Pursuant to the Clean Water Act, 86 Stat. 816, as amended, 33 U. S. C. § 1251 et seq., the Environmental Protection Agency (EPA or Agency) issued a discharge permit to a new point source in Arkansas, about 39 miles upstream from the Oklahoma state line. The question presented in this litigation is whether the EPA's finding that discharges from the new source would not cause a detectable violation of Oklahoma's
In 1985, the city of Fayetteville, Arkansas, applied to the EPA, seeking a permit for the city's new sewage treatment plant under the National Pollution Discharge Elimination System (NPDES). After the appropriate procedures, the EPA, pursuant to § 402(a)(1) of the Act, 33 U. S. C. § 1342(a)(1), issued a permit authorizing the plant to discharge up to half of its effluent (to a limit of 6.1 million gallons per day) into an unnamed stream in northwestern Arkansas.
The permit imposed specific limitations on the quantity, content, and character of the discharge and also included a number of special conditions, including a provision that if a study then underway indicated that more stringent limitations were necessary to ensure compliance with Oklahoma's water quality standards, the permit would be modified to incorporate those limits. App. 84.
Respondents challenged this permit before the EPA, alleging, inter alia, that the discharge violated the Oklahoma water quality standards. Those standards provide that "no degradation [of water quality] shall be allowed" in the upper Illinois River, including the portion of the river immediately downstream from the state line.
On a petition for review, the EPA's Chief Judicial Officer first ruled that § 301(b)(1)(C) of the Clean Water Act "requires an NPDES permit to impose any effluent limitations necessary to comply with applicable state water quality standards."
On remand, the ALJ made detailed findings of fact and concluded that the city had satisfied the standard set forth by the Chief Judicial Officer. Specifically, the ALJ found that there would be no detectable violation of any of the components of Oklahoma's water quality standards. Id., at 127a—143a. The Chief Judicial Officer sustained the issuance of the permit. Id., at 145a—153a.
Both the petitioners in No. 90-1262 (collectively Arkansas) and the respondents in this litigation sought judicial review.
The Court of Appeals did not accept either of these arguments. The court agreed with the EPA that the statute required compliance with Oklahoma's water quality standards,
"(C)not later than July 1, 1977, any more stringent limitation, including those necessary to meet water quality standards . . . established pursuant to any State law or regulations . . . or required to implement any applicable water quality standard established pursuant to this chapter." 33 U. S. C. § 1311(b)(1)(C) (emphasis added).
The importance and the novelty of the Court of Appeals' decision persuaded us to grant certiorari. 499 U.S. 946 (1991). We now reverse.
Interstate waters have been a font of controversy since the founding of the Nation. E. g., Gibbons v. Ogden, 9 Wheat. 1 (1824). This Court has frequently resolved disputes between States that are separated by a common river, see, e. g., Ohio v. Kentucky, 444 U.S. 335 (1980), that border the same body of water, see, e. g., New York v. New Jersey, 256 U.S. 296 (1921), or that are fed by the same river basin, see, e. g., New Jersey v. New York, 283 U.S. 336 (1931).
Among these cases are controversies between a State that introduces pollutants to a waterway and a downstream State that objects. See, e. g., Missouri v. Illinois, 200 U.S. 496 (1906). In such cases, this Court has applied principles of common law tempered by a respect for the sovereignty of the States. Compare id., at 521, with Georgia v. Tennessee Copper Co., 206 U.S. 230, 237 (1907). In forging what "may
In Milwaukee v. Illinois, 451 U.S. 304 (1981) (Milwaukee II), we held that the Federal Water Pollution Control Act Amendments of 1972 did just that. In addressing Illinois' claim that Milwaukee's discharges into Lake Michigan constituted a nuisance, we held that the comprehensive regulatory regime created by the 1972 amendments pre-empted Illinois' federal common law remedy. We observed that Congress had addressed many of the problems we had identified in Milwaukee I by providing a downstream State with an opportunity for a hearing before the source State's permitting agency, by requiring the latter to explain its failure to accept any recommendations offered by the downstream State, and by authorizing the EPA, in its discretion, to veto a source State's issuance of any permit if the waters of another State may be affected. Milwaukee II, 451 U. S., at 325-326.
