Team No. 30

No. 17-000123 and 17-000124

_________________________________

IN THE UNITED STATES COURT OF APPEALS

FOR THE TWELFTH CIRCUIT

_________________________________

EnerProg, L.L.C.,

Petitioner, and

Fossil Creek Watchers, Inc.,

Petitioner

v.

United States Environmental Protection Agency,

Respondent

_________________________________

On Consolidated Petition for Review of a

Final Permit Issued Under Section 402 of the Clean Water Act

___________________________________________________________

BRIEF OF RESPONDENT,

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

___________________________________________________________

Oral Argument Requested

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES……...……………………………………………………………iii

STATEMENT OF JURISDICTION...........................................................................................vi

STATEMENT OF ISSUES..........................................................................................................vi

TABLE OF TERMS USED ........................................................................................................ ix

STATEMENT OF THE CASE………….....................................................................................1

SUMMARY OF THE ARGUMENT...........................................................................................5

ARGUMENT..................................................................................................................................7

I. THE FINAL PERMIT PROPERLY INCLUDES CONDITIONS REQUIRING

THE CLOSURE AND REMEDIATION OF THE COAL ASH POND AS

PROVIDED BY THE STATE OF PROGRESS IN THE CWA SECTION 401

CERTIFICATION.............................................................................................................7

A. The EPA was not required to include all Progress certification conditions

without regard to their consistency with CWA section 401(d)………………..8

B. The ash pond closure and remediation conditions constitute "appropriate

requirements of State law" as required by CWA section 401(d)……………..9

II. THE COURT SHOULD AFFIRM THE EAB'S CONCLUSION THAT OUTFALL

008 IS AN INTERNAL DISCHARGE AND DOES NOT REQUIRE A SECTION

402 PERMIT BECAUSE THE JULY 21, 1980 STAY BY THE EPA IS AN

INTERPRETIVE RULE AND POLICY GUIDELINE..…………………………....11

III. A SECTION 404 PERMIT IS NOT REQUIRED FOR THE COAL ASH POND

CLOSURE AND CAPPING BECAUSE THE POND IS NOT A "WATER OF THE

UNITED STATES" THAT CAN BE RECAPTURED.……………………………...13

IV. THE COURT SHOULD AFFIRM THE EAB'S DECISION THAT THE EPA

COULD RELY ON BEST PROFESSIONAL JUDGMENT AS AN

ALTERNATIVE GROUND FOR REQUIRING ZERO DISCHARGE OF COAL

ASH TRANSPORT WASTES…………………………………………………………16

A. Assuming the 2015 ELG Rule was eliminated or vacated, the EPA could rely

on its BPJ to set case-by-case limits for toxic pollutants in coal ash transport

and treatment wastes…………………………………………………………...17

i. EPA's use of BPJ to require a zero discharge limit of coal ash

transport and treatment wastes would not constitute arbitrary and

capricious conduct on behalf of the Agency………………………….18

V. THE COURT SHOULD REJECT THE EAB'S DECISION THAT THE APRIL 25,

2017 NOTICE IS NOT EFFECTIVE TO REQUIRE SUSPENSION OF THE

COMPLIANCE DEADLINES OF THE 2015 ELG RULE….………………………21

A. The Notice satisfies the two conditions of section 705 of the APA…………...23

i. The EPA reasonably concluded that "justice so requires" a

postponement of the 2015 ELG Rule's compliance deadlines……….23

ii. The Notice is pending judicial review in the Fifth Circuit…………...24

B. Section 705 of the APA permits agencies to postpone compliance deadlines in

a rule……………………………………………………………………………..25

ii

C. The EPA was not required to undertake notice-and-comment rulemaking

before issuing the Notice requiring postponement of certain future

compliance deadlines of the 2015 ELG Rule under section 705 of the

APA……………………………………………………………………………...27

CONCLUSION AND PRAYER FOR RELIEF………………………………………………28

iii

TABLE OF AUTHORITIES

CASES

Am. Frozen Food Inst. v. Train, 539 F.2d 107 (D.C. Cir. 1976) ............................................ 17, 18

Am. Petroleum Inst. v. E.P.A., 787 F.2d 965 (Ct. App. 5th Cir. 1986) ................................... 18, 19

Black Warrior Riverkeeper, Inc. v. Black Warrior Minerals, Inc., 734 F. 3d 1297 (11th Cir.

2013) ....................................................................................................................................... 8, 9

Burlison v. McDonald’s Corp., 455 F. 3d 1242 (11th Cir. 2006) ................................................... 7

Chevron U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837 (1984) .............................. 11, 12, 22

Couer Alaska, Inc. v. Se. Alaska Conservation Council, 557 U.S. 261 (2009) ............................ 14

Envtl. Def. Fund, Inc. v. Costle, 657 F.2d 275 (D.C. Cir. 1981) .................................................. 22

EPA v. Nat’l Crushed Stone Ass’n, 449 U.S. 64 (1980) ................................................................. 3

Iowa League of Cities v. E.P.A., 711 F.3d 844 (8th Cir. 2013) ........................................ 11, 12, 14

Ky. Bd. Of Nursing v. Ward, 890 S.W.2d 641 (Ky. Ct. App. 1994) ............................................. 16

Lindall v. Ky. Ret. Sys., 112 S.W.3d 391 (Ky. Ct. App. 2003) ..................................................... 16

Meister v. Dept. of Agric., 623 F.3d 363 (6th Cir. 2010) .............................................................. 11

Motor Vehicle Mfrs. Ass’n v. State Farm Mutual Auto Ins. Co., 463 U.S. 29 (1983) .................. 22

Nat. Res. Def. Council v. EPA, 822 F.2d 104 (D.C. Cir. 1987) ...................................................... 3

Nat. Res. Def. Council v. EPA, 863 F.2d 1420 (Ct. App. 9th Cir. 1988) ...................................... 19

PUD No. 1 of Jefferson Cty. v. Washington Dept. of Ecology, 511 U.S. 700 (1994) ......... 9, 10, 11

Sierra Club v. Jackson, 833 F. Supp. 2d 11 (D.D.C. 2012).................................................... 24, 25

Syncor Inter. Corp. v. Shalala, 127 F.3d 90 (D.C. Cir. 1997) ................................................ 12, 13

Tex. Oil & Gas Ass’n v. EPA, 161 F.3d 923 (5th Cir. 1998). ........................................ 3, 19, 20, 21

Weyerhaeuser Co. v. Costle, 590 F.2d 1101 (D.C. Cir. 1978)…………………………………..19

iv

CODE OF FEDERAL REGULATIONS

33 C.F.R. § 320.4 ........................................................................................................................... 9

33 C.F.R. § 323.2(4) ..................................................................................................................... 15

33 C.F.R. § 323.2(e)(1)(ii) ............................................................................................................ 14

40 C.F.R. § 122.2 .......................................................................................................................... 15

40 C.F.R. § 125.3(a)........................................................................................................................ 4

40 C.F.R. § 125.3(c)(1)-(3) ........................................................................................................... 17

40 C.F.R. § 125.3(c)(1)(3) ............................................................................................................ 16

40 C.F.R. § 125.3(c)(3) ........................................................................................................... 17, 18

40 C.F.R. § 125.3(c)-(d)................................................................................................................ 19

40 C.F.R. § 401.15-.16 .................................................................................................................... 4

40 C.F.R. § 423 (IX)(A)................................................................................................................ 23

40 C.F.R. § 423.13(g)(1)(i) ........................................................................................................... 26

40 C.F.R. § 423.13(h)(1)(i) ........................................................................................................... 26

40 C.F.R. § 423.13(i)(1)(i) ............................................................................................................ 26

40 C.F.R. § 423.13(j)(1)(i) ............................................................................................................ 26

40 C.F.R. § 423.13(k)(1)(i) ........................................................................................................... 26

FEDERAL REGULATIONS

Postponement of Certain Compliance Dates for Effluent Limitations Guidelines and Standards,

82 Fed. Reg. 19,005 (Apr. 25, 2017) ............................................................ 5, 22, 23, 24, 25, 27

Effluent Limitations Guidelines and Standards for Steam Electric Power Generating Point

Source Category, 80 Fed. Reg. 67,838 (Nov. 3, 2015) ....................................................... 4, 24, 26

v

Steam Electric Power Generating Point Source Category, 47 Fed. Reg. 52,290

(Nov. 19, 1982) ............................................................................................................... 4, 17, 18

STATUTES

5 U.S.C. § 551(4) .................................................................................................................... 27, 28

