WEICK, Circuit Judge.
The principal question before us is whether the Environmental Protection Agency [EPA] properly vetoed modifications in Ford Motor Company's [Ford] existing National Pollutant Discharge Elimination System [NPDES] permit which were proposed by the Michigan Water Resource Commission [MWRC] pursuant to the Federal Water Pollution Control Act of 1972 [FWPCA] §§ 101, et seq., 33 U.S.C. §§ 1251, et seq. Ford has petitioned for review of EPA's veto of the permit modifications. We hold that the veto of EPA was invalid because it was not based upon any published regulation or guideline or on any express statutory provision.
In order fully to understand the issues, a review of the pertinent provisions of the FWPCA is necessary. Congress declared that the objective of the Act was "to restore and maintain the chemical, physical and biological integrity of the Nation's waters" § 101(a), 33 U.S.C. § 1251(a). One of the national goals of the Act was to eliminate by 1985 "the discharge of pollutants into navigable waters." § 101(a)(1). Furthermore, Congress proclaimed by the Act its policy to have the States participate in the prevention, reduction and elimination of pollution. § 101(b). Congress also stressed the need for public participation "in the development, revision and enforcement of any regulation, standard, effluent limitation, plan or program established by the Administrator or any State" and required the publication of "regulations specifying minimum guidelines for public participation in such processes." § 101(e).
The Supreme Court in EPA v. State Water Resources Control Bd., 426 U.S. 200, 204-05, 96 S.Ct. 2022, 2024-25, 48 L.Ed.2d 578 (1976), noted one of the purposes of the Act:
The EPA Administrator was required after consultation with the appropriate federal and state agencies and other interested persons, to adopt regulations providing guidelines for effluent limitations no later than October 18, 1973 and annually thereafter. § 304(b)(2), 33 U.S.C. § 1314(b)(2). Once these guidelines were provided they were to be followed when NPDES permits were issued and were "to serve as the basis of the administrator's veto of objectionable permits." CPC Int'l, Inc. v. Train, 515 F.2d 1032, 1039 (8th Cir. 1975). Compare E. I. duPont deNemours & Co. v. Train, 430 U.S. 112, 133, n. 24, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977).
The EPA Administrator also was authorized to promulgate effluent limitations for classes and categories of existing point sources which necessarily serve as a basis for denial of a permit. See § 301, 33 U.S.C. § 1311; E. I. duPont deNemours & Co. v. Train, supra; and American Iron and Steel Inst. v. EPA, 526 F.2d 1027, 1041 (3d Cir. 1975).
The Court in the duPont case explained at 130 of 430 U.S., at 976 of 97 S.Ct. the function of the § 304(b) guidelines and at the same time their relation to § 301 regulations:
Congress also provided a plan for implementing water quality standards, which addressed the problem of concentration of pollutants in particular bodies of water, to meet the purposes and goals of the FWPCA.
Section 303(a), 33 U.S.C. § 1313(a) provides for state-adopted water quality standards including those state standards adopted prior to the FWPCA, which standards meet the requirements of the FWPCA unless otherwise determined by the EPA Administrator. For instance, on September 21, 1973 the State of Michigan, pursuant to the FWPCA, approved new water quality standards which went into effect on December 12, 1973. Michigan Water Quality Standards, Michigan Administrative Code
Moreover, the EPA Administrator, after issuing notice and holding a public hearing, has authority to establish more restrictive effluent limitations to "discharges of pollutants from a point source or group of point sources" which (even though the effluent limitations under § 301(b)(2) (best available control technology) are applied to the point sources) would still be interfering "with the attainment or maintenance of that water quality in a specific portion of the navigable waters . . .". § 302(a) and (b), 33 U.S.C. § 1312(a) and (b).
The Supreme Court in the State Water Resources case also explained a second purpose of the FWPCA, 426 U.S. at 205, 96 S.Ct. at 2025:
EPA is empowered by Congress to issue these permits. § 402, 33 U.S.C. § 1342. However, the Act also provides that these permits may be issued by the States. If a State desires to administer the program pursuant to the Congressional policy of State control over water pollution, EPA must first approve the State's permit program. See § 402(b). Once the Administrator's approval is given, the State may issue NPDES permits as long as the permits meet the requirements of the FWPCA. Among its duties under the permit program, the State must "provide an opportunity for public hearing before a ruling on each such application [for a permit]" and provide the Administrator with "notice of each application [including a copy thereof] for a permit." § 402(b)(3) and (4). On October 17, 1973 the EPA Administrator approved the permit program of the State of Michigan. 39 F.R. 26061 (July 16, 1974).
