ENVIRONMENTAL PROTECTION AGENCY, PETITIONER V. STATE OF OKLAHOMA, ET AL. No. 90-1266 In The Supreme Court Of The United States October Term, 1990 The Solicitor General, On Behalf Of The United States Environmental Protection Agency, Petitions For A Writ Of Certiorari To Review The Judgment Of The United States Court Of Appeals For The Tenth Circuit In This Case. Petition For A Writ Of Certiorari To The United States Court Of Appeals For the Tenth Circuit PARTIES TO THE PROCEEDINGS The petitioner is the United States Environmental Protection Agency. The respondents are the State of Arkansas, the Arkansas Department of Pollution Control & Ecology, the City of Fayetteville, Arkansas, the Beaver Water District, the State of Oklahoma, the Oklahoma Scenic Rivers Commission and Pollution Control Coordinating Board, and Save the Illinois River (STIR). TABLE OF CONTENTS Questions Presented Parties To The Proceedings Opinion below Jurisdiction Statutory and regulatory provisions involved Statement Reasons for granting the petition Conclusion OPINION BELOW The opinion of the court of appeals (App., infra, 1a-97a) is reported at 908 F.2d 595. JURISDICTION The judgment of the court of appeals was entered on July 11, 1990. Petitions for rehearing were denied on October 11, 1990 (App., infra, 98a-99a). On December 29, 1990, Justice White extended the time for filing a petition for a writ of certiorari to and including February 8, 1991. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTORY AND REGULATORY PROVISIONS INVOLVED The relevant provisions of the Clean Water Act, 33 U.S.C. 1251 et seq., are reproduced at App. C, infra, 100a-106a. The relevant provisions of the Oklahoma Water Quality Standards are reproduced at App., infra, 96a-97a. QUESTIONS PRESENTED 1. Whether determination of the appropriate standards governing the issuance of permits under the Clean Water Act for discharges into interstate waters involves a question of federal law, requiring a reviewing court to uphold the validity of the Environmental Protection Agency's permitting action if based upon a reasonable interpretation and application of the federally approved water quality standards of the receiving State. 2. Whether the Environmental Protection Agency reasonably concluded that the contemplated discharge would comply with the applicable water quality standards because it would have no detectable impact on current water quality within the receiving State. 3. Whether the court exceeded the proper scope of judicial review. STATEMENT 1. The Clean Water Act, 33 U.S.C. 1251 et seq., is a comprehensive statute designed "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters" through reduction and eventual elimination of the discharge of pollutants into those waters. Section 101(a), 33 U.S.C. 1251(a). The Act anticipates a partnership between the federal government and the States to achieve this fundamental goal. The Administrator of the Environmental Protection Agency (EPA) is, with certain explicit exceptions not relevant here, responsible for administering the Act. Section 101(d), 33 U.S.C. 1251(d). A major responsibility of the Administrator under the Act is the development and promulgation of uniform national technology-based standards, known as "effluent limitations guidelines," for categories and classes of discharges. Sections 301 and 304, 33 U.S.C. 1311 and 1314. E.I. duPont de Nemours & Co. v. Train, 430 U.S. 112, 126-136 (1977). An "effluent limitation" is "a() restriction * * * on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources * * *." Section 502(11), 33 U.S.C. 1362(11). /1/ A second major source of authority for reducing pollution is found in Section 303, which directs States, with federal approval and oversight, to institute a range of comprehensive requirements, potentially more stringent than the federally promulgated guidelines, to assure protection of the quality of all state waters. Section 303(a), (b), and (c)(1), 33 U.S.C. 1313(a), (b), and (c)(1). These water quality standards are not technology-based standards; instead, they are based on the desired uses and condition of the particular waterway involved. Congress utilized water quality standards "as a supplementary basis * * * so that numerous point sources, despite individual compliance with effluent limitations, may be further regulated to prevent water quality from falling below acceptable levels." EPA v. California ex rel. State Water Resources Control Bd., 426 U.S. 200, 205 n.12 (1976). Section 303(c)(2), 33 U.S.C. 1313(c)(2). A water quality standard is a method of expressing the desired condition of a waterway. Water quality standards under the Act generally consist of three elements: (1) a designated "use" of that waterway (e.g., public water supply, recreation, propagation of fish, or agriculture) consistent with the goals of the Act as set forth in Section 101; (2) "criteria" specifying the amount of various pollutants that may be present in those waters and still protect the designated uses, expressed in numerical concentration limits or narrative form; and (3) a restriction on the degradation of higher quality waters, i.e., an antidegradation provision. Section 303(c)(2), 33 U.S.C. 1313(c)(2); Section 303(d)(4)(B), 33 U.S.C. 1313(d)(4)(B); 40 C.F.R. Pt. 131, Subpt. B. The States must submit their water quality standards to EPA for review and approval. Upon approval by EPA, a state-adopted water quality standard "shall thereafter be the water quality standard for the applicable waters of that State." Section 303(c)(3), 33 U.S.C. 1313(c)(3). The primary means for achieving and enforcing effluent limitations and state water quality requirements is the "national pollutant discharge elimination system" (NPDES) permit program under Section 402 of the Act, 33 U.S.C. 1342. State Water Resources Control Bd., 426 U.S. at 205. The Act prohibits the discharge of any pollutant /2/ into the waters of the United States except