5 U.S.C. § 551(13) .................................................................................................................. 25, 26

5 U.S.C. § 701(b)(2) ..................................................................................................................... 26

5 U.S.C. § 705 ................................................................................................. 22, 23, 24, 25, 26, 28

5 U.S.C. § 706(A)(2)..................................................................................................................... 22

33 U.S.C. § 1251(a) ........................................................................................................................ 3

33 U.S.C. § 1311 ....................................................................................................................... 4, 15

33 U.S.C. § 1311(a) ........................................................................................................................ 3

33 U.S.C. § 1311(b) ........................................................................................................................ 3

33 U.S.C. § 1311(b)(2)(A) .............................................................................................................. 3

33 U.S.C. § 1314 ....................................................................................................................... 4, 18

33 U.S.C. § 1314(b)(2)(B) ............................................................................................................ 19

33 U.S.C. § 1341 ........................................................................................................................... 10

33 U.S.C. § 1342 ................................................................................................................. 3, 14, 17

33 U.S.C. § 1342(a) ........................................................................................................................ 3

33 U.S.C. § 1342(a)(1) .................................................................................................................. 19

33 U.S.C. § 1344 ........................................................................................................................... 15

33 U.S.C. § 1344(a) ...................................................................................................................... 14

33 U.S.C. § 1344(d) ...................................................................................................................... 14

33 U.S.C. 1369(b) ......................................................................................................................... 27

vi

33 U.S.C. § 1313 ................................................................................................................. 9, 10, 11

33 U.S.C. § 1313(c)(2)(A) ............................................................................................................ 11

42 U.S.C. § 7607(d)(7)(B) ............................................................................................................ 24

OTHER AUTHORITIES

Black's Law Dictionary (8th ed. 2004) ......................................................................................... 12

NPDES Permit Writers' Manual 5-16 (U.S. Environmental Protection Agency Office of

Wastewater Management, Water Permits Division State and Regional Branch 2010) ............ 18

Sylvia Quast, Regulation of Wetlands: Section 404, in THE CLEAN WATER HANDBOOK, 113

(Mark A. Ryan ed., 3d ed. 2011) .............................................................................................. 14

vi

STATEMENT OF JURISDICTION

Jurisdiction properly lies in this court pursuant to 33 U.S.C. section 509(b), and all issues raised

in the petitions were properly preserved for appeal.

STATEMENT OF THE ISSUES

I. The Clean Water Act gives the Environmental Protection Agency the jurisdiction to review

state certifications and allows states broad discretion regarding conditions included in state

certifications. The final permit properly includes conditions requiring the closure and

remediation of the coal ash pond as provided by the State of Progress in the Clean Water Act

section 401 certification. Specifically, the Environmental Protection Agency was not required

to include all such State of Progress certification conditions without regard to their

consistency with Clean Water Act section 401(d) and the ash pond closure and remediation

conditions constitute “appropriate requirements of State law” as required by Clean Water Act

section 401(d). Thus, the Environmental Appeals Board correctly concluded that the State of

Progress’s certification conditions were proper, but erroneously determined that the

Environmental Protection Agency does not have authority to review these conditions.

II. Fossil Creek Watchers argues that the ash pond is a water of the United States as defined

under 40 C.F.R. section 122.2. The ash pond is more correctly defined as a manmade waste

treatment system, which is excluded by language in subsection 2 of the Federal Register from

being a water of the United States. This exclusion has been stayed indefinitely since July 21,

1980. The stay is an interpretive rule and policy guideline from the Environmental Protection

Agency because the Environmental Protection Agency is not promulgating a new legislative

rule. Here, the stay has been in effect for over 35 years, and Fossil Creek Watchers has no

ground to challenge the Environmental Protection Agency's authority to interpret the

vii

definition. Therefore, the Environmental Appeals Board correctly denied Fossil Creek

Watcher's request for a section 402 permit under the Clean Water Act.

III. A section 404 permit may be issued by the Secretary of the Army acting through the

Chief of Engineers if there is discharge of dredged or fill material into navigable waters of

the United States. Fill material is defined as material that (1) replaces a portion of a water of

the United States with dry land and (2) changes the bottom elevation of water. Section 402

permits and section 404 permits are subject to the same jurisdictional definition of water of

the United States. The Environmental Protection Agency did not grant Fossil Creek

Watcher's request for a section 402 permit, in part, because the ash pond is not a water of the

United States. Because a section 404 permit only applies to navigable waters of the United

States, the section 404 permit must also be denied. Thus, the Environmental Appeals Board

correctly denied Fossil Creek Watcher's request for a section 404 permit for the closure and

capping of the coal ash pond.

IV. The Clean Water act requires National Pollutant Discharge Eliminations System permits

to contain applicable Technology-based Effluent Limitations in accordance with the Best

Available Technology. Furthermore, under circumstances where no Technology-based

Effluent Limitation has been set, the Environmental Protection Agency may exercise its Best

Professional Judgment to determine appropriate levels for discharge limitations on a case-by-

case basis. Here, the 1982 Steam Electric Power Generating Industry Effluent Limitation

Guidelines set no limits for toxic pollutants such as mercury, arsenic, and selenium.

Therefore, the Environmental Appeals Board was correct in determining that Region XII

could rely on its Best Professional Judgment as an alternative ground to require zero

discharge of coal ash transport and treatment wastes, independent of the applicability or

viii

effectiveness of the 2015 Steam Electric Power Generating Industry Effluent Limitation

Guidelines.

V. Section 705 of the Administrative Procedure Act provides federal agencies with broad

authority to postpone any of its actions pending judicial review when justice so requires.

Additionally, pursuant to section 553 of the Administrative Procedure Act, any rule created

by a federal agency must undergo notice and comment rulemaking. Here, the Environmental

Protection Agency found that justice required a postponement of certain future compliance

deadlines pending judicial review in the Fifth Circuit. Likewise, the Environmental

Protection Agency reasonably determined that the postponement was not a rule under Section

553 of the Administrative Procedure Act that required notice and comment procedures

because its conduct did not equate to the definition of a rule pursuant to section 551 of the

Administrative Procedure Act. Therefore, the Environmental Appeals Board was incorrect in

concluding that section 705 of the Administrative Procedure Act does not authorize the

extension of compliance dates, only of the effective date. Additionally, the Environmental

Appeals Board was incorrect in holding that the Environmental Protection Agency

Administrator, without undergoing notice and comment rulemaking, may not postpone the

compliance dates of a rule that has already become effective.

ix

TABLE OF TERMS USED

Administrative Procedure Act (“APA”)

April 25, 2017 Notice (“Notice”)

Army Corps of Engineers ("Corps")

Best Available Technology (“BAT”)

Best Professional Judgement (“BPJ”)

Clean Air Act (“CAA”)

Clean Water Act (“CWA”)

EPA Administrator (“Administrator”)

EnerProg, L.L.C. (“EnerProg”)

Environmental Appeals Board (“EAB”)

Food and Drug Administration (“FDA”)

Fossil Creek Watches, Inc. (“FCW”)

Moutard Electric Generating System (“MEGS”)

National Pollutant Discharge Eliminating System (“NPDES”)

Positron Emission Tomography (“PET”)

State of Progress (“Progress”)

Progress Coal Ash Cleanup Act (“CACA”)

Region XII (“Region 12”)

Technology-based Effluent Limitations (“TBELs”)

The Secretary of the Army ("Secretary”)

United States Environmental Protection Agency (“EPA”)

x

1982 Steam Electric Power Generating Industry Effluent Limitation Guidelines (“1982 ELG

Rule”)

2015 Steam Electric Power Generating Industry Effluent Limitations Guidelines (“2015 ELG

Rule”)

1

STATEMENT OF THE CASE

I. State certification under section 401(d) of the CWA

EnerProg L.L.C. (“EnerProg”) was issued a state certification by the State of Progress

(“Progress”) pursuant to section 401(d) of the Clean Water Act (“CWA”). R. 8. The State

certification was produced in accordance with a National Pollutant Discharge Elimination

System (“NPDES”) permit for the continued operation of EnerProg’s Moutard Electric

Generating System (“MEGS”) coal ash pond. R. 2. EnerProg takes issue with several state-

mandated standards included in the section 401 certification, including the termination of the

facility’s coal ash pond by November 1, 2018; the dewatering of the ash pond by September 1,

2019; and the capping of the pond by September 1, 2020. R. 6. The plant argues that these

requirements are not “based on achieving water quality standards under section 303 of the CWA,

nor are they related to achieving effluent limitations.” R. 10. The conditions included by

