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The impact of Arkansas v. Oklahoma on the NPDES process under the Clean Water Act.

I. Introduction

Under the National Pollution Discharge Elimination System (NPDES)(1) permit process, the Federal Water Pollution Control Act (the Clean Water Act)(2) has maintained a delicate balance of federal power and state sovereignty in interstate disputes involving the discharge of pollutants into downstream state waterways.

Recently, in Arkansas v. Oklahoma,(3) the U.S. Supreme Court attempted to clarify the extent to which the Clean Water Act preempts state law. The Court reaffirmed its holdings in City of Milwaukee v. Illinois (Milwaukee Il), that the Clean Water Act preempts federal common law,(4) and in International Paper Co. v. Ouellette, that the Act preempts a common law nuisance suit filed in one state under the law of that state, when the source of the alleged injury was in another state.(5) The Arkansas Court held that an upstream discharger may be required by the U.S. Environmental Protection Agency (EPA) to comply with the water quality standards of a downstream state because Congress has vested substantial discretion in the EPA.(6) In addition, the Court held that the Clean Water Act does not require the EPA to ban discharges into an interstate waterway when the waters already violate water quality standards.(7)

Section II of this Note outlines the relevant statutory framework of the Clean Water Act(8), giving special consideration to its "savings clause(9)," and examines the development of the law in Milwaukee II and International Paper v. Ouellette.(10) Section III discusses the factual setting of Arkansas v. Oklahoma, the procedural history of the case and the U.S. Supreme Court's opinion. Section IV analyzes the implications of the Court's holding with respect to federal preemption of state law, U.S. Department of Energy v. Ohio,(11) and its practical impact upon the NPDES interstate permit process. Section V concludes that the EPA will determine the future of the interstate permit process.

II. Background

A. The Clean Water Act

The Clean Water Act establishes national permit requirements for the discharge of pollutants into interstate and navigable waters and directs the EPA to set effluent standards on an industry-by-industry basis.(12) As long as a state's effluent discharge standards are at least as stringent as the federal standards, a state may establish its own permit system.(13) Before issuing a permit to a discharger, the federal government (and the source state where the discharger is located if it has a permit program) must give notice and an opportunity to be heard to those downstream states whose water quality might be affected by the discharger's effluent.(14) After the source state certifies that the permit complies with its own discharge standards, the federal government can issue a permit under the Clean Water Act.(15)

The Act explicitly preserves a state's authority to regulate water pollution, as long as state standards are at least as stringent as the federal standards they are replacing and provides: "nothing in this chapter shall . . . be construed as impairing or in any manner affecting any right or jurisdiction of the States with respect to the waters (including boundary waters) of such States."(16) This "savings clause" also permits any person to seek enforcement of an effluent standard or limitation, or other relief under statute or common law.(17) In Arkansas v. Oklahoma, the Court was required to interpret the meaning of the "savings clause."(18)

B. Milwaukee II

In Illinois v. City of Milwaukee (Milwaukee I),(19), which was decided just before adoption of the 1972 amendments to the Clean Water Act, the Supreme Court created a federal common law of nuisance for interstate water pollution disputes. Illinois petitioned the Supreme Court to assume original jurisdiction so that a complaint could be filed alleging that discharges by Milwaukee and other Wisconsin cities into Lake Michigan constituted a public nuisance.(20) The Court, relying on the pre-1972 statute, held that the federal interest in uniform application of the laws controlling the pollution of interstate or navigable waters required application of federal law and preempted state common law remedies.(21) It then denied the motion to assume original jurisdiction and remitted the action to district court.(22)

After Illinois refiled the claim, the district court found that the lake was potentially damaged by the dumping of sewage by Wisconsin cities, affecting the quality of water for both drinking and recreational uses.(23) On appeal, the Seventh Circuit affirmed the judgment in part, and held that the Clean Water Act did not preempt the federal common law of nuisance.(24) The district court's order was reversed by the court of appeals to the extent that its effluent limitations were more stringent than those under the permit.(25)

In Milwaukee II, the Supreme Court held that the Clean Water Act preempted federal common law quits for abatement of water pollution and vacated the order of the district court.(26) The Court found that the 1972 "total restructuring" and "complete rewriting" of the Clean Water Act created federal "occup[ation of] the field through the establishment of a comprehensive regulatory program supervised by an expert administrative agency."(27) The Court remanded the case to the Seventh Circuit.(28)

At the Seventh Circuit, in Illinois v. City of Milwaukee (Milwaukee III), the court held that the Clean Water Act precluded a suit under the common law of any state, except that in which the point source polluter was located.(29) The court stated that uniformity of the federal scheme prohibited application of state common law to out-of-state dischargers, unless the common law cause of action was specifically preserved under the statute.(30) While a state can regulate discharges into its own waters, the statute does not allow the state to exercise jurisdiction over activities occurring outside its boundaries.(31) The court held that the "savings clause" did not confer a right on a citizen of a foreign state to seek a limit on pollution sources by applying the law of the foreign state, because this would lead to a "chaotic confrontation" between the states.(32)

C. International Paper Co. v. Ouellette(33)

The Supreme Court in Ouellette held that the Clean Water Act preempts a common law nuisance suit filed in a Vermont court under Vermont law when the source of the alleged injury was located in New York.(34) This dispute began when Vermont filed an action in the Supreme Court alleging that discharge by International Paper Company (IPC) constituted a nuisance to Vermont residents. The original action was dismissed after a settlement was reached by the EPA, IPC, Vermont, and New York.(35) But, property owners on the Vermont shore filed a class action suit in Vermont State superior Court alleging a "continuing nuisance" from discharge of effluent by IPC on the New York side of Lake Champlain.(36) After removal of the case to federal district court, the plaintiffs moved for judgment on the pleadings, based on preemption of the lawsuit by the Clean Water Act.(37)