when authorized by an NPDES permit or a Section 404 permit. /3/ Section 301(a), 33 U.S.C. 1311(a). Thus, an NPDES permit -- which typically includes a timetable for compliance -- transforms generally applicable effluent limitations and state water quality standards into obligations of the individual discharger. See 40 C.F.R. 122.44(d)(1). The Act provides that EPA will issue NPDES permits except in those States where EPA has approved a state permit program pursuant to Section 402(b), 33 U.S.C. 1342(b). /4/ Even in those States with approved permit programs, the State must submit a copy of each proposed permit to EPA before it may be issued. Section 402(d)(1) and (2), 33 U.S.C. 1342(d)(1) and (2). EPA may object to the issuance of an NPDES permit if it determines that issuance would be "outside the guidelines and requirements" of the Act. Section 402(d)(2)(B), 33 U.S.C. 1342(d)(2)(B). On receipt of such an objection, the State may submit an appropriately revised permit; if it fails to do so, EPA will issue a permit "in accordance with the guidelines and requirements" of the Act. Section 402(d)(4), 33 U.S.C. 1342(d)(4). The Clean Water Act establishes specific mechanisms for resolving interstate water pollution questions, i.e., situations where a discharge in one State may affect the waters of another State. The statutory conditions for EPA approval of state permit programs require each state program to contain specified provisions for dealing with such situations. The source, or permit issuing, State must have procedures for notifying other States "the waters of which may be affected" of a permit application contemplating such discharges. Section 402(b)(3), 33 U.S.C. 1342(b)(3). The potentially affected State must then be given an opportunity to "submit written recommendations to the permitting State" and EPA regarding the application. Section 402(b)(5), 33 U.S.C. 1342(b)(5). If any part of those recommendations is not accepted by the permitting State, that State must notify the affected State and EPA. Section 402(b)(5), 33 U.S.C. 1342(b)(5). EPA then has the right to object to the issuance of the permit, as provided in Section 402(d)(2)(a), 33 U.S.C. 1342(d)(2)(a). Where EPA itself retains permit-issuing authority, the statutory procedures for the resolution of interstate disputes are contained in the provisions governing the issuance of federal licenses and permits that may affect water quality. Thus, Section 401(a), 33 U.S.C. 1341(a), requires applicants for federal licenses or permits for activities that may result in discharges to navigable waters to provide a certification from the source State that the proposed discharge will comply, inter alia, with applicable water quality standards. If the source State denies certification, no permit may be issued. Section 401(a), 33 U.S.C. 1341(a). Whenever EPA (or any other federal permitting authority) determines that a discharge might affect water quality in another State, it must notify that State. Section 401(a)(2), 33 U.S.C. 1341(a)(2). If the notified State determines that the discharge will violate its water quality requirements, the federal permitting authority must (if the State requests) hold a hearing to consider the State's objections and EPA's recommendations, and "condition such * * * permit in such manner as may be necessary to insure compliance with applicable water quality requirements." Section 401(a)(2), 33 U.S.C. 1341(a)(2). /5/ 2. This case involves an interstate dispute concerning the waters of the Illinois River, which originates in the State of Arkansas and flows into the State of Oklahoma. /6/ In the early 1980's the City of Fayetteville, Arkansas, operated a sewage treatment plant that discharged all of its wastewater into the White River, which is not a tributary of the Illinois River. The White River was unable to assimilate that waste without violating the Arkansas water quality standards. To alleviate this situation, Fayetteville constructed a new wastewater treatment plant, with federal financial assistance provided by EPA under the Clean Water Act. The plant was designed so that the plant's discharges into the White River would not cause a violation of the state water quality standards: wastewater pollutants were to be reduced, and half of the treated effluent was to be discharged into the Illinois River. App., infra, 2a 5a. /7/ In 1985, Fayetteville applied to EPA for an NPDES permit for its new treatment plant. Following public notice and an informal public hearing (see 40 C.F.R. Pt. 124), EPA issued an NPDES permit to Fayetteville on November 5, 1985, to become effective on December 10, 1985. The permit authorized split flow into both the White and Illinois Rivers and contained stringent limits on oxygen demand, total suspended solids, and phosphorus in the discharge. It also prohibited discharge of inadequately treated sewage, so that in the case of a plant malfunction, untreated waste would have to be stored and retreated. Finally, a reopener in the permit specified that if an ongoing study of existing problems in the Illinois River showed a need for more stringent limitations on Fayetteville's discharge to ensure compliance with Oklahoma water quality standards, the permit would be modified accordingly. App., infra, 5a-6a. Both Oklahoma and Arkansas requested an evidentiary hearing before EPA on its issuance of the NPDES permit. After an evidentiary hearing, the Administrative Law Judge upheld the permit, finding that the discharge into the Illinois River would not have an "undue impact" on Illinois River water quality in Oklahoma. App., infra, 2a. Oklahoma appealed to the Administrator; the Chief Judicial Officer, acting on behalf of the Administrator, reversed and remanded to the ALJ for a redetermination. The Chief Judicial Officer ruled that the Fayetteville discharges would have to comply with the Oklahoma water quality standards at the state boundary. /8/ Compliance with the