Food and Water Watch v. United States Environmental Protection Agency , 5 F. Supp. 3d 62 ( 2013 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
FOOD AND WATER WATCH and :
FRIENDS OF THE EARTH :
:
Plaintiffs, : Civil Action No.: 12-1639 (RC)
:
v. : Re Document Nos.: 35, 36
:
UNITED STATES ENVIRONMENTAL :
PROTECTION AGENCY and :
BOB PERCIASEPE, Acting Administrator :
:
Defendants. :
MEMORANDUM OPINION
GRANTING DEFENDANTS’ MOTIONS TO DISMISS
I. INTRODUCTION
The plaintiffs in this action challenge the Environmental Protection Agency’s (“EPA”)
“authorization” of pollution trading and offsets outlined in its 2010 Chesapeake Bay Total
Maximum Daily Loads (“Bay TMDL”). They allege that the “authorization” of pollution trading
and offsets is contrary to the Clean Water Act, and arbitrary and capricious in violation of the
Administrative Procedure Act (“APA”). They also allege that the “authorization” of pollution
trading and offsets violates the APA’s requirement for Notice and Comment Rulemaking. The
defendants and defendant-intervenors1 moved to dismiss the Complaint for lack of subject matter
1
The Court granted two motions to intervene in this case on February 1, 2013:
collectively to the American Farm Bureau Federation and the National Association of Home
Builders, and collectively to the National Association of Clean Water Agencies, Virginia
Association of Municipal Wastewater Agencies, Virginia Nutrient Credit Exchange Association,
Inc., Maryland Association of Municipal Wastewater Agencies, Inc., North Carolina Water
jurisdiction because, they allege, the plaintiffs do not have standing. In addition, the defendants
moved to dismiss the Complaint for failure to state a claim because, they allege, the plaintiffs do
not challenge a final agency action in this case. For the reasons that follow, the Court will grant
the defendants’ motions to dismiss on both grounds.
II. FACTUAL BACKGROUND
A. Statutory Background
The Clean Water Act (“CWA”) was implemented to “restore and maintain the chemical,
physical, and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251 (a). The Act
contemplates collaborative efforts between the Federal Government, through the EPA, and State
governments “to develop comprehensive solutions to prevent, reduce, and eliminate pollution in
concert with programs for managing water resources.” Id. § 1251(g).
The CWA specifies that “the discharge of any pollutant by any person shall be unlawful.”
33 U.S.C. § 1311(a). The CWA recognizes two types of pollutant sources: point and nonpoint.
Point sources are defined in the CWA as “any discernible, confined, and concrete conveyance,
including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure . . .
from which pollutants are or may be discharged.” 33 U.S.C. § 1362(14). Nonpoint sources are
not defined in the CWA, but in the regulations promulgating it, and are defined as “not traceable
to a discrete identifiable origin, but [as] generally result[ing] from land runoff, precipitation,
drainage, or seepage.” 40 C.F.R. § 35.1605-4.
Quality Association, Inc., the West Virginia Municipal Water Quality Association, Inc., and
CSO Partnership, Inc. See ECF No. 19. Though the latter group filed an answer, it never filed
any dispositive motions, only the former group did. ECF Nos. 20, 34, 35. The latter group of
intervenors will nevertheless still be bound by this Court’s judgment. See Schneider v.
Dumbarton Developers, Inc., 767 F.2d 1007, 1017 (D.C. Cir. 1985) (“When a party intervenes, it
becomes a full participant in the lawsuit and is treated just as if it were an original party. The
intervenor renders itself ‘vulnerable to complete adjudication by the federal court of the issues in
litigation between the intervenor and the adverse party.’” (citation omitted)).
2
There are two main ways the CWA controls the discharge of these two sources into
navigable waters of the United States: through technology-based controls and through water
quality standards. See, e.g., Bravos v. Green, 306 F. Supp. 2d 48, 50-51 (D.D.C. 2004). The
main technology-based regulation implemented by the CWA is the National Pollutant Discharge
Elimination System (“NPDES”). That system only regulates point sources, and does so by
allowing the EPA Administrator, and/or the States, to issue permits for the discharge of a point
source pollutant. 33 U.S.C. § 1342. The regulations implementing the NPDES system specify
that “no permit may be issued [w]hen the conditions of the permit do not provide for compliance
with the applicable requirements of CWA, or regulations promulgated under CWA.” 40 C.F.R.
§ 122.4(a). States are authorized to adopt programs for issuing permits to point sources, but the
EPA retains the authority to object to an inadequate State permit and to issue a federal permit
instead. 33 U.S.C. § 1342(d). The anti-backsliding provision of the permit system provides that
“a permit may not be renewed, reissued, or modified on the basis of effluent guidelines . . . to
contain effluent limitations2 which are less stringent than the comparable effluent limitations in
the previous permit.” 33 U.S.C. § 1342(o).
The other main way the CWA seeks to control the discharge of pollutants, point source
and nonpoint source alike, is through the water quality standards (“WQS”) process outlined in
Section 303 of the CWA, and codified in 33 U.S.C. § 1313. Section 1313 specifies that “each
State shall identify those waters within its boundaries for which the effluent limitations . . . are
not stringent enough to implement any water quality standard applicable to such waters.” 33
2
In order to carry out the objectives of the CWA, “there shall be achieved . . .
effluent limitations. . . .” 33 U.S.C. § 1311(b)(1)(A). “Effluent limitation means any restriction
imposed by the Director on quantities, discharge rates, and concentrations of ‘pollutants’ which
are ‘discharged’ from ‘point sources’ into the ‘waters of the United States.’” See 40 C.F.R. §
122.2.
3
U.S.C. § 1313(d)(1)(A). “Each State shall [also] establish for the waters identified in paragraph
(1)(A) . . . the total maximum daily load (“TMDL”), for those pollutants which the Administrator
identifies . . . as suitable for such calculation.” Id. § 1313(d)(1)(C). The regulations
implementing the CWA specify that States are to “identify those water quality-limited segments
(“WQLS”)3 still requiring TMDLs within its boundaries for which technology-based effluent
limitations . . . are not stringent enough to implement any water quality standards applicable to
such waters.” 40 C.F.R. § 130.7(b)(1)(i)-(iii).
Under § 1313(d)(2), the State shall submit to the Administrator the waters identified and
the loads established in sections (1)(A), (1)(B), and (1)(C), and the Administrator shall either
approve those identifications and loads, or if the Administrator does not approve the
identifications and loads, the Administrator “shall identify such waters in such State and
establish such loads for such waters as he determines necessary to implement the water quality
standards applicable to such waters,” and then the State shall incorporate them into its
“continuing planning process,” as codified in § 1313(e). See 33 U.S.C. § 1313(d)(2). Each State
is to “have a continuing planning process” to ensure that it comports with the TMDL that either
it, or the EPA sets. See 33 U.S.C. § 1313(e).
Though there is no NPDES analogue for nonpoint sources, the EPA can use federal
grants to encourage states to address nonpoint source pollution and implement the load
allocations established in a TMDL. See 33 U.S.C. § 1329(h). See also Chesapeake Bay TMDL
ES-8 (“nonpoint sources are not covered by a similar federal permit program; as a result,
3
A water quality limited segment is defined as “[a]ny segment where it is known
that water quality does not meet applicable water quality standards, and/or is not expected to
meet applicable water quality standards, even after the application of the technology-based
effluent limitations required by sections 301(b) and 306 of the Act.” 40 C.F.R. § 130.2(j).
4
financial incentives, other voluntary programs and state-specific regulatory programs are used to
achieve nonpoint source reductions”).
