Appeals Court Strips State's Authority To Run CWA Pollution Permitting Program

The U.S. Court of Appeals for the Ninth Circuit vacated EPA's 2002 decision to approve Arizona's application to run a National Pollution Discharge Elimination System (NPDES) permitting program, stating that the agency's action was in violation of the Endangered Species Act (Defenders Of Wildlife vs. EPA, 9th Cir., No. 0371439p, Aug. 22, 2005).

Under federal law, a state may take over the Clean Water Act pollution permitting program in its state from EPA if it applies to do so and meets the applicable standards. When deciding whether to transfer permitting authority to Arizona, the U.S. Fish and Wildlife Service (FWS) issued, and EPA relied on, a Biological Opinion premised on the proposition that EPA lacked the authority to take into account the impact of that decision on endangered species and their habitat.

Arizona applied on Jan. 14, 2002, for transfer of pollution permitting authority regarding Arizona waterways (except those on Native American land). Under that proposal, the Arizona Department of Environmental Quality (ADEQ) was to be responsible for issuing water pollution permits. EPA's Region 9 office in San Francisco determined that the transfer could affect listed species in Arizona and so initiated formal ESA section 7 consultations with FWS.

Defenders of Wildlife and others challenged EPA's transfer decision, particularly its reliance on the Biological Opinion's proposition regarding the EPA's limited authority. At issue in the case is whether the Endangered Species Act (ESA) requires EPA to consider the impact on endangered and threatened species and their habitat when it decides whether to transfer water pollution permitting authority to state governments.

FWS staff concluded "that the transfer of this program from EPA to the state causes the loss of protections to species resulting from the section 7 process, and the impact of this loss must be taken into account in the effects analysis in the biological opinion."

In response, EPA staff concluded that the agency lacked the legal authority to base its transfer decision on these concerns, because the agency does "not have the legal authority to regulate the non-water quality-related impacts associated with state NPDES-permitted projects that are of concern to FWS, including the authority to object to such permits based on non-water quality related impacts to listed species."

To resolve this disagreement, staff of the two agencies developed an "Interagency Elevation Document," summarizing their respective opinions. After the consultation at the national level between the EPA and FWS, the field supervisor of the Arizona Ecological Services Field Office of the FWS issued a Biological Opinion recommending approval of the transfer of permitting authority to Arizona. Noting the loss of section 7 consultation, the Biological Opinion recognized that, after the transfer, no federal agency would have the legal authority to consult with developers concerning the potential impact on listed species of any pollution permits. The Biological Opinion stated that other federal and state laws would sufficiently protect endangered species, so that transfer of permitting authority would not likely jeopardize such species or their critical habitat.

A lower court found that the appeals court has exclusive jurisdiction over the Biological Opinion challenge.

The appeals court found that EPA did have the authority to consider jeopardy to listed species in making the transfer decision, and erred in determining otherwise.

Additional information on ADEQ's water quality permits can be found at http://www.azdeq.gov/environ/water/permits.

The opinion can be accessed at the Web site of the U.S. Court of Appeals for the Ninth Circuit: http://www.ca9.uscourts.gov.

This article originally appeared in the 08/01/2005 issue of Environmental Protection.

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