U.S. District Court for The Northern District of California Vacates EPA’s Clean Water Act Section 401 Certification Rule

On October 21, 2021, the U.S. District Court for the Northern District of California (“District Court” or “Court”) vacated the U.S. Environmental Safety Company’s (“EPA”) 2020 Clean Water Act (“CWA”) Section 401 “Certification Rule” (“the 2020 Rule”).  In re Clean Water Act Rulemaking, No. 20-cv-4636, et al. (Oct. 21, 2021).  The impact of the Court’s ruling is to reinstate EPA’s earlier Certification Rule, which had been in impact since 1971 (“the 1971 Rule”). 

The 2020 Rule was promulgated by the Trump Administration to help in expediting and streamlining the federal authorities’s allowing course of for initiatives that require a CWA Section 401 water high quality certification.  The Biden Administration sought remand with out vacatur of the 2020 Rule. If the Court had agreed with the request,  it will have left the 2020 Rule in impact whereas the Biden EPA reconsidered it.  Relatively than granting the Biden Administration’s request, the Court vacated the Rule on the request of different events.  It’s clear that the Court intends its ruling to have nationwide impact: by vacating the 2020 Rule, federally permitted initiatives requiring Section 401 certification all through the nation will once more be topic to the 1971 Rule.  It stays to be seen whether or not EPA or trade intervenors supporting the 2020 Rule will enchantment the choice.  Federal district courts in Pennsylvania and South Carolina had beforehand remanded the 2020 Rule to EPA with out vacatur.

Background

Underneath Section 401 of the CWA, a federal company might not subject a allow or license to an applicant that seeks to conduct any exercise which will end in any discharge into the navigable waters of america except a state or approved Tribe the place the discharge would originate points a water high quality certification or waives that requirement. EPA is accountable for the certification by non-authorized Tribes or when a discharge would originate from lands beneath unique federal jurisdiction.    

A number of main federal licensing and allowing schemes are topic to Section 401 certification necessities, equivalent to Nationwide Pollutant Discharge Elimination System permits beneath CWA Section 402, permits for discharge of dredged or fill materials into wetlands beneath CWA Section 404, Federal Power Regulatory Fee licenses for hydropower amenities and pure gasoline pipeline certifications, and Rivers and Harbors Act Section 9 and Section Ten permits.

In 2019, President Trump issued Govt Order 13,868 (the “Trump EO”), which was entitled “Promoting Energy Infrastructure and Economic Growth.”   84 Fed. Reg. 15,495 (Apr. 10, 2019).  The Trump EO said: “The United States is blessed with plentiful energy resources, including abundant supplies of coal, oil, and natural gas,” and the “Federal Government must promote efficient permitting processes and reduce regulatory uncertainties that currently make energy infrastructure projects expensive and that discourage new investment.” To that finish, the Trump EO asserted that “[o]utdated Federal guidance and regulations regarding section 401 of the Clean Water Act . . . are causing confusion and uncertainty and are hindering the development of energy infrastructure,” and instructed EPA to evaluation and subject new steerage relating to Section 401. 

Pursuant to the Trump EO, EPA revised its normal Section 401 steerage in June 2019. Two months later, EPA revealed an financial evaluation of current Section 401 processes. That very same month, in a publication dated August 22, 2019, EPA proposed an up to date Section 401 certification rule with in depth revisions. EPA revealed the ultimate rule within the Federal Register on July 13, 2020.  The rule went into impact September 11, 2020. 

Virtually instantly, states, Tribes, and conservation teams introduced go well with in opposition to EPA to put aside the 2020 Rule.  Amongst these fits had been challenges introduced in america District Court for the Northern District of California in August 2020.  Trade teams intervened on the aspect of EPA.

Implementation of the 2020 Rule stalled after President Biden was elected.  He issued Govt Order 13,990, entitled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.”  86 Fed. Reg. 7037 (Jan. 20, 2021) ( the “Biden EO”).  Within the Biden EO, the Administration listed the 2020 Rule as one which was to be reviewed by EPA.  A Declaration filed for EPA later said that the earliest EPA may full that evaluation can be Spring 2023.  See 86 Fed. Reg. 29,541 (June 2, 2021).

In consequence, EPA, with out stating that the 2020 Rule was in error, requested that the Court remand the 2020 Rule to EPA with out “vacatur,” i.e., a remand that would depart the 2020 Rule in place.  Plaintiff states, Tribes, and conservation teams as a substitute sought vacatur, which trade teams supporting EPA opposed.

