The Environmental Protection Agency (EPA) appealed the district court's grant of a preliminary injunction, which prevented EPA from enforcing a July 2000 National Pollution Discharge Elimination System (NPDES) permit application deadline against the City of San Diego. EPA argued that the court lacked subject matter jurisdiction because the letter it sent to the City was not a "final agency action" under the Administrative Procedure Act (APA). The Ninth Circuit agreed with EPA, vacating the district court's judgment and dismissing the City's underlying action.
The City of San Diego operates a publicly owned wastewater treatment facility, Point Loma, which discharges pollutants into the Pacific Ocean. That discharge brings the facility under the regulation of the Clean Water Act (CWA), which required the Point Loma facility to obtain an NPDES permit and meet secondary treatment requirements. In 1977, Congress amended the CWA to allow EPA to modify secondary treatment requirements for facilities that discharge into the ocean. Because the City failed to meet the original deadline to qualify for the modified standards, Congress passed the Ocean Pollution Reduction Act (OPRA), which authorized the City to apply for a modified permit during a 180-day window in 1994. OPRA also required the City to implement four other substantive requirements to qualify for the revised deadline.
The City applied for, and was issued in December 1995, a section 301(h) modified permit. EPA extended the application deadline for renewal of this permit from June 2000 to July 2000. Prior to this deadline, the Mayor of San Diego wrote to the EPA Administrator requesting that the OPRA provisions not be applied to the renewal permit. The City's position was that OPRA only governed the reopening of the initial permit deadline. In response, the EPA Regional Administrator for Region IX wrote a letter stating that EPA interprets the OPRA conditions to remain in effect for the renewal application. The City of San Diego filed suit under the APA, contending that EPA's letter constituted a "final agency action" subject to judicial review and that OPRA did not apply to the renewal application. The district court held that the letter was a
"final agency action" because "it constitute[d] Defendants' definitive position on the applicability of 33 U.S.C. § 1311(j)(5), and create[d] immediate and direct adverse effects on Plaintiff." The district court granted a preliminary injunction preventing EPA from enforcing the July 2000 renewal application deadline, pending a trial. EPA appealed that decision.
The Ninth Circuit concluded that EPA's letter did not constitute a final agency action reviewable under the APA. The court relied on the two-prong test for a "final agency action" stated in Bennett v. Spear: 1) the action must mark the "consummation" of the agency's decision-making process, and 2) the action must be "one by which rights or obligations have been determined, or from which legal consequences will flow." EPA's letter failed both of these requirements. First, the letter was not the consummation of a decision-making process. The court pointed out that the letter itself correctly stated that it did not constitute a "final agency action"; rather, a decision made on the permit application would be subject to appeal to the Environmental Appeals Board (EAB), and the decision of EAB would constitute a "final agency action" subject to judicial review. The letter also failed the second prong of the test, in that it was merely a response to a request made by the Mayor of San Diego. EPA expressed its intention to apply OPRA to the renewal application and encouraged the City to comply, but the letter did not create a legal obligation. Therefore, because EPA's letter was not a "final agency action" subject to judicial review, the Ninth Circuit vacated the district court's preliminary injunction and remanded with instructions to dismiss the City of San Diego's underlying action.
 33 U.S.C. § 1311(j)(5)(B), (C) (1994) (requiring the City to 1) commit to implement a wastewater reclamation program that would achieve a system capacity of 45 million gallons per day, 2) commit to a reclamation program that would reduce the amount of suspended solids discharged into the ocean during modification, 3) show that the modification would remove no less than 80 percent of suspended solids on a monthly average, and 4) show that the modification would reduce not less than 58 percent of biological oxygen demand on an annual average).