
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                                                                      ____________________        No. 93-1597                           CARIBBEAN PETROLEUM CORPORATION,                                     Petitioner,                                          v.                    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,                                     Respondent.                                                                                      ____________________                      ON PETITION FOR REVIEW OF AN ORDER OF THE                    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY                                                                                      ____________________                                        Before                            Selya and Cyr, Circuit Judges,                                           ______________                         and Pettine,* Senior District Judge.                                       _____________________                                                                                      ____________________             Karin G. Diaz-Toro, with whom Goldman, Antonetti & Cordova was on             __________________            ____________________________        brief for petitioner.             Alan  D. Greenberg, Attorney, with  whom Lois J. Schiffer, Acting             __________________                       ________________        Assistant  Attorney General,  Randolph L.  Hill,  Attorney, and  Meyer                                      _________________                  _____        Scolnick, Assistant Regional Counsel, were on brief for respondent.        ________                                                                                      ____________________                                     July 7, 1994                                                                                      ____________________                                    ____________________             *Of the District of Rhode Island, sitting by designation.                    CYR,  Circuit Judge.    Petitioner Caribbean  Petroleum                    CYR,  Circuit Judge.                          _____________          Corporation challenges the discharge permit it was issued by  the          United  States Environmental  Protection Agency  (EPA) under  the          Clean Water  Act.  Relying on  our recent opinion  in Puerto Rico                                                                ___________          Sun Oil Co.  v. United  States EPA,  8 F.3d 73  (1st Cir.  1993),          ___________     __________________          Caribbean contends that EPA acted arbitrarily and capriciously by          incorporating a water  quality certification issued by  the Envi-          ronmental Quality Board of the Commonwealth  of Puerto Rico (EQB)          which was still undergoing review by the EQB.  Finding no  error,          we deny the petition for review.                                          I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    We had occasion, in Puerto  Rico Sun Oil, to survey the                                        ____________________          regulatory framework controlling the present appeal:                           The  Clean Water Act,  33 U.S.C.   1251,                    et seq.,  prohibits the  discharge into  pro-                    _______                    tected waters of any pollutant by any person,                    id.   1311(a), unless  a discharge permit has                    ___                    been  secured from  EPA.   Id.    1342.   The                                               ___                    permitting regime is  a hybrid  one in  which                    both  EPA and  the  counterpart state  agency                    play a  role.   The precise  role depends  on                    whether  EPA  has  delegated  permit  issuing                    authority  to the state;  but no such delega-                    tion is present here.  Puerto Rico is treated                    as  a state for  purposes of the  Clean Water                    Act, id.    1362(3), and its local  agency is                         ___                    the Environmental Quality Board.                                          2                         To obtain  a permit, the  applicant must                    satisfy a variety of substantive requirements                    under the Clean  Water Act but,  in addition,                    no EPA permit  can issue unless the  state in                    which the  discharge will occur gives its own                    approval (called  "certification") or  waives                    its right to do so.   33 U.S.C.   1341(a)(1).                    Further, the  state certification  may impose                    discharge  limitations  or  requirements more                    stringent  than  federal  law  requires,  and                    those more stringent obligations are incorpo-                    rated  into the federal permit as a matter of                    course.  See generally United States v. Mara-                             ___ _________ _____________    _____                    thon Development Corp., 867  F.2d 96, 99 (1st                    ______________________                    Cir. 1989) (describing state role).          Id. at 74-75.          ___                    Petitioner  Caribbean  discharges  a  large  volume  of          process and storm  water from its Bayamon,  Puerto Rico, refining          facility into Las Lajas Creek, a protected waterway designated by          EQB as  a drinking  water source.   