Because this action arises specifically from the EPA’s establishment of the Chesapeake
Bay TMDL, it is useful to describe what, exactly, a TMDL is. A TMDL is the “total maximum
daily load” of a given pollutant that can be added into a navigable water of the United States on a
given day. It essentially “identifies the maximum amount of a pollutant that can be added to a
body of water consistent with attaining applicable water quality standards.” EPA’s Mot. to
Dismiss 4, ECF No. 36. The way this number is calculated is defined in 40 C.F.R. § 130.2(i),
and it turns largely on the amount of point and nonpoint sources of pollution in that particular
body of water. “The portion of a receiving water’s loading capacity that is allocated to one of its
existing or future point sources of pollution” is known as the wasteload allocation (“WLA”). 40
C.F.R. § 130.2(h) (emphasis added). “The portion of a receiving water’s loading capacity that is
attributed either to one of its existing or future nonpoint sources of pollution” is known as the
load allocation (“LA”). Id. § 130.2(g) (emphasis added). The TMDL is the sum of the LA and
the WLA, plus a “margin of safety.” Id. § 130.2(i); 33 U.S.C. §§ 1313(d)(1)(C), (d)(1)(D). See
also Chesapeake Bay TMDL 1-2.
B. The Chesapeake Bay TMDL
The Chesapeake Bay is the largest estuary in the United States and one of the largest and
most biologically productive estuaries in the world. See Chesapeake Bay Protection and
Restoration, 74 Fed. Reg. 23,099, 23,099 (May 12, 2009). Unfortunately, and despite
decades-long efforts by federal and state regulators, the Bay remains widely polluted, which has
prevented “the attainment of existing State water quality standards and the ‘fishable and
swimmable’ goals of the Clean Water Act.” See id. The main pollutants in the Bay are nitrogen,
5
phosphorus and sediment. See Chesapeake Bay TMDL 2-7, ECF No. 36-1.4 These pollutants
generally come from point sources such as municipal wastewater facilities and industrial
discharge facilities; and from nonpoint sources such as agricultural lands and other runoff. See
id. at 4-1.
On December 29, 2010, the EPA established the Chesapeake Bay TMDL because the
State TMDLs were not achieving the water quality standards mandated by the CWA. See
Chesapeake Bay TMDL ES-1. The TMDL establishes final load allocations (from both point
and nonpoint sources of pollution) for the entire Chesapeake Bay and it “identifies the necessary
pollution reductions of nitrogen, phosphorus, and sediment across Delaware, Maryland, New
York, Pennsylvania, Virginia, West Virginia, and the District of Columbia and sets pollution
limits necessary to meet applicable water quality standards in the Bay and its tidal rivers and
embayments.” Chesapeake Bay TMDL ES-1.
Because the finality and legality of the TMDL are in dispute in this case, it is helpful to
outline several of its key provisions. The Executive Summary of the TMDL explains EPA’s
process in establishing the numbers set out in the TMDL. See Chesapeake Bay TMDL ES-1‒5.
EPA collaborated with the Chesapeake Bay jurisdictions (Delaware, Maryland, Virginia,
Pennsylvania, New York, West Virginia, and the District of Columbia) to arrive at the various
loading allocations. Each State submitted its own Watershed Implementation Plan (“WIP”) that
details how each State will implement the TMDL in its own State to achieve its jurisdiction-
specific pollutant loading allocations. The EPA and the Bay jurisdictions went back-and-forth
exchanging drafts of loading allocations, and the draft TMDL was published for a 45-day public
comment period. The EPA then evaluated each State’s WIP, along with all the public comments
4
also available at http://www.epa.gov/reg3wapd/tmdl/ChesapeakeBay
/tmdlexec.html.
6
to arrive at the TMDL it finally published on December 29, 2010. Id. at ES-5. The WIPs “are
the roadmap for how the jurisdictions, in partnership with federal and local governments, will
achieve and maintain the Chesapeake Bay TMDL nitrogen, phosphorus, and sediment
allocations.” Id. at 7-6.
Section 10 of the TMDL, whose provisions are most in dispute in this case, outlines
EPA’s expectations for how States will keep pollution levels down despite future population
growth. Section 10 begins by discussing offsets, which “[f]or purposes of the Chesapeake Bay
TMDL, means . . . compensating for the loading of a pollutant of concern from a point or
nonpoint source with a reduction in the loading from a different source or sources, in a manner
consistent with meeting WQS.” Chesapeake Bay TMDL, Appendix S-2. Section 10.1.2 notes
that the “EPA expects that new or increased loadings of nitrogen, phosphorus, and sediment in
the Chesapeake Bay that are not specifically accounted for in the TMDL’s WLA or LA will be
offset by loading reductions and credits generated by other sources . . . .” Id. at 10-1 (emphasis
added). The EPA also states that it “encourages and expects that the jurisdictions will generally
develop and implement programs for offsetting new and increased loadings consistent with the
definitions and common elements described in Appendix S . . . .” Id. (emphasis added).
Section 10.2 covers water quality trading. The EPA has defined trading as an approach
that “allows one source to meet its regulatory obligations by using pollutant reductions created
by another source that has lower pollution control costs. Trading capitalizes on economies of
scale and the control cost differentials among and between sources.” See United States
Environmental Protection Agency, Final Water Quality Trading Policy 1, January 13, 2003
(“Final Water Quality Trading Policy”).5 With respect to water quality trading, “EPA recognizes
5
available at http://water.epa.gov/type/watersheds/trading/upload
7
that a number of Bay jurisdictions already are implementing water quality trading programs.
EPA supports implementation of the Bay TMDL through such programs, as long as they are
established and implemented in a manner consistent with the CWA, its implementing regulations
and the EPA’s Water Quality Trading Policy and 2007 Water Quality Trading Toolkit for
NPDES Permit Writers.” Id. at 10-3 (emphasis added). The EPA also states that “an assumption
of this TMDL is that trades may occur between sources contributing pollutant loadings to the
same or different Bay segments, provided such trades do not cause or contribute to an
exceedance of WQS in either receiving segment or anywhere else in the Bay watershed.” Id.(emphasis added). In addition, EPA notes that it “does not support any trading activity that
would delay or weaken implementation of the Bay TMDL that is inconsistent with the
assumptions and requirements of the TMDL.” Id.Appendix S of the TMDL outlines the common elements from which the EPA “expects”
the jurisdictions to develop and implement offset programs. See id. at S-1‒S-2. Appendix S
goes on to note that, “[t]hose common elements are not presented here as regulatory
requirements. However, EPA believes that in the aggregate, they will help to ensure that offsets
are achieved through reliable pollution controls and that the goals of the Bay TMDL are met
. . . .” Id. (emphasis added).
The EPA’s authority to oversee such a comprehensive management plan stems in part
from 33 U.S.C. § 1313(e) and in part from 33 U.S.C. § 1267(g), which states that the
“Administrator, in coordination with other members of the Chesapeake Executive Council, shall
ensure that management plans are developed and implementation is begun by signatories to the
/2008_09_12_watershed_trading_finalpolicy2003.pdf.
8
Chesapeake Bay Agreement to achieve and maintain” the goals of the Chesapeake Bay
Agreement.6
C. Plaintiffs’ Allegations
Plaintiff Food and Water Watch is a non-profit organization that advocates for common
sense policies that will result in access to safe and healthy food and clean water. Am. Compl.
¶ 6, ECF No. 29. Its “members live, work, recreate, and own property in the lands and waters of
the Chesapeake Bay watershed.” Am. Compl. ¶ 7. Plaintiff Friends of the Earth, Inc., is a non-
profit environmental advocacy organization whose “mission is to defend the environment and
champion a healthy and just world.” Am. Compl. ¶ 8. Its members also live near and enjoy the
area surrounding the Chesapeake Bay watershed. Am. Compl. ¶ 9. Plaintiffs allege that the
Chesapeake Bay TMDL reflects the EPA’s “authorization” of offsets and water pollution trading
and that such “authorization of pollution trading is unlawful, arbitrary and capricious.” Am.
Compl. ¶¶ 88-96. In addition, they allege that “EPA’s authorization of offsets for new and
expanded pollutions sources is unlawful, arbitrary and capricious” and that “EPA’s authorization
of pollution trading and offsets violates notice and comment requirements under the APA.” Am.
Compl. ¶¶ 101-123.
