The PINEY RUN PRESERVATION ASSOCIATION, Plaintiff-Appellee, v. COUNTY COMMISSIONERS OF CARROLL COUNTY, MARYLAND, Defendant-Appellant. Association of Metropolitan Sewerage Agencies; Water Environment Federation; Maryland Association of Municipal Wastewater Agencies, Incorporated; Virginia Association of Municipal Wastewater Agencies, Incorporated; West Virginia Municipal Water Quality Association, Incorporated; American Chemistry Council; American Forest And Paper Association; Chamber of Commerce of The United States of America; General Electric Company; National Association of Manufacturers; Utility Water Act Group; Virginia Manufacturers Association; M.A.D.E. in Maryland; Alliance of Automobile Manufacturers; American Iron And Steel Institute; American Petroleum Institute; Environmental Federation of Oklahoma; Michigan Manufacturers Associations; Mississippi Manufacturers Association; National Petrochemical and Refiners Association; Nuclear Energy Institute; Western States Petroleum Association, Amici Curiae. The Piney Run Preservation Association, Plaintiff-Appellant, v. County Commissioners of Carroll County, Maryland, Defendant-Appellee. Association of Metropolitan Environment Federation; Maryland Association of Municipal Wastewater Agencies, Incorporated; Virginia Association of Municipal Wastewater Agencies, Incorporated; West Virginia Municipal Water Quality Association, Incorporated; American Chemistry Council; American Forest and Paper Association; Chamber of Commerce of the United States of America; General Electric Company; National Association of Manufacturers; Utility Water Act Group; Virginia Manufacturers Association; M.A.D.E. in Maryland; Alliance of Automobile Manufacturers; American Iron and Steel Institute; American Petroleum Institute; Environmental Federation of Oklahoma; Michigan Manufacturers Associations; Mississippi Manufacturers Association; National Petrochemical and Refiners Association; Nuclear Energy Institute; Western States Petroleum Association, Amici Curiae.
Nos. 00-1283, 00-1322.
United States Court of Appeals, Fourth Circuit.
Argued April 5, 2001. Decided Oct. 10, 2001.
268 F.3d 255
mation in the arbitration proceedings would better honor the policy favoring arbitration than would a finding of waiver. While we conclude that Lauricia has failed to establish that MicroStrategy has waived its right to arbitrate, we do not address the appropriate-ness of MicroStrategy‘s use during arbitration of the information it obtained. That question, as well as the related question of whether Lauricia should be allowed to seek similar information from MicroStrategy, is better left to the arbitrator.
Before WILKINS, KING, and GREGORY, Circuit Judges.
Vacated and remanded by published opinion. Judge KING wrote the opinion, in which Judge WILKINS and Judge GREGORY joined.
OPINION
KING, Circuit Judge:
The Piney Run Preservation Association sued the Commissioners of Carroll County, Maryland, claiming that a county-operated waste treatment plant was discharging warm water into a local stream, Piney Run, in violation of the Clean Water Act. The district court construed the plant‘s NPDES permit as not prohibiting the discharge of heat. Nonetheless, the court decided that the Commissioners were liable under the Clean Water Act for the discharge of pollutants not expressly authorized by the permit. On appeal, the Commissioners maintain that the “permit shield” defense, embodied in
I.
Piney Run is a small stream with its headwaters near the border of Carroll and Baltimore counties in Maryland. The Maryland Department of the Environment
Because of the Plant‘s discharge of effluent into Piney Run, the Plant is subject to the Clean Water Act (“CWA“). See
Under the CWA, the various states are required to promulgate water quality standards for certain waters within their borders. See
The Piney Run Preservation Association (“Association“), which is dedicated to the protection of Piney Run, filed this lawsuit in the District of Maryland in 1998. The Association sued the Commissioners under section 505 of the CWA,
Both the Association and the Commissioners appeal from the district court‘s final order of February 10, 2000. The Association claims that the district court erred in holding that the Plant only violated the CWA when its discharge of heat exceeded state temperature standards. It contends that the Plant violated the CWA whenever it discharged any level of heat whatsoever. Accordingly, the Association seeks remand of this case on the issue of damages. The Commissioners, on the other hand, claim that the permit shield defense in
II.
