In 1995, the Environmental Protection Agency (EPA) granted the Confederated Salish and Kootenai Tribes of the Flathead Reservation (Tribes) "treatment as state" (TAS) status under the Clean Water Act (CWA), authorizing the Tribes to set water quality standards for all navigable waterways within their reservation. The State of Montana and others owning land in fee within the reservation challenged this grant of authority. The Ninth Circuit upheld the grant of TAS status to the Tribes, holding that EPA's regulations properly applied the doctrine of inherent tribal authority in extending the Tribes' regulatory authority over nonmembers on fee land within the reservation. The court also denied standing to irrigation districts and individual irrigators who sought to intervene.
Under the CWA, states and tribes that are granted TAS status set water quality standards for waters under their jurisdiction. States and tribes are then charged with certifying that each discharge permit issued under the National Pollutant Discharge Elimination System (NPDES) does not derogate those standards. In this case, Montana argued that that the grant of TAS status to the Tribes allowed the Tribes to set water quality standards that would apply to all emissions within the reservation, including those originating on land owned in fee by nonmembers of the Tribe. Montana claimed that this was an improper extension of the Tribes' authority beyond that necessary for self-governance.
In issuing regulations governing the grant of TAS status, EPA adopted the standard of inherent tribal authority, a standard developed by the Supreme Court to determine when a tribe may regulate nontribal activities. Under this standard, the activity the tribe seeks to regulate must "'serious[ly] and substantial[ly]'" affect "the political integrity, the economic security, or the health or welfare of the tribe." In order to meet its burden under the regulations, a tribe must show that 1) the tribe uses waters located within the reservation, 2) those waters are subject to protection under the CWA, and 3) impairment of those waters would have a serious and substantial effect on the tribe's health and welfare.
The Ninth Circuit held that these regulations properly delineate the scope of inherent tribal authority set forth by the United States Supreme Court in Montana v. United States. In that case, the Court held that absent express authorization by statute or treaty, tribes lack civil jurisdiction over nonmembers' activities on fee land within a reservation. The Supreme Court recognized the following two exceptions to this rule: 1) when nonmembers enter into consensual relationships with tribal members; and 2) when nonmember conduct "threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe." EPA adopted the language of the second exception in its own regulations, taking the view that TAS status represents a form of civil jurisdiction proper only when the conditions of the second Montana v. United States exception are met.
In upholding EPA's regulations, the Ninth Circuit first stated that EPA's choice of standard for granting TAS status was entitled to Chevron deference because the statutory language and legislative history of the CWA are unclear as to which standard should be used to evaluate TAS status. Second, the court held that notwithstanding the deference accorded to the choice of standard, the application of that standard was a question of law to which EPA was entitled no deference because such application "has nothing to do with [EPA's] own expertise or with any need to fill interstitial gaps in the statute." Finally, the court nevertheless held that EPA had not made any material error of law in its application of the doctrine of inherent tribal authority.
In supporting the final holding, the court stated that in requiring the impacts on tribal health and welfare to rise to a "serious and substantial" level, EPA had properly taken into account the Supreme Court's comments on inherent authority in Brendale v. Confederated Tribes & Bands of the Yakima Indian Nation. While Montana argued in the present case that Brendale repudiated the Montana v. United States standard of inherent authority, the Ninth Circuit rejected this argument, noting instead that the holding in Montana v. United States had been reaffirmed recently by the Supreme Court in Strate v. A-1 Contractors. The Ninth Circuit also noted that EPA's finding of serious and substantial threats to tribal health and welfare was supported by Ninth Circuit precedent holding that threats to water rights may invoke inherent authority. Finally, the court explained that its decision was "fully consistent" with the Tenth Circuit's recent holding that the authority to establish water quality standards more stringent than federal standards was "in accord with powers inherent in Indian tribal sovereignty."
On the question of intervention as of right by the irrigators, the Ninth Circuit upheld the district court's holding that the intervenors did not have a protectable interest at stake in this case because they did not hold NPDES permits that would be modified by the Tribes' exercise of TAS authority. The intervenors argued on appeal that their interest in the proceedings derived from 1) an alleged violation of their civil rights by the imposition of the Tribes' standards, and 2) an alleged depression in value of their property caused by the water quality standards. In responding to these arguments, the court held that TAS status would not subject nonmembers to tribal enforcement authority--even if the nonmembers held NPDES permits--because EPA retains authority to issue and enforce permits in federal, not tribal courts. The court also noted that the possible effect on property values was speculative and did not present a protectable interest under the CWA, a statute that pertains to environmental concerns.
 For further discussion of Montana v. United States Environmental Protection Agency, see Regina Cutler, To Clear the Muddy Waters: Tribal Regulatory Authority Under Section 518 of the Clean Water Act, 29 Envtl. L. __ (1999).