permits for water transfers under the plaintiffs' preferred interpretation would pose a serious Tenth Amendment
But the plaintiffs' proposed interpretation raises no Tenth Amendment concerns that we can discern because it would not result in federal overreach into states' traditional authority to allocate water quantities. The Clean Water Act's preservation of states' water-allocation authority "do[es] not limit the scope of water pollution controls that may be imposed on users who have obtained, pursuant to state law, a water allocation." PUD No. 1 of Jefferson Cty. v. Wash. Dep't of Ecology, 511 U.S. 700, 720, 114 S.Ct. 1900, 128 L.Ed.2d 716 (1994). As we noted in Catskill II, the "flexibility built into the [Act] and the NPDES permit scheme," which includes variances, general permits, and the consideration of costs in setting effluent limitations, "allow[s] federal authority over quality regulation and state authority over quantity allocation to coexist without materially impairing either."
We conclude, then, that Congress did not in the Clean Water Act speak directly to the question of whether NPDES permits are required for water transfers.
At last, we reach the application of the second step of Chevron analysis, upon which our decision to reverse the district court's judgment turns. We conclude that the EPA's interpretation of the Clean Water Act is reasonable and neither arbitrary nor capricious. Although the Rule may or may not be the best or most faithful interpretation of the Act in light of its paramount goal of restoring and protecting the quality of U.S. waters, it is supported by several valid arguments — interpretive, the-oretical, and practical. And the EPA's interpretation of the Act as reflected in the Rule seems to us to be precisely the kind of policymaking decision that Chevron is designed to protect from overly intrusive judicial review. As we have already pointed out, although we might prefer a different rule more clearly guaranteed to reach the environmental concerns underlying the Act, Chevron analysis requires us to recognize that our preference does not matter. We conclude that the Water Transfers Rule satisfies Chevron's deferential standard of review, and, accordingly, we reverse the judgment of the district court.
The question for the reviewing court at Chevron Step Two is "whether the agency's answer [to the interpretive question] is based on a permissible construction of the statute." Mayo Found. for Med. Educ. & Research v. United States, 562 U.S. 44, 54, 131 S.Ct. 704, 178 L.Ed.2d 588 (2011) (quoting Chevron, 467 U.S. at 843, 104 S.Ct. 2778). We will not disturb an agency rule at Chevron Step Two unless it is "arbitrary or capricious in substance, or manifestly contrary to the statute." Id. at 53, 131 S.Ct. 704 (quoting Household Credit Servs., Inc. v. Pfennig, 541 U.S. 232, 242, 124 S.Ct. 1741, 158 L.Ed.2d 450 (2004)); see also Lawrence + Mem'l Hosp., 812 F.3d at 264. Generally, an agency interpretation is not "arbitrary, capricious, or manifestly contrary to the statute" if it is "reasonable." See Encino Motorcars, LLC v. Navarro, ___ U.S. ___, 136 S.Ct. 2117, 2125, 195 L.Ed.2d 382 (2016) ("[A]t [Chevron's] second step the court must defer to the agency's interpretation if it is `reasonable.'" (quoting Chevron, 467 U.S. at 844, 104 S.Ct. 2778)); Mayo, 562 U.S. at 58, 131 S.Ct. 704 ("[T]he second step of Chevron... asks whether the [agency's] rule is a `reasonable interpretation' of the enacted text." (quoting Chevron, 467 U.S. at 844, 104 S.Ct. 2778)); Lee v. Holder, 701 F.3d 931, 937 (2d Cir. 2012); Adams v. Holder, 692 F.3d 91, 95 (2d Cir. 2012). The agency's view need not be "the only possible interpretation, nor even the interpretation deemed most reasonable by the courts." Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 218, 129 S.Ct. 1498, 173 L.Ed.2d 369 (2009) (emphasis in original). This approach "is premised on the theory that a statute's ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps." FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000). When interpreting ambiguous statutory language "involves difficult policy choices," deference is especially appropriate because "agencies are better equipped to make [these choices] than courts." Brand X, 545 U.S. at 980, 125 S.Ct. 2688.
"Even under this deferential standard, however, agencies must operate within the bounds of reasonable interpretation," Michigan v. EPA, ___ U.S. ___, 135 S.Ct. 2699, 2707, 192 L.Ed.2d 674 (2015) (internal quotation marks omitted), and we therefore will not defer to an agency
In the course of its Chevron Step Two analysis, the district court incorporated the standard for evaluating agency action under APA § 706(2)(A) set forth in Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Company, 463 U.S. 29, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ("State Farm"), a much stricter and more exacting review of the agency's rationale and decisionmaking process than the Chevron Step Two standard. Under that section, a reviewing court may set aside an agency action if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). In State Farm, the Supreme Court explained that under Section 706(2)(A),
463 U.S. at 43, 103 S.Ct. 2856. On appeal, the plaintiffs urge us to incorporate the State Farm standard into our Chevron Step Two analysis, and to affirm the district court's vacatur of the Rule for essentially the same reasons stated by the court. While we have great respect for the district court's careful and searching analysis of the EPA's rationale for the Water Transfers Rule, we conclude that it erred by incorporating the State Farm standard into its Chevron Step Two analysis and thereby applying too strict a standard of review. An agency's initial interpretation of a statutory provision should be evaluated only under the Chevron framework, which does not incorporate the State Farm standard. State Farm review may be appropriate in a case involving a non-interpretive rule or a rule setting forth a changed interpretation of a statute; but that is not so in the case before us.
As the Supreme Court, our Circuit, and other Courts of Appeals have made reasonably clear, State Farm and Chevron provide for related but distinct standards for reviewing rules promulgated by administrative agencies. See, e.g., Encino, 136 S.Ct. at 2125-26; Judulang v. Holder, 565 U.S. 42, 132 S.Ct. 476, 483 n.7, 181 L.Ed.2d 449 (2011); Nat. Res. Def. Council, 808 F.3d at 569; New York v. FERC, 783 F.3d at 958; Pub. Citizen, Inc. v. Mineta, 340 F.3d 39, 53 (2d Cir. 2003); N.Y. Pub. Interest Research Grp. v. Whitman, 321 F.3d 316, 324 (2d Cir. 2003); see also, e.g., Shays v. FEC, 414 F.3d 76, 96-97 (D.C. Cir. 2005); Arent v. Shalala, 70 F.3d 610, 619 (D.C. Cir. 1995) (Wald, J., concurring). State Farm is used to evaluate whether a rule is procedurally defective as a result of flaws in the agency's decisionmaking process. See Encino, 136 S.Ct. at 2125; FERC v. Elec. Power Supply Ass'n, ___ U.S. ___, 136 S.Ct. 760, 784, 193 L.Ed.2d 661 (2016). Chevron, by contrast, is generally used to evaluate whether the conclusion reached as a result of that process — an agency's interpretation of a statutory provision it administers — is reasonable. See Encino, 136 S.Ct. at 2125; Entergy, 556 U.S. at 217-18, 129 S.Ct. 1498. A litigant challenging a rule may challenge it under State Farm, Chevron, or both. As Judge Wald explained,
Arent, 70 F.3d at 620 (Wald, J., concurring) (citation and footnotes omitted).