Because of this “authorization,” plaintiffs allege that their members’ ability to enjoy the
Chesapeake Bay will be impaired. For instance, Food and Water Watch member Paul Stern
“lives near a new point source that will be allowed to discharge if and when it identifies offsets
6
The term “Chesapeake Bay Agreement” means “the formal, voluntary agreements
executed to achieve the goal of restoring and protecting the Chesapeake Bay ecosystem and the
living resources of the Chesapeake Bay ecosystem and signed by the Chesapeake Executive
Council.” See 33 U.S.C. § 1267(a)(2). The EPA explained in the TMDL that “[i]n establishing
the Bay TMDL, EPA acted pursuant to the consensus direction of the Chesapeake Executive
council’s PSC [principal’s staff committee] and in partnership with each of the seven
Chesapeake Bay watershed jurisdictions.” See Chesapeake Bay TMDL at 1-16.
9
as required by the TMDL.” Pl.’s Opp. Mot. to Dismiss 15, Stern Decl. ¶ 6, ECF No. 39-1.
Another member, Fred Tutman, alleges that “EPA’s authorization of pollution trading has and
will diminish his enjoyment of the beauty and natural resources of the Chesapeake Bay.” Pl.’s
Opp. Mot. to Dismiss 15, Tutman Decl. ¶ 5, ECF No. 39-5. Additionally, plaintiffs’ members
generally “are all concerned about the creation of hot[ ]spots in the Bay watershed where high
levels of pollution will exacerbate existing impairments.” Pl.’s Opp. Mot. to Dismiss 16, ECF
No. 39. They allege that “hotspots” are “created when one source increases its discharges into a
water body because it has purchased pollution credits from another source that has allegedly
decreased its discharges.” Pl.’s Opp. Mot. to Dismiss 14. The defendants have moved to
dismiss under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction, and under Fed. R.
Civ. P. 12(b)(6) for failure to state a claim. The Court now turns to the relevant legal standards.
III. ANALYSIS
A. Legal Standards
1. Motion to Dismiss for Lack of Subject Matter Jurisdiction (12(b)(1))
Federal courts are courts of limited jurisdiction, and the law presumes that “a cause lies
outside this limited jurisdiction . . . .” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,
377 (1994); see also Gen. Motors Corp. v. E.P.A., 363 F.3d 442, 448 (D.C. Cir. 2004) (“As a
court of limited jurisdiction, we begin, and end, with an examination of our jurisdiction.”). It is
the plaintiff’s burden to establish that the court has subject matter jurisdiction. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992).
Because subject matter jurisdiction focuses on the Court’s power to hear a claim, the
Court must give the plaintiff’s factual allegations closer scrutiny than would be required for a
12(b)(6) motion for failure to state a claim. See Grand Lodge of Fraternal Order of Police v.
10
Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001). Thus, the court is not limited to the allegations
contained in the complaint. See Wilderness Soc’y v. Griles, 824 F.2d 4, 16 n.10 (D.C. Cir.
1987). Instead, “where necessary, the court may consider the complaint supplemented by
undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus
the court’s resolution of disputed facts.” Herbert v. Nat’l Acad. of Scis., 974 F.2d 192, 197 (D.C.
Cir. 1992) (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981)).
The D.C. Circuit has explained that a motion to dismiss for lack of standing constitutes a
motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure because “the defect of
standing is a defect in subject matter jurisdiction.” Haase v. Sessions, 835 F.2d 902, 906 (D.C.
Cir. 1987). See also City of Harper Woods Employees’ Retirement Sys. v. Olver, 577 F. Supp. 2d
124, 128 (D.D.C. 2008) (“In this jurisdiction, a motion to dismiss for lack of standing is treated
as a challenge to the subject matter jurisdiction of the court, and is properly analyzed under Rule
12(b)(1).”).
2. Motion to Dismiss for Failure to State a Claim (12(b)(6))
The Federal Rules of Civil Procedure require that a complaint contain “a short and plain
statement of the claim” in order to give the defendant fair notice of the claim and the grounds
upon which it rests. Fed. R. Civ. P. 8(a)(2); accord Erickson v. Pardus, 551 U.S. 89, 93 (2007)
(per curiam). A motion to dismiss under Rule 12(b)(6) does not test a plaintiff’s ultimate
likelihood of success on the merits; rather, it tests whether a plaintiff has properly stated a claim.
See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other grounds by Harlow v.
Fitzgerald, 457 U.S. 800 (1982). A court considering such a motion presumes that the
complaint’s factual allegations are true and construes them liberally in the plaintiff’s favor. See,
e.g., United States v. Philip Morris, Inc., 116 F. Supp. 2d 131, 135 (D.D.C. 2000). It is not
11
necessary for the plaintiff to plead all elements of her prima facie case in the complaint. See
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511–14 (2002); Bryant v. Pepco, 730 F. Supp. 2d 25,
28–29 (D.D.C. 2010).
Nevertheless, “[t]o survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). This means that a plaintiff’s factual allegations “must be enough to raise a right to relief
above the speculative level, on the assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Twombly, 550 U.S. at 555–56 (citations omitted). “Threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements,” are
therefore insufficient to withstand a motion to dismiss. Iqbal, 556 U.S. at 678. A court need not
accept a plaintiff’s legal conclusions as true, see id., nor must a court presume the veracity of the
legal conclusions that are couched as factual allegations. See Twombly, 550 U.S. at 555.
B. Standing
The defendants first argue that the plaintiffs do not have standing to bring this case, and
for that reason, the court lacks subject matter jurisdiction to hear it. In order to demonstrate
Article III standing, a plaintiff must meet three requirements. First, “the plaintiff must have
suffered an injury in fact—an invasion of a legally protected interest which is (a) concrete and
particularized, and (b) actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at
560 (citations omitted). “Second, there must be a causal connection between the injury and the
conduct complained of—the injury has to be fairly traceable to the challenged action of the
defendant, and not the result of the independent action of some third party not before the court.”
Id. at 560-561 (citations omitted). Finally, “it must be likely, as opposed to merely speculative,
12
that the injury will be redressed by a favorable decision.” Id. at 561. To establish standing to
sue on behalf of its members, an organization must demonstrate that “its members would have
standing to sue in their own right, the interests at stake are germane to the organization’s
purpose, and neither the claim asserted nor the relief requested requires members’ participation
in the lawsuit.” Consumer Fed’n of Am. v. F.C.C., 348 F.3d 1009, 1011 (D.C. Cir. 2003)
(quoting Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977)).
1. Injury
With respect to the injury, “[a] prospective plaintiff must show that it has suffered a
concrete and particularized injury in order to convince the court that it is sufficiently involved in
the current legal dispute to have a defined and personal stake in the outcome of the litigation.”
Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 663 (D.C. Cir. 1996). The Supreme Court has
“repeatedly reiterated that the threatened injury must be certainly impending to constitute injury
in fact, and that allegations of possible future injury are not sufficient.” Clapper v. Amnesty
Intern., USA, 133 S. Ct. 1138, 1147 (2013) (emphasis in original, internal quotation marks
omitted). The plaintiffs allege that their members are “fearful of using waters contaminated by
NPDES permit holders who discharge excess pollutants pursuant to trading and offset
programs.” Am. Compl. ¶¶ 7, 9. To show that their injuries are particularized, the plaintiffs cite
declarations by various members whose use and enjoyment of the Chesapeake Bay will be
impaired because of EPA’s “authorization” of the offset and trading program. For instance, one
member alleges that EPA’s “authorization” of pollution trading has and will diminish his
enjoyment of the beauty and natural resources of the Chesapeake Bay, because the issuance of
certain NPDES permits by state agencies will lead to the creation of “hotspots” and other over-
polluted areas in the Bay. See Walls Decl. ¶ 25, ECF No. 39-3. Another individual member “is
13
concerned that increased pollution and sediments from new or increased discharges will impede
his ability to enjoy” walking, hiking, and kayaking near the Chesapeake Bay. See Stern Decl. ¶¶
11-12; see also Tutman Decl. ¶ 22. Such aesthetic, recreational injuries are cognizable injuries-
in-fact. See, e.g., Friends of the Earth, Inc. v. Laidlaw Envt’l. Svcs. (TOC), Inc., 528 U.S. 167,
183 (2000) (“environmental plaintiffs adequately allege injury in fact when they aver that they
use the affected area and are persons for whom the aesthetic and recreational values of the area
will be lessened by the challenged activity.” (citations omitted)); Sierra Club v. Morton, 405
U.S. 727, 734 (1972).
