Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 1 of 32
`
`ROBERT W. FERGUSON
`Attorney General of Washington
`KELLY T. WOOD *
`CINDY CHANG *
`Assistant Attorney Generals
`Washington Office of the Attorney General
`Environmental Protection Division
`800 5th Ave Ste. 2000 TB-14
`Seattle, Washington 98104
`Telephone: (206) 326-5493
`E-mail: Kelly.Wood@atg.wa.gov
`Attorneys for Plaintiff State of Washington
`
`XAVIER BECERRA
`Attorney General of California
`SARAH E. MORRISON
`ERIC KATZ
`Supervising Deputy Attorneys General
`CATHERINE M. WIEMAN, SBN 222384
`TATIANA K. GAUR, SBN 246227
`ADAM L. LEVITAN, SBN 280226
`BRYANT B. CANNON, SBN 284496
`LANI M. MAHER, SBN 318637
`Deputy Attorneys General
`300 South Spring Street, Suite 1702
`Los Angeles, CA 90013
`Telephone: (213) 269-6329
`Fax: (916) 731-2128
`E-mail: Tatiana.Gaur@doj.ca.gov
`Attorneys for Plaintiff State of California, by
`and through Attorney General Xavier Becerra
`and the State Water Resources Control Board
`
`LETITIA JAMES
`Attorney General of New York
`BRIAN LUSIGNAN *
`Assistant Attorney General
`Office of the Attorney General
`Environmental Protection Bureau
`28 Liberty Street
`New York, NY 10005
`Telephone: (716) 853-8465
`Fax: (716) 853-8579
`E-mail: brian.lusignan@ag.ny.gov
`Attorneys for Plaintiff State of New York
`
`[Additional Parties and Counsel Listed on
`Signature Pages]
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`
`STATE OF CALIFORNIA, BY AND THROUGH
`ATTORNEY GENERAL XAVIER BECERRA AND
`THE STATE WATER RESOURCES CONTROL
`BOARD, STATE OF WASHINGTON, STATE OF
`NEW YORK, STATE OF COLORADO, STATE OF
`CONNECTICUT, STATE OF ILLINOIS, STATE OF
`MAINE, STATE OF MARYLAND,
`COMMONWEALTH OF MASSACHUSETTS, STATE
`OF MICHIGAN, STATE OF MINNESOTA, STATE
`OF NEVADA, STATE OF NEW JERSEY, STATE OF
`NEW MEXICO, STATE OF NORTH CAROLINA,
`STATE OF OREGON, STATE OF RHODE ISLAND,
`
`Case No.: 3:20-cv-4869
`COMPLAINT FOR DECLARATORY
`AND INJUNCTIVE RELIEF
`(Administrative Procedure Act, 5 U.S.C. §
`551 et seq.)
`
`1
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 2 of 32
`
`STATE OF VERMONT, COMMONWEALTH OF
`VIRGINIA, STATE OF WISCONSIN, AND THE
`DISTRICT OF COLUMBIA,
`Plaintiffs,
`v.
`ANDREW R. WHEELER, IN HIS OFFICIAL
`CAPACITY AS ADMINISTRATOR OF THE UNITED
`STATES ENVIRONMENTAL PROTECTION
`AGENCY, AND THE UNITED STATES
`ENVIRONMENTAL PROTECTION AGENCY,
`Defendants.
`
`Plaintiffs, the States of California, Washington, New York, Colorado, Connecticut,
`Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North
`Carolina, Oregon, Rhode Island, Vermont, Wisconsin, the Commonwealths of Massachusetts and
`Virginia, the District of Columbia, and the California State Water Resources Control Board, by
`and through their respective Attorneys General, allege as follows against defendants Andrew R.
`Wheeler, in his official capacity as Administrator of the United States Environmental Protection
`Agency (EPA), and EPA (collectively, Defendants):
`
`INTRODUCTION
`This lawsuit challenges a final rule issued by the Defendants, entitled “Updating
`1.1
`Regulations on Water Quality Certification,” 85 Fed. Reg. 42,210 (July 13, 2020) (Rule). The
`Rule upends fifty years of cooperative federalism by arbitrarily re-writing EPA’s existing water
`quality certification regulations to unlawfully curtail state authority under the Clean Water Act,
`33 U.S.C. §§ 1251 et seq. (CWA or the Act).
