National Association Of Home Builders v. Defenders Of Wildlif

551 U.S. 644 (2007)

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Nature of the Case

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Facts

Section 402(b) of the Clean Water Act (CWA) requires that the EPA transfer certain permitting powers to state authorities upon an application and a showing that nine specified criteria have been met. Section 7(a)(2) of the Endangered Species Act (ESA) provides that a federal agency must consult with agencies designated by the Secretaries of Commerce and the Interior in order to 'insure that any action authorized, funded, or carried out by such agency is not likely to jeopardize the continued existence of any endangered species or threatened species.' The CWA established a NPDES that is designed to prevent harmful discharges. A State may apply for a transfer of permitting authority to state officials by meeting nine statutory requirements; once met, transfer is mandatory. If authority is transferred, then state officials--not the federal EPA--have the primary responsibility for reviewing and approving NPDES discharge permits, albeit with continuing EPA oversight. In February 2002, Arizona applied for EPA authorization to administer the NPDES program. The EPA initiated consultation with the FWS to determine whether the transfer of permitting authority would adversely affect any listed species. FWS was concerned that the transfer could result in the issuance of more discharge permits, which would lead to more development, which in turn could have an indirect adverse effect on the habitat of certain upland species. The EPA disagreed. EPA concluded that the mandatory nature, which directs that the EPA 'shall approve' a transfer request if that section's nine statutory criteria are met, stripped it of authority to disapprove a transfer based on any other considerations. There is no doubt that Arizona met all nine requirements for transfer. The transfer was approved. Ps sued to dispute it. The Ninth Circuit held that the EPA's approval of the transfer was arbitrary and capricious because the EPA 'relied during the administrative proceedings on legally contradictory positions regarding its section 7 obligations.' The panel concluded that §7(a)(2) of the ESA provided an 'affirmative grant of authority to attend to the protection of listed species,' in effect adding a tenth criterion to those specified in § 402(b) on the transfer. It dismissed the argument that the EPA's approval of the transfer application was not subject to § 7(a)(2) because it was not a 'discretionary action' within the meaning of § 7(a)(2) to apply only to agency actions 'in which there is discretionary Federal involvement or control'. The Supreme Court granted certiorari.