The plaintiffs’ standing problem, however, is not the lack of a particularized injury7—it is
the lack of an actual or imminent one. To show that their injury is actual or imminent, the
plaintiffs allege, through declarations by their members, that their use and enjoyment of the
Chesapeake Bay will be affected by the creation of “hotspots” once various state agencies start
granting new or modified NPDES permits to would-be polluters. Pl.’s Opp. Mot. to Dismiss 14-
16. The plaintiffs also allege that the West Virginia Department of Environmental Protection’s
(“WVDEP”) granting of a “NPDES permit to Mountain Springs Utility is one such offset that
injures Plaintiffs’ members.” Id. at 18. They also allege that WVDEP has “permitted a permit
modification on an offset for the Jefferson County Public Service District,” and that Maryland
“began a process to certify farms for credit generation.” Id. at 19.
The creation of “hotspots” by the issuance of such permits is neither actual nor imminent.
There is no indication that the trading and offset programs supported by—but not required or
7
To the extent the plaintiffs allege that their injury is a procedural one in that the
EPA violated the APA’s notice-and-comment requirement (see Pl.’s Opp. Mot. to Dismiss 26,
EPA’s Mot. to Dismiss 18), it is clear that “the deprivation of a procedural right without some
concrete interest that is affected by the deprivation—a procedural right in vacuo—is insufficient
to create Article III standing.” Summers v. Earth Island Institute, 555 U.S. 488, 496 (2009).
14
“authorized” by—the EPA will result in the creation of “hotspots” of pollution. The plaintiffs
offer no support beyond their own conclusory allegations that “hotspots” have been, or
necessarily will be created by the offset and trading programs. They describe “hotspots” as areas
“where increased discharges of pollutants will occur resulting in water quality that is worse than
other areas in the watershed.”8 Id. at 14. However, all the provisions of the TMDL and the Bay
jurisdictions’ WIPs specifically state that any implementation program must comply with the
requirements of the CWA and the TMDL itself. To the extent trades and permits were and are
granted by the various state agencies, such offsets would still have to comport with the TMDL
and the CWA, and no offset or trade could be permitted if it would result in an “exceedance of
WQS [water quality standard] in either receiving segment or anywhere else in the Bay
watershed.” Chesapeake Bay TMDL at 10-3. Nor could any trading or offsetting occur if it
would “delay or weaken implementation of the Bay TMDL, [or be] inconsistent with the
assumptions and requirements of the TMDL.” Id. Nor could a permit issue “[w]hen the
imposition of conditions cannot ensure compliance with the applicable water quality
requirements of all affected States.” 40 C.F.R. § 122.4(d). As the defendants aptly note, the
plaintiffs “fail to explain how any trading or offsets authorized by a State could override the
[CWA’s] overarching command that a point source discharge that does not comply with a permit
is a violation of the Act.” EPA’s Mot. to Dismiss 17, ECF No. 36. The creation of “hotspots”
(to the extent such creation even results in an actionable injury) in other words, is highly
speculative and therefore not “certainly impending” enough to show an actual or imminent injury
for purposes of Article III. See Clapper, 133 S. Ct. at 1147.
8
Plaintiffs do not explain whether this term is a term of art that derives from the
CWA, its implementing regulations, or the case law interpreting them. In fact, it is not clear that
the creation of a “hotspot” necessarily violates the CWA.
15
Additionally, the plaintiffs’ complaints about the State agencies’ actions do not establish
an actual or imminent injury. As the EPA points out in its reply brief, the WVDEP has rescinded
the certificate of convenience and necessity for the Flowing Spring Wastewater Treatment Plant
that the plaintiffs indicated would lead to an offset of 500 lbs/year of nitrogen downstream. See
EPA’s Reply 15-16, ECF No. 42; West Virginia Department of Environmental Protection Letter
from Scott Mandirola at 2, ECF No. 39-3 (explaining the modification of a permit for the
Flowing Springs Wastewater Treatment Plant); EPA’s Reply Brief Ex. A, Public Service
Commission of West Virginia Commission Order at 22, ECF No. 42-1 (ordering that “the
District petition for approval of revised financing and post-project rates for its Flowing Springs
Project is denied and the previously issued certificate of convenience and necessity for the
Flowing Springs project is rescinded.” (emphasis added)). Therefore, the permit modification—
issued in 2006, well before the creation of the TMDL—is moot because the plant whose loads it
authorized will not be financed, and therefore will not be constructed.
The Mountain Springs Utility also poses no injury to the plaintiffs—actually or
imminently. The plaintiffs essentially note this themselves saying that the Utility will be allowed
to discharge extra pollutants “once it identifies an offset.” Pl.’s Opp. Mot. to Dismiss 19
(emphasis added). See also id. at 15 (“Paul Stern . . . lives near a new point source that will be
allowed to discharge if and when it identifies offsets as required by the TMDL.” (emphasis
added)). See also Stern Decl. ¶ 9 (“the agency does not allow any operation or discharge of any
phosphorus or nitrogen from the wastewater treatment plant under any circumstances until
appropriate offsets have been obtained” (emphasis added)). The permit the plaintiffs fear will
cause increased levels of pollution, therefore, is not even in effect, and it will not be until the
Utility identifies an offset that comports with the requirements of the Bay TMDL, and more
16
importantly the CWA. Thus, it is not “certainly impending” that any injurious discharges will
occur if lawful offsets cannot be identified by the plant, and thus the plaintiffs may never suffer
an injury. Moreover, and as set forth above, even if permitted discharges begin, there is no
indication that such discharges will cause the plaintiffs any actionable injury. Each permit
issuance and modification must comport with the requirements of the Bay TMDL and the CWA.
See, e.g., Pl.’s Opp. Mot. to Dismiss, WVDEP letter, ECF No. 39-1 (“the nitrogen and
phosphorus loadings associated with this new discharge must be offset so that there is no net
increase in loading to the Chesapeake Bay”); 33 U.S.C. § 1342(o) (“a permit may not be
renewed, reissued, or modified on the basis of effluent guidelines . . . to contain effluent
limitations which are less stringent than the comparable effluent limitations in the previous
permit”). There is no indication that, even if offsets are identified and permitted discharges
begin, that such discharges will not comport with that relevant water segment’s TMDL, contain
higher pollutants than allowed under the previous permit, or not comport with the CWA. The
purported injury that the plaintiffs envision is thus far too speculative, as the entire purpose of
the Bay TMDL is to reduce the amount of pollution in the Chesapeake Bay—not to increase it.
2. Traceability
Even if the plaintiffs could show that their injury was actual or imminent, they would still
have a serious traceability problem. The Supreme Court has stated that “[w]hen the suit is one
challenging the legality of government action or inaction . . . [and] a plaintiff’s asserted injury
arises from the government’s allegedly unlawful regulation of someone else . . . it becomes the
burden of the plaintiff to adduce facts showing that those choices have been or will be made in
such a manner as to produce causation and permit redressability of injury.” Lujan, 504 U.S. at
561-62. See also Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 29, 41-42 (1976) (“Art. III
17
still requires that a federal court act only to redress injury that fairly can be traced to the
challenged action of the defendant, and not injury that results from the independent action of
some third party not before the court.”). The D.C. Circuit has explained that “[w]hen a
plaintiff’s asserted injury arises from the Government’s regulation of a third party not before the
court, it becomes ‘substantially more difficult to establish standing.’” Nat’l Wrestling Coaches
Ass’n v. Dep’t of Educ., 366 F.3d 930, 938 (D.C. Cir. 2004) (citing Lujan, 504 U.S. at 562).