The district court, relying on the Milwaukie III decision, determined that the issue was not whether legislation preempted state common law with respect to water pollution, but whether legislation expressly or implicitly authorized a state common law remedy.(38) The court analyzed three interpretations of the Clean Water Act's state authority and private suits.(39) The court rejected the most restrictive view that the only state common lawsuits preserved were those involving waters not covered by the Clean Water Act.(40) It also rejected a view, articulated in Milwaukee III, that the Clean Water Act preserved state nuisance law only with respect to discharges within the state.(41) The district court adopted the most liberal view and held that the nuisance law of the state where the injury occurred is preserved by the Clean Water Act.(42)

The Supreme Court agreed that a private nuisance suit could be maintained in federal court in Vermont against a water pollution source in New York but held the nuisance law of the source state of New York must be applied.(43) The Court inferred that Congress intended to leave no room to the states; the Act preempted state regulation of water pollution.(44) The Court relied upon the analysis in Milwaukee II that the 1972 amendments to the Clean Water Act are "an all-encompassing program of water pollution regulation"(45) in which federal law is primary.(46) As a result, the "savings clause" does not preclude preemption of state law based upon the goals and policies of the Clean Water Act.(47) The nuisance law of Vermont, is applied to the source state of New York, stood as an obstacle to the full implementation of the Clean Water Act.(48) Applying the forum state's common law would circumvent the NPDES system and upset the balance between public and private interests by compelling the source state to adopt a different compliance schedule than that approved by the EPA.(49) The Court, in finding primacy of federal law, chose efficiency and predictability in the permit system over the potential chaos that could result from conflicts between state laws.

Nonetheless, the Court held that the Clean Water Act does not preclude an affected state from bringing a nuisance action in the source state,(50) because the "savings clause" preserved that remedy.(51) The Court relied on Milwaukee II and interpreted the Clean Water Act to permit a source state to impose higher restrictions on its own point sources.(52) The Court's conclusion does not upset the balance among the interests of the source states, affected states, and federal interests because it does not disrupt the regulatory scheme of the Clean Water Act. Further, restricting lawsuits to those brought under source-state nuisance law provides a limit on potential regulations.(53)

Justice Brennan, joined by Justices Blackmun and Marshall, concurred in holding that the Clean Water Act did not preempt the private nuisance action filed in Vermont when the source was located in New York.(54) They disagreed with the majority view, however, that Vermont courts must apply New York law. The majority's holding diminishes the traditional right of the affected state to apply its own law against an out-of-state polluter and prevents the source state from choosing the forum under conflict-of-law principles.

Justices Blackmun and Stevens agreed with the majority that nothing in the Clean Water Act deprives a federal district court of diversity jurisdiction.(55) However, the Justices dissented from the majority view that the substantive law of the source state would govern such disputes, viewing the determination premature because the issue had not been raised in the district court.(56)

III. Arkansas v. Oklahoma(57)

A. Background of the Case

In 1985, the city of Fayetteville, Arkansas, received an NPDES permit from the EPA to discharge municipal wastewater from the City's new sewage treatment plant.(58) The effluent was to be divided between the White River in Arkansas and Mud Creek, an Arkansas tributary that flows across the Oklahoma border into the Illinois River, thirty-nine miles from the original source. The EPA permit imposed specific limitations on the quantity, content, and character of the discharge. It also included special conditions, including a provision that if a study, then underway, indicated that more stringent limitations were necessary to ensure compliance with the water quality standards of Oklahoma, the permit would be modified to incorporate those limitations.(59) That portion of the Illinois River in Oklahoma is a state-designated scenic river and a study had been proposed to determine if it would be added to the National Wild and Scenic Rivers System.(60) The State of Oklahoma and a nonprofit group, Save The Illinois River, challenged the permit before the EPA, alleging, inter alia, that the discharge violated the State's water quality standards.(61)

The Administrative Law Judge (ALJ) granted an evidentiary hearing and found that the discharge would not have an "undue impact" on Oklahoma's waters and concluded that the Oklahoma standards would not be implicated unless the discharge had more than a "de minimus" impact on that state's waters.(62)

The EPA's Chief Judicial Officer (CJO) upheld the general requirement that a NPDES permit under the Clean Water Act must comply with applicable state water quality standards, but that an "actual detectable" standard should be used, rather than a "de minimus" standard because it offered more protection.(63) The CJO remanded the case.(64) The ALJ then found that the discharge by the city of Fayetteville did not violate the "actual detectable" standard.(65) The CJO sustained the issuance of the permit.(66)

B. The Tenth Circuit Opinion in Oklahoma v. EPA

Oklahoma and Arkansas petitioned for review of the CJO's decision to the Tenth Circuit Court of Appeals.(67) Oklahoma argued that the EPA wrongly concluded that the Fayetteville discharge would not produce a detectable violation of Oklahoma's water quality standards.(68) Arkansas argued that Oklahoma's standards were irrelevant because the Clean Water Act did not require an Arkansas point source to comply with Oklahoma's water quality standards.(69) The EPA argued that the terms of an NPDES permit under the Clean Water Act must require compliance with Oklahoma water quality standards, that the permit would meet those standards, and urged that the permit be issued.(70)

