The past few month has seen a series of important environmental law decisions from various courts across the United States. The following is an overview of two important cases that have been decided in June, 2021 that will affect the agricultural industry on both a national and a state level.

Biofuels Reach the Supreme Court

A lawsuit concerning biofuels was heard by the United States Supreme Court earlier this year, resulting in a decision that will allow small fuel refineries to take advantage of an exemption from a Clean Air Act (“CAA”) requirement for domestic refineries to blend renewable fuels into the transportation fuels they produce, even if the small refinery in question has not used the exemption for some years.

The renewable fuel program (“RFP”) was initially authorized by a series of amendments to the CAA in 2005. The goal of the program is to replace or reduce the amount of non-renewable petroleum-based fuel in use in the United States by requiring most domestic refineries to blend renewable fuels into their product. Nearly all refiners of gasoline or diesel fuel are required to participate in the RFP, except for those that fall into one of the program’s exemptions. One of those exemptions, the small refinery exemption, allows smaller refineries to temporarily comply with the RFP if doing so would pose a disproportionate financial hardship for the refinery. The exemption originally applied to all small refineries from 2005 to 2011, with the option for a small refinery to request an additional two-year exemption from the Environmental Protection Agency (“EPA”) if complying with the RFP would cause a disproportionate economic impact. In 2007, the CAA was further amended with language that allowed small refineries to petition EPA “at any time” for an extension of the exemption.

Hollyfrontier Cheyenne Refining, LLC v. Renewable Fuels Ass’n., No. 20-472 (U.S. 2021) involves three small refineries that initially received the exemption from 2005 to 2011. All three refineries saw the exemption lapse for a period, and then petitioned for an extension of the exemption due to economic hardship. EPA granted the exemptions, after which a group of renewable fuel producers filed suit, claiming that the exemptions should not have been granted. In early 2020, the Tenth Circuit Court of Appeals issued a decision in this lawsuit, concluding that the exemptions should not have been granted because an “extension” of the exemption could only be granted if the initial exemption had never lapsed. For more information on the Tenth Circuit’s decision, click here. Following the ruling from the Tenth Circuit, the small refineries appealed this case to the Supreme Court.

In reviewing this case, the Supreme Court determined that the question before it was whether a small refinery that is able to comply with the blending requirements of the RFP in one year is “forever forbidden” from applying for an extension of the small refinery exemption in any future year. Ultimately, the Supreme Court ruled that a small refinery could apply for an extension of the exemption at any time regardless of whether it had ever let the exemption lapse.

Like the Tenth Circuit, the Supreme Court focused on the word “extension.” The word itself is not defined in the CAA or the regulations implementing the RFP, and where Congress does not provide the definition of a word, the Court will generally give that word “its ordinary natural meaning.” Here, the Court found that “extension” was referring to the lengthening, or increase of a time period. In reaching that conclusion, the Court also determined that the Tenth Circuit “didn’t just hold that an extension means an increase in time – it imposed a continuity requirement.”

According to the Supreme Court, there are multiple instances where the word “extension” is used in a federal statute where the timer on a particular event can “start, run, finish, and then restart.” As an example, the Court referenced the statute granting federal court’s the ability to “extend” a party’s time to appeal an unfavorable ruling “even after the expiration of the time otherwise set for bringing appeal.” 28 U.S.C. § 2107(c). Additionally, the Court noted that on occasion, Congress will indicate that an extension should be “consecutive” or “successive” by using those or similar words as modifiers to suggest a continuity requirement. The absence of any language specifying that the small refinery exemption to the RFP may only be extended if a continuity requirement is met lead to the Court’s conclusion that no such requirement exists.

Following the decision from the Supreme Court, small refineries may apply for an extension of the small refinery exemption from the RFP at any time, regardless of whether that refinery had let the exemption lapse.

Water Quality Permits in Washington State

A state court of appeals in Washington issued a ruling on June 29, ordering the Washington Department of Ecology (“Ecology”) to redraft waste discharge permits for confined animal feeding operations (“CAFOs”). According to the court, the current permits failed to adequately protect groundwater and to take climate change into account. Therefore, the court found against the permits.

Under the Clean Water Act (“CWA”), any discharge of pollutants from a “point source” into navigable water is prohibited unless the discharge occurs in accordance with a National Pollutant Discharge Elimination System (“NPDES”) permit. CAFOS are considered “point sources” and therefore must comply with NPDES permitting requirements. While EPA is responsible for the NPDES program, it can delegate the power to issue NPDES permits to states. In the state of Washington, Ecology is responsible for issuing NPDES permits. Ecology is also responsible for administering a state discharge permit program under Washington’s Water Pollution Control Act (“WPCA”). Under the WPCA, any industrial or commercial operation that discharges either solid or liquid waste into state waters must obtain a permit from Ecology.

