Tag: APA

EPA ANNOUNCES FINAL CLEAN WATER ACT SECTION 401 WATER QUALITY CERTIFICATION IMPROVEMENT RULE

In another “Waters of the United States” development, the EPA published its final 2023 Clean Water Act Section 401 Quarter Quality Certification Improvement Rule on September 27, 2023. (88 Fed. Reg. 66558.) The final 2023 Rule revises and replaces the 2020 Rule’s regulatory requirements for water quality certification that were adopted by the prior federal administration. The updates seek to realign the scope of Section 401 certification with established practices, while also restoring the roles of states, territories, and authorized Tribes as certifying agencies.

Background on Section 401 Permitting

Section 401 of the Clean Water Act (CWA) requires applicants for any federal license or permit that may result in discharge from a point source into “waters of the United States” to obtain a water quality certification or waiver from the certifying authority (i.e., states, territories, and Tribes with treatment in a similar manner as a state [TAS]). To initiate the process, the applicant must submit a “request for certification,” and the certifying authority must act upon that request within a “reasonable period of time” (which shall not exceed one year).

If the certifying authority determines the proposed activity will comply with statutory limitations and requirements (i.e., effluent limits; monitoring and reporting; etc.), it may grant or waive certification, after which the federal agency can issue the corresponding federal license/permit. If the certifying authority denies certification, no license may be issued. Alternatively, the certifying authority may waive certification simply by “failing or refusing to act on a request for certification within a reasonable period of time.”

The 2020 Rule

On April 15, 2019, then-President Trump issued Executive Order 13868, entitled “Promoting Energy Infrastructure and Economic Growth,” which directed the EPA to propose new regulations governing Section 401 permitting consistent with the order’s policy of “promot[ing] private investment in the Nation’s energy infrastructure.” Pursuant to this directive, EPA promulgated a final rule on July 13, 2020.

The 2020 Rule clarified that federal agencies unilaterally set the “reasonable period of time” for the certifying authority to act on a certification request, clarified that certification was required for any federally licensed activity that discharges into WOTUS, and reaffirmed that certifying authorities may explicitly waive 401 certification. The 2020 Rule also introduced several new features, including one that allowed federal agencies to review certifying agencies’ certification decisions for compliance and, if found non-compliant, deem the non-complying certifications as waived. The 2020 Rule also prohibited certifying agencies from requesting applicants to withdraw and resubmit a certification request. Finally, the 2020 Rule rejected the traditional scope of review as one that considered “the activity as a whole,” in favor of a narrower and more limited “discharge-only” approach.

The 2020 Rule was challenged in three federal district courts by various states, tribes, and NGOs, where, at varying times, it was remanded, reinstated, and ultimately vacated for further proceedings. (E.g., In re Clean Water Act Rulemaking (N.D. Cal. 2021) 568 F. Supp. 3d 1013 (reversed and remanded by (9th Cir. 2023) 60 F.4th 583.)

2023 Rulemaking Process

On January 20, 2021, President Biden signed Executive Order 13990, entitled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” (86 Fed. Reg. 7037.) The order directed the EPA to review and, as appropriate, revise or replace any or all portions of the 2020 Clean Water Action (CWA) Section 401 Certification Rule that had been adopted by the Trump administration.

On May 27, 2021, the EPA announced its intent to revise the 2020 Rule and update the regulatory requirements for water quality certification under Section 401. The EPA later circulated the proposed rule on June 2, 2022, which updated existing regulations to be more consistent with the statutory text of the CWA and to clarify elements of the Section 401 certification process, particularly as it applied to state, federal, and Tribal authority. Thereafter, the EPA conducted pre-proposal engagement and provided a 60-day public comment period.

After receiving public comments and incorporating stakeholder feedback, the EPA published the final Section 401 Rule on September 27, 2023. The rule will become effective on November 27, 2023, and apply to all Section 401 permit applications from then on.