In addition to EPA's possible withdrawal of its approval of a State's permit program under § 402(c), EPA also retains a veto power over a State's issuance of an individual permit. Section 402(d)(2)(B) provides:
The aggrieved party has ninety days from the date of denial of the permit under § 402 in which to seek review of the Administrator's action, by petition therefor filed in the appropriate United States Court of Appeals. § 509(B)(1)(F), 33 U.S.C. § 1369(b)(1)(F).
Ford operates a stamping plant in Monroe, Michigan. Each day the plant produces 40,000 steel automobile wheels, 16,000 bumpers and numerous coil springs. The plant discharges into the Raisin River less than one mile above the river's point of entry into Lake Erie, various metals, such as chromium, copper, nickel and zinc.
On June 30, 1971 Ford applied for a NPDES discharge permit for its Monroe plant.
In August, 1974 EPA questioned among other things, Ford's proposed use of the entire Raisin River as a "mixing zone." Under Michigan Water Quality Standards Rule 1043(n) a "mixing zone" is "a region of a water body which receives a wastewater discharge of a different quality than the receiving waters, and within which the water quality standards as prescribed by these rules do not apply." The State of Michigan does not allow use of more than 25% of the stream as a mixing zone "unless it can be demonstrated [to the MWRC] that designation of a greater area or volume of streamflow will allow passage of fish and fishfood organisms so that effects on their immediate and future populations are negligible or not measurable." Rule 1082 of the Michigan Water Quality Standards.
EPA, based on a bioassay conducted by the MWRC in April, 1973, also questioned Ford's ability during the Raisin River's low flow period, to meet the water quality standard concentration limits.
In September, 1974 EPA again questioned the use of the entire width of the Raisin River as a mixing zone and suggested that Ford use only one-half of the river. MWRC soon responded to the EPA suggestion and revised the mixing zone to include "the total flow in the River Raisin from the point of discharge to the Detroit Edison Power Plant intake" (which intake is about 900 feet distant from the Ford discharge). MWRC stated that "[t]he effluent restrictions placed on the Ford Motor Company Monroe Plant discharge are more restrictive than the promulgated guidelines."
On December 20, 1974 the State of Michigan, pursuant to the approval of MWRC, issued Ford the NPDES permit on its Monroe Plant. The permit included the mixing zone as suggested to EPA by MWRC, supra. EPA did not veto the permit and it became effective.
On July 11, 1975 MWRC at Ford's suggestion, sent to EPA a proposed modification of Ford's Monroe Plant permit. Among other things, MWRC proposed use of flow augmentation for Ford to meet water quality standards. Ford, in its brief to this Court, stated:
The proposed modification was succinctly stated by Jeffrey G. Miller, EPA Deputy Assistant Administrator for Water Enforcement:
Initially, in August, 1975 in a telephone conversation between Harry J. Clemens of EPA's Region V Permit Branch and Carl Schafer of EPA's Washington headquarters, EPA believed that use of flow augmentation in the mixing zone and receiving water was proper so long as the best practicable control technology [BPT] currently available was being applied and that the flow augmentation was not being used to "dilute to meet [the best available technology economically achievable]". In fact, in the next three communications between EPA and MWRC, no objections were raised with respect to the use of flow augmentation.
On October 1, 1975 however, in a letter from Dale S. Bryson, the Region V EPA Deputy Director Enforcement Division, to Roy Schrameck, MWRC's Division Permit Coordinator, EPA again questioned whether fish passage on the river was possible due to the large size of the mixing zone, and requested studies from MWRC pursuant to Rule 1082 of the Michigan Water Quality Standards to demonstrate fish passage in the river. More importantly, EPA expressed displeasure with the use of flow augmentation to meet the water quality standards. Mr. Bryson said:
Despite the above letter, on October 7, 1975 Robert J. Courchaine, Chief Engineer of MWRC formally submitted to EPA (Bryson) the proposed modifications on Ford's Monroe Plant permit which included a control of heavy metal concentration that would assure uninterrupted fish passage "accomplished on a continuing basis by low-flow augmentation, an acceptable water quality management tool." Mr. Courchaine emphasized that the proposed permit modifications required filtration as an additional BPT treatment step.