Progress in the section 401 certification follow the Progress Coal Ash Cleanup Act (“CACA”)—

a state-implemented law with the stated purpose of “prevent[ing] public hazards associated with

the failures of ash treatment pond containment systems, as well as leaks from these treatment

ponds into the grounds and surface waters.” R. 9. Fossil Creek Watchers (“FCW”), a local

environmental group, and the United States Environmental Protection Agency (“EPA”) both

argue that the conditions included in the section 401 certification are “appropriate requirements

of state law,” while EnerProg argues they are not. R. 3. FCW adds that although these conditions

are appropriate, by themselves, they violate the requirements of a section 404 permit. Id. In

addition, EnerProg and the EPA argue that the EPA has jurisdiction to review conditions

included in the section 401 certification, while FCW argues it does not. Id. The Environmental

Appeals Board (“EAB”) found the state-included conditions to be appropriate, holding that the

2

“Supreme Court has taken a broad view of what sorts of conditions may be considered

appropriately related to water quality.” R. 11. The EAB also found that the EPA “has no

discretion to reject a condition on any Federal license or permit subject to the provisions of

[section 401(d)].” Id. EnerProg and FCW have each sought judicial review of the Board’s

findings. R. 2.

II. The 1980 stay and section 402 permit

FCW asserts that they are entitled to a section 402 permit under the CWA. R. 12. A section

402 permit exists to cure the discharge of pollutants into a water of the United States. R. 7. FCW

argues that the section 401 permit issued by Progress will unlawfully allow pollutants to remain

in the ash pond after it is closed. R. 6, 7. The EAB rejected this argument. R. 12. In order for a

section 402 permit to be issued, the area in question must be a water of the United States as

defined by 40 C.F.R. section 122.2. Id. FCW argues that the ash pond is a water of the United

States because it is an “impoundment of water otherwise identified as waters of the United

States.” Id. However, on July 21, 1980, the EPA indefinitely stayed this language indefinitely—

which has been published in every subsequent Federal Register. Id. FCW asserts that the stay

should not be given effect because the EPA “lacked statutory authorization and failed to comply

with the requirements of section 553 of the Administrative Procedure Act (“APA”). R. 12.

III. Section 404 permit

FCW argues that even if the ash pond is not considered a water of the United States for the

purposes of obtaining a section 402 permit, it should be considered one for the purposes of a

section 404 permit under the CWA. Id. A section 404 permit is issued by the Corps for the illegal

discharge of dredge or fill material into waters of the United States. R. 13. FCW contends that

3

because draining the coal ash will change the bottom elevation of the ash pond and replace it

with dry land, it is entitled to a section 404 permit. Id. The EAB rejected this argument. Id.

IV. The Clean Water Act and applicable permit requirements under the Act

A. The Clean Water Act and NPDES permit

Congress passed the CWA in 1972 to “restor[e] and maint[ain]” the “chemical, physical, and

biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). To achieve this goal, the CWA

prohibits the “discharge of any pollutant” by “any person” except as authorized by the Act. 33

U.S.C. § 1311(a). One of the primary mechanisms for complying with the CWA is through the

application of an NPDES permit administered by the EPA or states with delegated authority from

the EPA. 33 U.S.C. § 1342. Direct dischargers, such as EnerProg, must obtain an NPDES permit

as well as comply with certain requirements and conditions established under other provisions of

the CWA, including Technology-based Effluent Limitations (“TBELs”) based on Best Available

Technology (“BAT”) standards to reduce or eliminate the discharging of pollutants. R. 6; see

also 33 U.S.C. §§ 1311(b), 1342(a); see generally Tex. Oil & Gas Ass’n v. EPA, 161 F.3d 923,

927 (5th Cir. 1998).

B. Best Available Technology

The Supreme Court held that BAT should represent “commitment of the maximum resources

economically possible to the ultimate goal of eliminating polluting discharges.” EPA v. Nat’l

Crushed Stone Ass’n, 449 U.S. 64, 74 (1980) (concluding that a technology is achievable where

it is in use in a given industry). Specifically, toxic pollutants must be controlled by BAT, which

“shall require the elimination of discharges of all pollutants if . . . such elimination is

technologically and economically achievable.” 33 U.S.C. § 1311(b)(2)(A); see Nat. Res. Def.

Council v. EPA, 822 F.2d 104, 110 (D.C. Cir. 1987) (“Toxic pollutants, whether from new or

4

existing sources, are subject to effluent limitations based on application of the BAT standard.”).

The CWA imposes the most stringent limits on the discharge of toxic pollutants, which includes

dissolved metals such as mercury, arsenic, and selenium at issue in this case. R. 11; see 33

U.S.C. §§ 1311, 1314; 40 C.F.R. §§ 125.3(a), 401.15-.16.

V. The Steam Electric Effluent Limitations Guidelines Rules

A. The EPA’s 1982 and 2015 Effluent Limit Guidelines for Power Plants

The 1982 Steam Electric Power Generating Industry Effluent Limitation Guidelines (“1982

ELG Rule”) did not explicitly set any limits for metal or other toxic pollutants. R. 11. The EPA

excluded toxic pollutants such as mercury, arsenic, and selenium from the 1982 ELG Rule

because it lacked sufficient data and technologies to control such pollutants. Steam Electric

Power Generating Point Source Category, 47 Fed. Reg. 52,290 (Nov. 19, 1982) (to be codified at

40 C.F.R. pt. 125 and 423). Moreover, in 1982, the EPA stated, “toxic pollutants are excluded

from national regulation because they are present in amounts too small to be effectively reduced

by technologies known to the Administrator.” Id.

The EPA proposed revised guidelines in 2013, and on November 3, 2015, the EPA published

the final revised guidelines, which became effective January 4, 2016. Effluent Limitations

Guidelines and Standards for Steam Electric Power Generating Point Source Category, 80 Fed.

Reg. 67,838 (Nov. 3, 2015) (to be codified at 40 C.F.R. pt. 423). The 2015 Steam Electric Power

Generating Industry Effluent Limitations Guidelines (“2015 ELG Rule”) requires dischargers

such as EnerProg to meet new, more stringent limitations and standards “as soon as possible”

after November 1, 2018. Steam Electric Power Generating Point Source Category, 47 Fed. Reg.

52,290. The 2015 ELG Rule is the subject of an industry challenge that is pending in the Fifth

5

Circuit. R. 9; Postponement of Certain Compliance Dates for Effluent Limitations Guidelines

and Standards, 82 Fed. Reg. 19,005 (Apr. 25, 2017) (to be codified at 40 C.F.R. pt. 423).

VI. The Notice

On April 12, 2017, EPA Administrator (“Administrator”) Scott Pruitt, signed the April 25,

2017 Notice (“Notice”) to postpone the applicable compliance deadlines for the new, more

stringent limitations and standards applicable to existing sources for several waste streams

pending judicial review in the Fifth Circuit. Id. The Administrator explained in his letter that the

administrative petitions for reconsideration raise “sweeping and wide ranging” objections to the

2015 ELG Rule that overlap with issues in the pending litigation. Id. Specifically, the EPA noted

that it wished to review the new information that petitioners submitted, bearing feasibility of

certain limits in the 2015 ELG Rule. Id. Furthermore, the EPA determined that in light of the

capital expenditures that facilities would incur under the 2015 ELG Rule to satisfy its

approaching deadlines that “justice requires it to postpone the compliance dates of the Rule that

have not yet passed, pending judicial review.” Id.

SUMMARY OF THE ARGUMENT

As an initial matter, the EPA has jurisdiction to review Progress’s certification conditions. .

Because the EPA is authorized to review such state-implemented conditions pursuant to the

CWA, the EPA was not required to include them without regard to their consistency with CWA

section 401(d). The CWA gives the EPA review over section 401 state certifications in order to

ensure that the conditions implemented in these certifications are within the parameters of

federal law. The Administrator has discretion in approving state certifications and permit

programs and can reject a state permit that includes conditions that are inappropriate under the

CWA.

6

Additionally, the conditions included by Progress in its section 401 certification are

appropriate requirements of state law because they meet the criteria of section 303 of the CWA,

which governs water quality standards. CACA, the State law from which Progress derives the

conditions included in its 401 certification, makes clear through its stated purpose that the

conditions work to protect the public health and welfare, enhance the quality of water, and serve

the purpose of section 303 of the CWA. Here, Progress’s section 401 certification requirements

take into consideration the value of the public water by protecting ground and surface waters.

