Environmental organizations (collectively ONDA)[1] brought suit against the United States Forest Service (USFS), alleging USFS violated the Clean Water Act[2] (CWA) by issuing federal grazing permits for areas of the Malheur National Forest without requiring prior certification from the State of Oregon. ONDA argued that pollutants from livestock grazing, a nonpoint source, should be construed as "discharge" subject to the state certification requirements of section 401 of the CWA.[3] Relying on principles of stare decisis, the Ninth Circuit affirmed the district court's judgment on the pleadings, holding the term "discharge" was limited to effluents from point sources and thus did not require certification from the state.

USFS issued a federal permit to Colvin Cattle Company (Colvin) in February 2006, authorizing livestock grazing in areas of the Malheur National Forest. USFS did not require Colvin to obtain certification from the State of Oregon prior to issuing the federal permit. ONDA brought suit against USFS, alleging violations of the CWA, which requires federal permit applicants whose activities "may result in any discharge into the navigable waters" to obtain certification from the state in which the discharge originates.[4] ONDA argued that the USFS-permitted grazing activities caused short- and long-term damage to habitat and resources in the Middle Fork John Day River basin.

The parties disputed whether the term "discharge" is limited to effluents from point sources or whether it "should be read to include the discharge of pollutants from nonpoint sources, such as livestock grazing."[5] The Ninth Circuit previously had addressed the issue in Oregon Natural Desert Ass'n v. Dombeck[6] and held the certification requirement under section 401 of the CWA applied only to point source releases.[7] In that case, the court cited Ninth Circuit precedent and explained that under the CWA, Congress did not directly prohibit discharges from nonpoint sources, such as runoff from farmlands.[8] Further, a cow is "inherently mobile" and therefore not a point source under the CWA.[9]

Given the prior history, USFS responded to ONDA's complaint in this case with a motion for judgment on the pleadings. The magistrate issued findings and recommendations that concluded that collateral estoppel barred ONDA's claim, because ONDA sought to litigate a claim substantially identical to the claim in Dombeck. The district court adopted the magistrate's findings and recommendations and granted USFS's motion.

Reviewing the district court's grant of judgment on the pleadings de novo,[10] the Ninth Circuit analyzed ONDA's claim to determine whether stare decisis principles barred the action.[11] Prior circuit authority may be overruled when an intervening United States Supreme Court decision undermines an existing precedent and both decisions are "closely on point"[12] but not necessarily identical.[13] Where the reasoning or theory underlying circuit precedent is "clearly irreconcilable" with that of higher authority, a panel of the Ninth Circuit may recognize that the higher authority has effectively overruled the prior opinion.[14] On appeal, ONDA argued the 2006 United States Supreme Court decision of S.D. Warren Co. v. Maine Board of Environmental Protection[15] was irreconcilable with the Ninth Circuit's decision in Dombeck,[16] and thus the latter should be overruled.

In S.D. Warren, the Supreme Court considered whether water flowing through dam turbines-undoubtedly point sources-constituted a discharge under the CWA, thereby requiring a company to obtain water quality certifications from the state. The Ninth Circuit distinguished the decision in S.D. Warren by noting the parties in that case did not dispute the contention that "[section] 401 does not cover nonpoint source . . . pollution."[17] The narrow issue for resolution in S.D. Warren was whether a discharge from a point source could occur absent the addition of a pollutant, as from a dam turbine; the Supreme Court did not address the issue of nonpoint source pollution. ONDA argued that S.D. Warren controlled the instant case and urged the court to expand the meaning of "discharge" to include effluents from nonpoint sources. The Ninth Circuit declined, reading the S.D. Warren decision as limited to holding that a discharge need not involve pollutants and could encompass the flow of existing water through dam turbines.

The Ninth Circuit further determined the reasoning in S.D. Warren was easily reconcilable with the reasoning in Dombeck. ONDA argued that because the Supreme Court read "discharge" to include nonpollutants in S.D. Warren, the Ninth Circuit should similarly read "discharge" to include nonpoint sources. The Ninth Circuit rejected this argument, noting that while the former interpretation is supported by the legislative history of the CWA, the latter is not. Although Congress could have chosen to target such nonpoint discharges as generalized runoff, it restricted the federal permit program to point sources. Despite the recognized harmful effects of nonpoint source pollutants, the CWA does not exercise jurisdiction over them.

The Ninth Circuit concluded that the Supreme Court's decision in S.D. Warren was not irreconcilable with Ninth Circuit's analysis in Dombeck. Although the court recognized that "stare decisis does not control the outcome of every case," the instant case raised no new facts or novel changes in the legal landscape to justify a departure from circuit precedent.[18] Accordingly, the court held the term "discharge" was limited to effluents from point sources and affirmed the district court's judgment on the pleadings in favor of USFS.