Court Rules that EPA Must Engage in ESA Consultation When Adopting Water Quality Standards

By Brigit Rollins, National Agricultural Law Center

The Environmental Protection Agency (“EPA”) must analyze how its revised water quality standards for cadmium will affect threatened and endangered species after a federal court determined that the agency had failed to comply with the Endangered Species Act (“ESA”) when adopting the standards. According to the environmental plaintiffs that brought the case, EPA had risked exposing endangered and threatened species to higher levels of cadmium by not undergoing ESA consultation when adopting the water quality standards. While EPA claimed that engaging in ESA consultation at the time the standards are adopted by the agency instead of when they are implemented was inefficient, the court disagreed. Ultimately, the court’s ruling may have effects further down the road as it sets water quality standards for other pollutants.


CWA Water Quality Criteria

The purpose of the Clean Water Act (“CWA”) is to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters” by reducing and ultimately eliminating the discharge of pollutants into such waters. 33 U.S.C. § 1251(a). As part of accomplishing that goal, the CWA instructs states to adopt water quality standards for all waters located in that state, and to review and revise those standards at least once every three years. 33 U.S.C. § 1313. Water quality standards consist of two basic components – designated uses, and water quality criteria. 40 C.F.R. § 131.3(i). Designated uses are the goals for how a water body should be used. Typical designated uses include protection of fish, shellfish, and wildlife; recreation; public drinking water supply; and agricultural, industrial, navigational, and other purposes. 40 C.F.R. § 131.10(a). Water quality criteria refer to maximum pollutant concentration levels that can be permitted in a water body while still protecting the designated uses of said water body. 40 C.F.R. § 131.3(b). If water quality criteria are met, then all the designated uses for a water body should be achievable.

While states are ultimately responsible for adopting water quality standards, and thus water quality criteria, the CWA instructs EPA to develop and publish recommendations for states’ water quality criteria known as “304(a) criteria.” 33 U.S.C. § 1313. States may either adopt EPA’s recommended 304(a) criteria as part of their water quality standards, or adopt their own water quality criteria. However, should a state adopt its own criteria, it must justify the departure with “sound scientific rationale” and “scientifically defensible methods.” 40 C.F.R. §§ 131.11, 131.20. Whether a state adopts the 304(a) criteria or develops its own, it must seek approval from EPA before formally revising its water quality standards. 33 U.S.C. § 1313(c).

ESA Agency Consultations

The ESA was established in 1973 for the purpose of conserving endangered species, and the ecosystems on which those species rely. 16 U.S.C. § 1531(b). One of the primary ways that the ESA works to achieve that purpose is by requiring all federal agencies to consult with either Fish and Wildlife Service (“FWS”) or the National Marine Fisheries Service (“NMFS”) (collectively “the Services”) to ensure that any action a federal agency authorizes, funds, or carries out, will not jeopardize the continued existence of any species protected by the ESA, or result in the destruction of designated critical habitat. 16 U.S.C. § 1536(a)(2). In this context, “jeopardy” refers to an action that would reasonably be expected to reduce the likelihood that an endangered species would both survive and recover enough to no longer be considered endangered. 50 C.F.R. § 402.02. Similarly, “designated critical habitat” refers to habitat that the Services have identified as “essential for the conservation” of a threatened or endangered species. 16 U.S.C. § 1532(5).

Prior to carrying out an agency activity such as promulgating a regulation, grating a license or permit, or any action that will directly or indirectly modify the environment, it must first make an informal determination as to whether the action “may affect” a species listed as threatened or endangered under the ESA. 50 C.F.R. §§ 402.02, 402.14(a). The “may affect” standard is considered a low threshold to clear because it includes any impact the action may have on listed species, even if the predicted impact is not expected to harm the species. If a federal agency finds that its proposed action “may affect” any listed species, it is required to reach out to the Services for consultation. During the first stage of consultation, the Services will help the agency taking the proposed action, otherwise known as the action agency, determine whether the action is “likely to adversely affect” listed species. If it is determined that adversely impacts to listed species are likely, then the Services will move on to formal consultation. 50 C.F.R. § 402.14(a).

During formal consultation, the Services develop a document known as a Biological Opinion, or a BiOp. Ultimately, the BiOp will resulting in a finding as to whether the proposed agency action will jeopardize the existence of a listed species or destroy any designated critical habitat. If the Services find that the propose action will result in either jeopardy of a species or the destruction of critical habitat, they will propose any mitigation measures necessary to avoid that result. The action agency will then decide whether to adopt the mitigation measures proposed by the Services or take a different approach that would satisfy the agency’s ESA requirements.

