United States Court of Appeals
Fifth Circuit
F I L E D
June 16, 2005
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 03-60506
TEXAS INDEPENDENT PRODUCERS AND ROYALTY OWNERS ASSOCIATION, et
al.,
Petitioners,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,
Respondent.
ON PETITION FOR REVIEW FROM THE ENVIRONMENTAL PROTECTION AGENCY
Before JOLLY, DAVIS and CLEMENT, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Petitioners filed their petition to review a final rule
promulgated by the Environmental Protection Agency (EPA) issued
under the Clean Water Act (CWA). The appeal was taken from Final
Rule 70 FR 2832, which deferred the National Pollution Discharge
Elimination System (NPDES) permit requirement for certain oil and
gas construction sites until March 10, 2005. Since then, EPA has
promulgated Final Rule 40 CFR Part 122 on March 9, 2005, which
further delays the date by which small oil and gas construction
sites must obtain permits until June 12, 2006. For the reasons
-1-
that follow, we conclude that Petitioners lack standing and we
dismiss the petition.
I.
In 1987, Congress amended the CWA to establish two separate
phases for the regulation of stormwater discharges. 33 U.S.C. §
1342(p). Phase I required EPA to establish a permit program for
certain dischargers, which EPA defined to include construction
sites that disturb more than five acres of land. These major
source dischargers of stormwater were defined by geographic
criteria, without regard to actual contamination.
Phase II required EPA to investigate other storm water
discharges and to create a comprehensive program to regulate such
sources to the extent EPA determined necessary to protect water
quality. EPA was directed to conduct two specific studies, in
consultation with the States, to identify potential additional
point source discharges of pollutants to be addressed, and to
determine appropriate means of controlling those additional
sources as necessary to protect water quality. EPA was to report
the results of these studies to Congress and then, in
consultation with the States, issue regulations to establish a
comprehensive program to control additional stormwater discharges
as necessary to protect water quality.
In a separate section of these 1987 Amendments, Congress
-2-
included a limitation on permit requirements for certain oil, gas
and mining operations. Section 402(l)(2) expressly prohibited EPA
from requiring a permit for stormwater discharges from oil and
gas activities, unless the discharges were contaminated by
contact with materials located on the site of such operations.
The exemption reads as follows:
The Administrator shall not require a permit under this
section, nor shall the Administrator directly or indirectly
require any State to require a permit, for discharges of
stormwater runoff from mining operations or oil and gas
exploration, production, processing, or treatment operations
or transmission facilities, composed entirely of flows which
are from conveyances or systems of conveyances (including
but not limited to pipes, conduits, ditches, and channels)
which are not contaminated by contact with, or do not come
into contact with, any overburden, raw material,
intermediate products, finished product, byproduct, or waste
products located on the site of such operations.
The reasoning behind this exception, as found in the legislative
history, was to allow “important oil, gas, and mining operations
[to] continue without unnecessary paperwork restrictions, while
protection of the environment remains at a premium”. See 132
Cong. Rec. 31, 964 (1986); 133 Cong. Rec. H171 (daily ed. Jan. 8,
1987).
On December 8, 1999, after identifying additional sources of
storm water discharges that needed to be regulated to protect
water quality, EPA issued the Phase II storm water rule (Phase II
Rule). The Phase II Rule extends the NPDES permit program to
additional dischargers, including operators of construction sites
-3-
that disturb one to five acres of land (“small construction
sites”). In order to comply with these 1999 rules, operators of
such sites were required to have permits by March 10, 2003.
According to EPA, at the time that it promulgated the Phase
II Rule, it “assumed that few, if any, oil and gas exploration,
production, processing, or treatment operations or transmission
facilities would be affected by the rule”. 40 C.F.R. Part 122; 68
Fed. Reg. 11325 (March 10, 2003). Soon afterwards, however, EPA
received information that as many as 30,000 oil and gas sites per
year could be affected by the storm water regulations.