In Milwaukee II, the Court did not address whether the 1972 amendments had supplanted state common law remedies as well as the federal common law remedy. See id., at 310, n. 4. On remand, Illinois argued that § 510 of the Clean Water Act, 33 U. S. C. § 1370, expressly preserved the State's right to adopt and enforce rules that are more stringent than federal standards.
This Court subsequently endorsed that analysis in International Paper Co. v. Ouellette, 479 U.S. 481 (1987), in which Vermont property owners claimed that the pollution discharged into Lake Champlain by a paper company located in New York constituted a nuisance under Vermont law. The Court held the Clean Water Act taken "as a whole, its purposes and its history" pre-empted an action based on the law of the affected State and that the only state law applicable to an interstate discharge is "the law of the State in which the point source is located." Id., at 493, 487. Moreover, in reviewing § 402(b) of the Act, the Court pointed out that when a new permit is being issued by the source State's permit-granting agency, the downstream State
The Clean Water Act anticipates a partnership between the States and the Federal Government, animated by a shared objective: "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U. S. C. § 1251(a). Toward this end, the Act provides for two sets of water quality measures. "Effluent limitations" are promulgated by the EPA and restrict the quantities, rates, and concentrations of specified substances which are discharged from point sources. See §§ 1311, 1314. "[W]ater quality standards" are, in general, promulgated by the States and establish the desired condition of a waterway. See § 1313. These standards supplement effluent limitations "so that numerous point sources, despite individual compliance with effluent limitations, may be further regulated to prevent water quality from falling below acceptable levels." EPA v. California ex rel. State Water Resources Control Bd., 426 U.S. 200, 205, n. 12 (1976).
The EPA provides States with substantial guidance in the drafting of water quality standards. See generally 40 CFR pt. 131 (1991) (setting forth model water quality standards). Moreover, § 303 of the Act requires, inter alia, that state authorities periodically review water quality standards and secure the EPA's approval of any revisions in the standards. If the EPA recommends changes to the standards and the State fails to comply with that recommendation, the Act authorizes the EPA to promulgate water quality standards for the State. 33 U. S. C. § 1313(c).
The primary means for enforcing these limitations and standards is the NPDES, enacted in 1972 as a critical part of Congress' "complete rewriting" of federal water pollution
Section 402(b) authorizes each State to establish "its own permit program for discharges into navigable waters within its jurisdiction." 33 U. S. C. § 1342(b). Among the requirements the state program must satisfy are the procedural protections for downstream States discussed in Ouellette and Milwaukee II. See §§ 1342(b)(3), (5).
The parties have argued three analytically distinct questions concerning the interpretation of the Clean Water Act. First, does the Act require the EPA, in crafting and issuing a permit to a point source in one State, to apply the water quality standards of downstream States? Second, even if the Act does not require as much, does the Agency have the statutory authority to mandate such compliance? Third, does the Act provide, as the Court of Appeals held, that once a body of water fails to meet water quality standards no discharge that yields effluent that reach the degraded waters will be permitted?
In these cases, it is neither necessary nor prudent for us to resolve the first of these questions. In issuing the Fayetteville permit, the EPA assumed it was obligated by both the Act and its own regulations to ensure that the Fayetteville discharge would not violate Oklahoma's standards. See App. to Pet. for Cert. in No. 90-1262, pp. 116a—117a, and n. 14. As we discuss below, this assumption was permissible and reasonable and therefore there is no need for us to address whether the Act requires as much. Moreover, much of the analysis and argument in the briefs of the parties relies on statutory provisions that govern not only federal permits issued pursuant to §§ 401(a) and 402(a), but also state permits issued under § 402(b). It seems unwise to evaluate those arguments in a case such as these, which only involve a federal permit.
Since 1973, EPA regulations have provided that an NPDES permit shall not be issued "[w]hen the imposition of conditions cannot ensure compliance with the applicable water quality requirements of all affected States."
