## Facts

- The Clean Water Act requires EPA to set effluent limitations for industrial categories of point sources, often using incomplete data and broad classifications.
- EPA created a “fundamentally different factor” (FDF) variance mechanism to adjust generally applicable effluent limits for atypical facilities whose circumstances were fundamentally different from those considered in the rulemaking.
- EPA issued regulations allowing FDF variances for indirect dischargers, including facilities whose discharges involve pollutants listed as toxic.
- NRDC challenged the regulations, arguing that Clean Water Act § 301(l) bars EPA from issuing any variances that would “modify” requirements applicable to listed toxic pollutants.
- The D.C. Circuit agreed with NRDC and held that § 301(l) prohibited EPA from granting FDF variances for toxic pollutants.
- The Supreme Court granted review to decide whether EPA could permissibly interpret § 301(l) to allow FDF variances for toxic pollutants.

## Issues

1. Whether Clean Water Act § 301(l) unambiguously prohibits EPA from granting FDF variances from effluent limitations for pollutants on the toxic pollutant list.
2. If § 301(l) is ambiguous, whether EPA’s interpretation permitting FDF variances for toxic pollutants is reasonable and entitled to judicial deference.

## Decision

- The Supreme Court reversed the D.C. Circuit.
- The Court held that § 301(l) does not unambiguously forbid FDF variances for toxic pollutants.
- Because the statutory term “modify” lacked a clear meaning in this context and Congress did not clearly bar FDF variances, the Court upheld EPA’s interpretation as reasonable.
- The Court sustained EPA’s authority to grant FDF variances from toxic pollutant effluent limitations under its regulations.

## Legal Principles

- When a statute administered by an agency is ambiguous on the specific question, courts generally uphold the agency’s interpretation if it is reasonable.
- The term “modify” in Clean Water Act § 301(l) is not self-defining in context; its ambiguity permits agency construction.
- Absent clear congressional intent to prohibit a variance mechanism, EPA may incorporate case-specific adjustments (such as FDF variances) into a uniform, category-based regulatory program.
- Courts should not replace an agency’s reasonable policy judgment with their own where Congress has left interpretive room and the agency’s reading fits the statute’s structure.

## Conclusion

The Court held that Clean Water Act § 301(l) does not clearly bar FDF variances for toxic pollutants and, deferring to EPA’s reasonable interpretation of an ambiguous provision, upheld EPA’s authority to grant such variances.


Chem. Mfrs. Ass’n v. Nat. Res. Def. Council, Inc., 470 U.S. 116 (1985)