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Dominion Energy Brayton Point, LLC v. Johnson

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What is deference in the context of the administrative state?

Deference, or judicial deference, is a principle of judicial review in which a federal court yields to an agency's interpretation of a statute or regulation. The U.S. Supreme Court has developed several forms of deference in reviewing federal agency actions, including Chevron deference, Skidmore deference, and Auer deference. Learn about state-level responses to deference here.

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Dominion Energy Brayton Point, LLC v. Johnson was a 2006 case decided by the United States Court of Appeals for the 1st Circuit that applied the Chevron doctrine to rule in favor of the Environmental Protection Agency (EPA) on a question of whether the agency had to conduct a formal hearing. The decision overturned circuit precedent from Seacoast Anti-pollution League v. Costle (1978). In the case of ambiguous statutes, the court ruled that agencies would be able to make reasonable decisions about whether to follow formal procedures during hearings. Dominion Energy involved whether the Clean Water Act required the Environmental Protection Agency (EPA) to provide a formal evidentiary hearing, as described by the Administrative Procedure Act (APA), during a certain permitting process.[1]

HIGHLIGHTS
  • The case: Dominion Energy sued the EPA when the agency denied the company a requested evidentiary hearing after disputing the terms of a permit governing the water the company used to cool its electricity generation equipment.
  • The issue: Whether the Clean Water Act's mandate for a public hearing required the formal procedures outlined by the Administrative Procedure Act (APA).
  • The outcome: The First Circuit ruled in favor of the EPA, citing Chevron v. NRDC and saying that the EPA made a reasonable determination that a formal hearing was not required by the Clean Water Act.


    • Why it matters: In Brayton Point, the First Circuit overturned precedent from Seacoast Anti-Pollution League v. Costle in order to apply the Chevron deference doctrine, which the U.S. Supreme Court had established in the 1984 Chevron case. Chevron compels federal courts, in reviewing a federal government agency's action, to defer to the agency’s construction of a statute that Congress directed the agency to administer. Brayton Point empowered agencies to decide whether to follow formal procedures during hearings mandated by ambiguous statutes. The older Seacoast precedent had instructed courts to presume that most agency hearings subject to judicial review required formal procedures.

    Timeline

    The following timeline details key events in this case:

    • March 30, 2006: First Circuit Court decision announced
    • January 13, 2006: Oral argument
    • August 11, 2004: Dominion Energy notified the EPA that it intended to sue the agency under the Clean Water Act
    • July 23, 2004: The EPA's Environmental Appeals Board accepted Dominion Energy's request for a review of the EPA's decision but rejected a request for an evidentiary hearing
    • October 6, 2003: EPA issued a proposed final permit that rejected Dominion Energy's request for a thermal variance

    Background

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    Facts of the case

    For three decades, Dominion Energy Brayton Point (Dominion) received permits to use a cooling system for its electricity-generating facility in Somerset, Massachusetts, that took water from nearby rivers to cool its machinery and then discharged that water into Mount Hope Bay. When Dominion applied for permit renewal in 1998, the Environmental Protection Agency (EPA) rejected the portion of the permit that had previously allowed Dominion to discharge higher-temperature water. Dominion appealed the decision to the Environmental Appeals Board (Board) and requested a formal evidentiary hearing. The Board granted Dominion's appeal but did not conduct an evidentiary hearing.[1]

    Dominion sued the EPA for not holding an evidentiary hearing and the United States District Court for the District of Massachusetts ruled that the First Circuit had exclusive jurisdiction over the case. At issue was whether the EPA had to follow the formal adjudication procedures of the Administrative Procedure Act (APA) while reviewing Dominion's appeal.[1]

    Original circuit standard set in Seacoast

    Before the First Circuit addressed the issues involved in the Brayton Point case, its opinion discussed the way the court had answered similar questions in the past. In 1978, the First Circuit decided Seacoast Anti-pollution League v. Costle, which said that the words "on the record" were not required in a statute to trigger the formal adjudication procedures. The court held that EPA administrator fact-finding when making a permit decision was "exactly the kind of quasi-judicial proceeding for which the adjudicatory procedures of the APA were intended." Whether the APA formal procedures applied to a hearing came down to "the substantive nature of the hearing Congress intended to provide." The opinion in Seacoast went on to clarify that the court would presume that adjudicatory hearings subject to judicial review must be on the record following formal procedures:[2]

    “ One of the developments that prompted the APA was the '(m)ultiplication of federal administrative agencies and expansion of their functions to include adjudications which have serious impact on private rights.' This is just such an adjudication. The panoply of procedural protections provided by the APA is necessary not only to protect the rights of an applicant for less stringent pollutant discharge limits, but is also needed to protect the public for whose benefit the very strict limitations have been enacted. If determinations such as the one at issue here are not made on the record, then the fate of the Hampton-Seabrook Estuary could be decided on the basis of evidence that a court would never see or, what is worse, that a court could not be sure existed. We cannot believe that Congress would intend such a result.