Congress has vested in the Administrator broad discretion to establish conditions for NPDES permits. Section 402(a) (2) provides that for EPA-issued permits "[t]he Administrator shall prescribe conditions . . . to assure compliance with the requirements of [§ 402(a)(1)] and such other requirements as he deems appropriate. " 33 U. S. C. § 1342(a)(2) (emphasis added). Similarly, Congress preserved for the Administrator broad authority to oversee state permit programs:
The regulations relied on by the EPA were a perfectly reasonable exercise of the Agency's statutory discretion. The application of state water quality standards in the interstate context is wholly consistent with the Act's broad purpose "to restore and maintain the chemical, physical, and
Notwithstanding this apparent reasonableness, Arkansas argues that our description in Ouellette of the role of affected States in the permit process and our characterization of the affected States' position as "subordinate," see 479 U. S., at 490-491, indicates that the EPA's application of the Oklahoma standards was error. We disagree. Our statement in Ouellette concerned only an affected State's input into the permit process; that input is clearly limited by the plain language of § 402(b). Limits on an affected State's direct participation in permitting decisions, however, do not in any way constrain the EPA's authority to require a point source to comply with downstream water quality standards.
Arkansas also argues that regulations requiring compliance with downstream standards are at odds with the legislative history of the Act and with the statutory scheme established by the Act. Although we agree with Arkansas that the Act's legislative history indicates that Congress intended to grant the Administrator discretion in his oversight of the issuance of NPDES permits,
Similarly, we agree with Arkansas that in the Clean Water Act Congress struck a careful balance among competing policies and interests, but do not find the EPA regulations concerning
For these reasons, we find the EPA's requirement that the Fayetteville discharge comply with Oklahoma's water quality standards to be a reasonable exercise of the Agency's substantial statutory discretion. Cf. Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842— 845 (1984).
The Court of Appeals construed the Clean Water Act to prohibit any discharge of effluent that would reach waters already in violation of existing water quality standards.
Although the Act contains several provisions directing compliance with state water quality standards, see, e. g., § 1311(b)(1)(C), the parties have pointed to nothing that mandates a complete ban on discharges into a waterway that is in violation of those standards. The statute does, however, contain provisions designed to remedy existing water quality violations and to allocate the burden of reducing undesirable discharges between existing sources and new sources. See, e. g., § 1313(d). Thus, rather than establishing the categorical ban announced by the Court of Appeals—which might frustrate the construction of new plants that would improve existing conditions—the Clean Water Act vests in the EPA and the States broad authority to develop long-range, areawide programs to alleviate and eliminate existing pollution. See, e. g., § 1288(b)(2).
To the extent that the Court of Appeals relied on its interpretation of the Act to reverse the EPA's permitting decision, that reliance was misplaced.
The Court of Appeals also concluded that the EPA's issuance of the Fayetteville permit was arbitrary and capricious because the Agency misinterpreted Oklahoma's water quality standards. The primary difference
As discussed above, an EPA regulation requires an NPDES permit to comply "with the applicable water quality requirements of all affected States." 40 CFR § 122.4(d) (1991). This regulation effectively incorporates into federal law those state-law standards the Agency reasonably determines to be "applicable." In such a situation, then, state water quality standards—promulgated by the States with substantial guidance from the EPA
Two features of the body of law governing water pollution support this conclusion. First, as discussed more thoroughly above, we have long recognized that interstate water pollution is controlled by federal law. See supra, at 98-100. Recognizing that the system of federally approved state standards as applied in the interstate context constitutes federal law is wholly consistent with this principle. Second, treating state standards in interstate controversies as federal law accords with the Act's purpose of authorizing the EPA to create and manage a uniform system of interstate water pollution regulation.
Because we recognize that, at least insofar as they affect the issuance of a permit in another State, the Oklahoma standards have a federal character, the EPA's reasonable, consistently held interpretation of those standards is entitled to substantial deference. Cf. INS v. National Center for Immigrants' Rights, 502 U.S. 183, 189-190 (1991); Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). In these cases, the Chief Judicial Officer ruled that the Oklahoma standards—which require that there be "no degradation" of the upper Illinois River—would
This interpretation of the Oklahoma standards is certainly reasonable and consistent with the purposes and principles of the Clean Water Act. As the Chief Judicial Officer noted, "unless there is some method for measuring compliance, there is no way to ensure compliance." Id., at 118a, n. 16 (internal quotation marks omitted; citation omitted). Moreover, this interpretation of the Oklahoma standards makes eminent sense in the interstate context: If every discharge that had some theoretical impact on a downstream State were interpreted as "degrading" the downstream waters, downstream States might wield an effective veto over upstream discharges.
The EPA's application of those standards in these cases was also sound. On remand, the ALJ scrutinized the record and made explicit factual findings regarding four primary measures of water quality under the Oklahoma standards: eutrophication,
In its review of the EPA's interpretation and application of the Oklahoma standards, the Court of Appeals committed three mutually compounding errors.