The Tenth Circuit viewed the case as a question of whose water quality standards - "the upstream state's, the downstream state's, the federal government's, or nobody's" - would take precedence under the Act.(71) The court concluded that "no state |imposes' its standards on another state, but rather that the Clean Water Act mandates compliance with federal law, including the federally approved water quality standards of affected states."(72) Therefore, the Act requires that any permitted discharge must comply with all applicable water quality standards, including the EPA-approved regulations of any affected downstream State.(73)

The EPA's statutory argument was that states are allowed to set more stringent limitations to reach the goals of the Clean Water Act.(74) Although Arkansas argued that the savings clause is limited to intrastate waters of the source state, the court rejected the argument to prevent chaotic consequences.(75) The court reasoned that [section] 1370 is a "savings clause" that preserves the right of the states to set more restrictive standards than those otherwise imposed by the Clean Water Act, but does not preclude preemption of state law.(76) the reach of stricter standards under the savings clause is not limited by the language which refers to "any right or jurisdiction of the States with respect to the waters . . . of such States" because that portion of the statute is only applicable to jurisdiction, and not the rights of the states to regulate pollution, irrespective of boundary.(77) Further, the goals of the Act could not be achieved if an out-of-state discharger was not required to comply with the stricter standards of a downstream state. 78 Instead, the result would be "pollution shopping," contrary to the congressional intent of the 1972 amendments to the Clean Water Act.(79) The court concluded that compliance with the water quality standards of a downstream state is limited by the impact of the source downstream, which eventually becomes so attenuated as to be undetectable.(80)

The court also rejected Arkansas' argument that Milwaukee III and Ouellette supported its construction of the Clean Water Act.(81) Those cases both involved an affected state using state nuisance law to enjoin an ongoing discharge in another state.(82) The court in Milwaukee III noted that Illinois had not sought enforcement of an effluent limitation under Wisconsin law or the 1972 Clean Water Act and concluded that the Act precluded application of state law.(83)

The court noted that Ouellette seemed to undercut the downstream state's interpretation of the Act's regulatory scheme.(84) Arkansas relied on Ouellette's suggestion that while source states have a "strong voice" in regulating their own pollution, the Clean Water Act contemplates a "lesser role" for affected downstream states.(85) The court dismissed this as dicta.(86)

The court also pointed out that the apparent impact of the language cited by Arkansas was mitigated by other language in Ouellette stating that the plaintiffs had a right to pursue other remedies under the Clean Water Act.(87)

The court interpreted the statutory and regulatory framework of the Clean Water Act to provide several mechanisms for ensuring that minimum pollution and water quality criteria apply to all American navigable waters.(88) These mechanisms include: prohibiting pollutant discharge without a permit; requiring the EPA to establish effluent limitations for point source discharges; requiring the EPA to approve state water quality standards and permit programs; establishing minimum procedural requirements for state permit programs; and permitting states to impose pollution limitations more stringent than those of the EPA.(89)

In interpreting the Act's framework, the court relied on [sections] 1341, 1342 and 1365 of the Act.(90) Section 1341 provides that no NPDES permit shall be granted until a source state certifies that the discharge will comply with [section] 1341 water quality requirements.(91) The plain language of the section ensures that water quality will not be jeopardized by discharges in other states.(92) The court found this interpretation to be consistent with Congress' intent that state water quality standards must be considered in the certification process and emphasized that "[n]either the statute as amended nor the committee reports concerning the bills distinguish between source and affected states."(93)

Section 1342(d)(2) allows the EPA Administrator to veto any proposed permit if he objects to its issuance.(94) And, if the source state does not satisfy the Administrator's objections, the EPA may issue a permit with requirements that are at least as stringent as any state's effluent limitations and water quality criteria.(95) The court reasoned that since the EPA is subject to the same requirements as a state, "no reasonable argument would justify invalidating a state-issued permit that fails to account for the [water quality standards] of another state, yet allowing EPA to issue a permit objectionable on the same ground."(96)

Finally, the court noted that [section] 1365, which gives the governor the power to commence civil actions against the EPA Administrator for failing to enforce effluent standards, limitations, or water quality standards of his state which occur in another state, recognizes that effluent limitations are a means to the end of desired water quality.(97)

The court addressed another issue of first impression in the federal courts: whether a new discharge may be permitted under the NPDES of the Clean Water Act when the applicable water quality standards are already being violated.(98) The court began by noting that the upper portion of the Illinois River is designated as an Oklahoma Scenic River.(99) The court's analysis centered on the water quality standards concerning phosphorous and nitrogen.(100) Specifically, the court found that the presence of phosphorous and nitrogen violated the nutrients standard, Antidegradation policy, and Beneficial Use Limitations because Oklahoma's water quality standards allow "no degradation" of water quality in designated scenic rivers.(101) The court also held that the burden to prove that the discharge would injure, harm, or create a nuisance in the Illinois River did not lie with Oklahoma.

