In the Matter of the CITIES OF ANNANDALE AND MAPLE LAKE NPDES/SDS PERMIT ISSUANCE FOR THE DISCHARGE OF TREATED WASTEWATER, and Request for Contested Case Hearing.
No. A04-2033.
Supreme Court of Minnesota.
May 17, 2007.
ANDERSON, PAUL H., Justice.
This appeal results from the issuance of a National Pollutant Discharge Elimination System (NPDES) permit by the Minnesota Pollution Control Agency (MPCA) for a wastewater treatment plant jointly proposed by the City of Annandale and the City of Maple Lake (the Cities). The MPCA found that the proposed plant—when operating at capacity—would increase phosphorus discharge to the North Fork of the Crow River by approximately 2,200 pounds per year over that which is discharged by the Cities’ existing facilities, but the MPCA concluded that, under
A divided Minnesota Court of Appeals reversed the MPCA, concluding that the phosphorus discharge from the proposed facility would violate water quality standards, and therefore issuing a permit violated
The cities of Annandale and Maple Lake (the Cities) are located in Wright County, Minnesota, approximately 125 miles northwest of Lake Pepin. Annandale and Maple Lakе experienced population increases of 27 percent and 44 percent respectively between 1980 and 2000. Wright County as a whole is projecting a 54 percent population increase between 2000 and 2030.
Maple Lake currently utilizes a mechanical plant for its wastewater treatment, which plant is nearing capacity. The plant discharges approximately 1,400 pounds of phosphorus annually into Mud Lake, which flows into the North Fork of the Crow River (North Fork), then into the Mississippi River, and ultimately into Lake Pepin. Lake Pepin is a naturally-occurring lake on the Mississippi River and has been identified by the Minnesota Pollution Control Agency (MPCA) as impaired under the Clean Water Act. See
In late 2002, the Cities jointly developed plans for a new wastewater treatment plant. In 2003, the Cities applied to the MPCA for an NPDES permit for a single joint plant that would discharge into an unnamed tributary of the North Fork. Based on a condition imposed by the Wright County Planning Commission, which required discharge directly into the North Fork rather than the unnamed tributary, the Cities submitted an amendment to their permit application in March 2004.
The MPCA placed a draft proposed permit “on public notice” on May 10, 2004, and held a public hearing on May 27, 2004. The draft permit placеd specific limits on the proposed plant‘s discharge, including a maximum concentration level of 1 mg/L for phosphorus and a minimum level of 6 mg/L for dissolved oxygen, as well as limits on carbonaceous biochemical oxygen demand, ammonia nitrogen, mercury, fecal coliform, pH, and suspended solids. With these limits in place, the proposed plant would discharge 3,600 pounds of phosphorus annually when it reached capacity by the year 2024. The MPCA received comments from respondent Minnesota Center for Environmental Advocacy (MCEA) and others, and responded in writing to the comments. On September 28, 2004, the MPCA held a meeting at which MPCA staff members, MCEA representatives, and members of the public discussed the draft proposed permit and the MPCA‘s proposed findings of fact, conclusions of law, and order.
One focus of the discussion at the MPCA meeting was the MCEA‘s concern that issuance of the NPDES permit would violate
The MPCA recommended approval of the draft NPDES permit and issued findings, including a finding that, when operated at capacity, the proposed plant would inсrease phosphorus discharge to the North Fork by approximately 2,200 pounds annually over that which is discharged by Maple Lake‘s existing plant. But the MPCA found that this increase in phosphorus discharge would be offset by an approximate 53,500-pound reduction in phosphorus discharge to the North Fork due to upgrades to the Litchfield wastewater treatment plant. Accordingly, the MPCA concluded that “[b]ecause of the net reduction in the watershed, the proposed joint Annandale/Maple Lake facility will not contribute to water quality standards violations in Lake Pepin.”
Additionally, the MPCA concluded that the dissolved oxygen effect from the proposed plant would not contribute to the
By writ of certiorari to the court of appeals, the MCEA challenged the MPCA‘s decision to issue the NPDES permit. The MCEA argued to the court of appeals that (1) no deference should be given to the MPCA‘s interpretation of
A divided court of appeals reversed in a published opinion. In re Cities of Annandale & Maple Lake NPDES/SDS Permit Issuance (Cities of Annandale & Maple Lake), 702 N.W.2d 768, 770 (Minn.App. 2005). The court concluded that no deference is given to a state agency‘s interpretation of a federal regulation because the interpretation of a federal regulation is a question of law that is reviewed de novo. Id. at 771. The court then rejected the MCEA‘s argument that
The court of appeals’ dissent concluded that “when reviewed with the deference properly accorded agency actions on review by this court, the [M]PCA‘s interpretation of the regulation and its decision to grant the permit wеre reasonable and consistent with the purposes and principles of the [Clean Water Act].” 702 N.W.2d at 776 (Schumacher, J., dissenting). The dissent concluded that “judicial deference, rooted in the separation of powers doctrine, is extended to an agency decision-maker in the interpretation of statutes that the agency is charged with administering and enforcing.” Id. at 777 (citations omitted). The dissent further concluded that a “reasonableness” standard should be applied by a court reviewing the MPCA‘s decision to issue an NPDES permit, and that the MPCA‘s decision was reasonable and should have been affirmed. Id. at 777-79.