First, the court failed to give due regard to the EPA's interpretation of its own regulations, as those regulations incorporate the Oklahoma standards. Instead the court voiced its own interpretation of the governing law and concluded that "where a proposed source would discharge effluents that would contribute to conditions currently constituting a violation of applicable water quality standards, such [a] proposed source may not be permitted." 908 F. 2d, at 620. As we have already pointed out, that reading of the law is not supported by the statute or by any EPA regulation. The Court of Appeals sat in review of an agency action and should have afforded the EPA's interpretation of the governing law an appropriate level of deference. See generally Chevron, supra, at 842-844.
Second, the court disregarded well-established standards for reviewing the factual findings of agencies and instead made its own factual findings. The troubling nature of the court's analysis appears on the face of the opinion itself: At least four times, the court concluded that "there was substantial evidence before the ALJ to support" particular findings which the court thought appropriate, but which were
Third, the court incorrectly concluded that the EPA's decision was arbitrary and capricious. This error is derivative of the court's first two errors. Having substituted its reading of the governing law for the Agency's, and having made its own factual findings, the Court of Appeals concluded that the EPA erred in not considering an important and relevant fact—namely, that the upper Illinois River was (by the court's assessment) already degraded.
As we have often recognized, an agency ruling is "arbitrary and capricious if the agency has . . . entirely failed to consider an important aspect of the problem." Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 (1983). However, in these cases, the degraded status of the river is only an "important aspect" because of the Court of Appeals' novel and erroneous interpretation of the controlling law. Under the EPA's interpretation of that law, what matters is not the river's current status, but rather whether the proposed discharge will have a "detectable effect" on that status. If the Court of Appeals had been properly respectful of the Agency's permissible reading of the Act and the Oklahoma standards, the court would not have adjudged the Agency's decision arbitrary and capricious for this reason.
In sum, the Court of Appeals made a policy choice that it was not authorized to make. Arguably, as that court suggested,
Accordingly, the judgment of the Court of Appeals is
Briefs of amici curiae urging affirmance were filed for the State of Illinois et al. by Roland W. Burris, Attorney General of Illinois, Rosalyn Kaplan, Solicitor General, and James L. Morgan, Assistant Attorney General, Charles W. Burson, Attorney General of Tennessee, John Knox Walkup, Solicitor General, and Michael D. Pearigen, Deputy Attorney General, Jimmy Evans, Attorney General of Alabama, Grant Woods, Attorney General of Arizona, Daniel E. Lungren, Attorney General of California, Richard Blumenthal, Attorney General of Connecticut, Charles M. Oberly III, Attorney General of Delaware, Robert A. Butterworth, Attorney General of Florida, Michael E. Carpenter, Attorney General of Maine, and Jon H. Edwards, Assistant Attorney General, Frank J. Kelley, Attorney General of Michigan, Mike Moore, Attorney General of Mississippi, Robert J. Del Tufo, Attorney General of New Jersey, and T. Travis Medlock, Attorney General of South Carolina; for the Cherokee Nation of Oklahoma by Jim Wilcoxen; for the Natural Resources Defense Council et al. by Jessica C. Landman and Mark Van Putten; for the Scenic Rivers Association of Oklahoma et al. by Kathy Carter-White, Joel Glenn Richardson, Harvey Chaffin, and Bill J. Ballard; for the Sierra Club by Stephan C. Volker; for the U. S. Senator from Oklahoma, Don Nickles, et al. by James George Jatras; and for Mike Synar, Member of Congress, pro se.
"Allstreams and bodies of water designated as (a)are protected by prohibition of any new point source discharge of wastes or increased load from an existing point source except under conditions described in Section 3.
"All streams designated by the State as `scenic river areas,' and such tributaries of those streams as may be appropriate will be so designated. Best management practices for control of nonpoint source discharge should be initiated when feasible." App. 46-47. Oklahoma has designated the portion of the Illinois River immediately downstream from the state line as a "scenic river." Okla. Stat., Tit. 82, § 1452(b)(1) (Supp. 1989); see also App. 54.
Section 3 of the Oklahoma water quality standards provides, in relevant part:
"The intent of the Anti-degradation Policy is to protect all waters of the State from quality degradation. Existing instream water uses shall be maintained and protected. No further water quality degradation which would interfere with or become injurious to existing instream water uses shall be allowed. Oklahoma's waters constitute a valuable State resource and shall be protected, maintained and improved for the benefit of all the citizens.