In 2017, Ecology issued two general permits for CAFOs under both the CWA and the WPCA. Unlike an individual permit which is issued to an individual facility, a general permit covers multiple facilities that engage in the same kind of discharge activities. The state general permit issued under the WPCA covers discharges from CAFOS into groundwater and prohibits any discharges into surface water. The federal general permit issued under the CWA regulates discharges into surface and groundwater. Both permits include requirements on the amount of pollutants that may be discharged, as well as conditions authorizing some discharge to groundwater from manure storage lagoons, land application of manure, composting areas, and animal pens and corrals provided the facility is otherwise in compliance with the permit.

The environmental plaintiffs in Washington State Dairy Fed’n v. State of Washington, Dep’t of Ecology, No. 52952-1-II (Wash. Ct. App. June 29, 2021) appealed both the federal and state permits, alleging that the permits authorized unlawful discharges and that the conditions failed to protect water quality standards. Among other things, the plaintiffs argued that that the permit conditions did not satisfy the “all known, available, and reasonable methods of prevention, control and treatment” (AKART) requirement imposed by the WPCA with respect to discharges from manure storage lagoons, composting areas, and animal pens and corrals; that the permit conditions did not ensure that discharges from CAFOs would not violate water quality standards; that the permits did not provide for adequate monitoring; and that Ecology failed to consider the effects of climate change when drafting the permits. Ultimately, the courts agreed with the environmental plaintiffs and issued an order remanding the permits to Ecology for rewriting.

Under the WPCA, Ecology is required to ensure that the permit conditions contain technology-based requirements that reflect “all known, available, and reasonable methods of prevention, treatment, and control.” WAC 173-226-070(1). AKART involves use of “the most current methodology that can be reasonably required for preventing, controlling, or abating the pollutants associated with a discharge.” WAC 173-201A-020.5. The court noted that the term “reasonable” in AKART limits Ecology to imposing only those conditions which are “both economically and technically feasible.” Upon review, the court found that while the permit conditions met AKART requirements for animal pens and corrals, they failed to meet AKART requirements for manure lagoons and composting areas. According to the court, Ecology had met AKART requirements for animal pens and corrals because the permit conditions required CAFOs to implement “best management practices” which is one method of establishing AKART. The court went on to conclude that AKART conditions had not been met for manure lagoons because many of the permit requirements, such as limitations on discharges into groundwater, only apply to new lagoons. Existing lagoons would continue to operate and potentially discharge contaminants into groundwater indefinitely. Finally, the court found that AKART requirements had not been met for composting areas because the permit conditions failed to involve the most current methodology for preventing nitrates from leaching into groundwater that could reasonably be required.

Next, the court considered whether the permit conditions would ensure that discharges from CAFOs would not violate water quality standards. The court found that while the conditions relating to surface water would prevent violation of water quality standards. However, the conditions relating to groundwater did not contain adequate water quality-based limitations because a CAFO operator could be in full compliance with permit conditions while still potentially violating groundwater quality standards through discharges from existing manure storage lagoons and compost areas.

The court also agreed with the plaintiffs that the monitoring requirements included in the permits were not adequate. Those requirements including visual inspections for surface water monitoring, soil monitoring for groundwater, and groundwater monitoring under limited circumstances. The court found that those requirements were not sufficient because the visual monitoring of surface water would not involve any actual measuring of what was being discharged, while the groundwater monitoring was only required until limited circumstances. According to the court, none of these requirements would sufficiently monitor whether CAFOs were violating water quality standards.

Finally, the court considered whether Ecology had failed to fulfill a requirement under Washington law that the Department consider the effects of climate change when issuing water quality permit. According to the court, the Washington State Environmental Policy Act places on Ecology a particular responsibility to consider the impacts of climate change when it takes actions such as issuing water quality permits. Ecology admitted to failing to consider climate change when drafting the permits. Therefore, the court found that the requirement to consider climate change had not been fulfilled.

The permits have been sent back to Ecology so that they may be rewritten to reflect the opinion of the court. However, the court did not vacate the permits meaning they will remain in legal effect during the rewriting process. It is currently unclear whether Ecology will appeal this decision. In the meantime, CAFO operators in Washington state should still be covered by the 2017 permits while Ecology works on rewriting. Those CAFOs and dairies that have been operating under the general permits are still in compliance with both the CWA and the WPCA.


To read the Supreme Court’s opinion in Hollyfrontier Cheyenne Refining, LLC v. Renewable Fuels Ass’n., click here.

To read the opinion in Washington State Dairy Fed’n v. State of Washington, Dep’t of Ecology, click here.

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

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