antidegradation provisions was to be judged by whether there would be a "detectable" or "measurable" impact on water quality parameters (i.e., on the measurements of pollutants governed by the standards) at the boundary. Ibid. On remand, the ALJ ruled that a "detectable" impact had not been established, and upheld the permit. He explicitly ruled that the proposed discharge would not cause violations of any of the Oklahoma water quality standards. Oklahoma's appeal to the Administrator resulted in an affirmance by the Chief Judicial Officer. Id. at 2a-3a. The permit went into effect, and the discharge commenced on January 21, 1989. /9/ 3. Three petitions for review challenging EPA's final decision were filed in early 1989. The Arkansas petition challenged EPA's authority to require, as a condition of an NPDES permit, that an Arkansas discharger comply with Oklahoma water quality standards. The petitions by the Oklahoma parties and by an environmental group, Save The Illinois River (STIR), alleged violations of Oklahoma water quality standards resulting from EPA's grant of the NPDES permit. The Arkansas petition, which was initially brought in the Eighth Circuit, was transferred to the Tenth Circuit and consolidated with those of the Oklahoma parties and STIR. On July 11, 1990, the Tenth Circuit issued its opinion in this matter. App., infra, 1a-95a. The court first determined that EPA had properly interpreted the Act to require it to consider, in the NPDES permit procedure, whether a discharge would violate the federally approved water quality standards of a downstream State. Id. at 14a-48a. The court nevertheless reversed EPA's decision to issue the permit. The court rejected EPA's conclusion that the antidegradation provisions of the Oklahoma water quality standards (OWQS) /10/ are satisfied so long as the Fayetteville discharge does not result in any detectable change to any water quality parameter at the Oklahoma state line. Finding that EPA "incorrectly construed and applied (the) Oklahoma regulations" (id. at 60a, 83a-84a), the court adopted an interpretation of the antidegradation provisions of the OWQS not proposed by any party (id. at 48a). In light of the court's view of the federal policies embodied in the Clean Water Act and EPA regulations, /11/ it read the OWQS antidegradation provisions as prohibiting any further release of pollutants that will reach an "already degraded" river. /12/ The court summarized its view of the relevant provisions (App., infra, 90a-91a): (I)f a body of water is experiencing (water quality standard) violations and a proposed new source would discharge the same pollutants to which those standards apply, that source may not be permitted if its effluent will reach the degraded waters. Analyzing the record presented to EPA, the court concluded that there was "ample evidence from which the ALJ could have concluded" (App., infra, 63a) that the Illinois River in Oklahoma was already degraded (id. at 62a-73a), /13/ and that pollutants from the Fayetteville discharge would reach the Oklahoma boundary (id. at 73a-76a) and would contribute to the existing degradation of the river at that point (id. at 76a-82a). /14/ The court expressly "reject(ed) any notion that once water quality standards have been violated (i.e., the quality of the receiving waters has been degraded), the incremental impact of a proposed additional discharge must itself be detectable." App., infra, 90a. Instead, the court was of the view that it was necessary to deny the permit because "(a)t worst, (permitting the proposed discharges) will increase the frequency and severity of ongoing violations; at best, it will thwart efforts to bring the river back into compliance with the applicable standards." Id. at 91a. In sum, the court concluded that "EPA's failure to exercise its authority to deny the Fayetteville permit is arbitrary and capricious or otherwise not in accordance with law." App., infra, 94a. Under the analysis adopted by the court, Fayetteville discharges "may not be permitted" (id. at 61a), and "the Fayetteville permit may not issue" (id. at 83a n.49). Accordingly, instead of remanding to EPA for reconsideration of the permit decision under the judicially prescribed standards, the court of appeals simply "reverse(d) EPA's decision authorizing Fayetteville's municipal treatment plant to discharge a portion of its effluent to the Illinois River basin." Id. at 95a. /15/ REASONS FOR GRANTING THE PETITION This case presents an important issue of administrative law in the context of a fundamental part of EPA's mission under the Nation's environmental laws. In its decision, the court of appeals has significantly undermined EPA's authority to implement the Clean Water Act by usurping EPA's role under the Act as the arbiter of interstate water pollution disputes. The court reversed EPA's permitting decision on the basis of the court's own interpretation of federally approved water quality standards. That approach dramatically transforms the appropriate province of both court and agency. Under a proper analysis, the validity of EPA's permitting decision depends on whether the Agency reasonably interpreted and applied those standards, and is not properly subject to collateral attack based on the reviewing court's own interpretation of those standards as a question of the law of the receiving State simpliciter. Otherwise, EPA's exercise of its federal statutory responsibilities would be deprived of coherence and predictability, notwithstanding the Agency's peculiar expertise with respect to Clean Water Act standards. The decision of the court of appeals is thus seriously inconsistent with well established principles governing judicial review of agency actions. If not reversed, it will inevitably sow seeds of confusion among States that share particular waters -- and all those who use those waters -- as to the standards for discharges into those waters. 