Much confusion about the relationship between State Farm and Chevron seems to arise because both standards purport to provide a method by which to evaluate whether an agency action is "arbitrary" or "capricious," and Chevron Step Two analysis and State Farm analysis often, though not always, take the same factors into consideration and therefore overlap. See Judulang, 132 S.Ct. at 483 n.7 (stating, in a case governed by the State Farm standard, that had the Supreme Court applied Chevron, the "analysis would be the same, because under Chevron step two, we ask whether an agency interpretation is arbitrary or capricious in substance" (internal quotation marks omitted)); Pharm. Research & Mfrs. of Am. v. FTC, 790 F.3d 198, 204 (D.C. Cir. 2015) (noting that it is "often the case" that an agency's "interpretation of its authority under Chevron Step Two overlaps with our arbitrary and capricious review under 5 U.S.C. § 706(2)(A)"); Am. Petroleum Inst. v. EPA, 216 F.3d 50, 57 (D.C. Cir. 2000) ("The second step of Chevron analysis and State Farm arbitrary and capricious review overlap, but are not identical."). We read the case law to stand for the proposition that where a litigant brings both a State Farm challenge and a Chevron challenge to a rule, and the State Farm challenge is successful, there is no need for the reviewing court to engage in Chevron analysis. As the Supreme Court has explained, "where a proper challenge is raised to the agency procedures, and those procedures are defective, a court should not accord Chevron deference to the agency interpretation." Encino, 136 S.Ct. at 2125.
Several other considerations also counsel against employing the searching State Farm standard of review of the agency's decisionmaking and rationale at Chevron Step Two. The Supreme Court has decided that agencies are not obligated to conduct detailed fact-finding or cost-benefit analyses when interpreting a statute — which suggests that the full-fledged State Farm standard may not apply to rules that set forth for the first time an agency's interpretation of a particular statutory provision. See, e.g., Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 651-52, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990) (an agency may interpret an ambiguous statutory provision by making "judgments about the way the real world works" without making formal factual findings); Entergy, 556 U.S. at 223, 129 S.Ct. 1498 (absent statutory language to the contrary, an agency is not required to conduct cost-benefit analysis under Chevron); Am. Textile Mfrs. Inst., Inc. v. Donovan, 452 U.S. 490, 510, 101 S.Ct. 2478, 69 L.Ed.2d 185 (1981) ("When Congress has intended that an agency engage in cost-benefit analysis, it has clearly indicated such intent on the face of the statute."). These decisions seem to establish that while an agency may support its statutory interpretation with factual materials or cost-benefit analyses, an agency need not do so in order for its interpretation to be regarded as reasonable.
Further, the Supreme Court has cautioned that State Farm is "inapposite to the extent that it may be read as prescribing more searching judicial review" in a case involving an agency's "first interpretation of a new statute." Verizon Commc'ns Inc. v. FCC, 535 U.S. 467, 502 n.20, 122 S.Ct. 1646, 152 L.Ed.2d 701 (2002); see also Judulang, 132 S.Ct. at 483 n.7 (stating that "standard arbitrary or capricious review under the APA" was appropriate because the agency action at issue was "not an interpretation of any statutory language" (internal quotation marks and brackets omitted)). Dovetailing with this point, the Supreme Court held in Brand X and Fox Television Stations that when an agency changes its interpretation of a particular statutory provision, this change is reviewable under APA § 706(2)(A), and will be set aside if the agency has failed to provide a "reasoned explanation ... for disregarding facts and circumstances that underlay or were engendered by the prior policy." Fox Television, 556 U.S. at 516, 129 S.Ct. 1800; Brand X, 545 U.S. at 981, 125 S.Ct. 2688 (explaining that "[u]nexplained inconsistency" is "a reason for holding an [agency] interpretation to be an arbitrary and capricious change from agency practice under the [APA]"). Of course, if all interpretive rules were reviewable under APA § 706(2)(A) and the State Farm standard, these pronouncements in Brand X and Fox Television Stations would have been unnecessary. We also note that applying a reasonableness standard to the agency's decisionmaking and rationale at Chevron Step Two instead of a heightened State Farm-type standard promotes respect for agencies' policymaking discretion and promotes policymaking flexibility.
For these reasons, the plaintiffs' challenge to the Water Transfers Rule is properly analyzed under the Chevron framework, which does not incorporate the State
We conclude that the EPA provided a reasoned explanation for its decision in the Water Transfers Rule to interpret the Clean Water Act as not requiring NPDES permits for water transfers. We can see from the EPA's rationale how and why it arrived at the interpretation of the Clean Water Act set forth in the Water Transfers Rule. It is clear that the EPA based the Rule on a holistic interpretation of the Clean Water Act that took into account the statutory language, the broader statutory scheme, the statute's legislative history, the EPA's longstanding position that water transfers are not subject to NPDES permitting, congressional concerns that the statute not unnecessarily burden water quantity management activities, and the importance of water transfers to U.S. infrastructure. See Water Transfers Rule, 73 Fed. Reg. at 33,699-33,703.
In the Water Transfers Rule, the EPA analyzed the text of the statute, explaining how its interpretation was justified by its understanding of the phrase "the waters of the United States," id. at 33,701, as well as by the broader statutory scheme, noting that the Clean Water Act provides for several programs and regulatory initiatives other than the NPDES permitting program that could be used to mitigate pollution caused by water transfers, id. at 33,701-33,702. The EPA also justified the Rule by reference to statutory purpose, noting its view that "Congress intended to leave primary oversight of water transfers to state authorities in cooperation with Federal authorities," and that Congress intended to create a "balance ... between federal and State oversight of activities affecting the nation's waters." Id. at 33,701. The EPA also stated that subjecting water transfers to NPDES permitting could affect states' ability to effectively allocate water and water rights, id. at 33,702, and explained how its interpretation was justified in light of the Act's legislative history, see id. at 33,703. The EPA concluded by addressing several public comments on the Rule, and explaining in a reasoned manner why it rejected proposed alternative readings of the Clean Water Act. See id. at 33,703-33,706.
This rationale, while not immune to criticism or counterargument, was sufficiently reasoned to clear Chevron's rather minimal requirement that the agency give a reasoned explanation for its interpretation. We see nothing illogical in the EPA's rationale.
Having concluded that the EPA offered a sufficient explanation for adopting the Rule, we next examine whether the Rule reasonably interprets the Clean Water Act. We conclude that it does. The EPA's interpretation of the Clean Water Act as reflected in the Rule is supported by several valid arguments — interpretive, theoretical, and practical. The permissibility of the Rule is reinforced by longstanding practice and acquiescence by Congress, recent case law, practical concerns regarding compliance costs, and the existence of alternative means for regulating pollution resulting from water transfers.
