Takeaway
In short, this case shows that under Chevron and Brand X, an earlier judicial reading of an ambiguous statute must give way to a later reasonable agency interpretation, leaving no citizen-suit jurisdiction absent a clear mandatory agency duty.
Dominion owned the Brayton Point electric-generating station in Somerset, Massachusetts. Its open-cycle cooling system withdrew water from the Lees and Taunton Rivers, ran it through the plant, and discharged heated water into Mount Hope Bay. The Clean Water Act regulated those withdrawals and discharges through an NPDES permit and a requested thermal-variance authorization.
When Dominion sought renewal of its permit in 1998, the EPA's 2003 proposed final permit rejected the requested thermal variance. Dominion petitioned the Environmental Appeals Board for review and requested a formal evidentiary hearing. The Board accepted the review petition but declined to hold that type of hearing under the EPA's revised NPDES procedures.
After giving the required sixty-day notice, Dominion sued under Clean Water Act section 505(a)(2), which permits a citizen suit against the EPA Administrator for failure to perform a nondiscretionary duty. The district court dismissed for lack of subject-matter jurisdiction, reasoning that the suit was effectively a direct challenge to an EPA rule that belonged exclusively in the court of appeals. Dominion appealed.
Issue #1
Whether the Clean Water Act's requirement of an opportunity for a "public hearing" unambiguously requires the EPA to provide a formal evidentiary hearing for an NPDES permit or thermal-variance decision.
Holding
No. The statute is ambiguous, and the EPA reasonably construed it to permit informal review procedures rather than a formal evidentiary hearing.
Reasoning
The Clean Water Act requires an opportunity for a public hearing before the EPA issues an NPDES permit or grants a thermal variance, but it does not define "public hearing" or state that a hearing must be conducted "on the record." The APA's formal-adjudication procedures apply only when a statute requires an adjudication to be determined on the record after an agency hearing, and the CWA contains no such express language.
In Seacoast Anti-Pollution League v. Costle, the First Circuit had interpreted the CWA's public-hearing language to require an evidentiary hearing. But Seacoast reached that result by applying a presumption drawn from APA legislative history after finding no contrary indication of congressional intent. That method selected what the court considered the best reading of an unclear statute; it did not hold that the CWA's language had only one unambiguous meaning.
Chevron requires courts to defer to an administering agency's permissible interpretation when Congress has not directly resolved the precise question. The EPA found no evidence that Congress meant to mandate formal evidentiary hearings and adopted regulations eliminating that requirement from the NPDES permit-review process. Its choice of informal procedures, after considering the affected private interests, the risk of error, and the government's interests, was reasonable. Dominion conceded that the EPA's interpretation was reasonable.
Issue #2
Whether Seacoast remained binding circuit precedent that prevented deference to the EPA's later contrary interpretation of the Clean Water Act.
Holding
No. Under Chevron and National Cable & Telecommunications Ass'n v. Brand X Internet Services, Seacoast yielded to the EPA's reasonable contrary interpretation because Seacoast did not rest on an unambiguous statutory command.
Reasoning
Brand X holds that a prior judicial interpretation overrides a later agency interpretation otherwise entitled to Chevron deference only when the judicial decision held that its construction followed from the statute's unambiguous terms. Courts must therefore reassess pre-Chevron precedent through the Chevron framework rather than treat every earlier statutory interpretation as permanently controlling.
Seacoast did not satisfy that demanding standard. Its reliance on a rebuttable presumption and its acknowledgement that the CWA did not clearly indicate whether a hearing had to be on the record showed that Congress's intent was not plain. Thus, Seacoast operated at Chevron's second step and could not displace a later reasonable EPA interpretation.
The ordinary law-of-the-circuit rule did not change the result. A prior panel decision need not be followed where subsequent controlling Supreme Court authority undermines it, and Chevron together with Brand X supplied that authority. Nor was Seacoast merely an interpretation of the APA: although it borrowed an APA-based presumption, its actual holding construed the CWA's phrase "public hearing," a provision in the statute administered by the EPA.
Issue #3
Whether Dominion alleged the EPA's failure to perform a nondiscretionary duty, as required for district-court jurisdiction under Clean Water Act section 505(a)(2).
Holding
No. Because neither the EPA's regulations nor the Clean Water Act required an evidentiary hearing, the EPA had no nondiscretionary duty to provide one, and the district court properly dismissed the suit for lack of subject-matter jurisdiction.
Reasoning
Section 505(a)(2) grants district courts jurisdiction only over a citizen suit alleging that the EPA Administrator failed to perform an act or duty that is not discretionary. Dominion satisfied the statute's sixty-day notice requirement, so the decisive question was whether a mandatory duty to convene an evidentiary hearing existed.
The current EPA regulations expressly eliminated the former requirement of an evidentiary hearing after issuance of an NPDES permit. Once the court concluded that the EPA's regulation was a reasonable construction of the ambiguous CWA hearing provision, Seacoast could no longer supply the mandatory duty Dominion asserted.
Without a nondiscretionary duty, Dominion could not invoke the citizen-suit provision. The court therefore affirmed the dismissal without deciding whether the suit was also an impermissible direct challenge to the EPA's rule under the Clean Water Act's separate judicial-review provision.