Caribbean has  been regulated          under the Clean  Water Act National Pollution  Discharge Elimina-          tion System (NPDES) at its  Bayamon operation since it was issued          a  five-year permit in  1983.   The present  controversy surfaced          during the NPDES renewal process, which proceeded as follows:               10/27/88  Caribbean files NPDES renewal               10/27/88                         application with EPA.               11/10/88  EPA requests EQB certification.                11/10/88               02/01/89  EQB issues draft certification,               02/01/89                         instructing EPA that it "shall be                         incorporated into [Caribbean's]                         NPDES permit."               04/07/89  Caribbean submits comments to EQB               04/07/89                         on draft certification, contending                         that its pollutant concentration                         standards are unreasonable,                         impractical, and unfeasible.                                          3               05/10/89  EQB issues (substantially               05/10/89  ___ ______                         unmodified) final certification.                                     _____ _____________               06/30/89  Caribbean requests EQB                06/30/89                         reconsideration of certification                         issued 5/10/89.               08/07/89  EPA issues draft NPDES to Caribbean               08/07/89                         incorporating the 5/10/89 final                         certification.               09/06/89  EPA receives comments on draft               09/06/89                         NPDES from Caribbean.                10/13/89  EQB notifies EPA that it is               10/13/89  ___ ________ ___ ____ __ __                         reviewing the 5/10/89 certification                         _________ ___ _______ _____________                         and requests that EPA delay is-                         suance of final NPDES pending re-                         view.                                               09/28/90  EPA issues final NPDES, incorpora-               09/28/90                         ting 5/10/89 certification.                    At the time the final NPDES was issued on September 28,          1990, EPA considered  the May 10, 1989  certification appropriate          for  incorporation into  the final  NPDES  because EQB  had never          stayed its certification and it therefore remained in effect as a          matter of  law.  Now, more than five  years later, EQB has yet to          act on  Caribbean's request  for reconsideration  of the  "final"          certification issued May 10, 1989.                                           II                                          II                                      DISCUSSION                                      DISCUSSION                                      __________                    Caribbean attempts to  rest its challenge to  the final          NPDES on the coattails of Puerto Rico Sun Oil, by posing the same                                    ___________________          generic question involved there:  Is it  arbitrary and capricious                                          4          for EPA to incorporate a water quality certification into a final          NPDES  while the certification ostensibly is undergoing review by          the local agency?  In Puerto Rico Sun Oil, we held that there was                                ___________________          no procedural  bar to the  incorporation of an  EQB certification             __________          which had  not been  stayed until after  the final  NPDES issued.          Id. at 77.  In a similar  vein, we perceive no serious procedural          ___          obstacle in the  present case.1   We went on  to hold,  neverthe-          less, that in the circumstances presented in Puerto Rico Sun Oil,                                                       ___________________          EPA's decision "made  no sense,"  and amounted  to arbitrary  and          capricious agency action  absent explanation.  Id.   By contrast,                                                         ___          however,  here the  only colorable  rationality  claim raised  by          Caribbean rests on a far less substantial basis.                      "The  scope  of   review  under   the  'arbitrary   and          capricious' standard is  narrow and a court is  not to substitute          its judgment for  that of the agency." Motor  Vehicle Mfrs. Ass'n                                                 __________________________          v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983).  Agency             _____________________________          actions are not to be set  aside as arbitrary and capricious, see                                                                        ___          Administrative Procedure Act,  5 U.S.C.   706(2)(a),  unless they                                        ____________________               1Caribbean  raises two  lackluster  procedural claims  which          warrant but brief consideration.  First, a request from the local          certifying agency that  EPA delay issuance  of its NPDES  pending          reconsideration  of the  local agency  certification  is not  the          equivalent of  a formal stay  suspending the legal effect  of the          certification,  such as  EPA issued  in the  Puerto Rico  Sun Oil                                                       ____________________          proceedings,  see Puerto Rico  Sun Oil,  8 F.3d  at 80.   