`1.2
`The CWA’s primary objective is “to restore and maintain the chemical, physical
`and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). In achieving that goal,
`Congress recognized the critical and important role states play in protecting and enhancing waters
`within their respective borders. Id. § 1251(b). And, Congress sought to preserve the States’
`preexisting and broad authority to protect their waters. To those ends, the Act specifically
`provides that “[i]t is the policy of the Congress to recognize, preserve, and protect the primary
`responsibilities and rights of States to prevent, reduce, and eliminate pollution, to plan the
`2
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 3 of 32
`
`development and use (including restoration, preservation, and enhancement) of land and water
`resources ….” Id.
`1.3
`This preservation of state authority is present throughout the Act. Congress
`preserved for each State the authority to adopt or enforce the conditions and restrictions the state
`deems necessary to protect its state waters, so long as the state does not adopt standards that are
`less protective of waters than federal standards. Id. § 1370. State standards, including those of the
`Plaintiff States, may be and frequently are more protective. And, critical to the current action,
`Congress in section 401 of the Act, 33 U.S.C. § 1341 (section 401), expressly authorized States to
`independently review the water quality impacts of projects that may result in a discharge and that
`require a federal license or permit to ensure that such projects do not violate state water quality
`laws.
`
`1.4 Where a State denies a water quality certification under section 401, Congress
`specifically prohibited federal agencies from permitting or licensing such projects. Id. §
`1341(a)(1).
`Congress also broadly authorized States to include conditions in state certifications
`1.5
`necessary to ensure an applicant’s compliance with any “appropriate requirement of State law.”
`Id. § 1341(a), (d). The conditions in state certifications must be incorporated as conditions in
`federal permits. Id. § 1341(d). In this way, section 401 prevents the federal government from
`using its licensing and permitting authority to authorize projects that could violate state water
`quality laws. See generally, id. § 1341.
`1.6
`EPA has long acknowledged and respected the powers preserved for the States in
`section 401. In fact, until 2019, EPA’s regulations and every guidance document issued by EPA
`for section 401 certifications—spanning three decades and four administrations—expressly
`recognized states’ broad authority under section 401 to condition or deny certification of federally
`permitted or licensed projects within their borders. The Supreme Court and Circuit Courts of
`Appeals have affirmed that broad state authority under section 401.
`1.7
`In April 2019, however, President Trump signed Executive Order 13868, directing
`EPA to issue regulations that reduce the purported burdens current section 401 certification
`3
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 4 of 32
`
`requirements place on energy infrastructure project approval and development, thus effectively
`prioritizing such projects over water quality protection. Executive Order on Promoting Energy
`Infrastructure and Economic Growth, 84 Fed. Reg. 15,495 (Apr. 15, 2019) (Executive Order
`13868). EPA issued the Rule pursuant to Executive Order 13868.
`1.8
`The Rule violates the Act and unlawfully usurps state authority to protect the
`quality of waters within their borders.
`1.9
`Contrary to the language of section 401, Supreme Court precedent, and EPA’s
`long-standing interpretation, the Rule prohibits States, including Plaintiff States, from considering
`how a federally approved project, as a whole, will impact state water quality, instead unlawfully
`limiting the scope of state review and decision-making to point source discharges into narrowly
`defined waters of the United States. Cf. PUD No. 1 of Jefferson County v. Wash. Dep’t of Ecology
`(PUD No. 1), 511 U.S. 700, 711 (1994) (“The language of [Section 401(d)] contradicts
`petitioners’ claim that the State may only impose water quality limitations specifically tied to a
`‘discharge’” because the text “allows the State to impose ‘other limitations’ on the project in
`general.”).