The Commissioners claim that the Association lacks Article III standing. Pursuant to Article III of the Constitution, federal courts are restricted to the adjudication of “cases” and “controversies.” The standing requirement therefore “ensures that a plaintiff has a sufficient personal stake in a dispute to render judicial resolution appropriate.” Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 153 (4th Cir.2000). Moreover, the standing inquiry also “tends to assure that the legal questions presented to the court will be resolved, not in the rarefied atmosphere of a debating society, but in a concrete factual context conducive to a realistic appreciation of the consequences of judicial action.” Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). In analyzing a decision on Article III standing, we review the district court‘s factual findings for clear error. We consider the legal question of whether the Association possesses standing to sue as a de novo matter. See Marshall v. Meadows, 105 F.3d 904, 905-06 (4th Cir.1997).
An association, as the representative of its members who have been harmed, possesses standing to sue if it can show: (1) at least one member would otherwise have individual standing, (2) the interests at stake in the litigation are germane to the organization‘s purpose, and (3) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. See Friends of the Earth, Inc. v. Laidlaw Envt‘l. Servs. (TOC), Inc., 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000); Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). On appeal, the Commissioners only contest the first prong of this three-part test, i.e., whether any member of the Association has individual standing to sue. An individual possesses Article III standing if (1) he or she has suffered an “injury in fact,” (2) that is fairly traceable to the challenged action of the defendant, and (3) it is likely
A plaintiff can show an “injury in fact” when he or she suffers “an invasion of a legally protected interest which is concrete and particularized, as well as actual or imminent.” Gaston Copper, 204 F.3d at 154; see also Defenders of Wildlife, 504 U.S. at 560, 112 S.Ct. 2130. In an environmental case, the question is whether the plaintiff has suffered an injury, as opposed to whether the environment has actually been harmed. See Laidlaw, 528 U.S. at 181, 120 S.Ct. 693. Specifically, a plaintiff need only show that he used the affected area, and that he is an individual “for whom the aesthetic and recreational values of the area [are] lessened” by the defendant‘s activity. Sierra Club v. Morton, 405 U.S. 727, 735, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972); see also Laidlaw, 528 U.S. at 184, 120 S.Ct. 693 (holding that plaintiffs had established an injury in fact because the challenged activity directly affected their “recreational, aesthetic, and economic interests“); Defenders of Wildlife, 504 U.S. at 562-63, 112 S.Ct. 2130 (“[T]he desire to use or observe an animal species, even for purely aesthetic purposes, is undeniably a cognizable interest for the purpose of standing.“); Gaston Copper, 204 F.3d at 159 (concluding that individuals’ allegations that they would make greater recreational use of waterway except for concern over defendant‘s discharges sufficient for injury in fact).
In this case, Dorothy Rowland, a member of the Association, is able to show that she has suffered an injury in fact. Piney Run flows through Rowland‘s property. She testified that when she purchased her property in 1967, Piney Run was “very pristine,” but that in the last several years the stream had acquired a high concentration of green algae. Rowland stated that the green algae significantly interfered with her use and enjoyment of Piney Run. For example, the algae made the stream‘s rocks slippery, and therefore difficult to cross. Because the water is no longer clear, she stopped allowing her horses to drink from Piney Run. Further, according to Rowland, the green algae made the stream less desirable to observe. In sum, Rowland demonstrated that her enjoyment of Piney Run has been diminished, and accordingly, she has sufficiently shown an “injury in fact.”
Rowland can also show that her injury was “fairly traceable” to the Plant‘s operation. The plaintiff‘s injury must be fairly traceable to the challenged action of the defendant and not the result of some independent action. See, e.g., Defenders of Wildlife, 504 U.S. at 561, 112 S.Ct. 2130. The Commissioners maintain that the Association failed to provide sufficient scientific evidence that the concentration of green algae in Piney Run was caused by the Plant‘s discharge of heat. According to the Commissioners, the Association had to show that, but for the Plant‘s operation, the algae would not have developed in the stream. The Commissioners, however, misapprehend what the Association must demonstrate to show traceability. Traceability “does not mean that plaintiffs must show to a scientific certainty that defen-
In this case, the Association presented evidence that the Plant is discharging heat into Piney Run. Dr. Stauffer, a professor of ichthyology (the study of fish), testified that heat can cause green algae to proliferate.8 Rowland therefore has sufficiently shown that her alleged injury is “fairly traceable” to the challenged actions of the Plant. Rowland has demonstrated that she would possess individual standing if she were to sue the Commissioners for unlawfully operating the Plant. Because Rowland would have individual standing, the Association has standing to sue as a representative of its members.
III.