The 2023 Rule Update

The updated 2023 Rule aims to enhance certification review and provide more regulatory certainty that better reflects the CWA’s cooperative federalism framework. The 2023 Rule makes key updates to five major areas of the certification process, including: pre-filing meeting requests; requests for certification; the length of “reasonable period of time”; scope of review; and certification decisions. The Rule also clarifies provisions related to: federal agency review; neighboring jurisdictions; certification modifications; and Tribal TAS status.

Pre-Filing Meeting Requests (Section 121.4)
The 2023 Rule reaffirms that project proponents must request a pre-filing meeting from the certifying agency at least 30 days before it requests certification. (Section 121.4).

As part of the update, the 2023 Rule now provides certifying authorities with the ability to waive or shorten the pre-filing meeting request requirement either on a case-by-case basis (i.e., individual) or on a categorical basis (i.e., for certain types of projects, permits, etc.). The Rule also provides a recommended list of pre-filing meeting request contents to ensure any issues are timely addressed and the certification process moves efficiently.

Requests for Certification (Section 121.5)
The 2023 Rule updates the submission requirements for requests for certification. (Section 121.5). Now, requests for certification must be in writing, signed, date, and include defined minimum contents. For example, if the certification request is for an individual license/permit, it must include a copy of the federal license/permit application and any readily available water-quality materials that informed the application. Alternatively, if the certification request is for a general license/permit, then it must include a copy of the draft federal license/permit and any available water quality-related materials that informed the draft permit.

Moreover, if the EPA is acting as the certifying authority, the Rule sets forth seven additional components that the project proponent must submit. To this end, the Rule now allows state and Tribal certifying authorities to define their own contents or forms for submitting requests for certification, in lieu of relying on EPA’s default list. But if they choose not to do so, the seven elements contained in the Rule’s default list must be included in the request.

Finally, the 2023 Rule now requires certifying authorities to send written confirmation of the date it received a request for certification to the project proponent and the corresponding federal agency.

Reasonable Period of Time (Section 121.6)
Section 121.6 requires certifying agencies to review certification requests and act on those requests within a “reasonable period of time.” (Section 121.6.)  For the first time, the 2023 Rule now provides certifying authorities a role in determining, with the federal agency, the length of the “reasonable period of time” for the certifying authority to review a certification request. Certifying authorities may collaborate with federal licensing or permitting agencies to jointly establish reasonable periods of time before receiving a request. For example, time periods may be established on a case-by-case basis, or on a categorical basis (i.e., through a memorandum of agreement between the federal and certifying agencies).

If the certifying and federal agencies do not reach an agreement, the “reasonable period of time” will default to six months from the time the certifying authority receives a compliant certification request.

In the event the certifying authority needs more time to comply with its public notice procedures or if there is a force majeure event, the agency may, subject to proper notice, automatically extend the review period, provided that the extension does not exceed the statutory maximum of one year.

Scope of Review (Section 121.3)
The 2023 Rule realigns certification processes with previously-established practices that preceded the 2020 Rule. In particular, the Rule modifies the regulatory text to better clarify the extent of the activity subject to certification and the water quality limitations inherent to Section 401.

Under the 2020 Rule, certifying authorities could only consider potential water quality impacts from a proposed project’s point source “discharges.” The 2023 Rule replaces this “discharge-only” approach and returns the scope of review to the “whole activity” that will be subject to the federal permit. Specifically, the Rule provides that, when a certifying authority reviews a certification request, the authority shall evaluate whether the activity complies with all water quality requirements.

However, the Rule clarifies that this evaluation is limited only to those water-quality-related impacts from the activity subject to the federal permit, including the activity’s construction and operation (i.e., impacts that adversely affect the chemical, physical, and biological integrity of WOTUS). Therefore, indirect project impacts with no connection to water quality should not be considered.

To this end, the 2023 Rule also clarifies that the certifying authority’s review is limited to considering impacts to WOTUS, except where a state or authorized Tribe has jurisdiction over those waters. In other words, the certifying authority’s analysis of any given activity is limited to adverse water-quality impacts that may prevent compliance with applicable state or Tribal water quality requirements.

