The US Court of Appeals for the Third Circuit has set oral argument for November 18, 2014 in American Farm Bureau Federation, et al. v. US EPA, an appeal of a September 13, 2013 district court decision upholding US EPA’s December 2010 total maximum daily load (TMDL) limits for the Chesapeake Bay.

As we previously reported, the American Farm Bureau Federation (AFBF) – with the support of other agricultural groups, 21 US states, 8 counties and various members of Congress – is challenging US EPA’s decision to set waste load allocations (WLAs) for permitted point sources as well as load allocations (LAs) for non-point sources, such as agricultural runoff, in the final Chesapeake Bay TMDL. AFBF and its supporters argue that the Chesapeake Bay TMDL’s inclusion of sector-specific allocations for non-point sources, along with related accountability measures and implementation deadlines, improperly infringes on states’ inherent authority over land-use management decisions. In its most recent briefing, AFBF argues that the US Supreme Court’s June 23, 2014 ruling in Utility Air Regulatory Group v. US EPA (summarized here), which determined that US EPA lacked authority under the Clean Air Act (CAA) to regulate facilities based solely on their Greenhouse Gas emissions, further supports a finding that the Agency is limited to allocating a “total load” pollution limit under the plain language of the Clean Water Act (CWA) and cannot determine specific LAs for non-point sources.

US EPA argues in its response that the CWA is ambiguous and therefore requires the Court to give deference to the Agency’s reasonable determination that sector-specific allocations are needed to promote the principal goal of restoring and maintaining water quality under the CWA.  Likewise, US DOJ filed correspondence touting the high court’s recent decision to uphold US EPA’s Cross-State Air Pollution Rule in US EPA v. EME Homer City Generation, LP (summarized here) as indicative of the broad deference afforded to US EPA when addressing statutory interpretation and cooperative federalism issues in the context of a complex interstate pollution problem such as the Chesapeake Bay. Maryland and Virginia, 7 US cities, several municipalities and various environmental groups have also filed amicus briefs in support of US EPA, arguing that the TMDL is consistent with US EPA’s authority under the CWA and is necessary for attaining meaningful reductions from all sources of nutrient pollution, including non-point agricultural sources.

A determination by the Third Circuit that the Chesapeake Bay TMDL is unlawful would call into question US EPA’s approach in thousands of other TMDLs that also use WLAs and LAs.  Moreover, the recent algae bloom that resulted in a drinking water ban for residents in the City of Toledo, Ohio has led to even greater scrutiny of the Chesapeake Bay TMDL appeal as impacted communities weigh their options for controlling agricultural nutrient pollution, which is cited as the primary contributor to such blooms.

Squire Patton Boggs will continue to monitor these developments and provide updates.