Therefore, the ash pond closure and remediation conditions are appropriate requirements of State

law under the CWA.

Additionally, FCW lacks the right to obtain a section 402 permit under the CWA. The ash

pond acts as a waste treatment system and is thus exempt as a water of the United States as

provided by 40 C.F.R. section 122.2. Additionally, the language that FCW relies on was stayed

in 1980 and has been honored by the EPA for the last 35 years. The ash pond is not entitled to a

section 402 permit because there is no discharge into a water of the United States. Furthermore,

the EAB correctly denied a section 404 permit to FCW. A section 404 permit may only be

granted if dredge or fill material is being discharged into an area of dry land with a bottom

elevation that has been changed from a portion of a water of the United States. Although a

section 402 permit and a section 404 permit differ, the jurisdictional definition of waters of the

United States is the same. Since the ash pond is not a water of the United States under the

definition of 40 C.F.R. section 122.2, it cannot be granted a section 404 permit.

Assuming the 2015 ELG Rule was eliminated or vacated, the EPA could rely on its BPJ as an

alternative ground for requiring zero discharge of coal ash transport and treatment wastes. Under

the CWA, NPDES permits must contain TBELs for each pollutant discharge. Here, it is

7

undisputed that the 1982 ELG Rule did not set TBELs for toxic pollutants such as mercury,

arsenic, and selenium. In assessing the BAT for the aforementioned pollutants, the EPA

reasonably determined that a zero discharge requirement is a feasible task for EnerProg to

achieve. Therefore, the EPA could exercise its BPJ in setting case-by-case limits to require a

zero discharge of coal ash transport and treatment wastes.

Lastly, the Notice is a reasonable exercise of the EPA’s authority under section 705 of the

APA. In its determination, the EPA considered the petitioners’ concerns regarding the new, more

stringent limitations and standards on their effluent discharges and reasonably concluded that in

light of the pending litigation and petitions for reconsideration, justice required postponement of

the November 1, 2018 compliance deadline. Additionally, the EPA was not required to undergo

notice-and-comment rulemaking procedures pursuant to section 553 of the APA. Specifically,

the Notice does not equate to a rule pursuant to section 551 of the APA because the Notice does

not implement, interpret, or prescribe law or policy. Thus, the EPA did not act arbitrarily and

capriciously in issuing to postpone the effect of the 2015 ELG Rule’s compliance deadlines.

ARGUMENT

I. THE FINAL PERMIT PROPERLY INCLUDES CONDITIONS REQUIRING

THE CLOSURE AND REMEDIATION OF THE COAL ASH POND AS

PROVIDED BY THE STATE OF PROGRESS IN THE CWA SECTION 401

CERTIFICATION.

The standard of review in this case is de novo because the Court is reviewing a question of

“pure statutory interpretation.” Burlison v. McDonald’s Corp., 455 F. 3d 1242, 1245 (11th Cir.

2006).

The EPA was not required to include all of Progress’s certification conditions in the final

permit. Here, the EPA has jurisdiction to review state conditions included in a section 401

certification because the Administrator has discretion in approving state certifications and permit

8

programs. Additionally, the remediation conditions constitute appropriate requirements of state

law as required by section 401(d) because they meet the standards of section 303 of the CWA,

which governs water quality standards.

The EPA maintains discretion regarding state law conditions implemented through section

401 certifications because without this review, states would have the power to enact standards

through federal law which may hinder the federal objective underlying the basis of the CWA.

A. The EPA was not required to include all Progress certification conditions

without regard to their consistency with CWA section 401(d).

The EPA has jurisdiction to review state conditions included in a section 401 certification

because the Administrator has discretion in approving state certifications and permit programs.

The CWA empowers the Administrator to issue permits and to approve a permit programs

established by a state “so long as the program conforms to federal guidelines.” Black Warrior

Riverkeeper, Inc. v. Black Warrior Minerals, Inc., 734 F. 3d 1297, 1301 (11th Cir. 2013).

“Certification of compliance with applicable effluent limitations and water quality standards

required under provisions of section 401 of the Clean Water Act will be considered conclusive

with respect to water quality considerations unless the Regional Administrator, Environmental

Protection Agency (EPA) advises of other water quality aspects to be taken into consideration.”

33 C.F.R. § 320.4(d).

On January 18, 2017, Region XII (“Region 12”) of the EPA issued a federal NPDES permit

to EnerProg pursuant to section 402 of the CWA. R. 6. EnerProg and FCW both appeal from the

re-issuance of the NPDES permit and each takes issue with whether the EPA has jurisdiction to

review state-mandated conditions included in the state-issued section 401 certification. R. 2, 6.

The Administrator has discretion in approving state certifications and permit programs, Black

9

Warrior Riverkeeper, Inc., 734 F. 3d at 1297; 33 C.F.R. § 320.4(d); 33 C.F.R. § 320.4(d);

therefore, the EPA does have the jurisdiction to review state conditions included in a section 401

certification.

As stated in Black Warrior Riverkeeper, Inc. v. Black Warrior Miners, Inc., “[t]he [Clean

Water] Act empowers the Administrator of the Environmental Protection Agency either to issue

permits or to approve a permit program established by a state so long as the program conforms to

federal guidelines.” Black Warrior Riverkeeper, Inc., 734 F.3d at 1301. “Certification of

compliance with applicable effluent limitations and water quality standards required under

provisions of section 401 of the Clean Water Act will be considered conclusive with respect to

water quality considerations unless the Regional Administrator, Environmental Protection

Agency (EPA), advises of other water quality aspects to be taken into consideration.” 33 C.F.R.

§ 320.4. Therefore, the EPA has jurisdiction to review the appropriateness of state CWA section

401(d) certificates.

B. The ash pond closure and remediation conditions constitute “appropriate

requirements of State law” as required by CWA section 401(d).

Once it is established that a project creates a “discharge” and requires a section 401(d)

permit, a state may authorize additional requirements under other provisions of the CWA. PUD

No. 1 of Jefferson Cty. v. Washington Dept. of Ecology, 511 U.S. 700, 712 (1994). Section 303 of

the CWA governs water quality standards and implementation plans. 33 U.S.C. § 1313. State

standards implemented under this provision must (1) protect public health and welfare, (2)

enhance quality of water, and (3) serve the purpose of [33 U.S.C. § 1313]. PUD No. 1 of

Jefferson Cty., 511 U.S. at 704-05.

As part of its certification pursuant to section 401 of the CWA for the renewal of EnerProg’s

MEGS NPDES permit, Progress stipulated that the plant must cease operation of its ash pond by

10

November 1, 2018; complete dewatering of its ash pond by September 1, 2019; and cover the

dewatered ash pond with an impermeable cap by September 1, 2020. R. 8. The pond closure and

remediation conditions are pursuant to the Progress CACA. R. 8-9. These conditions, imposed

by Progress and incorporated into the renewal of EnerProg’s MEGS NPDES permit, comply

with section 401(d) of the CWA and are aimed at achieving water quality standards under

section 303 of the CWA. Thus, the EPA was correct to include them in the reissuance of the

NPDES permit.

The authority for Region 12 to issue NPDES permits comes from section 401 of the CWA.

33 U.S.C. § 1341. Section 401(d) specifically addresses state requirements:

Any certification provided under this section shall set forth any effluent limitations

and other limitations and monitoring requirements necessary to assure that any

applicant for a Federal license or permit will comply with any applicable effluent

limitations and other limitations, under section 1311 or 1312 of this title, standard

of performance under section 1316 of this title, or prohibition, effluent standard, or

pretreatment standard under section 1317 of this title, and with any other

appropriate requirement of State law set forth in such certification, and shall

become a condition on any Federal license or permit subject to the provisions of

this section.

Id.