Finally, in granting the certification, the certifying authority must include any requisite conditions that will ensure the activity complies with all applicable water quality requirements (e.g., Sections 301, 302, 303, 306, and 307, and/or any applicable state or Tribal statutes and regulations governing water quality). As such, any conditions that are imposed to address impacts should not be treated as part of the “activity” under consideration.

Certification Decisions (Section 121.7)
The 2023 Rule also establishes that a certifying agency may “act on a request for certification” in one of four ways: (1) by granting certification; (2) by granting certification with conditions; (3) denying certification; or (4) expressly waiving certification. The Rule also requires all final certification decisions be in writing and defines recommended minimum contents for each type of decision.

For example, the Rule recommends that each decision identify the type of decision being made, the applicable federal license/permit, acknowledgement that the certifying agency complied with public noticing procedures. For certifications granted with conditions, the Rule recommends the authority provide a statement explaining why each condition is necessary to assure the activity will comply with water quality requirements. Alternatively, for denials, the Rule recommends the authority explain why it is unable to certify compliance with water quality requirements.

Federal Agency Review (Sections 121.8–121.9)
The 2023 Rule shifts away from the 2020 Rule by limiting the role of federal agency review. Now, federal agencies are limited to verifying: (1) whether the certifying authority issued a certification decision; (2) the authority confirmed it complied with public noticing procedures; and (3) the authority acted on the request within a reasonable period of time.

Neighboring Jurisdictions (Sections 121.12–121.15)
The 2023 Rule adds more detail to the discussion of neighboring jurisdictions and how they can participate in the permitting process when the EPA has determined that a proposed project in another jurisdiction may affect their water quality. The regulatory text now clarifies: the roles of actors involved; when the neighboring jurisdiction process begins; and identifying minimum contents of notifying the EPA.

Certification Modifications (Section 121.10)
The 2023 Rule authorizes certifying authorities and federal agencies to modify a grant of certification, but only if the modifications are to portions that are agreed upon by both entities. The Rule clarifies that the certifying authority cannot unilaterally modify a certification decision, nor can it change the nature of the final decision through the modification process (i.e., grant, deny, waive).

Tribes Applying for Treatment in a Similar Manner as a State (Section 121.11)
For the first time, the 2023 Rule includes provisions for Tribes to obtain TAS status for purposes of Section 401 certification or to obtain TAS status to act as a neighboring jurisdiction. This will not allow tribes to have more involvement in the certification process without also having to apply for TAS for water quality standards under Section 303(c).

Conclusion

The Final 2023 Rule will go into effect on November 27, 2023 and apply to all prospective certification decisions. All other certifications currently pending review or submitted before then will be governed by the 2020 Rule or corresponding certification scheme.

For more information, the EPA has provided an overview of the final rule, along with a summary of key updates and a comparison of the 2023 Rule vs. the 2020 Rule. The Agency is also finalizing conforming amendments to the water quality certification regulations for EPA-issued NPDES permits. (Docket ID No. EPA-HQ-OW-2022-0128; -0391).

Brian Plant, Of Counsel Attorney at RMM, advises private and public agency clients regarding a broad range of permitting actions under Federal and State water quality, endangered species, and other natural resources laws and regulations. He can be reached at: [email protected].

Bridget McDonald, Associate Attorney at RMM, advises private and public agency clients regarding a broad range of permitting actions under Federal and State water quality laws, as well as CEQA, the Coastal Act, and matters related to planning, zoning, and housing. She can be reached at: [email protected].

EPA PUBLISHES REVISED DEFINITION OF “WATERS OF THE UNITED STATES” IN RESPONSE TO SCOTUS’ SACKETT DECISION.

On August 29, 2023, the U.S. Environmental Protection Agency (EPA) and the Department of the Army (Army) issued a final rule to amend the agencies’ earlier “Revised Definition of ‘Waters of the United States,’” published on January 18, 2023. (88 Fed. Reg. 3004.) The latest rule revises the definition of “waters of the United States” (WOTUS) to conform to the Supreme Court’s May 25, 2023 opinion in Sackett v. Environmental Protection Agency (2023) 598 U.S. 651.