`Similarly, the Rule would unlawfully limit states’ review and decision-making
`1.10
`authority under section 401 by allowing only consideration of whether a federally licensed project
`will comply with state water quality standards and requirements regulating point source
`discharges. But section 401 contains no such limitation, instead broadly authorizing States to
`impose any condition necessary to ensure an applicant complies with “any other appropriate
`requirement of State law.” 33 U.S.C. § 1341(d). Both EPA and the Courts have long recognized
`the broad scope of the phrase “appropriate requirement of State law.” See PUD No. 1, 511 U.S. at
`712-13 (Section 401(d) “author[izes] additional conditions and limitations on the activity as a
`whole”; these conditions and limitations include “state water quality standards … [which] are
`among the ‘other limitations’ with which a State may ensure compliance through the § 401
`certification process”).
`1.11
`The Rule would also interfere with the States’ ability to apply their own
`administrative procedures to their review of applications for water quality certification, instead
`4
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 5 of 32
`
`imposing onerous federal control over virtually every step of the administrative process. The Rule
`requires States to take action within a time limit imposed by the federal permitting agency based
`on a minimal list of required information. State agencies appear to be discouraged from obtaining
`additional information if that information cannot be developed and provided within that time
`limit, even for major infrastructure projects that pose significant risk to a wide variety of state
`water resources for decades. Even when a State is able to make a certification decision before the
`expiration of the time limit imposed by the federal agency, the federal agency could still
`determine that the State waived its authority if it concludes that the State failed to provide certain
`information to the federal agency required by the Rule. This Federal dictate of state
`administrative procedures is fundamentally inconsistent with the cooperative federalism scheme
`established by the CWA in general, and with the preservation of broad state authority affirmed by
`section 401 in particular.
`1.12
`EPA’s departure from 50 years of consistent administrative and judicial precedent
`by narrowing state authority under section 401 is contrary to Congress’s 1972 enactment of the
`CWA, which by its terms expressly preserved state authority by incorporating the language of
`section 401 essentially unchanged from its predecessor statute, the Water Quality Improvement
`Act of 1970. EPA claims that this drastic change is justified based on its “first holistic analysis of
`the statutory text, legislative history, and relevant case law.” 85 Fed. Reg. at 42,215. However,
`nothing in the text, purpose, or legislative history of section 401, no matter how “holistically”
`considered, supports the Rule’s substantial infringement on state authority. The Rule unlawfully
`interprets a statute that is “essential in the scheme to preserve state authority to address the broad
`range of pollution” affecting state waters, S.D. Warren Co. v. Me. Bd. of Envtl. Prot., 547 U.S.
`370, 386 (2006) (S.D. Warren), to instead restrict state authority to do so.
`1.13 By attempting to limit the scope of state section 401 water quality certifications
`and by imposing new, unjustified, and unreasonable substantive limits, time constraints, and
`procedural restrictions on States’ review of and decisions on section 401 certification
`applications, the Rule is a radical departure from past EPA policy and practice, is unlawful, and
`
`5
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 6 of 32
`
`abandons the decades-long successful cooperative federalism approach Congress intended in the
`CWA.
`
`1.14 As set forth below, the Rule is arbitrary, capricious, an abuse of discretion,
`contrary to the CWA and binding precedent, and in excess of EPA’s authority under the
`Administrative Procedure Act, 5 U.S.C. § 706(2)(A), (C). Accordingly, Plaintiff States seek a
`declaration that the Rule violates the Clean Water Act and the Administrative Procedure Act, 5
`U.S.C. § 551 et seq. (APA), and request that the Court set aside and vacate the Rule.
`
`JURISDICTION AND VENUE
`This action raises federal questions and arises under the CWA and the APA. This
`2.1
`Court has jurisdiction over the States’ claims pursuant to 28 U.S.C. § 1331 (action arising under
`the laws of the United States) and 5 U.S.C. §§ 701-706. An actual controversy exists between the
`parties within the meaning of 28 U.S.C. § 2201(a), and this Court may grant declaratory,
`injunctive, and other relief pursuant to 28 U.S.C. §§ 2201-2202, and 5 U.S.C. §§ 701-706.
`2.2
`The United States has waived sovereign immunity for claims arising under the
`APA. 5 U.S.C. § 702.