On October 20, 1975 Bryson of EPA wrote a letter to Miller of EPA requesting information "as soon as possible as to the national policy" on flow augmentation. Bryson said that his office was opposed to the use of "flow augmentation to achieve lower concentration in the effluent to comply with their Water Quality Standards."
On November 3, 1975 Mr. Courchaine of MWRC, pursuant to Bryson's letter to MWRC on October 1, 1975, requested from Ford "documentation to justify the use of flow augmentation" which would "show why treatment beyond [the] present proposal, BPT plus filtration, to meet water quality standards is economically and/or technically unfeasible."
In response to Bryson's request of October 20, 1975 concerning the subject of flow augmentation to achieve water quality standards, Miller on January 14, 1976 sent to Bryson his written memorandum, which memorandum concluded that flow augmentation at the Ford Plant was unacceptable. Miller stated:
Therefore, on January 22, 1976 Mr. Bryson of EPA informed Mr. Courchaine of MWRC by letter that MWRC's proposed permit modifications on the Ford Monroe Plant were denied. Bryson stated that
On April 20, 1976 pursuant to § 509(b)(1)(F) of the Act, 33 U.S.C. § 1369(b)(1)(F), Ford petitioned this Court to review the January 22, 1976 decision of EPA denying the permit modifications for the Monroe Plant.
Initially, EPA contends that actions taken by MWRC subsequent to its veto of the proposed permit modifications have mooted this case. Specifically, EPA argues that in May 1976 which was subsequent to the filing by Ford of its petition for review in this Court, MWRC decided not to continue to support the issuance of the NPDES permit on the Monroe Plant; agreed that EPA's refusal to concur in issuance was reasonable; and ordered an adjudicatory hearing to reconsider the need for the permit modifications. Therefore, EPA concludes that judicial review at this time is not appropriate because no controversy exists. It asserts that only if MWRC and/or EPA later refuse to issue the permit modifications, after an adjudicatory hearing record has been developed, should this Court review the action of EPA.
The State of Michigan as an intervenor also requests that this Court defer ruling on EPA's denial of the permit modifications until the administrative record can be developed through an adjudicatory hearing. The State concedes that it forwarded to EPA the proposed permit modifications without an adequate factual review.
The statute at § 509(b)(1)(F) is quite clear however, in conferring upon this Court jurisdiction to review the EPA Administrator's action for denial of any permit under § 402. There is no dispute by any party that EPA denied Ford modification on its Monroe Plant permit under § 402(d)(2)(B). We hold therefore, that the Administrator's action is properly before this Court subject to review. Mianus River Preservation Comm. v. Administrator EPA, 541 F.2d 899, 909 (2d Cir. 1976) and Shell Oil Co. v. Train, 415 F.Supp. 70, 77-78 (N.D.Cal.1976). Cf. E. I. duPont deNemours & Co. v. Train, supra, 430 U.S. at 137, 97 S.Ct. 965. The factual record in this case has been sufficiently developed that this Court can review adequately the action of EPA.
This Court is not reviewing the action of the State of Michigan to issue the revised permit with the proposed modifications, and the FWPCA does not foreclose the State from conducting further hearings in the matter. Nevertheless, Ford is entitled under the statute to have its day in court, and post-denial action by the State of Michigan (which obviously was reacting to EPA's veto of the proposed permit modifications) neither changes the action already taken by EPA nor moots this case. An actual controversy still exists between Ford and EPA. Accordingly, we will proceed to the merits of this case.
As noted above, the EPA Administrator has authority to refuse a NPDES permit proposed by the State if the Administrator, within ninety days of the State's transmittal of the proposed permit, objects to it in writing "as being outside the guidelines and requirements" of the FWPCA. § 402(d)(2)(B).