A state may authorize additional requirements under other provisions of the CWA after it has

been established that a project creates a discharge requiring a section 401(d) permit. PUD No. 1

of Jefferson Cty., 511 U.S. at 712. It has been well-established that EnerProg’s MEGS creates

discharges and requires a section 401(d) permit. R. 2. Therefore, Progress is allowed to include

conditions on the section 401(d) permit under section 303 of the CWA. 33 U.S.C. § 1313. The

state water quality standard “shall consist of the designated uses of the navigable waters involved

and the water quality criteria for such waters based upon such uses.” PUD No. 1 of Jefferson

Cty., 511 U.S. at 704. State standards implemented under this provision must (1) protect the

11

public health and welfare, (2) enhance quality of water, and (3) serve the purpose of [33 U.S.C. §

1313]. Id. at 704-05. Considerations for these requirements include: “value for public water

supplies, propagation of fish and wildlife, recreational purposes, use and value for navigation,

and agricultural, industrial, and other purposes.” 33 U.S.C. § 1313(c)(2)(A). The permit

conditions set by Progress consist of the designated use of the navigable waters involved, the

MEGS coal ash pond. Additionally, the water quality criteria is based upon such uses by the

factory. The stated purpose of CACA is to prevent public hazards associated with the failures of

ash ponds and leaks from these ponds into ground and surface waters. R. 8-9. This establishes

that Progress’s regulations aim to (1) protect public health and welfare, (2) enhance the quality of

water, and (3) serve the purpose of section 303 of the CWA. In addition, CACA takes into

consideration the value for public water supplies because it seeks to protect ground and surface

waters, which are often used for or naturally incorporated into the public water supply.

Therefore, the ash pond closure and remediation conditions constitute appropriate requirements

of State law as required by CWA section 401(d).

II. THE COURT SHOULD AFFIRM THE EAB’S CONCLUSION THAT OUTFALL

008 IS AN INTERNAL DISCHARGE AND DOES NOT REQUIRE A SECTION 402

PERMIT BECAUSE THE JULY 21, 1980 STAY BY THE EPA IS AN

INTERPRETIVE RULE AND POLICY GUIDELINE.

The standard of review for agency action can be either de novo in favor of the party

challenging the agency, or a discretionary review in favor of the agency. Iowa League of Cities v.

E.P.A., 711 F.3d 844, 872 (8th Cir. 2013). The standard hinges on whether the challenge to an

agency rule is legislative or interpretive. If the challenged rule is legislative, circuits will often

employ a de novo standard of review. Id. "If the intent of Congress is clear, [however], that is the

end of the matter; for the court as well as the agency, must give effect to the unambiguously

expressed intent of Congress." Chevron U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837, 844

12

(1984). A legislative rule is defined by the courts as "impos[ing] new rights or duties." Id. The

rationale for this standard lies in an agency's unique familiarity with Congressional matters. Id.

Three circuits have applied this method, and the Eighth Circuit in Iowa League of Cities v. EPA,

followed the Ninth Circuit's de novo standard for legislative issues. Iowa League of Cities, 711

F.3d at 872 (quoting Meister v. Dept. of Agric., 623 F.3d 363, 370 (6th Cir. 2010)). Conversely,

if the issue being challenged is interpretive, the courts are more likely to employ a discretionary

review in favor of the agency. Iowa League of Cities, 711 F.3d at 872. The courts define an

interpretive rule as an agency "simply stat[ing]…the statute mean[ing] and only 'remind[ing]'

affected parties of existing duties." Id. Furthermore, an agency will receive deference if

"Congress has explicitly left a gap for the agency to fill." Chevron, 467 U.S. at 843.

A federal agency must undergo promulgation during the rulemaking process. “Promulgate” is

defined in the capacity of an agency as "carry[ing] out the formal process of rulemaking by

publishing the proposed regulation, inviting public comments, and approving or rejecting the

proposal." Iowa League of Cities, 844 F.3d at 861 (citing Black's Law Dictionary (8th ed. 2004)).

Promulgation is meant to impose a binding effect. However, a rule can also be interpretative,

which makes it non-binding since "the agency retains the discretion and the authority to change

its position—even abruptly—in any specific case because a change in its policy does not affect

the legal norm." Syncor Inter. Corp. v. Shalala, 127 F.3d 90, 94 (D.C. Cir. 1997). Interpretive

rules are treated as policy statements and are not binding on the public or the agency. Notably, a

reasonableness standard is imposed when looking to an Administrator's interpretation of

particular programs. Chevron, 367 U.S. at 843-44.

FCW's main argument regards the regulation defining "waters of the United States," but the

crux of the dispute is whether the EPA had authority to continue a stay issued in 1980. In Syncor

13

International Corporation v. Shalala, the Food and Drug Administration (“FDA”) suggested that

Positron Emission Tomography (“PET”) be regulated under the Federal Food, Drug, and

Cosmetic Act. Syncor Inter. Corp., 995 F.2d at 92. In Syncor Inter. Corp., an announcement was

labeled as a "notice," id., and the court wrote the following:

[A]n agency policy statement does not seek to impose or elaborate or interpret a

legal norm. It merely represents an agency position with respect to how it will

treat— typically enforce—the governing legal normal. By issuing a policy

statement, an agency simply lets the public know its current enforcement or

adjudicatory approach. The agency retains the discretion and the authority to

change its position—even abruptly—in any specific case because a change in its

policy does not affect the legal norm . . . [and] policy statements are binding on

neither the public nor the agency.

Id at 94.

In Syncor Inter. Corp., the court determined that the FDA's publication was not an

interpretive rule because the language used in the rule was "consistent only with the invocation

of its general rulemaking authority to extend its regulatory reach." Id. at 95. Words such as

"concluded" and "should be regulated" were pointed to as language consistent with rulemaking.

Id. Here, the portion of 40 C.F.R. section 122.2 that was held as unlawful was stayed and not

amended. Moreover, the stay has been in effect for over 35 years and has not been modified

during that time. In addition, the language does not purport to be absolutely binding. Rather, the

stay serves as a policy guideline that the EPA can choose to interpret differently in the future if it

sees fit. However, because the language has been interpreted consistently for 35 years without

any successful challenge to its validity, the EPA has not violated the requirements of section 553

of the APA—notice and comment rulemaking procedures. Thus, Outfall 008 is an internal

discharge that does not require a section 402 permit because the violation asserted by FCW is not

applicable to the EPA’s interpretation of the stay.

14

III. A SECTION 404 PERMIT IS NOT REQUIRED FOR THE COAL ASH POND

CLOSURE AND CAPPING BECAUSE THE POND IS NOT A “WATER OF THE

UNITED STATES” THAT CAN BE RECAPTURED.

The standard of review for this issue is analogous to that of issue II, therefore, the agency

action can be reviewed using either a de novo standard in favor of the party challenging the

agency, or a discretionary review in favor of the agency. Iowa League of Cities., 711 F.3d at 872.

The Army Corps of Engineers ("Corps") and the EPA share responsibility for the

implementation of a section 404 permit pursuant to the CWA. 33 U.S.C. § 1344; Sylvia Quast,

Regulation of Wetlands: Section 404, in THE CLEAN WATER HANDBOOK, 113, 118 (Mark A.

Ryan ed., 3d ed. 2011). The Secretary of the Army ("Secretary”), acting through the Chief of

Engineers, has the authority to "issue permits . . . for the discharge of dredged or fill material into

the navigable waters at specific disposal sites." 33 U.S.C. § 1344(d); 33 U.S.C. § 1344(a).

Furthermore, "[t]he EPA ha[s] the statutory authority to veto the Corps permit, and prohibit []

discharge [of fill material]." Couer Alaska, Inc. v. Se. Alaska Conservation Council, 557 U.S.

261, 268 (2009) (discussing 40 C.F.R. § 323.2). The Corps and the EPA jointly define fill

material as replacing any portion of a water of the United States with dry land or changing the

bottom elevation of any portion of a water of the United States. 33 C.F.R. § 323.2(e)(1)(ii).

Although section 404 permits mimic portions of its permitting program counterpart in section

402, there are significant differences. Quast, supra at 113. Section 402 permits are for the

discharge of pollutants and are issued by the EPA with no involvement from the Corps. 33

U.S.C. § 1342. The overlap in the two permits is the shared definition of "waters of the United

States" by the EPA and the Corps. Quast, supra at 115. For either a section 402 or section 404

permit to be issued, the area in question must qualify as a "water of the United States."

15

Here, FCW argues that EnerProg is entitled to a section 404 permit under the CWA because

an abandonment of the coal ash pond and a placement of an impermeable cap over the ash pond

will constitute a discharge of fill material. R. 13; 33 U.S.C. § 1344. Fill material is defined as

"material placed in waters of the United States where the material has the effect of replacing any

portion of a water of the United States with dry land, or changing the bottom elevation of any

portion of a water of the United States." 33 C.F.R. § 323.2(e)(1)(i-ii). In effect, the closure of the

ash pond will result in a change in bottom elevation and will replace water that was initially part

of Fossil Creek with dry land.