Second,                        ___ ____________________          since  the original certification  was never stayed,  EPA was not          obliged to resort  to the procedures in 40  C.F.R.   122.44(d)(3)          to compel EQB  either to issue a new certification within 60 days          or waive certification. See Puerto Rico Sun Oil, 8 F.3d at 80.                                  ___ ___________________                                          5          lack  a rational  basis.   See, e.g.,  Rhode Island  Higher Educ.                                     ___  ____   __________________________          Assistance Auth. v.  Department of Educ., 929 F.2d  844, 855 (1st          ________________     ___________________          Cir. 1991).   Like other executive  agencies acting within  their          respective  bailiwicks,  EPA  is  due  substantial  deference  in          interpreting and implementing the Clean  Water Act -- "so long as          [its] decisions do not collide directly with substantive statuto-          ry  commands  and  so  long as  procedural  corners  are squarely          turned." Puerto Rico Sun Oil, 8 F.3d at 77; see generally Chevron                   ___________________                ___ _________ _______          U.S.A. v. Natural  Resources Defense Council,  467 U.S. 837,  843          ______    __________________________________          (1984).   We  therefore inquire  whether,  in the  vernacular  of          Puerto Rico Sun Oil, the challenged EPA action    its issuance of          ___________________          a  final NPDES notwithstanding  EQB's request that  EPA forestall          its  processes in anticipation  of further action  on Caribbean's          request for review of the EQB certification    makes sense.                     First,  surface  appearances   aside,  several  factors          plainly reflect  that this case is  not of a  feather with Puerto                                                                     ______          Rico Sun Oil.  Not least  important is the fact that EPA  delayed          ____________          its issuance of  the Caribbean NPDES  for almost a year  at EQB's                                                    ______ _ ____          request; whereas in Puerto Rico  Sun Oil EPA incorporated the EQB                              ____________________          certification   within   two  weeks   after  learning   that  the                                   ___  _____          certification was  being reconsidered by EQB.   Thus, whereas the          timing of  the EPA  action in  Puerto Rico  Sun Oil  lent to  the                                         ____________________          impression that an  administrative trap had been  hastily snapped          shut, there is nothing in the present record to indicate that the                                          6          eleven and one-half  month period EPA afforded EQB  to review its          certification was either unreasonable or arbitrary.                     Second,  the  significance  of the  timing  of  the EPA          action  in Puerto  Rico Sun  Oil was  magnified by  a substantive                     _____________________          Clean Water Act monitoring issue not implicated in these proceed-          ings.  As a consequence  of EPA's precipitous action, the permit-          tee  in Puerto Rico  Sun Oil was  left to cope  with a monitoring                  ____________________          methodology unequivocally  disavowed by EQB.2  We found that this          whipsaw  certification procedure "made no sense." Puerto Rico Sun                                                            _______________          Oil, 8 F.3d at 77.3            ___                                        ____________________               2The late 1980s witnessed an abortive effort by EQB to alter          its  water quality  monitoring methodology.   For many  years EQB          Water Quality  Standards had used  a "mixing zone"  method, which          calls for pollutant concentrations to be measured in the protect-          ed waters  into which the  permitted discharge occurs.   In 1989,          however, EQB  issued a draft  document that  adopted an  "end-of-          pipe"  (or effluent)  approach, whereby  pollutant concentrations          are measured  at the discharge  source, prior to dilution  in the          receiving waters.  Although this  draft document was withdrawn in          1990, the  permittee in  Puerto Rico Sun  Oil had  been certified                                   ____________________          during the  brief reign of the new  "effluent monitoring" policy,          and this  (presumably more  exacting) monitoring methodology  had          been written into the certification EQB provided EPA.               3"EQB  had used a mixing  zone analysis in  the past and was          proposing  to do so in the future . .  . .  Yet just as [Sun Oil]          moved  to  correct the  EQB  certification, EPA  moved  even more          swiftly to adopt a final permit based on the EQB certificate that          omitted  a mixing zone analysis." Puerto  Rico Sun Oil, 8 F.3d at                                            ____________________          76.                 In sharp contrast, no such ambivalent EQB monitoring method-          ology  was at work in this case.   Effluent monitoring, see supra                                                                  ___ _____          note 2, was  the pre-1990 baseline  for Caribbean, which,  unlike          the permittee in Puerto Rico Sun Oil, discharges into a designat-                           ___________________          ed drinking water  source.  