    Our holding does not render the opening phrases of § 554 of the APA meaningless. We are persuaded that their purpose was to exclude 'governmental functions, such as the administration of loan programs, which traditionally have never been regarded as adjudicative in nature and as a rule have never been exercised through other than business procedures.' Attorney General's Manual on the Administrative Procedure Act 40 (1947). Without some kind of limiting language, the broad sweep of the definition of 'adjudication', defined principally as that which is not rule making, 5 U.S.C. § 551(6), (7), would include such ordinary procedures that do not require any kind of hearing at all. In short, we view the crucial part of the limiting language to be the requirement of a statutorily imposed hearing. We are willing to presume that, unless a statute otherwise specifies, an adjudicatory hearing subject to judicial review must be on the record. The legislative history of the APA and its treatment in the courts bear us out.[3][2][4]

    		”

    Outcome

    The United States Court of Appeals for the 1st Circuit affirmed the ruling of the district court dismissing Dominion's case. The opinion was written by Judge Bruce Marshall Selya.[1]

    Opinions

    Opinion of the court

    Writing for the court, Judge Bruce Marshall Selya began with a survey of the changing legal landscape. He argued that the Clean Water Act did not define what a public hearing was when it required the EPA to offer an opportunity for one before it issued a National Pollution Discharge Elimination System (NPDES) permit or thermal variance. Further, he said that the Administrative Procedure Act (APA) § 554(a) did not address whether formal adjudication procedures were required when statutes required public hearings but did not specify whether those hearings had to be on the record. He cited circuit court precedent from Seacoast Anti-pollution League v. Costle in 1978 that held that organic statutes calling for public hearings would be read as requiring a formal adjudication under the APA. After the Seacoast ruling, the EPA adopted regulations that used formal hearings as part of the NPDES permitting process.[1]

    Next, Selya cited Chevron v. Natural Resources Defense Council as "a sea change in administrative law." Chevron deference is an administrative law principle that compels federal courts to defer to a federal agency's interpretation of an ambiguous or unclear statute that Congress delegated to the agency to administer. Selya said that the EPA relied on Chevron deference when it eliminated formal evidentiary hearings from the NPDES permitting process in 2000. The First Circuit opinion then held that Chevron and National Cable & Telecommunications Ass'n v. Brand X Internet Services required the court to re-examine precedents like Seacoast through a deferential lens. It said that the EPA's conclusion that the Clean Water Act did not mandate evidentiary hearings seemed reasonable and deferred to the agency:[1][5]

    “ We summarize succinctly. Although we in no way disparage the soundness of Seacoast's reasoning, the Chevron and Brand X opinions and the interposition of a new and reasonable agency interpretation of the disputed statutory language have changed the picture. Because we, like the Seacoast court, cannot discern a clear and unambiguous congressional intent behind the words “public hearing” in the CWA and because the EPA's interpretation of that term constitutes a reasonable construction of the statute, deference is due. It follows inexorably that no non-discretionary duty to grant Dominion an evidentiary hearing on its permit application exists. Consequently, the jurisdictional requirements of section 505(a)(2) have not been satisfied.


    We need go no further. For the reasons elucidated above, we conclude that the district court did not err in dismissing Dominion's action.[6][1][4]

    		”

    Impact

    The court decided to eliminate its Seacoast presumption that ambiguous statutes calling for a public hearing required compliance with the formal procedures of the APA. In Dominion Energy, the court held that Chevron established a new standard requiring reviewing courts to yield to reasonable agency interpretations of ambiguous statutes. In the case of ambiguous statutes, agencies were empowered to decide whether to follow formal procedures during hearings.[1]

    Melissa Berry, assistant dean for student and career services at the University of Washington School of Law, argued in a 2007 law review article that Dominion Energy was an example of a trend following the U.S. Supreme Court's decision in Chevron to grant deference to agency interpretations of procedural provisions in their enabling statutes:

    “ This trend should end before it gains further support. The rationales underlying Chevron deference-implied delegation and agency expertise-fail to support deference in this context. Moreover, such deference maximizes the opportunity for agency discretion and its accompanying concerns about self-interest while potentially decreasing fairness to regulated parties. Instead of deferring to agencies, courts should interpret statutory procedural provisions using a de novo contextual approach. This approach recognizes the courts' expertise and institutional competence in interpreting statutory procedural provisions as well as the crucial need for procedural formalities to protect individual rights from agency self-interest and arbitrariness.[7][4] ”

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 FindLaw, "Dominion Energy Brayton Point LLC v. Johnson," accessed October 30, 2018
    2. ↑ 2.0 2.1 JUSTIA, "Seacoast Anti-pollution League et al., Petitioners, v. Douglas M. Costle, 572 F.2d 872 (1st Cir. 1978)," accessed October 30, 2018
    3. ↑ Internal citations and quotations have been omitted
    4. ↑ 4.0 4.1 4.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    5. ↑ Bloomberg, "Get Ready, Supreme Court Fans. Brush Up on Your Chevron Doctrine." February 3, 2017
    6. ↑ Internal citations and quotations have been omitted
    7. ↑ Seattle University Law Review, "Beyond Chevron's Domain: Agency Interpretations of Statutory Procedural Provisions," 2007
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