Posted on October 9, 2015
Does this make sense to you? Eighteen states petitioned the Sixth Circuit to challenge the new rule adopted by EPA and the Corps of Engineers defining “waters of the United States” under the Clean Water Act. Then the petitioners move the court to dismiss their own petition for lack of subject matter jurisdiction, but at the same time request a stay of the rule. And then, the court acknowledges it may not have jurisdiction but issues the stay anyway! That is exactly what Sixth Circuit did in the case published today.
This case is among many seeking to block the rule. The Clean Water Act confers original jurisdiction upon the circuit courts for challenges to “effluent limitations or other limitations.” But as reported earlier in this space, thirteen states convinced a federal district judge in North Dakota that he had jurisdiction because the WOTUS rule is merely definitional, and neither an effluent nor other limitation.
The court concluded that petitioners have a good chance at prevailing on the merits, that the rule exceeds “guidance” given by the Supreme Court in extending CWA jurisdiction too broadly. The court also indicated that the final rule may have strayed too far from the notice given in the proposed rule in its definitions of jurisdictional waters.
The majority was not troubled by the fact the parties are still briefing subject matter jurisdiction, finding that it had plenty of authority to preserve the status quo pending a jurisdictional determination. The dissent took the view that the proper sequence is to first decide jurisdiction, then decide on a national stay of a rule years in the making. Pants first, then shoes.
Did the majority consider the situation an emergency that required immediate action? No, the court found that petitioners were not persuasive that irreparable harm would occur without a stay, but neither could the court find any harm with freezing implementation of the rule. The reasoning seems to be that we’ve muddled through so far, let’s take a step back and consider all the implications before implementation.
Why do the states prefer to go after the rule in the district courts instead of the circuit courts of appeal? Maybe they believe they can forum shop to find conservative judges and build a favorable body of case law before appealing. Or maybe they believe they can more directly attack the science underlying the rule or otherwise augment the administrative record. Whatever the reasons, the ultimate return of this issue to the Supreme Court will be delayed and the law dealing with regulation of wetland fills will remain as confused as ever.
Posted on September 2, 2015
A whole lot of craziness is going on in federal district and appellate courts all over the country right now. About what? About judicial review of EPA’s recent “WOTUS” rule under the Clean Water Act (CWA). So I can avoid wheel re-invention, see the very recent ACOEL blogs by Seth Jaffe and Rick Glick.
So what’s the problem? You might find a lot to hate about the Clean Air Act, the Resource Conservation Act, the Safe Drinking Water Act, and I could name a few others, but at least they all have one good thing going for them: they all provide in a crystal clear manner that judicial review of EPA’s national rules under those statutes will lie exclusively with the D.C. Circuit. No ifs, ands, buts, or maybes.
For reasons I have never understood (and I have been trying since the 1970s), Congress in its infinite wisdom chose a different path in the CWA. In Section 509, they listed seven types of actions that must be reviewed in a federal Court of Appeal (not necessarily the D.C. Circuit) and left any other type of action to be reviewed initially in federal district court.
Over the years, a lot of mixed case law has developed regarding EPA’s CWA rules that don’t fit neatly within one of the seven types of actions Section 509 has specified for Court of Appeals review. Quite predictably, as reflected in Seth’s and Rick’s recent blogs, three district courts last week reached conflicting results over whether WOTUS fits within the seven types. In its WOTUS preamble, EPA included a discussion about confusion in the courts over the issue and took no position on whether WOTUS should initially be reviewed in a district court or Court of Appeals.
So how crazy is this: right now, we have (1) a ruling from one district court judge in North Dakota finding he has jurisdiction and enjoining EPA from enforcing WOTUS; (2) a statement from EPA saying the agency will honor his injunction only in the 13 States that were plaintiffs in that action; (3) an order from that judge directing the parties to brief the issue of whether EPA has authority to honor his ruling in only those states; (4) decisions from two other federal district judges holding WOTUS judicial review must be brought only in a Court of Appeals; (5) numerous cases filed in several circuit Courts of Appeals that have been transferred (at least for now) to the 6th Circuit; (6) an almost certain EPA appeal to the 8th Circuit in attempt to reverse the North Dakota judge’s injunction; and (7) WOTUS review cases filed in numerous other federal district courts by lots of parties with various motions still pending.
This is early September, and I can’t imagine how this won’t get a lot crazier over the next few months. Congress in its infinite wisdom!
Posted on August 31, 2015
With so many challenges filed in so many venues to EPA’s Waters of the United States or WOTUS rule, it seemed inevitable that some plaintiffs somewhere would find a sympathetic court. And so it is that thirteen states found U. S. District Judge Ralph R. Erickson to preliminarily enjoin the “exceptionally expansive view” of the government’s reach under the Clean Water Act.
This case is interesting from a couple of perspectives. First, Congress conferred original jurisdiction for challenges to EPA “effluent limitations or other limitations” and for permit decisions upon the Circuit Courts of Appeal. In the past two days, district court judges in West Virginiaand Georgiaconcluded they lacked jurisdiction over challenges to the WOTUS rule on that basis. Judge Erickson, however, did not feel so constrained.
The judge found that the WOTUS rule is simply definitional, and neither an effluent limitation nor an “other limitation” on states’ discretion. Further, the judge found that the rule “has at best an attenuated connection to any permitting process.” The conclusion states’ discretion is not affected is a bit odd in that the judge later concludes that the state plaintiffs satisfied all the criteria for a preliminary injunction, including irreparable harm caused by the rule.
Second, Judge Erickson plays on an internecine dispute between EPA and the Army Corps of Engineers in an unusual way. In my first sentence I refer to the WOTUS rule as EPA’s, although the rule was jointly adopted by EPA and the Corps. However, recently leaked internal government memorandaindicate that the Corps disavows much of the technical support and policy choices underlying the rule. Judge Erickson obliquely references these memoranda and seems to rely on them to conclude that plaintiffs are likely to succeed on the merits of their challenge.
Typically, courts are loathe to rely on internal documents of uncertain provenance, as they prefer to leave the government room to openly discuss policies under development without fear its deliberations would be disclosed. But in this case, Judge Erickson notes that he has not been presented with the full record for the WOTUS rulemaking, and so felt justified in citing the Corps memos.
As Seth Jaffe has observed, it seems likely that Judge Erickson’s jurisdictional determination will not stand, and his reliance on the confidential exchanges between the Corps and EPA is a little disturbing. However, his order highlights EPA’s poor management of this rulemaking, which has led to challenges from states, property rights advocates and environmentalists—a kind of anti-EPA trifecta.
As previously noted, EPA released its draft WOTUS rule before the work of the Science Advisory Board was complete, thus raising questions as to the rule’s scientific objectivity. Then EPA seemingly disregarded the technical concerns raised by its rulemaking partner, the Corps. Any WOTUS rulemaking would be controversial, but EPA has unnecessarily raised the bar for public acceptance.
Posted on July 24, 2015
On July 6, in American Farm Bureau Federation v. EPA, a Clean Water Act case involving important issues of first impression, the U.S. Court of Appeals for the Third Circuit upheld the Chesapeake Bay Watershed Total Maximum Daily Load (TMDL) – the largest and most complex TMDL ever issued. This watershed covers 64,000 square miles in parts of Maryland, Virginia, Pennsylvania, Delaware, West Virginia, New York, and the District of Columbia. Its population is 17 million and growing.
Under Clean Water Act Section 303(d), when a water body is not meeting water quality standards, a TMDL must be developed, typically by the state, subject to EPA approval. It specifies the maximum amount of a pollutant that can be discharged to the water body and still meet water quality standards. Under Section 303(e), the TMDL becomes part of a state’s “continuing planning process,” which specifies the measures the state will take to bring the impaired water body into compliance. This plan is designed by the state, with EPA oversight, but EPA has no authority to implement the plan. In addition, the Act does not define a TMDL or spell out exactly what EPA may do to assure achievement of the water quality standards if the plan is not adhered to.
The Chesapeake Bay TMDL was issued by EPA in December, 2010. It was the culmination of over 25 years of unsuccessful efforts by the Bay states and EPA to stem the increasing discharges of nitrogen, phosphorus and sediment which were damaging the water quality of the Bay, causing losses of blue crabs, oysters, and other aquatic organisms – including notably those at the base of the food chain, and impairing a number of uses: commercial, recreational and aesthetic. Because of the interstate nature of the pollution and the complex scientific issues involved, in 2006 the Bay states asked EPA to take the lead in drafting a watershed-wide TMDL, in consultation with them and the public, which EPA did.
In prior blogsI have described the substance and background of the Bay TMDL, the district court decision upholding it and the issues raised on appeal and the large number of amicus briefs from across the country on both sides. In American Farm Bureau Federation, appellants claimed that EPA exceeded its statutory authority by (1) establishing not just the maximum daily and annual loadings of nitrogen, phosphorus and sediment, but also waste load allocations to a number of permitted point sources and load allocations to “sectors” of nonpoint sources (such as agricultural and urban stormwater), (2) specifying target dates for compliance (60% of the necessary measures in place by 2017, and the rest by 2025) and (3) requiring “reasonable assurance” by each state that it is making progress with its plan, to be reviewed at two-year intervals for which “milestones” were to be established.
While the TMDL was in development, interim action has involved an iterative process in which each state developed a “watershed implementation plan” to eventually bring its part of the Bay watershed into compliance, with input from county and local government entities and the private sector. EPA has conducted regular reviews and advised states of any shortcomings. This advice is then discussed, with the states having the final say on implementation measures.