First, as far as we have been able to determine, in the nearly forty years since the passage of the Clean Water Act, water transfers have never been subject to a general NPDES permitting requirement. Congress thus appears to have, however silently, acquiesced in this state of affairs. This may well reflect an intent not to require NPDES permitting to be imposed in every situation in which it might be required, including as a means for regulating water transfers. This in turn suggests that the EPA's unitary-waters interpretation of Section 402 of the Act in the Water Transfers Rule is reasonable.
Second, the Supreme Court's decision in Miccosukee and the Eleventh Circuit's decision in Friends I support this conclusion. Miccosukee was decided before the EPA issued the Water Transfers Rule and, absent the interpretation of an agency rule, did not involve the application of Chevron. It was a citizen suit against the South Florida Water Management District (the "District"), which is also an intervenor-defendant in the instant proceedings. The Miccosukee plaintiffs argued that the District was impermissibly operating a pumping facility without an NPDES permit. 541 U.S. at 98-99, 124 S.Ct. 1537. The district court granted summary judgment to the plaintiffs; the Eleventh Circuit affirmed. Id. at 99, 124 S.Ct. 1537. The Supreme Court vacated the judgment and remanded the case on the ground that granting summary judgment was inappropriate because further factual findings as to whether the two water bodies at issue were meaningfully distinct were necessary. Id. In its decision, the Supreme Court addressed three key questions. First, it asked whether the definition of "discharge of a pollutant" in Section 502 of the Clean Water Act (33 U.S.C. § 1362(12)) reaches point sources that do not themselves generate pollutants. The Court held that it does. Miccosukee, 541 U.S. at 105, 124 S.Ct. 1537.
Second, the Court addressed whether "all the water bodies that fall within the Act's definition of `navigable waters' (that is, all `the waters of the United States, including the territorial seas,' § 1362(7))
Id. at 108, 124 S.Ct. 1537. Ultimately, the Court declined to rule on the unitary-waters theory because the parties did not raise the argument before the Eleventh Circuit or in their briefs supporting and opposing the Court's grant of certiorari. Instead, the Court did no more than note that unitary-waters arguments would be open to the parties on remand. Id. at 109, 124 S.Ct. 1537.
Third, the Supreme Court addressed whether a triable issue of fact existed as to whether the water transfer at issue was between "meaningfully distinct" water bodies, and thus required an NPDES permit. The Court held that such a triable issue did exist, and vacated and remanded for further fact-finding. Id. at 109-12, 124 S.Ct. 1537. The Court stated that if after reviewing the full record, the district court concluded that the water transfer was not between two meaningfully distinct bodies of water, then the District would not need to obtain an NPDES permit in order to operate the pumping facility. Id. at 112, 124 S.Ct. 1537. Thus, it seems as though the purpose of the remand was (a) to address the parties' unitary-waters arguments as a preliminary legal matter, and (b) to engage in fact-finding necessary to resolve the case if the argument as to unitary-waters did not prevail.
With respect to the unitary-waters interpretation of Section 402, then, Miccosukee suggested that a unitary-waters interpretation of the statute was unlikely to prevail because it was not the best reading of the statute, but did not conclude that it was an unreasonable reading of the statute. By acknowledging the arguments against requiring NPDES permits for water transfers, and noting that unitary-waters arguments would be open to the parties on remand, the Court can be read to have suggested that such arguments are reasonable, even if not, in the Court's view, preferable.
This interpretation of Miccosukee is reflected in subsequent case law interpreting that decision. In Catskill II, we expressed our view that "Miccosukee did no more
Friends I provides further support for the reasonableness of the Rule's interpretation. Like Miccosukee, the decision addressed whether the District was required to obtain NPDES permits to conduct certain specified water transfers. See Friends I, 570 F.3d at 1214. This time, however, the issue was addressed after the EPA had issued the Water Transfers Rule, and the deferential framework of Chevron therefore applied. In Friends I, the parties did not contest that the donor water bodies (canals from which water was pumped into Lake Okeechobee) and the receiving water body (the lake) were "navigable waters." Id. at 1216. Because under Miccosukee the NPDES "permitting requirement does not apply unless the bodies of water are meaningfully distinct," the question was therefore "whether moving an existing pollutant from one navigable water body to another is an `addition ... to navigable waters' of that pollutant." Id. at 1216 & n.4 (quoting 33 U.S.C. § 1362(12)). The District argued, based on the "unitary waters theory," that "it is not an `addition ... to navigable waters' to move existing pollutants from one navigable water to another." Id. at 1217. "An addition occurs, under this theory, only when pollutants first enter navigable waters from a point source, not when they are moved between navigable waters." Id.
The Eleventh Circuit agreed. It began its analysis by surveying relevant prior decisions, noting that "[t]he unitary waters theory has a low batting average. In fact, it has struck out in every court of appeals where it has come up to the plate." Id. (collecting cases). In the time since those decisions were issued, however, there "ha[d] been a change. An important one. Under its regulatory authority, the EPA ha[d then-]recently issued a regulation adopting a final rule specifically addressing this very question. Because that regulation was not available at the time of the earlier decisions," including Catskill I, Catskill II, and Miccosukee, "they [we]re not precedent against it." Id. at 1218. Therefore, the question before the Court was whether to give Chevron deference to the Rule. "All that matters is whether the regulation is a reasonable construction of an ambiguous statute." Id. at 1219. The cases on which the plaintiffs relied — which included Catskill I, Catskill II, and Miccosukee — were therefore unhelpful because there was then no formal rule to which to apply the Chevron framework. "Deciding how best to construe statutory language is not the same thing as deciding whether a particular construction is within the ballpark of reasonableness." Id. at 1221.
The court then engaged in a Chevron analysis strikingly similar to the one we are tasked with conducting here. As to the plain meaning of the statutory language, the Eleventh Circuit determined that the key question was whether "`to navigable waters' means to all navigable waters as a singular whole." Id. at 1223 (emphasis in original). This question could not be resolved by looking to the common meaning of the word "waters," which could be used to refer to several different bodies of water collectively (e.g., "the waters of the Gulf coast") or to a single body of water (e.g., "the waters of Mobile Bay"). Id. After examining the statutory language in the context of the Clean Water Act as a whole, the court then noted that Congress knew how to use the term "any navigable waters" in other statutory provisions when
Id. at 1228 (first brackets in original).
Following Friends I, the Eleventh Circuit in Friends II dismissed several petitions for direct appellate review of the Water Transfers Rule on the grounds that the Court lacked subject-matter jurisdiction under the Act (specifically, 33 U.S.C. §§ 1369(b)(1)(E), (F)) and could not exercise hypothetical jurisdiction. Friends II, 699 F.3d at 1286-89. In the course of doing so, the Eleventh Circuit clarified its holding in Friends I that "the water-transfer rule was a reasonable interpretation of an ambiguous provision of the Clean Water Act," and therefore passed muster under Chevron's deferential standard of review. Id. at 1285. We are in general agreement with the Friends I approach, and in complete agreement with its conclusion that we must give Chevron deference to the EPA's interpretation of Section 402 of the Act in the Water Transfers Rule.
