Arkansas v. Oklahoma

The Clean Water Act provides for two sets of water quality measures: effluent limitations, which are promulgated by the Environmental Protection Agency (EPA or Agency), and water quality standards, which are promulgated by the States. The Act generally prohibits the discharge of effluent into a navigable body of water unless the point source obtains a National Pollution Discharge Elimination System (NPDES) permit from a State with an EPA-approved permit program or from the EPA itself. A Fayetteville, Arkansas, sewage treatment plant received an EPA-issued permit, authorizing it to discharge effluent into a stream that ultimately reaches the Illinois River upstream from the Oklahoma border. Respondents, Oklahoma and other Oklahoma parties, challenged the permit before the EPA, alleging, inter alia, that the discharge violated Oklahoma water quality standards, which allow no degradation of water quality in the upper Illinois River. The EPA's Chief Judicial Officer remanded the initial affirmance of the permit by the Administrative Law Judge (ALJ), ruling that the Act requires an NPDES permit to impose any effluent limitations necessary to comply with applicable state water quality standards, and that those standards would be violated only if the record shows by a preponderance of the evidence that the discharge would cause an actual detectable violation of Oklahoma's water quality standards. The ALJ then made detailed findings of fact, concluding that Fayetteville had satisfied the Chief Judicial Officer's standard, and the Chief Judicial Officer sustained the permit's issuance. The Court of Appeals reversed, ruling that the Act does not allow a permit to be issued where a proposed source would discharge effluent that would contribute to conditions currently constituting a violation of applicable water quality standards. It concluded that the Illinois River was already degraded, that the Fayetteville effluent would reach the river in Oklahoma, and that the effluent would contribute to the river's deterioration even though it would not detectably affect the river's water quality.

'''[p. 92]' Held:'' The EPA's action was authorized by the Clean Water Act. Pp. 98–114.

(a) Where interstate discharge is involved, both federal common law of nuisance, Milwaukee v. Illinois, 451 U.S. 304, and an affected State's common law, International Paper Co. v. Ouellette, 479 U.S. 481, 493, are pre-empted. Affected States may not block a permit, but must apply to the EPA Administrator, who may disapprove a plan if he concludes that the discharge will have an undue impact on interstate waters. Id., at 490–491. Pp. 98–101.

(b) The EPA has construed the Act as requiring that EPA-issued permits comply with the requirements for a permit issued under an approved state plan and with §401(a) of the Act, which appears to prohibit the issuance of a federal permit over the objection of an affected State unless compliance with the affected State's water quality requirements can be insured. Pp. 101–103.

(c) The EPA's requirement that the Fayetteville discharge comply with Oklahoma's water quality standards is a reasonable exercise of the substantial statutory discretion Congress has vested in the Agency. There is no need to address the question whether the Act requires compliance with affected States' standards, for it clearly does not limit the EPA's authority to mandate such compliance. EPA regulations, which since 1973 have required that an NPDES permit not be issued when compliance with affected States' water quality standards cannot be insured, are a reasonable exercise of the Agency's discretion and are a well-tailored means of reaching the Act's goal of achieving state water quality standards. The EPA's authority is not constrained by the limits in Ouellette, supra, concerning an affected State's direct input into the permit process, does not conflict with the Act's legislative history and statutory scheme, and is not incompatible with the balance among competing policies and interests that Congress struck in the Act. Pp. 104–107.

(d) Contrary to the Court of Appeals’ interpretation, nothing in the Act mandates a complete ban on discharges into a waterway that is in violation of existing water quality standards. Instead, the Act vests in the EPA and the States broad authority to develop long-range, areawide programs to alleviate and eliminate existing pollution. Pp. 107–108.

(e) The Court of Appeals exceeded the legitimate scope of judicial review of an agency adjudication when it invalidated the EPA’s issuance of the permit on the ground that the Agency misinterpreted Oklahoma's water quality standards. It substituted its own reading of the law for the EPA's. Thus, it failed to give substantial deference to the Agency's reasonable, consistently held interpretation of its own regulations, which incorporate the Oklahoma standards. It also disregarded well- '''[p. 93]''' established standards for reviewing factual findings of agencies by making its own factual findings when the ALJ's findings were supported by substantial evidence. See generally Universal Camera Corp. v. NLRB, 340 U.S. 474. As a result, the court's conclusion that the river's degradation was an important and relevant factor which the EPA failed to consider was based on its own erroneous interpretation of the controlling law. Had it been properly respectful of the EPA's permissible reading of the Act—that what matters is not the river's current status, but whether the proposed discharge will have a detectable effect on that status—it would not have adjudged the Agency's decision arbitrary and capricious. Pp. 109–114.

908 F.2d 595, reversed.

Stevens, J., delivered the opinion for a unanimous Court.

Edward W. Warren argued the cause for petitioners in No. 90–1262. With him on the briefs were Winston Bryant, Attorney General of Arkansas, Mary B. Stallcup, Angela S. Jegley, David G. Norrell, James N. McCord, Walter R. Niblock, and Nancy L. Hamm. Deputy Solicitor General Wallace argued the cause for petitioner in No. 90–1266. With him on the briefs were Solicitor General Starr, Assistant Attorney General Stewart, Harriet S. Shapiro, Michael A. McCord, Anne S. Almy, Gary S. Guzy, and E. Donald Elliott.

Robert A. Butkin, Assistant Attorney General of Oklahoma, argued the cause for respondents in both cases. With him on the brief for respondents State of Oklahoma et al. were Susan B. Loving, Attorney General, Brita Haugland Cantrell, Assistant Attorney General, and Julian Fite. Theodore E. Dinsmoor and Susan Hedman filed a brief for respondent Oklahoma Wildlife Federation.