None of the parties sought review of the dissolved oxygen issue; but, in the context of the phosphorous discharge, the Cities and the MPCA sought review of the court of appeals’ rulings on (1) whether a state agency‘s interpretation of a federal regulation that the agency is charged with enforcing and administering is entitled to deference by the courts, and (2) whether the MPCA may consider offsets from other sources in determining whether a new discharge causes or contributes to the violation of water quality standards under
I.
Before specifically addressing the two issues raised by the parties, a general overview of the Clean Water Act (CWA) as applicable to the facts of this case is helpful. The CWA is the cornerstone of surface water protection in the United States. Its purpose “is to restore and maintain the chemical, physical, and biological integrity of the Nation‘s waters.”
It is the policy of the Congress to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution, to plan the development and use (including restoration, preservation, and enhancement) of land and water resources, and to consult with the Administrator in the exercise of his authority under this chapter.
The CWA provides for two types of water quality measures: “effluent limitations” and “water quality standards.” Arkansas v. Oklahoma, 503 U.S. 91, 101 (1992). Effluent limitations promulgated by the Environmental Protection Agency (EPA) “restrict the quantities, rates, and concen
Water quality standards, which are promulgated by the states, generally establish the desired condition of a body of water. The CWA requires states to establish water quality standards sufficient to “protect the public health or welfare, enhance the quality of water and serve the purposes of this chapter.”
None of the parties in this case specifically identifies the relevant water quality standards, but it appears that if a body of water is identified as impaired under section 303(d) of the CWA, it is necessarily in violation of one or more of the relevant water quality standards. See
In addition to requiring states to identify impaired waters, section 303(d) of the CWA also mandates that states establish a TMDL for each pollutant that causes a body of water to fail to meet water quality standards.
If a TMDL has been established for a body of water identified as impaired under section 303(d), an NPDES permit may not be issued unless the permitting authority finds that the new source or discharge will not cause or contribute to the violation of water quality standards and will not violate the TMDL. See
When a TMDL has not been established, a new source is not required to demonstrate compliance with the TMDL. Rather, the opening sentence of
40 C.F.R. § 122.4(i) provides that a permit may be issued provided that the new source does not “cause or contribute to the violation of water quality standards.” The remainder of section 122.4(i) addresses the criteria for issuing a permit when a TMDL has been established.
Cities of Annandale & Maple Lake, 702 N.W.2d at 773. No party sought review of the court‘s ruling that an NPDES permit may be issued before establishment of a TMDL, and we conclude that it is neither necessary nor prudent for us to address this issue at this time.
With the foregoing general background on the CWA, we now address the first issue raised by the parties—whether a state agency‘s interpretation of a federal regulation that the agency is charged with enforcing and administering is entitled to deference by the courts. The MCEA ar7gues that no deference should be given to the MPCA‘s decision on how to interpret
The court of appeals’ majority apparently agreed with the MCEA‘s argument that the MPCA‘s decision to grant the permit was affected by an error of law, and did not give deference to the MPCA‘s interpretation of
While we have been asked on several occasions to dеtermine whether and how much deference courts should give to administrative agency interpretations of reg
St. Otto‘s Home addressed a state agency‘s interpretation of a regulation promulgated by that agency. 437 N.W.2d at 40. We stated in St. Otto‘s Home that we give considerable deference to a state agency‘s construction of its “own regulation.” Id. But, unlike the case before us, in St. Otto‘s Home we were not required to decide whether an agency‘s “own regulation” is limited to regulations promulgated by that agency or also includes regulations coming from another source that the agency is legally required to enforce and administer. Yet, a United States Supreme Court case cited in St. Otto‘s Home provides us with a reference point on this issue. Id. (citing Udall v. Tallman, 380 U.S. 1, 16 (1965)). In Udall, the Supreme Court reasoned that deference to an agency‘s interpretation of a statute is appropriate, particularly “when the administrative practice at stake ‘involves a contemporaneous construction of a statute by the [people] charged with the responsibility of setting its machinery in motion; of making the parts work efficiently and smoothly while they are yet untried and new.‘” 380 U.S. at 16 (quoting Power Reactor Dev. Co. v. Int‘l Union of Elec., Radio & Mach. Workers, 367 U.S. 396, 408 (1961)). We agree with the Supreme Court‘s reasoning in Udall and conclude that an agency‘s “own regulation” may include a regulation that the agency is legally required to enforce and administer, even if the regulation was not promulgated by the agency.
