Streamlining EPA's NPDES Permit Program with Administrative Summary Judgment: Puerto Rico Aqueduct & Sewer Authority V. Environmental Protection Agency

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I. Introduction

Nearly forty years ago, Professor Kenneth C. Davis declared: "Some agencies might well take a leaf from the federal rules of civil procedure and permit summary judgment without evidence when no issue of fact is presented."(1) Several federal agencies have followed this advice by incorporating summary disposition provisions into their regulatory schemes.(2) Under such provisions, an agency may refuse to hold an evidentiary hearing when an applicant is unable to establish a substantial factual or legal dispute in its request for an evidentiary hearing. Similarly, if an evidentiary hearing is granted, an agency may summarily dispose of a particular claim or defense when a party fails to advance an issue worthy of full adjudication. Both applications effectively resolve disputes without expending valuable agency resources or infringing on a party's statutory right to a hearing.

The Environmental Protection Agency (EPA) has promulgated rules adopting both summary determination procedures.(3) Although EPA's use of administrative summary judgment following the granting of a hearing has received little attention,(4) its use to deny a hearing request has been the subject of two First Circuit cases(5) and numerous agency adjudications.(6) This Note focuses on the latter use of the device. Both the First Circuit and EPA look to Federal Ride of Civil Procedure 56 and relevant case law to determine when administrative summary judgment is appropriate.(7) This approach provides both adjudicators and private parties meaningful guidance as to when an evidentiary hearing is necessary to resolve disputes over National Pollutant Discharge Elimination System (NPDES) permits.(8)

Despite rigorous analysis of administrative summary judgment's general tenets, EPA and the First Circuit have glossed over many fine points. This Note addresses potential problems and recommends continued and expanded use of administrative summary judgment when a hearing requester cannot show that an evidentiary hearing would be meaningful. Part II briefly describes the federal summary judgment rule and analyzes the development of administrative summary judgment by various federal agencies. Part III outlines the Clean Water Act(9) and the implementing regulations that provide for administrative summary judgment.(10) Finally, part IV examines additional considerations in applying the federal summary judgment standard in the administrative hearing context.

II. The Judicial and Administrative Summary Judgment Rules

A. Federal Summary Judgment Rule

I. Introduction

In applying administrative summary judgment, many federal administrative agencies look to Federal Rule of Civil Procedure 56 (Rule 56) for guidance.(11) The federal summary judgment rule is intended "to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial."(12) The basis for granting summary judgment is the lack of a disputed issue requiring evidentiary review for resolution.(13) According to Ride 56, a party's motion for summary judgment shall be granted if there is no genuine issue as to any material fact, and the moving party is "entitled to a judgment as a matter of law."(14) If there is a genuine issue as to any material fact, the motion must be denied.(15) A plaintiff or defendant may make a motion for summary judgment with or without supporting affidavits.(16) Although Rule 56 does not expressly provide for a court-initiated grant of summary judgment, it is within the court's power.(17)

Summary judgment, when properly applied, yields increased judicial efficacy and economy.(18) Litigants are spared the necessity of preparing for and executing a full-dress trial.(19) The court is able to reduce its docket and to allocate time and resources efficiently.(20) Even if a motion for summary judgment is denied, the process defines and limits the issues that are eventually litigated.(21)

The decision to grant or deny a motion for summary judgment requires analysis of three, often interrelated, matters: 1) whether the issue is purely legal or factual, or somewhere in between; 2) whether resolution of a specific issue will affect the final outcome of the adjudication; and 3) if questions of fact are involved, whether a reasonable trier of fact could find for the nonmoving party.

