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US Supreme Court Affirms EPA’s Interpretation of the Clean Water Act; Justice Scalia Signals that the Tide for Agency Deference May be Turning

Oregon courts have a long-standing practice of giving deference to an agency's interpretation of its own administrative rule if the interpretation is “plausible” and not “inconsistent with the wording of the rule itself, or with the rule's context, or with any other source of law.” This type of broad deference is given not only to agencies in interpreting their own rules but also to local governments when applying their own land use plans and land use regulations. This approach seems to work well, especially in cases of local government interpretations, where the local government is an elected body and presumably can be voted out if their interpretations are viewed by the public to be inconsistent with adopted codes. Agencies, by contrast, are not elected but are typically run by governor-appointed commissions or boards. Deference to agency interpretations stems from a belief that the agency has knowledge of and will act to further the original intent of its own rules.

Similarly, the federal courts have historically treated federal agency interpretations of statutes and administrative rules with a great deal of deference. Again, under the same premise that so long as the interpretation is not inconsistent with the plain language of the rule, it is entitled to be affirmed. But a few weeks ago, in the case of Decker v. Northwest Environmental Defense Center, the Supreme Court indicated a change may be coming soon.

In that case, the court ruled 6-1 that runoff from logging roads does not constitute a discharge from a point source that requires a National Pollutant Discharge Elimination System or NPDES permit under agency rules implementing the Clean Water Act. The decision upholds EPA’s interpretation of its own regulations.

The Clean Water Act and its implementing regulations require a permit before industry-associated stormwater runoff can be discharged into the navigable waters of the United States. The Environmental Protection Agency interpreted the regulation to exclude runoff from logging roads. The Northwest Environmental Defense Center claimed that logging and paper companies, who use logging roads to harvest timber from the Tillamook State Forest discharged polluted water (as runoff from the roads caused by rainfall), without a permit into the South Fork Trask River and the Little South Fork Kilchis River.

About five months after the Supreme Court took up the case, the EPA amended the rule to expressly exempt logging activities from the NPDES permit requirement. The case was not moot because of logging activities occurring before the rule was changed. A majority of the court found that "the EPA's determination is a reasonable interpretation of its own regulation; and, in consequence, deference is accorded to the interpretation."

Justice Scalia dissented. "Enough is enough," Scalia wrote. "For decades, and for no good reason, we have been giving agencies the authority to say what their rules mean, under the harmless-sounding banner of 'defer[ring] to an agency's interpretation of its own regulations." To Justice Scalia, deference is appropriate when agencies, rather than courts, interpret statutes that are implemented by the legislature, but allowing agencies to interpret their own regulations has the dangerous result of concentrating both the writing and interpretation function in one branch of government. Scalia concluded his dissent by saying that the fairest handling of the case would find that the discharges came from point sources and were associated with industrial activity. "It is time for us to presume (to coin a phrase) that an agency says in a rule what it means, and means in a rule what it says there," he wrote.

One might view this result as Scalia furthering an interpretative agenda that he alone may discern the intent of the authors through their plain language, but he may not be alone. Although Chief Justice John Roberts and Justice Samuel Alito joined the majority in full, their separate concurrence included a footnote signaling that they may be open to reconsidering agency deference, but given the rule amendment and the way the case was argued, this was not the right case to address that question.

The amount of deference agencies have to interpret their own rules at the federal level remains intact, so far, and the same is true with Oregon agencies. A ruling by the US Supreme Court in a similar case will have no effect on how Oregon courts will review decisions by Oregon agencies. However, consider that one of the primary legal issues before the Oregon Court of Appeals in the challenge to the Metro urban and rural reserves rules in Barkers Five v. LCDC, is how much deference the Land Conservation Development Commission should get when interpreting its own rules. The rules, which implement state law, require that urban and rural reserves decisions are made based on a series of factors and the balancing of impacts. Determining whether compliance with the requires factors requires any analysis including the weighing of alternatives and prioritizing lands or rather a scintilla of evidence suggesting that the factors were considered area by area is sufficient, is the question squarely before the court.

Can an agency, as Scalia suggests, enact broad-reaching and vague regulations providing the agency with the maximum amount of interpretive flexibility knowing that it can, in effect, make law through its interpretations without providing any opportunity for notice and comment? "Blackstone, and our Constitution did not mirror the British practice of using the House of Lords as a court of last resort, due in part to the fear that he who has 'agency in passing bad laws' might operate in the 'same spirit' in their interpretation.” Scalia said. It is highly unlikely that historical references to Blackstone or the House of Lords will be included in the forthcoming Court of Appeals decision in Barkers Five but these cases do raise similar issues.

The authors’ law firm represents Save Helvetia in the Barkers Five case.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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