With this background, the Third Circuit first considered the jurisdictional issues of standing and ripeness, which had not been raised by the parties. The court held, as many other courts have, that a TMDL is not a regulation but an “informational tool” which gets implemented when permits are issued or other regulatory measures are taken. If it is not currently impacting anyone, who can have standing to challenge it? The court found that while the TMDL is not itself enforceable, where a petitioner can demonstrate a high likelihood that it will be affected by the implementation that will follow, it has standing. This test was met by the farm community represented by the Farm Bureau. The court then held that the TMDL was ripe for review because it was a purely legal dispute on a well-developed record, and hardship would result to the parties if the merits were not addressed. As the court put it: “If there is something wrong with the TMDL, it is better to know now than later.”
Because the statute neither defines a TMDL nor sets out what EPA must or might do if satisfactory implementation is not undertaken by a state, the court concluded that Chevron deference was warranted so long as EPA’s actions were reasonable and consistent with the purposes of the Act – in this case to substantially improve the quality of the nation’s waters. The court stated, citing extensive case law, that often Congress legislates in broad terms, leaving to the agency the task of filling in the “gaps” based on its expertise and evolving experience. The court then noted that EPA has had regulations in place defining a TMDL as the sum of the loadings from point and nonpoint sources to a water body for over 20 years, they had never been challenged, and had been discussed by numerous courts. The court held this definition reasonable. It further held that since a TMDL is an informational tool, EPA acted reasonably in including loading allocations to point sources and categories of nonpoint sources, especially in light of the interstate nature of the TMDL and the complexity of moving thousands of sources towards compliance with water quality standards.
The court also held that EPA did not err in prescribing target dates (which are hortatory but not enforceable) because Congress clearly intended that water quality standards be achieved with reasonable promptness. Similarly it held that EPA acted within its authority in requiring “reasonable assurance” from the states that they are taking appropriate measures leading to achievement of water quality standards. The court further held that none of EPA’s actions illegally impinged on the rights of the states to make the detailed choices as to which sources to regulate, and how stringently, to achieve the TMDL loadings. Nor did EPA intrude improperly into matters of local land use regulation, which is traditionally the province of the states.
As a result, all of the cleanup and restoration measures being taken throughout the watershed based on the TMDL can continue to go forward, now that the foundation on which they are based is secure. In addition, this decision, by resolving a number of key issues, will provide valuable guidance to practitioners across the country.
Posted on July 10, 2015
The U.S. EPA and Army Corps of Engineers have designated July 13 as the official issuance date for purposes of judicial review of their Final Rule defining the scope of “waters of the United States” or “WOTUS” under the federal Clean Water Act. However, a number of lawsuits have already been filed, including four separate actions brought on behalf of a total of 27 states and a fifth action filed by Murray Energy Corp., a privately held coal mining company.
The lawsuits seek to overturn the Final Rule on several grounds that include:
- Usurpation of state authority over intrastate waters in violation of the Constitution’s Commerce Clause and Tenth Amendment
- violation of the federal Administrative Procedures Act (APA) due to the Final Rule’s allegedly unlawful expansion of federal powers granted under the federal Clean Water Act, as well the arbitrary and capricious nature of the rulemaking;
- violation of the APA’s requirement to provide notice and opportunity for comment on proposed rulemakings, and to properly respond to comments made during the comment period; and
- violation of the National Environmental Policy Act’s requirement to prepare an environmental impact statement for a major federal action significantly affecting the quality of the human environment.
The object of all this attention is a long expected – and expansive – WOTUS interpretation adopted by EPA and the Corps. As reported on this blog site, the rule is controversial; the draft generated over one million comments. For a comprehensive analysis of the draft rule, including the cases leading up to the rule, see the American College of Environmental Lawyers reportfor the Environmental Council of the States.
The Final Rule, which does not change much from the draft, is intended to provide more certainty regarding what is and is not subject to the Clean Water Act’s Section 402 and 404 permitting provisions and its Section 311 oil spill prevention and response provisions so as to reduce case-by-case determinations of applicability. Despite the inclusion of a number of definitions and exclusions, it is doubtful that this goal has been achieved, given the number of new situations where a “significant nexus” determination must be made.
The significant nexus inquiry finds its genesis in Justice Kennedy’s concurring opinion in Rapanos v. United States where Justice Scalia wrote the plurality opinion. According to Justice Kennedy’s opinion, wetlands adjacent to navigable waterways are waters of the United States based on a “reasonable inference of ecologic interconnection” in accordance with the Supreme Court’s 1985 opinion in United States v. Riverside Bayview Homes. However, isolated wetlands or wetlands adjacent to a non-navigable tributary, either alone or in combination with similarly situated lands in the region, [must] significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as navigable” in order to fall within the purview of the Clean Water Act. Rejecting a bright-line test, Justice Kennedy noted that a “mere hydrologic connection should not suffice in all cases” as it “may be too insubstantial . . . to establish the required nexus with navigable waters as traditionally understood.”
The Final Rule broadly defines “tributaries” and “adjacent waters” and classifies them as “per se” jurisdictional waters, along with waters used in interstate or foreign commerce, interstate waters and wetlands, territorial seas, and impoundments of such waters. It also identifies a number of other waters (prairie potholes, Carolina bays and Delmarva bays, pocosins, western vernal pools, and Texas coastal prairies) as navigable waters if they meet the significant nexus test which involves consideration of a number of factors identified in a compilation of peer reviewed scientific reports assembled by EPA.
All of the complaints reference the Supreme Court’s Rapanosdecision, as well as the Court’s 2001 decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, regarding what constitutes a “navigable water”. In particular, they claim that the Final Rule goes well beyond the limits set forth in those decisions, including Justice Kennedy’s “significant nexus” test in Rapanos. Some of the complaints provide pretty convincing arguments on the latter point, and so another “wave” of litigation can be expected. Given that the litigation now extends back 30 years, a paraphrase of that old adage about water – and litigation - being everywhere seems right “on course”.
Posted on July 7, 2015
Since he's much in the news these days, I thought I'd share this story about an encounter of Donald Trump with the Clean Water Act.
Back in 1919, Eugene Meyer (a chairman of the Federal Reserve, the first president of the World Bank, publisher of the Washington Post, and father of Katherine Graham) built a palatial mansion on a 230-acre property in Westchester County, New York (about 40 miles north of New York City) known as Seven Springs. Eventually the property fell into disuse, and in 1996 Trump bought it so that he could build a luxury golf course there, with the mansion as the clubhouse. The land straddled the extremely affluent towns of Bedford, North Castle and New Castle, so those towns' zoning approval was needed. It was adjacent to Byram Lake, which serves as the drinking water reservoir for the much less affluent Village of Mount Kisco. More than one-third of its population is Hispanic.
Crabgrass and dandelions, of course, would be utterly unacceptable at a Trump golf course, so the plan involved the considerable application of pesticides. Mount Kisco became very concerned that the stormwater runoff from the golf course flowing into Byram Lake would contaminate their drinking water. They hired me as their environmental counsel to see if Trump's plan could be stopped. Since none of the golf course was in Mount Kisco, the village had no direct authority. The town of New Castle gave Trump a hard time over traffic impacts, and he decided to give up plans to use that corner of the site for his project. Bedford and North Castle don't rely on Byram Lake for their water and weren't so concerned about the pesticides.
A close reading of the appendices to the environmental impact statement (when laid against state regulations) revealed that pesticide levels in the runoff could exceed drinking water standards under certain scenarios. Trump proposed to address this problem through a novel technology called "linear adsorption systems" that would involve a carbon filtration unit at each of the 18 holes. The land would be graded so that the runoff went into these filtration units, which were supposed to remove the pesticides and discharge clean water into Byram Lake.
No such system had ever been built before, and we didn't know if it would work. We wanted it tested first. A local citizens group made up buttons saying "We're Not Trump's Guinea Pigs," with a drawing of a guinea pig and a red slash through it. The golf course didn't seem to require any state approvals, but I was able to convince the state environmental department that capturing the runoff, treating it, and discharging it through pipes had the effect of converting a sheet flow into point sources, requiring NPDES permits for each discharge point. This afforded us the opportunity to get a public hearing before the state regulators (in which we packed a high school auditorium with Mount Kisco residents worried about their drinking water), and then an adjudicatory hearing at which we pressed the need for a pilot test of the treatment system.
The hearing led to a decision that a pilot test was needed. We then entered into protracted administrative adjudication over the parameters of the pilot test.
All this went on for eight years. Finally, in 2004, Trump gave up the idea of the golf course and decided instead to build a small number of large single-family homes. That residential project involved far less use of pesticides than a golf course, and Mount Kisco was satisfied with it. The NY Daily News covered the story with the headline, "Trump 'Fires' Plan for New Golf Course Over Community Pesticide Concerns."
The local approval process for the homes took many more years, and was punctuated by litigation with the Nature Conservancy over an access easement. Trump now has his approvals but construction of the homes has not yet begun. The property has been mostly idle during all this time, except that in 2009 he rented a portion of the land to some tenants from the Middle East, until it turned out that the tenants planned to erect tents to be used by Muammar el-Quaddafi while he was In New York for a United Nations meeting. When Bedford learned of this, they issued a stop work order because one can't erect a tent in Bedford without a permit, and Quaddafi never visited.
In the end, the environmental impact review process and the Clean Water Act did their jobs, the people of Mount Kisco still enjoy clean drinking water, and the occasional dandelion still pokes its head through the grass. And, notwithstanding all of this, Donald Trump tells us that he is still really, really rich.
Posted on June 19, 2015
On June 12, 2015, EPA’s final rule calling for 35 states and the District of Columbia to revise their regulations on excess emissions during startup, shutdown and malfunction was published. This rulemaking saga dates back to a June 30, 2011 petition filed by the Sierra Club. The vast majority of these regulations have been part of State Implementation Plans (SIPs) since the 1970s or early 1980s. As EPA sets out in the rule, the question of how to deal with emissions during startup, shutdown and malfunction (SSM) has also been the subject of guidance issued in 1982, 1983, 1999, 2001, and now 2015. This is a tough issue.
