CWA: 2007 Judicial Review

Court decisions affect EPA, Army Corps policies, confuse permittees

Major judicial decisions continue to shape water law in significant ways even though the Clean Water Act (CWA) is 35 years old. Recent court decisions have shown a willingness of parties to attack the policies and programs of the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers, and some courts have disregarded “judicial deference” to EPA. The agency traditionally has been given latitude for its CWA regulatory interpretations. Case law, however, seems to challenge the notion of deference, even if EPA’s interpretation is well reasoned and a reflection of the statute. (See Chevron v. Natural Resources Defense Council, 467 US 837 [1984]). Other battles also are being forged over the reach of the act and jurisdiction.

One of the key concepts in CWA is that it establishes the total maximum daily load (TMDL) process as a tool to implement state water quality standards. A TMDL is based on a relationship between the pollution source and the water quality conditions. EPA interprets the phrase broadly to include not only “daily” calculation of loads but also the flexibility to express TMDLs in increments that are seasonal or account for stream flow variations.

Sidebar: 2007 Significant Cases
Chevron v. Natural Resources Defense Council, 467 US 837 (1984)

Friends of the Earth, Inc. v. EPA, 446 F.3d 140 (DC Cir. 2006).

Natural Resources Defense Council Inc. v. Muszynski, 268 F.3d 91 (2d Cir. 2001)

D.C. Water & Sewer Author. v. Friends of the Earth, Inc., 127 S Ct. 1121 (Jan. 16, 2007)

Catskills Mountains Chapter of Trout Unlimited v. City of New York, 452 F.3d 77 (2d Cir. 2006)

Friends of the Everglades v. South Florida Water Management District, 2006 U.S. Dist LEXIS 89450 (SD Fla. 2006)

Rapanos v. United States, 126 S. Ct. 2208 (2006)

The Federal Circuit Court in the influential D.C. District, however, did not defer to EPA’s interpretation and instead ruled that daily means daily; nothing else. (Friends of the Earth, Inc. v. EPA, 446 F.3d 140 [DC Cir. 2006]). The court rejected a Second Circuit opinion from 2001 that had deferred to EPA’s interpretation and found that TMDL could be calculated more flexibly than use of a uniformly applicable 24-hour load. (See Natural Resources Defense Council Inc. v. Muszynski, 268 F.3d 91 [2d Cir. 2001]).

EPA opposed petition
In January 2007, the U.S. Supreme Court denied certiorari to clear up the conflict between the D.C. and 2nd circuit courts. (D.C. Water & Sewer Author. v. Friends of the Earth, Inc., 127 S Ct. 1121 [Jan. 16, 2007]). Interestingly, EPA opposed the cert petition. Its position was that the D.C. Circuit decision limited jurisdictional reach, and the agency will continue to interpret TMDL calculations broadly, rejecting the literal reading that the statute only allows for a 24-hour load. Thus, in 2008, water watchers can expect further litigation on this issue, given the conflict that exists between the circuits and EPA’s disregard for the D.C. Circuit’s holding on how to interpret the act going forward.

As the result of another development in water law, EPA anticipates releasing a new final water transfer rule. Several cases reviewed whether National Pollutant Discharge Elimination (NPDES) permits are required for the movement of water between waterbodies where the water contains pollutants, and the water is being transferred for water management purposes. Initially, the issue was raised in a case before the U.S. Supreme Court in 2004. While the court did not decide the issue, it expressed skepticism about EPA’s “unitary waters theory.” This theory formed EPA’s opinion that the transfer of water from one waterbody to another could never trigger NPDES permit requirements. In 2006, a couple of courts took the Supreme Court’s dicta further and rejected EPA’s transfer rule. (See Catskills Mountains Chapter of Trout Unlimited v. City of New York, 452 F.3d 77 [2d Cir. 2006]; Friends of the Everglades v. South Florida Water Management District, 2006 U.S. Dist LEXIS 89450 [SD Fla. 2006]). 

Perhaps the most widely discussed water issue that has caused the most consternation and confusion involves wetlands. On June 8, 2007, EPA and the Army Corps of Engineers issued joint guidance to reconcile divergent jurisdictional tests set forth by the U.S. Supreme Court in Rapanos v. United States, 126 S. Ct. 2208 (2006).

In Rapanos, the issue was whether wetlands that empty into traditional navigable waterways through ditches or manmade drains could be regulated. The case was an opportunity to clarify CWA’s reach and the Corps’ permitting authority. That opportunity was squandered when the Supreme Court made its decision. If the wetland is relatively permanent standing or continuously flowing or adjacent to such water, it is a water of the United States, according to the jurisdictional rule laid out by the plurality opinion written by Justice Scalia. That opinion prompted the joint guidance.

The nexus standard
Disagreeing with Justice Scalia, Justice Kennedy wrote that the Corps had to decide on a case-by-case basis if a significant nexus exists between the wetlands in question and the navigable waters the CWA was meant to protect. The joint guidance, under the circumstances, was welcome. However, the guidance, while attempting to meld the plurality opinion of the Supreme Court with the divergent view set out in the opinion by Justice Kennedy, is difficult to apply. Thus, the Corps put together an instructional manual to provide further guidance, but the process still is not easy to apply and far from clear.

To create even more confusion, courts have split on their interpretations after Rapanos. The First Circuit Court of Appeals and the District Court in Florida have followed the plurality approach and attempted to mesh the divergent view articulated by Justice Kennedy in the decision. (United States v, Johnson, 467 F.3d 56 [1st Cir. 2006]). Other circuit courts have adopted the Justice Kennedy approach alone.

One can expect more confusion from courts and continuing difficulty determining any type of bright-line test to define CWA Section 404 jurisdiction. Moreover, Congress has tried to pass "The Clean Water Restoration Act" to expand CWA’s jurisdiction. While the intent seems to be to expand federal jurisdiction and avoid litigation over jurisdiction, the bill has the potential to substantially expand litigation and jurisdiction of the act.

Another development that has seen an EPA position challenged and is far from over is the regulation of ballast discharge, or discharges incidental to the normal operation of a vessel. EPA’s former rule exempted these types of discharges from NPDES permit requirements (33 C.F.R. Section 122.3[a]). In 2006, this exemption rule was overturned, and the issue still is being litigated.

In Michigan this year, state lawmakers passed their own ballast regulations. A challenge in U.S. District Court has largely been resolved in favor of the state’s regulations in August, 2007. This is a first-of-its-kind state environmental law that requires vessels operating in state waters to obtain ballast discharge permits. It also requires vessels that will discharge ballast water to use control technology to prevent the introduction of non-invasive species into state waters. These ballast regulations are on appeal before the Sixth Circuit Court of Appeals. The preemption, commerce clause, and due process arguments before that court may have wide implications throughout the Great Lakes and in other states as they attempt to protect their water resources.

About the Author

Robert Casarona is a partner at Roetzel & Andress, L.P.A., in Cleveland, Ohio. He is partner in charge of the law firm's Litigation Group and specializes in environmental litigation. He can be reached at 216.615.4841.

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