. . . . .
"No degradation shall be allowed in high quality waters which constitute an outstanding resource or in waters of exceptional recreational or ecological significance. These include water bodies located in national and State parks, Wildlife Refuges, and those designated `Scenic Rivers' in Appendix A." App. 27-28.
. . . . .
"Except as expressly provided in this[Act],nothing in this [Act]shall (1) preclude or deny the right of any State or political subdivision thereof or interstate agency to adopt or enforce (A) any standard or limitation respecting discharges of pollutants, or (B) any requirement respecting control or abatement of pollution [with exceptions];or (2) be construed as impairing or in any manner affecting any right or jurisdiction of the States with respect to the waters (including boundary waters) of such States. " 33 U. S. C. § 1370 (emphasis added).
"(3) [t]o insure that . . . any other State the waters of which may be affected . . . receive notice of each application for a permit and to provide an opportunity for public hearing before a ruling on each such application;
. . . . .
"(5) [t]o insure that any State (other than the permitting State), whose waters may be affected by the issuance of a permit may submit written recommendations to the permitting State (and the Administrator) with respect to any permit application and, if any part of such written recommendations are not accepted by the permitting State, that the permitting State will notify such affected State (and the Administrator) in writing of its failure to so accept such recommendations together with its reasons for so doing." 33 U. S. C. § 1342(b).
Although § 402(b) focuses on state-issued permits, § 402(a)(3) requires that, in issuing an NPDES permit, the Administrator follow the same procedures required of state permit programs. See 33 U. S. C. § 1342(a)(3); see also § 1341(a)(2).
"(2) No permit shall issue (A) if the Administrator within ninety days of the date of his notification under subsection (b)(5) of this section objects in writing to the issuance of such permit, or (B) if the Administrator within ninety days of the date of transmittal of the proposed permit by the State objects in writing to the issuance of such permit as being outside the guidelines and requirements of this chapter. Whenever the Administrator objects to the issuance of a permit under this paragraph such written objection shall contain a statement of the reasons for such objection and the effluent limitations and conditions which such permit would include if it were issued by the Administrator." 33 U. S. C. § 1342(d)(2).
"Whenever such a discharge may affect, as determined by the Administrator, the quality of the waters of any other State, the Administrator . . . shall so notify such other State, the licensing or permitting agency, and the applicant. If, within sixty days after receipt of such notification, such other State determines that such discharge will affect the quality of its waters so as to violate any water quality requirements in such State, and within such sixty-day period notifies the Administrator and the licensing or permitting agency in writing of its objection to the issuance of such license or permit and requests a public hearing on such objection, the licensing or permitting agency shall hold such a hearing. The Administrator shall at such hearing submit his evaluation and recommendations with respect to any such objection to the licensing or permitting agency. Such agency, based upon the recommendations of such State, the Administrator, and upon any additional evidence, if any, presented to the agency at the hearing, shall condition such license or permit in such manner as may be necessary to insure compliance with applicable water quality requirements. If the imposition of conditions cannot insure such compliance such agency shall not issue such license or permit." 33 U. S. C. § 1341(a)(2).
"Congress cannot reasonably be presumed to have intended to exclude from the CWA's `all-encompassing program,' 451 U. S., at 318, a permitting decision arising in circumstances such as those of this case. It is even more unfathomable that Congress fashioned a `comprehensive . . . policy for the elimination of water pollution,' id. , which sanctions continued pollution once minimum water quality standards have been transgressed. More likely, Congress simply never contemplated that EPA or a state would consider it permissible to authorize further pollution under such circumstances. We will not ascribe to the Act either the gaping loophole or the irrational purpose necessary to uphold EPA's action in this case." Id., at 632 (footnotes omitted).
The second flaw identified by the court was the ALJ's mistaken reliance on the 1985, rather than the 1982 version, of the Oklahoma standards. We agree with the Chief Judicial Officer, who also noted this error, that the portions of the two versions relevant to this case "do not differ materially." App. to Pet. for Cert. in No. 90-1262, p. 150a. Therefore, this error was also harmless.
Because these two errors were harmless, we have focused in the text on the major difference between the court's and the EPA's readings of the Oklahoma standards: the "no degradation" provision.