Ford argues that this statute provides the Administrator with but narrow review powers over a proposed permit when a State is supervising its own permit program under the FWPCA. Ford contends that EPA is exercising control over the effluent limitations in individual States on a plant-by-plant basis, even though the permits as in the present case, are not inconsistent with the published guidelines and explicit statutory requirements under the Act.
Although the issue as to whether the proposed permit modifications are or are not outside the guidelines and requirements of the FWPCA is the main question to be decided in this case, there is little doubt that EPA has limited review powers over the issuance of a proposed permit submitted by a State pursuant to the State's own NPDES permit program under § 402. The FWPCA does vest final review authority with the Administrator for permits issued by the states (see the duPont case, supra, at 137 n. 27, 97 S.Ct. 965) but since it was "believed that the states would shoulder the primary burden of issuing permits to individual dischargers," the "EPA duties were to be restricted to assuring that the state followed the procedural guidelines and to reviewing individual permits of major significance." Natural Resources Defense Council, Inc. v. Train, 166 U.S.App.D.C. 312, 329, 510 F.2d 692, 709 (1975). See 1972 U.S.Code Cong. & Ad.News, p. 3737. Cf. Mianus River Preservation Comm. v. Administrator, EPA, supra.
The permit involved raises an issue of "major significance," namely, the use of low-flow augmentation to meet water quality standards. This issue may have a major impact on many dischargers in the United States.
We now proceed to determine whether under § 10 of the Administrative Procedure Act, the Administrator's action was "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). See Buckeye Power, Inc. v. EPA, 481 F.2d 162, 171 (6th Cir. 1973); Appalachian Power Co. v. Train, 545 F.2d 1351, 1356 (4th Cir. 1976); and Sierra Club v. EPA, 176 U.S.App.D.C. 335, 344-45, 540 F.2d 1114, 1123-24 (1976), cert. denied, 430 U.S. 959, 97 S.Ct. 1610, 51 L.Ed.2d 811 (1977).
Under the "arbitrary and capricious" standard, the Supreme Court in Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823-24, 28 L.Ed.2d 136 (1971) stated:
Quoted with approval in Buckeye Power, Inc. v. EPA, supra, at 171.
Furthermore, EPA is held to a high standard of articulation. Id., quoting from Environmental Defense Fund, Inc. v. EPA, 150 U.S.App.D.C. 348, 360-61, 465 F.2d 528, 540-41 (1972).
Ford argues that EPA objected to the use of low-flow augmentation to meet water quality standards under the FWPCA solely upon EPA's own ad hoc policy determination as to effluent limitations at the Monroe Plant. Ford further contends that there are no published regulations, guidelines or specific statutory requirements under the FWPCA prohibiting the use of low-flow augmentation to meet water quality standards. Ford concludes therefore, that EPA exceeded its veto authority when it denied Ford the permit modification because § 402(d)(2)(B) allows EPA to object only to the issuance of NPDES permits which are
It is clear from the record in this appeal that EPA had no prior well-established agency policy which prohibited the use of low-flow augmentation to meet water quality standards. In fact, in August 1975 two EPA officials appear to have indicated initially that flow augmentation was proper. When Bryson, the Region V EPA Deputy Director, in October 1975 requested from Miller of EPA a memorandum on flow augmentation, Bryson did not even know the national policy of the agency on flow augmentation. Miller's response in a memorandum, the basis for EPA's veto of the proposed permit modifications, did not cite any statutory provision, regulation or guideline. As already noted, Miller stated:
EPA's November 1976 memorandum from the office of its General Counsel, on the subject of low-flow augmentation, contains this statement:
Nonetheless, this memorandum stated that the EPA policy clearly discouraged the use of flow augmentation or dilution "as an alternative to treatment for meeting water quality standards," developing its reasoning from analogies on the statutory requirements under § 102(b)(1) of the Act, 33 U.S.C. § 1252(b)(1), and § 110(a)(2)(B) of the Clean Air Act, 42 U.S.C. § 1857c-5(a)(2)(B). Such a position would undoubtedly be a good reason for publishing regulations or guidelines in the future on this subject, but it can hardly be a justification for vetoing the proposed permit modifications in the present case when the reasoning was adopted ten months after the veto. This Court can consider only the grounds asserted by EPA in its letter of January 22, 1976 which vetoed the permit modifications.