The plaintiffs make two arguments on causation. First, they argue that the EPA’s
references to offsets and trades in the Bay TMDL has indirectly caused their injury “through
authorization,” citing Animal Legal Def. Fund, Inc. v. Glickman, 154 F.3d 426, 440-44 (D.C. Cir.
1998) (en banc) and Am. Road & Transp. Builders Ass’n v. E.P.A., 588 F.3d 1109 (D.C. Cir.
2009), for the proposition that even if the EPA itself did not directly cause the plaintiffs’ injuries,
it could still satisfy the traceability requirement through authorization of third party conduct that
directly caused the plaintiffs’ injuries.9 See Pl.’s Opp. Mot. to Dismiss 20-21. Second, the
plaintiffs argue that the EPA’s references to offsets and trades in the Bay TMDL has directly
caused their injury by coercing and “strong-arming” States into implementing offset and trading
programs, thereby serving as a proxy for a command.10 See Pl.’s Opp. Mot. to Dismiss 22-23.
As to this point, the plaintiffs argue that “EPA essentially requires” States to adopt offsets and
trading programs to comply with the Bay TMDL, and that the EPA’s review of the States’
9
As another court explained: “[c]ausation and redressability thus are satisfied
[where] . . . the intervening choices of third parties are not truly independent of government
policy.” Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930, 940-41 (D.C. Cir.
2004). Importantly, in the D.C. Circuit, “a federal court may find that a party has standing to
challenge government action that permits or authorizes third-party conduct that would otherwise
be illegal in the absence of the Government’s action.” Id. at 940 (emphasis added). In this case,
the third party conduct “authorized”— offset and trading programs—would not “otherwise be
illegal in the absence of the Government’s action.”
10
Given the plaintiffs’ litigation position that offset and trading programs violate the
CWA, it appears that their “concern” about such coercion is strategic rather than empathetic.
18
implementation plans “constitutes de facto approval authority” of the offset and trading
programs. Id. at 9, 22 (emphasis added).
The plaintiffs are incorrect on both counts for similar reasons. First, the Bay TMDL does
not authorize offset or trading programs. The plaintiffs’ repetition of that assertion throughout
their opposition does not make it more true. The trading program being challenged here has
been approved by the EPA since 2003 (at the latest), when the EPA established its Water Quality
Trading Policy Statement. See generally Final Water Quality Trading Policy. Since (or even
before) then, many States have engaged in trading and offset programs to achieve desired water
quality levels, including States in the Chesapeake Bay. See, e.g., VA. CODE ANN. § 62.1-
44.19:12 (West 2013) (explaining that because of the 2000 Chesapeake Bay Agreement, the
“General Assembly finds and determines that adoption and utilization of a watershed general
permit and market-based point source nutrient credit trading program will assist” in achieving
water quality) (emphasis added); 25 PA. CODE § 96.8 ([Oct. 9,] 2010) (outlining the use of
offsets and tradable credits from pollution reduction in the Chesapeake Bay watershed);
Chesapeake Bay TMDL 10-3 (“EPA recognizes that a number of Bay jurisdictions are already
implementing water quality trading programs.”). In addition, offset programs have been
authorized and supported by the EPA since at least the 1980s. See, e.g., Environmental
Protection Agency, Office of Water, A Summary of U.S. Effluent Trading and Offset Projects,
November 1999 (listing various offset programs, including several in the Chesapeake Bay
States) [hereinafter “A Summary of U.S. Effluent Trading and Offset Projects”].11 To the extent
there is any cognizable injury caused by the offset and trading programs, then, it cannot be traced
11
available at http://water.epa.gov/type/watersheds/upload/2000_01_21_
watershed_trading_traenvrn.pdf.
19
to the 2010 Chesapeake Bay TMDL because the TMDL does not authorize or require such
programs, as they already existed before the establishment of the 2010 TMDL.
Second, the plaintiffs mischaracterize the EPA’s role in the supervision of the States’
WIPs. The EPA does have an extensive role in helping States develop their respective
implementation plans, as demonstrated in particular in this case. See Chesapeake Bay TMDL
ES-5. But ultimately, it is up to the States to choose how to implement those plans. See 33
U.S.C. §1313(e). That being said, States are often left with the difficult choice of implementing
the TMDL in accordance with EPA’s suggestions, or face losing federal grants if they do not.
See Pronsolino v. Marcus, 91 F. Supp. 2d 1337, 1340 (N.D. Cal. 2000) (explaining that “failure
to implement the TMDL [established by the EPA] could imperil federal funding”); id. at 1355(“[The State] is also free to moderate or to modify the TMDL reductions, or even refuse to
implement them, in light of countervailing state interests. Although such steps might provoke
EPA to withhold federal environmental grant money, [the State] is free to run the risk. A
practical reality, of course, is that once federal environmental grant money begins to flow, state
regulatory agencies become dependent on it [and] [t]hey become sensitive to threats to terminate
it . . . .”). The EPA’s extensive involvement in the planning process is not, however, tantamount
to “authorization” of State action, but instead, a result of the structure of the CWA, which
contemplates both State and federal involvement in the process. See 33 U.S.C. § 1251(g).
Moreover, the difficult choices States face is just a reflection of the reality that if States wish to
accommodate growth and development and meet the goals of the CWA, they may have to use
offsets and trading programs to implement the Bay TMDL, which happen to be encouraged and
supported—but not authorized—by the Bay TMDL.
20
The plaintiffs’ coercion arguments similarly ignore the practical reality of the difficult
choices States face—which, again, is not the result of EPA strong-arming or coercion in the Bay
TMDL document—but of the balance States must strike if they want to—in an environmentally-
friendly and cost-effective way— (1) comply with the TMDL numbers allotted to them, (2)
comport with the CWA, and (3) accommodate population growth, and promote agricultural and
industrial growth. Offsets and trades are but one option in the States’ arsenal for achieving those
goals—that the EPA encourages the use of trades and offsets does not make it the States’ only
option, or a coercive one at that, in achieving water quality.
Neither does the fact that the EPA retains supervisory authority over the TMDL
implementation process amount to causation through coercion. As the EPA’s supplemental
authority notes, though “there may be a fine line between collaboration and coercion, the court
finds this [TMDL] framework to be more indicative of collaboration. The purpose of the
revision process . . . was to strengthen the WIPs to ensure attainment of water quality standards
through the use of both federal and state resources and expertise . . . [and] the record is replete
with numerous communications that demonstrate discussion, debate, and negotiation between the
federal and state government, not coercion.” See American Farm Bureau Fed’n v. E.P.A., No.
1:11-cv-0067, 2013 WL 5177530, at *29 (M.D. Pa. Sept. 13, 2013). Thus, there is no coercion,
commanding, or “strong-arming” here, but instead, a joint federal and state effort aimed at
achieving a common objective: better water quality.
The plaintiffs’ purported injury, then, is not ultimately caused by the Bay TMDL—
directly or indirectly—because the Bay TMDL does not “authorize” any third party action, nor
does it coerce States into implementing any programs they would not consider implementing on
their own.
21
3. Redressability
Even if the plaintiffs could establish an injury that is traceable to the conduct of the EPA,
it would still not be redressed by a decision in their favor. With respect to the redressability
analysis, a court “examines whether the relief sought, assuming that the court chooses to grant it,
will likely alleviate the particularized injury alleged by the plaintiff.” Fla. Audubon Soc’y, 94
F.3d at 663-64. The plaintiffs seek a declaratory judgment from this Court “that the trading and
offset provisions of the TMDL are in violation of the Clean Water Act and notice and comment
procedural requirements of the APA and are null and void.” Am. Compl. ¶ 124.
