Brook Duer

Postscript:  After this article was completed and while waiting to be published, the Ninth Circuit Court of Appeals rendered a decision on October 2, 2024, upholding the EPA’s decision to deny the plaintiff environmental groups’ petition to compel revised CAFO regulations. A request for the granting of an appeal to the U.S. Supreme Court must be filed within 90 days of October 2, 2024.

Note: This article is a continuation of a topic first discussed in an article published on March 15, 2024, titled, “EPA Made Commitment to CAFO Permitting Reform But No Action Evident to Date.” 

There have been significant developments in the last six months since Southern Ag Today first published an article outlining: 

1. the United States Environmental Protection Agency’s (“EPA”) announcement of an internal “comprehensive evaluation” of its Clean Water Act (“CWA”) NPDES permit regulations for confined animal feeding operations (“CAFO”) for potential agency initiation of reforms; and 
2. a lawsuit captioned, Food & Water Watch, et al. v. EPA, No. 23-2146, pending in the U.S. Court of Appeals for the Ninth Circuit, seeking NPDES CAFO permit reform through court intervention and order. 

At issue is EPA’s continued use and implementation of a regulatory scheme defining NPDES permit obligations by reference to species-specific animal equivalency units (“AEU”) housed on site—resulting in the now familiar CAFO classifications as Large, Medium and Small, each carrying varying obligations, or none at all. Notably, the CWA contains no definition of a CAFO, which statutorily must be regulated as a point source discharge under the NPDES permit system. EPA uses those classifications to implement and enforce the law in substitution for measurement or monitoring of discharges. EPA’s regulatory scheme is based entirely upon an agency interpretation, not one found in the law. 

1. EPA internal CAFO Permitting Reform Process

EPA has begun its internal assessment of NPDES CAFO permitting reform in earnest with:

• April 30, 2024: EPA appointments to the advisory Animal Agriculture and Water Quality Subcommittee “(AAWQ”), charged with making reform recommendations to EPA; 
• May 30-31, 2024: First AAWQ meeting (Washington, D.C.) 
• August 8-9, 2024: Second AAWQ meeting (Lancaster, PA)

It has been slightly more than one year since EPA announced its internal CAFO Reform effort, and its parameters. EPA included its plan within two August 15, 2023, agency adjudications denying administrative petitions filed by Food & Water Watch and others challenging the continued legal efficacy of the current NPDES CAFO permit regulations. Despite fifteen years of use (last revised in 2008) the petitioners argue that the regulations fail to conform to CWA statutory authority and purposes. It is a relatively safe assumption that this process will likely continue at a slow pace. 

1. Litigation on its way to the U.S. Supreme Court?  

Meanwhile, Food & Water Watch, and the other petitioners, appealed the August 15, 2023, denial of those two petitions to the Ninth Circuit Court of Appeals in Food & Water Watch, et al. v. EPA, No. 23-2146.  That case has now completed:

• All Briefs have been filed by the parties. 
• September 12, 2024: Oral argument conducted (view recording). 

Oral argument is a difficult predictor of an outcome, but questioning during oral argument by the Ninth Circuit panel of 3 judges appeared to be more sympathetic to EPA’s arguments. That is not surprising based upon the heretofore poor track record of success of administrative petitions seeking to force regulation changes.  

Nevertheless, the most important thing about the pending appeal is that the U.S. Supreme Court is the next available appeal. Whichever party receives an adverse ruling, in whole or in part, the outcome at the Ninth Circuit will almost certainly result in a request to the U.S. Supreme Court to grant an appeal and review the legal issue of whether current EPA NPDES CAFO permit regulations should stand as-is, be declared invalid and remanded to EPA for further action, or some permutation of those outcomes as applied to individual provisions.  

The current U.S. Supreme Court has illustrated its interest in becoming involved in cases where it perceives an administrative agency has overstepped its statutory bounds in promulgating regulations and/or has made interpretations not directly supported by the statute on how to fulfill its statutory duties to implement and enforce a statute.

That willingness has been illustrated in full flower in the well-known recent decisions in both Sackett et ux. v. EPA et al., No. 21-454 (reversing EPA’s regulatory scheme for interpreting the statutory term “waters of the United States” (“WOTUS”) under the Clean Water Act) and Loper Bright, et al., v. Raimondo, et.al, No. 22-451 (no longer granting any deference to administrative agency interpretation of how to implement and enforce a regulation when faced with a statute containing an ambiguity).    