Relying on substantial evidence that: (1) degraded water quality conditions existed in the Illinois River, that were caused in part by Fayetteville's effluent; (2) the effluent would be transported downstream to Oklahoma; and (3) the plant could be expected to contribute to the ongoing deterioration of the scenic river,(103) the court ultimately held that the EPA's actions were arbitrary and capricious.(104) The court reversed the EPA'S authorization of Fayetteville's municipal treatment plant to discharge a portion of its effluent into the Illinois River basin.(105)

C. The Supreme Court Decision

A unanimous Supreme Court, in an opinion written by Justice St,evens, reversed the Tenth Circuit because it found that the new source would not cause a detectable violation downstream of Oklahoma's water quality standards.(106)

The Court began its inquiry with a brief history of resolving controversies concerning interstate waters.(107) The Court noted that while interstate common law was tempered by a respect for state sovereignty, new federal laws and regulations might one day preempt the federal common law of nuisance.(108) The Court reviewed the relevant case law. Milwaukee II held that the 1972 Amendments to the Clean Water Act preempted Illinois' federal common law remedy.(109) Milwaukee I recognized that a downstream state must be afforded opportunity for a hearing before the source state's permitting agency, and that the EPA has authority to veto issuance of a state permit if the waters of another state might be affected.(110) The Court noted that Ouellette held that the Clean Water Act preempted an action based on the law of an affected state and that the only applicable state law to an interstate discharge is the law of the state of the point source.(111) Furthermore, the Court noted that while a downstream state could not block the permit, the EPA could disapprove the permit if it found that the discharge would have an undue impact on interstate waters.(112) It distinguished Arkansas from the two leading cases on interstate water disputes because they did not involve a federally issued permit.(113)

To explain the significance of distinguishing between state and federally issued permits, the Court then turned its attention to the statutory scheme of the Act.(114) The Court acknowledged the shared objectives of the states and federal government "to restore and maintain the chemical, physical and biological integrity of the Nation's waters."(115) The means of reaching this goal are effluent limitations promulgated by the EPA under [subsection] 1311 and 1314, or water quality standards, generally promulgated by the states under [section] 1313.(116) The ERA not only assists the states in drafting water quality standards,(117) but periodically reviews revisions made by the states and may promulgate water quality standards for states if they do not comply with EPA recommendations.(118) Finally, in the absence of an approved state program, the EPA may issue an NPDES permit which is subject to the same requirements as a state program and insures the state's water quality requirements.(119)

The Court first analyzed whether the Clean Water Act requires the EPA to apply the water quality standards of downstream states when issuing a permit to a point source in another state.(120) Because the EPA reasonably assumed it was obligated to ensure that the Fayetteville discharge would not violate Oklahoma's water quality standards, the Court refused to decide whether the Clean Water Act requires such action.(121) The Court also thought it unwise to address the issue because the case involved only a federal, and not a state, permit.(122)

The Court then analyzed whether the EPA has the statutory authority to mandate such compliance, even if the Clean Water Act does not require it.(123) The Court held that the Clean Water Act does not limit the EPA's authority to mandate that Fayetteville comply with Oklahoma's water quality standards, and that the EPA's decision was a reasonable exercise of its discretion.(124) The Court relied on the broad powers vested in the EPA Administrator to establish conditions of NPDES permits and oversee state permit programs.(125)

The Court next rejected the Tenth Circuit's interpretation of 33 U.S.C. [section] 1342(h) that once a body of water fails to meet water quality standards, no discharge may be permitted.(126) The Court explained that while the Clean Water Act contains provisions directing compliance with state water quality standards and remedial action to eliminate existing pollution, nothing in the Act mandates a complete ban on discharges into a waterway that is already polluted.(127)

Finally, the Court held that the Tenth Circuit had exceeded the legitimate scope of review of an agency adjudication when it concluded that, the EPA's decision was arbitrary and capricious.(128) he Court upheld the EPA's interpretation and application of Oklahoma's water quality standards.(129)

In reaching its conclusion, the Court relied on federal law governing interstate water pollution and the federal character of Oklahoma's water quality standards.(130) The EPA requirement that NPDES permits comply with water quality standards of affected states effectively incorporates state standards that the EPA determines are "applicable" into federal law.(131) The Court reasoned that this interpretation, which adopts the "actually detectable or measurable" standard, was logical because it avoids a downstream state veto based on a theoretical impact of the discharge.(132)

The Court criticized the Tenth Circuit for not deferring to the EPA's interpretation of EPA regulations and substituting its own interpretation of the law, unsupported by statute or EPA regulation.(133) The Tenth Circuit also erred in substituting its own findings of fact for those of the EPA.(134) Finally, it erred in concluding that the EPA's decision was arbitrary and capricious.(135) It was beyond the role of any court to determine whether any discharge of effluent, even with no adverse effect on water quality of the Illinois River, would be preferable to the benefits of increased flow in Arkansas, when the authority to make policy decisions was entrusted to the EPA by Congress.(136)

IV. DISCUSSION

A. Federal Preemption

As a result of Arkansas, it appears that an affected downstream state is subordinate to the EPA because the EPA must approve the state's water quality standards, as well as determine whether the state's standards will be violated by an "actually detectable or measurable" impact. In addition, the strong deference given by the Supreme Court to the EPA indicates that federal law preempts state law.