Yet another consideration supporting the reasonableness of the Water Transfers Rule is that several alternatives could regulate pollution in water transfers even in the absence of an NPDES permitting scheme, including: nonpoint source programs;
With respect to other state authorities and laws, the Act "recognizes that states retain the primary role in planning the development and use of land and water resources, allocating quantities of water within their jurisdictions, and regulating water pollution, as long as those state regulations are not less stringent than the requirements set by the CWA." Catskill II, 451 F.3d at 79 (citations omitted). To these ends, states can rely on statutory authorities at their disposal for regulating the potentially negative water quality impacts of water transfers.
States have still more regulatory tools at their disposal. State agencies may be granted specific authority to address particular pollution or threats of pollution. For example, in New York, the NYSDEC is authorized and directed to promulgate rules to protect the recreational uses — such as trout fishing and canoeing — of waters affected by certain large reservoirs such as the Schoharie Reservoir. See N.Y. Envtl. Conserv. Law §§ 15-0801, 15-0805 (McKinney 2008). And as discussed above, states likely can also bring common-law nuisance suits to enjoin and abate pollution. See Int'l Paper Co. v. Ouellette, 479 U.S. 481, 487, 107 S.Ct. 805, 93 L.Ed.2d
The plaintiffs advance several other arguments against the reasonableness of the Water Transfers Rule's interpretation of the Clean Water Act. Ultimately, none persuades us that the Rule is an unreasonable interpretation of the Clean Water Act.
The plaintiffs first argue, as we have noted, that the Water Transfers Rule arises out of an unreasonable reading of the Act because it subverts the main objective of the Clean Water Act, "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters," 33 U.S.C. § 1251(a), by allowing "the transfer of water from a heavily polluted, even toxic, water body to one that was pristine," Catskill II, 451 F.3d at 81. While this is a powerful argument against the EPA's position, we are not convinced that it establishes that the Water Transfers Rule is an unreasonable interpretation of the Clean Water Act, which is "among the most complex" of federal statutes and "balances a welter of consistent and inconsistent goals." Catskill I, 273 F.3d at 494. Congress's overarching goal in passing the Act does not imply that the EPA could not accommodate some of the compromises and other policy concerns embedded in the statute in promulgating the Water Transfers Rule.
Some plaintiffs also argue that the EPA's interpretation of Section 402 contained in the Water Transfers Rule is unreasonable in light of the EPA's interpretation of Section 404. They point out that the EPA has interpreted the phrase "discharge of dredged ... material into the navigable waters" from Section 404 to require a permit when dredged material is moved from one location to another within the same water body, regardless of whether the dredged material is ever removed from the water. See 33 U.S.C. § 1344(a); 40 C.F.R. § 232.2. They argue that if moving dredged material from one part of a water body to another part of that same water body is an "addition ... into ... the waters of the United States," see 40 C.F.R. § 232.2, then it is unreasonable to say that the movement of heavily polluted water from one water body into a pristine water body is not also an "addition" to "waters" that would require an NPDES permit.
But Section 404 contains different language that suggests that a different interpretation of the term "addition" is appropriate in analyzing that section. Section 404 concerns "dredged material," which, as the EPA pointed out in the Water Transfers Rule, "by its very nature comes from a waterbody." 73 Fed. Reg. at 33,703. As the Fifth Circuit has observed, in the context of Section 404, one cannot reasonably interpret the phrase "addition
Finally, we think that the plaintiffs' reliance on Clark v. Martinez, 543 U.S. 371, 386-87, 125 S.Ct. 716, 160 L.Ed.2d 734 (2005), and Sorenson v. Sec'y of the Treasury of U.S., 475 U.S. 851, 860, 106 S.Ct. 1600, 89 L.Ed.2d 855 (1986), is misplaced. In Clark, the Supreme Court cautioned against "the dangerous principle that judges can give the same statutory text different meanings in different cases." Clark, 543 U.S. at 386, 125 S.Ct. 716. But that cautionary statement referred to an interpretation of a specific subsection of the Immigration and Nationality Act that would give a phrase one meaning when applied to the first of three categories of aliens, and another meaning when applied to the second of those categories. See id. at 377-78, 386, 125 S.Ct. 716. It does not follow that an agency cannot interpret similar, ambiguous statutory language in one section of a statute differently than similar language contained in another, entirely distinct section. In Sorenson, the Supreme Court noted in dicta that there is a presumption that "identical words used in different parts of the same act are intended to have the same meaning," 475 U.S. at 860, 106 S.Ct. 1600 (quoting Helvering v. Stockholms Enskilda Bank, 293 U.S. 84, 87, 55 S.Ct. 50, 79 L.Ed. 211 (1934)). But this is no more than a presumption. It can be rebutted by evidence that Congress intended the words to be interpreted differently in each section, or to leave a gap for the agency to fill. See Duke, 549 U.S. at 575-76, 127 S.Ct. 1423 ("There is, then, no effectively irrebuttable presumption that the same defined term in different provisions of the same statute must be interpreted identically." (internal quotation marks omitted)). Here, there is evidence that Congress gave the EPA the discretion to interpret the terms "addition" and the broader phrases "addition ... to navigable waters" (Section 402) and "addition ... into ... the waters of the United States" (40 C.F.R. § 232.2, defining "discharge of dredged material" in Section 404) differently.
In sum, the Water Transfers Rule's interpretation of the Clean Water Act — which exempts water transfers from the NPDES permitting program — is supported by several reasonable arguments. The EPA's interpretation need not be the "only possible interpretation," nor need it be "the interpretation deemed most reasonable." Entergy, 556 U.S. at 218, 129 S.Ct. 1498 (emphasis in original). And even though, as we note yet again, we might conclude that it is not the interpretation that would most effectively further the Clean Water Act's principal focus on water quality, it is reasonable nonetheless. Indeed, in light of the potentially serious and disruptive practical consequences of requiring NPDES permits for water transfers, the EPA's interpretation here involves the kind of "difficult policy choices that agencies are better equipped to make than courts." Brand X, 545 U.S. at 980, 125 S.Ct. 2688. Because the Water Transfers Rule is a reasonable construction of the Clean Water Act supported by a reasoned explanation, it survives deferential review under Chevron, and the district court's decision must therefore be reversed.
For the foregoing reasons, we defer under Chevron to the EPA's interpretation of the Clean Water Act in the Water Transfers Rule. Accordingly, we reverse the judgment of the district court and reinstate the challenged rule.
Chin, Circuit Judge, dissenting:
I respectfully dissent.
The Clean Water Act (the "Act") prohibits the "discharge of any pollutant by any person" from "any point source" to "navigable waters" of the United States, without a permit. 33 U.S.C. §§ 1311(a), 1362(12)(A). The question presented is whether a transfer of water containing pollutants from one body of water to another — say, in upstate New York, from the more-polluted Schoharie Reservoir through the Shandaken Tunnel to the less-polluted Esopus Creek — is subject to these provisions.