This broader definition of an agency‘s “own regulation” is supported by our recent decision in In re Excess Surplus Status of Blue Cross & Blue Shield of Minn. (BCBSM), 624 N.W.2d 264 (Minn.2001), in which we gave deference to the Minnesota Department of Commerce‘s determination that Blue Cross and Blue Shield‘s proposal to bring its excess surplus into compliance with the law did not satisfy the requirements of
[t]he agency decision-maker is presumed to have the expertise necessary to decide technical matters within the scope of the agency‘s authority, and judicial deference, rooted in the separation of powers doctrine, is extended to an agency decision-maker in the interpretation of statutes that the agency is charged with administering and enforcing.
Id. at 278 (emphasis added) (citation and footnote omitted). Not only is our decision in BCBSM consistent with the Supreme Court‘s holding in Udall, our conclusion in BCBSM goes beyond Udall because we state that when judicial deference—which is rooted in the separation of powers doctrine—is appropriate, it goes beyond deference to agency-created regulations and also includes statutes administered by the agency that the agency is charged with enforcing and administering.
Based on the foregoing case law, we conclude that when addressing whether to
II.
Having concluded that we treat a federal regulation as a state agency‘s own regulation if the state agency is legally charged with the day-to-day enforcement and administration of the regulation, we now proceed to determine our standard for reviewing an agency‘s interpretation of its own regulation. In particular, we must identify what factors we should consider when determining whether courts should give deference to the agency‘s interpretation. We stated in Reserve Mining Co. that “decisions of administrative agencies enjoy a presumption of correctness, and deference should be shown by courts to the agencies’ expertise and their special knowledge in the field of their technical training, education, and experience.” 256 N.W.2d at 824. We concluded that the rationale for deference to administrative agency decisions is rooted in the separation of powers doctrine and the agency‘s training and expertise in the subject matter. See id. The legislature codified some aspects of this deferential review of agency decisions arising out of contested case proceedings in the Minnesota Administrative Procedures Act (MAPA).8 See Minn. Ctr. for Envtl. Advocacy v. Minn. Pollution Control Agency (MCEA v. MPCA), 644 N.W.2d 457, 463 (Minn.2002). Thus, while it is evident that under certain circumstances we have a policy of deferring to аn agency‘s interpretation, it is not clear what criteria and limits guide this policy. Therefore, it will be helpful to review when and why we have given deference in the past.
We have previously indicated that we will not defer to an agency‘s interpretation of its own regulation when the regulation‘s language is clear and capable of understanding. Resident v. Noot, 305 N.W.2d 311, 312 (Minn.1981). This approach comports with the approach articulated by the Supreme Court. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984) (“If the intent of Congress is clear, that is the end of the
It also appears that if we conclude that the language of a regulation is unclear or susceptible to different interpretations, another factor influences whether we defer to an agency‘s interpretation. We have said that we defer to an agency‘s interpretation of its own regulations when the language of the regulation is subject to a construction that is so technical in nature that only a specialized agency has the experience and expertise needed to understand the regulation. See BCBSM, 624 N.W.2d at 278; Reserve Mining Co., 256 N.W.2d at 824. Soon after BCBSM, we reached a similar result in MCEA v. MPCA, in which we concluded that the MPCA‘s interprеtation and application of a state statute was entitled to deference on the basis that the interpretation of the statute required an application of the agency‘s training and expertise. 644 N.W.2d at 464. Specifically, we concluded that the statute requires an EIS if Boise Cascade‘s project will result in “significant environmental effects.” A determination whether significant environmental effects result from this project is primarily factual and necessarily requires application of the agency‘s technical knowledge and expertise to the facts presented. Accordingly, it is appropriate to defer to the agency‘s interpretation of whether the statutory standard is met. Id. (citation omitted). In MCEA v. MPCA, we did not expressly conclude that the phrase “significant environmental effects” was ambiguous, but we concluded that the MPCA‘s training and expertise were necessary to interpret and apply the statute. See id. Our language in MCEA v. MPCA echoes in part the language we used in Reserve Mining Co. where we said that “decisions of administrative agencies enjoy a presumption of correctness, and deference should be shown by courts to the agencies’ expertise and their special knowledge in the field of their technical training, education, and experience.” 256 N.W.2d at 824.
