Last week, a three-judge panel of the U.S. Court of Appeals for the 2nd Circuit unanimously rejected challenges by environmental and industry groups to the Environmental Protection Agency’s (EPA) Clean Water Act (CWA) cooling water intake structure permit rule (Rule) in Cooling Water Intake Structure Coalition (CWISC), et al., v. EPA, et al. The panel’s ruling upholds the Rule and affirms broad deference to the EPA and wildlife agencies on both their factual findings and legal interpretations.

The Rule was promulgated in August 2014 pursuant to section 316(b) of the CWA to establish the requirements for cooling water intake structures (CWISs) at existing regulated facilities that withdraw more than 2 million gallons of water per day, of which 25 percent or more is used for cooling. In particular, the Rule addresses Section 316(b)’s requirement to use the “best technology available” (BTA) for CWISs to mitigate the entrainment and impingement of aquatic organisms.

Given the Rule’s potential impact on aquatic organisms, the EPA’s development of the Rule entailed an Endangered Species Act (ESA) biological opinion (BO) of no likely jeopardy following consultations with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service (the Services).

The case entailed a number of claims from both environmental and industry groups. Among the important aspects of the panel’s decision is its upholding of the Rule’s case-by-case entrainment approach and agreement that it was permissible to consider a cost-benefit analysis in determining the BTA. In making that decision, the court rejected the environmental group’s argument that BTA for entrainment and impingement should uniformly be closed-cycle cooling for all facilities nationally. The court also upheld the biological determinations associated with the Rule (e.g,, the Services’ BO), finding (largely based on deference) that the jeopardy determination was not improper, the BO did not unlawfully defer the jeopardy analysis, and that the BO and Rule sufficiently establish required ESA processes supporting the ESA determinations.

The panel’s strong deference to the agencies could make any appeal of the case an interesting target for the Supreme Court, if Justice Anthony Kennedy’s departure leads the Court towards increased skepticism of Chevron deference principles.