EPA found that a majority of the states have regulations that impermissibly allow a source to assert affirmative defenses to avoid a determination that excess emissions due to SSM events are violations of the Clean Air Act. Similarly, EPA also concluded that regulations providing discretion to the state agency to determine whether excess emissions are violations are improper. Because such provisions deprive EPA or citizens of the ability to pursue enforcement action, EPA concludes the provisions are impermissible. The preamble also points out that broad SSM exclusions under state law would effectively allow state agencies to usurp the authority given to the federal courts by Congress to enforce SIPs and determine penalties. In response to concerns voiced by the regulated community, EPA emphasizes that sources can assert any common law or statutory defenses they believe are supported by the circumstances when they get to court.
With respect to startup and shutdown provisions, the rule reiterates that different emissions limitations can apply to particular modes of operation and the preamble discusses the use of work practice standards rather than numerical emission limitations. EPA recommends seven criteria as appropriate considerations for States as they consider SIP revisions to address startup and shutdown provisions in response to the SIP Call. The criteria seem designed to encourage a series of source category-specific rules to replace regulatory provisions that apply to all types of emission sources. However, EPA also emphasized that each state has discretion to determine the best means by which to make a revision so long as the revisions are consistent with the Clean Air Act. It remains to be seen how states will choose to respond and the extent of administrative burden this process will impose on agency staff.
Affected states have until November 22, 2016 to respond to the SIP Call. Until EPA takes final action on the SIP submittals, the existing SIP provisions remain in effect. SIP calls were issued for Maine, Rhode Island, New Jersey, Delaware, District of Columbia, Virginia, West Virginia, Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Illinois, Indiana, Michigan, Minnesota, Ohio, Arkansas, Louisiana, New Mexico, Oklahoma, Texas, Iowa, Kansas, Missouri, Colorado, Montana, North Dakota, South Dakota, Arizona, California, Alaska, and Washington.
Posted on June 8, 2015
On May 5, 2015, the Wisconsin Department of Administration (WDOA) released its Preliminary Determination that compliance with the Wisconsin water quality-based effluent limitations (WQBEL) for phosphorus will cause “substantial and widespread adverse social and economic impacts on a statewide basis”, thus providing the foundation for availability of a statewide multi-discharger variance (MDV).
What brought this on?
In posts in 2011 and 2013, I described Wisconsin’s phosphorus reduction rule, including its compliance options of water quality trading and adaptive management. Recognizing that these innovative compliance alternatives to traditional construction are not viable for all dischargers, in 2014 Wisconsin enacted legislation to authorize a statewide MDV for those dischargers that cannot meet the WQBEL for phosphorus without a major facility upgrade. Under the MDV, a point source will have more time to meet its phosphorus limitations. However, during the extended period, they will be obligated to either implement nonpoint source reductions or to provide funding to counties to implement existing, but seriously underfunded, nonpoint source reduction programs. The expectation is that most permittees will choose to fund their local county. At $50/pound for the difference between the actual pounds of phosphorus discharged and the target value of 0.2 mg/L, we are talking about real money.
The MDV legislation required the WDOA, in consultation with the Wisconsin Department of Natural Resources (WDNR), to conduct a study to:
“determine whether attaining the water quality standard for phosphorus . . . through compliance with water quality based effluent limitations by point sources that cannot achieve compliance without major facility upgrades is not feasible because it would cause substantial and widespread adverse social and economic impacts on a statewide basis.”
Based on work conducted by ARCADIS, The University of Massachusetts Donohue Institute, and Sycamore Advisors, consultants to WDOA and WDNR, the Preliminary Determination concludes that, without this variance:
· “almost 600 Wisconsin businesses will be impacted as they continue to work their way out of the recession”
· Wisconsin communities will experience a minimum cost of “$3.4 billion in capital expenditures which will rise to nearly $7 billion when accounting for interest” to meet increased capital costs
· Annual operations and maintenance (O&M) cost of $405 million along with debt service will “equate to $708 million annually”
· In 2025 when the full impact of the costs will be felt, statewide impacts will result in:
o 4,517 fewer jobs
o $283.3 million in foregone wages
o $616.6 million reduction in gross state product
o 11,000 fewer Wisconsin residents
A hearing on the Preliminary Determination was held on May 12, and written comments are due by June 11. The next step is for WDNR to submit a request to the United States Environmental Protection Agency (USEPA) to approve the MDV for phosphorus for Wisconsin. Once implementation of the MDV begins, much-needed nonpoint source funding can begin to flow.
Additional relevant documents are accessible via the WDNR website.
Posted on May 28, 2015
Today EPA and the Army Corps of Engineers released a prepublication version of the final rule defining “waters of the United States,” the jurisdictional trigger under the Clean Water Act. The term needs defining because the Act extends to navigable waters and adjacent wetlands, but it is often not clear how some streams or wetlands relate to a navigable waterway, and the Supreme Court has provided conflicting guidance.
So, the agencies have attempted to clarify. With the new definition they hope to reduce the number of case-by-case jurisdictional determinations and litigation, but they understand full well the controversial nature of the rule, having received over a million comments on the draftpublished on April 21, 2014. In response, EPA and the Corps today also released a battery of public relations offerings—press release, fact sheets, blogs, op-ed pieces—to explain and defend the rule. The controversy will not end here.
As previously reportedin this space, the impetus for the rule is uncertainty created by a 2006 Supreme Court decision in Rapanos. In that case, a 5-4 split Court held that the government had overstepped its authority, but failed to issue a majority opinion. Instead, four justices, led by Justice Scalia, proposed a rule in essence requiring that the subject waters or wetlands be free flowing and obviously wet. The concurring opinion by Justice Kennedy would instead look for a “signficant nexus” between a wetland and a navigable waterway. The lower courts have struggled ever since to discern a clear jurisdictional definition.
At first glance, the final rule does not veer much from the draft. For a comprehensive analysis of the draft rule, including the cases leading up to the rule, see the American College of Environmental Lawyers reportfor the Environmental Council of the States. Although EPA and the Corps have declared that the rule does not represent a major policy shift, a diverse ACOEL writing team—made up of experts in academia, non-profit organizations, and private practice—had differing opinions. Some saw a sea change in federal policy, while others believed the draft rule was simply a restatement of existing policy.
Congress has been fulminating about government overreach since the draft rule was published. On May 12, 2015 the House passed HR 1732, the Regulatory Integrity Protection Act, in an effort to block the final rule. If the Senate passes the bill, Congress will need to muster the votes to override a certain presidential veto.
Although the purpose of the final rule is to provide some certainty as to the scope of Clean Water Act jurisdiction, it is highly likely to be challenged by industry groups in the courts. That means years of litigation and appellate review across the country, ultimately landing once again before the Supreme Court. Whether we get clarity this time from the Court remains to be seen.
Posted on March 17, 2015
In a decision that may end a 13-year battle over wetlands jurisdiction, the Fourth Circuit on March 10 upheld the U.S. Army Corps of Engineers findings that a 4.8 acre wetland had a “significant nexus” to navigable waters under the Clean Water Act. Of importance to future challenges, the court deferred to the Corps’ rather ordinary wetlands evidence, despite contrary evidence from a developer of a proposed planned unit development in Chesapeake, Virginia.
The Precon case spanned the 2006 Supreme Court decision in Rapanos v. United States, when Justice Kennedy introduced the jurisdictional standard of “significant nexus.” For a refresher, a “significant nexus” between wetlands and navigable waters exists “if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’”. For previous posts concerning CWA jurisdiction, see here and here. The Fourth Circuit previously had found a “nexus” between Precon’s 4.8 acre wetland and navigable waters seven miles away and allowed aggregation of the Precon’s 4.8 wetland acres with a region of 448 “similarly situated” wetlands, but remanded for application of the “significant” aspect of Justice Kennedy’s test.
CWA jurisdictional groupies watched the Precon case as among the first to involve evidence demonstrating jurisdiction under the “significant nexus” test and the only decision to be remanded for a showing of “significance.” Evidence was presented, experts disagreed, and the court deferred to the Corps. On the key point of “significance,” the decision found neither arbitrary nor capricious the Corps’ findings of water flow. In addition, the court deferred to the Corps’ showing of wetland functions in relation to the navigable water, particularly water quality (dissolved oxygen) impairments to the Northwest River, which are reduced by the carbon sequestration of retained organic matter by the aggregated wetlands. The court also found credible the Corps’ qualitative evidence of habitat use by common species (deer, squirrels, amphibians).
The take-away: If a “nexus” is “significant” based on a showing of general relationship of wetland functions to downstream receiving water impairments and common wildlife (wetland and non-wetland) usage, it is hard to imagine a wetland failing to be held jurisdictional when aggregation is allowed. Counsel for Precon indicates it will seek en banc rehearing and may seek certiorari, so there may be yet another chapter to this saga.
Posted on February 26, 2015
The internet and social media have changed our lives in subtle and not-so-subtle ways. Many of these changes are good. Agencies offer an amazing array of information about their work and achievements on environmental issues. Environmental NGOs and law firms provide websites and electronic newsletters with breaking news and hot topics in the environmental arena, catching our attention and educating us on important developments. So today, everything seems to be just a click away. (When was Ginger Rogers born anyway? And when did she and Fred star in Top Hat? When will the EPA and the Corps finalize the “waters of the U.S. rule”?) At any rate, information on environmental law and environmental issues is available faster than most of us would have dreamed when we began practice, and this on-demand on-line information is helpful.