In 1989, we attempted to summarize our approach to interpreting an agency‘s regulation in St. Otto‘s Home, where we said:
When a decision turns on the meaning of words in a statute or regulation, a legal question is presented. In considering such questions of law, reviewing courts are not bound by the decision of the agency and need not defer to agency expertise. When the agency‘s construction of its own regulation is at issue, however, considerable deference is given to the аgency interpretation, especially when the relevant language is unclear or susceptible to different interpretations. If a regulation is ambiguous, agency interpretation will generally be upheld if it is reasonable. No deference is given to the agency interpretation if the language of the regulation is clear and capable of understanding; therefore, the court may substitute its own judgment.
437 N.W.2d at 39-40 (citations omitted). Several key conclusions appear to emerge from our decisions in St. Otto‘s Home and other relevant cases. First, when a decision turns on the meaning of words in an agency‘s own regulation, it is a question of law that we review de novo. Second, when the language of the regulation is clear and capable of understanding, we give no deference to the agency‘s interpretation and we may substitute our own judgment for that of the agency. Third, when the relevant language of the regulation is unclear or susceptible to different reasonable interpretations, i.e., ambiguous, we will give deference to the agency‘s interpretation and will generally uphold that interpretation if it is reasonable.
What is not immediately apparent from our holding in St. Otto‘s Home and from our other decisions is when and why we are to consider an agency‘s expertise and special knowledge when determining whether to give deference to the agency‘s interpretation. As noted above, we have on several occasions stated that we will defer to an agency when that agency has expertise and special knowledge in its field of technical training, education, and expertise. See MCEA v. MPCA, 644 N.W.2d at 464; BCBSM, 624 N.W.2d at 278; Reserve Mining Co., 256 N.W.2d at 824. It is only after we read our prior case law closely that a pattern emerges for when and why we would consider an agency‘s expertise and special knowledge in the context of the case before us. Based on this case law, we have deferred to an agency‘s expertise and special knowledge when (1) the agency is interpreting a regulation that is unclear and susceptible to more than one interpretation; and (2) the agency‘s interpretation is reasonable.9 Therefore, we conclude that when determining whether to defer to an agency, we will consider that agency‘s expertise and special knowledge.
In asserting its position that no deference should be given to the MPCA‘s interpretation of
In summary, we glean from our case law that review of an agency‘s interpretation of its own regulations is a question of law that courts review de novo. When answering this question, there are several factors courts need to consider when determining whether to give deference to an agency‘s interpretation. These factors include whether the agency is legally required to enforce and administer the regulation under review and whether the meaning of the words in the regulation is clear and unambiguous or is unclear and susceptible to different reasonable interpretations—ambiguous. If a court concludes the meaning of the words in the regulation is clear and unambiguous, it need not defer to the agency‘s interpretation and may substitute its own judgment for that of the agency. If a court concludes that the meaning of the words in an agency‘s regulation is unclear and susceptible to different reasonable interpretations, the court must then determine whether the agency‘s interpretation is reasonable. When determining whether an agency‘s interpretation is reasonable, courts may consider the agency‘s expertise and special knowledge, especially when the construction of the regulation‘s language is so technical in nature that the agency‘s field of technical training, education, and experience is necessary to understand the regulation. When a court concludes that the language of the agency‘s regulation is unclear and susceptible to different reasonable interpretations and that the agency‘s interpretation of the regulation is reasonable, then the court will generally defer to the agency‘s interpretation.
III.
The next step in our analysis is to consider the foregoing factors in the context of the case before us. The first factor we address is whether the MPCA is legally required to enforce and administer
IV.
Next, we must determine whether
To determine if
[t]o a new source or a new discharger, if the discharge from its construction or operation will cause or contribute to the violation of water quality standards. The owner or operator of a new source or new discharger proposing to discharge into a water segment which does not meet applicable water quality standards or is not expected to meet those standards even after the application of the effluent limitations required by sections 301(b)(1)(A) and 301(b)(1)(B) of CWA, and for which the State or interstate agency has performed a pollutants load allocation for the pollutant to be discharged, must demonstrate, before the close of the public comment period, that:
(1) There are sufficient remaining pollutant load allocations to allow for the discharge; and
(2) The existing dischargers into that segment are subject to compliance schedules designed to bring the segment into compliance with applicable water quality standards.
