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Ninth Circuit restores Trump-era gut of Clean Water Act rule

Judges cannot vacate agency rules without first finding them unlawful.

(CN) — A Ninth Circuit panel on Tuesday revived a Trump-era Clean Water Act regulation, finding the lower court lacked authority to vacate the rule without finding it unlawful.

In 2021, U.S. District Judge William Alsup vacated a Trump administration revision of the “Clean Water Act 401 Certification Rule,” which narrows what issues state and tribal governments can consider when determining whether a project, particularly one discharging pollution into a waterway, complies with state water quality standards.

The rule affected the permitting and relicensing process for thousands of industrial projects, including natural gas pipelines, hydroelectric plants, wastewater treatment facilities and construction sites near sensitive wetlands. Beginning September 2020, states could no longer consider a project’s effects on air emissions and road traffic congestion. The scope of review would be limited to water quality alone.

By July 2021, the Biden administration asked the court to remand the dispute to the U.S. Environmental Protection Agency because it planned to revise the rule by spring 2023. A coalition of states, tribal governments and conservation groups opposed Biden’s request, arguing that waiting another 18 months would cause “extreme” harm to the environment.

Alsup eventually concluded the risk of long-term environmental harms was of greater concern than economic hardships for project developers. Alsup also surmised the rule likely violated the law because it adopted an understanding of the Clean Water Act that contradicted decades of EPA interpretation and Supreme Court precedent established in the 1994 ruling PUD No. 1 of Jefferson County v. Washington Department of Ecology.

Industry groups asked Alsup to stay his decision, arguing that vacating the regulation would scuttle important energy projects, impose burdensome costs on project developers and hurt the economy. The groups also argued voiding the rule trampled on their rights to actively participate in rulemaking before different regulations are imposed. Alsup rejected that, finding the groups could still fully participate in the EPA’s rulemaking process.

While the EPA declined to appeal Alsup’s decision, the industry groups took the case to the Ninth Circuit in November 2021. Meanwhile, eight intervening Republican states appealed to the U.S. Supreme Court, which granted a stay pending appeal in a 5-4 split in April 2022. The stay restored the 2020 rule until the EPA revises it in 2023 or until the Ninth Circuit vacates it.

And in May 2022, the state of California filed a motion for an indicative ruling that would “clear the way for conclusive merits briefing on the validity of the rule in the district court.” Alsup rejected the motion after finding the plaintiffs had not demonstrated extraordinary circumstances. Moreover, Alsup noted the EPA issued a notice in June that it intends to do away with the Trump-era changes.

“We must ask what is the point of proceeding to litigate the merits of the 2020 rule when the agency says it will eviscerate it anyway?” Alsup wrote.

The Ninth Circuit panel appeared to ask the same question several times last November, but ruled to restore the rule. Senior U.S. Circuit Judges Richard Tallman and Susan Graber, both Bill Clinton appointees, and U.S. Circuit Judge Michelle Friedland, a Barack Obama appointee, made up the panel.

Writing for the court, Friedland explained that when a federal regulation is challenged in court, the promulgating agency can ask the Ninth Circuit to remand the regulation to the agency or give it time to reevaluate and correct any errors.

“The question we face today is whether a court granting a voluntary remand may also vacate the regulation without first holding it unlawful, as the district court did here,” Friedland wrote. “We hold that courts lack the authority to do so, and we therefore reverse.”

Friedland noted the panel is barred from the factfinding necessary to identify any harms that keeping the 2020 rule in place during remand might cause, nor can it weigh those harms against considerations of judicial and administrative efficiency.

“We accordingly reverse and remand for further proceedings consistent with this opinion,” Friedland wrote for the panel.

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