We turn now to the district court‘s interpretation and application of the CWA. The court found that the Plant‘s NPDES permit contained no prohibition on discharging heat, but concluded that the Plant was liable under the CWA because the discharge of heat was not expressly allowed by the permit. We are, however, constrained to disagree. In these circumstances, because the Commissioners adequately disclosed that the Plant was discharging heat and because their discharges were within the reasonable contemplation of the MDE during the permit application process, the NPDES permit allowed the Plant to discharge heat. To explain our view on this point, a brief overview of the history and structure of the CWA is required.
A.
Prior to enactment of the CWA in 1972, the Water Pollution Control Act of 1948, as amended by the Water Quality Act of 1965, was the primary means of federal regulation of water pollution. See generally EPA v. California ex rel. State Water Res. Control Bd., 426 U.S. 200, 202, 96 S.Ct. 2022, 48 L.Ed.2d 578 (1976); Martin A. McCrory, Standing in the Ever Changing Stream: The Clean Water Act, Article III Standing, and Post Compliance Adjudication, 20 Stan. Envtl. L.J. 73, 79-81 (2001).
Under this regulatory scheme, states were required to promulgate water quality standards for certain bodies of water within their borders. See Gaston Copper, 204 F.3d at 151. Operators could discharge pollutants so long as their discharges did not reduce water quality below these standards. This water quality standard scheme, however, was plagued with many problems. Significantly, it was often difficult to formulate precise water quality standards and even more difficult to prove that a particular operator‘s discharge reduced water quality below these standards. See S.Rep. No. 92-414 (1971); see also Gaston Copper, 204 F.3d at 151.
The primary exception to the blanket liability imposed by the CWA is the NPDES permitting system. See Natural Res. Def. Council, Inc. v. Costle, 568 F.2d 1369, 1374 (D.C.Cir.1977) (“[T]he legislative history makes clear that Congress intended the NPDES permit to be the only means by which a discharger from a point source may escape the total prohibition of [§]301(a).“). Although Congress intended the CWA to lead to the long-term elimination of pollutants in the nation‘s waterways, Congress recognized the technological infeasibility of prohibiting all pollutants in the short term. See id. at 1373. Therefore, under § 402 of the CWA, individuals may apply for NPDES permits to discharge a limited amount of effluent. See
In crafting a permit, the permitting authority (either the EPA or the designated state authority, in this case, the MDE), must take account of two central concepts. The CWA requires that “every permit contain (1) effluent limitations that reflect the pollution reduction achievable by using technologically practicable controls and (2) any more stringent pollutant release limitations necessary for the waterway receiving the pollutant to meet ‘water quality standards.‘” American Paper Inst. v. United States Envt‘l. Prot. Agency, 996 F.2d 346, 349 (D.C.Cir.1993) (citing
The effectiveness of the permitting process is heavily dependent on permit holder compliance with the CWA‘s monitoring and reporting requirements. See
B.
Having briefly reviewed the history and structure of the CWA, we now turn to the central question on appeal, the nature of the Commissioners’ liability, if any, under the CWA. The district court concluded that the CWA prohibits the discharge of any pollutant not expressly allowed by an operator‘s NPDES permit. The Commissioners challenge that ruling, contending that the permit shield defense bars suit against NPDES permit holders under the CWA except for violations of the express conditions of the permit. We view each of these interpretations as being at variance with the CWA‘s liability scheme; although the CWA does prohibit the discharge of pollutants not contained within the NPDES permit, the protection offered by the permit is broader than the district court suggests.
At issue is the scope of the permit shield defense. As noted previously, the NPDES permit sets out the allowable departures from the CWA‘s baseline of total liability for discharges of effluent. Natural Res. Def. Council, Inc. v. Costle, 568 F.2d 1369, 1374 (D.C.Cir.1977). It is clear, therefore, that if a permit holder discharges pollutants precisely in accordance with the terms of its permit, the permit will “shield” its holder from CWA liability. The permit shield defense, however, raises two additional questions that are slightly more difficult: (1) what comprises the scope or terms of an NPDES permit, and (2) whether the permit shield bars CWA liability for discharges not expressly allowed by the permit when the holder has complied with the permit‘s express restrictions. It is to these matters that we now turn.
The central issue in determining the scope of an NPDES permit is whether the permit implicitly incorporates pollutant discharges disclosed by the permit holder to the permitting authority that are not explicitly allowed in the permit. Put more simply, although an operator may report multiple discharges of pollutants to the licensing body, the permit may only contain explicit limitations for some of those pollutants. The question, in that circumstance, is whether the permit holder may continue to empty the unlisted pollutants into the water, or whether it may only discharge those pollutants that are specifically listed in the permit.
