Splish/Splash: No Original Subject Matter Jurisdiction Over EPA’s Water Transfer Rule

In a decision with potentially broad implications, the Eleventh Circuit recently concluded that it lacked original subject matter jurisdiction over petitions for review of an EPA rule which freed federal, state and municipal agencies from obtaining a Clean Water Act permit for certain water transfers.  In Friends of the Everglades v. EPA, the Circuit Court addressed a challenge to EPA’s 2008 Water Transfer Rule creating a permanent exemption from the National Pollutant Discharge Elimination System (NPDES) permit program for pollutants discharged in the context of transfers from one body of water to another.  The Eleventh Circuit’s decision is the latest ruling in a seemingly never-ending series of lawsuits concerning water transfers in the Everglades.

The 2008 Water Transfer Rule was promulgated during the appeal of a Southern District of Florida injunction which required the local water management district to obtain an NPDES permit to transfer water from canals near the Everglades into Lake Okeechobee.  The district court concluded that “water transfers between distinct water bodies” constituted an “addition of a pollutant to the receiving navigable water body.”  On appeal, the Court of Appeals reversed, concluding that the Water Transfer Rule was a reasonable interpretation of an ambiguous provision of the Clean Water Act. 570 F.3d 1210 (11th Cir. 2009).

Shortly after the EPA promulgated its Water Transfer Rule, nine states, one Canadian province, the Miccosukee tribe and several environmental groups filed petitions challenging the rule in district courts in Florida and New York and before the Second and Eleventh Circuits.  After the appellate petitions were consolidated in the Eleventh Circuit and the district court cases stayed, the Court of Appeals dismissed the petitions for lack of original subject matter jurisdiction.

The Eleventh Circuit rejected the petitioners’ arguments that  §509(b)(1)(E) or (F) of the Clean Water Act - which generally provides for circuit court jurisdiction - applied.  First, in determining that §509(b)(1)(E) was inapplicable, the Court held that the water transfer rule was neither an “effluent standard” nor a “limitation” on entities engaged in water transfers.  Instead, “the rule frees the industry from the constraints of the permit process and allows the discharge of pollutants from water transfers.”  Second, the Court of Appeals rejected EPA arguments that §509(b)(1)(F), which provides for original jurisdiction over actions related to the issuance or denial of a permit applied, concluding that the rule “exempts a category of activities from the requirements of a permit and ensures that no permit will ever be issued or denied for discharge from a water transfer.”  The Eleventh Circuit left no ambiguity that it lacked “original jurisdiction to review a permanent exemption from the permit program.”  Lastly, the court soundly rejected the request to exercise “hypothetical jurisdiction,” noting that “[w]e cannot exercise hypothetical jurisdiction any more than we can issue a hypothetical judgment.”

The issue of original subject matter jurisdiction over challenges to EPA rules may soon be addressed by the Supreme Court.  On December 3, 2012, oral argument will be held in Decker v. Northwestern Environmental Defense Center, an appeal of a Ninth Circuit decision which held that a district court had original jurisdiction over a challenge to EPA’s interpretation of its ambiguous “silviculture rule.” See Northwest Environmental Defense Center v. Brown, 640 F.3d 1063 (9th Cir. 2011). The Brown and Friends of the Everglades decisions cannot be reconciled with National Cotton Council v. EPA, 553 F.3d 927 (6th Cir. 2009), in which the Sixth Circuit concluded it had original jurisdiction over a citizen’s suit in the context of its decision vacating a 2006 EPA rule exempting certain pesticide applicators from obtaining NPDES permits.  Regulated industries and environmental groups would be well served if the Supreme Court uses the Decker case as a vehicle to clarify whether challenges to permitting exemptions under the Clean Water Act should be brought before district courts under §505 or before in the circuit courts of appeal under §509.

 
 

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