On July 6, 2015, a unanimous three-judge panel of the U.S. Court of Appeals for the Third Circuit upheld the Chesapeake Bay Total Maximum Daily Load ("Bay TMDL") for nitrogen, phosphorus, and sediment issued by the U.S. Environmental Protection Agency ("EPA") in 2010. In American Farm Bureau Federation (AFBF), et al. v. EPA, et al., groups representing the agricultural and home building industries challenged EPA's authority to set separate allocations for point and nonpoint sources in the Bay TMDL, arguing that the word "total" in TMDL limits EPA to providing a single total level of acceptable pollution for a waterbody rather than dividing it into point source wasteload allocations ("WLAs") and nonpoint source load allocations ("LAs"). The groups also alleged EPA exceeded its Clean Water Act ("CWA") authority by requiring "reasonable assurance" from the states that the states would implement sufficient nutrient and sediment reduction strategies to meet the allocation goals. Finally, the groups challenged EPA's implementation timeline for the TMDL under which states are expected to incrementally decrease nutrient and sediment loading to the Chesapeake Bay. The industry groups' primary contention is that the Bay TMDL violated principles of cooperative federalism, infringing on the traditional state role of regulating land use. Relying on a Chevron deference analysis, the Court rejected all of these arguments.
The Third Circuit opinion adds further support to a growing line of cases holding that TMDLs are "informational tools" that are not self-executing, but from which enforceable rights and obligations are derived.
Although the decision is not binding on other circuit courts, the decision has significant implications for EPA's and states' regulations of water bodies impaired by excess nutrients from point and nonpoint sources, including the 61,000 TMDLs established across the country and the states' continuing planning process and watershed improvement plans aimed at implementing the TMDL cleanup. Proponents of watershed-based solutions, such as water quality trading and offsets, have long argued the CWA provides EPA and the states the flexibility to adopt trading and offset programs. Although the Third Circuit decision does not expressly address this issue, the decision affirms the lower court's September 2013 ruling that explicitly affirmed that the use of trading programs to achieve water quality goals.
A copy of the opinion can be found here.
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