The Supreme Court in Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69, 83 S.Ct. 239, 246, 9 L.Ed.2d 207 (1962), stated, with reference to SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947):
See also Atchison, Topeka & Santa Fe Ry. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 806-07, 93 S.Ct. 2367, 37 L.Ed.2d 350 (1973) (Marshall, J., speaking for the plurality). Cf. Hooker Chemical & Plastics Corp. v. Train, 537 F.2d 620, 634, 636 (2d Cir. 1976).
Moreover, EPA's contention that Ford did not provide the necessary information to EPA or MWRC on the need for flow augmentation at the Monroe Plant and other related arguments cannot support EPA's veto because such "deficiencies" were not included in any part of EPA's veto letter. In other words, they are an afterthought.
An examination of the various statutory provisions of the FWPCA indicates that Congress among other things, directed EPA to publish guidelines and regulations setting forth the effluent limitations applicable to point sources. For example, § 304(a) required EPA to publish "criteria for water quality accurately reflecting the latest scientific knowledge" as to most aspects of water pollution and its effect on the aquatic environment, as well as to develop and publish information on the factors necessary to measure, restore and maintain water quality and to protect the aquatic environment. Section 304(b) required EPA to publish "regulations, providing guidelines for effluent limitations." Section 301(b) required EPA to publish regulations on effluent limitations for point sources. Section 302 directed EPA to publish regulations on water quality related effluent limitations where such limitations were necessary. Section 306(b) ordered EPA to "propose and publish regulations establishing Federal standards of performance for new [pollution] sources within" various industries. Section 307 required EPA to publish toxic and pretreatment effluent standards. These regulations and guidelines if violated, would serve as a basis for vetoing a NPDES permit. Compare E. I. Dupont deNemours & Co. v. Train, 430 U.S. 133 n. 24, 97 S.Ct. 965 (1977) and American Iron and Steel Inst. v. EPA, 526 F.2d 1027, 1041 (3rd Cir. 1975) with CPC Int'l, Inc. v. Train, 515 F.2d 1032, 1039 (8th Cir. 1975). See also §§ 402(a)(1) and (b)(1)(A).
EPA has not met with difficulty in publishing necessary regulations and guidelines within the time framework contemplated by Congress for most industries.
The absence of such regulations and guidelines however, as well as the lack of specific statutory requirements under the Act relating to the use of flow augmentation to meet water quality standards precludes EPA's denial of a modification on a NPDES permit as to flow augmentation under § 402(d)(2)(B) because such modification is not "outside the guidelines and requirements" of the Act. Cf. Republic Steel Corp. v. Train, 557 F.2d 91 (6th Cir. 1977). Without such guidelines and requirements, EPA could arbitrarily deny permit modifications and render state NPDES permit programs a farce. An industry would have difficulty in preparing its application for a permit without such guidelines. As Ford argued, a permittee would effectively be denied a hearing on issues related to the permit. In other words, EPA would be making decisions unfettered by administrative constraints, despite the congressional policy specifically providing therefor. § 101(e).
In the present case we are unable to find any "guidelines and requirements" in the FWPCA, or guidelines promulgated pursuant thereto upon which EPA on January 22, 1976 relied, to deny the NPDES permit modifications on the Ford Monroe Plant. Therefore, EPA's veto action under § 402(d)(2)(B) was a clear error in judgment and was arbitrary, capricious and an abuse of discretion. Ad hoc national policy determinations developed through internal agency memoranda standing alone without promulgating regulations or guidelines through public notice and/or an opportunity
If the State of Michigan conducts further hearings on the proposed permit modifications at the Ford Monroe Plant, Ford and EPA may appear at these hearings to present their respective contentions with respect thereto.
Accordingly, EPA's veto of the proposed permit modifications at the Ford Monroe Plant is set aside. This case is remanded for further proceedings not inconsistent with this opinion.
ENGEL, Circuit Judge, dissenting.
I respectfully dissent. The practical effect of the majority opinion is to hold that if a pollution discharge is not expressly forbidden by the FWPCA, EPA regulations or state-adopted water quality standards, it is permitted.
In my opinion such a view runs counter both to the history and text of the Act, and in particular to the language of Section 301(a) of the Act, 33 U.S.C. § 1311(a), which in a straightforward manner states:
The use of flow augmentation is not authorized by any of the exceptions referred to in Section 301(a) of the Act.