The United States Environmental Protection Agency ("EPA") takes the position that such a transfer is not covered, on what has been called the "unitary waters" theory — all water bodies in the United States, that is, all lakes, rivers, streams, etc., constitute a single unit, and therefore the transfer of water from a pollutant-laden water body to a pristine one is not an "addition" of pollutants to the "navigable waters" of the United States because the pollutants are already present in the overall single unit. Consequently, in a rule adopted in 2008 (the "Water Transfers Rule"), EPA determined that water transfers from one water body to another, without intervening industrial, municipal, or commercial activity, were excluded from the permitting requirements of the National Pollutant Discharge Elimination System ("NPDES"), even if dirty water was transferred from a polluted water body to a clean one. The majority holds that the Water Transfers Rule is a reasonable interpretation of the Act. I disagree.
As the majority notes, we evaluate EPA's interpretation of the Act under the two-step framework of Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). At step one, we consider whether Congress has "unambiguously expressed" its intent. Riverkeeper Inc. v. EPA, 358 F.3d 174, 184 (2d Cir. 2004). If so, we "must give effect to the unambiguously expressed intent of Congress." Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. If the statute is "silent or ambiguous," however, we turn to step two
I would affirm the district court's decision to vacate the Water Transfers Rule. First, I would hold at Chevron step one that the plain language and structure of the Act is unambiguous and clearly expresses Congress's intent to prohibit the transfer of polluted water from one water body to another distinct water body without a permit. In my view, Congress did not intend to give a pass to interbasin transfers of dirty water, and excluding such transfers from permitting requirements is incompatible with the goal of the Act to protect our waters.
I begin with the language of the Act, its structure, and its purpose.
The Act provides that "the discharge of any pollutant by any person shall be unlawful," 33 U.S.C. § 1311(a), except to the extent allowed by other provisions, including, for example, those provisions establishing the NPDES permit program, 33 U.S.C. § 1342.
The Act defines "discharge of a pollutant" to include "any addition of any pollutant to navigable waters from any point source." 33 U.S.C. § 1362(12)(A) (emphasis added). It defines "pollutant" to include solid, industrial, agricultural, and biological waste. Id. § 1362(6) (emphasis added). It defines "navigable waters" as "the waters of the United States, including the territorial seas." Id. § 1362(7) (emphasis added). And it defines a "point source" as "any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged." Id. § 1362(14) (emphasis added). The Act does not define the word "addition."
In my view, the plain language of the Act makes clear that the permitting requirements apply to water transfers from one distinct body of water through a conveyance to another. As noted, the Act prohibits "any addition of any pollutant to navigable waters from any point source." Id. § 1362(12)(A). The transfer of contaminated water from a more-polluted water body through a conveyance, such as a tunnel, to a distinct, less-polluted water body is the "addition" of a pollutant (contained in the contaminated water) to "navigable waters" (the less-polluted water body)
273 F.3d at 492.
EPA contends that such a transfer of contaminated water, from a polluted body of water to a distinct and pristine one, is not an "addition" because all the waters of the United States are to be "considered collectively," EPA Br. at 2, that is, because the polluted and pristine bodies of water are both part of the waters of the United States and all the waters of the United States are considered to be one unit, the transfer of pollutants from one part of the unit to another part is not an "addition." I do not believe the words of the Act can be so interpreted. The critical words for our purposes are "addition" and "navigable waters." I take them in reverse order.
EPA's position — accepted by the majority — requires us to add words to the Act, as we must construe "navigable waters" to mean "all the navigable waters of the United States, considered collectively." Contra Dean v. United States, 556 U.S. 568, 572, 129 S.Ct. 1849, 173 L.Ed.2d 785 (2009) (courts must "ordinarily resist reading words or elements into a statute that do not appear on its face") (quoting Bates v. United States, 522 U.S. 23, 29, 118 S.Ct. 285, 139 L.Ed.2d 215 (1997)).
EPA also argues that if Congress had intended the NPDES permitting requirements to apply to individual water bodies, it would have inserted the word "any" before "navigable waters." See 33 U.S.C. § 1362(12)(A) ("any addition of any pollutant to navigable waters from any point source"). This interpretation is flawed, for the use of the plural "waters" obviates the need for the word "any." The use of the plural "waters" indicates that Congress was referring to individual water bodies, not one collective water body. The Supreme Court addressed this precise issue in its discussion of "the waters of the United States" in Rapanos v. United States. There the Court considered the issue of whether § 1362(7)'s definition of "navigable waters" meant "waters of the United States," and the Court squarely held that "waters" referred to "individual bodies," not one collective body:
547 U.S. 715, 732, 126 S.Ct. 2208, 165 L.Ed.2d 159 (2006) (alterations, in original) (emphases added). Hence, the Supreme Court concluded the plural form "waters" does not refer to "water in general," but to
As the majority acknowledges, the Act contains multiple provisions suggesting that the term "navigable waters" refers to multiple water bodies, not one national collective water body. Op. at 513-14 (citing 33 U.S.C. §§ 1313(c)(2)(A), (c)(4), 1313(d)(1)(B), 1314(2), 1314(f)(2)(F), 1314(l)(1)(A)-(B), 1342).
S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe, 541 U.S. 95, 107-08, 124 S.Ct. 1537, 158 L.Ed.2d 264 (2004). In all of these instances, the phrase "navigable waters" refers to individual water bodies and not one collective national water body. Indeed, neither the majority nor the parties have identified a single provision in the Act where "navigable waters" refers to the waters of the United States as a unitary whole.
EPA's interpretation also requires us to twist the meaning of the word "addition."
The ordinary meaning of "addition" is "the result of adding: anything added: increase, augmentation." Webster's Third New International Dictionary of the English Language Unabridged 24 (1968); see also Webster's New World Dictionary of the American Language 16 (2d College ed. 1970 and 1972) ("a joining of a thing to another thing"). Transferring water containing pollutants from a polluted water body to a clean water body is "adding" something to the latter; there is an "addition" — an increase in the number of pollutants in the second water body. In this context, "addition" means adding a pollutant to "navigable waters" when that pollutant would not otherwise have been in those "navigable waters." Words should be given their "contextually appropriate ordinary meaning," Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 70 (2012), and the context here is a statute intended to eliminate water pollution discharges. See Catskill I, 273 F.3d at 486. That context makes clear that the word "addition" encompasses an increase in pollution caused by an interbasin transfer of water.
The plain words of the statute thus make clear that Congress did not intend to except water transfers from §§ 1311 and 1362 of the Act.
Congress's intent to require a permit for interbasin water transfers is even clearer when we consider the statutory language in light of the Act's structure. In determining whether Congress has spoken to the precise question at issue, we consider the words of the statute in "their context and with a view to their place in the overall statutory scheme," FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000), because "the meaning — or ambiguity — of certain words or phrases may only become evident when placed in context," King v. Burwell, ___ U.S. ___, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015) (citing Brown & Williamson, 529 U.S. at 133, 120 S.Ct. 1291); see also Util. Air Regulatory Grp. v. EPA, ___ U.S. ___, 134 S.Ct. 2427, 2442, 189 L.Ed.2d 372 (2014) ("reasonable statutory interpretation must account for both `the specific context in which ... language is used' and `the broader context of the statute as a whole'" (citations omitted)); Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989) (a "fundamental canon of statutory construction" is "that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme").