The highly anticipated Sackett decision resolved long-standing debate over the scope and definition of WOTUS under the Clean Water Act (CWA). The Court’s opinion considerably narrows the regulatory reach of the EPA and the Army by invalidating the agencies’ application of the “significant nexus” test and promulgating a limited interpretation of jurisdictional “waters” and “adjacent wetlands” that are covered by the CWA.

While the EPA and Army’s January 2023 WOTUS Rule was not directly before the Supreme Court, the Sackett decision made clear that certain aspects of the that Rule were invalid, in turn creating further uncertainty for CWA implementation. The August 2023 Rule (also referred to as “the Conforming Rule”) thus responds to Sackett by amending only those components of the rule’s regulatory text that are now invalid under the Supreme Court’s interpretation of the CWA—namely, removing the “significant nexus” standard and amending the definition of “adjacent” waters. By expeditiously issuing these amendments, the agencies assert the final rule provides much-needed clarity and a clear path forward that is not only consistent with the Supreme Court’s ruling, but allows the Army Corps to resume issuing jurisdictional determinations (which have been put on hold in some Corps’ Districts).

A summary of the August 2023 Rule’s key amendments and its timeline for implementation are summarized below:

Key Regulatory Amendments

To align with the Sackett holding, the August 2023 Rule takes a surgical approach to make targeted revisions to selected portions of the January 2023 Rule that are implicated by the decision:

Removal of “Significant Nexus” Standard
The Sackett decision found that the agencies’ application of the “significant nexus” test to identify federally protected tributaries and other waters was inconsistent with the text and structure of the CWA. The August 2023 Rule thus removes all references to the standard.

As a result, tributaries, adjacent wetlands, and intrastate lakes and ponds that “significantly affect the chemical, physical, or biological integrity of [traditional navigable] waters” are no longer jurisdictional under the CWA. Along these lines, the Conforming Rule also eliminates the definition of “significantly affect,” which listed various factors and conditions that the agencies used to ascertain whether certain waters would have a material influence on the chemical, physical, or biological integrity of traditional navigable waters. These standards, according to the Court, were too nebulous for reasonable and understandable implementation and were inconsistent with the structure of the Clean Water Act.

Amended Definition of “Adjacent” Waters
To conform to Sackett, the August 2023 Rule also amends the WOTUS definition so that water can no longer be found “jurisdictional” based on the January 2023 Rule’s definition of “adjacent.” As such, wetlands are not “adjacent,” and thus, not jurisdictional under the CWA, solely because they are “bordering, contiguous, or neighboring…[or] separated from other ‘waters of the United States’ by man-made dikes or barriers, natural river berms, beach dunes, and the like.”

Instead, “adjacent” tributaries, wetlands, and intrastate lakes/ponds are only jurisdictional if they are “relatively permanent, standing, or continuously flowing bodies of water,” or have a continuous surface connection to navigable waters.

No More “Interstate Wetlands,” But Little Clarity on “Relatively Permanent” Wetlands
With the elimination of the “significant nexus” standard, tributaries, wetlands, and intrastate lakes/ponds that are “adjacent” to federal navigable waters are only jurisdictional if they are “relatively permanent, standing, or continuously flowing bodies of water.” The August 2023 Rule also eliminates “interstate wetlands” from the definition of “interstate waters” that are subject to the CWA.

Notably, however, the August 2023 Rule provides little clarity into the factors that create “relatively permanent” waters. The Rule’s supplemental preamble explains that, under Rapanos, those waters do “not necessarily exclude streams, rivers, or lakes that might dry up in extraordinary circumstances such as drought,” or “seasonal rivers, which contain continuous flow during some months of the year but no flow during dry months.”

And, under Sackett, “waters”  encompass “only those relatively permanent, standing, or continuously flowing bodies of water forming geographical features that are described in ordinary parlance as streams, oceans, rivers, and lakes.” Wetlands are  WOTUS “when they have a continuous surface connection to bodies that are ‘waters of the United States’in their own right, so that there is no clear demarcation between ‘waters’ and wetlands.’” Nevertheless, under the Conforming Rule, it remains unclear the length of “relative permanency” a water must experience in order to qualify as jurisdictional under the CWA.