As pointed out in the majority opinion, Michigan adopted its water quality standards effective December 12, 1973. Because the Administrator did not express his disapproval, they became standards under the FWPCA. Section 303(c)(3) of the Act, 33 U.S.C. § 1313(c)(3). Michigan's adopted water quality standards do not provide for flow augmentation even by inference. The EPA was not accorded the opportunity to pass upon the question of flow augmentation when the standards were submitted to it, there being no suggestion that the issue was ever raised.
Ford's Monroe plant is currently subject to a permit which does not include any authorization for the use of flow augmentation as a means of meeting the applicable water quality standards. The NPDES permit issued to Ford for its Monroe plant on December 20, 1974 was not vetoed by the EPA. Only six months later, however, a modification was sent to the EPA, proposing the use of flow augmentation by Ford to meet the water quality standards for the Raisin River. The modification sought would allow Ford to draw water from nearby Lake Erie, thus raising the flow of the Raisin River at the point of discharge. The proposal would permit Ford to divert any volume of water in order to meet the concentration limits contained in the water quality standards.
Taking advantage of the fact that the Michigan water quality standards are stated on a per liter basis, Ford proposes a permit modification which would allow it to dilute its pollution to achieve the water quality standards without a reduction in the amount of pollutants it discharges. With the modification Ford proposes to dump more than twice as much metallic sludge into the Raisin River as has previously been permitted.
It is true that if Michigan water quality standards do not condone, neither do they expressly condemn flow augmentation as a means of achieving acceptable concentrations of discharged pollutants. And it is
To be lawful under Section 301(a) of the Act, 33 U.S.C. § 1311(a), a discharge must satisfy carefully delineated exceptions set forth in the other sections of the Act. In other words, unless a discharge of pollutants can be shown to be legal, it is illegal under Section 301(a).
The effect of the majority opinion is to require the EPA to point to a regulation which outlaws the flow augmentation technique before it can act. No doubt the potential means of evading the operation of the Act are myriad if the plain command of Section 301 is to be ignored. It was, in my judgment, precisely because such loopholes could not be anticipated that Congress couched the Act in such bold, prohibitory terms.
While it is not necessary to hold that flow augmentation is implicitly forbidden by the FWPCA, there is much within the Act and its history to support such a view. Congress chose the phrase "effluent limitation" to describe the means for attaining water quality. Section 302 of the Act, 33 U.S.C. § 1312.
Section 502(11) of the Act, 33 U.S.C. § 1362(11); See American Iron & Steel Institute v. EPA, 543 F.2d 521, 528 (3d Cir. 1976).
Such a view is fully substantiated in the legislative history. The goals and policy of
A further indication of national policy is to be gleaned from Section 102(b)(1) of the Act, 33 U.S.C. § 1252(b)(1), which states:
The flow augmentation contemplated by Section 102(b)(1) involves the release of impounded waters at a time of low flow. The Act notes that such augmentation shall not be a substitute for "adequate treatment or other methods of controlling waste at the source."
The Conference Committee Report noted with respect to Section 102(b)(1):
S.Conf.Rep.No. 92-1236, 92d Cong., 2d Sess. (1972), reprinted in 2 U.S.Code Cong. & Admin.News at 3778-79 (1972).
Without question, Ford's Monroe plant is a "point source," as defined in Section 502(14) of the Act, 33 U.S.C. § 1362(14), and is thus not within the qualified exception recognized in the Conference Committee Report. The conclusion is inescapable that the drafters of the FWPCA did not intend industrial dischargers of waste materials from point sources such as Ford's Raisin River plant to achieve statutory compliance by using dilution as a substitute for waste treatment.