2. The of Issue and Value of Full Adjudication

The issues to be resolved at trial range from disputes over basic facts to questions of law. Ascertaining where an issue falls on this factual-legal spectrum partly determines the appropriateness of summary judgment, though this is a particularly difficult exercise.(22) Disputes relating solely to historical facts or credibility of testimony generally require a trial to allow confrontation and cross-examination.(23) When a question of law cannot be addressed until underlying historical facts are resolved, such as whether a contract exists, the issue is described as a mixed question of law and fact.(24) In such cases, disputed facts normally preclude summary judgment.(25) If, however, parties do not contest the facts and the dispute focuses solely upon legal standards, conclusions, or inferences, a trial simply belabors points that could otherwise be settled quickly and painlessly.(26)

In general, pinpointing the location of an issue on the factual-legal spectrum is essential for assessing the appropriateness of summary judgment. In nonjury situations, however, the decision maker's role shifts from identifying the type of issue to appraising the value of full adjudication. In other words, in nonjury situations, including administrative evidentiary hearings, the critical question for determining summary judgment is: Would a complete adjudicative proceeding improve the decision maker's ability to resolve effectively the disputed factual or legal issue?(27)

For example, if the disputed issue is the amount of pollutant discharged on a certain date and only two conflicting monitoring reports of equivalent evidentiary value are available, the issue may be resolved without a trial or hearing because the judge is also the fact-finder. Because demeanor evidence or competing expert opinions are not at issue, an adjudicative proceeding before a judge would add nothing to the decision-making process. Likewise, if the dispute centers solely on a legal issue, the dispute can easily be settled by a decision maker without a formalized adjudicative proceeding. However, when expert testimony is necessary to interpret scientific details of a monitoring report and their credentials may be an issue, summary disposition is inappropriate.(28) In short, absent crucial questions of demeanor evidence or basic facts, dispensing with an adjudicative proceeding through summary judgment is appropriate in many nonjury situations such as administrative evidentiary hearings.(29)

3. Materiality and Genuineness Requirements

Notwithstanding whether an issue is purely legal or whether an adjudicative proceeding would add to the decision-making process, a judge must assess the materiality and genuineness of a dispute. In Anderson v. Liberty Lobby, Inc.,(30) the Supreme Court explained that a nonmoving party must advance a material, factual dispute to avert a motion for summary judgment.(31) If resolution of a factual dispute would not affect the final determination of the claim, the issue is immaterial and summary judgment is appropriate.(32) The materiality of fact depends on whether the underlying substantive law identifies the fact as critical or irrelevant.(33) The materiality requirement applies equally to administrative summary judgment.(34)

In addition to fulfilling the materiality requirement, a nonmoving party must also establish a genuine issue to avoid summary judgment. The Liberty Lobby Court held that summary judgment is precluded when the dispute over a material fact is genuine.(35) A genuine issue exists when a reasonable decision maker could render a favorable verdict to either party under the applicable standard of proof.(36) Accordingly, the test for genuineness has become the standard for assessing summary judgment proof.(37) If it is clear that the nonmoving party cannot prevail at trial, summary judgment should be granted for the moving party.(38) The nonmoving party in the administrative context must also establish a genuine issue to avoid summary judgment.(39) In this context, the burdens of persuasion and production are less problematic.(40)

As admonished by the Liberty Lobby Court, when determining whether there is a genuine issue of material fact, a judge must avoid the temptation to weigh the evidence.41 Weighing of evidence is the exclusive domain of the jury.(42) On a motion for summary judgment the evidence should be viewed in the light most favorable to the nonmoving party.(43)

4. Burden Shifting

Under Rule 56, the moving party must make a showing that it is entitled to a favorable judgment as a matter of law.(44) If the nonmoving party bears the burden of persuasion at trial, summary judgment may be granted solely on the pleadings, depositions, answers to interrogatories, and admissions on file.(45) The moving party may discharge its burden by demonstrating that there is no evidence to support a favorable judgment for the nonmoving party.(46) In this case, to preclude summary judgment, the non-moving party must "go beyond the pleadings" and show specific facts that support a genuine issue for resolution.(47) Failure by the nonmoving party to make the requisite showing will result in summary judgment; however, the court, at its discretion, may give the nonmoving party additional time to make the necessary showing.(48)