1. a. This Court has previously considered the provisions of the Clean Water Act regarding discharges into interstate waters. It has done so in the context of resolving interstate disputes over the standards to be applied in the issuance of permits for such discharges. See Illinois v. Milwaukee, 406 U.S. 91, 105 (1972) (Milwaukee I); Milwaukee v. Illinois, 451 U.S. 304 (1981) (Milwaukee II); International Paper Co. v. Ouellette, 479 U.S. 481 (1987). In these cases, the Court has emphasized that interpretation of the Act's requirements is a matter of federal, not state law (Milwaukee I, 406 U.S. at 102, 105; Ouellette, 479 U.S. at 492), and that the 1972 Amendments to the Federal Water Pollution Control Act (now the Clean Water Act) "establish an allencompassing program of water pollution regulation" (Milwaukee II, 451 U.S. at 318), under which "(f)ederal courts lack authority to impose more stringent effluent limitations * * * than those imposed by the agency charged by Congress with administering this comprehensive scheme" under the guise of applying federal common law. Id. at 320. /16/ And in Ouellette, the Court specifically concluded that "the CWA precludes a court from applying the (common) law of an affected State against an out-of-state source." Instead, "the Act limits the right to administer the permit system to the EPA and the source States." 479 U.S. at 494-495. It follows from this Court's precedents that the question of the proper standards to be applied to the Fayetteville discharges under the Clean Water Act ultimately involves a question of federal, not simply Oklahoma, law. b. The statutory scheme confirms that EPA has ultimate responsibility for the interpretation and application of water quality standards whenever interstate pollution issues arise in the course of permit proceedings. The Act directs EPA to address interstate water pollution issues in either of two ways, depending upon whether the source State or EPA is the permit-issuing authority. If the source State's program has been approved by EPA under Section 402(b), 33 U.S.C. 1342(b), the State may issue the permit, unless EPA objects pursuant to Section 402(d)(2), 33 U.S.C. 1342(d)(2) /17/ . Where, as here, EPA is the permit-issuing authority, EPA is directly responsible for determining whether a proposed permit will meet all applicable requirements of the Act and implementing regulations (Section 402(a)). Although the federal permitting authority may not issue a permit if the source State determines that the permit will not comply with its water quality standards, the federal permitting authority need only consider the "recommendations" of the receiving State in determining whether the permit will comply with that State's standards. Section 401(a)(1) and (2), 33 U.S.C. 1341(a)(1) and (2). As this Court explained in Ouellette, 479 U.S. at 491, "the Act makes it clear that affected States occupy a subordinate position to source States in the federal regulatory program." Thus, in any interstate dispute involving the application of a downstream State's water quality standards, the statutory scheme provides that EPA -- not the downstream State -- is to determine the proper application of the standards, either in reviewing the permits for possible objection under Section 402(d) or in its role as permit issuer. This federal responsibility is consistent with the fact that the Act requires EPA to review proposed state water quality standards before they may become effective. Section 303(c), 33 U.S.C. 1313(c). Before granting approval, EPA must determine that the proposed standard "meets the requirements" of the Act. Section 303(c)(3), 33 U.S.C. 1313(c)(3). /18/ In determining whether a proposed standard meets the statutory requirement, it is, of course, necessary for EPA to determine the meaning of that standard. Therefore, if a dispute concerning the meaning of the standard subsequently arises in the context of a permitting decision, EPA's interpretation of the disputed provision, which will reflect its understanding of that provision when approval to implement it was granted, should normally be dispositive. /19/ This is particularly true where, as in this case, the water quality standard adopted by the State substantially reflects the model standard promulgated by EPA. /20/ Absent a clear indication at the time the proposed standard was submitted to EPA for approval that the State intended a different meaning, it is surely reasonable for EPA to construe the state standard as having the same meaning as the model provision. Indeed, this approach is necessary to ensure uniform application of substantially identical terms and thus to provide certainty and predictability in the administrative process. c. For all these reasons, it is particularly important in the context of EPA's administration of the Clean Water Act to apply the well-established rule that a reviewing court should defer to an agency's reasonable interpretation of a regulation it is charged with administering. Gardebring v. Jenkins, 485 U.S. 415, 429-430 (1988); Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 566 n.9 (1980); United States v. Larionofff, 431 U.S. 864, 872-873 (1977); Navistar Int'l Transp. Corp. v. EPA, 858 F.2d 282, 288 (6th Cir. 1988), cert. denied, 490 U.S. 1039 (1989) (EPA's interpretation of a federally approved state air quality standard is accorded the same deference by a reviewing court as EPA's interpretation of its own regulations). Cf. Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 844 (1984). Thus, if the terms of a standard are ambiguous or silent on a particular point in the context of an interstate dispute, EPA's interpretation of the standard should be followed "unless it is plainly erroneous or inconsistent with the regulation." United States v. Larionoff, 431 U.S. at 872 (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945)). In short, the question is not whether EPA interpreted the water quality standards applicable to the Oklahoma portion of the Illinois River the same way they would be interpreted by the reviewing court or by Oklahoma itself (see, e.g., App., infra, 60a); instead, the question is whether EPA's reading and application of those standards in the permitting proceeding was reasonable. But rather than focusing on that question and considering whether there was substantial evidence in the record to support EPA's findings, the court took an almost diametrically opposite approach. It combed the record to find evidence to sustain the court's own contrary findings, in support of an interpretation of the relevant regulations that the court developed on its own initiative. Id. at 73a, 76a, 81a-82a. The court's decision thus reflects its assurance that it was capable of making scientifically-based policy determinations without benefit of briefing or argument, and without evaluation by the expert agency to which Congress assigned the responsibility for making such policy determinations. The court embarked on an independent analysis of the complex and highly technical evidence contained in this very extensive administrative record, which led it to reject the scientific findings underlying EPA's action. /21/ That inquiry went well beyond the permissible scope of judicial review. The proper inquiry is whether the administrative agency's findings are supported by substantial evidence, and "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620 (1966). Moreover, when examining agency scientific findings, as opposed to simple findings of fact, "a reviewing court must generally be at its most deferential." Baltimore Gas & Elec. Co. v. NRDC, Inc., 462 U.S. 87, 103 (1983). 2. a. Analyzed under the appropriate standards for judicial review, the record here amply supported EPA's permitting decision. EPA concluded that the Fayetteville discharge would not cause a prohibited degradation of Oklahoma waters because it would cause no detectable change in the quality of any waters within the State. That conclusion was entirely reasonable and consistent with the policies and purposes of the Clean Water Act. The court of appeals' preferred reading of the EPA-approved antidegradation provision apparently turned on its belief that "degradation" must be measured from some historic point, and that if current river quality is poorer than it was at that time, no further discharges may be permitted regardless of whether such discharges will have any detectable effect within the State. These beliefs, however, represent policy choices, rather than demonstrating that EPA's decision was in any way unreasonable. The court found the "plain language" of the OWQS beneficial use and antidegradation provisions showed that they disallow discharges of pollutants into a scenic river if "its water quality has been degraded or if the new source would degrade it." App., infra, 53a-54a (emphasis in original). But the court did not identify the regulatory language upon which it relied, and in fact no language in the regulations suggests that whether water quality "has been degraded" is a relevant consideration. See OWQS Section 3, App., infra, 97a. Instead, the regulations themselves give no indication that the time from which "degradation" is to be measured is at any time in the past -- still less do they give any indication of how such a benchmark date would be determined. Instead, the standards address only the prospective impact of a proposed activity. The regulations protect the status quo by prohibiting new discharges which threaten to degrade the river -- i.e., to cause it to fall below the quality it has at the time the permit is under consideration. They are thus entirely consistent with the federal standards on which they are modeled, since those standards are also clearly designed to protect the status quo. See note 20, supra. It is scarcely surprising that, as the court itself noted (App., infra, 48a), "neither of the EPA judicial officers nor any of the parties addresse(d) whether, or how, this (preexisting condition) is relevant to Fayetteville's application to discharge to the Illinois River." Under EPA's model antidegradation provision, it is not relevant; and the court erred in holding that EPA was required to conclude otherwise in interpreting that provision as adopted by Oklahoma. /22/ The court also incorrectly rejected EPA's conclusion that the antidegradation provision applies only to detectable changes. /23/ A discharge that has no perceptible effect on the quality of a stream would not normally be considered to "degrade" it; the concept of degradation surely implies at least some verifiable change in quality. /24/ And it is only discharges that can be expected to result in degradation that are prohibited by the applicable regulations, not all discharges from any additional sources whatsoever, or even discharges of pollutants that are already present in the affected waters. See App., infra, 81a. In short, EPA's interpretation of the applicable regulations was reasonable and consistent with the complex statutory and regulatory scheme for the protection of this nation's waters. Since Congress has entrusted the administration of that scheme to EPA, the court should have deferred to that Agency's reasonable interpretation, rather than substituting its own reading, based on its own policy preferences. b. Serious adverse consequences in the administration of the Clean Water Act will flow from substitution by reviewing courts of their own interpretation of an EPA-approved water quality standard for that of EPA. First, the Agency's responsibility for approving state standards will be undercut if its reasonable interpretations of those standards are nonetheless to be jettisoned on judicial review. This is of fundamental practical importance, because EPA's ability to perform effectively its statutory role in resolving interstate disputes over the issuance of NPDES permits