`2.3
`The States are “persons” within the meaning of 5 U.S.C. § 551(2), authorized to
`bring suit under the APA to challenge unlawful final agency action. 5 U.S.C. §§ 701(2), 702.
`2.4
`Venue is proper in this Court pursuant to 28 U.S.C. § 1391(e)(1)(C) because
`plaintiff State of California resides within the district and this action seeks relief against federal
`agencies and officials acting in their official capacities.
`INTRADISTRICT ASSIGNMENT
`Pursuant to Civil Local Rules 3-5(b) and 3-2(c), there is no basis for assignment of
`3.1
`this action to any particular location or division of this Court.
`PARTIES
`The Plaintiff States are sovereign states of the United States of America. The
`4.1
`States bring this action in their sovereign and proprietary capacities. As set out below, the Rule
`directly harms the States’ interests, including, but not limited to, environmental harms, financial
`harms that flow from implementing EPA’s radical shift in policy, and limits on powers
`6
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 7 of 32
`
`specifically reserved to the States by Congress in the Act. The States also bring this action as
`parens patriae on behalf of their citizens and residents to protect public health, safety, and
`welfare, their waters, natural resources, and environment, and their economies.
`4.2
`Defendant EPA is the federal agency with primary regulatory authority under the
`Act and bears responsibility, in whole or in part, for the acts complained of in this Complaint.
`4.3
`Defendant Andrew R. Wheeler is sued in his official capacity as Administrator of
`the EPA and bears responsibility, in whole or in part, for the acts complained of in this
`Complaint.
`
`STATUTORY AND REGULATORY BACKGROUND
`The Administrative Procedure Act
`Federal agencies are required to comply with the APA’s rulemaking requirements
`5.1
`in amending or repealing a rule.
`5.2
`Under the APA, a federal agency must publish notice of a proposed rulemaking in
`the Federal Register and “shall give interested persons an opportunity to participate in the rule
`making through submission of written data, views, or arguments.” 5 U.S.C. § 553(b), (c).
`5.3
`“[R]ule making” means “agency process for formulating, amending, or repealing a
`rule.” Id. § 551(5).
`5.4
`An agency that promulgates a rule that modifies its long-standing policy or
`practice must articulate a reasoned explanation and rational basis for the modification and must
`consider and evaluate the reliance interests engendered by the agency’s prior position. See, e.g.,
`Dep’t of Homeland Security v. Regents of the University of Ca., ___ S. Ct. ___, Slip Op. at 23-26
`(June 18, 2020); Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
`43 (1983). An agency does not have authority to adopt a regulation that is “manifestly contrary to
`the statute.” Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 844 (1984);
`see also 5 U.S.C. § 706(2)(C).
`5.5
`The APA authorizes this Court to “hold unlawful and set aside agency action,
`findings and conclusions” it finds to be “arbitrary, capricious, an abuse of discretion, or otherwise
`
`7
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 8 of 32
`
`not in accordance with law” or taken “in excess of statutory jurisdiction, authority, or limitations,
`or short of statutory right.” 5 U.S.C. § 706(2).
`The Clean Water Act
`The Act’s objective is to “restore and maintain the chemical, physical, and
`5.6
`biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a).
`5.7
`In furtherance of that primary objective, Congress both preserved and enhanced
`the States’ authority to protect the quality of state waters. The Act provides that “[i]t is the policy
`of the Congress to recognize, preserve, and protect the primary responsibilities and rights of
`States to prevent, reduce, and eliminate pollution, to plan the development and use (including
`restoration, preservation, and enhancement) of land and water resources ….” Id. § 1251(b). As
`such, “Congress expressed its respect for states’ role[s] through a scheme of cooperative
`federalism ….” United States v. Cooper, 482 F.3d 658, 667 (4th Cir. 2007).
`5.8
`Congress’s preservation of pre-existing state authority is evident throughout the
`Act. For example, section 303 of the Act authorizes states, subject to baseline federal standards,
`to determine the level of water quality they will require and the means and mechanisms through
`which they will achieve and maintain those levels. 33 U.S.C. § 1313.