It is important to understand the similarities and differences between a section 402 permit

and a section 404 permit. A section 402 permit is for the illegal discharge of pollutants and is

administered by the EPA without the consultation of the Corps. 33 U.S.C. § 1311. A section 404

permit, however, is for the illegal discharge of dredged or fill material into navigable waters of

the United States. 33 U.S.C. § 1344. A section 404 permit is issued by the Secretary and may be

vetoed by the Administrator. Coeur, 447 U.S. at 270.

FCW first sought a section 402 permit on the basis that the EPA had illegally given effect to

a 1980 stay. R. 12. Although the denial of the section 402 permit is justified by the EPA through

an exception under section 553(b)(A) of the APA, it is also justified because the water in

question does not qualify as a "water of the United States." 40 C.F.R. § 122.2. Similarly, a

section 404 permit can only be issued if the "discharge of dredged material destroys an area of

waters of the United States [in that] it alters the area in such a way that it would no longer be a

water of the United States." 33 C.F.R. § 323.2(4). A section 404 permit is not required for the

closure and capping of the coal ash pond because a section 404 permit can only be issued to a

water of the United States and the ash pond is not considered a water of the United States under

16

the July 21, 1980 stay.Moreover, because the ash pond is not a water of the United States it is

inappropriate to seek out a section 404 permit.

IV. THE COURT SHOULD AFFIRM THE EAB’S DECISION THAT THE EPA COULD

RELY ON BEST PROFESSIONAL JUDMENT AS AN ALTERNTAIVE GROUND

FOR REQUIRING ZERO DISCHARGE OF COAL ASH TRANSPORT WASTES.

When reviewing agency action, courts generally focus on the question of whether the

agency’s conduct was arbitrary and capricious. Specifically, “[i]n reviewing an agency decision,

a court may only overturn that decision if the agency acted arbitrarily or outside the scope of its

authority, if the agency applied an incorrect rule of law, or if the decision itself is not supported

by substantial evidence in the record.” Lindall v. Ky. Ret. Sys., 112 S.W.3d 391, 394 (Ky. Ct.

App. 2003). “Substantial evidence” is evidence that “has sufficient probative value to induce

conviction in the mind of a reasonable person.” Ky. Bd. Of Nursing v. Ward, 890 S.W.2d 641,

641 (Ky. Ct. App. 1994).

The CWA requires NPDES permits to contain TBELs for each pollutant discharge. These

limitations must be derived from either national effluent guidelines promulgated by the EPA or

an agency’s case-by-case determination based on its Best Professional Judgment (“BPJ”). 40

C.F.R. § 125.3(c)(1)(3). It is undisputed that the 1982 ELG Rule does not set TBELs for toxic

pollutants such as those discharged from the MEGS coal ash pond, therefore the EPA had a clear

mandatory duty to exercise its BPJ as an alternative ground for requiring zero discharge of coal

ash transport and treatment wastes. R. 11.

Assuming the 2015 ELG Rule was eliminated or vacated, the EPA can rely on BPJ as an

alternative ground for requiring zero discharge for coal ash transport and treatment wastes. At

the time the EPA issued the 1982 ELG Rule, the EPA explicitly stated that it excluded toxic

pollutants such as mercury, arsenic, and selenium. Steam Electric Power Generating Point

17

Source Category, 47 Fed. Reg. 52,290. Therefore, the EAB was correct in concluding that the

EPA could rely on BPJ to set case-by-case limits for toxic pollutants not regulated in the 1982

ELG Rule.

A. Assuming the 2015 ELG Rule was eliminated or vacated, the EPA could rely on

its BPJ to set case-by-case limits for toxic pollutants in coal ash transport and

treatment wastes.

The EAB relied on the plain language of the statute and controlling regulations to conclude

that the EPA could rely on its BPJ analysis for requiring zero discharge of coal ash transport and

treatment wastes. R. 11.

The principle purpose of the CWA is “to achieve the complete elimination of all discharges

of pollutants into the nation’s waters.” Am. Frozen Food Inst. v. Train, 539 F.2d 107, 124 (D.C.

Cir. 1976). The CWA mandates that NPDES permits include TBELs for each pollutant

discharged under an NPDES permit. 33 U.S.C. §§ 1311(a), 1342. Moreover, the CWA

regulations require permitting authorities to set TBELS under one of three possible methods.

First, by application of the EPA’s national guidelines. Second, on a case-by-case basis by the

permitting agency when the guidelines are inapplicable. Third, “[w]here promulgated effluent

limitations guidelines only apply to certain aspects of the discharger’s operation, or to certain

pollutants, other aspects or activities are subject to regulation on a case-by-case basis in order to

carry out the provisions of the Act.” 40 C.F.R. § 125.3(c)(1)-(3) (emphasis added). Thus, the

EAB correctly found that because the 1982 ELG Rule applies only “to certain pollutants”—

excluding mercury, arsenic, and selenium —in coal ash transport and treatment wastes, the CWA

expressly instructs that a case-by-case review is required in order “to carry out the purpose of the

Act.” 40 C.F.R. § 125.3(c)(3); Steam Electric Power Generating Point Source Category, 47 Fed.

Reg. 52,290.

18

It is well established that the 1982 ELG Rule did not contain TBELs for mercury, arsenic,

and selenium. Id. The question at hand then, as the EAB recognized, is whether the EPA was

required to undertake a case-by-case analysis under 40 C.F.R. section 125.3(c)(3) for the toxic

pollutants not regulated by the 1982 ELG rule—including mercury, arsenic, and selenium. Here,

the EPA was required to undertake a case-by-case analysis pursuant to 40 C.F.R. section

125.3(c)(3) because the plain language of the Act and the regulations require a case-by-case

review “to carry out the purpose of the Act” when the ELG applies only to “certain pollutants” in

a discharger stream. See Am. Frozen Food Inst., 539 F.2d at 124.

i. EPA’s use of BPJ to require a zero discharge limit of coal ash transport and

treatment wastes would not constitute arbitrary and capricious conduct on

behalf of the Agency.

In instances where no ELGs have been created for “certain pollutants” in a discharger stream,

the EPA permit writer has the duty to exercise his BPJ to set TBELs in accordance with an

assessment of the BAT. 40 C.F.R. § 125.3(c)(3); see also NPDES Permit Writers' Manual 5-16

(U.S. Environmental Protection Agency Office of Wastewater Management, Water Permits

Division State and Regional Branch 2010). Therefore, in the event that the 2015 ELG Rule were

vacated or eliminated, the EPA’s use of BPJ to require a zero discharge limit of coal ash

transport and treatment wastes would not constitute arbitrary and capricious conduct on behalf of

the Agency if a proper analysis of the BAT factors was applied.

NPDES permits must incorporate applicable TBELs guidelines promulgated by EPA on a

nationwide industry-by-industry basis under sections 301(b) and 304 of the CWA. 33 U.S.C. §§

1311(b), 1314; see Am. Petroleum Inst. v. E.P.A., 787 F.2d 965, 969 (Ct. App. 5th Cir. 1986). In

situations where the EPA has not yet promulgated any ELGs for the point source category or

subcategory, NPDES permits must incorporate “such conditions as the Administrator determines

19

are necessary to carry out the provisions of the Act.” 33 U.S.C. § 1342(a)(1); see Am. Petroleum

Inst., 787 F.2d at 969. Accordingly, “[i]n practice, this means that the EPA must determine on a

case-by-case basis what effluent limitations represent the BAT level, using its ‘best professional

judgment.’” 40 C.F.R. § 125.3(c)-(d); Tex. Oil & Gas Ass’n v. E.P.A, 161 F.3d 926, 929 (5th Cir.

1998). The CWA specifies several factors that must be considered by the EPA in determining

BAT limits: “the age of the equipment involved, the process employed, the engineering aspects

of the application of various types of control techniques, process changes, the cost of achieving

such effluent reduction, non-water quality environmental impact (including energy requirements,

and such other factors as the Administrator deems appropriate. . . .” 33 U.S.C. § 1314(b)(2)(B).

Nonetheless, the EPA maintains “considerable discretion in evaluating the relevant factors and

determining the weight to be accorded to each in reaching its ultimate BAT determination.” Tex.

Oil & Gas Ass’n, 161 F.3d at 929; see also Weyerhaeuser Co. v. Costle, 590 F.2d 1101, 1045

(D.C. Cir. 1978); Nat. Res. Def. Council v. EPA, 863 F.2d 1420, 1426 (Ct. App. 9th Cir. 1988).