Nevertheless, generally there are costs associated with benefits, and downsides as well as upsides to developments. The sheer volume of information available online can be overwhelming. Online research often leads to more questions and more research, creating confusion similar to a discovery response providing too many boxes of documents. Managing and using voluminous and rapid-fire information can be difficult. Moreover, the online and always “on” orientation can create heightened expectations – both by the public and clients. The general sense has become that anything can be found online in an instant. (How many movies did Fred and Ginger make together anyway?)
The goal of transparent government means agencies (including federal, state, and local agencies) make substantial information available on the internet. The Freedom of Information Act of 1966 (FOIA) is by no means the only -- or even the primary -- tool for gaining information about the government. The Federal Register provides a wealth of information. Created in 1935, 44 U.S.C. § 1501, et seq. (2012), the Register now provides online access to virtually all agency decisions. Additionally, numerous websites offer information on agency programs, processes, and enforcement actions, all without the need of filing a FOIA request. For example, the U.S. Environmental Protection Agency (EPA) website provides scientific information relevant to environmental statutes, and extensive information on regulatory initiatives. See, e.g., Environmental Protection Agency, Climate Change Science. The EPA also gives specific guidance on how to submit a FOIA request. See Environmental Protection Agency, Freedom of Information Act (FOIA).
Agencies invest substantial resources in the internet generally and social media in particular. Necessarily the commitment to online access involves a cost, both in terms of expenditures and agency resources. Recently EPA began using blast emails to get its message to the public on particular initiatives and to poll the public about environmental protection measures. See, e.g., Thunderclap; Thunderclap, I Choose Clean Water, (Sept. 29, 2014) (showing EPA as organizer of the Thunderclap poll).
A dramatic recent example of the use of social media is found in the proposed rule on the “waters of the United States” (often referred to as “WOTUS”). In April 2014, the EPA and the U.S. Army Corps of Engineers (Corps) published a proposed jurisdictional rule on waters of the United States for notice and comment. The rationale of the proposed rule rests in significant part on the principles articulated by Justice Kennedy in his concurring opinion in SWANCC and asserts jurisdiction (by category under the rule) based on a determination that the nexus, alone or in combination with similarly situated waters in the region, is significant based on data, science, the CWA, and case law. ACOEL and many other organizations and individuals commented on this important rule. For a full exploration of the commenting process on the proposed WOTUS rule, see the article Social Media: Changing the Landscape of Rulemaking, by Nina Hart, Elisabeth Ulmer, and Lynn White, which will appear in the summer edition of Natural Resources & Environment. The article reports on the increased use of social media in the rule making process, the dramatic number of comments submitted on the high-profile and contentious issue of classifying waters of the U.S., and the difficulties for the agencies in trying to respond to so many comments.
While the difficulty of limited agency resources is nothing new, recent news coverage highlights the issue in the modern context of tight budgets. An example is found in the disappointing pace of EPA delay on the important work of listing toxic substances (showing EPA’s work of assessment of toxic chemicals has fallen below the pace set by the Bush administration).
This is not to say that the burden of evaluating comments in one office of EPA is the cause of the shortfall on toxic chemical assessment in another. Moreover, the difficulties of setting agency priorities and allocating scarce enforcement resources are new to no one. Nevertheless, he challenges for EPA and other agencies in using the tools of the online age, including social media, are real. As a practical matter, agencies need to give serious thought to reinventing government in the sense of using the technological tools to manage the growing flood of information. Significant study will be required for agencies to fulfill the mission of educating and informing the public, managing data, and taking input seriously, all while meeting their statutory missions.
Posted on February 25, 2015
As a result of a change in ownership of the Pawtucket, Rhode Island Red Sox, the AAA farm team for the Boston Red Sox, there are plans to move the team to Providence to a proposed new stadium hard by the Providence River. Apparently, the proposed stadium will be designed so that home runs hit over the right field wall will land in the River - comparable to home runs hit over the right field wall at the San Francisco Giants’ ball park into McCovey Cove in San Francisco Bay.
However, there is growing opposition to the proposed stadium location, among other things. It is not inconceivable that opponents will take whatever steps they deem necessary to stop the use of this valuable urban redevelopment land for the stadium. And the discharge of “discarded equipment” or “solid waste” – i.e, a baseball hit over the right field wall – into the River without a permit from the Rhode Island Department of Environmental Management (RIDEM) could lead to an enforcement action against the team that no one would anticipate or want.
Such a notion is not as far-fetched as one might surmise. I was involved in a matter a few years ago concerning skeet shooting activities where the “clay” targets were sent out over the water to be shot. RIDEM took the position that such activities – even with non-toxic shot and biodegradable targets – required a permit under the Rhode Island Pollutant Discharge Elimination System regulations. And such permit was ultimately denied for various reasons.
So the team owners might want to talk to RIDEM about a permit for home run baseballs landing in the River. Given the proposed design of the stadium, this would not be a random occurrence but could occur on a regular basis due to the stadium design. Would the stadium be viewed as a point source? Otherwise, the team (or its fans) may have to patrol the River in a boat before and during each game to retrieve the home run baseballs or even put up a net on top of the wall.
Posted on January 28, 2015
Caligula was the cruelest and craziest of a string of deranged Roman emperors. Among his meanest and most irrational acts was to have edicts carved at the top of tall columns and then punish unsuspecting violators, who had no way to decipher the obscure laws etched far over their heads. For this and other cruel acts, he was killed by his own Praetorian Guards.
For all its virtues, American environmental law has traces of this same sort of lunacy and unfair lack of certainty and notice to its regulated citizens. Examples include the chronic uncertainty, after over three decades, about what constitutes a “solid” or “hazardous waste” under RCRA, our basic waste management law, and what constitutes a “major modification” that triggers the onerous PSD Program of the Clean Air Act.
Nowhere is this uncertainty more glaring than in the Clean Water Act (CWA). More than 40 years after its passage, what constitutes a vaguely-defined “water of the U.S.” regulated under the Act is now murkier than ever. At this juncture, however, EPA and the Army Corps of Engineers have a unique opportunity to provide clarity, certainty, and consistency to this key concept by taking three critical actions that would (1) properly clarify by rule the nature and scope of CWA-regulated waters; (2) clearly describe the process for making and also tracking “jurisdictional determinations” made under such rule; and (3) provide affected parties the right to seek prompt judicial review of any final approved determination.
EPA and the Corps have undertaken the first key task by an ongoing rulemaking set to be completed in 2015. While aspects of the agencies’ initial proposed rule were problematic, calls by some quarters to ban or “ditch the rule” altogether are misguided. EPA and the Corps already have on the books vague rules defining regulated waters that are inconsistent with the Supreme Court‘s 2006 Rapanos decision and subsequent case law, and it is in no one’s interest simply to maintain the current status quo of uncertainty and inconsistency. As Chief Justice Roberts emphasized in Rapanos, if the agencies had adopted reasonable rules clarifying the scope of regulated waters a decade ago, as originally planned, the confusing result in Rapanos would likely have been avoided.
In finalizing such rule, however, the agencies should recall that their role and legal duty is to identify and implement the intent of Congress under the 1972 Act, not embark on a policy making exercise about what additional areas should be regulated as a matter of public policy. They should also strive to increase, not decrease, the clarity and certainty of what constitutes regulated wetlands and other waters. For example, aspects of the proposed rule properly and helpfully exclude groundwater and minor ephemeral drainages but then elsewhere create confusion and inconsistency by suggesting that subsurface hydrologic connections and overly broadly defined tributaries can still make an area jurisdictional. Overly expansive proposed approaches to determining “adjacency” and aggregating numerous small areas for their cumulative nexus to downstream navigable waters similarly increase, rather than lessen, the current regulatory confusion and uncertainty. Whether the pending rulemaking is a helpful clarification, or just yet another Caligula’s column, depends on how the agencies resolve those and other problematic provisions in the final rule.
The agencies should also use this occasion to develop a specific process and procedures for making approved “jurisdictional determinations (JDs)” under the final rule. That process should include improved procedures for regulated entities to present evidence that an area is not a “jurisdictional water” under the Act, and for the agencies to track and publically post all final approved JDs as they are made, so they can be used to ensure consistency and inform the public about past determinations in an area.
The third critical fix to make this JD process fair and transparent is to provide that final agency jurisdictional determinations are subject to judicial review. The Corps’ rules already provide for an administrative appeal of approved JDs, as well as proffered or denied 404 permits. 33 CFR Part 331. Inconsistent with that appeal process, however, the Corps and EPA have taken the position that their final decisions on JDs, unlike permitting decisions, are not judicially reviewable “final agency actions” under the Administrative Procedure Act (APA). The 5th Circuit agreed with that position in July 2014 in Belle Company, LLC v. U.S. Army Corps of Engineers, which is subject to a pending Petition for Certiorari to the U.S. Supreme Court. In a pending appeal of this issue before the 8th Circuit in Hawkes Co. v. U.S. Army Corps of Engineers, two judges during oral argument on December 11, 2014 indicated disagreement with Belle, suggested the agencies’ position is inconsistent with the Corps’ administrative appeal rules, and described this claimed exemption from judicial review as “government by regulatory tyranny.” An eventual adverse ruling by the 8th Circuit would greatly increase the odds of the Supreme Court granting certiorari in the Belle case or later in the Hawkes case. The agencies could avoid that uncertainty and the cost, effort, and risk of litigating this issue before the Supreme Court by simply confirming by rule that final approved JDs are final agency actions subject to judicial review under the APA. That confirmation would be consistent with the Corps’ administrative appeal rules and the Supreme Court’s 2012 ruling in Sackett v. EPA, which held that EPA compliance orders (that have a parallel practical effect) are subject to judicial review.