Determining the proper scope of an NPDES permit requires us to examine the language of the CWA. See Atlantic States Legal Found., Inc. v. Eastman Kodak Co., 12 F.3d 353, 358 (2d Cir.1993). In construing the application of the CWA‘s provisions in this case, we find it necessary and appropriate to perform a Chevron analysis. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under Chevron, we are required to apply a two-part test. First, we examine the language of the statute to see if “Congress has directly spoken to the precise question at issue.” Id. at 842, 104 S.Ct. 2778. If Congressional intent 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.” Id. at 843. If the statute is ambiguous, then we apply Chevron‘s second step, and we defer to the agency‘s interpretation of its governing statute and regulations, as long as (1) the agency has promulgated that interpretation pursuant to a notice-and-comment rulemaking or a formal adjudication, Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d. 621 (2000), and (2) the agency‘s interpretation is reasonable. Chevron, 467 U.S. at 843, 104 S.Ct. 2778. In analyzing the reasonableness of the EPA‘s interpretation of the CWA, “we need not find that [the EPA‘s interpretation] is the only permissible construction that EPA might have adopted but only that EPA‘s understanding of this very ‘complex statute’ is a sufficiently rational one to preclude a court from substituting its judgment for that of EPA.” Chemical Mfrs. Ass‘n. v. Natural Res. Def. Council, Inc., 470 U.S. 116, 125, 105 S.Ct. 1102, 84 L.Ed.2d 90 (1985) (quoting Train v. Natural Res. Def. Council, Inc., 421 U.S. 60, 75, 87, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975)) (emphasis added).
In applying step one of Chevron, we view the crucial language of the CWA as ambiguous. The permit shield provision,
In applying step two of Chevron, we observe that the EPA has promulgated, pursuant to a formal adjudication, an interpretation of the permit shield provision that is reasonable. The EPA is authorized both to administer and enforce the CWA. See
The Ketchikan decision therefore made clear that a permit holder is in compliance with the CWA even if it discharges pollutants that are not listed in its permit, as long as it only discharges pollutants that have been adequately disclosed to the permitting authority. Id. at *17 (“[T]he discharge of unlisted pollutants is in violation of the CWA unless the applicant makes adequate disclosures to permit authorities during the application process about the source and nature of its discharges.“). To the extent that a permit holder discharges a pollutant that it did not disclose, it violates the NPDES permit and the CWA. Id. at *13 (“[W]here the discharger has not adequately disclosed the nature of its discharges to permit authorities, and as a result thereof the permit authorities are unaware that unlisted pollutants are being discharged, the discharge of unlisted pollutants has been held to be outside the scope of the permit.“).
The EPA in Ketchikan therefore outlined the proper structure for the permitting process. The applicant discloses the
Thus, the scope of the permit shield defense is relatively straightforward. An NPDES permit holder is shielded from CWA liability for discharges in compliance with its permit, and is liable for any discharges not in compliance with its permit. As the EPA has determined, however, compliance is a broader concept than merely obeying the express restrictions set forth on the face of the NPDES permit; all discharges adequately disclosed to the permitting authority are within the scope of the permit‘s protection. Having examined the nature of liability under the CWA, we turn to whether, in this case, the Plant‘s discharge of heat during the period in question was in violation of its NPDES permit and the CWA.
C.
1.
The Commissioners would be in violation of their NPDES permit through the Plant‘s discharge of heat if either: (1) the permit specifically barred such discharges; or (2) the Commissioners did not adequately disclose them to the MDE. Section I of the Commissioners’ NPDES permit expressly limits the discharge of certain pollutants, such as dissolved oxygen and fecal coliforms, but makes no mention of heat. Under the permitting process previously explained, that would indicate, assuming proper disclosure of its heat discharges, that the Commissioners did not violate the CWA. A footnote to the list of pollutants in the Commissioners’ NPDES permit provides, however, that the “dis-
In analyzing a provision of an NPDES permit, we review the district court‘s interpretation in the same manner as we would contracts or other legal documents. See Hendricks v. Central Reserve Life Ins. Co., 39 F.3d 507, 512 (4th Cir.1994) (applying rules of contract interpretation to benefit plan provision in ERISA lawsuit); see also Northwest Envt‘l. Advocates v. Portland, 56 F.3d 979, 982 (9th Cir.1995) (applying principles of contract interpretation to NPDES permit). We review the district court‘s application of contract principles de novo, but review its findings of fact with respect to extrinsic matters for clear error. Hendricks, 39 F.3d at 512.
