In re Clean Water Act Rulemaking

District Court, N.D. California·Decided December 7, 2021·No. 3:20-cv-04636·Unknown

Opinion

NORTHERN DISTRICT OF CALIFORNIA

In re No. C 20-04636 WHA No. C 20-04869 WHA No. C 20-06137 WHA RULEMAKING.

This Document Relates to: (Consolidated)

ALL ACTIONS. ORDER DENYING MOTION FOR STAY PENDING APPEAL

Intervenor defendants move for a stay of the order vacating and remanding EPA’s Clean Water Act Section 401 certification rule pending appeal. Intervenors’ arguments on the merits and irreparable harm provide lukewarm support for a stay. On the other side, a stay would substantially injure plaintiffs and does not align with the public interest. The motion is The previous order at issue here describes our facts (Dkt. No. 173). In brief, Congress enacted the Federal Water Pollution Control Act Amendments of 1972, commonly referred to as the Clean Water Act, with the express goal “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). Relevant here, under seeks to conduct any activity that may result in any discharge into the navigable waters of the United States unless the state where the discharge would originate issues a water quality certification or waives the requirement. Authorized tribes and EPA can also act as certifying entities. Notably: “No license or permit shall be granted if certification has been denied by the State, interstate agency, or the Administrator [of the EPA], as the case may be.” 33 U.S.C. § 1341(a)(1). Section 401 certifications are required for certain permits issued by, for example, the Army Corps of Engineers and the Federal Energy Regulatory Commission (FERC). EPA employed 40 C.F.R. Part 121 to administer Section 401 certifications, which the agency had promulgated a year prior to the Clean Water Act to regulate water quality certifications pursuant to Section 21(b) of the FWPCA. See 36 Fed. Reg. 22,487 (Nov. 25, 1971), redesignated at 37 Fed. Reg. 21,441 (Oct. 11, 1972), redesignated at 44 Fed. Reg. 32,899 (June 7, 1979). EPA utilized this regulation unchanged for half a century. This order will refer to this certification rule as the 1971 rule. On September 11, 2020, EPA revised 40 C.F.R. Part 121 in accordance with President Trump’s Executive Order 13,868, which asserted that the “Federal Government must promote efficient permitting processes and reduce regulatory uncertainties that currently make energy infrastructure projects expensive and that discourage new investment.” 84 Fed. Reg. 15,495 (Apr. 15, 2019); see also 85 Fed. Reg. 42,210 (July 13, 2020). The revised Section 401 certification rule — which this order will refer to as the 2020 rule — parted ways with the 1971 rule in dramatic fashion. This led to challenges to the rule by our plaintiff states, tribes, and non-profit conservation groups. Those actions eventually consolidated before the undersigned. In October 2020, eight states and three industry groups intervened as defendants. But the election of President Biden in November shifted the course of this litigation. On January 20, 2021, Executive Order 13,990 revoked Executive Order 13,868. The Biden administration also specifically listed the 2020 rule as one agency action it planned to review. Five months later, on June 2, 2021, EPA noticed its intent to revise the 2020 rule. EPA expects to finalize the (June 2, 2021); Fact Sheet: List of Agency Actions for Review, https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-list-of- agency-actions-for-review/ (Jan. 20, 2021). Less than a month after EPA announced it would revise the 2020 rule, the agency, in this action, moved for remand of the rule without vacatur (Dkt. No. 143). Plaintiffs, opposing the motion, argued that the 2020 rule should be vacated upon remand to the agency. Intervenors, who had chosen not to file any briefing on EPA’s motion up to that point, filed a reply brief arguing for remand without vacatur and separately moved to strike plaintiffs’ vacatur arguments (Dkt. Nos. 148, 155). After a hearing on the motions, intervenors were offered the opportunity to file supplemental briefing on the vacatur issue, which they did (Dkt. No. 172). An October 2021 order vacated and remanded the 2020 rule (Vacatur Order, Dkt. No. 173). EPA has stated it will not appeal the vacatur order. Intervenors, however, now move for a stay of the vacatur order pending their own appeal. To expedite the hearing on this motion, defendants waived their reply briefing. This order follows oral argument held telephonically due to the COVID-19 pandemic. Under the traditional test for a stay pending appeal, a district court considers four factors: (1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies. Nken v. Holder, 556 U.S. 418, 433–34 (2009); see also Al Otro Lado v. Wolf, 952 F.3d 999, 1006–07 (9th Cir. 2020). Our court of appeals has instructed that we weigh these factors using a flexible, sliding- scale approach, under which “a stronger showing of one element may offset a weaker showing of another.” Leiva-Perez v. Holder, 640 F.3d 962, 964, 966 (9th Cir. 2011). The first two factors are the most critical. The mere possibility of success or irreparable injury are insufficient. A movant must show “at a minimum, that she has a substantial case for relief on demonstrate irreparable harm is probable, not merely possible. We consider the final two factors — which tend to merge when the government is an opposing party — once a movant satisfies the first two. Nken, 556 U.S. at 435; United States v. Mitchell, 971 F.3d 993, 996 (9th Cir. 2020). If a petition raises at least a serious question going to the merits, the other factors can be satisfied by a showing that the balance of hardships tips sharply in the movant’s favor. Leiva-Perez, 640 F.3d at 970. This order will proceed through the stay factors in a moment, but offers this overview. On the one hand, allowing the 1971 rule to remain in effect will give certifying entities greater latitude to prescribe more conditions. This would harm those who wish to be free of further requirements, such as our intervenor defendants. On the other hand, should we allow the 2020 rule to remain in effect, those certifying entities that wish to impose more conditions on Section 401 certifications will lose the opportunity to do so. This would result in harm to them. We face a crossroads where one side or the other will suffer some harm, no matter what. But harm is one thing, irreparable harm another. Certifying entities that dislike more conditions can simply choose not to impose additional conditions. And, a party saddled with unwanted conditions can sue in district court if presented with a flawed certification process. These considerations mitigate some potential harms. Ultimately, when it comes to mitigating harm, prudence favors maintaining the course EPA has charted the past fifty years under the 1971 rule, the devil we know, rather than the devil we don’t. With these overarching points in mind, this order considers each factor in turn. 1. SUCCESS ON THE MERITS. We start with whether intervenors can make a “strong showing” of success on the merits. In light of the irreparable harm considerations previewed above, this order not

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