EPA and the Corps are at a crossroads. They can decide to make the definition and identification of jurisdictional “waters of the U.S.” subject to the Clean Water Act clear, consistent, based on Congress’ original intent in 1972, and subject to prompt, objective judicial review. Or, they can decide to keep that process complex and ambiguous, expanded beyond Congress’ original intent, determined case-by-case in the varying judgment of agency personnel, and unreviewable by any court – in effect etched on a proverbial Caligula’s column. The choice should be clear. It’s time to knock that column down.
Posted on November 17, 2014
November 1967: The Moody Blues release their second album, Days of Future Passed, said to be an influential work of the countercultural, psychedelic era. May 2014: Wolverine goes back in time to rally the X-Men against the Sentinels in Days of Future Past. In between: Ed Muskie and Leon Billings roamed the Earth, particularly the U.S. Senate, and modern-day environmental law was born and thrives.
2014 also is the centennial of the birth of Muskie in the old mill town of Rumford, Maine. On November 15, almost exactly 47 years after release of Future Passed, Harvard Law Professor Richard Lazarus and Leon Billings, Senator Muskie’s former chief of staff, spoke on a panel looking back and to the future of laws like the Clean Air and Water Acts that were unanimously passed by the Senate through the guidance of Muskie and Billings.
Billings spoke of how what Muskie was able to shepherd through Congress and into law involved concepts still pervasive and taken for granted today—such as private attorneys general, nondegradation, open decision-making, the public’s right to breathe healthy air and removal of the right to pollute. He described Muskie’s insistence of and ability to achieve bipartisanship, with allies for the CAA and CWA efforts including such Senators as Baker, Eagleton, Cooper, Bayh, Boggs and Dole, as well as the exhaustive efforts to fully vet and document the need for legislation. For example, for the CWA the Senate Committee held 33 days of hearings with 1721 witnesses, 470 statements and 6,400 pages of testimony, followed by 45 sub-or-full-Committee markup sessions and 39 Conference meetings.
Billings then focused on two concepts that he said demonstrate Muskie’s ability over 40 years ago to look to the future. The first, “waters of the Unites States” grew out of the Senator’s knowledge of the 1899 Refuse Act; he successfully convinced his colleagues that the Act supported a broad view of “waters of the US” to include, for example, wetlands. Since then, the Supreme Court has gone “at least as far as we had expected, and more broadly than we could have hoped”, said Billings.
The second concept is that of climate change and the Clean Air Act. Billings was very clear: Section 111(d) was no accident, is not being misinterpreted, and Muskie intended there to be a legislative basis for then-unknown or undefined pollution problems like CO2, what Billings now calls the “epitome of the precautionary principle”. The phrase “selected air pollution agents” almost never made it out of the House-Senate Conference in December 1970, but a compromise was struck so late at night it never made it into the Conference reports. And while no one then envisioned CO2 and climate change, Billings said that if Muskie were alive when the Supreme Court ruled in Massachusetts v EPA that CO2 is a pollutant, he would have said, “Why do you think I put that provision in there in the first place?”
Richard Lazarus then spoke of Senator Muskie’s enduring legacy in the courts as the font of legislative intent underlying many environmental laws, including frequent references to Muskie in court opinions and during oral arguments at the Supreme Court. He also demonstrated that while President Nixon did sign the bills authored by Muskie and had the label of being an environmental President, in fact he was largely using the issue for a short time as a defensive measure to cut off Muskie’s prospects as a potential 1972 Presidential candidate. Richard then showed slides of handwritten notes made by Nixon’s Chief of Staff, H.R. Haldeman of three discussions with the President: in February 1971, even when they thought environmental protection “has to be done”, at the same time they thought it “is not worth a damn”; in June “should take on environment—it’s not a sacred cow”; and by July 1971 they wanted to put the “brakes on pollution bills…when we can without getting caught”, and to “reexamine all pollution bills in terms of current economic impact”.
Richard also discussed the current EPA rulemaking under 111, especially referencing the term “best system of emission reduction”; EPA’s June 2014 legal memorandum in support of its rulemaking proposal used Senator Muskie’s own words concerning “system” as encompassing the potential for emission reductions to occur outside the fence, and to include more than just controls. He said that for EPA, Muskie is its “Mr. Clean”.
During Q&A, both panelists discussed the partisanship of the past 10-20 years contrasted with during Muskie’s era. Billings mentioned how during Muskie’s opening presentation of the Clean Air Act on the Senate floor, the presiding officer was Senator Barry Goldwater, who sent down a note (now lost to history) saying, “Ed, that is the finest speech I think I have ever heard on the floor of the U.S. Senate.” Turning to NEPA, the concept of an” environmental impact statement” developed through a personal compromise Muskie struck with Senator Jackson.
Afterwards I asked Billings, “If Ed Muskie and you were in the Senate now, what would you be doing?” He said, “If we were the majority party, holding a lot of oversight hearings to bring in all the scientists and evidence; if the minority party, writing speeches.”
And that is how the Past (or Days Passed) in Environmental Law still have major force in today’s many controversies. Oh, by the way: The Moody Blues recently released a new box set, “Timeless Flight”, and are still touring. Long live rock and environmental laws!
Posted on October 28, 2014
Many Clean Water Act practitioners will have their eyes on the Third Circuit on November 18 when oral argument has been set on an appeal from a decision upholding EPA’s issuance of a multi-state Total Maximum Daily Load (TMDL) for the Chesapeake Bay and its tributaries. The Chesapeake Bay TMDL, issued in December, 2010, is the biggest EPA has ever set, covering parts of 6 states and the District of Columbia. As I reported in a blog article a year ago on September 13, 2013, in a 99 page decision the Middle District of Pennsylvania upheld the TMDL against numerous challenges by the American Farm Bureau Federation, other agricultural trade associations and the American Home Builders Association. Those organizations appealed, and a flurry of intervenor and amicus briefs have been filed on both sides.
The issues raised by the appellants are whether EPA exceeded its statutory authority when (1) it set pollutant allocations for nitrogen, phosphorus and sediment on a watershed-wide basis, and then, by agreement with the states, subdivided them by state and by major river basin; and (2) it insisted that states provide “reasonable assurance” that they would implement measures reasonably calculated to achieve compliance with the TMDL within agreed-upon timetables.
As described in the district court decision, the Chesapeake Bay TMDL has a long history, including more than 25 years of cooperative but unsuccessful efforts by the Bay states, working together and with EPA, to design and implement programs to reduce the large amounts of nutrients and sediment flowing annually into the Bay. This pollution has contributed to the decimation of oysters, blue crabs and other fish, destruction of hundreds of acres of bay grasses, and significant economic, recreational and cultural losses throughout the watershed. Because of the inherently interstate nature of the pollution, and the inability of one state to stem pollution in another state, the states in 2007 asked EPA to set a multistate TMDL, which EPA did. At the heart of the legal dispute are issues of “cooperative federalism” – the proper roles for the states and EPA and the limits of EPA authority under Clean Water Act Section 303, which gives only minimal guidance on TMDL implementation. The district court decision addressed several issues of first impression and, in upholding EPA’s actions, provided a thoughtful analysis and helpful guidance.
The precedential significance of this case has not escaped states, cities and other interested parties elsewhere in the country. Briefs have been filed by intervening environmental groups, wastewater treatment agencies and municipal authorities in support of EPA. In addition at least 10 amicus briefs have been filed on behalf of over 100 other entities. A group of 21 attorneys general, mostly from western and Mississippi Valley states, filed a brief in support of the appellants. They were joined by a group of counties, and much later by a group of 39 Congressmen. Amicus briefs were filed in support of EPA by the states of Virginia, Maryland, Delaware and the District of Columbia (all in the Chesapeake Watershed). Also supporting EPA are a brief by the cities of New York, Baltimore, Philadelphia, Los Angeles, Chicago and San Francisco, and a separate brief for the City of Annapolis, plus two amicus briefs by groups of environmental organizations and a brief by 19 environmental law professors from around the country.
One of the interesting features of this case is that none of the EPA actions challenged by the appellants were forced by the agency on unwilling states. The “reasonable assurance” features are contained in “watershed implementation plans” drafted by each state. The deadlines are not inflexible, cannot be enforced by EPA, and were agreed to by the states. In fact on June 16, 2014, all 6 Bay states, the District of Columbia and EPA signed a new Chesapeake Bay Watershed Agreement reaffirming their commitment to the TMDL and the implementation measures. So stay tuned! The courtroom will likely be SRO, and I’ll be back to you after a decision.
Posted on October 3, 2014
The Blog Calendar Gods directed me to post something on September 16, 2014, which just happens to be the 40th anniversary of the date that I first started to practice law. Not wanting that coincidence to go to waste, I decided to look back 40 years, to a time when the practice of environmental law was far less complex – or, at least, the things that EPA then published in the Federal Register were a lot shorter.
On September 16, 1974, EPA’s rules and notices took up less than four pages in the Federal Register and consisted of a notice of receipt of applications for pesticide registration under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA); a correction to one line of a previously-published notice of proposed rulemaking under the Clean Water Act; and the approval of a compliance schedule under the State of Kansas’ state implementation plan. The entire Federal Register on that date was only 104 pages long.
Fast forward 40 years. EPA’s fairly typical Federal Register postings on September 16, 2014, include – as was the case 40 years ago – rulemaking proposals and notices under the Clean Air Act, Clean Water Act, and FIFRA; however, the September 16, 2014 proposals and notices from EPA take up more than 125 pages of the Federal Register, and a typical edition of the Federal Register these days is well over 300 pages long. I could complain that EPA did not celebrate my anniversary with the publication of a splashy huge new rule in the Federal Register – but I think many of my clients would consider that to be a good thing.