Additionally, “the EPA may prescribe [Effluent Limitation Guidelines] ELGs whose costs are

significantly disproportionate to their benefits, just as long as the BAT determination remains

economically feasible for the industry as a whole.” Tex. Oil & Gas Ass’n, 161 F.3d at 936; see

Am. Petroleum Inst., 787 F.2d at 965. (“[A] direct cost/benefit correlation is not required [for

BAT], so even minimal environmental impact can be regulated, so long as the prescribed

alternative is ‘technologically and economically achievable.’”). Therefore, the EPA has

significant leeway when exercising its BPJ in determining how the BAT standard will be

incorporated. Tex. Oil & Gas Ass’n, 161 F.3d at 929.

In Tex. Oil & Gas Association v. E.P.A., the court addressed an issue similar to the issue

presented by the Court in this case. In Tex. Oil & Gas Ass’n, the court held that Region 6 of the

20

EPA, relying on its BPJ, reasonably required a zero discharge limit on drilling wastes that

contained toxic pollutants. Id. at 923. Specifically, the court determined that although Region 6

acted without any guidance from ELGs, the Agency reasonably exercised its BPJ within its

General Permit governing the discharge of produced water for coastal oil and gas facilities in

Texas and Louisiana. Id. at 929. Following an examination of the various types of produced

water control technologies available to coastal operators in Texas and Louisiana, Region 6

determined through exercising its BPJ that the BAT standard required the use of a reinjection

technology, which produced no discharge. Id. In that case, the discharge limit on produced water

was based on a number of EPA findings. Id. at 931. In exercising its BPJ, Region 6 condensed

the BAT factors into a three-tiered analysis in determining the zero discharge limit for produced

water. Id. First, the EPA considered a combination of factors such as operational preference and

state or federal requirements. Id. Next, the EPA considered the control technologies available to

coastal dischargers. Id. Lastly, the EPA assessed the economic achievability of the zero

discharge standard. Id.

In applying Region 6’s three-tiered approach to the case at hand, it remains clear that the

EPA can rely on BPJ as an alternative ground for requiring zero discharge of coal ash transport

and treatment wastes regardless of the applicability or effectiveness of the 2015 ELG Rule. First,

in assessing the operational preference and state or federal requirements, the EPA in Tex. Oil &

Gas Ass’n, noted that 99.9 percent of coastal facilities in Louisiana and Texas either had already

stopped discharging produced water or soon would as a result of new Louisiana water quality

regulations and Region 6’s General Permit. Id. Specifically, Region 6 also determined that a

zero discharge requirement was necessary to prevent violations of state water quality criteria for

toxicity and salinity. Similar to the analysis by Region 6 in Tex. Oil & Gas Ass’n, based on the

21

requirements of the Progress 401 certification, the EPA determined that EnerProgs MEGS is

capable of meeting a zero discharge standard by the initial compliance deadline of November 1,

2018. R. 9. Additionally, in Tex. Oil & Gas Ass’n, Region 6 noted that reinjection was already

widely practiced throughout the Coastal Subcategory. Furthermore, the court concluded that

because reinjection resulted in a zero discharge level, Region 6 determined the proper discharge

limit on produced water to be zero. Tex. Oil & Gas Ass’n, 161 F.3d at 931. Like Region 6 in Tex.

Oil & Gas Ass’n, the EPA staff determined that dry handling of bottom ash and fly ash has been

in use at existing plants in the industry for many years. R. 9. Lastly, Region 6 in Tex. Oil & Gas

Ass’n, found that only the six coastal facilities not already covered by either the General Permit

or the new Louisiana water quality standards would incur additional compliance costs as a result

of the limit, and none of the six facilities would be forced to close. Id. at 929. Moreover, Region

6 found the total economic costs considered in the context of the coastal subcategory as a whole

to be minimal. Id. Because the zero discharge limit reflected current industry practice, the EPA

found the economic effect of the zero discharge limit also to be zero. Id. at 932. Here, the MEGS

is sufficiently profitable to adopt dry handling of its toxic wastes with zero liquid discharges,

with no more than a mere twelve cents per month increase in the average consumer’s electric

bill. R. 9. Accordingly, the permit writer, in the exercise of his BPJ, can reasonably determine

that zero discharge of ash handling wastes by November 1, 2018 constitutes the BAT for

discharges associated with coal ash transport and treatment wastes.

V. THE COURT SHOULD REJECT THE EAB’S DECISION THAT THE APRIL 25,

2017 NOTICE IS NOT EFFECTIVE TO REQUIRE SUSPENSION OF THE

COMPLIANCE DEADLINES OF THIE 2015 ELG RULE.

The Court should review the effectiveness of the April 25, 2017 Notice based on an arbitrary

and capricious standard. Under section 706(2) of the APA, a court must “hold unlawful and set

22

aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with the law.” 5 U.S.C. § 706(A)(2). Review under the

“arbitrary and capricious” standard is “highly deferential” and presumes the agency’s action to

be valid.” Envtl. Def. Fund, Inc. v. Costle, 657 F.2d 275, 283 (D.C. Cir. 1981) (citations

omitted). Generally, an agency’s decision can be set aside “if the agency has relied on factors

which Congress has not intended it to consider, entirely failed to consider an important aspect of

the problem, offered an explanation for its decision that runs counter to the evidence before the

agency, or is so implausible that it could not be ascribed to a difference in view or the product of

agency expertise.” Motor Vehicle Mfrs. Ass’n v. State Farm Mutual Auto Ins. Co., 463 U.S. 29,

42 (1983). Moreover, "If Congress has explicitly left a gap for the agency to fill, there is an

express delegation of authority to the agency to elucidate a specific provision of the statute by

regulation. Such legislative regulations are given controlling weight unless they are arbitrary,

capricious, or manifestly contrary to the statute." Chevron, 467 U.S. at 844.

The Notice is a lawful and practical exercise of the EPA’s authority under section 705 APA.

5 U.S.C. § 705. The statute broadly empowers an agency to “postpone the effective date of

action taken by it, pending judicial review,” whenever the agency finds that “justice so requires.”

Id. The EPA reasonably determined that, under the circumstances, justice required granting

petitioners’ request to postpone the effect of impending compliance deadlines. Postponement of

Certain Compliance Dates for Effluent Limitations Guidelines and Standards, 82 Fed. Reg.

19,005. Without the Notice, the 2015 ELG Rule would require plants to meet new, more

stringent limitations and standards on their effluent discharges “as soon as possible” after

November 1, 2018. Id. To satisfy these limits, the industry would have to incur hundreds of

millions of dollars in capital compliance costs associated with the development and

23

implementation of new pollution control technologies required by the 2015 ELG Rule. 40 C.F.R.

§ 423 (IX)(A). The EPA did not act arbitrarily and capriciously in issuing to postpone the effect

of these compliance deadlines given the reconsideration petitions and current judicial challenges

raising questions as to the feasibility and costs of achieving the 2015 ELG Rule’s more stringent

limitations and standards.

A. The Notice satisfies the two conditions of section 705 of the APA.

Section 705 of the APA imposes two conditions on the EPA’s authority to postpone the

effectiveness of a rule: (1) the agency must find that “justice so requires;” and (2) the rule must

be “pending judicial review.” 5 U.S.C. § 705. The Notice meets both conditions. Thus, the

EAB’s determination that section 705 of the APA does not authorize the extension of compliance

dates, only of the effective date is unfounded.

i. The EPA reasonably concluded that “justice so requires” a postponement of

the 2015 ELG Rule’s compliance deadlines.

The EPA reasonably determined that justice requires postponement of the 2015 ELG Rule. In

authorizing agencies to postpone their own actions pending judicial review, section 705 allows

agencies to prevent any disruption that may result from forcing compliance with a rule that might

be vacated or significantly modified as a result of a court decision. Thus, considering the

hundreds of millions of dollars required in capital expenditures by the industry to comply with

the 2015 ELG Rule’s provisions that are challenged as unlawful and that the EPA is

reconsidering, the EPA’s decision is well within Congress’s broad grant of authority provided in

section 705. 5 U.S.C. § 705.