Finally, the August 2023 Rule removes “interstate wetlands” to conform to the Sackett decision’s determination that wetlands are not jurisdictional simply because they are interstate. Instead, under the Supreme Court’s interpretation of the CWA, the term “waters” refers to such ‘open waters’ such as rivers, lakes, and other waters that flow across or form a part of State boundaries.

Regulatory Interpretation & Agency Guidance
Unlike prior versions of the WOTUS rule, the August 2023 Rule’s proposed amendments note that the agencies will continue to interpret the remainder of the definition of WOTUS in a manner that is consistent with the Sackett decision. But the agencies reiterate that it is both reasonable and appropriate for the agencies to promulgate this rule as quickly as feasible, without notice and comment, in response to the Supreme Court’s significant holding.

In turn, the agencies concede that they will address any potential issues arising from implementation of the August 2023 Rule through appropriate avenues, such as approved jurisdictional determinations and CWA permits, issuing future guidance, subsequent notice and comment rulemaking, preparing agency forms and training materials, and holding stakeholder meetings to ensure the public has an opportunity to provide input on other issues they would like the agencies to address.

Thus, in practice, the agencies will develop guidance and take stakeholder input regarding the August 2023 Rule’s proposed amendments after it is published in the Federal Register and becomes effective, and not rely on pre-publication comment.

Severability Clause
As with the agencies’ January 2023 Rule, the August 2023 Rule similarly provides a severability clause that attempts to preserve as many portions as feasible in the event future litigation attempts to stay or invalidate the Rule. The August 2023 Rule reiterates that the WOTUS rule was crafted so that each portion or element is disjunctive and capable of operating independently. Therefore, if any provision is deemed legally invalid, that partial invalidation will not render the remainder of the Rule as also invalid. To this end, if applying any portion of the Conforming Rule is determined to be invalid, the agencies intend that the complete WOTUS rule, as revised, will remain applicable to all other circumstances. In other words, if any of the exclusions from WOTUS were deemed invalid, invalidating one exclusion would not necessarily have any practical impact on any other part of the definition of WOTUS.

Implementation Timeline

No Notice and Public Comment Process
Because the proposed amendments are change only those parts of the January 2023 rule that are invalid under Sackett, the EPA and the Army have decided to issue the August 2023 Rule without notice or an opportunity for public comment. Citing section 553(b)(B) of the Administrative Procedure Act (APA), the agencies have found there is good cause that providing noticing or receiving public comments on the final rule would be impracticable and unnecessary.

According to the agencies, the conforming amendments “do not involve the exercise of the agencies’ discretion,” therefore a “notice and comment process would neither provide new information to the public nor inform any agency decisionmaking regarding the aspects of the regulations defining ‘waters of the United States’ that are invalid as inconsistent with the [CWA] under Sackett.”

Immediate Publication & Effect
The August 2023 Rule will become immediately effective upon publication in the Federal Register. The agencies have found similar good cause under APA section 553(d)(3) to make the August 2023 Rule immediately effective because it will not impose any burdens on the regulated community. Instead, the agencies contend that the amendments merely conform the January 2023 Rule to Sacket by amending those provisions deemed invalid under the Supreme Court’s interpretation of the CWA.

The agencies reiterate that making the rule immediately effective will provide more clarity and certainty to the regulated community; whereas a delayed effective date would prolong confusion and potentially result in project delays for prospective permittees that seek a jurisdictional determination for their project’s proposed discharges. Finally, the immediate effect of the Conforming Rule will also provide clarity to States and Tribes that administer CWA permitting programs, as well as members of the general public who seek to understand which waters are subject to the CWA’s requirements.

Next Steps

The amended August 2023 Rule is expected to be published in the Federal Register by Friday, September 1, 2023. Once published, the rule will go into immediate effect and the Army Corps’ pause on issuing jurisdictional determinations (due to the pending Sackett decision) will be lifted.