Perhaps the most significant change over the past 40 years, though, is to the overall length and complexity of the rules that are now appear in volume 40 of the Code of Federal Regulations. (There is that number “40” again.) In 1974, 40 C.F.R. – the volume of the code containing most of EPA’s regulations – was about 2000 pages long. In the decades following that time, 40 C.F.R. has steadily increased in size (and complexity). In 1984, it was approximately 5,800 pages long; by 1993, it topped 11,000 pages; and in 2012, there were over 25,000 pages of regulations in 40 C.F.R.
For those of you wondering what else was going on 40 years ago (outside of the practice of environmental law), let me share the following tidbits from September 16, 1974. The big news that day was President Ford’s announcement of his “Program for the Return of Vietnam Era Draft Evaders and Military Deserters.” In addition, on that day, BART began operations in the Bay area, Bob Dylan recorded Blood on the Tracks, the Royal Canadian Mounted Police swore-in their first female recruits, and Joe Namath was on the cover of Sports Illustrated (he was shown rehabbing his battered knees, hoping to play one more season in his $250,000-per-year contract with the New York Jets). Also, if I had stopped cutting my hair 40 years ago today, my golden locks would be more than six yards longer than they are today.
I will be thinking about all of this as I lift my glass this evening and toast all of you and begin year 41.
Posted on September 24, 2014
The history of the Clean Water Act (CWA) permit shield provision was recently addressed in a blog post by David Buente on July 31, 2014. This post covers an update on one of the referenced cases that was pending before the Ninth Circuit Court of Appeals. The case Alaska Community Action on Toxics v. Aurora Energy Services, LLC (“ACAT”) involved a facility in Seward, Alaska that conveyed coal onto ships where it was exported into international markets. The facility had been covered under the Multi-Sector General Permit (“MSGP”) since the mid-1980s. The MSGP authorized the discharge of stormwater and also identified eleven categories of non-stormwater discharges which were authorized under the MSGP. None of these categories covered discharges of coal.
The plaintiffs filed a CWA citizens suit in early 2010 alleging that coal was discharged from a conveyor into the ocean during ship loading operations and that these discharges were not covered under the MSGP. The alleged discharges involved small chunks of coal falling from the underside of the conveyor belt on the “return” trip and incidental dust or chunks unintentionally released during the loading of ships. The district court granted summary judgment in favor of the facility, applying the principles in Piney Run Pres. Ass’n v. City Comm’rs, 268 F.3d 255 (4th Cir. 2001).
On appeal, the Ninth Circuit reversed, holding that the MSGP did not cover discharges of coal. The court found that all non-stormwater discharges were prohibited except those identified in the list of eleven permissible non-stormwater discharges. The Ninth Circuit’s decision is most striking for what it does not say. First, there is no discussion in the opinion of the fact that the permittee had, in fact, disclosed its coal discharges during the permitting process. Second, the court places no weight - indeed, did not even mention - the fact that EPA and its state counterpart actively oversaw the facility, including its discharges of coal. In contrast, the district court specifically found that all the relevant parties - EPA, the Alaska Department of Environmental Conservation (“ADEC”), and the permittee - viewed the MSGP as extending to discharges of coal. As the district court found, “the discharges were not only ‘reasonably contemplated’ by EPA, but were actively regulated by the agencies under the General Permit.”
The Ninth Circuit’s decision in ACAT should make any MSGP permittee shudder since it suggests that many facilities may not be properly permitted. Specifically, if a non-stormwater discharge is not identified on the list of permissible non-stormwater sources, ACAT suggests that discharge is not covered by the MSGP. The case also reaffirms the point that reliance on agency communications and “course-of-dealing” with agencies can be a perilous exercise.
Time will tell whether the ACAT court’s analysis will be applied outside of the MSGP context to IPs and other GPs. In the meantime, when considering permit shield issues, permittees and their counsel would be wise to carefully focus on the language of permits and what a permit purports to cover (and not cover).
Posted on August 22, 2014
At the request of El Dorado Chemical Company (EDCC), the Arkansas Commission on Pollution Control and Ecology (Commission) twice approved site specific revisions to its water quality standards for dissolved minerals, finding that the new standards were protective of downstream uses. Twice, EPA rejected the rulemaking. In a court battle over a state’s right to set water quality standards, EPA won. El Dorado Chemical Company v. EPA, et al, Case No. 13-1936 (8th Cir. August 15, 2013).
Arkansas has the most restrictive water quality criteria for dissolved minerals (chlorides, sulfates and total dissolved solids) in the nation, having set the criteria years ago based on naturally occurring levels in undisturbed streams. Few receiving streams with industrial discharges can meet these “pristine stream” mineral standards, creating permitting problems, 303(d) listings of impaired waters, and the need for TMDLs. To address this issue, Arkansas developed a procedure to revise the standards on a site-specific basis to accommodate permitting historical discharges that were not impacting water quality.
EDCC received an NPDES permit from the Arkansas Department of Environmental Quality (ADEQ) with unachievable mineral limits, and a 3-year compliance schedule to provide time to pursue a criteria change. Following ADEQ procedures, EDCC demonstrated the absence of water quality impacts, and the Commission approved the new criteria, paving the way for an NPDES permit modification with achievable mineral limits. That was derailed by EPA Region 6, which rejected the criteria change, stating that potential toxic impacts to downstream waters had not been adequately evaluated. At the same time EPA was threatening enforcement against EDCC for permit violations that were then occurring because the NPDES permit compliance schedule had expired while EPA was holding up approval of the new criteria. EDCC did the additional work requested by EPA, which demonstrated that the water quality immediately downstream of EDCC’s discharge was not impacted, but a stream reach further downstream failed a simulated toxicity test for sub-lethality (reproduction) of the water flea. Since EDCC’s effluent mineral concentration was less than the background mineral concentration downstream, any downstream mineral toxicity was beyond EDCC’s control—likely the lingering effects of historical oilfield practices dating back to the early 1900’s. EDCC decided to forego any criteria change for the downstream reach. The Commission agreed and rescinded the criteria change for that downstream reach. The revised rulemaking was submitted to EPA for approval and EPA again rejected it, based on the sub-lethality failure downstream. In the meantime EDCC was participating in a project to construct a joint municipal/industrial pipeline that would by-pass these downstream waters and avoid the mineral criteria issue altogether, but appeals of the pipeline permit delayed that project as well. With no clear alternative, EDCC appealed.
EDCC relied upon the primary authority granted to states in the Clean Water Act to establish water quality standards, including the evaluation of potential downstream effects on water quality, and argued that EPA overstepped its bounds. Relying on EPA administrative appeals court decisions, EDCC argued that EPA must present "compelling evidence, based on strong science" before rejecting Arkansas’s proposed water quality standards. EDCC urged that more deference should be given to the state decision. EDCC also argued that EPA had relied upon a single, sub-lethal test result, in the face of overwhelming evidence relied upon by Arkansas, that downstream uses were not impacted. The district court and Eighth Circuit agreed with EPA that Arkansas had failed to demonstrate that the proposed water quality standards are protective of downstream water quality. The Court of Appeals said that EPA’s reading of its responsibilities under the CWA was not plainly erroneous, adopting the traditional APA standard of review, and found EPA’s decision to be consistent with the CWA’s broad purpose to "restore and maintain the chemical, physical, and biological integrity of the Nation’s waters." With respect to the evidence of downstream impacts, the Eighth Circuit upheld EPA’s reliance upon the sub-lethal data, stating that EPA’s decision was not "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." During oral argument the Eighth Circuit panel seemed interested in EDCC’s argument that since the revised mineral criteria for the problematic downstream reach had been rescinded, EPA should deal with potential impacts from EDCC’s discharge to those stream reaches further downstream in the NPDES permit review. However, the opinion rejected that argument, stating that assessment of downstream impacts was part of EPA’s responsibility when evaluating proposed water quality standards—how far downstream this assessment can go is not discussed.
While the appeal was pending, the pipeline appeals were successfully resolved, and the pipeline has been operating since August 2013. Hence, EDCC has a compliance option in place. The Court of Appeal’s awareness that this compliance option had been implemented (and Arkansas’s failure to participate in the appeal to defend its rulemaking decision), may have influenced the Court’s decision.
ADEQ is currently working with EPA to pursue a long term study of Arkansas’ dissolved mineral standards, with a goal of developing a “simplified” procedure to deal with Arkansas’ overly restrictive mineral standards. If these discussions are successful, others should be saved from the ordeal EDCC had to endure.
Posted on August 11, 2014
If you've been following the recent controversy surrounding the proposed rule regarding "waters of the United States" (referred to in some environmental and agricultural circles as "WOTUS"), you know the wave the EPA has created among opponents of the rule. In April 2014, the EPA and the U.S. Army Corp of Engineers ("Corps") published a proposed rule defining the scope of waters protected by the Clean Water Act ("CWA"). Originally, the public comment period for the proposed rule ended July 21, 2014. That period was extended to October 20.
According to its opponents, a majority coming from agricultural interests in the nation's Heartland, the proposed rule is a stealthy way to expand the EPA's authority; a clear land grab epitomizing government overreach. According to the EPA, the purpose is to clarify the definition of navigable waters in light of U.S. Supreme Court decisions in U.S. v. Riverside Bayview Homes, Rapanos v. United States, and Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers.
Although EPA explicitly stated that the proposed rule would not affect any exemptions to CWA Section 404 permitting requirements, which include normal farming and ranching activities, opponents think otherwise. Because of the expanded definition of navigable waters to include some waters that are merely connected to navigable waters, opponents worry landowners now will have new land covered by the CWA, forcing them to obtain permits under other provisions of the CWA for regular farming operations. Missouri farmer Andy Klay told Fox News he worries how long a permit might take. A day? A month? He and his wife created a parody video of the EPA to the tune of the popular song "Let it go" from Disney's Frozen -- "The EPA and the Corp. They will try, to justify! That's enough, that's enouuugh!"
