ELR Citation: ELR 20206
No(s). s. 89-9503 et al (10th Cir. Jul 11, 1990)

The court rules that the Federal Water Pollution Control Act (FWPCA) requires a point source of pollution to comply with the federally approved water quality standards of all affected downstream states. Oklahoma and Arkansas appealed a decision by the U.S. Environmental Protection Agency (EPA) upholding EPA's issuance of a national pollution discharge elimination system (NPDES) permit to the city of Fayetteville, Arkansas, for a new municipal wastewater treatment plant. Fayetteville proposed to discharge treated wastewater into a tributary of the Illinois River, a stream originating in Arkansas and terminating in Oklahoma. The court initially holds that Arkansas has standing to challenge EPA's determination that Oklahoma water quality standards apply to the plants and that Arkansas' appeal is ripe for review. The court next holds that EPA correctly interpreted the FWPCA as mandating compliance with federally approved water quality standards of affected states. EPA's interpretation is reasonable and consistent with Congress' purposes in enacting the FWPCA. To interpret the Act otherwise would impose a disproportionate burden on dischargers located in downstream states and would reward polluters for locating in states with less stringent water quality requirements. EPA's interpretation of the FWPCA is supported by several provisions of the Act and by EPA rulemaking. FWPCA §401(a)(2) requires EPA to furnish notice of discharge permit applications to states whose water quality may be affected by such discharge. The plain meaning of §401(a)(2) indicates that it was intended to enable affected states to ensure that their water quality will not be jeopardized by a discharge in another state. FWPCA §402(d)(2) entitles EPA to object to an NPDES permit issuance by a state if that state failed to accept recommendations from other states potentially affected by the issuance. Because nothing in the Act suggests that permits issued by states are subject to more stringent requirements than those issued by EPA, §402 is instructive as to EPA's permitting responsibilities and authority. In adopting its upset defense rule, EPA stated that because water quality standards must be met at all times, permittees intending to assert the defense must continuously monitor all potentially affected stream segments to ensure compliance with water quality standards. Finally, FWPCA §505(h) entitles a state to sue EPA to enforce effluent standards being violated in one state if that violation causes water quality violations in the plaintiff's state. Common sense and congressional intent dictate that the injury sustained by a state for which this section provides a remedy is the impact on that state's water quality, not the violation of the effluent standards per se.

The court next holds that EPA's decision to issue the Fayetteville permit was arbitrary and capricious. The court rules that the FWPCA prohibits permitting additional point source discharges that would contribute to existing water quality violations in the receiving waters. The court holds that despite substantial evidence of ongoing violations of Illinois River water quality standards, EPA's judicial officers failed to consider the relevence of this evidence to Fayetteville's permit application. The court further holds that EPA's judicial officers misinterpreted and misapplied two important Oklahoma water quality regulations, which are clearly intended to prohibit degredation of the water quality of scenic rivers, such as the Illinois River. They also arbitrarily disregarded important expert testimony. The court finds substantial evidence that degraded water conditions currently exist in the Illinois River in Oklahoma and that these conditions have been caused, at least in part, by pollutants that are constituents of Fayetteville's effluent. The court also finds that since substantial evidence exists that Fayetteville's effluent will be transported downstream to Oklahoma, the new wastewater treatment plant can be expected to contribute to the ongoing deterioration of the Illinois River. Accordingly, the court reverses EPA's decision authorizing Fayetteville's municipal treatment plant to discharge a portion of its effluent into the Illinois River Basin.

Counsel for Petitioners
Robert A. Butkin, Robert H. Henry, Attorney General, William J. Holmes, Ass't Attorney General
112 State Capitol, Oklahoma City OK 73105
(405) 521-3921

John Steven Clark, Attorney General, R.B. Friedlander, Solicitor General
200 Tower Bldg., Little Rock AR 72201
(501) 682-2007

Counsel for Respondent
Gary Guzy, Catherine A. Winer, Pat Rankin
U.S. Environmental Protection Agency
401 M St., Washington DC 20460
(202) 382-2090

Richard B. Stewart, Ass't Attorney General
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before ANDERSON and BRORBY, Circuit Judges, and THEIS,^* District Judge.