## Facts

- EPA promulgated the 2008 NPDES “Water Transfers Rule,” providing that “water transfers” are not subject to NPDES permitting under the Clean Water Act (CWA).
- The rule defines a “water transfer” as conveying waters of the United States from one jurisdictional water to another, through an engineered conveyance, without intervening industrial, municipal, or commercial use.
- EPA reasoned that moving water containing pollutants from one jurisdictional water to another does not constitute an “addition of any pollutant to navigable waters from any point source” because the pollutants are already present in “the waters of the United States” in the aggregate.
- Environmental organizations, several states, and other entities challenged the rule under the Administrative Procedure Act (APA), arguing it conflicted with the CWA’s text and purposes.
- The district court vacated the rule, holding EPA’s interpretation of the CWA was unreasonable.
- EPA and intervenor defendants (including states and water suppliers) appealed.

## Issues

1. Whether the CWA unambiguously requires NPDES permits for water transfers (Chevron step one).
2. If the statute is ambiguous, whether EPA’s interpretation that water transfers are not an “addition” of pollutants requiring NPDES permits is reasonable (Chevron step two).

## Decision

- The Second Circuit reversed the district court and upheld the Water Transfers Rule.
- At Chevron step one, the court held the CWA does not speak directly to whether water transfers require NPDES permits; the statute is ambiguous on that question.
- At Chevron step two, the court held EPA’s interpretation is reasonable and therefore valid under the APA.
- The court emphasized that, under Chevron, the inquiry is whether the agency’s construction is permissible, not whether it best advances environmental protection goals.

## Legal Principles

- When statutory language does not clearly resolve a regulatory question, courts apply Chevron deference and uphold an agency rule if it reflects a permissible construction of the statute.
- The phrase “addition of any pollutant to navigable waters from any point source” can reasonably be interpreted not to reach the transfer of already-polluted water between waters of the United States.
- In assessing reasonableness at Chevron step two, an agency may consider policy judgments such as implementation costs, administrability, and the CWA’s cooperative federalism structure.
- A long-standing agency practice, later formalized through notice-and-comment rulemaking, may support the reasonableness of the agency’s construction where the statute is ambiguous.
- Prior judicial decisions requiring permits in particular transfer-like situations do not necessarily foreclose a later agency interpretation if the statute remains ambiguous and the agency adopts a reasonable construction.

## Conclusion

The Second Circuit held that the Clean Water Act is ambiguous as to whether NPDES permits are required for water transfers and sustained EPA’s Water Transfers Rule as a reasonable Chevron step-two interpretation, reinstating the exemption from NPDES permitting for qualifying transfers.


Catskill Mountains Chapter of Trout Unlimited, Inc. v. EPA, 846 F.3d 492 (2d Cir. 2017)