Capturing the same sentiment, the American Farm Bureau Federation has launched a viral marketing campaign called "#DitchtheRule." The campaign supplies talking points and pre-written messages for supporters of #DitchtheRule to share on Twitter. For example, the campaign has a pre-written tweet "Ditches and puddles are not navigable. #DitchtheRule." In an attempt to set the record straight, the EPA has responded with a campaign called "DitchtheMyth." The campaign responds directly to the #DitchtheRule allegations. EPA contends, for example, that the myth that the rule will regulate puddles is "not remotely true." But the criticisms, or misconceptions, depending on your perspective, surrounding the rule are very real in the Heartland.
It remains to be seen how things will shake out when balancing the cost of increased regulation with the benefit of additional clarity in the rule. However, there clearly is a gap in communication and deep mistrust between the EPA and agricultural interests. Though some of the fear may be based in myth, folks in the Heartland want the EPA to tread lightly and take seriously the unintended consequences of the rule for farmers and ranchers. Either way, the rule's polarizing effect has already caught the attention of lawmakers. According to The Hill, more than 260 members of Congress, spanning both parties, have opposed the rule.
For more background, see: Weighing in on the Waters of the U.S. rule: an update
Posted on July 31, 2014
Section 402(k) of the Clean Water Act (CWA) is commonly known as the “permit shield.” It has been part of the CWA since 1972. Even seasoned environmental lawyers would not likely need even one hand to count the number of permit shield cases that mattered to one’s practice. If you fall into this category, it is time to listen up!
Background. Section 402(k) states that compliance with a National Pollutant Discharge Elimination System (NPDES) Permit “shall be deemed compliance, for purposes of,” among others, various government enforcement actions and citizens’ suits. EPA’s regulations make clear that where a party has been issued a permit, if the permit holder complies with the express limits of the permit, the permittee has “the security of knowing that . . . it will not be enforced against for violating some requirements of the [CWA] which was not a requirement of the permit. 45 Fed. Reg. 33,290, 33,311 (May 19, 1980). Federal Register.
Almost 40 years ago, the Supreme Court in E.I. Du Pont De Nemours & Co. v. Train, confirmed that the purpose of the permit shield is to “insulate permit holders from changes in various regulations during the period of a permit and to relieve them of having to litigate in an enforcement action the question of whether their permits are sufficiently strict. In short, Section 402(k) serves the purpose of giving permits finality.”
Train, however, was not the last word on the permit shield. In 1994, EPA issued a Guidance Memorandum providing its interpretations of the scope of the permit shield. EPA’s 1994 Guidance explains that:
A permit provides authorization and therefore a shield for the following pollutants resulting from facility processes, wastestreams and operations that have been clearly identified in the permit application process . . .: (1) Pollutants specifically limited in the permit or pollutants which the permit, fact sheet, or administrative record explicitly identify as controlled through indicator parameters.; (2) Pollutants for which the permit authority has not established limits or other permit conditions, but which are specifically identified as present in facility discharges during the permit application process; and (3) Pollutants not identified as present [in the facility discharges] but which are constituents of wastestreams, operations, or processes that were clearly identified during the permit application process.
Policy Statement on Scope of Discharge Authorization and Shield Associated with NPDES Permits at 2-3 (July 1, 1994) quoted in In re Ketchikan Pulp Co., CWA Appeal No. 96-7, p. 624 (May 15, 1998).
Shortly thereafter, in 1995, EPA re-issued the July 1994 memorandum entitled “Revised Policy of Scope of Discharge Authorization and Shield Associated with NPDES Permits” (now known as the “1995 Policy Statement”). The 1995 Policy Statement added qualifying text to the second and third conditions in EPA’s 1994 Guidance document. In both cases, EPA required that the pollutants for which the permit authority has not established limits or other permit conditions or that were not identified as present but which are constituents of wastestreams, operations or processes had to be “specifically” or “clearly” identified in writing and contained in the administrative record which is available to the public.” Id. at 2-3.
Thirteen years later, in Piney Run Pres. Ass’n v. City Comm’rs, 268 F.3d 255 (4th Cir. 2001), the Fourth Circuit held that the permit shield applies to discharges of pollutants not listed in a permit as long as the permittee had adequately disclosed the unlisted pollutants to the permitting authority. If the discharger, however, “has not adequately disclosed the nature of its discharges to permit authorities, and as a result thereof the permitting authorities are unaware that unlisted pollutants are being discharged, the discharge of unlisted pollutants has been held to be outside the scope of the permit.”
The Piney decision held the day for 13 years with no significant permit shield decisions in the interim.
Times Are Changing. After more than a decade of dormancy, the scope of the permit shield is now being tested. In 2013 and 2014, the DOJ on behalf of EPA has filed – under very quick time frames – two briefs as amici curiae addressing NPDES individual and general permits and providing a more nuanced interpretation of Section 402(k). DOJ now takes the position that a NPDES permit can shield its holder from liability only where the permit holder (1) complies with the express terms of the permit and with the EPA/State permit application rules; and (2) the permit holder does not make a discharge of pollutants that was not within the reasonable contemplation of the permitting authority at the time the permit was granted. DOJ made clear that any reliance on prong three from the 1995 EPA guidance “is misplaced” because, in the government’s view, the third prong of the guidance deals with an entirely different situation – namely, it is intended to cover pollutants where there is no affirmative duty to disclose them during the permit application but where, nonetheless, the applicant has made a complete and adequate disclosure with respect to constituents of wastestreams, operations, or process” that “are clearly identified in writing and contained in the administrative record. Southern Appalachian Mountain Stewards v. A&G Coal Corp., Case No. 13-2050 (4th Cir.), DOJ Brief at 27.
Then, earlier this year, the Fourth Circuit issued a sharply-worded decision in Southern Appalachian Mountain Stewards v. A&G Coal Corp. upholding a lower court’s decision that A&G was not entitled to the permit shield because nowhere in the NPDES application did A&G state that it would be discharging selenium. The Fourth Circuit did an about face from its decision in Piney based on upon DOJ’s amicus brief and its new disjunctive test, and held that unlike in Piney, A&G did not disclose the unlisted pollutant adequately and, thus the permit shield was not available.
There are two cases pending before the Sixth and the Ninth Circuits that will address the scope of the permit shield. The Sixth Circuit case – Sierra Club v. ICG Hazard, Inc. – was argued in April, 2013, and the Ninth Circuit case -- Alaska Community Action on Toxics v. Aurora Energy Services, LLC and Alaska Railroad Corp. -- has just recently concluded the briefing process. DOJ has filed an amicus brief in the Alaska Community Action case which is substantially similar to the one submitted in the A&G Coal litigation.
Once these decisions are rendered, there may well be a circuit split giving the Supreme Court the opportunity to become the final arbiter of the scope and meaning of Section 402(k)’s permit shield.
Posted on July 22, 2014
Every city of any size wants development. Some prefer commercial over residential, but they share the common belief that growing is the best way to survive. The problem that arises, however, is nature.
Development is, necessarily, hard surfaces. It is rooftops, streets and driveways. In other words, it is impervious area. When rain hits the impervious area, it must be diverted, collected and pushed downstream. While attempts can be made to allow it to soak into the ground, the reality is that there is simply no way to make up for all of the new impervious area without a great deal of planning, preparation and expense.
Most attorneys who practice in the area of water regulation have received a call from a business or homeowner that is located at the “bottom of the hill.” These entities are the ones who are feeling the effects of the urban development. They have noticed that over the past five or ten years, they have been receiving more and more water to the point that they are now flooding on a routine basis. They ask the obvious question: Who is at fault? Who can pay me for the destroyed basement, the flooded parking lot or the months of work stoppage while repairs are made?
In most states, riparian law prohibits the upstream neighbor from altering the water flow from his/her property in a way that adversely affects the next door neighbor. But that does not provide a solution when it is the cumulative effect of many upstream neighbors, all of which have been issued permits from the city, that is the root of the problem.
As was recently reported, the stormwater runoff question was called in a recent series of class action cases filed in Illinois by an unlikely plaintiff, the Illinois Farmers Insurance Company. In the suits, the insurance carrier alleged that 200 cities in Illinois had negligently maintained the stormwater system, had failed to remedy a known dangerous condition and had undertaken an unlawful “taking” in that the government had appropriated the properties of others to use as diversion and retention basins. The carrier sought to recover amounts it had paid out under flood claims made by their insureds.
Interestingly, about fifty days after filing, Farmers Insurance filed a notice to dismiss the action. The carrier said that it had successfully brought important issues to the attention of the respective cities and counties and that it hoped to continue a constructive conversation with the cities to build stronger, safer communities. As one would expect, the spokesman for the cities believed that the dismissal was because the carrier recognized it did not have sufficient grounds for the suit.
There are some things that local governments are particularly suited to do: manage solid waste, ensure the timely delivery of electricity and coordinate the development and maintenance of streets, for example. These are matters that potentially affect everyone within the city limits and for which everyone must pay. There is no better example of this than addressing stormwater that lands on every property in the city. Having a system in place that safely carries the stormwater away from buildings cannot be done by any single landowner. And regulating the bigger picture -- building the necessary stormwater infrastructure while encouraging development -- is uniquely within the purview of the city.
It would appear that the proverbial warning shot has been fired across the bow. If cities are going to encourage activity that significantly exacerbates the stormwater problem, they may also be charged with protecting those that are affected by the fallout from those activities. For this problem, time, without action, is only going to make the problem worse and the solution more expensive. And counting on the next case being voluntarily dismissed is a lot like hoping the rain won’t fall.
Posted on July 2, 2014
Imagine a nutrient reduction program that achieves financially manageable point source reductions while generating new cash for nonpoint source reductions, has bi-partisan support and requires no new state regulatory or fee programs. Not possible you say? Meet the Wisconsin Clean Waters, Healthy Economy Act, now codified at Wis. Stat. s. 283.16.
