High Court Limits Role of Endangered Species Act in NPDES Program

August 16, 2007
Client Alert Newsletter August 2007

In a 5-4 decision, the U.S. Supreme Court ruled that the U.S. Environmental Protection Agency's ("EPA's") mandate under the federal Clean Water Act ("CWA") to transfer discharge permitting authority to a state upon satisfaction of nine statutory criteria was not also subject to compliance with the federal Endangered Species Act ("ESA"). In National Association of Home Builders v. Defenders of Wildlife, Justice Alito, writing for the majority, reversed a 2005 Ninth Circuit decision rejecting EPA's transfer of National Pollutant Discharge Elimination System ("NPDES") permitting authority to Arizona for failing to consider fully the transfer's potential impacts to endangered species. The Ninth Circuit required EPA to comply with ESA § 7(a)(2), in addition to nine criteria set forth in CWA § 402(b), when approving the transfer of permitting authority to a state. Justice Alito ruled, however, that the nine CWA criteria established a statutory ceiling and floor that could not be augmented by the courts. Seeking to harmonize the two conflicting statutes, the Court deferred to the agency's "expert interpretation" of a fisheries regulation that EPA contended limited the application of ESA § 7(a)(2) to actions in which the agency has discretionary involvement or control. Justice Alito reasoned that because the transfer of NPDES authority is not discretionary if the nine CWA criteria are met, the ESA provision did not apply. The ruling, while somewhat limiting the ESA's role in environmental regulation, is not expected to alter the procedural landscape for the five remaining states yet to receive NPDES permitting authority.