North Dakota v. U.S. Envtl. Prot. Agency

127 F.Supp.3d 1047

States of NORTH DAKOTA, Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, and Wyoming; New Mexico Environment Department; and New Mexico State Engineer, Plaintiffs,

v.U.S. ENVIRONMENTAL PROTECTION AGENCY, Regina McCarthy in her official capacity as Administrator of the U.S. Environmental Protection Agency, U.S. Army Corps of Engineers, Jo Ellen Darcy in her official capacity as Assistant Secretary of the Army (Civil Works), Defendants.

Civil No. 3:15–cv–59.

United States District Court, D. North Dakota, Southeastern Division.

Signed Aug. 27, 2015.

Wayne K. Stenehjem, Jennifer L. Verleger, Margaret I. Olson, Attorney General's Office, Bismarck, ND, Paul M. Seby, Holland & Hart, LLP, Denver, CO, Ruth Hamilton Heese Alaska Dept. of Law, Juneau, AK John R. Lopez, IV, Arizona Attorney General's Office, Phoenix, AZ, Jamie L. Ewing, Arkansas Attorney General Little Rock, AR Frederick R. Yarger, Colorado Attorney General's Office, Denver, CO, Douglas M. Conde, Office of the Idaho Attorney General, Boise, ID, John A. Hirth, Missouri Attorney General's Office, Jefferson City, MO, Alan Joscelyn, Montana Attorney General, Helena, MT, Justin D. Lavene, Nebraska Attorney General's Office, Lincoln, NE, Lawrence Vandyke, Nevada Office of the Attorney General, Carson City, NV, Charles D. McGuigan, SD Attorney General's Office, Pierre, SD, Peter K. Michael, David Patrick Ross, James C. Kaste, Wyoming Attorney General's Office, Cheyenne, WY, Jeffrey Melvin Kendall, Kay Ramona Bonza, New Mexico Environment Department, Gregory Campbell Ridgley, Matthias L. Sayer, New Mexico Office of the State Engineer, Santa Fe, NM, for Plaintiffs.

Daniel R. Dertke, Kristofor R. Swanson, Martha C. Mann, Stacey M. Bosshardt, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

RALPH R. ERICKSON, Chief Judge.

I. SUMMARY OF DECISION

Original jurisdiction is vested in this court and not the court of appeals because the "Clean Water Rule: Definition of Waters of the United States," jointly promulgated by the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers, has at best only an attenuated connection to any permitting process. If the exceptionally expansive view advocated by the government is adopted, it would encompass virtually all EPA actions under the Clean Water Act, something precisely contrary to Section 1369(b)(1)(F)'s grant of jurisdiction.

The court finds that under either standard—"substantial likelihood of success on the merits" or "fair chance of success"—the States are likely to succeed on their claim because (1) it appears likely that the EPA has violated its Congressional grant of authority in its promulgation of the Rule at issue, and (2) it appears likely the EPA failed to comply with APA requirements when promulgating the Rule. Additionally, the court finds the other factors relevant to the inquiry weigh in favor of an injunction.

II. PROCEDURAL BACKGROUND

On April 21, 2014, the United States Army Corps of Engineers and the Environmental Protection Agency ("EPA") (collectively "the Agencies") issued a proposed rule to change the definition of "Waters of the United States" under the Clean Water Act. Following a period for comment, the Agencies promulgated a final rule ("the Rule") on June 29, 2015, which defines waters of the United States. The Rule has an effective date of August 28, 2015.

On June 29, 2015, twelve States¹ and the New Mexico Environment Department and the New Mexico State Engineer (collectively "the States") filed a complaint against the Agencies, the EPA Administrator in her official capacity, and the Assistant Secretary of the Army (Civil Works) in her official capacity.² On August 10, 2015, the States filed a motion for a preliminary injunction.³ A hearing was held on the motion on August 21, 2015. The court, having considered the entire record as now developed including evidence presented at the hearing and the arguments of counsel, issues this memorandum opinion and order.