Recently, the Supreme Court in U.S. Department of Energy v. Ohio further restricted the role of the states in the NPDES process.(137) In Ohio, three dissenting Justices criticized the majority for adopting an "unduly restrictive interpretation" of the statutes, thereby depriving the states of "a powerful weapon in combatting federal agencies that persist in despoiling the environment."(138)

B. Cooperative Federalism

The restrictive view of the Clean Water Act criticized in the Ohio dissent is contrary to the "cooperative federalism" adopted in Arkansas.(139) The Ohio dissenters recalled the partnership between the EPA and the states for issuing discharge permits under [section] 1342 but noted that a state may "administer" its own program if it complies with statutory and regulatory requirements.(140) While states are required to adopt civil penalties, including rules for imposition, penalties must be above a minimum set by the federal government.(141) The EPA has authority to review state water quality standards, object to permits, monitor state programs for continued compliance with federal directives, and enforce the terms of state-imposed permits when the state has failed to do so.(142) The minority noted that, under the unusual structure of the Act, a state administered permit allows compliance with the Clean Water Act.(143) Arkansas recognized the "federal character" of state pollution standards in interstate pollution.(144)

C. Impact on NPDES Process

The apparent impact of Arkansas is that EPA-approved water quality standards of a downstream state will be applied to an upstream discharger if there is an "actually detectable or measurable" violation of the downstream state's water quality.(145) course, "actually detectable or measurable" requires a measurement against an existing standard, independent of the status of a waterway.(146) The standard is the downstream state's water quality standards.(147) Yet, if the state has a "no degradation" standard, the EPA would be able to avoid applying the standard by striking the "balance among competing policies and interests."(148) In effect, the federal government would veto the state's water quality standards.

Arkansas may be seen as embodying two contrasting perspectives. The first is that the water quality standards of a state take on a "federal character" when approved by the EPA which, in some sense, reaches beyond the state's borders against an upstream state.(149) The contrasting view, buttressed by Ohio, is that the true "federal character" of the downstream state's water quality standards is subject to a discretionary categorization by the EPA on a case-by-case basis.(150)

Rather than creating a system which is "efficient and predictable," these contrasting perspectives reveal a chaotic system of regulation, which Ouellette sought to avoid.(151) Indeed, a potential NPDES permittee cannot predictably determine the standard with which she must comply because the EPA's approval is exerted not only at the water quality standards approval stage, but in post hoc revision of those standards when permits are issued.

The question remains how an upstream discharger should comply with a federally approved state water quality standard that is more stringent than that of an upstream state in which a point source is located. Obviously, the composition and effect of the effluent, proximity to the receiving state's borders, and the "detectability" of such effluent are critical factors in answering that question. Of greater importance are the Clean Water Act's goals and policies of cleaner discharge of effluent. The policy choice - whether to prohibit any discharge into a waterway, even if there would be no adverse effect - will be made by the discharger. And if the potential discharger does not make the policy choice, the EPA will.

