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Legal Lines
Solutions Elusive in Complex Disputes With EPA
By Beth Card, NEIWPCC
In this edition of Legal Lines, we examine two disputes in detail, both of which illustrate the intense legal conflicts that can ensue when the U.S. Environmental Protection Agency, the states, and other interested parties do not see eye-to-eye on an issue. Courtrooms become the battlegrounds, and the battles are often long—and unpredictable.
Ship Discharges: A Row Over Regulation
Invasive species are a real problem and concern. (Read Susy King’s article on didymo (page 3) for just one example of the threat they pose.) So when Northwest Environmental Advocates, a nonprofit based in Portland, Ore., sued EPA over the agency’s failure to regulate certain discharges from ships—discharges that can and often do contain invasive species—the outcome of the case might have seemed inevitable. What reasonable person, or court, could be against regulating practices that contribute to the growing problems surrounding invasives? As usual when disputes enter the legal world, it was not so simple. This case proved yet again that interpreting a law is often much easier than implementing it.
Recipe for Conflict
In 1999 a number of environmental advocacy groups petitioned EPA asking that the agency repeal regulation 40 CFR 122.3(a), which states that certain discharges incidental to the normal operation of vessels, such as ballast water, bilge water, and gray water, are excluded from National Pollutant Discharge Elimination System (NPDES) requirements. The groups’ main concern was that ballast water is a vector for invasive species and by not regulating the discharge of it, invasive species were being transported at a rapid pace. Nearly four years later, EPA denied the petition, arguing among other things that there was documented acquiescence by Congress to the exclusions. That prompted Northwest Environmental Advocates, the Ocean Conservancy, and Waterkeepers Northern California to file a lawsuit in the U.S. District Court for the Northern District of California.
In March 2005, the district court ruled that EPA had exceeded its authority under the Clean Water Act in exempting vessel discharges from permitting requirements. The court said EPA had acted ultra vires, meaning unauthorized—that is, beyond the scope of power allowed or granted by a corporate charter or by law. Because the Clean Water Act does not authorize the exemptions in 40 CFR 122.3(a), the court ordered on September 16, 2006, that the regulatory exemptions be vacated by September 30, 2008. EPA countered that the order should apply only to ballast water, since it alone was responsible for transporting invasive species. But the court refused, and ordered the regulation vacated in its entirety. EPA appealed the decision to the 9th Circuit Court of Appeals, where several states—Illinois, Michigan, Minnesota, New York, Pennsylvania, and Wisconsin—joined as plaintiffs. At issue was not only the fundamental decision by EPA, but also procedural issues such as whether there was appropriate subject matter jurisdiction in the 9th Circuit. In July 2008 came the decision: the 9th Circuit upheld the district court’s ruling.
In the Meantime…
Even before the appellate court’s decision, EPA had been trying to determine what the district court’s ruling would mean for the NPDES program and how vessel discharges would be defined and ultimately regulated. The implication of the ruling was obvious and onerous: thousands of previously unregulated boats would have to be regulated through the NPDES program in a relatively short period of time. But questions arose about what the term “vessel” meant, about how EPA or states would permit discharges “incidental to the normal operation of a vessel,” and about whether there would be a legislative fix.
In the end, EPA developed two general permits—a vessel general permit and a recreational general permit. A boat’s type, size, and activity would determine which of the two permits it required, with the recreational permit applying to craft as small as kayaks and canoes. Because the court order did not distinguish between discharges of ballast water, bilge water, gray water, and runoff from decks, all had to be covered. EPA published the draft permits in the Federal Register on June 17, 2008, with public comments due by August 1, 2008. In addition, EPA regional offices were contacting states with requests for Clean Water Act Section 401 certifications of the permits. States also have the option of adding conditions to the permits.
The Road to Implementation
So, what now? Over the summer several developments occurred that should ease implementation of the district court’s decision. On July 29, 2008, Senate Bill 2766, a.k.a. the Clean Boating Act of 2008, was passed into law. The act says recreational vessels are not subject to requirements to obtain a NPDES permit, and it directs EPA to evaluate recreational vessel discharges, develop management practices for appropriate discharges, and issue performance standards for those practices. It also directs the Coast Guard to promulgate regulations for EPA’s management practices, with which recreational boaters must comply. On July 31, 2008, President Bush signed Senate Bill 3298, which gives fishing vessels and other boats under 79 feet long a two-year moratorium from NPDES requirements. The bill directs EPA, the Coast Guard, and other interested federal agencies to conduct a 15-month study on the effects of discharges incidental to the normal operation of a vessel.
In addition to the legislative adjustments, a joint stipulation was agreed to by the parties to modify the district court’s September 16, 2006, order so that the exemption for discharges is vacated as of December 19, 2008. All other components of the original order remain intact. While this time extension provided EPA and the states with some breathing room, much still needs to be worked out. Recently, the Association of State and Interstate Water Pollution Control Administrators (ASIWPCA) Legal Affairs Task Force hosted a conference call for states to discuss issues and questions associated with how EPA intends to proceed with issuing these permits, and whether EPA even has that authority in delegated states. There has been a lot of movement toward consensus on this issue, but it is not over yet.
Water Transfers: At Odds Over Permitting
Faithful IWR readers may recall a Legal Lines article in 2004 about the Miccosukee Tribe of Florida and water transfers within the Everglades. This case and the subsequent opinion of the U.S. Supreme Court centered on whether a NPDES permit is required when water is moved from one water body and discharged to another, even when nothing is added to the water in the process.