The relief the plaintiffs seek cannot be redressed by an order from this Court. As set
forth above, the EPA did not “authorize” offsets and trading programs, as the plaintiffs
repeatedly assert. Rather, the EPA made statements in the TMDL referencing already-existing
(and state-implemented) trading and offset programs. This Court could only order those
references removed from the Bay TMDL—but such an order would not change the legal
landscape because (1) the authority to implement offset and trading programs is with the States
themselves, (2) there is no WIP approval before the Court, and (3) the pre-existing 2003 EPA
Water Quality Trading Policy remains in place. Therefore, any order from this Court removing
all references in the Bay TMDL to offsets or trades would have no effect on the legal landscape,
and would therefore not redress the plaintiffs’ injuries.12
12
This is not to say that the approval of offsets and trades that violate the CWA
could not be challenged. They certainly could be challenged—through the remedial scheme
created by the CWA itself. If the EPA issues an NPDES permit that violates the CWA, that
action is subject to judicial review in the Court of Appeals. See 33 U.S.C. § 1369(b)(1)(F). If it
is issued by a State agency, the State is obligated under the CWA to provide a judicial review
process. See 40 C.F.R. § 123.30. In addition, the citizen-suit provision of the CWA allows “any
citizen” to “commence a civil action on his own behalf against any person [including the United
States and other government agency] . . . who is alleged to be in violation of” the CWA. See 33
22
The plaintiffs have failed to show that they have an actual or imminent injury that is
traceable to the EPA’s conduct and redressable by an order of this Court. Therefore, the Court
must dismiss this case for lack of subject matter jurisdiction. 13
C. Ripeness
The defendants also argue that the plaintiffs’ claims are not ripe for adjudication. The
D.C. Circuit has explained that “[r]ipeness, while often spoken of as a justiciability doctrine
distinct from standing, in fact shares the constitutional requirement of standing that an injury in
fact be certainly impending.” Nat’l Treas. Employees Union v. United States, 101 F.3d 1423,
1427 (D.C. Cir. 1996). See also Wyo. Outdoor Council v. United States Forest Serv., 165 F.3d
43, 48 (D.C. Cir. 1999) (“Just as the constitutional standing requirement for Article III
U.S.C. § 1365(a)(1). Thus, there are other ways the plaintiffs can seek redress from the
appropriate entities if, and when, a violation of the CWA, and in turn, an injury, occurs.
13
The only other case considering the Chesapeake Bay TMDL’s legality is
American Farm Bureau Fed’n v. E.P.A., No. 1:11-cv-0067, 2013 WL 5177530, at *1 (M.D. Pa.
Sept. 13, 2013). In that case, the court found that the plaintiffs had standing to challenge the
TMDL because the injury they alleged—economic injury from having to comply with the
requirements of the TMDL—was traceable to the EPA’s establishment of the TMDL. Id. at *18-
19. The challenge in that case was to the legality of the TMDL itself—not its references to the
permissive offset and trading program being challenged in the instant action. Additionally, the
injury alleged there was an actual and imminent economic injury of having to comply with the
TMDL requirements, which arose directly from the EPA’s establishment of the TMDL itself.
That court’s reasoning is not inconsistent with this Court’s logic because the plaintiffs here (1)
do not allege an actual or imminent injury as set forth above, and (2) do not challenge the TMDL
itself, but instead challenge EPA’s “authorization of offsets and trading.” Because as set forth
above, such purported “authorization” does not arise from the Bay TMDL, that district court’s
finding on standing does not conflict with this Court’s finding.
Also, the Court notes that the defendant-intervenors in this case were the plaintiffs in
American Farm Bureau. They challenged the Bay TMDL as contrary to the Clean Water Act
and as arbitrary and capricious in violation of the APA. The district court upheld the Bay TMDL
in that case, whose decision is currently on appeal in the Third Circuit Court of Appeals. See
Notice of Appeal, American Farm Bureau Fed’n, et al. v. E.P.A., No. 11-0067 (M.D. Pa.
October 7, 2013), ECF No. 153; Civil Case Docketed, American Farm Bureau Fed’n, et al. v.
E.P.A., No. 13-4079 (3d Cir. October 16, 2013). The plaintiffs in that case intervened in this
case because, “to the extent the Bay TMDL survive[d] their lawsuit, Intervenors’ members will
depend on, and benefit from, state pollutant trading and offset programs during the states’
implementation of the Bay TMDL.” Def. Intervenor’s Mot. to Dismiss 2 n.1, ECF No. 35-1.
23
jurisdiction bars disputes not involving injury-in-fact, the ripeness requirement excludes cases
not involving present injury.”). If a court establishes constitutional ripeness, it then goes on to
analyze the prudential aspect of ripeness, which is “where a court balances ‘the fitness of the
issues for judicial decision and the hardship to the parties of withholding court consideration.’”
Nat’l Treas., 101 F.3d at 1427-28 (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967)).
The Supreme Court has elaborated that with respect to the ripeness inquiry, the court must
consider “(1) whether delayed review would cause hardship to the plaintiffs; (2) whether judicial
intervention would inappropriately interfere with further administrative actions, and (3) whether
the courts would benefit from further factual development of the issues presented.” Ohio
Forestry Ass’n Inc. v. Sierra Club, 523 U.S. 726, 733 (1998). The “paradigmatic hardship
situation is where a petitioner is put to the choice between incurring substantial costs to comply
with allegedly unlawful agency regulations and risking serious penalties for non-compliance.”
Natural Res. Def. Council, Inc. v. E.P.A., 859 F.2d 156, 166 (D.C. Cir. 1988). In addition,
“neither the possibility that the petitioner may have to make capital budgeting decisions under a
cloud of uncertainty, nor the fact that it may incur future expense in challenging the regulations
in a later permit or enforcement proceeding, will qualify as hardship.” Id. (citations omitted).
The ripeness requirement has been described as being designed “to prevent the courts,
through avoidance of premature adjudication, from entangling themselves in abstract
disagreements over administrative policies, and also to protect the agencies from judicial
interference until an administrative decision has been formalized and its effects felt in a concrete
way by the challenging parties.” Wyo. Outdoor, 165 F.3d at 50 (quoting Abbott Labs, 387 U.S.
at 148-49). In Wyoming Outdoor, for instance, the plaintiffs challenged U.S. Forest Service
regulations that had designated certain lands as suitable for oil and gas leases. Id. at 45, 50. The
24
court found the plaintiffs’ challenges (brought under the National Environmental Policy Act)
unripe for review because of the multiple-stage nature of the agency action at issue—it was when
the agency actually issued a lease under the regulations, after other phases of regulation it
promulgated, that the agency action would be ripe for review, and that had not yet happened in
that case. See id. at 50. See also Cntr. for Biological Diversity v. Dep’t of Interior, 563 F.3d
466, 480 (D.C. Cir. 2009) (finding plaintiff’s National Environmental Policy Act claims not ripe
because the Department of Interior had only approved a leasing program and no leases had yet
been issued under it).
In this case, the Court finds that none of the elements of the ripeness inquiry are satisfied.
First, as set forth above, there is no injury that is certainly impending in this case to meet the
constitutional ripeness requirement. Second, even if there were, the Court does not find that the
plaintiffs can establish any prudential aspect of ripeness. To begin, there is no indication that the
plaintiffs will suffer any hardship from the lack of judicial review at this stage in the litigation.
The trading and offsets statements in the Bay TMDL impose no legal obligation on the
plaintiffs—or any other actor for that matter—and therefore, there is no risk that plaintiffs will
have to expend resources in order to comply with the EPA’s “requirements.” In addition,
judicial intervention at this stage would be premature because any reviewing court could benefit
from further factual development. For instance, there is currently no indication that the EPA (or
any state actor) is issuing any permits in violation of the provisions of the CWA. Nor is there
any indication that any permits have been issued by the EPA or state agencies that has actually,
or imminently will, injure the plaintiffs. Because there are multiple stages to the implementation
of the Bay TMDL at issue here, and the implementation occurs primarily through the actions of
25
state actors, who are not parties to this action, judicial intervention at this time would be
inappropriate, as further factual development would better help a court adjudicate these issues.14
D. Failure to State a Claim
Even if the Court were to find that the plaintiffs had standing, this case must nevertheless
be dismissed for failure to state a claim under the APA. Review under the APA requires final
agency action. See 5 U.S.C. § 704 (“agency action made reviewable by statute and final agency
action for which there is no other adequate remedy in a court are subject to judicial review”
(emphasis added)). The plaintiffs have failed to challenge a final agency action.