V. CONCLUSION

Arkansas v. Oklahoma opened the door to a "cooperative federalism" between the states and the EPA in the NPDES permit process of the Clean Water Act. Whether the federally approved water quality standards of the downstream state or the discretion of the EPA will predominate in eliminating pollution is in open question. One thing is known. The answer will be made on a permit-by-permit basis by the EPA. (1.) 33 U.S.C. [sections] 1311-1345 (1988). (2.) Id. [sections] 1251-1387, amended by Water Quality Act of 1987, Pub. L. No. 100- 4, 101 Stat. 7 (1987). (3.) 112 S. Ct. 1046 (1992). (4.) Id. at 1053 (citing City of Milwaukee v. Illinois, 451 U.S. 304 (1981)). (5.) Id. (citing International Paper Co. v. Ouellette, 479 U.S. 481 (1987)). (6.) Id. at 1057. (7.) Id. at 1057-58. (8.) 33 U.S.C. [sections] 1311-1345. (9.) Id. [section] 1370(2). (10.) 479 U.S. 481 (1987). See also, Randolph L. Hill, Preemption of State Common Law Remedies by Federal Environmental Statutes: International Paper Co. v. Ouellette, 14 Ecology L. Q. 541 (1987). 11. 112 S. Ct. 1627 (1992). (12.) 33 U.S.C. [sections] 1311 1345. (13.) Id. [sections] 1342(b)-(c), 1370(1). (14.) Id. [sections] 1341(a)(2), 1342(b)(5). (15.) Id. [section] 1341(a)(1). (16.) Id. [section] 1370(1), (2). (17.) 33 U.S.C. [section] 1365(e). (18.) 112 S. Ct. 1046, 1058 (1992) (citing 33 U.S.C. [sections] 1311(b)(1)(C), 1288(b)(2)). (19.) 406 U.S. 91 (1972). (20.) Id. at 93. (21.) Id. at 107 n.9. (22.) Id. at 108. (23.) Illinois v. City of Milwaukee, 599 F.2d 151, 167-69 (7th Cir. 1979), vacated, 451 U.S. 304 (1981). (24.) Id. at 163. (25.) Id. at 173-77. (26.) City of Milwaukee v. Illinois, 451 U.S. 304, 317, 322 (1981). (27.) Id. at 317. (28.) Id. at 332. (29.) Illinois v. City of Milwaukee, 731 F.2d 403 (7th Cir. 1984), cert. denied, 469 U.S. 1196 (1985). (30.) Id. at 410-11. (31.) Id. at 413 (citing 33 U.S.C. [section] 1370). (32.) Id. at 414 (citing 33 U.S.C. [section] 1365(e)). (33.) 479 U.S. 481 (1987). (34.) International Paper Co. v. Ouellette, 479 U.S. 481, 494 (1987). (35.) Vermont v. New York, 406 U.S. 186 (1972) (granting motion for leave to file complaint). Under the same party names, see also 417 U.S. 270 (1974) for subsequent history leading to dismissal and 419 U.S. 955 (1974) which dismissed the case. (36.) Ouellette, 479 U.S. at 484. (37.) Ouellette v. International Paper Co., 602 F. Supp. 264, 265 (D.Vt. 1985), aff'd per curiam, 776 F.2d 55 (2d Cir. 1985), aff'd in part, rev'd in part, 479 U.S. 481 (1987). (38.) Id. at 269-274. (39.) Id. (40.) Id. (41.) Id. (42.) Id. at 269. (43.) International Paper Co. v. Ouellette, 479 U.S. 481, 500 (1987). (44.) Id. at 492-94. (45.) Id. at 492 (citing City of Milwaukee v. Illinois, 451 U.S. 304, 318 (1981)). (46.) Id. (quoting City of Milwaukee v. Illinois, 451 U.S. 304, 318 (1981)). (47.) Id. at 493-94. (48.) International Paper Co. v. Ouellette, 479 U.S. 481, 494-97 (1987). (49.) Id. at 494. (50.) Id. at 497. (51.) 33 U.S.C. [section] 1365(e). (52.) International Paper Co. v. Ouellette, 479 U.S. 481, 497 (1987) (citing City of Milwaukee v. Illinois, 451 U.S. 304, 328 (1981)). (53.) Id. at 498-99. (54.) Id. at 500-08. (55.) Id. at 508-10, (56.) Id. at 509. (57.) 112 S. Ct. 1046 (1992). (58.) See Oklahoma v. EPA, 908 F.2d 595, 597-98 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046, 1051-52 (1992) (generally discussing the background of the case). (59.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1051 (1992) (citing Oklahoma's Petition for Writ of Cert. at 84, (No. 90-1262)). (60.) 16 U.S.C. [section] 1276 (1988); Okla. Stat. Tit. 82 [section] 1452(b)(1) (Supp. 1989). (61.) Arkansas, 112 S. Ct. at 1051 n.2 (citing Oklahoma's Petition for Writ of Cert. at 101a-103a, (No. 90-1262)). (62.) Id. (63.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1051-52 (1992). (64.) Id. at 1052. (65.) Id. (66.) Oklahoma v. EPA, 908 F.2d 595, 597 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046 (1992). (67.) Id. (68.) Id. (69.) Id. (70.) Id. at 604 (citing Brief for Appellee at 15-16). (71.) Oklahoma v. EPA, 908 F.2d 595, 602 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046 (1992). (72.) Id. (citing 33 U.S.C. [section] 1342). (73.) Id. at 602-03 n.6. The Tenth Circuit distinguished Champion Int'l Corp. v. EPA, 648 F. Supp. 1390 (W.D.N.C. 1986), vacated, 850 F.2d 182 (4th Cir. 1988). The district court in Champion upheld EPA's assumption of permitting authority under 33 U.S.C. [section] 1342(d)(4) after the EPA objected to North Carolina's proposal to permit a discharge in its state without regard to Tennessee water quality standards for color. The court recognized that the Clean Water Act would not automatically require such an action. Id. at 1399. The Fourth Circuit vacated the district court's judgment and instructed the district court to dismiss for lack of subject matter jurisdiction. Champion, 850 F.2d at 190. In addition, the court dismissed the following statement contained in Montgomery Envtl. Coalition v. Costle, 646 F.2d 568, 594, n.21 (D.C. Cir. 1980) as dicta: "A state whose water quality will be affected by the issuance of a permit for discharge in another state may block that permit until conditions are imposed insuring compliance with applicable water quality requirements of the objecting state." Oklahoma, 908 F.2d at 603. (74.) Oklahoma v. EPA, 908 F.2d 595, 602, 604-05 (10th Cir. 1990), rev'd sub nom, Arkansas v Oklahoma, 112 S. Ct. 1046 (1992) (citing 33 U.S.C. [sections] 1311(b)(1)(C), 1342(a)(2), 1342(b)(1)(A)). (75.) Id. at 605 citing Brief for Appellant at 35, id.). (76.) Id. at 605. (77.) We do not suggest one state may directly regulate the conduct of a discharger in another state. Such exercise of jurisdiction would exceed traditional bounds of sovereignty. Nor does the Act redefine those bounds to allow dual permitting. See