The EPA's position also finds analogous support in our court's interpretation of the Clean Air Act. In Big Rivers, supra, the Administrator had disapproved the Kentucky state implementation plan submitted under the Clean Air Act. We upheld the Administrator's view that the dispersal of airborne contaminants was not a satisfactory
Finally turning to the Michigan Water Quality Standards themselves, they provide that:
Michigan Water Quality Standards, Michigan Admin.Code, Part 4, Rule 323.1090. "Receiving waters" is defined therein as "the waters of the state into which an effluent is or may be discharged." Id., Rule 323.1044(f). A natural construction of the terms "receiving waters" and "the waters of the state," would not normally be thought to include waters which the polluter has artificially diverted from elsewhere into the stream in order to dilute the pollution. The concentrations expressed in the water quality standards applicable to the receiving waters of the Raisin River appear wholly consistent with the Administrator's position and are inconsistent with the manipulation of flow contemplated by Ford.
Further, I cannot agree with the majority that we should take so grudging a view of the EPA's articulated basis for the exercise of its veto. It is true, as the majority notes, that it is not for the courts to provide post hoc rationalization for an agency's action which that agency has not itself given. It is also, however, true that our scope of review is a narrow one and that an agency decision of less than ideal clarity will be upheld "if the agency's path may reasonably be discerned." Bowman Transportation, Inc. v. Arkansas-Best Freight System, 419 U.S. 281, 286, 95 S.Ct. 438, 442, 42 L.Ed.2d 447 (1974), quoting Colorado Interstate Gas Co. v. FPC, 324 U.S. 521, 589, 65 S.Ct. 829, 89 L.Ed. 1206 (1945). The majority opinion would appear to confine the EPA to the grounds asserted in its letter of January 22, 1976, vetoing the permit modification. However, accompanying that letter was a memorandum dated January 14, 1976, which the veto letter incorporated by reference. The January 22 letter stated:
The January 14 memorandum added:
The only reasonable construction of the January 14 and January 22 memoranda in the context of the EPA's veto of the proposed permit modification is that simply satisfying the best practicable technology requirement contained in effluent limitation standards would be insufficient if in-stream concentration limits, without flow augmentation, still could not be met.
Contrary to the view of the majority, I would hold that the path of the agency's reasoning is sufficiently clear from its veto correspondence and does not constitute a post hoc rationalization.
Finally, I am unable to join in attributing a legal distinction to permits of "major" and minor significance. The majority apparently concludes that the Administrator's veto will be summarily set aside if the permit is not of major significance— a conclusion which I am unable to draw from the authorities cited.
Congress undoubtedly intended that, where states qualified themselves to issue NPDES permits, the great bulk of the work was to be performed by the state and that, to this extent, the EPA would be relieved of a great deal of responsibility which would otherwise be vested solely in it. This, however, is a far cry from holding that there is any statutory limitation upon the powers of the EPA under Section 402(d)(2) of the Act, 33 U.S.C. § 1342(d)(2). As the Second Circuit noted in Mianus River Preservation Committee v. Administrator, EPA, 541 F.2d 899, 907 (2d Cir. 1976):
I would hold, with the Second Circuit, that the review power under the Act is entirely discretionary with the EPA and is not limited to permits of major significance. The key to the system of review devised by Congress is a practical flexibility, with the EPA itself judging when the circumstances warrant its intervention. I would hold instead that any unlawful permit outside the
Had the EPA approved water quality standards for the State of Michigan expressly providing for flow augmentation, there would be much more force to the claim that its veto was arbitrary and capricious. As the majority concedes, however, the standards are silent as to flow augmentation. It is not for us to speculate that the Administrator approved or would have approved the use of flow augmentation, when such an inference is obviously inconsistent with the objectives of the Act and results in a strained construction of the water quality standards themselves.
The Administrator, in vetoing the proposed permit modification, has expressed his view that flow augmentation is an impermissible means of attaining the concentrations of pollutants contained in the water quality standards of Michigan. As our court held in Big Rivers, supra, "interpretations of this complex statute [the Clean Air Act] by the agency charged with administering it are entitled to great deference." 523 F.2d at 22. Similar deference should be given to the EPA's interpretation of the FWPCA and of the state water quality standards, the text of which the agency itself reviewed and approved. American Iron & Steel Institute v. EPA, 543 F.2d 521, 526 (3d Cir. 1976). In my view the Administrator was justified in concluding that flow augmentation was not a permissible technique for achieving water quality standards, since no express authorization in the Act or regulations can be found to support it. I would deny the petition for review and affirm the action of the Administrator.
Section 102(b)(2), (3) of the Act, 33 U.S.C. § 1252(b)(2), (3).