Recent Lawsuit

The plaintiffs in Ctr. for Biological Diversity v. U.S. Envt’l Protection Agency, No. CV-22-00138 (D. Ariz. Aug. 21, 2023) filed suit against EPA to challenge the agency’s failure to engage in ESA consultation when adopting its 2016 chronic freshwater 304(a) cadmium criterion. In response, EPA claimed that it did not have to go ESA consultation when developing and issuing 304(a) criteria. The agency claimed that ESA consultation was only required when a state decided to adopt a 304(a) criterion as part of its water quality standards. Ultimately, the court disagreed and found in favor of the plaintiffs.

As a threshold issue, the court had to determine whether issuing 304(a) criteria is an agency action subject to ESA consultation requirements. To determine whether an agency’s activity qualifies as an “action” under the ESA, the court utilized a two-part test. First, the court considered whether EPA “affirmatively authorized, funding, or carried out the underlying activity.” Then, the court determined whether EPA “had discretion to influence or change the underlying activity for the benefit of a protected species.”

For the first prong of the test, the court noted that the issue was not about the agency activity itself, but rather the agency activity relative to the “underlying activity,” which in this case the court identified as the state adoption of water quality standards. The court went on to explain that agency activity relative to underlying activity is affirmative so as to satisfy the first prong of it test if it involves “decisions about whether, or under what conditions, to allow this underlying activity to proceed.” Because EPA’s decision to issue 304(a) criteria will decide how a state will proceed, either by adopting the criteria or providing an explanation why the criteria will not be adopted, the court determined that issuing the 304(a) cadmium criterion was affirmative under the ESA and therefore satisfied the first prong of the test.

Next, the court turned to the second prong of the test to consider whether EPA had discretion to influence or change the underlying activity for the benefit of species protected by the ESA. First, the court considered whether EPA’s activity in issuing 304(a) criteria is discretionary. Ultimately, the court concluded that EPA had broad discretion when issuing 304(a) criteria because EPA chooses when to update the criteria, generates the criteria based on its own judgement, and chooses how to respond to peer review and public comment. After determining that issuing the 304(a) cadmium criterion was discretionary, the court then considered whether issuing the criterion influences states directly or indirectly when presented with the option of adopting the criterion. The court found that EPA’s activity influenced states’ decisions because any state that departed from EPA’s 304(a) criteria were required to provide an explanation. Additionally, the court found that only five states do not use EPA’s 304(a) criteria. Therefore, the court concluded that by issuing 304(a) criteria, EPA directly influenced states’ activity when adopting state water quality standards. Finally, the court noted that issuing 304(a) criteria could be done to benefit species protected by the ESA by setting maximum cadmium concentration at levels beneficial to listed species.

Because EPA’s activity was affirmative, discretionary, and influenced the underlying activity for the benefit of protected species, the court concluded that issuing the 2016 304(a) cadmium criterion was an activity that required ESA consultation.

After concluding that issuing 304(a) criteria is an agency action subject to consultation requirements, the court then considered whether issuing 304(a) criteria “may affect” species listed under the ESA. Only agency actions that “may affect” listed species require consultation with the Services. The “may affect” standard is a relatively low standard to clear because it includes any possible effect the action may have on listed species. Here, the court found that issuing 304(a) criteria “may affect” listed species because the criteria determine how much pollution species are exposed to. Because issuing the 2016 304(a) cadmium criterion was an agency action that “may affect” listed species, the court concluded that EPA was required to engage in ESA consultation prior to issuing the criterion.

Going Forward

While this lawsuit focused on EPA’s 304(a) criteria for cadmium, the court’s reasoning extends to all 304(a) criteria issued by EPA. There are numerous pollutants for which EPA sets 304(a) criteria, including common agricultural pollutants such as ammonia, nutrients, and various pesticides. States implement water quality standards in part by working to maintain pollutant levels set by water quality criteria. If, for example, a state finds that the current levels of ammonia in its waterways exceed the water quality ammonia criterion it has adopted, the state will work to reduce the amount of ammonia that gets added to its waters. If ammonia is primarily added to that state’s waterbodies though runoff from fertilizer, the state is likely to take steps to reduce that runoff to implement its water quality standards for ammonia.

Requiring EPA to engage in ESA consultation prior to issuing 304(a) criteria could result in stricter criteria going forward. EPA already had a practice of engaging in ESA consultation when states adopted 304(a) criteria and sought approval of new water quality standards. However, those consultations focused on one state at a time. After the court’s decision, EPA would be required to take a broader approach to consider how new 304(a) criteria would impact listed species throughout the country.

To read the court’s decision in Ctr. for Biological Diversity v. U.S. Envt’l Protection Agency, click here.

To read the text of the CWA, click here.

To read the text of the ESA, click here.

For more National Agricultural Law Center resources on the CWA, click here.

For more National Agricultural Law Center resources on the ESA, click here.