Under the test articulated in Bennett v. Spear, “two conditions must be satisfied for
agency action to be ‘final:’ First, the action must mark the ‘consummation’ of the agency’s
decision-making process—it must not be of a merely tentative or interlocutory nature.” Bennett
v. Spear, 520 U.S. 154, 177-78 (1997) (citations omitted). And second, the action must be one
by which “rights or obligations have been determined,” or from which “legal consequences will
flow.” Id. The D.C. Circuit has given guidance as to the second prong of the Bennett test. “In
determining whether an agency has issued a binding norm . . . we are guided by two lines of
inquiry. One line of analysis considers the effects of an agency’s action, inquiring whether the
agency has (1) imposed any rights and obligations or (2) genuinely left the agency and its
14
The plaintiffs rely on Time Warner Entm’t Co. v. F.C.C., 93 F.3d 957, 974 (D.C.
Cir. 1996), which held a challenge to FCC regulations ripe even though local franchise
authorities had discretion whether to implement certain programming. The plaintiffs analogize
that case to the instant action, where state authorities have discretion whether to implement the
trading and offset programs “authorized” by the EPA. That case, however, is distinguishable
because in that case, the plaintiffs were challenging a statutory provision that they alleged
violated the First Amendment. Thus, the question presented was purely a legal question of
statutory interpretation—having to do with the legal impact of an act of Congress. Here, the
plaintiffs are not challenging a statute, but rather what they deem to be agency action, where the
purely legal question cannot be reached if there is no final agency action. Because as explained
in Part D of this opinion, there is no final agency action, the legal question cannot be reached and
Time Warner is inapposite.
26
decisionmakers free to exercise discretion.” Cntr. for Auto Safety v. Nat’l Highway Traffic
Safety Admin., 452 F.3d 798, 806 (D.C. Cir. 2006) (citations omitted). “The second line of
analysis looks to the agency’s expressed intentions. This entails a consideration of three factors:
(1) the agency’s own characterization of the action; (2) whether the action was published in the
Federal Register or the Code of Federal Regulations;15 and (3) whether the action has binding
effects on private parties or on the agency.” Id. at 806-807.
In Cntr. for Auto Safety, the plaintiffs challenged letters sent to various vehicle
manufacturers which outlined NHTSA’s “policy guidelines” for “regional recalls.” Id. at 799-
800. The court held that the NHTSA Guidelines did not constitute final agency action because,
under the second prong of the Bennett test, NHTSA “has not commanded, required, ordered, or
dictated,” and the “agency remains free to exercise discretion in assessing proposed recalls and
in enforcing the Act.” Id. at 809. The court also went on to say that “it does not matter that
agency officials have encouraged automakers to comply with the guidelines.” Id. (emphasis in
original). The guidelines still amounted to nothing more than a general statement of policy. Id.Moreover, the NHTSA Associate Administrator had no authority to issue binding regulations
under the relevant statutory provision in that case. Id. at 810. Thus, the letters were really
nothing more than guidelines. Id. Similarly, in Nat’l Ass’ n of Home Builders v. Norton, the
15
The plaintiffs make much of the fact that the TMDL was published in the Federal
Register as an indication that the “authorization for offsets and pollutant trading” represents final
agency action. The Court notes that what was published in the Federal Register was EPA’s
“Notice for the Establishment of the Total Maximum Daily Load (TMDL) for the Chesapeake
Bay”—not the TMDL itself. See 76 Fed. Reg. 549 (January 5, 2011). That notice gives a brief
overview of the TMDL. The TMDL itself, however, is not published in the Federal Register or
the Code of Federal Regulations. Importantly, the notice published in the Federal Register
explains that “[o]ther provisions of the CWA, as well as the jurisdictions’ Watershed
Implementation Plans (WIPs), were developed to implement the Bay TMDL.” 76 Fed. Reg. at
550. Thus, the only part of the TMDL published in the Federal Register recognizes that the
TMDL itself is not self-executing, requires further implementation efforts by the States to come
into effect, and therefore certain of its provisions are not final.
27
court found that a Fish & Wildlife Service Protocol that outlined recommendations for detecting
the endangered Quino Butterfly was not a final rule because it did not establish a binding norm,
but rather served as a recommendation. 415 F.3d 8, 11-12, 14 (D.C. Cir. 2005). The court
explained: “[g]iven the voluntary nature of the language contained in the Protocols, it is futile for
Home Builders to argue that the Protocols are binding on their face.” Id. at 14.
Under either line of analysis, the Court finds that there is no final agency action here.
The same problems that plague the plaintiffs’ standing arguments also undermine their argument
that the Bay TMDL document’s reference to offsets and trading constitutes final agency action:
such references do not impose any binding or legal obligations on any actor. The EPA’s
language in the Bay TMDL regarding offsets and trading does not legally require any conduct,
but rather serves as an “informational tool.”16 Pronsolino v. Nastri, 291 F.3d 1123, 1129 (9th
Cir. 2002). The Bay TMDL uses verbs such as: “EPA expects17 that new or increased loadings
16
The agency action the plaintiffs contest is the purported “authorization of offsets
and trades” in the Chesapeake Bay TMDL. See Am. Compl. ¶¶ 88-123, ECF No. 29. The
plaintiffs do not challenge the legality of the TMDL itself—only the provisions purportedly
authorizing what they deem to be illegal water pollutant trading. The parties—and the Court—
are in agreement that the Chesapeake Bay TMDL is a final agency action in itself. That is not in
dispute. See Sierra Club v. E.P.A., 162 F. Supp. 2d 406, 420 (D. Md. 2001) (“approval or
disapproval of state submissions under the Clean Water Act is not rule making; it is only the
actual development of the list or load that is rule making”). See also EPA’s Reply 9, ECF No. 42
(“nor is there any dispute that EPA’s establishment of the Bay TMDL is a final agency action . . .
.”). As defendants point out, though, “[t]he fact that EPA took final action to establish the Bay
TMDL does not, however, mean that every associated statement is equally ‘final’ within the
meaning of the APA.” See id. (citing Natural Res. Def. Council v. E.P.A., 559 F.3d 561, 564-
65 (D.C. Cir. 2009) (finding the preamble statements were not final agency action because the
EPA spoke in the conditional and the preamble statements had no legal consequences);
Interstate Natural Gas Ass’n of Am. v. F.E.R.C., 285 F.3d 18, 59-61 (D.C. Cir. 2002) (finding
that the discussion of seasonal rates within a final rule “represents only a policy statement and
therefore is neither binding on any party nor ripe for judicial review”)).
17
The word “expect” is the most forceful verb used in the TMDL, and even still, its
use does not impose any requirement on the States. In the context of the EPA’s relationship with
the Bay States, it is clear that use of that word simply acknowledges the fact that States face
difficult decisions when it comes to implementing TMDLs. Based on the conversations between
28
. . . will be offset by loading reductions . . . .” Chesapeake Bay TMDL 10-1 (emphasis added);
EPA “encourages and expects that the jurisdictions will generally develop and implement
programs for offsetting new and increased loadings . . . .” Id. at 10-2 (emphasis added); EPA
“recognizes that a number of Bay jurisdictions already are implementing water quality trading
programs. EPA supports implementation of the Bay TMDL through such programs, as long as
they are established and implemented in a manner consistent with the CWA . . . .” Id. at 10-3
(emphasis added); “An assumption of this TMDL is that trades may occur between sources
contributing pollutant loadings to the same or different Bay segments.” Id. (emphasis added). In
addition, in Appendix S, the EPA notes that the common elements (which include trading and
offsets) it hopes each State will implement “are not presented here as regulatory requirements.”