`5.9
`Section 510 of the Act states that “nothing in [the Act] shall … preclude or deny
`the right of any State or political subdivision thereof or interstate agency to adopt or enforce (A)
`any standard or limitation respecting discharges of pollutants, or (B) any requirement respecting
`control or abatement of pollution” as long as such requirements are at least as stringent as the Act.
`Id. § 1370.
`Section 401 of the Act provides that “[a]ny applicant for a Federal license or
`5.10
`permit to conduct any activity … which may result in any discharge into the navigable waters,
`shall provide the licensing or permitting agency a certification from the State in which the
`discharge originates or will originate … that any such discharge will comply with the applicable
`provisions of sections 1311, 1312, 1313, 1316, and 1317 of this title.” Id. § 1341(a)(1). Section
`401(d) broadly states that “[a]ny certification provided … shall set forth any effluent limitations
`and other limitations, and monitoring requirements necessary to assure that any applicant for a
`8
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 9 of 32
`
`Federal license or permit will comply with any applicable effluent limitations and other
`limitations … 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. § 1341(d).
`5.11
`The authority reserved to States in section 401 is meaningful and significant. In
`enacting section 401, Congress sought to ensure that all activities authorized by the federal
`government that may result in a discharge would comply with “State law” and that “Federal
`licensing or permitting agencies [could not] override State water quality requirements.” S. Rep.
`92-313, at 69, reproduced in 2 Legislative History of the Water Pollution Control Act
`Amendments of 1972 (“Legislative History Vol. 2”), at 1487 (1973).
`5.12
`States’ authority under section 401 to impose conditions on a federally permitted
`or licensed project is not limited to water quality controls specifically tied to a “discharge.”
`Rather, section 401 “allows [states] to impose ‘other limitations’ on the project in general to
`assure compliance with various provisions of the Act and with ‘any other appropriate requirement
`of State law.’” PUD No. 1, 511 U.S. at 711. Thus, while section 401(a)(1) “identifies the category
`of activities subject to certification—namely, those with discharges”—section 401(d) authorizes
`additional conditions and limitations “on the activity as a whole once the threshold condition, the
`existence of a discharge, is satisfied.” Id. at 711-12 (emphasis added). Section 401’s “terms have
`a broad reach, requiring state approval any time a federally licensed activity ‘may’ result in a
`discharge…, and its object comprehends maintaining state water quality standards.” S.D. Warren,
`547 U.S. at 380. Furthermore, “Congress intended that [through section 401, States] would retain
`the power to block, for environmental reasons, local water projects that might otherwise win
`federal approval.” Keating v. FERC, 927 F.2d 616, 622 (D.C. Cir. 1991).
`5.13
`The Act imposes only one restriction on the timeframe of state certification review
`and decision-making: if a State “fails or refuses to act on a request for certification, within a
`reasonable period of time (which shall not exceed one year) after receipt of such request, the
`certification requirements of this subsection shall be waived.” 33 U.S.C. § 1341.
`
`9
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 10 of 32
`
`In the quarter of a century since the Supreme Court’s decision in PUD No. 1,
`5.14
`Congress has not limited or otherwise amended the language of section 401.
`EPA’s Longstanding Section 401 Regulations and Guidance
`In 1971, EPA promulgated regulations regarding state water quality certifications
`5.15
`pursuant to section 21(b) of the Water Quality Improvement Act of 1970—the CWA’s
`predecessor (1971 Regulations). See 36 Fed. Reg. 22,369, 22,487 (Nov. 25, 1971). Congress
`carried over the provisions of section 21(b) in section 401 of the CWA of 1972 with only “minor”
`changes. Senate Debate on S. 2770 (Nov. 2, 1971), reproduced in Legislative History Vol. 2 at
`1394.
`
`In the Water Pollution Control Act Amendments of 1972, now known as the Clean
`5.16
`Water Act, Congress directed EPA to “promulgate guidelines establishing test procedures for the
`analysis of pollutants that shall include the factors which must be provided in any certification
`pursuant to section [401] of this [Act] or permit application pursuant to section 402 of this [Act].”