requires the Agency to rely on its own reasonable construction of a state standard. Indeed, if reviewing courts were free to substitute their own interpretations of an EPA-approved state standard, the similarly worded standards of various States could well have different meanings in different circuits, or even within the same circuit. The resultant uncertainty and confusion -- especially in lengthy river systems involving several or numerous receiving States -- would lead to precisely the situation that Congress sought to avoid by enacting the comprehensive Clean Water Act Amendments to replace the former case-by-case approach of the federal common law. Milwaukee II, 451 U.S. at 324-325. Indeed, the dangers of judicial intrusion into EPA's responsibilities are vividly illustrated by the Tenth Circuit's reinterpretation of the EPA-approved water quality standards. The court's interpretation involved two fundamental misconceptions. First, the court's belief that an antidegradation provision requires that a protected river be returned to its quality at some point in the past may well be administratively unworkable. The court offered no principled basis on which the historical benchmark date is to be selected. /25/ Moreover, the court simply assumed that it is possible to determine what the quality of the water was at that particular historical date with sufficient precision to make its use as a benchmark feasible. The record here is quite barren of any support of that assumption. /26/ The court's adoption of a "zero-discharge" policy is equally flawed. Nothing in the Act or the EPA-approved antidegradation regulations requires such a draconian policy. /27/ At least where the effects of a discharge are undetectable at the State boundary, the receiving State can have little more than a theoretical basis for concluding that its water has been degraded. In such circumstances, it is at least reasonable for the responsible agency to conclude that the balance of equities favors permitting the discharge and that the discharge is not prohibited. Cf. App., infra, 92a (recognizing that "it is arguably unfair to 'punish' Fayetteville for preexisting dischargers' past failure to comply with (water quality standards)"). 3. The court exacerbated its errors by the extreme and unwarranted remedy it imposed. The court flatly "reversed" Fayetteville's permit without remanding to EPA. App., infra, 95a. If a reviewing court finds that the agency's findings are not supported by the record, the court must allow the agency an opportunity to supplement the record, to reexamine its findings on the basis of the full record, and to correct or clarify them. See generally Kleppe v. Sierra Club, 427 U.S. 390 (1976); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). The court's failure either to defer to EPA's scientific expertise or to give EPA an opportunity to explain satisfactorily its reasoning or otherwise address the court's concerns transgressed the limits of judicial review. Accordingly, even if the court had been correct in finding the permit to be inconsistent with applicable standards, firmly established principles of administrative law would require a remand to EPA for further proceedings. It is for the administrative agency and not the court to evaluate different courses of action and ultimately make a choice. Kleppe v. Sierra Club, 427 U.S. at 410 n.21; Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. at 416. This Court stated the "guiding principle" nearly forty years ago: (T)he function of the reviewing court ends when an error of law is laid bare. At that point the matter once more goes to the (agency) for reconsideration. FPC v. Idaho Power Co., 344 U.S. 17, 20 (1952). See FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 140-146 (1940). An agency's task on remand remains "infused with judgment and discretion, requiring the '"accommodation of conflicting policies that were committed to the agency's care."'" Department of the Treasury v. FLRA, 110 S. Ct. 1623, 1629 (1990) (citations omitted). "It is not a task (courts) ought to undertake on the agency's behalf in reviewing its orders." Id. at 1630. In sum, the court of appeals undermined the carefully developed legislative system for resolving interstate permitting disputes under the Clean Water Act by imposing its own construction of the applicable water quality standards on the parties. Moreover, it did so on the basis of independent fact finding that ignored the technical expertise of the federal agency to which such determinations are reserved, and imposed a judicially devised remedy without remanding the case to that agency for further evaluation and correction of any perceived inadequacies in its approach. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. KENNETH W. STARR Solicitor General RICHARD B. STEWART Assistant Attorney General LAWRENCE G. WALLACE Deputy Solicitor General HARRIET S. SHAPIRO Assistant to the Solicitor General MICHAEL A. MCCORD ANNE S. ALMY GARY S. GUZY Attorneys E. DONALD ELLIOTT General Counsel Environmental Protection Agency FEBRUARY 1991 /1/ A point source is "any discernible, confined and discrete conveyance * * * from which pollutants are or may be discharged." Section 502(14), 33 U.S.C. 1362(14). /2/ The term "pollutant" is defined in Section 502(6) of the Act. 33 U.S.C. 1362(6). /3/ Section 404 permits authorize the discharge of "dredged or fill material," whereas NPDES permits authorize the discharge of all other pollutants. Section 404(a), 33 U.S.C. 1344(a). The permit at issue here is an NPDES permit. /4/ EPA had permit-issuing authority in this case, which involves discharges arising in Arkansas, because Arkansas did not have an approved permit program at the time the permit application was made. Arkansas' permit program has subsequently been approved by EPA. /5/ If EPA is itself the permitting agency, the hearing is held pursuant to the provisions of Section 402(a), 33 U.S.C. 1342(a). /6/ In 1970, Oklahoma designated the portion of the Illinois River from the state line to the Tenkiller Reservoir a state scenic river. App., infra, 50a, 62a; Okla. Stat. tit. 82, Section 1452(b)(1) (1970). /7/ Fayetteville's plans prompted the State of Oklahoma to move this Court for leave to file an original action against the State of Arkansas (and other entities) alleging causes of action under the federal and state common law of nuisance. Oklahoma v. Arkansas, No. 93 Orig. In response to the Court's invitation, the United States filed a brief opposing the motion for leave to file the complaint, on the ground that the Clean Water Act permitting procedures would afford the State an adequate remedy for any threat to its water quality standards. This Court denied the motion for leave to file the complaint. 