Entergy Corp. v. Riverkeeper, Inc.
556 U. S. ____ (2009) (2009)
Rule of Law:
An agency's decision to use cost-benefit analysis in setting environmental standards is a permissible interpretation of a statute when the statutory language, such as "best technology available," is ambiguous and does not explicitly forbid such an analysis.
Facts:
- Power plants operated by Entergy Corp. and other energy companies utilize 'cooling water intake structures' that draw massive amounts of water from natural sources to cool their equipment.
- This process results in the death of billions of aquatic organisms annually through 'impingement,' where they are pinned against intake screens, and 'entrainment,' where they are drawn into the cooling system.
- Section 316(b) of the Clean Water Act mandates that these intake structures reflect the 'best technology available for minimizing adverse environmental impact.'
- The EPA promulgated 'Phase II' regulations for existing power plants, setting national performance standards rather than mandating the most effective technology, closed-cycle cooling systems.
- The EPA's decision was based in part on the high cost of retrofitting existing facilities with closed-cycle systems (estimated at $3.5 billion annually) compared to the cost of complying with the new standards (estimated at $389 million annually).
- The regulations also included a provision allowing a facility to receive a site-specific variance if it could demonstrate that its compliance costs would be 'significantly greater than the benefits' of meeting the standards.
Procedural Posture:
- Riverkeeper, Inc., along with several states and other environmental groups, filed a petition in the U.S. Court of Appeals for the Second Circuit challenging the EPA's 'Phase II' regulations promulgated under Section 316(b) of the Clean Water Act.
- The Second Circuit granted the petition for review, finding that the Clean Water Act forbids the use of cost-benefit analysis in determining the 'best technology available.'
- The Second Circuit vacated the regulations and remanded the matter to the EPA for further proceedings.
- Entergy Corp., representing the power industry, petitioned the U.S. Supreme Court for a writ of certiorari, which was granted.
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Issue:
Does Section 316(b) of the Clean Water Act, which requires that the design and construction of cooling water intake structures reflect the 'best technology available for minimizing adverse environmental impact,' authorize the Environmental Protection Agency (EPA) to conduct a cost-benefit analysis when setting regulatory standards?
Opinions:
Majority - Justice Scalia
Yes. The EPA’s use of cost-benefit analysis is a permissible interpretation of the Clean Water Act. The statutory phrase 'best technology available' is ambiguous; 'best' does not necessarily mean the technology that achieves the greatest possible reduction in environmental harm, but could reasonably be interpreted as the technology that most efficiently produces environmental benefits. Similarly, the term 'minimizing' is a term of degree and does not unambiguously mean reducing to the smallest amount possible regardless of cost. Because the statute is silent on the specific factors the EPA must consider, unlike other sections of the Clean Water Act that explicitly detail cost considerations, this silence grants the agency discretion rather than implying a prohibition. Therefore, under the principles of Chevron deference, the EPA’s reasonable interpretation of the ambiguous statutory language is entitled to deference.
Concurring-in-part-and-dissenting-in-part - Justice Breyer
Yes. The Clean Water Act's language and history indicate that Congress intended to restrict, but not entirely forbid, the use of cost-benefit comparisons. For three decades, the EPA has reasonably interpreted the statute to permit a cost-benefit consideration where costs are 'wholly disproportionate' to the benefits, and this longstanding interpretation deserves deference. However, the agency's new variance standard, which allows an exception where costs are 'significantly greater than the benefits,' represents a change from its prior standard. The EPA did not adequately explain its reasoning for this change. Therefore, while I agree that cost-benefit analysis is permissible, I would remand for the agency to either apply its traditional standard or provide a sufficient justification for the new one.
Dissenting - Justice Stevens
No. The EPA's use of cost-benefit analysis is contrary to the plain text and structure of the Clean Water Act. The statute's silence on cost-benefit analysis in Section 316(b) should be read as a prohibition, especially because other sections of the Act, such as the one establishing the 'best practicable control technology' (BPT) standard, explicitly authorize it. Congress's decision to include cost-benefit analysis for some standards while omitting it for others, like the 'best technology available' (BTA) standard, demonstrates a deliberate choice to foreclose its use. This 'studied silence,' consistent with precedent like Whitman v. American Trucking Assns., Inc., shows Congress intended for the EPA to prioritize environmental protection over economic efficiency in this context. The EPA's interpretation fundamentally alters the regulatory scheme Congress created.
Analysis:
This decision solidifies the application of Chevron deference to agency interpretations involving cost-benefit analysis in the environmental context. It establishes that unless Congress explicitly forbids the consideration of costs, an agency's reasonable interpretation that allows for cost-benefit balancing will likely be upheld, especially when a statute uses ambiguous terms like 'best' or 'minimize'. This empowers agencies to weigh economic impacts when implementing environmental statutes, potentially leading to more flexible but less stringent regulations. The ruling shifts the burden to Congress to be explicit if it wishes to preclude cost-benefit analysis in future environmental legislation.
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