Catskill Mountains Chapter of Trout Unlimited, Inc. v. United States Environmental Protection Agency
846 F.3d 492
2d Cir.2017Background
- New York City operates a regional water-supply system that transfers water (e.g., Schoharie Reservoir → Shandaken Tunnel → Esopus Creek) via interbasin conduits; EPA’s 2008 "Water Transfers Rule" exempts such water transfers from NPDES permitting on the theory transfers do not constitute an "addition" of pollutants to "the waters of the United States."
- Plaintiffs (environmental groups and several States/province) challenged the Rule under the APA; the Southern District of New York vacated the Rule, finding the Clean Water Act unambiguously requires NPDES permits for water transfers or, at least, that the Rule was an unreasonable interpretation at Chevron Step Two.
- The Second Circuit reviews de novo, applies Chevron two-step framework, and must decide (1) whether the statute unambiguously requires permits for water transfers (Chevron Step One), and if ambiguous (2) whether EPA’s Rule is a reasonable interpretation (Chevron Step Two).
- Central statutory phrase: discharge of a pollutant = "any addition of any pollutant to navigable waters from any point source" (33 U.S.C. §1362(12)); dispute centers on whether "to navigable waters" means individual water bodies or the unitary whole of "the waters of the United States."
- Practical stakes emphasized: (a) millions rely on transfers for drinking water and agriculture (Western interbasin transfers); (b) requiring NPDES permits could impose large compliance costs and operational disruption; (c) alternative regulatory mechanisms (state law, §401 certification, other federal statutes, common law, interstate compacts) exist.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Clean Water Act unambiguously requires NPDES permits for water transfers (Chevron Step One) | Statute plainly bars "any addition" of pollutants to navigable waters; moving polluted water into a distinct receiving water is an "addition" requiring a permit (Catskill line). | Statute ambiguous as to whether "navigable waters" is unitary; EPA interprets transfers between "waters of the U.S." as not adding pollutants because pollutants already exist in the unitary whole. | Statute is ambiguous on the precise question; Chevron Step One does not resolve it. |
| Whether Chevron deference applies to EPA’s formal Water Transfers Rule | Plaintiffs: prior cases rejected EPA’s informal position; but now EPA’s rule is inconsistent with the Act and unreasonable. | EPA: Rule is a formal notice-and-comment regulation entitled to Chevron deference. | Chevron applies; agency rule is entitled to deference at Step Two. |
| Whether EPA’s Water Transfers Rule is reasonable (Chevron Step Two) | Rule undermines the Act’s purpose, creates an unwritten exemption to the discharge prohibition, and produces absurd results (polluted → pristine transfers unregulated). | Rule is a permissible, reasoned policy choice balancing water-quality goals, federalism, costs, and alternative regulatory mechanisms; longstanding practice and congressional acquiescence support reasonableness. | Rule is a reasonable interpretation supported by a reasoned explanation; not arbitrary or capricious. Court reverses district court and reinstates the Rule. |
| Whether canons (clear‑statement, constitutional avoidance, and statutory structure) or precedent (Miccosukee, Rapanos, SWANCC) require a different result | Plaintiffs/dissent: statutory structure, plain meaning, and precedent support requiring permits; no clear-statement needed to protect states. | Defendants: SWANCC/Rapanos clear-statement principles inapplicable; functional federalism concerns and practical burdens counsel deference. | Canons and precedents do not compel rejecting EPA’s reading; they do not foreclose Chevron deference or make EPA’s interpretation unreasonable here. |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) (establishes two-step deference framework for agency statutory interpretation)
- S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe, 541 U.S. 95 (2004) (Supreme Court: transfers count as discharges only if waters are "meaningfully distinct" and expresses reservations about unitary-waters theory)
- Brand X Internet Services v. FCC, 545 U.S. 967 (2005) (agency reasonable interpretation of ambiguous statute can displace earlier judicial reading)
- Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (1983) (arbitrary-and-capricious review standards for agency rulemaking)
- Rapanos v. United States, 547 U.S. 715 (2006) (plurality discusses scope of "waters of the United States" and federal-state balance)
- Solid Waste Agency of N. Cook Cty. v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001) (clear-statement concerns when agency interpretation alters federal-state balance)
- Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208 (2009) (deference to agency interpretation need not be the only or best reading)
- Catskill Mountains Chapter of Trout Unlimited v. City of New York (Catskill I), 273 F.3d 481 (2d Cir. 2001) (prior panel held an interbasin transfer was an "addition" under the CWA; applied Skidmore deference to EPA's informal positions)
- Catskill Mountains Chapter of Trout Unlimited v. City of New York (Catskill II), 451 F.3d 77 (2d Cir. 2006) (reaffirmed Catskill I; noted deference differences where EPA issues a formal rule)
- Friends of the Everglades v. South Fla. Water Mgmt. Dist. (Friends I), 570 F.3d 1210 (11th Cir. 2009) (upheld Water Transfers Rule under Chevron as a reasonable interpretation)