`33 U.S.C. § 1314(h). This is the only instruction that Congress gave EPA with regards to
`implementing section 401. EPA did so, as codified in 40 C.F.R. Part 136 (defining the scientific
`methods for analyzing a wide array of pollutants).
`5.17
`Following the 1972 amendments and the enactment of section 401, Congress
`directed EPA to modify other existing regulations but did not direct EPA to revise its existing
`1971 Regulations.
`5.18 Accordingly, EPA continued to apply the 1971 Regulations to implement section
`401 following the CWA’s enactment in 1972.
`5.19 Not only does the Rule conflict with the Act’s express protection of state interests
`under section 401, the Rule is a significant departure from, and contrary to, EPA’s 1971
`Regulations.
`Pursuant to EPA’s 1971 Regulations, when issuing a section 401 certification,
`5.20
`states are required to include a statement certifying that a permitted “activity,” not just a point
`source discharge, will comply with water quality standards. See former 40 C.F.R. § 121.2(a)(3)
`(June 7, 1979). Furthermore, “water quality standards” was broadly defined to include standards
`10
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 11 of 32
`
`established pursuant to the CWA, as well as any “State-adopted water quality standards.” Id. §
`121.1(g).
`The 1971 Regulations did not permit federal agencies to determine whether state
`5.21
`denials or conditional certifications met specified requirements and were therefore effective or
`not. Moreover, a State could only waive its authority under section 401 if it provided express
`written notification of such waiver or failed to act on a certification request within a reasonable
`period of time. Id. § 121.16(b) (June 7, 1979).
`5.22
`In April 1989, EPA’s Office of Water issued a section 401 certification guidance
`document entitled “Wetlands and 401 Certification—Opportunities and Guidelines for States and
`Eligible Indian Tribes” (1989 Guidance).
`5.23
`EPA’s 1989 Guidance acknowledged that section 401 “is written very broadly
`with respect to the activities it covers.” 1989 Guidance at 20. The 1989 Guidance further stated
`that “‘[a]ny activity, including, but not limited to, the construction or operation of facilities which
`may result in any discharge’ requires water quality certification.” Id. (emphasis in original). The
`1989 Guidance explained that the purpose of the water quality certification requirement in section
`401, “was to ensure that no license or permit would be issued for an activity that through
`inadequate planning or otherwise could in fact become a source of pollution.” Id. at 20.
`5.24
`The 1989 Guidance contemplated broad state review of federally permitted or
`licensed projects and stating the “imperative” principle that “all of the potential effects of a
`proposed activity on water quality—direct and indirect, short and long term, upstream and
`downstream, construction and operation—should be part of a State’s [401] certification review.”
`Id. at 22, 23. The 1989 Guidance also provided examples of conditions that States had
`successfully placed on section 401 certifications. These included watershed management plans,
`fish stocking, and noxious weed controls. Id. at 24, 54-55. EPA noted that “[w]hile few of these
`conditions [were] based on traditional water quality standards, all [were] valid” under section
`401. Id. at 24. EPA further noted that “[s]ome of the conditions [were] clearly requirements of
`State or local law related to water quality other than those promulgated pursuant to the [CWA]
`sections enumerated in Section 401(a)(1).” Id.
`
`11
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 12 of 32
`
`5.25 Consistent with the text of section 401 and EPA’s 1971 Regulations, the 1989
`Guidance narrowly construed the circumstances under which a State would waive its authority to
`review certification requests under section 401: a waiver would be deemed to have occurred only
`if a state failed to act within “a reasonable period of time (which shall not exceed one year) after
`receipt” of a certification request. Id. at 31.
`5.26
`The 1989 Guidance also advised States to adopt regulations requiring that
`applicants submit information to ensure informed decision-making. Id. Further, the 1989
`Guidance encouraged States to “link the timing for review to what is considered a receipt of a
`complete application.” Id. As an example, EPA cited a Wisconsin regulation requiring a
`“complete” application before the agency review time began. Id., citing Wisconsin
`Administrative Code, NR 299.04. The 1989 Guidance noted that pursuant to the same Wisconsin
`regulation, the state agency would review an application for completeness within 30 days of
`receipt and could request any additional information needed to make a certification decision. Id.