(Emphasis added.) It is the phrase “cause or contribute to the violation of water quality standards” that is the source of most of the disagreement about the interpretation of
The MPCA concluded that “[t]he proposed increase in phosphorus load * * * is significantly less than the reduction in phosphorus load in the watershed from the upgrade of the Litchfield wastewater treatment facility. Because of the net reduction in the watershed, the proposed * * * facility will not contribute to water quality standards violations in Lake Pe
the record demonstrates that, notwithstanding the reduction in phosphorus resulting from other sources, the waters at issue remain impaired. And the amount of phosphorus discharged into the North Fork from the proposed wastewater-treatment plant, which is more than double the current phosphorus level of 1,400 pounds per year, will contribute to impaired nutrient levels in Lake Pepin.
Id. The dissent in essence agrees with the court of appeals’ plain reading analysis that places a very narrow interpretation on
It appears that the difference between the MPCA‘s interpretation of the regulation and the court of appeals’ interpretation centers on whether any discharge to an “impaired water” necessarily “causes or contributes to a violation of water quality standards” or, alternatively, if net improvements to an “impaired water” can be considered in determining whether a new source or discharger “causes or contributes” to the violation of water quality standards. Specifically, the MPCA and the court of appeals ascribe different meanings to “cause or contribute” and “water quality standards” as used in the context of the CWA and as applied to the facts of this case.
The court of appeals’ majority did not find any ambiguity in the regulation‘s language and held that under a “plain reading of the phrase ‘cause or contribute to the violation of water quality standards,‘” an NPDES permit may not be issued “so long as some level of discharge may be causally attributed to the impairment of Section 303(d) waters.” Cities of Annandale & Maple Lake, 702 N.W.2d at 775. Because phosphorus “does not break down into smaller components,” the court of appeals essentially concluded that any increase in phosphorus discharge from the proposed plant will affect the Lake Pepin watershed. Id. at 774.
In essence, the court of appeals’ majority viewed the phrase “cause or contribute to the violation of water quality standards” in black-and-white terms. But both the Supreme Court and our court have said that “the meaning of statutory language, plain or not, depends on context.” King v. St. Vincent‘s Hosp., 502 U.S. 215, 221 (1991); see also State v. Donaldson, 41 Minn. 74, 80, 42 N.W. 781, 782 (1889) (noting that even when “the words are plain,” ambiguity “may be created by the context“). Therefore, we must view the words of the regulation “in their setting, not isolated from their context.” Chiodo v. Bd. of Educ., 298 Minn. at 382, 215 N.W.2d at 808. See also Metro Office Parks Co., 295 Minn. at 352, 205 N.W.2d at 124. Here, the regulation must be interpreted within the context of the language of the CWA. Such an approach is consistent with the approach taken by other courts, which have “favоred a ‘whole act’ approach to the Clean Water Act.” 3B Norman J. Singer, Statutes and Statutory Construction § 77:4 (6th ed.2003).
The MPCA found that the proposed plant, when operating at capacity, would increase phosphorus discharge into the North Fork by approximately 2,200 pounds annually over that which is currently discharged by the Maple Lake plant. But the MPCA found that this
The court of appeals’ majority in reversing the MPCA concluded that there is no “indication that a discretionary system of offsets is authorized” under
Given the Supreme Court‘s holding in Arkansas, we conclude that the court of appeals’ narrow reading of the regulation in essence imposes a complete ban on new facilities like the one proposed here and that such an interpretation is unreasonable. In Arkansas, the owners of a new wastewater treatment plant in the state of Arkansas applied for a permit to discharge up to 6.1 million gallons of effluent per day into an unnamed stream. 503 U.S. at 95. The stream ultimately flowed into the Illinois River in Oklahoma. Id. Oklahoma asserted the discharge into a tributary of the Illinois River would violate its water quality standards which provide that no degradation of water quality shall be allowed in the upper Illinois River. Id. An administrative law judge “found that there would be no detectable violation of [Oklahoma‘s water quality standards]” from the proposed plant and approved the permit. Id. at 97. On appeal, the Tenth Circuit Court of Appeals reversed the issuance of the permit, holding that “the Clean Water Act prohibits granting an NPDES permit * * * where applicable water quality standards have already been violated.” State of Okla. υ. Envtl. Prot. Agency, 908 F.2d 595, 616 (10th Cir.1990).
