U.S. Second Circuit - The FindLaw 2nd Circuit Court of Appeals Opinion Summaries Blog

Court Restores EPA's Water Transfer Rule

Turning the tide against environmentalists, a federal appeals court has upheld the Environmental Protection Agency's rule on water transfers.

The Second Circuit Court of Appeals said the Water Transfers Rule is not subject to the National Pollutant Discharge Elimination System, which permits and scrutinizes water quality throughout the country. The EPA rule has allowed water providers to transfer water from one body of water to another -- without NPDES permits -- for decades.

Environmental groups, including conservation and sporting organizations as well as several state, provincial, and tribal governments, argued in their lawsuit that the rule violated the Clean Water Act of 1972. A district court agreed, but the appellate court reversed.

"The EPA's interpretation of the Clean Water Act as reflected in the Rule is supported by several valid arguments--interpretive, theoretical, and practical," the court said in a divided opinion.

Long-Standing Water Rule

The court reviewed the history of the EPA's rule, which has been in place for nearly 40 years. Under the rule, state and local districts can still enforce water quality standards and guard against water pollution in their jurisdictions. The EPA rule only provides that transfers need not comply with permitting by the NPDES under the Clean Water Act.

The judges also considered the impact on water providers if the rule was undone. Several water districts said it could cost about $4.2 billion to treat just the most significant water transfers, and that it could cost a water provider hundreds of millions of dollars to obtain an NPDES permit and comply with its conditions.

"The permissibility of the Rule is reinforced by longstanding practice and acquiescence by Congress, recent case law, practical concerns regarding compliance costs, and the existence of alternative means for regulating pollution resulting from water transfers," Judge Robert Sack said for the majority.

Water Not Under the Bridge

In dissent, Judge Denny Chin echoed the arguments of environmentalists. He said Congress enacted the Clean Water Act to protect against water pollution, and water transfers raise the potential for contamination.

Without regulation, he said, there is a substantial risk that industrial waste, toxic algae, invasive species, and human and animal contaminants will flow from one water body to another.

"Clean drinking water is a precious resource, and Congress painstakingly created an elaborate permitting system to protect it," he said. "Deference has its limits; I would not defer to an agency interpretation that threatens to undermine that entire system."

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