`(currently, these requirements are codified in Wisconsin Administrative Code, NR 299.03).
`5.27
`EPA issued additional section 401 guidance in April 2010 entitled “Clean Water
`Act Section 401 Water Quality Certification: A Water Quality Protection Tool for States and
`Tribes” (2010 Guidance). The 2010 Guidance was consistent with and affirmed EPA’s
`longstanding recognition of States’ broad authority preserved under the CWA and enhanced by
`section 401.
`In the 2010 Guidance, EPA stated that, “[a]s incorporated into the 1972 [CWA], §
`5.28
`401 water quality certification was intended to ensure that no federal license or permit would be
`issued that would prevent states or tribes from achieving their water quality goals, or that would
`violate [the Act’s] provisions.” 2010 Guidance at 16. Relying on the Supreme Court’s controlling
`decision in PUD No. 1, the 2010 Guidance confirmed that “once § 401 is triggered, the certifying
`state or tribe may consider and impose conditions on the project activity in general, and not
`merely on the discharge, if necessary to assure compliance with the CWA and with any other
`appropriate requirement of state or tribal law.” Id. at 18. For example, EPA explained that “water
`quality implications of fertilizer and herbicide use on a subdivision and golf course might be
`12
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 13 of 32
`
`considered as part of a § 401 certification analysis of a CWA § 404 permit that would authorize
`discharge of dredged or fill material to construct the subdivision and golf course.” Id.
`5.29
`In line with EPA’s long-standing position, the 2010 Guidance maintained an
`expansive view of the scope of other state laws appropriately considered under section 401
`certification reviews: “It is important to note that, while EPA-approved state and tribal water
`quality standards may be a major consideration driving § 401 decision[s], they are not the only
`consideration.” Id. at 16.
`5.30
`The 2010 Guidance acknowledged that States establish requirements for what
`constitutes a complete application and highlighted the fact that the timeframe for state review of a
`section 401 certification request “begins once a request for certification has been made to the
`certifying agency, accompanied by a complete application.” Id. at 15-16 (emphasis added).
`5.31
`In the years following EPA’s issuance of its 1989 and 2010 guidance documents,
`Congress has neither limited nor otherwise amended the language of section 401.
`Executive Order 13868 and Section 401 Certifications
`5.32 On April 10, 2019, President Trump issued Executive Order 13868, upending
`EPA’s longstanding broad interpretation of state authority to protect water quality under section
`401.
`
`Intended to promote and speed infrastructure development, particularly in the coal,
`5.33
`oil, and natural gas sectors, Executive Order 13868 directed EPA to evaluate ways in which
`section 401 certifications have “hindered the development of energy infrastructure.” 84 Fed. Reg.
`at 15,496. Executive Order 13868 failed to acknowledge the critical role of section 401
`certifications to the Act’s primary purpose of restoring and maintaining the chemical, physical,
`and biological integrity of the Nation’s waters, and to preserving States’ authority to do so.
`5.34
`Executive Order 13868 directed the EPA Administrator to undertake a number of
`actions related to section 401 certifications. First, Executive Order 13868 required the
`Administrator, within 60 days, to (1) examine the 2010 Guidance and issue superseding guidance
`to States and authorized tribes; and (2) issue guidance to agencies to reduce the burdens on
`energy infrastructure projects caused by section 401’s certification requirements. Second,
`13
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 3:20-cv-04869 Document 1 Filed 07/21/20 Page 14 of 32
`
`Executive Order 13868 required the Administrator, within 120 days, to review EPA’s section 401
`regulations for consistency with Executive Order 13868’s energy infrastructure and economic
`growth goals and publish revised regulations consistent with those goals. Third, Executive Order
`13868 required the Administrator to finalize the revised regulations no later than 13 months from
`April 10, 2019.
`5.35
`Executive Order 13868 also required all federal