Before the U.S. Supreme Court granted an appeal of the Circuit Court of Appeals outcome in the Sackett case in 2022, few, if any, legal observers would have pegged that relatively obscure litigation as the future vehicle for a monumental overhaul of the WOTUS definition in federal law. 

Will this case be the next unlikely vehicle for groundbreaking U.S. Supreme Court intervention in administrative agency regulatory practice?  

Duer, Brook, and Paul Goeringer. “Will the U.S. Supreme Court Be Asked to Send EPA Back to the Drawing Board on CAFO Permits?” Southern Ag Today 4(41.5). October 11, 2024. Permalink

In August 2023, the United States Environmental Protection Agency (EPA) publicly disclosed an ambitious and extensive internal plan to conduct a potentially transformative reform process of NPDES permitting confined animal feeding operations (“CAFO”) under the Clean Water Act. The commencement of this process can best be described as a “soft launch” in that it was first revealed in a relatively obscure agency decision denying an administrative petition pending since 2017.  National attention to this undertaking will certainly grow as it progresses due to its potential, at least on paper, to be the seeds of significant changes to the CAFO permitting and regulatory scheme which has become an integral part of the national agricultural lexicon. 

On March 8, 2017, a group of environmental groups led by Food & Water Watch filed a petition with EPA seeking a complete re-write of the Clean Water Act CAFO permitting system embodied in federal regulations. Petitions seeking changes to federal executive agency regulations are quite common. While very rarely producing the requested relief, they create an agency decision-making process the results of which can be appealed to federal court. This serves to place a particular objective of the petitioners in play with an agency and, most importantly, provides a chance to appeal the results to a federal court which may be more sympathetic than the agency to some portion of the petitioners’ arguments. Generally, those arguments are that a regulation, on its face or as applied, fails to comply with the authorizing legislation’s text. Such was the case in this instance. 

The 2017 Food and Water Watch petition’s first paragraph summarized its contents as follows: “[T]he agricultural sector, including CAFOs, remains largely unregulated and is now the nation’s leading source of water quality impairments. The Agency’s current CAFO regulations are plainly not up to the task of protecting our waterways from industrial livestock operations.” On August 15, 2023, after six years pending and a subsequent October 2022 petition seeking similar relief, the EPA denied both the 2017 and 2022 petitions.   

Within the agency denials, the EPA announced it reform undertaking, which its website currently describes as “a comprehensive evaluation of the CAFO program” which will include “a detailed study of the CAFO effluent limitations guidelines [ELGs] as well as establishing a Federal Advisory Committee, the [Animal Agriculture and Water Quality Subcommittee (AAWQ)], . . . through which a diverse array of stakeholders will help inform EPA’s efforts to improve its CAFO program.” 

Noteworthy text within the EPA decisions included the following:

• “EPA also shares your concern that CAFOs can be a significant source of pollutants into waters of the United States. The Agency recognizes that there may be opportunities to do more to address these pollutants.”

• “Federal and state agency staff, have experienced challenges effectively implementing and assuring compliance with the current CWA CAFO regulatory requirements.”

The EPA’s statements do not read like an agency entirely confident that all is well with the status quo of its enforcement efforts of the Clean Water Act concerning CAFOs. 

Following the August 2023 decisions, the EPA published a Federal Register Notice on November 16, 2023, soliciting nominations to the AAWQ subcommittee by a deadline of January 24, 2024.  Thus far, there has been no further word on appointments.  EPA’s “detailed study” of the CAFO ELGs was in fact previously announced in January 2023.  However, there has been no public evidence of that undertaking being conducted over one year later.   

Meanwhile, the federal courts are now also involved. On September 8, 2023, the EPA’s denials were appealed through the filing of a petition for review with the U.S. Court of Appeals for the Ninth Circuit, docketed at Food & Water Watch, et al. v. EPA, No. 23-2146. American Farm Bureau Federation, National Pork Producers’ Council, U.S. Poultry & Egg Association and United Egg Producers have become intervening parties to that case. Presently, briefing by the parties is slated to conclude by June 1, 2024. A decision could take anywhere from a few months to a few years, and the outcome at the Ninth Circuit (perceived as potentially more sympathetic to the petitioners than the other eleven Circuit Courts of Appeals) remains uncertain. The same could be said about the prospects of any attempt by a dissatisfied party to appeal an adverse outcome to the U.S. Supreme Court (perceived as not sympathetic to the petitioners).  