The 2015 ELG Rule applies new, more stringent effluent limitations to coal ash transport

water released from regulatory plants “as early as November 1, 2018, for direct dischargers and

by November 1, 2018, for indirect dischargers.” Postponement of Certain Compliance Dates for

24

Effluent Limitations Guidelines and Standards, 82 Fed. Reg. 19,005. The regulated plants will

begin incurring capital compliance costs now to meet the 2015 ELG Rule’s compliance

deadlines. Postponement of Certain Compliance Dates for Effluent Limitations Guidelines and

Standards, 82 Fed. Reg. 19,005; Effluent Limitations Guidelines and Standards for Steam

Electric Power Generating Point Source Category, 80 Fed. Reg. 67,838 (explaining that the

compliance deadlines included in the 2015 ELG Rule “provide the time that many facilities need

to raise capital, plan and design systems, procure equipment, and construct and then test

systems”). The EPA estimates that the total post-tax compliance costs for the industry would be

$399.6 million/year. Given that the petitions challenging the 2015 ELG Rule are pending in the

Fifth Circuit and that the EPA has decided to pursue the reconsideration process for the 2015

ELG Rule, the EPA reasonably determined that it was not in the interest of justice to require the

industry to incur such detrimental expenditures amongst the confusion.

ii. The Notice is pending judicial review in the Fifth Circuit.

The Notice also satisfies section 705 of the APA because the EPA issued it “pending judicial

review.” 5 U.S.C. § 705; Postponement of Certain Compliance Dates for Effluent Limitations

Guidelines and Standards, 82 Fed. Reg. 19,005.

In Sierra Club v. Jackson, the court addressed the issue of a rule promulgated under the

Clean Air Act (“CAA”), which authorized the EPA to issue a three-month stay pending

reconsideration. See 42 U.S.C. § 7607(d)(7)(B). The court in Sierra Club concluded that the EPA

could not use section 705 to stay the effectiveness of its rules in order to avoid the three-month

limitation on stays under the CAA “simply because litigation in the court of appeals happens to

be pending.” Sierra Club v. Jackson, 833 F. Supp. 2d 11, 33–34 (D.D.C. 2012). In addition, the

court in Sierra club determined that the EPA’s stay decision merely referenced passing litigation

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and made no effort to ground the stay on the existence or consequences of the pending litigation.

Id. at 33.

Unlike the court’s determination in the Sierra Club, here the 2015 ELG Rule was

promulgated under the CWA, which has no corresponding three-month stay provision.

Additionally, the EPA clearly cited to the Fifth Circuit litigation in its reasons for issuing the

Notice of postponement. Moreover, by citing the pending litigation in the Fifth Circuit, the EPA

acknowledges the purpose of section 705 of the APA, which is to maintain the status quo

pending judicial review. Postponement of Certain Compliance Dates for Effluent Limitations

Guidelines and Standards, 82 Fed. Reg. 19,005. Thus, the Administrator’s Notice written

pursuant to section 705 of the APA plainly demonstrates a link to the pending Fifth Circuit

litigation.

B. Section 705 of the APA permits agencies to postpone compliance deadlines in

a rule.

The EAB’s decision that the EPA cannot postpone the 2015 ELG Rule because the January

4, 2016 effective date has already passed relies on an overly restrictive interpretation of the

phrase “effective date.” R. 11, 12. The EPA reasonably determined that certain future

compliance dates in the 2015 ELG Rule that had not yet passed are within the meaning of

“effective date” under section 705 of the APA, which provides the Agency’s authority to

postpone a rule’s deadlines. Postponement of Certain Compliance Dates for Effluent Limitations

Guidelines and Standards, 82 Fed. Reg. 19,005.

Under section 705 of the APA, the EPA may postpone the “effective date of action taken by

it.” 5 U.S.C. § 705. Although the APA does not define the term “effective date,” its meaning

may be understood from the words surrounding it. Under section 551 of the APA, the term

“agency action” is broadly defined as “the whole or a part of an agency rule.” 5 U.S.C. §

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551(13) (emphasis added); see also 5 U.S.C. § 701(b)(2) (cross-referencing § 551). An agency

action may have more than one part. Therefore, it is reasonable to read “effective date” to

include either any single date included in the rule or multiple dates when those parts of the rule

may become effective.

For example, the 2015 ELG Rule establishes an effective date of January 4, 2016. Effluent

Limitations Guidelines and Standards for Steam Electric Power Generating Point Source

Category, 80 Fed. Reg. 67,838. This date is the earliest in which the effluent limits and standards

established by the 2015 ELG Rule may be incorporated into NPDES permits. The 2015 ELG

Rule, however, also incorporates certain future compliance deadlines that reflect the dates by

which regulated plants must comply with specific parts of the 2015 ELG Rule. See 40 C.F.R. §

423.13(g)(1)(i), (h)(1)(i), (i)(1)(i), (j)(1)(i), and (k)(1)(i). The compliance deadlines indicated by

the EPA’s Notice reflect the dates when specific parts of the 2015 ELG Rule take effect,

therefore fitting within the meaning of the phrase “effective date” under section 705 of the APA.

5 U.S.C. § 705.

The EAB’s interpretation of section 705 of the APA ignores the express purpose of the

statute: to enable an agency to postpone agency action “when justice so requires . . . pending

judicial review.” 5 U.S.C. § 705. Under the EAB’s interpretation, an agency acting pursuant to

section 705 of the APA would only be able to postpone the effectiveness of an entire rule and

would not be able to determine “that justice so requires” a postponement of only part of its

action. Likewise, under the EAB’s interpretation, section 705’s grant of authority to postpone the

effectiveness of a rule “pending judicial review” would have little utility. Under section 553(d)

of the APA, a rule may have an initial “effective date” as early as 30 days after the Rule is

published in the Federal Register, but an interested party may seek judicial review far beyond

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that date. For example, while the 2015 ELG Rule became effective on January 4, 2016, the

period for filing petitions for review of the 2015 ELG Rule did not run until 120 days after on

March 16, 2016. See 33 U.S.C. 1369(b) (requiring petitions for review of effluent limitations to

be filed within 120 days); Effluent Limitations Guidelines and Standards for Steam Electric

Power Generating Point Source Category, 80 Fed. Reg. 67,837 (specifying November 17, 2015

as the date the 2015 ELG Rule was issued for purposes of judicial review under 33 U.S.C. §

1369(b)). Thus, the EPA’s interpretation of “effective date” to include both the initial effective

date and certain future compliance deadlines that have not yet passed reasonably comports with

the purpose of section 705 of the APA.

C. The EPA was not required to undertake notice-and-comment rulemaking

before issuing the Notice requiring postponement of certain future

compliance deadlines of the 2015 ELG Rule under section 705 of the APA.

The EAB’s decision that the EPA Administrator’s Notice is a rule that requires notice-and-

comment rulemaking procedures is not supported by section 705 of the APA. Section 705 of the

APA allows agencies to provide equitable relief from regulatory requirements pending judicial

review. Specifically, section 705 of the APA in this case allows the EPA to preserve the

regulatory status quo with respect to wastestreams subject to the 2015 ELG Rule's new, more

stringent, limitations and standards while litigation is pending, and reconsideration is underway.

Postponement of Certain Compliance Dates for Effluent Limitations Guidelines and Standards,

82 Fed. Reg. 19,005. Nothing in section 705 of the APA provides that the requirements of

rulemaking pursuant to section 553 of the APA apply to an agency’s postponement of an

effective date of a final rule pending judicial review.

A “rule” is defined as “the whole or a part of an agency statement of general or particular

applicability and future effect designed to implement, interpret, or prescribe law or policy.” 5

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U.S.C. § 551(4). Section 705 of the APA empowers an agency to postpone the effective date of

rules that have not yet become effective “pending judicial review.” 5 U.S.C. § 705. Here, the

Administrator’s action of issuing the Notice does not equate to implementing, interpreting, or

prescribing law or policy. 5 U.S.C. § 551(4). Rather, the purpose of the Administrator’s Notice is

to effectively postpone certain compliance deadlines, which does not equate to a rule that

requires an agency to conduct notice-and-comment to satisfy rulemaking requirements under

section 553 of the APA.

CONCLUSION AND PRAYER FOR RELIEF

For the foregoing reasons, the Respondent requests that this Court affirm the EAB’s

following decisions. First, the ash pond closure remediation conditions do constitute appropriate

requirements of state law as required by CWA 401(d). Second, the EPA has the authority to

review the appropriateness of section 401 state certificates. Third, a section 402 permit was

properly denied to FCW because outfall 008 does not discharge into a water of the United States.

Fourth, a section 404 permit was correctly denied to FCW because 40 C.F.R. section 122.2

contains no recapture provision to convert the ash pond into a water of the United States. Fifth,

regardless of the applicability or effectiveness of the 1982 ELG Rule, the EPA could rely on its

BPJ to require a zero discharge of coal ash transport and treatment waste. Lastly, we ask this

court to deny the EAB’s decision that the notice was not effective to require postponement of

future compliance dates.