Ouellette, 479 U.S. at 491, 107 S.Ct. at 811. But the question posed here is whether federal law embodied in the Clean Water Act requires a discharge permit to ensure compliance with the applicable [water quality standards] of all affected states. Traditional concepts of state powers and the [section] 1370 savings clause cannot provide the answer to that question. We must look to the CWA as a whole. Id at 606 n.9. (78.) Oklahoma v. EPA, 908 F.2d 595, 606 (10th Cir. 1990), rev'd sub nom, Arkansas Oklahoma, 112 S. Ct. 1046 (1992). (79.) Id. at 606 n.11 (citing S. Rep. No. 370, 95th Cong., 1st Sess. at 73 (1977), reprinted in 1977 U.S.C.C.A.N. 4326, 4398). (80.) Id. at 607. (81.) Id. (82.) Id. (citing International Paper Co. v. Ouellette, 479 U.S. 481, 483 (1987); Illinois v. City of Milwaukee, 731 F.2d 403, 404 (1984), cert. denied, 469 U.S. 1196 (1985)). (83.) Oklahoma v. EPA, 908 F.2d 595, 607 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046 (1992) (citing Illinois v. City of Milwaukee, 731 F.2d 403, 414 (1984), cert denied, 469 U.S. 1196 (1985)). (84.) Id. (85.) Id. at 608. While source States have a strong voice in regulating their own pollution, the [Clean Water Act] contemplates a much lesser role for States that share an interstate waterway with the source (the affected States). Even though it may be harmed by the discharges, an affected State only has an advisory role in regulating pollution that originates beyond its borders . . . . Significantly, however, an affected State does not have the authority to block the issuance of the permit if it is dissatisfied with the proposed standards. An affected State's only recourse is to apply to the EPA Administrator, who then him the discretion to disapprove the permit if he concludes that the discharges will have an undue impact on interstate waters. International Paper Co. v. Ouellette, 479 U.S. 481, 490-91 (1987). (86.) Id. (87.) Id. (citing Ouellette, 479 U.S. at 498 n.18). (88.) Oklahoma v. EPA, 908 F.2d 595, 609 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046 (1992). (89.) Id. (citing 33 U.S.C. [sections] 1311-1314, 1342, 1370). (90.) Id. (91.) Id. (92.) Id. (93.) Oklahoma v. EPA, 908 F.2d 595, 610-11 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046 (1992) (citing S. REP. No. 370, 95th Cong., 1st Sess. at 72-73; reprinted in 1977 U.S.C.C.A.N. 4326, 4397-98; H.R. Conf. Rep. No. 830, 95th Cong., 1st Sess., at 96 (1977), reprinted in 1977 U.S.C.C.A.N. 4424, 4471). (94.) Id. (95.) Id. (96.) Id. (97.) Id. at 614-615. (98.) Oklahoma v. EPA, 908 F.2d 595, 615-621 nn.39, 28 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046 (1992). The Tenth Circuit further limited "federally approved water quality standards of the affected states to those relevant to the physical and chemical makeup of a proposed source's effluent." The court drew no conclusions about state requirements that may not have been approved by the EPA. (99.) Id. at 616 (citing Okla. Stat. Tit. 82, [section] 1452 (b)(1) (Supp. 1990) (including Lake Frances, from the Arkansas state line down to the 650-foot elevation level of Tenkiller Ferry Reservoir)). (100.) Id. at 616 nn.29-30, 627 n.47. Oklahoma's Water Quality Standards (1982) include: [section] 3 the Anti-degradation Policy; [section] 4 & App. A Standards for Water Quality (regulating, inter alia, fish and wildlife propagation, aesthetics, and small mouth bass designated beneficial uses) via turbidity [section] 4.10 (b), nutrients [section] 4.10 (c) and dissolved oxygen [section] 4.11(a). These water quality standards were promulgated by the Oklahoma Water Resources Board pursuant to Okla. Stat. Tit, 82, [section] 926.3.6 and approved by the EPA. The significance of the presence of phosphorous and nitrogen is that, as nutrients, they stimulate the growth of aquatic plants and other organisms, altering over time biological characteristics of the system (including species populations biomass) and chemical parameters (such as temperature, turbidity, color and dissolved oxygen). Essentially, the court deemed it a crucial fact that although the ALJ knew that photosynthesis by algae produces oxygen, he did not understand that respiration by algae at night consumes oxygen. This, along with the process of decay of organic materials in the stream, causes.water quality problems, as recognized by the EPA, Congress, and case law. See, e.g., Chem. Mfrs. Ass'n v. EPA, 870 F.2d 177, 218 n.150 (5th Cir. 1989), cert. denied 495 U.S. 910 (1990) and Montgomery Envtl. Coalition v. Costle, 646 F.2d 568, 575 (D.C. Cir. 1980). In addition, the ALJ erroneously understood that the uptake of phosphorous by algae reduces the potential for eutrophication, instead of being the initial step in the process. That the ALJ overlooked or misunderstood evidence of these fundamental biological processes cast doubt on his conclusions that Fayetteville's discharge should not jeopardize compliance with Oklahoma's water quality standards, rendering his actions "arbitrary, capricious ... or otherwise not in accordance with law." 5 U.S.C. [section] 706(2)(A) (1988). (101.) Oklahoma v. EPA, 908 F.2d 595, 616-20 (10th Cir. 1990), rev'd sub nom, Arkansas v. Oklahoma, 112 S. Ct. 1046 (1992). (102.) Id. at 620 (citing 40 C.F.R. [section] 124.85(a)(1), (2) and (3)(ii) (noting that the opponent of a permit has the duty of going forward to the EPA with a challenge, but the applicant bears the burden of persuasion and the Agency bears the burden of presenting an affirmative case in support of challenged portions of a final permit)). (103.) Id at 620 29. The court noted the difficulty of summarizing a record consisting of five boxes and four years of pleadings, testimony, transcripts, and technical reports An abbreviated summary is instructive. Evidence of existing degradation: The variety of witnesses from the EPA, Arkansas, and Oklahoma