The court of appeals reviews a dismissal for want of subject matter jurisdiction de novo. In doing so, the court of appeals accepts the well-pleaded factual allegations of the plaintiff's complaint and indulges all reasonable inferences in the plaintiff's favor. The appellate court is not wedded to the lower court's reasoning, but may affirm the order of dismissal on any ground fairly presented by the record.
Plaintiff power plant owner applied for renewal of its National Pollution Discharge Elimination System (NPDES) permit and a thermal variance authorization. Defendant U.S. Environmental Protection Agency (EPA) issued a proposed final permit, in which it rejected the requested thermal variance. The owner sought review before the Environmental Appeals Board and asked for an evidentiary hearing. The district court granted the motion on jurisdictional grounds. In a bench decision, it concluded that it was without subject matter jurisdiction because the suit, though billed as a citizen's suit, constituted a direct challenge to the EPA's hearing rule and, thus, came within the exclusive jurisdiction of the circuit court. This timely appeal followed.
Did the EPA improperly fail to grant the owner's request for a formal evidentiary hearing after issuing a proposed final National Pollution Discharge Elimination System (NPDES) permit?
In affirming the district court's decision, the court held that the EPA's conclusion that an evidentiary hearing was not required was a reasonable interpretation of 33 U.S.C.S. § 1342(a) and § 1326(a) and entitled to deference. When a court reviews an agency's construction of the statute which it administers, the reviewing court first must ask whether Congress has directly spoken to the precise question at issue. If Congress's intent is clear, that intent governs, both the court and the agency must give it full effect. If, however, Congress has not directly addressed the question and the agency has stepped into the vacuum by promulgating an interpretive regulation, a reviewing court may not simply impose its own construction on the statute, but, rather, ought to ask whether the agency's answer is based on a permissible construction of the statute. The paradigm, sometimes called the Chevron two-step, increases the sphere of influence of agency action. If congressional intent is unclear and an agency's interpretation of a statute that it administers is reasonable, an inquiring court must defer to that interpretation. That is so even if the agency's interpretation is not the one that the court considers to be the best available interpretation.