Argument Preview: NAHB and EPA v. Defenders of Wildlife on 4/17

The following preview is by Andrew Dawson, a student in the Stanford Supreme Court Litigation Clinic.

On April 17 the Supreme Court will hear arguments in National Association of Home Builders v. Defenders of Wildlife and Environmental Protection Agency v. Defenders of Wildlife (Nos. 06-340 and 06-549), which address the question of whether and to what extent Section 7(a)(2) of the Endangered Species Act (ESA) applies to the EPA’s consideration of a state’s application, pursuant to the Clean Water Act (CWA), to administer the National Pollution Discharge Elimination System (NPDES) within its jurisdiction. The NPDES program is the primary means of enforcing CWA standards, and the statute permits a state to run its own program if it satisfies federal requirements and is approved by the EPA. Section 7(a)(2) of the ESA provides that federal agencies shall consult with the Secretary of the Interior to “insure that any action authorized, funded, or carried out by such agency…is not likely to jeopardize” a protected species or critical habitat of such a species.

Deputy Solicitor General Edwin S. Kneedler will argue for petitioners, and Eric R. Glitzenstein of Meyer, Glitzenstein & Crystal will argue for respondents. The briefs are available here.

This case arises from Arizona’s application to the EPA to administer the NPDES in that state. The CWA instructs EPA to “approve each submitted [NPDES] program unless [it] determines that adequate authority does not exist” to insure that nine criteria – which are outlined in the statute, and which relate to whether the relevant state agency has sufficient authority under state law to administer the program – are satisfied. If the application is approved, the EPA does retain some authority, albeit limited, to object to state-issued permits.

A few months after Arizona’s application, the EPA consulted with the Fish and Wildlife Service (FWS), which implements the ESA with respect to species under the jurisdiction of the Secretary of Interior, to determine the possible effects of the transfer of authority. Although the parties now disagree as to whether consultation is statutorily required, the consultation was initiated pursuant to Section 7(a)(2) of the ESA, which requires “[e]ach Federal agency . . . , in consultation with and with the assistance of the Secretary, [to] insure that any action authorized, funded, or carried out by such an agency is not likely to jeopardize the continued existence of any endangered species or threatened species.”

During the consultation process, FWS initially suggested that because Arizona itself would not be subject to Section 7 in its NPDES permitting process, various species could be negatively affected. FWS pointed out that in the past individual permit applications had threatened certain species, and that those species had been protected only because Section 7 applied to the federal NPDES system. EPA, however, argued that because the concerns outlined by FWS were not related to water-quality-related impacts, they were not properly within the scope of analysis and that – contrary to FWS’s contention – the transfer of authority to Arizona could not be regarded as the cause of any adverse effects on non-aquatic species. FWS eventually issued a biological opinion (BiOp) that outlined the expected effects of the action on relevant species and habitat and concluded that the transfer of NPDES authority to Arizona was not likely to endanger listed species. EPA subsequently approved the program.

Respondent Defenders of Wildlife, an advocacy group working to protect wild animals and their habitats, filed for review in the Ninth Circuit, which held that EPA’s approval of the transfer application was arbitrary and capricious. Specifically, the court of appeals held that EPA had relied on two legally contradictory positions to define its obligations under Section 7 of the ESA: (1) that EPA must consult with the FWS regarding the NPDES transfer application; but (2) that EPA is not permitted, as matter of law, to take into account the results of this consultation in considering the transfer application. The court went on to hold that the EPA did have both the power and a duty under the ESA to determine if such a transfer to state officials would affect protected species and to deny the transfer if such an impact was likely. Judge Thompson dissented, arguing that an EPA decision to approve the NPDES transfer was not an official “agency action,” and therefore was not subject to the ESA.

The court of appeals denied rehearing and rehearing on banc, with Judge Kozinksi and five others dissenting. Kozinski argued that if the panel had objected to the EPA’s inconsistent position, they should have remanded rather than deciding the merits itself. The National Association of Homebuilders filed a petition for certiorari on September 6, 2006, and EPA filed a separate petition October 23. This court granted the petitions on January 5, 2007, consolidating them for argument.

Petitioners argue that the Ninth Circuit’s holding ignores the plain language of Section 402(b) of the CWA – which provides that EPA “shall” approve an application to transfer authority if the specified criteria are met – and results in the implied repeal of that section. The Section 7 obligations of ESA, they suggest, would apply only if the EPA had been granted discretion to decide whether to transfer NPDES authority; here, however, EPA is required to grant the transfer if the conditions outlined in the CWA are met. Respondent, however, argues that to limit Section 7’s applicability merely because the CWA outlines criteria for approving the transfer of authority to states would severely undermine Section 7’s efficacy, as “Congress generally legislates by delineating the factors that agencies consider in making decisions.” They further reject the suggestion that applying Section 7 in this context would impliedly repeal the CWA’s transfer provision; in their view, the two statutes are not only capable of coexistence, but in fact EPA and FWS have in the past complied with both laws.

Relying on the Supreme Court’s 2004 opinion in Department of Transportation v. Public Citizen, petitioners also argue that the lack of EPA discretion under the CWA belies any legally cognizable causative link between the transfer of NPDES authority and downstream harm to protected species. In Public Citizen, which involved a different conflict between two federal statutes, the Court held that “where an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant ‘cause’ of the effect.” This is pertinent, according to petitioners, because it suggests that the Section 7 consultation – and EPA’s obligations under Section 7 – should have been limited to “effects on the water body receiving the discharge and the waters downstream there of” and should not extend to the effects of “[r]eal estate development and other private land uses” that may have resulted from a NPDES transfer. In other words, even if the EPA has statutory authority to regulate pollutant discharge, it is not authorized to “regulate the activity from which the discharge results.”

Respondents also point out that the EPA’s approach to its Section 7 obligations has been inconsistent, and that in earlier proceedings EPA acknowledged a responsibility to consult under Section 7, a responsibility which it now denies. Respondents argue that such a concession suggests that the case should be remanded to the agency for further proceedings. While the government acknowledges that there was “confusion” within the EPA regarding its obligations, it asserts that remand is not required because the EPA has since “clarified” its position. Respondents reject this argument on the ground that the clarification occurred only after the Ninth Circuit’s ruling; moreover, they contend, such a change in EPA’s position regarding its interpretation of regulations should “at least be exposed to public comment before being adopted and subjected to judicial review.”