The District Court’s Resolution

Because the Court noticed it, the brand new certification rule makes a spread of substantive modifications to EPA’s procedures for implementing Section 401.  It mentioned:

To state just some examples, the brand new rule: (i) narrows the scope of certification to make sure that a discharge from a degree supply right into a water of america from a federally licensed or permitted exercise will adjust to “water quality requirements” — one other outlined time period narrowed to imply relevant provisions of Sections 301, 302, 303, 306, and 307 of the Clean Water Act; (ii) authorizes EPA to determine the affordable quantity of time for a certifying authority to certify a request; and (iii) authorizes EPA to find out whether or not a certifying authority’s denial has complied with the rule’s procedural necessities, and to deem certifications waived if not. See 40 C.F.R. pt. 121.

In explaining the components the Court would think about in figuring out whether or not to vacate the 2020 Rule with out having reviewed it on the deserves, the Court said:

The deferential customary for reviewing an company’s request for voluntary remand can increase troublesome points when vacatur comes into play. When a district court docket guidelines that an company motion is flawed resulting from errors of truth, legislation, or coverage, the APA explicitly instructs that the court docket “shall . . . hold unlawful and set aside” the company motion. “This approach enables a reviewing court to correct the error but, critically, also avoids judicial encroachment on agency discretion.”

The Court acknowledged that the difficulty of whether or not vacatur was applicable with out having carried out a evaluation of company motion on the deserves has not been resolved by within the Ninth Circuit: “The caselaw here is unsettled. Leaving an agency action in place while the agency reconsiders may deny the petitioners the opportunity to vindicate their claims in federal court and would leave them subject to a rule they have asserted is invalid.”  Nonetheless, the Court agreed with these opinions of different District Judges throughout the Ninth Circuit concluding that, when an company requests voluntary remand, a district court docket might vacate an company’s motion with out first making a dedication on the deserves.  The Court discovered persuasive the reasoning in Middle for Native Ecosystems, which explains that

as a result of vacatur is an equitable treatment, and since the APA doesn’t expressly preclude the train of equitable jurisdiction, the APA doesn’t preclude the granting of vacatur with out a determination on the deserves.

On this occasion, the Court concluded that the 2020 Rule is “antithetical” to the Supreme Court’s determination in PUD No. 1 of Jefferson County v. Washington Dep’t of Ecology, 511 U.S. 700, 710 (1994) (“PUD No. 1”).  In accordance with the Court, the 2020 Rule restricted quite than expanded the states’ management over setting and imposing water high quality requirements by focusing solely on the “discharge” and never additionally on “the compliance of the applicant.”  Certainly, the Court concluded that EPA’s submissions to it signaled that the Biden EPA couldn’t, or wouldn’t, undertake the identical 2020 Rule itself and that the present EPA has substantial doubts about whether or not the 2020 Rule complies with the statute and PUD No. 1

The Court then thought-about the disruptive results of vacatur.  It concluded that as a result of the 2020 Rule had been in impact solely 13 months, and that the 1971 Rule had been in impact for nearly 50 years, there was inadequate time for regulated entities to have developed any reliance pursuits on the brand new rule.  Furthermore, the Court discovered “particularly persuasive” the Plaintiffs’ reference to a few hydroelectric initiatives on the Skagit River in Washington.  Plaintiffs identified that the re-licensing of these initiatives would final for 30-50 years, and that the dearth of ample water high quality circumstances connected to these licenses would final for a “generation” (emphasis the Court’s).  In response to trade arguments that the 1971 Rule had given inadequate consideration to financial impacts in figuring out applicable circumstances, the Court famous that the case legislation within the Ninth Circuit has given higher weight to environmental impacts in making certain compliance with environmental statutes.

Conclusion

The District Court’s determination to vacate the 2020 Certification Rule over EPA’s opposition, and with out having carried out a whole evaluation of the Rule on its deserves, could also be grounds for problem.  Different district courts within the Ninth Circuit have opined that vacatur is acceptable even within the absence of a deserves evaluation of company motion, however the Ninth Circuit itself doesn’t seem to have so held.  Nonetheless, assuming the Court’s determination to vacate the 2020 Rule and reinstate the 1971 Certification Rule stands, it will seem that, not less than till Spring 2023, Section 401 water high quality certifications might be based mostly on the 1971 Rule.  In consequence, certifications will doubtless be much less vulnerable to problem as in extra of state authority beneath Section 401 of the Clean Water Act than if the 2020 Certification Rule had been allowed to stay in impact.

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