Here, EPA's "unitary waters" theory, when considered in the context of other provisions of the Act, contravenes Congress's unambiguous intent to subject interbasin transfers to permitting requirements and is therefore unreasonable. See King, 135 S.Ct. at 2489 (a "provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory
First, the Water Transfers Rule creates an exemption to permitting requirements, in violation of the canon expressio unius est exclusio alterius, which cautions against finding implied exceptions where Congress has created explicit ones. Section 1311(a) of the Act prohibits "[t]he discharge of any pollutant by any person." 33 U.S.C. § 1311(a). The Supreme Court has held that "every point source discharge" is covered by the Act:
See City of Milwaukee v. Illinois, 451 U.S. 304, 318, 101 S.Ct. 1784, 68 L.Ed.2d 114 (1981).
Congress created specific exceptions to the prohibition on the discharge of pollutants, as § 1311(a) bans such discharges "[e]xcept as in compliance with this section and sections 1312, 1316, 1317, 1328, 1342, and 1344." 33 U.S.C. § 1311(a). These include specific exemptions to the NPDES permitting requirements for, e.g., return flows from irrigated agriculture, 33 U.S.C. § 1342(l)(1), stormwater runoff, 33 U.S.C. § 1342(l)(2), and discharging dredged or fill material into navigable waters, 33 U.S.C. § 1344(a). Congress did not create an exception for interbasin water transfers.
It is well-settled that when exceptions are explicitly enumerated, courts should not infer additional exceptions. See Hillman v. Maretta, ___ U.S. ___, 133 S.Ct. 1943, 1953, 186 L.Ed.2d 43 (2013) ("Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of contrary legislative intent." (citing Andrus v. Glover Constr., Co., 446 U.S. 608, 616-617, 100 S.Ct. 1905, 64 L.Ed.2d 548 (1980))). This prohibition against implying exceptions has been applied to the Act's permitting requirements. See NRDC v. Costle, 568 F.2d 1369, 1377 (D.C. Cir. 1977) ("The wording of the statute, legislative history and precedents are clear: the EPA Administrator does not have authority to except categories of point sources from the permit requirements of § [1342]"); Nw. Envir. Advocates v. EPA, 537 F.3d 1006, 1021-22 (9th Cir. 2008) (EPA may not "exempt certain categories of discharge from the permitting requirement"); N. Plains Res. Council v. Fidelity Exploration & Dev. Co., 325 F.3d 1155, 1164 (9th Cir. 2003) ("Only Congress may amend the CWA to create exemptions from regulation."). Defendants' position that all water transfers between water bodies are exempt from § 1342 permitting requirements is a substantial exemption that Congress did not create.
Second, the Act also sets forth a specific plan for individual water bodies. The Act requires States to establish water-quality standards for each distinct water body
This carefully designed plan to fight water pollution would be severely undermined by an EPA-created exception for water transfers. A State's efforts to control water-quality standards in its individual lakes, rivers, and streams would be disrupted if contaminated water could be transferred from a polluted water body to a pristine one without a NPDES permit. It is hard to imagine that Congress could have intended such a broad and potentially devastating exception. Indeed, exempting water transfers from the NPDES program would undermine the ability of downstream States to protect themselves from the pollution generated by upstream States. The NPDES program provides a procedure for resolving disputes between States over discharges. See Upper Blackstone Water Pollution Abatement Dist., 690 F.3d at 15 (citing City of Milwaukee, 451 U.S. at 325-26, 101 S.Ct. 1784). When a State applies for a permit that may affect the water quality of a downstream State, EPA must notify the applying State and the downstream State. If the downstream State determines that the discharge "will violate its water quality standards, it may submit its objections and request a public hearing." Id. If water transfers are exempt from NPDES requirements, the ability of downstream States to protect themselves from upstream states sending their pollution across the border will be severely curtailed.
The City and certain of the States argue that subjecting water transfers to permitting requirements will be extremely burdensome. As we have repeatedly recognized, however, there is ample flexibility in the NPDES permitting process to address dischargers' concerns. See Catskill Mountains v. EPA, 451 F.3d 77, 85-86 (2d Cir. 2006) ("Catskill II"); see also Nw. Envtl., 537 F.3d at 1010 ("Obtaining a permit under the CWA need not be an onerous process."). The draft permit issued in this case allows for variable turbidity level restrictions by season and exemptions from
In addition, much of the concern over water transfers involved agricultural use, but water diversions from a "navigable water" for agricultural use direct water away from a "navigable water," and thus do not trigger the need for a § 402 permit. Waters returning to a "navigable water" which are "agricultural stormwater discharges" and "return flows from irrigated agriculture" are specifically exempted from the statutory definition of "point source." 33 U.S.C. § 1362(14); see also 33 U.S.C. § 1342(l) (exempting "discharges composed entirely of return flows from irrigated agriculture" from permitting requirements). Thus, the catastrophic results of applying NPDES permits to water transfers bemoaned by appellants are exaggerated.
Third, as discussed above, Congress used the phrase "navigable waters" to refer to individual water bodies in numerous provisions of the Act. Another well-settled rule of statutory interpretation holds that the same words in a statute bear the same meaning. See Sullivan v. Stroop, 496 U.S. 478, 483, 110 S.Ct. 2499, 110 L.Ed.2d 438 (1990) ("the `normal rule of statutory construction [is] that identical words used in different parts of the same act are intended to have the same meaning.'" (internal citations omitted)); Prus v. Holder, 660 F.3d 144, 147 (2d Cir. 2011) ("the normal rule of statutory construction [is] that identical words used in different parts of the same act are intended to have the same meaning"). When the Act is read as a whole, it is clear that Congress did not intend the phrase "navigable waters" to be interpreted as a single water body because that interpretation is "inconsisten[t] with the design and structure of the statute as a whole." Utility Air, 134 S.Ct. at 2442; see also Scalia & Garner, Reading Law 63 ("A textually permissible interpretation that furthers rather than obstructs the document's purpose should be favored.").
Accordingly, in my opinion, the structure and context of the Act show clearly that Congress did not intend to exempt water transfers from the permitting requirements.
The Act was passed in 1972 to address environmental harms caused by the discharge of pollutants into water bodies. As the Act itself explains, its purpose was to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a); accord Miccosukee, 541 U.S. at 102, 124 S.Ct. 1537; Waterkeeper All., Inc. v. EPA, 399 F.3d 486, 490-91 (2d Cir. 2005); see also Catskill I, 273 F.3d at 486 ("[T]he Act contains the lofty goal of eliminating water pollution discharges altogether.").