B. Origins of Administrative Summary Judgment

I. Avoiding Administrative Adjudication Through Rulemaking

In general, an agency has the discretion to choose between rulemaking and adjudication to establish agency regulations.(49) By choosing to promulgate rules, an agency can obviate some adjudications. To facilitate the efficient allocation of regulatory resources, the Supreme Court has recognized and endorsed summary disposition devices for federal administrative agencies. In United States v. Storer Broadcasting Co.,(50) the Court reasoned that although a statute provided that applicants for broadcast licenses have the right to a full hearing, the Federal Communications Commission (FCC) was not required to review station operations that were contrary to the public interest, because such hearings would be a waste of time.(51) Hence, FCC was not required to grant a hearing to an applicant for a new broadcast license when that party's ownership interest in existing broadcast stations violated the agency's duly promulgated Multiple Ownership Rules.(52) The statutory right to a full hearing was satisfied by agency rules permitting a potential licensee to present an application detailing reasons for a waiver of the rules governing broadcast license limitations.(53)

In Federal Power Commission v. Texaco, Inc.,(54) the Court held that a statutory requirement for a hearing does not proscribe an agency from promulgating rules that, forestall review of meritless claims.(55) When a hearing applicant's case is doomed to fail because an explicit agency rule prohibits the applicant's proposed action, an agency is not required to hold a hearing that would needlessly drain its resources.(56) Thus, according to Federal Power Commission regulations, the agency could reject, without a hearing, a natural gas producer's application for certificate of public convenience and necessity when the application evidenced forbidden price-changing provisions.(57) To grant an applicant's hearing request would lead to proliferation of useless hearings and undermine the goals of the governing statute.(58) Thus, agencies can establish evidentiary threshold rules to balance competing interests in public welfare, agency efficiency, and fairness to private parties.(59)

2. Defining the Limits of Administrative Summary Judgment

The Storer Broadcasting and Texaco decisions established that an agency may deny an adjudicatory hearing when the party requesting the hearing fails to set forth a genuine, issue of material fact,(60) despite an enabling act that required a hearing. The Supreme Court first addressed limits on the application of administrative summary judgment procedures in Weinberger v. Hynson, Westcott & Dunning, Inc.(61) The 1962 amendments(62) to the Federal Food, Drug, and Cosmetic Act(63) required the Food and Drug Administration (FDA) to study the efficacy of all drugs on the market and withdraw marketing approval of any drug that was not effective for its intended use.(64) According to FDA regulations, a drug manufacturer could request a hearing after FDA gave notice of its intent to withdraw the drug's marketing approval; FDA could deny this request if the manufacturer failed to offer substantial evidence, of the drug's effectiveness.(65) The FDA hearing regulations required a manufacturer to submit reasons why its application should not be withdrawn, including an analysis of data supporting its drug efficacy assertions.(66)

In Hynson, FDA had withdrawn Hynson, Westcott & Dunning's drug application without a hearing on the ground that Hynson had failed to advance the requisite substantial evidence, to warrant a hearing.(67) On appeal, the Court, in an opinion by Justice William Douglas, held that Hynson met the threshold standard of substantial evidence and was therefore entitled to a hearing.(68) The Court, however, validated the general use of administrative summary judgment by FDA. In accordance with Storer Broadcasting and Texaco, the Court reasoned that FDA may deny a formal hearing when there is "no genuine and substantial issue of fact" as required by statutory standards incorporated in administrative regulations.(69) The Court continued. We cannot impute to Congress the design of requiring, nor does due process demand, a hearing when it appears conclusively from the applicant's `pleadings' that the application cannot succeed."(70)

The Hynson Court assessed several factors in concluding that a formal hearing may be denied if an applicant does not cross the substantial evidence threshold. First, the Court noted that there was a great number of ineffective drugs on the market; FDA did not have the resources to grant a hearing for every ineffective drug.(71) FDA would simply be unable to fulfill its statutory mandate of removing ineffective drugs from the market …