On November 6, 2019, the U.S. Environmental Protection Agency (US EPA) proposed a new procedural rule titled “Modernizing the Administrative Exhaustion Requirement for Permitting Decisions and Streamlining Procedures for Permit Appeals” (the Proposal). The Proposal represents the first update to the Environmental Appeals Board (EAB) in 27 years.

Specifically, the Proposal would impact the EAB’s process for reviewing US EPA’s permitting decisions under the Clean Water Act, including National Pollutant Discharge Elimination System (NPDES) permits; the Safe Drinking Water Act’s Underground Injection Control (UIC) program; the Resources Conservation and Recovery Act (RCRA); and the Clean Air Act, including Prevention of Significant Deterioration (PSD) permits, Outer Continental Shelf permits, Title V permits, Acid Rain permits, Tribal Major Non-Attainment NSR permits, and Tribal Minor NSR permits.

The Environmental Appeals Board
The EAB was created in 1992 to hear administrative appeals of enforcement proceedings and US EPA-issued permits. To appeal one of the above-listed permits to federal court, a party must first file a notice of dispute with the EAB. EAB review is thus a necessary precondition for judicial review of a US EPA-issued permit.

Over the past 27 years, however, states have begun assuming greater delegated authority to issue permits under US EPA statutes. For example, 47 states and 1 territory have assumed authority to issue NPDES permits, and all 50 states have been approved to administer Title V permit programs. With the states’ increased role in the environmental permitting process, EAB’s caseload has been dramatically reduced. Accordingly, in 2010, the EAB initiated a voluntary ADR program “to promote faster resolution of issues and more creative, satisfying and enduring solutions” and “to promote better environmental outcomes.”  The Proposal boasts that the ADR program has been “highly successful, and, to date, over 90% of the cases that have gone through the program have been resolved without litigation.”

The Proposal entails two types of amendments to the EAB: (1) procedural changes to the EAB’s appeal process and (2) changes to the workings of the EAB. The overall purpose of these amendments is to expedite and streamline EAB review.

Proposed Changes to the EAB’s Procedural Requirements
First, the Proposal creates a new, time-limited and mandatory ADR process. US EPA describes this proposed process as “a fundamental change to the Agency’s long-held administrative exhaustion requirements.”  The new ADR program would require the Settlement Judge to convene a meeting of all parties within 30 days from the parties’ deadline to file a response to the notice of dispute. During the meeting, each party would meet privately and confidentially with the Settlement Judge to discuss the strengths and weaknesses of their case. At the conclusion of the meeting, the parties must unanimously decide whether to extend the ADR process or proceed with an appeal to the EAB. If the parties do not agree to proceed with either the ADR process or an EAB appeal, the notice of dispute would be dismissed and the underlying permit would become final. At that time, the permit could be challenged in federal court. The Proposal, therefore, makes a determination as to whether to participate in the ADR process a precondition to judicial review.

The Proposal would also limit the scope and standard of the EAB’s review to findings of fact and conclusions of law that are clearly erroneous.

Additionally, the Proposal seeks to eliminate amicus curiae participation in EAB appeals. US EPA states that eliminating amici participation would simplify the permit appeal process and hasten resolution of permit appeals by 15 days. US EPA notes that the public still has the opportunity to participate in permit decisions by filing comments to draft EPA permits, which “coupled with the vigorous briefing by the permit applicant, the Region, and other parties will ensure that the EAB becomes aware of any issues or positions that might otherwise be raised by amici.”

The Proposal would also eliminate the EAB’s current ability to perform sua sponte review of any condition of any RCRA, UIC, NPDES, or PSD permit decision for which review is otherwise unavailable.

Finally, to further expedite the EAB appeal process, US EPA also proposes the following changes: (1) a 60-day deadline for the EAB to issue a final decision on each case, measured from the date of oral argument or filing of the last brief, whichever is later; (2) a limit on the length of EAB opinions (the exact limit is still to be determined); and (3) a limit on the number of requests for extensions.

Proposed Changes to the Workings of the EAB
First, the Proposal seeks to enact a 12-year term for EAB judges, which the US EPA Administrator may choose to renew at the end of the 12-year period. This is a potentially significant change. Of the 12 judges who have served on the EAB, 4 judges have held their positions for 9 to 21 years with one judge serving for 24 years.

US EPA also proposes to create a process for identifying certain EAB decisions as precedential. Only published EAB decisions would be precedential, and the US EPA Administrator acting through its General Counsel would determine which EAB decisions should be published.

Finally, the Proposal seeks to create a mechanism by which the US EPA Administrator acting through its General Counsel can issue a dispositive legal interpretation in any matter pending before the EAB. This is the only proposed change that would impact the EAB’s adjudication of enforcement appeals. Under this proposal, the General Counsel could file written notice of the Administrator’s legal interpretation of a US EPA regulation or governing statute in an EAB proceeding.

Comment Period
US EPA will accept comments on the proposed rule for 30 days after its publication in the Federal Register. Comments may be submitted online here under Docket ID No. EPA-HQ-OGC-2019-0406. Squire Patton Boggs will closely monitor developments and provide updates on this issue.