The Water Transfers Rule is simply inconsistent with the purpose of the Act and undermines the NPDES permit program. It creates a broad exemption that will manifestly interfere with Congress's desire to eliminate water pollution discharges. As the majority acknowledges, water transfers are a real concern. Artificial transfers of contaminated water present substantial risks to water quality, the environment, the economy, and public health. If interbasin
In sum, based on the plain words of §§ 1311 and 1362, the structure and design of the Act, and its overall purpose, I would hold that Congress has "unambiguously expressed" its intent to subject water transfers to the Act's permitting requirements.
As the majority notes, our Court has twice interpreted these precise provisions of the Act as applied to these very facts. See Catskill I, 273 F.3d at 484-85; Catskill II, 451 F.3d at 79-80. The decisions are not controlling, however, because EPA had not yet adopted the Water Transfers Rule and we conducted our review under a different deference standard. See Catskill I, 273 F.3d at 490 ("If the EPA's position had been adopted in a rulemaking or other formal proceeding, [Chevron] deference might be appropriate." (emphasis added)); Catskill II, 451 F.3d at 82 ("The City concedes that this EPA interpretation is not entitled to Chevron deference."). Nonetheless, the two decisions are particularly helpful to the analysis at hand. Similarly, Supreme Court decisions have also suggested that EPA's unitary waters theory is inconsistent with the plain wording of the Act.
In Catskill I and II, we conducted our inquiry under Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944), and United States v. Mead Corp., 533 U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). See Catskill I, 273 F.3d at 491; Catskill II, 451 F.3d at 83 n.5.
Under Skidmore, the court applies a lower level of deference to certain agency interpretations and considers "the agency's expertise, the care it took in reaching its conclusions, the formality with which it promulgates its interpretations, the consistency of its views over time, and the ultimate persuasiveness of its arguments."
As the majority notes, the Supreme Court has never explicitly held that courts must find ambiguity before applying the Skidmore framework. While there is some scholarly authority for the proposition that "`the Skidmore standard implicitly replicates Chevron's first step,'" Op. at 510 (quoting Kristin E. Hickman & Matthew D. Krueger, In Search of the Modern Skidmore Standard, 107 Colum. L. Rev. 1235, 1247 (2007)), the Supreme Court has decided numerous cases under Skidmore without finding that a statute's language was ambiguous, see, e.g., EEOC v. Arabian American Oil, 499 U.S. 244, 257, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991) (applying Skidmore without finding ambiguity in statute and noting that agency's interpretation "lacks support in the plain language of the statute"); Whirlpool Corp. v. Marshall, 445 U.S. 1, 11, 100 S.Ct. 883, 63 L.Ed.2d 154 (1980) (applying Skidmore without finding ambiguity in statute and holding that regulation was permissible after considering statute's "language, structure and legislative history"); see generally Richard J. Pierce, Jr., I Admin. L. Treatise § 6.4 (5th ed. 2010).
Of course, the Supreme Court did not hold, in either Skidmore or Mead, that ambiguity was a threshold requirement to applying the framework. See Mead, 533 U.S. at 235, 121 S.Ct. 2164 (An agency ruling is entitled to "respect proportional to its `power to persuade,'.... Such a ruling may surely claim the merit of its writer's thoroughness, logic, and expertness, and any other sources of weight." (citations omitted)); Skidmore, 323 U.S. at 164, 65 S.Ct. 161 ("The weight of [an agency's] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control."). Rather, the Skidmore/Mead framework adopts a less rigid, more flexible approach, see U.S. Freightways Corp. v. Comm'r, 270 F.3d 1137, 1142 (7th Cir. 2001) (referring to "the flexible approach Mead described, relying on ... Skidmore"), as it presents "a more nuanced, context-sensitive rubric" for determining the level of deference a court will give to an agency interpretation, Thomas W. Merrill and Kristin E. Hickman, Chevron's Domain, 89 Geo. L.J. 833, 836 (2001); see also Pierce, supra, § 6.4, at 444 ("The Court has referred to a variety of factors that can give an agency statement `power to persuade.' ... [N]o single factor is dispositive....").
Ambiguity in a statute, of course, can be a factor, and in the sliding-scale analysis of the Skidmore/Mead framework, the "power to persuade" of an agency determination can be affected by the clarity — or lack thereof — of the statute it is interpreting. Indeed, upon applying the Skidmore/Mead framework, a court may uphold — or reject — an agency interpretation because the interpretation is consistent with — or contradicts — a statute whose meaning is clear. See Pierce, supra, § 6.4, at 443. Here, we
The majority dismisses the notion that we ruled on the plain meaning of the Act in Catskill I and II, asserting that there were only a "few references to `plain meaning'" in our decisions. Op. at 510. To the contrary, through both our words and our reasoning, we made clear repeatedly in Catskill I and II that the agency's unitary waters theory was inconsistent with the unambiguous plain meaning of the Act.
In Catskill I, we held that defendants' interpretation was "inconsistent with the ordinary meaning of the word `addition.'" 273 F.3d at 493 (emphasis added). Specifically, we held that there is an "addition" of a pollutant into navigable water from the "outside world" — thus triggering the permitting requirement — any time such an "addition" is from "any place outside the particular water body to which pollutants are introduced." Id. at 491 (emphasis added). We reasoned that:
Id. at 493 (emphases added).
We also noted that "[e]ven if we were to conclude that the proper application of the statutory text to the present facts was sufficiently ambiguous to justify reliance on the legislative history of the statute,... that source of legislative intent would not help the City." 273 F.3d at 493. That language certainly makes clear we concluded the statutory text was not ambiguous.
Finally, in the penultimate paragraph of Catskill I, we made absolutely clear that our holding was based on the plain meaning of the statutory text. We held:
Id. at 494 (emphases added).
Our analysis in Catskill II was similar, as we dismissed defendants' arguments as merely "warmed-up" versions of those rejected in Catskill I, made no more compelling by EPA's new "holistic" interpretation of the statute. 451 F.3d at 82. We rejected New York City's "`holistic arguments about the allocation of state and federal rights, said to be rooted in the structure of the statute,'" because, we concluded, they "simply overlook its plain language." Id. at 84. (emphasis added). We noted our dismissal of the unitary waters theory in Catskill I based on the ordinary meaning of the word "addition":
Id. at 81 (emphasis added) (internal citations omitted). Again, we considered the very interpretation of "navigable waters" proffered in the current appeal and rejected it based on "the plain meaning" of the Act's text. Id. at 82.