As a result of this discovery EPA promulgated, on March 10,
2003, a final rule requiring “small oil and gas construction
activities” to obtain a permit for stormwater discharges by March
10, 2005 (“Deferral Rule”). The stated purpose of this deferral
was to
allow time for EPA to analyze and better evaluate: the
impact of the permit requirements on the oil and gas
industry; the appropriate best management practices for
preventing contamination of storm water runoff resulting
from construction associated with oil and gas exploration,
production, processing, or treatment operations or
transmission facilities, and the scope and effect of 33
U.S.C. 1342 (l)(2) and other storm water provisions of the
Clean Water Act.
Seven trade associations (Appellants-Petitioners), whose
purpose is to promote the interests of the oil and gas industry,
filed three petitions for review of the Deferral Rule. The
Oklahoma Independent Petroleum Association, another oil and gas
-4-
industry association, intervened in the cases. The three
petitions were consolidated by the Court.
On March 9, 2005, EPA published a final rule amending the
Deferral Rule by postponing the requirement for obtaining permit
coverage for discharges associated with oil and gas construction
activity that disturbs one to five acres of land from March 10,
2005 to June 12, 2006. Along with this rule, EPA published a
statement that “[w]ithin six months of [this] action, EPA intends
to publish a notice of proposed rulemaking in the Federal
Register for addressing these discharges and to invite public
comments”.
II.
EPA urges this Court to dismiss the petition for review as
unripe because it has never issued a final rule with respect to
the oil and gas exemption and, further, the Deferral Rule
contemplates an additional evaluation and assessment of Section
402(l)(2) during the Deferral Period. According to EPA, this
Court’s consideration of Petitioner’s attack on EPA’s
interpretation of § 402(l)(2) amounts to an improper interference
with the agency’s administrative actions.
In analyzing whether or not this case is ripe for review we
start with the awareness that, in some cases, pre-enforcement
review is acceptable. If there is certainty that the law will be
-5-
enforced, then it is irrelevant that the law has yet to be
enforced, unless the Government demonstrates that the statute
itself specifically demonstrates that Congress has prohibited
pre-enforcement review. See Abbott Labs v. Gardner, 387 U.S. 136,
141 (1998). That being said, pre-enforcement review is still
subject to the constraints of the ripeness test. In the cases in
which pre-enforcement review of an administrative regulation has
been permitted, the Courts have done so only after finding that
the “regulation requires an immediate and significant change in
the plaintiffs’ conduct of their affairs with serious penalties
attached to noncompliance”. Id. at 153. See also Gardner v.
Toilet Goods Ass’n, 387 U.S. 167, 171 (1967)(Finding that the
regulations are “self-executing and have an immediate and
substantial impact”).
The Supreme Court has defined ripeness as
a justiciability doctrine designed “to prevent the courts,
through avoidance of premature adjudication, from entangling
themselves in abstract disagreements over administrative
policies, and also to protect the agencies from judicial
interference until an administrative decision has been
formalized and its effects felt in a concrete way by the
challenging parties”.
Nat’l Park Hospitality Ass’n v. Dept. of the Interior, 538 U.S.
803, 807 (2003), citing Abbott Labs, 387 U.S. at 148 - 49. In
determining whether EPA’s decision is “ripe” for review we must
weigh both the fitness of the issues for judicial decision and
the hardship to the parties of withholding court consideration.
-6-
Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726, 733 (1998). A
court, in determining whether a case is ripe for review, must
evaluate the following factors:
(1) whether delayed review would cause hardship to the
plaintiffs;
(2) whether judicial intervention would inappropriately
interfere with further administrative action; and
(3) whether the courts would benefit from further factual
development of the issues presented.
Ohio Forestry Ass’n, 523 U.S. at 733. Stated differently, a case
or controversy is ripe for judicial review when “an
administrative decision has been formalized and its effects felt
in a concrete way by the challenging parties.” Arch Mineral Corp.
v. Babbitt, 104 F.3d 660, 665 (4th Cir. 1997).
Our application of the Ohio Forestry Ass’n test leads us to
conclude that this case is not ripe for review. Starting with the
second factor, it is clear to us that our ruling on this case
would inappropriately interfere with administrative action. Given
that EPA has specifically stated its intent to examine, during
the Deferral Period, the issue of “how best to resolve questions
posed by outside parties regarding section 402(l)(2) of the Clean
Water Act”, any interpretation we would provide would necessarily
prematurely cut off EPA’s interpretive process.