The Supreme Court in Arkansas did not address the use of offsets in determining whether a new discharge would cause or contribute to the violation of water quality standards, but the Environmental Appeals Board (EAB), which is the final EPA decisionmaker on administrative appeals under the CWA, has applied the principles underlying Arkansas to a situation similar to the case before us. Carlota Copper Co., 11 Envtl. Admin. Decisions 692 (Sept. 30, 2004) (order denying review). In Carlota Copper Co., several environmental groups challenged the issuance of an NPDES permit to the Carlota Copper Company for a new open-pit copper mine project that would discharge effluent into an impaired body of water. Id. at 702-06. The permit required Carlota to partially remediate, as an offset against Carlota‘s proposed new copper discharge, another of its copper mines, which was located upstream from the proposed mine. Id. at 705. In its order denying review of the permit, the EAB stated:
There is nothing in * * *
40 C.F.R. section 122.4(i) providing that an impaired water segment needs to be restored prior to allowing new source discharges into the water body. The Board declines to endorse Petitioners’ interpretation because to do so would perpetrate the very outcome the Supreme Court in Arkansas v. Oklahoma sought to avoid (adoption of a rigid approach that might frustrate the construction of new facilities that would improve existing conditions). The Board finds no clear error in the Region‘s determination that Carlota‘s discharges will not “cause or contribute” to a violation of water quality standards, but rather, Carlota will improve existing conditions because the reductions that will result from its activities are greater than the projected discharges. In addition, the Region did not clearly err in determining that “there are sufficient remaining pollutant load allocations to allow for Carlota‘s discharges.”
11 Envtl. Admin. Decisions at 695 (syllabus) (emphasis added) (citation omitted).
The MCEA argues that Carlota is distinguishable because (1) the permit in Carlota was issued post-TMDL; and (2) the offset was required to be made by the same discharger that was applying for the new permit. Although it is correct that the Carlota permit was issued after a TMDL had been established for the impaired body of water, the first sentence of
Moreover, while MCEA argues that Carlota is distinguishable because it dealt with an offset made by the same discharger, the propriety of considering offsets from another discharger when determining whether a new source or discharge causes or contributes to the violation of water quality standards is supported by the EPA‘s interpretation of
To date, EPA has not formally interpreted
40 C.F.R. § 122.4(i) with respect to what conditions, if present, would allow for permit issuance to new sources or new dischargers proposing to discharge their effluent into impaired waters. * * * In practice, permitting has occurred in at least three situations that EPA believes are consistent with current regulations.
Defendants’ Response Memorandum in Support of Schedule for Preparation of Total Maximum Daily Loads at 52, Clifford, 1999 WL 33494861. The EPA went on to identify three situations in which, by EPA practice, an NPDES permit may be issued to a new source or new discharger proposing to discharge effluent into impaired waters before completion of a TMDL. Id. at 52-53. The third situation identified by the EPA is
where it is demonstrated that other pollutant source reductions (such as nonpoint source reductions implemented by the discharger) will offset the discharge in a manner consistent with [water quality standards]. The ultimate result of this type of “offset” or “trade” may be a net decrease in the loadings of the pollutant of concern in the CWA § 303(d) listed water, and therefore, EPA, by practice, has considered a discharge which has been offset in accordance with permit requirements not to “cause or contribute to a violation of water quality standards.”
Id. at 53.
The court of appeals’ majority concluded that the EPA‘s brief in Clifford could not be relied upon as documentation of the EPA‘s interpretation of
Finding solutions to these complex water quality problems requires innovative approaches that are aligned with core water programs. Water quality trading is an approach that offers greater efficiency in achieving water quality goals on a watershed basis. It allows one source to meet its regulatory obligations by using pollutant reductions created by another source that has lower pollution control costs. Trading capitalizes on economies of scale and the control cost differentials among and between sources.
68 Fed.Reg. at 1609. While we are not dealing with a market-based program in the case before us, we conclude that much of the EPA‘s rationale on trading applies to the MPCA‘s consideration of offsets in enforcing and administering water quality regulations with respect to these two state subdivisions—the Cities.
The foregoing analysis demonstrates that the interpretation of
V.
We next address whether, under
The MPCA considers a number of variables in assessing how a particular discharge of phosphorus “affects” the watershed. See NPDES Permits at 2. The MPCA‘s assessment model “includes using standard lake/reservoir eutrophication models, data assessment, scientific research, and other information relating to the lake/reservoir and its tributaries, watershed, and cumulative point and non-point source phosphorus loads.” Id. Using this assessment model, the MPCA determines whether “the individual contribution of the discharge” causes any adverse changes in terms of actual or predicted increases in chlorophyll-a concentration, increased frequency of nuisance algae blooms, reduced transparency, reduced dissolved oxygen concentrations, or related adverse responses to phosphorus. Id. This determination is typically made over a range in flow сonditions after MPCA scientists review data and apply their “best professional judgment.” Id. Further, the MPCA has adopted the concept of “de minimus phosphorus loadings“—municipal facilities with a phosphorus load of 1,800 pounds per year or less. Id. at 3. In the MPCA‘s experience, these “small discharges” generally do not have “a measurable impact on the environment.” Id.
