CAFOs, Circularity and Certainty in the CWA: Fifth Circuit's Decision in <i>National Pork Producers Council v. EPA</i> Raises Problems

Robert Adler

March 18, 2011

A decision issued on March 15 by a panel of the U.S. Court of Appeals for the Fifth Circuit vacated portions of EPA’s Clean Water Act (CWA) regulations, issued most recently in 2008, governing water pollution from concentrated animal feeding operations, or “CAFOs”. In National Pork Producers Council, et al. v. United States Environmental Protection Agency, the Fifth Circuit panel vacated those portions of EPA’s rule that required CAFOs to apply for National Pollutant Discharge Elimination System (NPDES) permits based on a potential to discharge rather than an existing discharge, and that imposed liability for failure to apply for a permit. (The Court upheld other aspects of EPA’s CAFO rule.) The Fifth Circuit ruling represents a particular setback for EPA’s efforts to regulate CAFO pollution because it follows a 2005 decision by the Second Circuit (Waterkeeper Alliance, Inc. v. United States Environmental Protection Agency) that vacated portions of an earlier EPA CAFO rule and EPA’s efforts to revise the rule in response to that decision.

Water pollution from CAFOs poses serious health and environmental problems around the country. CAFOs are large industrial livestock operations in which thousands to hundreds of thousands of animals are raised in confined circumstances. CAFOs generate millions of tons of animal waste a year, which contain pollutants such as nutrients (nitrogen and phosphorus), organic matter, bacteria and other pathogens, salts, and pesticides and other potentially toxic pollutants. CAFOs are one of the many reasons why pollution from agricultural operations remains the largest single source of water pollution nationally—a problem that EPA and the states have struggled to address for decades.

The Fifth Circuit decision is based on a textual analysis of selected provisions of the Clean Water Act, but ignores or fails to account fully for other important provisions of the statutory text. Moreover, it results in a statutory tautology that belies one of the CWA’s most important goals. Finally, I am not sure it is even in the best interests of the livestock industry—although obviously their lawyers disagree—because it eliminates the business certainty that environmental permits are supposed to provide, and subjects operators to significant potential administrative, civil and even criminal liability if discharges occur absent a permit.

Section 301(a) of the CWA prohibits the discharge of any pollutant by any person absent a permit (under either section 402 or 404 of the Act, as appropriate) and compliance with various other substantive requirements. Section 501(12) of the statute then defines “discharge of a pollutant” as “any addition of any pollutant to navigable waters or waters of the ocean or contiguous zone from any point source.” On this basis, the Court concluded that absent such a discharge, there is no obligation to seek or obtain a permit. Also, the Court held that the statute creates liability for unpermitted discharges, or discharges in violation of permits, but not for the failure to seek and obtain a permit.

Although that analysis sounds logical, it fails to reflect how NPDES permits are supposed to implement and enforce effluent limitations and other substantive requirements of the Act, and that one of the law’s most important substantive requirements is to eliminate the discharge of pollutants into the Nation’s waters wherever possible. Although that “zero discharge” goal is articulated as an aspiration in the goals and policies of the Act (section 101(a)(1)), Congress made that goal substantively enforceable in sections 301 and 306, which require that best available technology (BAT) regulations and new source performance standards “shall require the elimination of discharges of all pollutants wherever such elimination is technologically and economically achievable.” The statute is clear that these and other effluent limitations are supposed to be implemented and enforced through permits. But under the Fifth Circuit decision, a permit is no longer required if the substantive requirement (zero discharge) is met, leading one in a statutory circle. In other words, effluent limitations may require existing or potential dischargers to eliminate their discharges entirely, as the statute requires EPA to do wherever possible, and EPA (or state agencies) may seek to enforce those requirements through permits, as the statute also requires. But if no permit is required once a discharge ceases, EPA (or state agencies) will lose a key implementation tool needed to ensure that the standard continues to be met.    

CAFO operators and other would-be dischargers might argue that this circularity problem presents no real problem. After all, if there is no discharge, why should we care whether CAFO operators need a permit? Under this view, a CAFO operator is free to make a risk-based business decision about whether to seek a permit. If the operator guesses correctly and no discharge ever occurs, they avoid the cost of obtaining a permit and complying with its monitoring and other conditions. If they guess wrong, however, assuming they are caught and either the government or a citizen group brings an enforcement action, they may be liable for the arguably worse violation of discharging absent any permit, as opposed to discharging in violation of a permit’s terms. This is essentially an environmental law analogy to the common law principle of caveat emptor (“let the buyer beware”), or in this case, “let the discharger beware.” It is also a somewhat libertarian view of environmental regulation because it argues that the government should not be able to tell CAFOs (or other would-be polluters) whether they should accept the risk of enforcement if their prediction about future discharges turns out to be wrong.

The key problem with this interpretation of the CWA permitting requirement is that it ignores the statute’s fundamentally precautionary approach, which has long been recognized by the courts (see Reserve Mining Co. v. EPA), in favor of an approach that waits for the harm to occur before action is taken. It also removes the unpermitted sources from the ongoing oversight of EPA and state water quality agencies, not to mention from the self-monitoring and reporting requirements included in NPDES permits. Violations are far less likely to be detected, and the precautionary goal of the statute will not be met in many cases. That, of course, is likely what the farm group petitioners had in mind.

EPA’s regulation tried to provide more certainty for operators as well as more protection against potential environmental harm. The rule did not require permits for all CAFOs. It only required them for CAFOs that either actually discharge wastes into waterways, or that are designed and operated in ways that generate a strong potential for such releases. Given the ambiguity created by the circularity in the statute explained above, and EPA’s authority to fill statutory gaps through general rulemaking authority (in section 501(a)), EPA’s approach was both lawful and sensible, and should have been upheld by the Court.

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