Due to an existing injunction against the January 2023 Rule, the agencies will implement the August 2023 Rule in the 23 states where the January 2023 Rule is not enjoined. In the remaining 27 states where the January 2023 is enjoined, the agencies will continue interpreting WOTUS consistent with the pre-2015 regulatory regime and the Sackett framework until further notice.

Brian Plant, Of Counsel attorney at RMM, advises private and public agency clients regarding a broad range of permitting actions under Federal and State water quality, endangered species, and other natural resources laws and regulations. He can be reached at: [email protected].

U.S. SUPREME COURT LIMITS FEDERAL PERMITTING JURISDICTION UNDER THE CLEAN WATER ACT, HOLDING THAT ONLY WETLANDS WITH A SURFACE CONNECTION TO INTERSTATE NAVIGABLE WATERS CONSTITUTE “WATERS OF THE UNITED STATES.”

SUMMARY AND UPDATE

In a highly-anticipated decision published on May 25, 2023, the United Stated Supreme Court in Sackett v. Environmental Protection Agency (2023) 598 U.S. __, 143 S.Ct. 1322 (No. 21-454), resolved the long-standing debate over the definition and scope of “waters of the United States” under the Clean Water Act. The unanimous opinion authored by Justice Alito significantly narrows the jurisdictional reach of the EPA and Army Corps by adopting the Court’s earlier plurality opinion in Rapanos v. U.S. to hold that only those wetlands with geographical features that are “indistinguishable” from traditional navigable waters due to a continuous surface connection are subject to federal regulation under the Clean Water Act. The Court applied this new standard to conclude that the EPA lacked regulatory and permitting authority over wetlands located adjacent to land owned by petitioners Michael and Chantell Sackett because those wetlands were distinguishable from covered waters.

Factual & Procedural Background

In 2004, Petitioners Michael and Chantell Sackett (the Sacketts) began backfilling land on their property near Priest Lake, Idaho, across the street from a tributary that feeds a non-navigable creek. While the parcel does not share a “continuous surface connection” with the tributary, the land could, at times, be hydrologically connected to the tributary and, by extension, Priest Lake.

After an enforcement action brought by EPA and after nearly a decade of litigation, the District Court entered summary judgment in favor of the EPA, holding that the Sacketts’ land was subject to CWA protections. The Ninth Circuit affirmed, holding that the CWA covers adjacent wetlands with a significant nexus to traditional navigable waters and that the Sacketts’ lot satisfied that standard.

The Supreme Court’s Opinion

The U.S. Supreme Court granted certiorari to decide the proper test for determining whether the wetlands on the Sacketts’ property constituted “waters of the United States” under the CWA.

The Court’s Holding – Defining “Waters of the United States”

Against the backdrop of a much litigated CWA history regarding jurisdiction, and relying heavily on earlier Supreme Court decisions (i.e., Rapanos), the 9-0 majority in Sackett held that the CWA’s use of the term “waters” in “waters of the United States” refers only to “those relatively permanent, standing, or continuously flowing bodies of water ‘forming geographical features’ that are described in ordinary parlance as ‘streams, oceans, rivers, and lakes.’” As such, adjacent wetlands only constitute statutory “waters of the United States” if they are “indistinguishable” from those bodies of water due to a continuous surface connection.

The Court agreed with the plurality in Rapanos that wetlands subject to the CWA include those that are “indistinguishable” from bodies of water that traditionally constitute “waters of the United States.” This only occurs when wetlands have “a continuous surface connection” to bodies of WOTUS, such that there is “no clear demarcation between ‘waters’ and ‘wetlands.’” Accordingly, to assert jurisdiction over an adjacent wetland under the CWA, a party must establish that: (1) “the adjacent body of water constitutes [WOTUS] (i.e., a relatively permanent body of water connected to traditional interstate navigable waters)”; and (2) “the wetland has a continuous surface connection with … a relatively permanent body of water connected to traditional interstate navigable waters,” such that it is “difficult to determine where the ‘water’ ends and the ‘wetland’ begins.”