In making its determination, the MPCA must also deal with difficult policy issues related to accommodating population growth in a state with significant surface waters, many of which are considered impaired. See NPDES Permits at 4. As previously noted, these are issues on which the CWA does not provide clear guidance. Because the MPCA‘s application of
Based on the foregoing, we conclude that when viewed in its setting and not isolated from its context, the broad nature of the phrase “cause or contribute to the violation of water quality standards” leaves leeway for the MPCA to make a range of policy judgments based on the MPCA‘s scientific and technical knowledge. Cf. Natural Res. Def. Council v. Costle, 568 F.2d 1369, 1382 (D.C.Cir.1977) (“conced[ing] necessary flexibility in the shaping of [NPDES] permits that is not inconsistent with the clear terms” of the CWA). Nothing in the language of the regulation or the structure of the CWA prohibits the MPCA from considering offsets in this situation. In light of the multitude of variables and possible approaches in determining whether a specific discharge of phosphorus will “cause or contribute to the violation of water quality standards“—not the least of which is whether the MPCA should consider the discharge in isolation or in the context of other reductions in the watershed as a whole—it appears that the MPCA‘s interpretation of
Our analysis also shows that the MPCA‘s interpretation of
Accordingly, we conclude that the MPCA‘s interpretation of
VI.
In summary, we conclude that the MPCA is legally required to enforce and administer
Finally, a few additional observations on the dissent are in order. At the core of our difference of opinion with the dissent is the dissent‘s conclusion that
With respect to our standard deference analysis, we are in apparent agreement with the dissent that we should dеcide whether to accord deference on a case-by-case basis. And that is precisely what we have done here. Specifically, we have concluded that deference is warranted only after thoroughly considering multiple factors, not the single factor to which the dissent would reduce our analysis. Judicial deference to an agency‘s interpretation of its own regulation is rooted in the separation of powers doctrine. In the spirit of this doctrine, we acknowledge that an agency‘s training and expertise are helpful and frequently necessary to properly interpret and apply a regulation that is unclear and susceptible to more than one reasonable interpretation. Further, we disagree with the dissent‘s conclusion that, based on this opinion, the MPCA can use discharge reductions from the “distant past” or “unknown future” or “geographically distant locales” to “largely circumvent” its mandate. Given our conclusion that, under our standard deference analysis, reasonableness is necessarily determined using a case-by-case inquiry, our opinion does not
For all the foregoing reasons, we hold that the court of appeals erred when it reversed the MPCA‘s decision to issue the NPDES permit for the Cities’ proposed wastewater treatment plant.
Reversed.
ANDERSON, Russell A., C.J., took no part in the consideration or decision of this matter.
PAGE, Justice (dissenting).
I.
I respectfully dissent. While I agree that under some circumstances deference to a state agency‘s interpretation of a federal regulation may be appropriate, deference is not appropriate in this case. Judicial deference to an agency‘s interpretation of a regulation is inappropriate if the language of the regulation is unambiguous, as an agency is not permitted to contravene the plain meaning of the language used in the regulation. See St. Otto‘s Home v. Minn. Dep‘t of Human Servs., 437 N.W.2d 35, 40 (Minn.1989). While context may help us ascertain its plain meaning, see King v. St. Vincent‘s Hosp., 502 U.S. 215, 221 (1991), an examination of the actual language that comprises the text is always necessary to reach conclusions about meaning. In this case, the court concludes that
II.
Under
It is undisputed that phosphorus levels in the Lake Pepin Watershed currently exceed water quality standards and, as determined by the MPCA, are in violation of those standards. Minn. Pollution Control Agency, MPCA 2002 303(d) List (Jan. 22, 2003), available at http://www.pca.state.mn.us/publications/reports/tmdl-2002list.pdf. The MPCA has also determined that the proposed Maple Lake/Annandale facility will increase the cities’ discharge of phosphorus into that watershed from approximately 1,400 pounds of phosphorus annually to about 3,600 pounds annually. Thus, while the proposed facility will not cause a violation of the standards, it is clear that an increase of 2,200 pounds of phosphorus per year will “help bring about,” that is, contribute to, a water quality standards violation in the Lake Pepin Watershed. It is also clear that the violation will occur irrespective of any action taken by the City of Litchfield to reduce the amount of phosphorus it discharges into the watershed. By granting the NPDES permit to the cities of Maple Lake and Annandale, the MPCA ignores the unambiguous language of
III.