If you are thinking this was a unique case that was long ago resolved, you would be wrong on both counts. Water transfers are necessary in many situations, including the delivery of drinking water and the irrigation of croplands. In fact, the case in the Everglades was not unique at all; a similar case in New York State was decided by the 2nd Circuit Court of Appeals, with the plaintiff—Catskill Trout Unlimited—successful in its argument that a permit is required when moving water through a tunnel into a trout stream and on to New York City.
While these cases were going on, EPA issued an interpretative memorandum and contemplated rulemaking that exempted water transfers from NPDES requirements. The agency’s interpretation was that movement of pollutants in a water transfer did not constitute an “addition” of a pollutant and therefore a permit was not needed. Attorneys general from several of NEIWPCC’s member states disagreed. They provided detailed comments to EPA and wrote an amicus brief to the U.S. Supreme Court stating, “The Clean Water Act requires a permit where a ‘point source’ conveys water containing pollutants from one distinct water body to another even though the point source is not the original source of the pollutants.”
In the Miccosukee case, the U.S. Supreme Court remanded the issue back to the district court for further fact finding, but that is old news. Just this past summer EPA issued its final rulemaking, which has once again brought water transfers to the forefront.
Rule Revealed
On June 13, EPA’s Water Transfer Rule was published in the Federal Register, to be effective on August 12. While the rule is actually an amendment to an existing regulation, and is quite simple on the surface, its potential consequences are significant. The action pertains to 40 CFR Part 122.3, which is amended by adding the paragraph below.
§122.3 Exclusions.
(i) Discharges from a water transfer. Water transfer means an activity that conveys or connects waters of the United States without subjecting the transferred water to intervening industrial, municipal or commercial use. This exclusion does not apply to pollutants introduced by the water transfer activity itself to the water being transferred.
In a preamble to the regulation notice, EPA stated that “water transfers are not subject to regulation under the NPDES permitting program” because they do not result in the “addition” of a pollutant. But the question of whether a NPDES permit is required for water transfers arises because activities that result in the movement of waters of the U.S. typically do move pollutants from one water body (donor water) to another (receiving water). And the lack of continuity in legal rulings regarding NPDES permits for water transfers points to the complexity of the issue and the problems associated with taking the hard stance on it as EPA was doing.
The concepts in play here involve the phrase “discharge of a pollutant,” which means any addition of any pollutant to navigable waters from any point source. That phrase as well as the term “point source” are clearly defined in the Clean Water Act and their meanings have been solidified in case law over the years. The definition of “addition,” on the other hand, has been questioned as part of the water transfer debate. In its announcement of the transfer rule, EPA noted that several courts have determined that “water flowing through dams and hydroelectric facilities does not constitute an addition of a pollutant under the Clean Water Act.” The notice went on to say, however, that other courts have concluded that “where a water transfer involves a distinct water of the U.S., the transfer constitutes an ‘addition’ of pollutants.” But semantics are not the only issue. EPA’s release of the final water transfer rule brought some practical and legal questions to a head, and sparked a new -challenge.
The States’ Case
Nine plaintiff states, including New York, Connecticut, and Maine, as well as the government of the province of Manitoba, Canada, filed suit against U.S. EPA on October 1. They brought their suit in the U.S. District Court for the Southern District of New York, but also filed a petition for review in the U.S. Circuit Court of Appeals. The reason for the dual filing is that with regard to Clean Water Act rules, EPA claims the circuit courts of appeal have exclusive jurisdiction. By filing in both places, the states protect themselves against a procedural impasse.
The plaintiffs make three allegations: 1) EPA’s promulgation of the NPDES Water Transfer Rule is illegal, 2) the permit exemption is contrary to the goals and purpose of the Clean Water Act, and 3) by exempting water transfers from the NPDES program, the rule undermines the broad purpose of the act, which is to eliminate water pollution. The lawsuit also references previously filed comments to EPA, which state that the rule is “inconsistent with EPA’s obligations under Executive Order 13112, entitled ‘Invasive Species’…which requires, among other things, that each federal agency take all feasible and prudent measures to minimize the risk of harm and not authorize, fund or carry out actions that it believes are likely to cause or promote the introduction or spread of invasive species.” The states contend that EPA ignored the comments of the attorneys general, its obligations under the Executive Order, the decisions of the 2nd Circuit, and the district court opinion in a case called Friends of the Everglades (currently under appeal). The states’ attorneys general feel that is a lot to disregard and is contradictory to the way legal and policy making processes should work.
To be fair, we had yet to see EPA’s response as this issue of IWR went to press, but the agency has previously argued that when the U.S. Supreme Court vacated the 11th Circuit’s decision in Miccosukee and remanded the case back to the district for additional fact finding, it left the issue of water transfers open to interpretation. In the meantime, there is speculation that several western states are likely to intervene in the lawsuit in support of the rule, which is consistent with their programs. Interveners had until October 31 to file their petition.
If the states are successful in their challenge, it will mean that thousands of water transfers will have to be permitted. Conversely, if EPA’s water transfer rule is upheld, there will almost certainly be thousands of incidents of pollutants from one waterbody being transferred to another, without federal regulation. With so much at stake, it will be interesting to see how this case ultimately plays out.
Beth Card (bcard@neiwpcc.org) is NEIWPCC’s director of water quality programs and a licensed attorney in Massachusetts. She also serves as chair of ASIWPCA’s Legal Affairs Task Force.