The coming months or years will tell us how diligently EPA pursues unilateral changes of its own accord in its Clean Water Act enforcement regarding CAFOs, either as presently defined or under a new regulatory design. Over that time, we will also learn whether decisions about the future of EPA’s CAFO regulatory and permitting scheme will be dictated by the federal courts. This effort could alter not only the federal definition of a CAFO itself and how potential surface water discharges of animal production operations are regulated and permitted, but also may include new tools like monitoring or drastically overhauled effluent standards. Any changes at the federal level will assuredly impact each states’ undertakings, where applicable, of NPDES and non-NDPES water quality programs and, most importantly, state budgeting for the same.  

Duer, Brook, and Paul Goeringer. “EPA Made 2023 Commitment To CAFO Permitting Reform But No Action Evident to Date.” Southern Ag Today 4(10.5). March 8, 2024. Permalink

The one-year anniversary date of the current highly pathogenic avian influenza (HPAI) outbreak passed in February 2023 and much of the U.S. agricultural industry hardly noticed. Animal health professionals certainly did as the wild fowl migration which they identified as the trigger of the diseases’ spread was rapidly approaching.  According to USDA’s database of HPAI 2022/2023 Confirmed Detections, January 2023 saw three scattered detections in commercial broilers or turkeys (Iowa, Tennessee and California), and two Kansas gamebird operations. The 2023 Spring months passed and by May 2023, commercial flock detections were zero and have remained so. The current outbreak seems to be at an end for the commercial poultry sector. 

All indications are that the USDA Animal and Plant Health Inspection Service’s (APHIS) HPAI Response Plan, otherwise simply known as “The Red Book,” and all the other USDA policy and guidance documents available to explain how and what USDA does in the event of an HPAI outbreak, served its function exceedingly well in explaining, coordinating and structuring USDA’s activities. For those entities who owned birds euthanized or eggs destroyed in the disease response activities, perhaps the most important USDA activity is that of indemnity (compensation for destroyed property) and compensation (reimbursement for services provided in the virus elimination process on the affected premises). 

This outbreak brought to the surface two key limitations of the current indemnification and compensation process: (1) contract growers without an ownership interest in the birds or eggs destroyed are not eligible despite a complete loss of revenue until production can resume after quarantine restrictions are lifted; and (2) ancillary business operations, e.g. breeders supplying chicks and poults, are not eligible for any compensation due to lost revenue from the cessation of production at infected or other premises under quarantine restrictions. This limitation is induced by the concentric circles of quarantine restrictions that stop product movement not only to infected premises but also to any poultry operation within the entire quarantined control zone imposed around an infected premise, i.e. the  “induced impact” of lost revenue from an infection. 

Relief in one state highly impacted by this HPAI outbreak, Pennsylvania (31 commercial flocks and 4.6 million birds euthanized), came in the form of an appropriation by the Pennsylvania General Assembly (Act 54 of 2022) of $25 million dollars for the “Highly Pathogenic Avian Influenza Recovery Reimbursement Grant” program. Administered by the Pennsylvania Department of Agriculture, it is intended to “provide reimbursement to farms, integrators, and allied industries directly impacted by HPAI. This covers those who incurred demonstrable financial losses due to inclusion in a control or quarantine zone.”  

The program has been the subject to four completed rounds of funding conducted between September 2022 and June 2023, with a fifth round of applications being accepted until October 5, 2023. Losses compensable have included loss of income, payroll costs, costs related to the continuation of group health care benefits and health insurance premiums, mortgage interest payments, rent payments, utility payments, and working capital for the purpose of covering costs of re-opening farming operations after being fully or partially closed due to the state or federally mandated quarantine period. 

A federal bill attempting to address the same gap on a nationwide level, called the Healthy Poultry Assistance and Indemnification Act of 2023, has been introduced as S. 2235 by Senator Chris Coons (Del.).  It is presently in the Senate Committee on Agriculture, Nutrition, and Forestry.  

Time will tell if other states may begin to address this gap or whether a federal solution may be successfully implemented. 

Duer, Brook, and Paul Goeringer. “HPAI in 2023: “Induced” Losses Leave a Gap in the Federal Indemnity Scheme.” Southern Ag Today 3(36.5). September 8, 2023. Permalink