In articulating this bright-line rule, the Court declined to defer to the EPA’s 2023 “wetlands” rule, which provides that “adjacent wetlands are covered by the CWA if they possess a significant nexus to traditional navigable waters, [and] that wetlands are ‘adjacent’ when they are ‘neighboring’ to covered waters.” The Court, in part, relied heavily on the thought that the assertion of jurisdiction should be clear so that those regulated can determine if their actions trigger the need for federal permitting and whether proposed “fill” activities can be subject to federal criminal enforcement.  In so doing, the Court relied on dictionary definitions and reasoned that the EPA’s earlier regulatory interpretations were inconsistent with the text of the CWA because the Act contained no “exceedingly clear language” indicating Congress’ intent.

Despite the Court’s focus on the need for clear language, the opinion provides that “[the Court] also acknowledge that temporary interruptions in surface connection may sometimes occur because of phenomena like low tides or dry spells.”  Here the Court raises a question with respect to what amounts to a “continuous” surface connection during drought, for instance.  Indeed, how “dry” is “dry” and how long does a feature need to be “dry” before it is no longer a “temporary” interruption of flow.

Recent Updates

Both EPA and the Corps have gone on record in saying that they anticipate issuing a federal rule addressing the Court’s opinion in September 2023. In addition, various Corps Districts are modifying procedures in anticipation of this proposed rule and/or guidance. For instance, the Sacramento District has suspended processing Approved Jurisdictional Determinations (AJDs) and will verify only Preliminary Jurisdictional Determinations (PJDs).

Numerous NGOs, policy groups and agencies are attempting to determine the impact of the ruling on their programs. For instance, the National Association of Homebuilders (NAHB) has conducted talks with aquatic resource consultants and scientists in an effort to determine the likely effect of future regulation and permitting. That input generally recognizes that “one size” will likely “not fit all” given the wide variety of regional wetland hydrology. In particular, regions with “ephemeral” Mediterranean climates like California will be affected differently than those with consistently wetter climates.

Brian Plant, of counsel attorney at RMM, advises private and public agency clients regarding a broad range of permitting actions arising under Federal and State water quality, endangered species, and other natural resources laws and regulations. He can be reached at [email protected].

Third Appellate District Upholds Department of Fish and Wildlife EIR, But Finds Department Violated APA in Adopting Underground Regulations

The Third District Court of Appeal held that the California Department of Fish and Wildlife’s program EIR analyzing the Department’s statewide fish hatchery and stocking enterprise passed muster. The Department did not abuse its discretion in the manner it organized the EIR, analyzed the project, and mitigated numerous impacts. The court also found, however, that the Department had violated the Administrative Procedure Act (APA) by adopting three mitigation measures, which imposed new obligations on private aquaculture facilities and required the Department to perform new duties, without complying with APA procedures. Center for Biological Diversity v. Dept. of Fish and Wildlife (Feb. 10, 2015) ___ Cal.App.4th ___, Case No. C072486.

The Department operates 14 trout hatcheries and 10 salmon and steelhead hatcheries throughout the state, stocking fish at close to 1,000 locations each year. After CEQA’s enactment, the hatching and stocking enterprise was found categorically exempt from complying with CEQA. Subsequently, concerns arose regarding the enterprise’s impact on native and wild animals due to predation and genetic hybridization. To address these concerns, the Department developed aquatic biodiversity management plans and hatchery genetic management plans. Center for Biological Diversity sued the Department in 2006, and the trial court agreed with the Center that the enterprise was not categorically exempt from CEQA because it likely caused significant environmental impacts. The court in this prior suit ordered the Department to prepare an EIR and comply with CEQA.

The Department prepared a broad-scope, program EIR/environmental impact statement pursuant to that decision and to additionally comply with NEPA. The EIR analyzed the statewide hatchery and stocking enterprise, as well as three other programs, including the Fishing in the City Program (providing fishing opportunities in urban areas), and the Private Stocking Permit Program (authorizing fish stocking by private aquaculture facilities in private and public lakes and ponds). The Department selected operations from 2004 to 2008 as the baseline and identified more than 200 impacts on biological resources. The EIR proposed a number of mitigation measures to lessen these impacts, and laid out three project alternatives. The EIR did not consider closing the hatcheries or eliminating trout stocking as alternatives.