This much  is clear from the  face of          the 1983 permit: "Samples taken in compliance with the monitoring          requirements set out  above shall be taken  at the outfall .  . .          prior   to  discharge  to   Las  Lajas  Creek."     Additionally,                                          7                    Third, at no time did EQB stay its Caribbean certifica-          tion.  In Puerto Rico Sun Oil, however, EQB issued a formal stay,                    ___________________          albeit after EPA had issued its NPDES incorporating the  certifi-          cation.   Although this court held that the  ex post EQB stay was                                                       __ ____          ineffective, as a matter of  procedure under the Clean Water Act,          id.  at 80  ("We agree  with EPA  that the  [post-NPDES issuance]          ___          decision of  EQB to  re-characterize its  certification order  as          non-final cannot affect the procedural validity of EPA's decision          to grant the permit."), the fact remains that EQB, by staying the          certification in  Puerto Rico Sun  Oil, took far more  timely and                            ____________________          definitive action than was ever  taken during the eleven and one-          half  months (not  to mention  the ensuing  four years)  that EPA          awaited EQB's promised review of the Caribbean certification.                      Finally, moving beyond the precedential shadow  cast by          Puerto Rico  Sun Oil, Caribbean  has not identified (nor  can we)          ____________________          any other  potential manifestation  of  arbitrary and  capricious          agency conduct on EPA's part.  Rather, our review evinces reason-          able agency  adherence to  appropriate procedures  and reasonable                                        ____________________          Caribbean's  April 7, 1989, comments on EQB's draft certification          requested "interim effluent standards," a further indication that                             ________          the substantive standards contained in the certification, not the          monitoring methodology, were driving  the conflict between Carib-          bean and EQB.  In sum, there is no evidence that the EQB certifi-          cation  issued  to Caribbean  was the  product of  a bureaucratic          snafu such as infected the  permitting process in Puerto Rico Sun                                                            _______________          Oil, 8  F.3d at  76 (noting that  EQB's certification  "must have          ___          appeared  a  probable  candidate for  administrative  or judicial          revision"  as it incorporated effluent standards that had already          been abandoned).                                          8          accommodation  of Caribbean's legitimate interests.  We note as a          significant further consideration that should EQB issue Caribbean          a revised certification, EPA may amend its NPDES. See 40 C.F.R.                                                              ___          124.55(b); Puerto Rico Sun Oil, 8 F.3d at 80.4   The availability                     ___________________          of   contingency   procedures   for   considering   post-issuance          modifications to EQB's  certification further  reduces the  like-          lihood of "arbitrary" EPA action in these circumstances.                                          III                                         III                                      CONCLUSION                                      CONCLUSION                                      __________                    Our conclusion that  the challenged EPA action  was not          "arbitrary and  capricious" is firmly  rooted in the  record evi-          dence that (1) EPA stayed its hand for more than eleven months to          permit EQB to reconsider its Caribbean certification; (2) yet EQB          neither issued a new certification, nor stayed its original cert-          ification;  and (3)  the EQB  certification  incorporated in  the          NPDES  essentially comported with  the effluent monitoring policy          to  which Caribbean  had been  subject  ever since  it was  first          permitted under the Clean Water Act.   We decline to visit on EPA                                        ____________________               4We need  not address  the complex issue  as to  whether any          such changes  to Caribbean's NPDES  would run afoul of  the Clean          Water Act "anti-backsliding" provisions. See 33 U.S.C.   1342(o).                                                   ___          We do note, however, that EPA represents that anti-backsliding is          "unlikely to be  an issue in this case"  because the modification          of a NPDES  to reflect changes in the  local agency certification          likely would  come within  one of  several exceptions to  section          1342(o).  See 33 U.S.C.   1342(o)(2) (prescribing five exceptions                    ___          to section 1342(o)).                                          9          the  responsibility for  unexplained,  if not  inexplicable,  EQB          delays in undertaking or completing its promised reconsideration,          nor to compromise in the meantime the important public  interests          served by the Clean Water Act.                     The petition for review is denied.                                                 denied                                               ______                                          10