460 U.S. 1020 (1983). /8/ State-designated scenic rivers, such as the portion of the Illinois River at issue here, are protected by Oklahoma's antidegradation and beneficial use standards. The beneficial use standard prohibits "any new point source discharge of wastes (into such rivers) except under conditions described in Section 3." Oklahoma Water Quality Standard (OWQS) Section 5, App., infra, 96a. Section 3, Oklahoma's antidegradation provision, in turn provides that "No further water quality degradation which would interfere with or become injurious to existing instream water uses shall be allowed." App., infra, 96a. Recognizing that certain high quality waters currently exceed their beneficial use standards, Section 3 also provides that "No degradation shall be allowed in high quality waters * * *." App., infra, 97a. /9/ In the course of the administrative proceedings, several rulings were made to which Arkansas objected; Arkansas thereupon moved this Court for leave to file an original action against Oklahoma concerning the application of Oklahoma's water quality standards to an Arkansas permittee. Arkansas v Oklahoma, No. 115 Orig. The United States filed a brief as amicus curiae, arguing that Arkansas was attempting to bypass the established administrative procedures for resolving this interstate dispute. Arkansas' remedy, the brief argued, was to let the permitting process run its course and seek judicial review under the Clean Water Act if it was displeased with the result. The Court denied leave to file an original action. 488 U.S. 1000 (1989). /10/ See note 8, supra. /11/ See, e.g., App., infra, 85a-90a (discussing Clean Water Act policy and legislative history), App., infra, 54a (court's examination of state policy is "guided by the minimum requirements * * * set forth in EPA's regulation"), App., infra, 85a (EPA's position inconsistent with "federal water pollution control strategy engineered by the Clean Water Act and enhanced by Oklahoma law"), App., infra, 90a ("We will not ascribe to the (Clean Water) Act either the gaping loop-hole or the irrational purpose necessary to uphold EPA's action."), App., infra, 94a (EPA "decision is inconsistent with the language of the Clean Water Act, as interpreted in light of the legislative history, and frustrates the policy that Congress sought to implement"). /12/ The court used 1970, the date of Oklahoma's designation of the relevant portion of the Illinois River as a "scenic river," as the benchmark from which to determine whether water quality had been degraded. App., infra, 62a. /13/ Because the parties had not considered the historic water quality of the Illinois River significant to the propriety of the issuance of the permit, the court's factual findings on this aspect of the case constitute gleanings from "a record that consists of five boxes and four years of briefs, orders, transcripts, prepared testimony, correspondence, technical reports, and miscellaneous other documents" (App., infra, 62a) on a matter that had not been addressed in the EPA proceedings, nor briefed and argued by the parties. See id. at 61a n. 40. /14/ The court was not deterred by its recognition that this latter issue is "more a scientific question than it is a legal one" (App., infra, 76a). /15/ On October 31, 1990, the court granted Arkansas' motion to stay the issuance of the mandate pending this Court's action on petitions for certiorari; accordingly, the discharges from the Fayetteville plant are continuing. /16/ In explaining why courts should not invoke federal common law to supplement the comprehensive statutory scheme, the Court noted (451 U.S. at 325): "(n)ot only are the technical problems difficult -- doubtless the reason Congress vested authority to administer the Act in administrative agencies possessing the necessary expertise -- but the general area is particularly unsuited to the (case-by-case) approach inevitable under a regime of federal common law." These same factors, of course, counsel reliance on the expert agency's interpretation and application of the relevant federal standards. See pp. 22-25, infra. /17/ That provision sets forth two grounds for an objection. See Champion Int'l Corp. v. EPA, 850 F.2d 182, 185 (4th Cir. 1988). Under Section 402(d)(2)(A), EPA may object when there is an unresolved interstate dispute that has been brought to EPA's attention under the procedures in Section 402(b)(5) (providing for notification to EPA of a receiving State's objections to the issuance of the permit, and of the permitting State's action with regard to those objections). Under Section 402(d)(2)(B), 33 U.S.C. 1342(d)(2)(B), EPA may -- even in the absence of a state complaint -- object to the issuance of any permit "as being outside the guidelines and requirements" of the Act. /18/ If EPA cannot make that finding, it must permit the State to make the changes necessary to bring the standards into conformity with the Act. If the State fails to do so in a timely manner, EPA will promulgate the water quality standards for the State. Section 303(c)(3) and (4), 33 U.S.C. 1313(c)(3) and (4). /19/ Since