January 22, 2018

Supreme Court Decides National Association of Manufacturers v. Department of Defense

On January 22, 2018, the Supreme Court decided National Association of Manufacturers v. Department of Defense, No. 16-299, in which it held that the federal courts of appeal do not have direct and exclusive jurisdiction under 33 U.S.C. § 1369(b)(1) over an appeal of the Environmental Protection Agency and the Army Corps of Engineers’ enacting a regulation defining “waters of the United States” for purposes of 33 U.S.C. § 1362(7).

The Clean Water Act, 33 U.S.C. § 1251, et seq., establishes a statutory scheme for “restor[ing] and maintain[ing] the chemical, physical, and biological integrity of the Nation’s waters.” Among other things, the Act prohibits the “addition of any pollutant” into “the waters of the United States, including the territorial seas,” “from any point source” without a permit. 33 U.S.C. §§ 1311, 1362(7), (12), (14). The EPA and the Corps administer the permitting programs under 33 U.S.C. § 1342 and § 1344, respectively. The Act provides that certain of the agencies’ actions are directly and exclusively appealable to federal courts of appeal, including those “approving or promulgating any effluent limitation or other limitation under section 1311, 1312, 1316, or 1345” (Effluent Limitations Exception) and “issuing or denying any permit under section 1342 of this title” (Permitting Exception). 33 U. S. C. §1369(b)(1)(E)-(F). The Administrative Procedures Act, 5 U.S.C. § 500, et seq., governs judicial review of any other final agency action under the Act. 33 U.S.C. § 1369(b)(1).

In 2015, the EPA and the Corps jointly promulgated a regulation defining the “waters of the United States” (the Rule). Some of those seeking judicial review of the agencies’ action appealed the action to federal courts of appeal, while others, including the National Association of Manufacturers, challenged the Rule only in a federal district court. A multi-district litigation panel declined to consolidate the district-court petitions but consolidated the appellate petitions and transferred them to the U.S. Court of Appeals for the Sixth Circuit. The Sixth Circuit stayed application of the Rule nationwide. The district courts, meanwhile, reached conflicting decisions on whether they had jurisdiction to review the agencies’ action, with some concluding that they did not and at least one concluding that it did.

In addition to pursuing review in a federal district court, the Association intervened as a respondent in the consolidated action before the Sixth Circuit and, with others, moved to dismiss that action for want of jurisdiction. The Government opposed those motions, arguing that the Effluent Limitations and Permitting Exceptions authorized only a federal court of appeals to review the agencies’ action. The Sixth Circuit denied the Association’s motion to dismiss and request for a rehearing en banc. The United States Supreme Court granted certiorari.

The Court first rejected the application of the Effluent Limitations Exception for two reasons. It held that the Rule is not an “effluent limitation,” as defined in 33 U.S.C. § 1362(11), or an “other limitation” because it does not impose any restriction on the “quantities, rates, or concentrations” of a regulated discharge. It further held that the agencies promulgated the Rule under 33 U.S.C. § 1361(A), rather than any of the statutory sections listed in, and available to trigger, the Exception.

The Court also rejected the availability of the Permitting Exception because the Rule does not issue or deny any permit under 33 U.S.C. § 1342.

Finally, the Court rejected the Government’s policy arguments as contrary to the clear text of the Act. It found unpersuasive the Government’s arguments that the bifurcated review scheme is “irrational,” that permitting direct review of the Rule in the federal courts of appeal would promote efficiency and national uniformity, and that a presumption favoring court-of-appeals review of administrative action should apply.

Justice Sotomayor delivered the unanimous opinion of the Court.

Download Opinion of the Court.

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