IN RE: AMERICAN RIVERS, ET AL V. AMERICAN PETROLEUM INSTITUTE, ET AL, No. 21-16958 (9th Cir. 2023)
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Section 401 certification obligates any applicant for a federal license or permit to conduct activity that may result in a discharge into the navigable waters of the United States to obtain certification (or waiver of certification) from the state governing the area where a discharge would originate. The Section 401 regulatory scheme remained unchanged until July 2020, when the EPA promulgated CWA Section 401 Certification Rule (“2020 Rule”). Several states, environmental groups, and tribes (“Plaintiffs”) filed lawsuits challenging the 2020 Rule. A different set of states and energy industry groups intervened to defend the 2020 Rule. The EPA publicly announced its intent to revise the 2020 Rule and moved in district court for a remand of the 2020 Rule so that the agency could reconsider it. The district court granted the EPA’s remand motion and granted Plaintiffs’ request for vacatur of the 2020 Rule. Intervenor-Defendants appealed the district court’s order vacating the 2020 Rule.
The Ninth Circuit reversed the district court’s order granting a voluntary remand and vacated an EPA regulation promulgated under the CWA. The panel held that a court granting a voluntary remand lacks authority to also vacate the regulation without first holding it unlawful. The panel exercised its jurisdiction and held that courts may not vacate agency actions in conjunction with granting requests for voluntary remands without first holding the agency actions unlawful. Plaintiffs contended that if voluntary remand before merits determinations existed, then so too must the authority to vacate the challenged authority in the interim. The panel held that federal courts do not have unlimited equitable authority.
Court Description: Remands / Agency Action. Reversing the district court’s order granting a voluntary remand and vacating an Environmental Protection Agency (“EPA”) regulation promulgated under the Clean Water Act (“CWA”), the panel held that a court granting a voluntary remand lacks authority to also vacate the regulation without first holding it unlawful. One CWA requirement, known as Section 401 certification, obligates any applicant for a federal license or permit to conduct activity that may result in a discharge into the navigable waters of the United States to obtain certification (or waiver of certification) from the state governing the area where a discharge would originate. The Section 401 regulatory scheme remained unchanged until July 2020, when the EPA promulgated CWA Section 401 Certification Rule (“2020 Rule”). Several states, environmental groups, and tribes (“Plaintiffs”) filed lawsuits challenging the 2020 Rule. A different set of states and energy industry groups intervened to defend the 2020 Rule. Before the litigation reached the summary judgment stage, a new President was elected. The EPA publicly announced its intent to revise the 2020 Rule, and moved in district court for a remand of the 2020 Rule so that the agency could reconsider it. The district court granted the EPA’s remand motion, and granted Plaintiffs’ AMERICAN RIVERS V. AMERICAN PETROLEUM INSTITUTE 9 request for vacatur of the 2020 Rule. Intervenor-Defendants appealed the district court’s order vacating the 2020 Rule. After unsuccessfully seeking a stay pending appeal from the district court and this court, the Supreme Court granted an emergency stay, so that the 2020 Rule has been in effect since. The panel held that it had jurisdiction to review the district court’s remand order. Plaintiffs’ goal in bringing this lawsuit was to have the 2020 Rule vacated, and Intervenor- Defendants sought to keep it in place. When the district court vacated the 2020 Rule in conjunction with granting the request for a voluntary remand, it gave Plaintiffs everything they wanted and left nothing else for the court to do. The district court’s order was thus final and appealable. The panel rejected the EPA’s argument that Alsea Valley Alliance v. Department of Commerce, 358 F.3d 1181 (9th Cir. 2004), applied here. Instead, general finality principles applied. The panel exercised its jurisdiction and held that courts may not vacate agency actions in conjunction with granting requests for voluntary remands without first holding the agency actions unlawful. Plaintiffs contended that if voluntary remands before merits determinations existed, then so too must the authority to vacate the challenged authority in the interim. The panel held that federal courts do not have unlimited equitable authority. Precedent suggests that permanent equitable remedies can be awarded against only illegal executive action. Illegality requires establishing that there has been (or will be) a violation of the law. Even if Plaintiffs could point to some precedent supporting a court’s authority to vacate executive action 10 AMERICAN RIVERS V. AMERICAN PETROLEUM INSTITUTE without a merits ruling, the panel read the Administrative Procedure Act (“APA”) as foreclosing any authority of courts to vacate agency actions not first held unlawful. Because Congress set forth in the APA a detailed process for repealing rules, the panel held that it could not endorse a judicial practice that would help agencies circumvent that process. The panel rejected two counterarguments raised by Plaintiffs. First, Plaintiffs argued that, because voluntary remands exist in a realm of equity that comes before a judicial ruling on the merits, the APA’s judicial-review section had nothing to say about what equitable remedies courts may fashion in the voluntary- remand context. The panel held that the APA’s judicial- review section cannot be construed so narrowly. Second, citing policy concerns, Plaintiffs urged that the APA should be read to give courts the authority to vacate regulations without first holding them unlawful. The panel held that policy concerns cannot trump the best interpretation of the statutory text. The APA’s text is best read as authorizing a court to vacate an agency action only when that court first held that action unlawful. The panel concluded that the district court lacked authority to vacate the 2020 Rule without first holding it unlawful. The panel reversed the district court’s order in its entirety and sent the case back on an open record for reconsideration of the EPA’s remand motion. AMERICAN RIVERS V. AMERICAN PETROLEUM INSTITUTE 11
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