many water quality standards are in narrative form and are necessarily stated in general terms, disagreements as to their meaning will often surface only when the standards are applied in the context of a specific proceeding. /20/ Compare the antidegradation provision of OWQS Section 3: No degradation shall be allowed in high quality waters which constitute an outstanding resource or in waters of exceptional recreational or ecological significance. with the corresponding language in EPA's model antidegradation regulations (40 C.F.R. 131.12(a)(3)): Where high quality waters constitute an outstanding National resource, such as * * * waters of exceptional recreational or ecological significance, that water quality shall be maintained and protected. /21/ Most notably, in footnote 47 of the opinion (App., infra, 76a-79a), the court severely criticized the ALJ's understanding of certain expert testimony. In doing so, however, the court took statements of the ALJ out of context, focused on the irrelevant, and materially misconceived what the ALJ did say. The first error ascribed to the ALJ is an alleged failure to recognize that algae can consume, as well as produce, oxygen. Id. at 76a, 84a. In fact, all the ALJ was saying was that Dr. Walker erred in not recognizing that photosynthesis by algae increases oxygen (a fact the court concedes); to infer from that statement that the ALJ did not recognize that other processes could also consume oxygen is unwarranted conjecture. The second basic error ascribed to the ALJ concerns phosphorus assimilation. Id. at 77a-78a, 84a. Here, the court apparently misunderstood the ALJ's point, which was that the testimony showed that increased flow would increase the assimilative capacity of the stream, and that that would be particularly beneficial in summer when algae flourish and the flow would otherwise be low. In any event, Dr. Walker (whom the court recognized as "eminently qualified," id. at 77a n. 47) testified that there would be no measurable phosphorus increase at the state line from the Fayetteville discharge. Tr. 702-703. This testimony surely provides adequate support for the ALJ's conclusion that the antidegradation provision would not be violated by the phosphorus in the Fayetteville effluent. /22/ Indeed, the court's misconception led it into the further error of believing that the water quality of the river itself could constitute a violation of an antidegradation provision. See, e.g., App., infra, 61a-62a, 90a. That is a flawed and unworkable concept. Unlike designated use standards and numeric criteria, antidegradation provisions are designed to protect the status quo -- particular discharges may of course violate the antidegradation provision, but that provision takes the river as it is; it is designed to prevent backsliding. /23/ The court's discussion on this matter is somewhat obscure. The court notes EPA's finding that the challenged discharge will have no detectable impact on Oklahoma waters, observing (App., infra, 89a, footnote omitted), "(w)hile this may prove true (and we pass no judgment thereon), we reject the argument" that the antidegradation provision is therefore satisfied. Apparently the court believes that the first adverse impact must be detectable, but subsequent ones need not be. See id. at 90a-91a. The regulation itself, of course, contains no such distinction between initial and subsequent discharges -- it simply prohibits "degradation". /24/ As Oklahoma itself observed in briefing before EPA, "any detectible (sic) increase in any 'wastes', defined as '(i)ndustrial waste and all other liquid, gaseous or solid substances which may pollute or tend to pollute any waters of the State,' will be a violation of the (scenic river) designation" (emphasis added). A.R. Doc. B146, at 45. /25/ The Oklahoma antidegradation provision does not, of course, establish any such benchmark date. The court simply adopted the date the river was designated under the Oklahoma Scenic Rivers Act, Okla. Stat. tit. 82, Section 1452(b)(1) (1970). That statute, however, bears no direct relation to Oklahoma's water quality standards. It simply recognizes that the designated part of the Illinois River is among those state rivers that should be preserved because of their "unique natural scenic beauty, water conservation, fish, wildlife and outdoor recreational values." Okla. Stat. tit. 82, Section 1452(a) (1970). While the date of designation under that statute is certainly one possible benchmark date, it is not readily apparent why it is preferable to any other historic date -- or even to some theoretical time when the river was in a "pristine" condition. /26/ The parties, EPA's Administrative Law Judge, and EPA's Chief Judicial Officer all accepted the traditional view that Oklahoma's antidegradation provision requires compliance to be measured from existing water quality. App., infra, 48a. Therefore, the record below simply does not address the issue created by the court's novel interpretation of the antidegradation provision, and the court supported its application of that provision to these facts by concluding that "(t)he record contains substantial evidence from which the ALJ could have found that the water quality of the Illinois scenic river has been degraded." Id. at 61a. This distortion of the proper scope of judicial review is by itself a significant departure from the accepted and usual course of judicial proceedings. See Rule 10 of the Rules of this Court. /27/ Nor is it entirely clear whether the court intended this policy to apply only to "high quality waters" subject to an antidegradation policy similar to Oklahoma's, or whether it was intended to apply to any application for a permit to discharge into waters not presently in compliance with any applicable standard. Cf. 40 C.F.R. 122.4(d) (requiring permit for additional discharges into non-complying waters to contain conditions that will assure compliance). APPENDIX