The Eleventh Circuit Court of Appeals has dismissed a challenge to a U.S. Environmental Protection Agency (EPA) decision that allowed transfers of contaminated water from Florida Everglades canals into Lake Okeechobee. Friends of the Everglades Inc. v. EPA, No. 08-13652 (11th Cir. 10/26/12). In 2008, EPA adopted a rule that exempted from permitting requirements under the Clean Water Act (CWA) discharges from a water transfer “that conveys or connects waters of the United States without subjecting the transferred water to intervening industrial, municipal, or commercial use.” Multiple plaintiffs, including environmental organizations, states and the Miccosukee Tribe, challenged the rule in cases filed in two federal district courts, and also filed “protective petitions” in the Second and Eleventh Circuit Courts of Appeals. The appeals court challenges were consolidated in the Eleventh Circuit.

The plaintiffs included entities that had been plaintiffs in prior litigation over transfers of water from the Everglades into Lake Okeechobee. The prior case dealt with water transfers that occurred before EPA promulgated the water transfer rule. Then, EPA took the position that the specific transfers were not discharges that would be subject to CWA permitting. The plaintiffs in the prior litigation, focusing on pollutants that were moved from the Everglades into the lake during such transfers, had asserted that the transfers required CWA permits. The case was tried and appealed, and EPA issued the water transfer rule while that appeal was pending. The Eleventh Circuit, in the prior Everglades case, held that the water transfer rule was a reasonable interpretation of the CWA, “even though all of the existing precedent would have supported” a holding that the Everglades transfer required a CWA permit. The Eleventh Circuit’s prior ruling concluded that litigation and had the effect of lifting a stay on appeals of the rule itself, which had also been consolidated before the Eleventh Circuit.

In these appeals, the Eleventh Circuit first addressed whether it lacked jurisdiction over the appeal or whether it should assert hypothetical jurisdiction to determine the rule’s validity, even if underlying statutes did not directly grant the court jurisdiction. EPA argued that the circuit court had jurisdiction. The court reviewed its statutory authority over challenges to EPA actions under the CWA, finding that the statute grants the circuit courts jurisdiction over challenges to EPA actions to approve or promulgate either an effluent limit or specific limitations under CWA sections 1311,1312, 1316, or 1345. The court held that the water transfer rule does not constitute a limitation and imposes no restrictions on discharges it covers. The court also noted that EPA did not cite sections 1311, 1312, 1316, or 1345 when it promulgated the water transfer rule. The court thus concluded it did not have jurisdiction over the rule as an approval or promulgation of a CWA limitation.

The CWA also gives circuit courts jurisdiction over challenges to issuance or denial of a CWA permit. EPA argued that the water transfer rule is functionally similar to a permit and that jurisdiction therefore should lie with the circuit court because the rule relates “to permitting itself.” The court concluded that a rule exempting specific discharges from a permit requirement could not constitute issuance or denial of a permit and that the statutory language granted jurisdiction only over permit issuance and denials, not over related rules. A private entity involved in the prior litigation and affected by the rule, United States Sugar (USS), argued that the court need not satisfy itself of its jurisdiction when the case involves statutory jurisdiction rather than Article III jurisdiction. USS asserted that the court should exercise “hypothetical jurisdiction” to allow it to reach the merits and deny the appeals. The court declined, noting that U.S. Supreme Court precedent rejected hypothetical jurisdiction. Having determined it lacked jurisdiction over the appeals, the Eleventh Circuit dismissed them.