In prior postings, I have described Wisconsin’s phosphorus reduction rule, including its compliance options of water quality trading and adaptive management. These are innovative alternatives to traditional construction but, unfortunately, not viable for all dischargers.
Now Wisconsin has another tool: a multi-discharger variance, based on a finding of statewide social and economic impact, available to dischargers that cannot meet the water quality based effluent limitation (WQBEL) for phosphorus without a major facility upgrade. Under the variance, a point source will still be required to decrease its phosphorus discharge -- meeting interim limitations of 0.8 mg/L, 0.6 mg/L, 0.5 mg/L, and the final WQBEL over four WPDES permit terms; and while doing so will make payments to the counties within its basin, providing cost-share dollars for nonpoint source phosphorus reductions. At $50/pound for the difference between the actual pounds of phosphorus discharged and the target value of 0.2 mg/L, this is expected to generate real money -- which the counties will use to implement existing, but seriously underfunded, nonpoint source reduction programs.
Because point sources have installed treatment and reduced their phosphorus discharges by 90% or more to meet Wisconsin’s prior technology-based limit of 1.0 mg/L, the remaining primary contributors of phosphorus to our waters are nonpoint sources. Yet getting funding for nonpoint source controls has been an ongoing, and largely unsuccessful, effort. For context, the Green Bay Metropolitan Sewerage District (GBMSD) currently removes about 95% of the phosphorus it receives; while the wastewater it discharges accounts for less than 3% of the total phosphorus to the lower Green Bay. With an investment of $200 million in capital improvements GBMSD could increase its removal to 98% -- a reduction of less than 2% of the total phosphorus load to the bay. Redirecting significant dollars to nonpoint source programs should be a game-changer.
The Wisconsin Department of Natural Resources (WDNR) has been reissuing WPDES permits with phosphorus WQBELs and compliance schedules based on the phosphorus reduction rule that went into effect in December 2010. The variance law went into effect on April 25, 2014, but won’t become available to WPDES permit holders until approved by USEPA. The rule package is expected to be sent to USEPA for approval in January 2015, once the statewide economic impact analysis is completed.
We have an opportunity for creative and meaningful point source and nonpoint source participation in reducing phosphorus discharges to our waters. But time is of the essence. Note to USEPA: there is much to like here – please don’t let the moment pass us by.
Posted on June 30, 2014
On May 19, 2014, EPA issued its long-awaited rule establishing requirements under the Clean Water Act for existing power-generating facilities and manufacturing and industrial facilities that withdraw more than 2 million gallons per day from waters of the United States and use at least 25% of the withdrawal exclusively for cooling purposes. The stated purpose of the Rule is to reduce injury and death to fish and other aquatic life caused by cooling water intake structures at existing power plants and commercial and industrial facilities. The rule covers approximately 1,065 existing facilities of which slightly more than half are power-generating facilities.
The Rule as adopted is 559 pages long. Summarizing a very complex rule of that length is virtually impossible. Those facilities covered by the Rule will need to study the Rule carefully to learn exactly how it affects their facility. At the great risk of over-generalization, there are three broad components to the final Rule which are highlighted in the EPA Press Release of May 19, 2014:
• Existing facilities that withdraw at least 25% of their water from an adjacent water body exclusively for cooling purposes and have a design intake flow of greater than 2 million gallons per day are required to reduce fish impingement. To ensure flexibility, the owner or operator of the facility will be able to choose one of seven options for meeting best technology available requirements for reducing impingement.
• Facilities that withdraw at least 125 million gallons per day are required to conduct studies to help the permitting authority determine what site-specific entrainment mortality controls, if any, will be required. This process will include public input.
• New units at existing facilities that are built to increase the generating capacity of the facility will be required to reduce the intake flow to a level similar to a closed-cycle recirculation system.
Any facility not covered by EPA’s rules governing cooling water intake structures will continue to be subject to Section 316(b) requirements set by the EPA, state or territory NPDES permitting director on a case-by-case, best available judgment basis.
EPA began its Section 316(b) rulemaking pursuant to a 1995 Consent Decree with a number of environmental organizations. Whether environmental organizations, the regulated community or anyone else with standing will appeal this latest rulemaking by EPA is anyone’s guess. Certainly there have been statements made that one or more appeals will be filed. Who thinks that a rulemaking 20 years in the making will end quietly?
Posted on June 20, 2014
In a surprising turn of events, on March 12, 2014 EPA Regions 1, 3 and 9 each simultaneously but separately responded, and each in a somewhat different way, to three virtually identical NGO petitions asking those Regions to use their Clean Water Act (“CWA”) Residual Designation Authority (“RDA”) to require that stormwater discharges from impervious surfaces at existing commercial, industrial and institutional (“CII”) sites be permitted under CWA Section 402. The three petitions were filed in July 2013 by several different and somewhat overlapping consortia of environmental organizations.
The three Regions’ responses were all signed by their respective Regional administrators, each was worded differently, and each included a somewhat similar -- yet somewhat different --explanatory enclosure that detailed the basis of each respective Region’s response.
EPA Region 3’s response is a flat out denial of the petition, citing existing tools and programs already in place to address stormwater pollution (e.g., MS4 permits, TMDL implementation and strong state programs). The enclosure with the Regional Administrator’s letter denying the petition also states that “Region III declines to begin a process for categorical designation of discharges from CII sites to impaired waters since … the data supplied by the Petitioners to support the exercise of RDA is insufficient.” The enclosure does note that if the existing programs ultimately do not meet their objectives, alternate tools, including RDA, will need to be considered.
Similarly, EPA Region 9’s response “declines to make a Region-wide designation of the sources” in the petition specific to Region 9. That response also concludes in the enclosure that “we currently have insufficient information to support a Region-wide designation” of the CII sites specified in the petition, “that effective programs are already in place that address the majority of the sites identified in the petition,” and that the Region will keep designation in their toolbag as they “continue to evaluate currently unregulated sources of stormwater runoff.”
However, Region 1’s response states that it “is neither granting the petition … nor is it denying the petition.” Instead, the Region is going to evaluate individual watersheds in its six states to look at the nature and extent of impairment caused by stormwater, and then “to determine whether and the extent to which exercise of RDA is appropriate.”
Given the identical language in certain portions of all three of the Regional response enclosures (e.g., Statutory and Regulatory Background; Petition Review Criteria), it is clear that EPA Headquarters was in the thick of the discussions regarding the responses to these three RDA petitions. However, the apparent autonomy afforded each Region in determining how to deal with the issue is remarkable, and the discussions ultimately may have centered (as they often do at EPA HQ) on resource allocations nationally and within each Region.
The responses of Regions 3 and 9 imply that their current respective paths, with time, will get results without diverting resources. EPA Region 1 appears to more fully embrace RDA as a near-term viable tool to more aggressively control stormwater runoff from CII sites. Apparently, the New England regulators’ successful experience with the Long Creek Watershed RDA and their efforts relative to the RDA process for the Charles River has only whetted their appetite for further candidate areas at which to employ this model to address impaired stormwater.
Whether the NGOs will seek judicial relief from the denial of their Petitions, whether the states in the USA’s upper right hand corner will be supportive of EPA New England’s continued utilization of this tool, as well as how this issue ultimately will be played by EPA HQ, is fuzzy math.
Posted on May 8, 2014
Debarment is the process whereby the federal government can permanently prevent a company from doing business with the federal government or suspend a company from doing business with the federal government for a period of years. The debarment process has been available for decades to the United States to be used against companies or persons whom the government believes are untrustworthy. For instance, removal from EPA’s list of violating facilities requires agency evaluation of corporate attitude. But the Obama Administration has broadened the scope of the process to potentially ensnare many an unsuspecting entity.
The debarment process as it currently exists has resulted in the following scenarios:
A. An oil company in the Rocky Mountain region settled a regulatory violation with the Department of the Interior’s Bureau of Land Management and as part of the agreement paid a substantial seven figure fine and adopted new procedures designed to prevent a reoccurrence of the violation and a two-year period of probation. Imagine the surprise of the company’s managers and in-house lawyers when eighteen months after the settlement was executed, they received a Notice of Debarment for a three-year period preventing the use of their federal leases requiring new permits.
B. A wind farm owner that was convicted for killing bald eagles discovered that the company could not sell future electricity production to a federal facility.
C. An oil and gas company that pleaded guilty to a Clean Water Act spill faced debarment from being able to bid on federal oil and gas leases for five years.
Companies or persons found to be in violation of civil or criminal statutes or departmental regulations are subject to debarment. While in egregious cases debarments can be perpetual, most debarments are for a period of three to nine years. Debarments do not affect a company’s current government contracts, but do affect renewals of those contracts or the need for new permits on federal lands. The debarments are company-wide. Consequently, the above-mentioned wind farm owner also could not sell its electricity produced from its coal fired power plants to federal facilities.
Debarment proceedings are administered by the various Offices of Debarment, located within each cabinet department, with the closest responsibility for enforcing the law that was violated. Thus, the Department of the Interior’s Office of Debarment (staffed by the Inspector General’s personnel) handles violations of fish and wildlife, public lands and Indian law. Environmental Protection Agency lawyers in the grants and debarment program handle debarment proceedings authorized by Section 508 of the Clean Water Act or Section 306 of the Clean Air Act.
Upon the entry of a federal court judgment or consent decree a representative of the Department of Justice, often an Assistant United States Attorney, forwards the document to the appropriate cabinet department’s Office of Debarment. The government deems debarment proceedings to be separate from the underlying litigation. Agreements to avoid debarment may not be a condition of any plea bargain or consent decree. Adverse outcomes after executive branch debarment hearings may be appealed to a federal district court under deferential Administrative Procedures Act standards.