A proper interpretation of the footnote requires that we first determine
Examining the footnote in the context of the entire NPDES permit and the permitting process persuades us that the interpretation offered by the Commissioners is the correct one. Indeed, another section of the NPDES permit anticipates that the Plant will discharge new, unlisted pollutants. Pursuant to Section II.A.1 of the permit, titled “Change in Discharge“:
Any anticipated facility expansions, production increases, or process modifications which will result in new, different, or increased discharge of pollutants shall be reported by the permittee by submission of a new application at least 180 days prior to the commencement of the changed discharge or, if such changes will not violate the effluent limitations specified in this permit, by notice to the Department.
J.A. 1561. This subsection of the NPDES permit indicates that the MDE contemplated, in its issuance, that the Plant would in fact discharge pollutants other than those expressly listed. To suggest, therefore, that the footnote constitutes a blanket ban on all pollutants not listed in the NPDES permit is problematic. Indeed, the Second Circuit, in its Atlantic States Legal Foundation decision in 1993, interpreted a similar permit provision as inconsistent with a general prohibition on the discharge of new pollutants. Atlantic States Legal Found., 12 F.3d at 359.
In fact, the structure laid out in the “Change in Discharge” provision reflects the permitting process as a whole. Because the focus of that process is to ensure that the MDE possesses sufficient information to calibrate discharge levels so that state water quality standards are met, the NPDES permit mandates that the Plant inform the MDE of future changes in what it discharges. This allows the MDE time to calculate the effects of the change and, if necessary, to modify the permit in order to maintain state water quality standards. If the permit holder is discharging less of a pollutant than originally disclosed, however, the change in discharge poses no risk to the environmental integrity of the system. Therefore, it is no surprise that the “Change in Discharge” provision exempts such cases from the new application process.
Moreover, the logic of the Commissioners’ position is apparent when the practical implications of interpreting the footnote as prohibiting the discharge of all pollutants not expressly listed, at any level, are considered. The CWA defines pollutant as “dredged spoil, solid waste, incinerator residue, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, heat,
We are not persuaded that the MDE either intended or contemplated such consequences when it issued the Commissioners’ NPDES permit. The provision at issue, an eight-word footnote in a twenty-one page NPDES permit, deals with significantly less controversial topics in great detail. For example, the permit contains a half-page description of the MDE‘s and EPA‘s rights of entry. Further, the record contains no evidence that the MDE or any other party discussed this footnote, its provisions, its possible ramifications, or its proper interpretation during the permitting process. If the MDE had intended to impose liability on the Commissioners for the discharge of a fully disclosed but unlisted pollutant at any level, we would expect to find an extended discussion of the
2.
The final questions that we must address are whether the Commissioners adequately disclosed the Plant‘s discharges of heated effluent to the MDE during and after the permit application process, and whether the Plant‘s discharges of heat were reasonably contemplated by the MDE. If both of these conditions are satisfied, then the Commissioners are protected by the permit shield defense and they are not liable under the CWA.
The record clearly demonstrates that both of these conditions were in fact met. The MDE and the Commissioners each testified that the Commissioners informed the permitting authority that the Plant was discharging heat during the permit application process. See J.A. 1213-21, 1338-44. The record also contains a significant compilation of the daily reports on water temperature and heat discharges provided by the Commissioners to the MDE after the permit was issued in 1990; in addition, there is testimony from the MDE and the Commissioners that the Commissioners filed such reports as required by the permitting authority. The evidence thus demonstrates that the Commissioners complied with permit and CWA disclosure requirements. Furthermore, the testimony of the MDE and the Com-
IV.
For the foregoing reasons, the judgment of the district court must be vacated, and we remand for the entry of judgment in favor of the Commissioners.
VACATED AND REMANDED.
ROBERT B. KING
UNITED STATES CIRCUIT JUDGE
Notes
Compliance with a permit issued pursuant to this section shall be deemed compliance, for purposes of sections 1319 and 1365 of this title, with sections 1311, 1312, 1316, 1317, and 1343 of this title, except any standard imposed under section 1317 of this title for a toxic pollutant injurious to human health.
A permit provides authorization and therefore a shield for the following pollutants resulting from facility processes, wastestreams and operations that have been clearly identified in the permit application process when discharged from specified outfalls: ... 2) Pollutants for which the permit authority has not established limits or other permit conditions, but which are specifically identified as present in facility discharges during the permit application process [.]Policy Statement on Scope of Discharge Authorization and Shield Associated with NPDES permits at 2-3 (July 1, 1994) (emphasis added).