Last month, at least three federal courts issued separate opinions that erode the U.S. Environmental Protection Agency’s (EPA) authority over air and water permitting.

  • In the case of Luminant Generation Co. v. EPA, the provisions of Texas’s air quality implementation plan were at issue.  Under the federal regulations of the Clean Air Act (CAA), each state must adopt and administer a statewide plan for implementing federal air quality standards.  Each state then submits its plan for review by the EPA to ensure that the regulations are consistent with the CAA’s requirements.

    Texas submitted amendments to its implementation plan to the EPA in 2006.  (The EPA had eighteen months to respond to these amendments.)  The EPA rejected Texas’s submission in 2010, more than three years after the statutory deadline for disapproval. In the disapproval, the EPA failed to identify a single provision of the CAA that the Texas plan violated.

    The Fifth Circuit Court of Appeals explained that the EPA is only to consider the CAA’s requirements when reviewing state implementation plans, and that the EPA must approve the plan if it meets all of them. In other words, the court stated that the EPA overstepped its bounds in disapproving Texas’s plan.  The case was sent back to the trial court with instructions that – if the Texas plan satisfies the basic requirements of the CAA – the EPA must approve it.

The U.S. Supreme Court and the federal Washington, D.C., District Court handed down more bad news for the EPA. Each decision significantly limits the authority of the EPA under the Clean Water Act (CWA).  

  • In Sackett v. EPA, the U.S. Supreme Court held that landowners have a right to challenge EPA CWA enforcement orders in federal court before being required to comply with such orders.  In the case, EPA sent a compliance order to landowners who were building a home near a lake in Idaho. The pre-enforcement order required the owners to restore the area that the EPA claimed was an illegally-filled wetland.  The EPA threatened civil penalties of up to $37,500 per day if they did not immediately comply.

    The owners filed suit in federal court, claiming a violation of their due process rights under the Fifth Amendment of the U.S. Constitution as well as a claim that the EPA’s action was “arbitrary and capricious” under the Administrative Procedure Act (APA).  The Court agreed and concluded that pre-enforcement orders are challengeable under the APA.  Essentially, the holding means that landowners are no longer forced to wait until after paying penalties to challenge the determination by the EPA.
  • The Mingo Logan Coal Company v. EPA case examined the EPA’s ability to set aside CWA permits after they have already been issued. In the case, a mining company worked with the Corps of Engineers and the EPA in a contentious, multi-year CWA permitting process.

    Four years after the permit was issued and work was underway, the EPA issued a veto of the permit.  After a review of the statute and the legislative history, the federal Washington, D.C., District Court concluded that the EPA did not possess open ended veto authority. 

    In a harshly worded opinion, the court stated that the EPA’s decision to veto the permit after it was issued had “the air of a disappointed player’s threat to take his ball and go home when he didn’t get to pitch.” 

All three decisions would appear to send a signal to the EPA that courts will not always defer to the agency’s position.  They may become very relevant in Texas because of ongoing disputes between the Texas Commission on Environmental Quality and the EPA related to storm water permitting. 

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