The Third Circuit Court of Appeals has unanimously affirmed the lower court's ruling that the Chesapeake Bay "total maximum daily load" (TMDL), developed over many years to address pollution in Chesapeake Bay, was consistent with the Clean Water Act (CWA) and the U.S. Constitution's division of powers between the states and the federal government. The case is American Farm Bureau Federation, et al., v. EPA, et al.

In 2010, EPA published the TMDL for nitrogen, phosphorus and sediment that can be released into Chesapeake Bay. The Bay's watershed consists of 64,000 square miles and contains tens of thousands of lakes, rivers streams and creeks all flowing into the Bay. It has a surface area of 4500 square miles and almost 12,000 miles of shoreline, and it is estimated that by 2030, 20 million people will live in the watershed--by any measure, this TMDL--and the environmental problems it confronts--is very significant. Many trade associations, led by the American Farm Bureau Federation, have argued that all aspects of the Chesapeake Bay TMDL, which go beyond the tally of the allowable sum of pollutants that the Bay can safely absorb every day, exceeds the scope of EPA's authority under the CWA. Moreover, they argue that EPA's actions will have the effect of unlawfully intruding upon the states' traditional role in regulating land use. However, this latter argument has not been successful with the states immediately involved with the TMDL--Virginia, West Virginia, Maryland, Delaware, Pennsylvania and the District of Columbia--that ceded authority to EPA to devise this plan, nor with the District Courts or the Court of Appeals.

The American Farm Bureau Federation argued that the statutory words "total maximum daily load" are not ambiguous, and therefore EPA was unwarranted in interpreting that term as it has in developing a complex plan specifying the distribution of pollutants from point sources and non-point sources, or by establishing deadlines for meeting target pollutant reductions. However, the Court of Appeals, in applying Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.467 U.S. 837 (1984), determined that the term was ambiguous, and EPA was justified in developing rules to implement the authority it had been provided by Congress. Proceeding to "Chevron Step Two", the Court of Appeals held that EPA's interpretation was reasonable, and indeed all courts that have reviewed EPA's TMDL determinations have agreed on this point. The petitioners raised federalism issues, but the Court of Appeals responded that the most recent U.S. Supreme Court decisions addressing this issue in the context of the CWA, the Solid Waste Agency of N. Cook Cnty. v. Army Corps of Eng'rs (SWANCC), 531 U.S. 159 (2001), and Rapanos et us., et al., v. United States547 U.S. 715, 73738 (2006), rulings dealt with smaller, even isolated bodies of water where the exercise of federal jurisdiction was problematic. Finally, the Court of Appeals was not persuaded that this TMDL and its implementation would unconstitutionally intrude on a state's power to regulate land use within its boundaries.

The Court of Appeals concluded its opinion by stating that, to judge from the arguments and amici briefs filed in the case, "the winners are environmental groups, the states that border the Bay, tourists, fishermen, municipal waste water treatment works, and urban centers. The losers are rural counties with farming operations, nonpoint source polluters, the agricultural industry, and those states that would prefer a lighter touch from EPA".