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Fifth Circuit Rejects New CAFO Rule

Stephanie Showalter Otts1

The Fifth Circuit Court of Appeals recently rejected changes to the Environmental Protection Agency’s management of concentrated animal feeding operations (CAFOs). The rule, issued in 2008, met with opposition from all sides, eventually leading to this litigation. Through the rule, EPA was exercising Clean Water Act (CWA) authority to regulate pollutants flowing into navigable waterways. However, after a careful review of the 2008 Rule, the court found that certain liability provisions exceeded EPA’s authority. 2

Section 301(a) of the CWA (33 U.S.C. § 1342(a)(1)) prohibits the discharge of any pollutant by any person absent a permit from either the EPA or the Corps of Engineers, as appropriate. “Discharge of a pollutant” is “any addition of any pollutant to navigable waters from any point source.” (33 U.S.C. § 1311(12)). EPA is responsible for implementing the National Pollutant Discharge Elimination System (NPDES) permit program pursuant to § 402 of the CWA.
      In 1976, EPA began requiring CAFOs that discharge pollutants into navigable waters to obtain NPDES permits. CAFOs are industrial agricultural facilities that keep and feed hundreds, sometimes even thousands, of animals before slaughter; any such facility that confines and feeds animals for a total of 45 days a year is considered a CAFO. Not surprisingly, CAFOs can generate enormous amounts of waste. If that waste is not handled properly, significant water quality and other environmental problems can arise.       
      In 2003, the EPA significantly altered its long-standing CAFO rule, due in part to successful litigation by environmental groups challenging EPA’s failure to update the rule despite significant changes in livestock production industries. Whereas the 1976 Rule required only those CAFOs that discharged pollutants to apply for and obtain NPDES permits, the 2003 Rule required all CAFOs to apply for a NPDES permit based upon a presumption that every CAFO has the “potential to discharge.” Only those CAFOs who could prove to the EPA’s satisfaction that they did not have the potential to discharge were exempt from this duty to apply. In addition, CAFOs applying for permits were required to develop site-specific Nutrient Management Plans (NMP) based on best management practices for dealing with storage of waste, management of chemicals, and site-specific protocols for land application. In 2005, the Second Circuit Court of Appeals in Waterkeeper Alliance v. EPA determined that the 2003 Rule’s “duty to apply” exceeded the EPA’s authority under the CWA. According to the court, the plain language of the CWA requires NPDES permits only for actual “discharge of pollutants,” not potential discharges.3 Therefore, EPA could not force CAFOs to apply for NPDES permits on the basis of a potential to discharge. Following the Waterkeeper decision, EPA began the process of revising its CAFO regulations. New regulations were issued in 2008 (the “2008 Rule”).

Duty to Apply
Although the 2008 Rule retained the “duty to apply” struck down by the Second Circuit, EPA clarified that only those CAFOs that discharge or propose to discharge pollutants were required to apply for a NPDES permit. CAFOs that were “designed, constructed, operated, and maintained in a manner such that the CAFO will not discharge” did not have to apply for a NPDES permit.4   If a CAFO did not apply for a permit and a discharge later occurred, however, the CAFO operator would face liability under the 2008 Rule on two separate counts: (1) discharging a pollutant without a permit, and (2) failing to apply for the permit in the first place. The National Pork Producers Council and several other industry groups challenged the 2008 Rule, arguing that EPA exceeded its statutory authority by requiring CAFOs that propose to discharge to apply for a permit and by imposing liability for failure to apply for a permit.
      The Fifth Circuit, relying heavily on the Second Circuit’s reasoning in Waterkeeper, agreed. Like the Second Circuit, the Fifth Circuit determined that the language of the statute was clear: without an actual discharge of pollutants EPA has no authority. According to the Fifth Circuit, CAFOs that are not discharging pollutants or do not intend to discharge cannot be required to apply for a permit. CAFOs that “propose to discharge” fall outside the EPA’s authority. For the court, the problem lay with how EPA defined “proposed discharge.” Under the 2008 Rule, a CAFO that “proposes to discharge” is not a CAFO that plans on discharging pollutants; rather it is a CAFO that is designed or operated in such a way that creates a high probability that a discharge will occur. In the court’s opinion, the risk of a discharge is not enough. EPA does not have authority to regulate a facility unless the operator actually intends to discharge pollutants or the facility actually discharges.
      As for the 2008 Rule’s imposition of liability for failure to apply for a permit, the Fifth Circuit determined that the CWA does not provide the EPA with the authority to create such liability. Although the EPA can assess criminal and civil penalties as appropriate for discharging pollutants without a permit or for violations of permit conditions, the EPA may not assess penalties for failing to apply for a NPDES permit.

Although the industry has once again successfully challenged the EPA’s at­tempt to regulate CAFOs with the high potential to discharge pollutants, CAFOs that discharge pollutants into navigable waters remain subject to EPA regulation. The court’s ruling, however, may make the EPA’s job much harder. Some CAFO operators who are risk adverse and unsure of the likelihood of a discharge may seek to obtain a permit “just in case” a discharge were to occur. In those situations, the NPDES permitting process will allow EPA to monitor the operation and ensure that the facility is adhering to best management practices. Other CAFO operators may decide to avoid the permitting process and “hope for the best.” If they guess wrong and a discharge results, they would face significant fines for discharging without a permit. Unfortunately, those fines would come too late to prevent the contamination of the environment.

1.  Director, Mississippi-Alabama Sea Grant Legal Program. Research assistance provided by Christopher Motta-Wurst, 2012 J.D. Candidate, Univ. of Mississippi School of Law.
2.  National Pork Producers Council v. EPA, 635 F.3d 738, 750 (5th Cir. 2011).
3.  Waterkeeper Alliance, Inc. v. EPA, 399 F.3d 486, 505 (2nd Cir. 2005).
4.  National Pork Producers, 635 F.3d at 750.

Recommended citation: Stephanie Showalter Otts, Fifth Circuit Rejects New CAFO
31:3 WATER LOG 10 (2011).

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