Even if the plain meaning of the regulation‘s language is ignored and it is assumed that the regulation is ambiguous, I would still conclude that deference is inappropriate because none of the traditional rationales for deferring to an agency‘s interpretation of a regulation are present in this case.
Under our case law, one rationale for giving deference to an agency‘s reasonable interpretation of an ambiguous regulation is rooted in the separation of powers doctrine. Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn.1977). More specifically, deference is warranted to prevent the judiciary from exercising excessive or potentially unconstitutional discretion over policy matters. Id. at 825. Such matters are properly the domain of the legislative and executive branches, which have both greater fact-finding abilities and greater political accountability than the judiciary. See id. However, when judicial review of an agency‘s interpretation of a regulation does not involve second-guessing policy decisions, the separation of powers doctrine is not a reason to defer to an agency‘s interpretation. To the contrary, the separation of powers doctrine compels the judiciary to ensure that other governmental bodies execute laws faithfully.
Another rationale for deferring to an agency‘s interpretation of a regulation arises when, unlike the judiciary, the agency has “the expertise necessary to decide technical matters.” In re Excess Surplus Status of Blue Cross & Blue Shield of Minn., 624 N.W.2d 264, 278 (Minn.2001). Accordingly, if the regulation refers to an open-ended technical or scientific matter—for example, a requirement that the agency determine whether certain effluents cause or contribute to a public health hazard, see Minn. Ctr. for Envtl. Advocacy v. Minn. Pollution Control Agency, 644 N.W.2d 457, 464 (Minn.2002) (interpreting “significant environmental effects“)—then it would be appropriate to defer to the agency‘s interpretation, provided that interpretation is reasonable. However, when interpretation of the regulation does not implicate any special scientific or tech
Deference may also be appropriate “when the administrative practice at stake involves a contemporaneous construction of a statute [or regulation] by the [people] charged with the responsibility of setting its machinery in motion, of making the parts work efficiently and smoothly while they are yet untried and new.” Udall v. Tallman, 380 U.S. 1, 16 (1965) (internal quotation marks omitted); see also Resident v. Noot, 305 N.W.2d 311, 312 (Minn.1981) (noting deference is appropriate “when the agency interpretation is one of long standing“); In re Estate of Abbott, 213 Minn. 289, 296, 6 N.W.2d 466, 469 (1942) (“That great weight should be given departmental construction of taxation statutes is dependent upon such construction‘s having been long continued and uniform * * *.” (Citations omitted.)). In such a case, deference may be justified because longstanding and consistent interpretations may have encouraged reliance by the public and because the failure of a delegating authority to correct the interpretation implies either that the interpretation is correct or that the authority has willingly acquiesced to the agency‘s interрretation. See Udall, 380 U.S. at 17-18; In re Estate of Abbott, 213 Minn. at 296, 6 N.W.2d at 470. However, in cases in which the agency interpretation is recent, any reliance interest is diminished, and changed or new interpretations may be the product of political opportunism rather than good-faith efforts at interpretation.
As noted previously, no rationale for deference is present in this case. The MPCA is tasked with determining whether “construction or operation” of a new facility “will cause or contribute to the violation of water quality standards.”
In comparison, if we were reviewing water quality standards set by the MPCA, deference would be warranted because that decision requires the evaluation of the effects of discharged substances on wildlife and public safety, which implicates special technical and scientific competence. See MCEA v. MPCA, 644 N.W.2d at 465. It would also be warranted because selecting such standards requires policy judgments involving the analysis of costs and benefits of the different options and consideration of competing interests. For example, if it were concerned with population growth, the MPCA could have presumably indexed water quality standards to population. Thus, if we were being asked to review the actual standards selected by the MPCA, considerations related to the separation of powers doctrine would make deference entirely appropri
In determining that we should defer to the MPCA‘s interpretation of
IV.
Even if it is assumed that the regulation is ambiguous and that some or all of the traditional reasons for deferring to the agency‘s interpretation of the regulation are present, before deference is appropriate, the agency‘s interpretation must be reasonable, as a court should not allow an agency to impose a meaning on a legal authority that its text will not bear. See St. Otto‘s Home, 437 N.W.2d at 40. Here, the court determines that the MPCA‘s interpretation of
As an initial matter, the court is mistaken when it suggests that the U.S. Supreme Court‘s decision in Arkansas v. Oklahoma,
Moreover, there is nothing in the text of
V.
In summary,
MEYER, Justice (dissenting).
I join in the dissent of Justice Page.