Id. at S-2. These statements create no binding legal requirement on the States—even though the
EPA “expects” (which is the strongest verb used in the Bay TMDL) the States will engage in
offset and trading programs, ultimately, it is in the individual States’ control whether or not to
use offsets and trades as a method of complying with the Bay TMDL. Nothing in the Bay
TMDL commands or requires States to engage in offsetting or trades, making this case similar to
Cntr. for Auto Safety and Nat’l Ass’n of Home Builders, where the relevant agency language was
voluntary and not mandatory. To be sure, a State has limited options if it wishes to implement
the Bay TMDL, continue to comply with the CWA, accommodate population growth, and
encourage economic expansion. But limited options does not mean no options. EPA’s
the States and the EPA, and the lead-up to the establishment of the Bay TMDL, the EPA
expected that the States would carry out the offset and trading programs, as the States themselves
pledged to do in their various WIPs. The States have limited options if they hope to (1)
implement the Bay TMDL, (2) comply with the CWA, and (3) accommodate population growth
and support economic expansion. EPA’s “expectation,” then, is just an acknowledgement of that
difficult reality.
29
encouragement that one option might be the most logical one does not command a State to
implement it.
Moreover, the EPA’s language cannot be mandatory because the CWA does not confer
on the EPA the authority to command or to require the States to take specific actions, with
respect to their implementation plans. The supplemental authority submitted by the defendants
serves them well on this point. See American Farm Bureau, 2013 WL 5177530, at *20 (“EPA is
not authorized to establish or otherwise take over TMDL implementation plans.”). The district
court in that case found that while “it would go too far to say that EPA has no role in developing
state implementation plans . . . EPA [does not have the] authority to enact its own
implementation plan where it has determined that the state’s effort has fallen short. EPA may
not, for example, dictate to a state what measures the state must undertake to reduce pollution
from a particular source.” Id.18
There are two other reasons why the Bay TMDL document’s references to offsets and
trading do not constitute final agency action. First, such references do nothing to change the
legal landscape, contrary to the plaintiffs’ arguments that the 2010 TMDL marks “formal legal
authorization by the EPA” of offsets and trading programs. See Pl.’s Mot. to Dismiss 9. The
EPA approved of such methods for regulating water quality no later than 2003 and States have
been engaging in such practices since then. See generally Final Water Quality Trading Policy 2
(“the policy is intended to encourage voluntary trading programs that facilitate implementation
of TMDLs, reduce the costs of compliance with CWA regulations, establish incentives for
18
Importantly, American Farm Bureau is the only case to date that has analyzed the
Chesapeake Bay TMDL in depth. In a thorough opinion, the court found that “the record, when
viewed as a whole, does not support a finding that the framework of federal and state interaction
was coercive in nature so as to render the TMDL an unlawful federal implementation plan.”
American Farm Bureau, 2013 WL 5177530, at *30.
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voluntary reductions, and promote watershed-based initiatives”); see also A Summary of U.S.
Effluent Trading and Offset Projects, supra p. 19. Thus, the EPA’s statements that it “expects”
and “encourages” trading programs to occur does absolutely nothing new. See Cntr. for Auto
Safety, 452 F.3d at 811 (“if the practical effect of the agency action is not a certain change in the
legal obligations of a party, the action is non-final for the purposes of judicial review under the
APA” (citation omitted)); Indep. Equip. Dealers Ass’n v. E.P.A., 372 F.3d 420, 428 (D.C. Cir.
2004) (“By restating EPA’s established interpretation of the certificate of conformity regulation,
the EPA Letter [did not] tread . . . new ground. It left the world just as it found it, and thus cannot
be fairly described as implementing, interpreting, or prescribing law or policy.”). If the Bay
TMDL document was entirely silent about offsets and trading, the legal landscape would not
change. In light of the fact that the EPA has not imposed any new legal obligation on any actor,
the fact that it still “expects,” or “encourages” States to engage in certain behavior has no
practical, legally-binding effect on the States whatsoever—because they were engaging in trades
and offsets before the TMDL came into being, and can do so even without the statements
contained in the TMDL.19
19
The plaintiffs rely extensively on Natural Res. Def. Council v. E.P.A. (“NRDC”),
643 F.3d 311 (D.C. Cir. 2011) and Appalachian Power Co. v. E.P.A., 208 F.3d 1015 (D.C. Cir.
2000). Those cases are distinguishable from the present action. In NRDC, the court found that
an EPA Guidance Document was a final agency action because it “altered the legal regime” by
resolving a question of statutory interpretation of the Clean Air Act. 643 F.3d at 320. That is not
the case here because as set forth above, the EPA’s language regarding offsets and trades does
not alter the legal regime—that regime was in place before the Bay TMDL was established, is
not binding on the States, and does not resolve a question of statutory interpretation. Meanwhile,
in Appalachian Power, the court found that a Guidance Document was a final agency action
because it “reads like a ukase. It commands, it requires, it orders, it dictates.” 208 F.3d at 1023.
The Appalachian Power court further found that “EPA has given States their ‘marching orders’
and EPA expects the States to fall in line . . . .” Id. That is not the case here, where, as set forth
above, the language the EPA uses is permissive, not obligatory (nor, as set forth above, could it
be under the CWA). Even though the EPA does “expect” that states will engage in trading and
offset programs, in the context of the CWA, such an expectation is acknowledgment of the
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In addition, this court has found that where agency action requires separate
implementation plans to make its goals come to fruition, such agency action is not final for
purposes of judicial review. See, e.g., Fund for Animals v. Williams, 391 F. Supp. 2d 132, 139
(D.D.C. 2005) (“In sum, the FWS’ publication of the Strategic Plan is not a final agency action
because it does not mandate the creation or expansion of hunting opportunities and has no direct
effect on those regulated. Because actual implementation of the goals announced in the Strategic
Plan occurs at a subsequent stage of decision[-]making, judicial review of the Plan would
prematurely interfere with the agency’s decision[-]making process and would improperly
substitute the court’s discretion for that of the agency.” (emphasis added)); Fund for Animals v.
U.S. Bureau of Land Mgmt., 357 F. Supp. 2d 225, 229 (D.D.C. 2004), aff’d on other grounds,
460 F.3d 13 (D.C. Cir. 2006) (“Because further decision[-]making on the part of the BLM’s state
offices is required prior to any implementation of the Strategy’s goals or guidelines, the Court
concludes that the Strategy, simply stated, is not a final agency action. So, despite the fact that
any decision[-]making process related to setting the Strategy may in fact be ‘final,’ it is not the
type of decision that will directly affect the parties because further agency action is necessary
before any concrete action will be taken by the agency that might affect the rights of the
plaintiffs.”). Similarly here, there are other actors—state agencies—that must implement the
TMDL established by the EPA. The plaintiffs’ rights will not be affected until further
implementation by the States begins to take shape. Thus, the EPA setting forth its
“expectations” is the starting point, and the States end up with the final decision as to whether to
limited options available, but imposes no binding obligation on the States, who are free to
implement their respective TMDLs in whatever way they see fit (as long as their plans comport
with the Bay TMDL itself and the CWA). In contrast, in Appalachian Power, the Guidance
Document at issue interpreted certain provisions of the Clean Air Act that imposed various
“requirements” on the States in the document itself. Id. at 1019-22 (explaining that “periodic
monitoring [by States] is required for each emission point . . . .” (emphasis added)).
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implement trading or offset programs and, if so, whether to approve a specific trade or offset
when it approves a new or modified permit. Any final agency actions, then, that could
potentially injure the plaintiffs’ members are in the future—i.e., down river from this point in
time.
IV. CONCLUSION
The plaintiffs want the Bay TMDL statements about offsets and trading to be declared
null and void. But the plaintiffs can only mount such a challenge if such statements constitute
(1) final agency action, and (2) if plaintiffs can show they have standing to challenge them. The
plaintiffs cannot do that, and as such the Court must dismiss their action for lack of subject
matter jurisdiction and for failure to state a claim.
For the foregoing reasons, the defendants’ motions to dismiss for lack of subject matter
jurisdiction and for failure to state a claim are granted. An order consistent with this
Memorandum Opinion is separately and contemporaneously issued.
Dated: December 13, 2013 RUDOLPH CONTRERAS
United States District Judge
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