We are also unpersuaded that Petitioner has satisfied the
first element of the ripeness test. Most particularly, we are
unconvinced that the hardship faced by Petitioners at this time
-7-
is sufficient to override the administrative body’s right to
interpret the law. Given that the effective date of the permit
requirement for Petitioners is now a year away, we are not
convinced that Petitioners will suffer significant hardship if we
decline to supersede the administrative process. Petitioners
themselves, when discussing the nature of oil and gas exploration
and production activities, explain that planning cannot be done
far in advance, but rather that “the potential number and
approximate location of the oil and gas wells is not known for a
comparatively long time after drilling commences”. Petitioners
Brief, 53. Further, Petitioners state that “oil and gas
activities do not have a long planning process, and instead
proceed in a series of stops and starts dictated by the results
of the last well and market conditions”. Id. at 54. Given this
uncertain nature of the oil and gas industry, Petitioners have
not demonstrated how a possible change in permitting requirements
a year from now could seriously affect an industry that, by its
own admission, is unable to plan far in advance.
Finally, we do believe that this Court would benefit from
further factual development of the issues presented. While we are
aware that, in some cases, pre-enforcement review of an
administrative rule is allowed, in this case we have no sense of
what oil and gas construction activities would fall under EPA’s
permitting requirements. Without a factual context, such as an
-8-
attempt to require a permit for the construction of a road
leading to a drilling site, a ruling of this Court would be
little more than a direction to EPA to give effect to the oil and
gas exemption. On the other hand, when EPA determines the
specific types of construction related to oil and gas development
upon which it will impose a permit requirement, Petitioners will
be in a better position to demonstrate how the regulation
violates the provisions of the statute. With this background, it
is easy to see how this case is distinguishable from Abbott
Laboratories. In that case the regulation unambiguously required
drug companies to label all prescription drugs in a particular
way. This regulation left no doubt of the immediate and severe
consequences the drug companies would face in re-labeling all
prescription drugs. By contrast, in our case it is uncertain
whether EPA will require permits from Petitioners and there is no
immediacy to the requirements as they do not go into effect for a
year. EPA may promulgate a regulation which defines oil and gas
operations to cover, for example, the building of roads at a
drilling site or only drilling and oil and gas pipelines. Given
the lack of specificity in the present rule, we would only be
able to address the issue by attempting to hypothesize possible
situations in which the rule might apply and determine what is or
is not an oil and gas “operation”. We conclude, therefore, that
-9-
this case is not ripe for review.1 See RICHARD J. PIERCE,
ADMINISTRATIVE LAW TREATISE § 15.4, at 1073 (4th ed.
2002)(discussing Abbott Laboratories and Toilet Goods Ass’n v.
Gardner, 387 U.S. 158 (1967)).
III.
For the reasons stated above, we conclude that this case is
not ripe for review and, accordingly, we dismiss the petition.
1
We recognize that this is the second time that EPA has
deferred this rule and we can understand that Petitioners would
be frustrated by their inability to obtain review. However, in
the closely related area of the exhaustion of administrative
remedies, courts have only excused petitioners from the
requirement that they exhaust the administrative process in
instances where the administrative agency’s delay in ruling was
particularly egregious. See Southwestern Bell Telephone Co. V.
FCC, 138 F.3d 746 (8th Cir. 1998)(Court excused the petitioner
from duty to allow an agency to consider a statutory
interpretation argument where the agency had already taken nine
years to resolve a dispute that was subject to a five-month
statutory deadline.); Pavano v. Shalala, 95 F.3d 147 (2d Cir.
1996)(Court declined to exclude exhaustion requirement where it
found that, while agency’s delay was “unfortunate” it was “not a
matter of administrative intransigence”.) See also RICHARD J.
PIERCE, ADMINISTRATIVE LAW TREATISE § 15.10, at 1032-34 (4th ed.
2002). Under the circumstances of this case, we are unable to say
that EPA’s action has been similarly unreasonable so as to allow
us to intervene before the agency has the chance to complete its
interpretation.
-10-