testified to degradation as shown by bacteria, turbidity, dissolved oxygen concentrations, phosphorous concentration ten times levels typical of eutrophic lakes, and algae concentrations three times levels typical of severe nuisance conditions. Downstream transport of pollution from Fayetteville: The court noted no witness for any of the parties disputed the fact that pollution from Fayetteville would reach the Arkansas-Oklahoma border when the ALJ recited evidence that 20 to 25% of the nutrients (phosphorous) would reach the border. Witnesses testified to 2.4%, 4.69%, 6%, 20 to 25% and 60% increases in the phosphorous load, respectively. Significance of Fayetteville effluent to existing conditions: Various witnesses testified to the likelihood of increased algae growth, increases in phosphorous in conjunction with dissolved oxygen trends, increased turbidity due to high stream flows, water clarity problems, and violations of aesthetics and color standards. (104.) Id. at 599. (105.) Id. at 635. (106.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1049-51 (1992). (107.) Id. at 1052-53 (citing Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824) (interstate disputes existing since the beginning of the nation); Ohio v. Kentucky, 444 U.S. 335 (1980), reh'g denied, 445 U.S. 939 (1980); decree entered 471 U.S. 153 (1985) (states separated by common river); New York v. New Jersey, 256 U.S. 296 (1921) (states that border the same body of water); and New Jersey v. New York, 283 U.S. 336 (1931) (fed by the source river basin)). (108.) Id. at 1053 (citing Missouri v. Illinois, 200 U.S. 496 (1906) (downstream state objecting to upstream state's pollution); Georgia v. Tennessee Copper Co., 206 U.S. 230 (1907) (sovereignty of the state); Illinois v. City of Milwaukee, 406 U.S. 91, 105-106 (1972) (interstate common law which may be preempted)). In Tennessee Copper Co., Justice Holmes wrote: This is a suit by a State for an injury to it in its capacity of quasi-sovereign. In that capacity the State has an interest independent of and behind the titles of its citizens, in all the earth and air within its domain. It has the last word as to whet,her its mountains shall be stripped of their forests and its inhabitants shall breathe pure air. It might have to pay individuals before it could utter that word, but with it remains the final power. Tennessee Copper Co., 206 U.S. at 237. (109.) Id. (citing City of Milwaukee v. Illinois, 451 U.S. 304, 325-26 (1981)). (110.) Id. (111.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1053-54 (1992). (112.) Id. (citing International Paper Co. v. Ouellette, 479 U.S. 481, 490-91 (1987)). (113.) Id. (114.) Id. at 10,54. (115.) Id. (116.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1054 (1992). (117.) Id. (citing 40 C.F.R. [section] 131 (setting forth model water quality standards)). (118.) Id. (citing 33 U.S.C. [section] 1313(c)). (119.) Id. at 1055 (citing 33 U.S.C. [section] 1341(a)(2)). (120.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1056 (1992). (121.) Id. (122.) Id. (123.) Id. (124.) Id. at 1056-57. (125.) 33 U.S.C. [subsection] 1342(a)(2), (d)(2). (126.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1056-57 (1992) (citing Oklahoma v. EPA, 908 F.2d 595, 616 (10th Cir. 1990). (127.) Id. at 1058 (citing 33 U.S.C. [subsection] 1288(b)(2), 1311(b)(1)(c), 1313(d)). (128.) Id. (129.) Id. at 1058-60. (130.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1059 (1992). (131.) Id. at 1058-59. (132.) Id. at 1059. (133.) Id. at 1069-60 (citing INS v. National Ctr. for Immigrant's Rights, 112 S. Ct. 551, 556, (1991); and Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 842-44 (1984)). (134.) Id. at 1060. (135.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1060 (1992) (citing Motor Vehicle Mfrs. Asan. of United States v. State Farm Mut. Auto. Insurance Co., 463 U.S. 29, 43 (1983)). (136.) Id. at 1061. (137.) U.S. Dept. of Energy v. Ohio, 112 S. Ct. 1627 (1992), remanded, 965 F.2d 1401 (6th Cir. 1992). In Ohio, the Sixth Circuit was the first U.S. Appeals Court decision to hold that states could assess penalties against polluting facilities under the federal facilities provision of the Clean Water Act, 33 U.S.C. [section] 1323. The court stopped short of finding that penalties were available to states under the federal facilities provision of the Resource Conservation and Recovery Act, 42 U.S.C. [section] 6961. Ohio, 904 F.2d 1058,1063 (6th Cir. 1990). The Supreme Court held that Congress has not waived the federal government's sovereign immunity from violation from liability for civil fines imposed by a state for past violations of the Clean Water Act. (138.) U.S. Dept. of Energy v. Ohio, 112 S. Ct. 1627, 1641 (1992), remanded, 965 F.2d 1401 (6th Cir. 1992). (139.) Id. at 1642 (citing Arkansas v. Oklahoma, 112 S. Ct. 1046, 1054 (1992)). (140.) Id. at 1642-43 (citing 33 U.S.C. [section] 1342(b); 40 C.F.R. [subsection] 123.1-123.64). (141.) Id. (citing 33 U.S.C. [section] 1342 (b)(7), 40 C.F.R. [subsection] 123.27(a)(3)(i), (b)(1), (c)). (142.) Id. (citing 33 U.S.C. [subsection] 1313(c), 1319(a), 1342(c), 1342(d)(2)). (143.) U.S. Dept. of Energy v. Ohio, 112 S. Ct. 1627, 1642 (1992) (citing 33 U.S.C. [section] 1342(k)). (144.) Id. (citing Arkansas v. Oklahoma, 503 U.S. , , 112 S. Ct. 1046, 1059 (1992)). (145.) Arkansas v. Oklahoma, 503 U.S. , 112 S. Ct. 1046 (1992). (146.) Id. at 1051-52. (147.) Id. at 1057. (148.) Id. (149.) Id. at 1059. (150.) Arkansas v. Oklahoma, 112 S. Ct. 1046, 1058-59 (1992). (151.) Id. at 1054 (citing 33 U.S.C. [section] 1251(a)). (152.) Id. at 1061.
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Title Annotation:National Pollution Discharge Elimination System
Author:Holmes, William J.
Publication:Environmental Law
Date:Jan 1, 1993
Words:7948
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