The Department’s EIR was challenged by the Center and other plaintiffs representing environmental interests in two separate CEQA suits, with plaintiffs representing recreational fishing interests bringing a third suit under the APA. The trial court upheld the EIR and found no violations of the APA. The appellate court affirmed in part and reversed in part.

First, the Third District addressed the EIR’s level of analysis. The CEQA Guidelines do not specify the level of analysis required to be performed in a program EIR. Rather, the Guidelines require an EIR to provide sufficient information in light of what is reasonably feasible. The court found the EIR satisfied that standard. The document reviewed and analyzed the hatchery and stocking enterprise specifically and comprehensively, but within reason, providing for further environmental review where warranted. Given the nature and statewide scope of the project and the consistency of its impacts across the state, the court found the analysis adequate to serve as a program EIR that also operated as project EIR. No additional site-specific environmental review was required given the agency’s determination that site-specific impacts were sufficiently addressed in the program EIR, and there were no new impacts. Indeed, that is the function of a program EIR.

The court also found the EIR did not impermissibly defer formulation of mitigation measures, as it provided sufficient performance standards for future mitigation to meet. The court noted that the rule prohibiting deferred mitigation prohibits loose or open-ended performance criteria. Here, in contrast, the EIR’s performance standards were sufficient to inform the Department what it had to do and accomplish, and committed the Department to mitigating impacts before proceeding with the enterprise. The performance standards were sufficient to ensure the aquatic biodiversity management plans would mitigate impacts in mountain lakes to insignificance. The Department also relied upon federal regulations to develop mitigation measures for impacts on anadromous fish.

The court held that the Department properly used the existing enterprise as the environmental baseline. The court rejected the Center’s contention that the EIR must use the existing environmental conditions—absent the project—as the baseline. It noted that though the origin of present conditions may interest enforcement agencies, such information is irrelevant to CEQA baseline determinations. The CEQA baseline must include existing conditions even when those conditions have never been reviewed and are unlawful. Furthermore, despite using the existing enterprise as the baseline, the EIR described, as much as reasonably possible the impacts hatcheries and stocking have had statewide on the environment from the enterprise’s inception more than a century ago, and proposed mitigation for those continuing impacts. Thus, the EIR did exactly what the Center sought.

Finally, the court held the EIR considered an adequate range of alternatives. For the no project alternative, the EIR considered the baseline project—continuation of the existing enterprise without making any changes. The court upheld this decision, noting that where the EIR is reviewing an existing operation or changes to that operation, the no project alternative is the existing operation; it is a factually based forecast of the environmental impacts of preserving the status quo. The court rejected the Center’s argument that the no project alternative should have been the elimination of the stocking enterprise, stating that the EIR is not the approval of a new program, but review of an ongoing one. The Department was not required to analyze the alternative scenario of discontinuing its hatchery and production enterprise, as it had no legal authority to implement a no-stocking alternative.

Turning to the APA contentions, the court concluded that three mitigation measures imposed by the Department were underground regulations, i.e., regulations adopted without complying with the notice and procedure requirements imposed by the APA. The mitigation measures at issue were: MM BIO-226 (Implement Private Stocking Permit Evaluation Protocol), MM BIO-229 (Require and Monitor Invasive Species Controls at Private Aquaculture Facilities), and MM BIO-233b (Implement Private Stocking Permit Evaluation Protocol). The court found that the measures fell within the definition of a “regulation” and were not exempt from APA requirements. The court rejected the Department’s argument that MM BIO-226 was exempt as a regulation relating “only to the internal management of the state agency,” and that MM BIO-229 and MM BIO-233b were exempt as regulations that embody the “only legally tenable interpretation of a provision of law.” In particular, the court concluded that MM BIO-226 required the Department to “perform a new duty” and MM BIO-229 imposed on a “class of persons a new affirmative duty.” The court’s application of the APA to mitigation measures in a state agency’s EIR appears to be a first and could have far-reaching implications on other EIRs studying statewide activities.