III. ANALYSIS

1. Jurisdiction

Title 33, of the United States Code, § 1369(b)(1)⁴ defines the circumstances under which the United States Courts of Appeals have exclusive jurisdiction over an action of the EPA Administrator. Implicated here are the provisions of subsections (b)(1)(E) and (b)(1)(F) of § 1369. Section 1369(b)(1)(E) posits jurisdiction in the courts of appeals where the Administrator has approved or promulgated "any effluent limitation or other limitation under section 301, 302, 306, or 405, [33 USCS § 1311, 1312, 1316, or 1345 ]". "Effluent limitations" are defined by the act as "any restriction established by a state or the [EPA] on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters."⁵

The Rule itself imposes no "effluent limitation." It merely redefines what constitutes "waters of the United States."⁶ This is made plain by the specific language of the Rule itself, as it unequivocally states that it "imposes no enforceable duty on any state, local, or tribal governments, or the private sector, and does not contain regulatory requirements that might significantly or uniquely affect small governments."⁷

The Agencies' claim that the Rule is an "other" limitation is equally unavailing. "[A]n agency action is [an ‘other] limitation’ within the meaning of section 509(b)(1)(E) if entities subject to the CWA's permit requirements face new restrictions on their discretion with respect to discharges or discharge-related processes."⁸ The Eighth Circuit Court of Appeals has noted that this phrase "leaves much to the imagination."⁹ The Fourth Circuit Court of Appeals has defined an "other limitation" as "a restriction on the untrammeled discretion of the industry ... [as it existed] prior to the passage of the [CWA]."¹⁰

The Rule here imposes no "other limitation" upon the Plaintiff States. At the hearing, the EPA argued that the Rule places no new burden or requirements on the States, a position supported by the language of the Rule itself at 80 F.R. 37102. The contention is that the States have exactly the same discretion to dispose of pollutants into the waters of the United States after the Rule as before. Rather, the Rule merely changes what constitutes waters of the United States.

Section 1369(b)(1)(F) grants the courts of appeals jurisdiction in cases involving the "issuing or denying [of] any permit under section 1342 of this title." In Iowa League of Cities, the Eighth Circuit noted, that the Supreme Court, in Crown Simpson Pulp Co. v. Costle,¹¹ "interpreted broadly the direct appellate review provision" of § 1369(b)(1)(F).¹² In Crown Simpson, the Supreme Court interpreted Subsection F "to extend jurisdiction to those actions that have ‘the precise effect’ of an action to issue or deny a permit."¹³ The precise holding in Crown Simpson is that original jurisdiction rests in the courts of appeal "when the action of the Administrator is functionally similar to the denial or issuance of a permit."¹⁴

The case at bar is much like that in Friends of the Everglades. The Rule "neither issues nor denies a permit"¹⁵ Indeed, the Rule has at best an attenuated connection to any permitting process. It simply defines what waters are within the purview of the "waters of the United States."¹⁶ This does not in itself implicate § 1369(b)(1)(F) because it is simply not the functional equivalent or similar to an action of the administrator in denying or issuing a permit.¹⁷

If the exceptionally expansive view advocated by the government is adopted, it would encompass virtually all EPA actions under the Clean Water Act. It is difficult to imagine any action the EPA might take in the promulgation of a rule that is not either definitional or regulatory. This view of § 1369(b)(1)(F)'s grant of jurisdiction would run precisely contrary to Congress' intent in drafting the court of appeals jurisdictional provision as recognized in the Supreme Court in National Cotton Council of America v. U.S. E.P.A.¹⁸

The relationship between issuing or denying a permit and the Rule at issue is tangential to issuance or denial of a permit—a classic red herring. Under these circumstances, original jurisdiction lies in this court and not the court of appeals.

2. Preliminary Injunction Motion.

The court applies the well-known four-factor inquiry in determining whether or not a preliminary injunction should issue.¹⁹ Commonly referred to as the Dataphase factors, the court weighs (1) the threat of irreparable harm to the movant; (2) the balance of harms; (3) the movant's likelihood of success on the merits; and (4) the public interest.²⁰

A. Likelihood of Success on the Merits

The court initially considers likelihood of success on the merits because if the movant fails to establish a likelihood of success, the quest for a preliminary injunction fails and the discussion is ended.

When issuing injunctive relief, the court must determine whether the moving party's claim has a likelihood of success on the merits.²¹ Two separate likelihood standards can be applied by a reviewing court. A "substantial likelihood of success on the merits" standard applies when the issue arises out of a statute or regulation made in the presumptively reasoned democratic process.²² In cases that do not meet the "presumptively reasoned requirement" a "fair chance of success" standard articulated in Heartland Acad. Cmty. Church v. Waddle²³ is applied.

As presaged by the phrasing of the cases describing the applicability of the higher "substantial likelihood of success" test, there is a presumption that the implementation process of the Rule here is reasoned. The presumption can be overcome where the evidence establishes a fundamentally flawed process, demonstrating that the regulation is not the product of a reasoned democratic process.

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