I do not suggest that we are bound by our prior decisions. But in both decisions, we carefully considered the statutory language, and in both decisions, based on the plain wording of the text, we rejected an interpretation of §§ 1311 and 1362 that construes "navigable waters" and "the waters of the United States" to mean a single
Finally, although the Supreme Court has not explicitly ruled on the validity of EPA's "unitary waters" theory, it has expressed serious reservations. In South Florida Water Management District v. Miccosukee Tribe of Indians, 541 U.S. 95, 124 S.Ct. 1537, 158 L.Ed.2d 264 (2004), the Court strongly suggested that the theory is not reasonable. First, the Court remanded for fact-finding on whether the two water bodies at issue were "meaningfully distinct water bodies." 541 U.S. at 112, 124 S.Ct. 1537. That disposition follows from Judge Walker's soup ladle analogy in Catskill I: "If one takes a ladle of soup from a pot, lifts it above the pot, and pours it back into the pot, one has not `added' soup or anything else to the pot (beyond, perhaps, a de minimis quantity of airborne dust that fell into the ladle)." 273 F.3d at 492. In Catskill II, we noted that such a transfer would be an intrabasin transfer, from one water body back into the same water body, and we then applied the analogy to the facts of this case: "The Tunnel's discharge... was like scooping soup from one pot and depositing it in another pot, thereby adding soup to the second pot, an interbasin transfer." 451 F.3d at 81. In Miccosukee, the Supreme Court cited the "soup ladle" analogy with approval, and remanded the case to the district court to determine whether the water bodies in question were "two pots of soup, not one." 541 U.S. at 109-10, 124 S.Ct. 1537; see also id. at 112, 124 S.Ct. 1537. If the "unitary waters" theory were valid, however, there would have been no need to resolve this factual question. If all the navigable waters of the United States were deemed one collective national body, there would be no need to consider whether individual water bodies were distinct — there would be no need to determine whether there were two pots of soup or one.
Second, as previously discussed, the Court observed that "several NPDES provisions might be read to suggest a view contrary to the unitary waters approach." Id. at 107, 124 S.Ct. 1537. The Court noted that under the Act, states "may set individualized ambient water quality standards by taking into consideration `the designated uses of the navigable waters involved,'" thereby affecting local NPDES permits. Id. (quoting 33 U.S.C. § 1313(c)(2)(A)). "This approach," the Court wrote, "suggests that the Act protects individual water bodies as well as the `waters of the United States' as a whole." Id.
Subsequent Supreme Court decisions support this reading of Miccosukee. In Los Angeles County Flood Control District v. Natural Resources Defense Council, Inc., the Supreme Court held that a water transfer between one portion of a river through a concrete channel to a lower portion of the same river did not trigger a NPDES permit requirement. ___ U.S. ___, 133 S.Ct. 710, 184 L.Ed.2d 547 (2013). The Court observed that "[w]e held [in Miccosukee] that th[e] water transfer would count as a discharge of pollutants under the CWA only if the canal and the reservoir were `meaningfully distinct water bodies.'" Id. at 713 (emphasis added) (citations omitted). In holding that "the flow of water from an improved portion of a navigable waterway into an unimproved portion of the very same waterway does not qualify as a discharge of pollutants under the CWA," id., the Court again suggested
In Miccosukee, the Supreme Court acknowledged the concerns that have been raised about the burdens of permitting, but also observed that "it may be that such permitting authority is necessary to protect water quality, and that the States or EPA could control regulatory costs by issuing general permits to point sources associated with water distribution programs." 541 U.S. at 108, 124 S.Ct. 1537 (emphasis added). Indeed, recognizing the importance of safeguarding drinking water, Congress created an extensive system to protect this precious resource, a system that would be undermined by exempting interbasin water transfers.
Hence, the Supreme Court's decisions in Miccosukee and Los Angeles County support the conclusion that water transfers between two distinct water bodies are not exempt from the Act.
In my view, then, Congress has "unambiguously expressed" its intent to subject interbasin water transfers to the requirements of §§ 1311 and 1362 of the Act. Accordingly, I would affirm the judgment of the district court based on step one of Chevron. Even assuming, however, that the statutory text is ambiguous, I agree with the district court that the Water Transfers Rule also fails at Chevron step two because it is an unreasonable and manifestly contrary interpretation of the Act, largely for the reasons set forth in the district court's thorough and carefully-reasoned decision. I add the following:
First, Chevron deference has its limits. "Deference does not mean acquiescence," Presley v. Etowah County Comm'n, 502 U.S. 491, 508, 112 S.Ct. 820, 117 L.Ed.2d 51 (1992), and "courts retain a role, and an important one, in ensuring that agencies have engaged in reasoned decisionmaking," Judulang v. Holder, 565 U.S. 42, 132 S.Ct. 476, 484-85, 181 L.Ed.2d 449 (2011).
Second, an agency's interpretation of an ambiguous statute is not entitled to deference where the interpretation is "at odds" with the statute's "manifest purpose," Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 487, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001), or the agency's actions "`deviate from or ignore the ascertainable legislative intent,'" Chem. Mfrs. Ass'n v. EPA, 217 F.3d 861, 867 (D.C. Cir. 2000) (quoting Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 520 (D.C. Cir. 1983)). See Katzmann, Judging Statutes 31 ("The task of the judge is to make sense of legislation in a way that is faithful to Congress's purposes. When the text is ambiguous, a court is to provide the meaning that the legislature intended. In that circumstance, the judge gleans the purpose and policy underlying the legislation and deduces the outcome most consistent with those purposes."). As discussed above, in my view the Water Transfers Rule is manifestly at odds with Congress's clear intent in passing the Act.
Third, the Water Transfers Rule is not entitled to deference because it will lead to absurd results. See Michigan v. EPA, ___ U.S. ___, 135 S.Ct. 2699, 2707, 192 L.Ed.2d 674 (2015) ("No regulation is `appropriate' if it does `significantly more harm than good.'"); see also Scalia & Garner, Reading Law 234 ("A provision may be either disregarded or judicially corrected as an error (when the correction is textually simple) if failing to do so would result in a disposition that no reasonable person could approve."). Indeed, this Court has already held — twice — that the "unitary waters" theory would lead to absurd results. In Catskill I, we concluded that "[n]o one can reasonably argue that the water in the Reservoir and the Esopus are in any
I would affirm the judgment of the district court, and, accordingly, I dissent.
40 C.F.R. § 122.3(i).
The Supreme Court's opinion in Los Angeles County does not discuss the definition of "navigable waters," nor does it imply a definition of that term. True, the Supreme Court characterized Miccosukee as holding that a "water transfer would count as a discharge of pollutants under the CWA only if the canal and the reservoir were `meaningfully distinct water bodies.'" Id. (quoting Miccosukee, 541 U.S. at 112, 124 S.Ct. 1537). But this cannot change what the Miccosukee majority opinion actually said, and, as we discussed above, Miccosukee indicates that a unitary-waters reading may be "within the ballpark of reasonableness." See Friends I, 570 F.3d at 1221. Ultimately, Los Angeles County does not provide support for either side of the debate over the unitary-waters theory encapsulated in the Water Transfers Rule.
273 F.3d at 491. In Catskill II, we observed that because EPA's position was not the product of a formal rulemaking, the most EPA could hope for was to persuade the court of the reasonableness of its position under Skidmore, a position we did not accept. Catskill II, 451 F.3d at 83 n.5 ("[W]e do not find the [`holistic'] argument persuasive and therefore decline to defer to the EPA.").
