(March 10, 2021) – Last Thursday, the U.S. Court of Appeals for the Ninth Circuit listened to oral arguments in NACWA’s on-going litigation in the case of Upper Missouri Waterkeeper v. EPA. 

The case involves appeals of a Montana District Court’s December 2019 ruling that, while water quality standards variances that take into account economic and social impacts are lawful under the Clean Water Act (CWA), any such variance must ultimately require compliance with the underlying water quality standard by the end of its term.  

NACWA, the Montana League of Cities (League), the Montana Department of Environmental Quality (DEQ) and EPA, represented by the U.S. Department of Justice (DOJ), appealed the District Court’s novel requirement that variances must end in compliance with underlying standards, while environmental groups challenged that it is ever lawful to consider costs in setting CWA water quality standards.

The three-judge panel hearing the case consisted of Judges Richard Paez, appointed by President Clinton, Paul Watford, appointed by President Obama, and Danny Boggs, a Sixth Circuit judge appointed by President Reagan sitting by designation.

While it is inadvisable to speculate how a court may rule based on oral arguments, it is notable that the panel asked several probing questions throughout the session. In particular, the judges seemed interested in the fact that, while the lower court held that variances must ultimately require compliance with underlying standards by the end of their term, neither side had actually made that argument to the District Court. 

The panel also questioned the impacts of not allowing states to consider any amount of cost – even in the trillions of dollars – in setting standards, as well as why environmental groups had not challenged EPA’s underlying variance regulations, which expressly allow for agencies to consider costs in adopting variances. However, the judges also questioned DOJ about how the Montana variance effectuated a designated use change, thereby ensuring that the variance was adequately protective of uses as required by the CWA.

NACWA anticipates a decision from the Ninth Circuit in the coming months. In the interim, the District Court has stayed its earlier order that would have required the state to promulgate a new variance in line with its holding, which will allow Montana utilities to not be subject to a new, more stringent variance pending the Ninth Circuit’s decision.

For questions concerning this litigation, please contact NACWA’s Chief Legal Counsel, Amanda Aspatore.