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The National Association of Clean Water Agencies (NACWA) is pleased to provide the membership with the Summer 2011 Legal Update.  This Update provides summaries of current legal initiatives and discusses developments in NACWA’s litigation matters.  Please contact NACWA’s General Counsel, Nathan Gardner-Andrews, at 202/833-3692 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it with any questions on items included in this Update or NACWA’s legal advocacy efforts.  Copies of relevant court filings and documents, along with additional information on NACWA’s ongoing litigation, can be found on the Association’s Litigation Tracking website.

Legal Affairs Committee Meets at Summer Conference

The Legal Affairs Committee met jointly with the Biosolids Management Committee in July as part of NACWA’s 2011 Summer Conference & 41st Annual Meeting to discuss NACWA’s ongoing efforts to challenge two recent EPA rules impacting sewage sludge incineration and the use of biosolids as a fuel.  The meeting kicked off with a detailed discussion of non-incineration biosolids issues, including EPA’s ongoing efforts to determine what, if any, changes are necessary to the Part 503 regulations.  The Committee also received an update on the Water Environment Research Foundation’s (WERF) ongoing biosolids research and recent developments in the biosolids land application challenge in Kern County, California.  Committee members then transitioned into a discussion of the administrative petition for reconsideration of EPA’s Clean Air Act (CAA) standards for sewage sludge incinerators (SSIs) recently filed by NACWA, as well as the Association’s pair of legal challenges to the SSI standards and related definition of solid waste rulemaking.  The joint Committee meeting concluded with a discussion of other NACWA litigation-related matters, including on-going cases regarding nutrient regulations in Florida and non-point source issues in the Chesapeake Bay. More information on all of the mentioned cases is located below.  Committee handouts from the joint Committee meeting from the Summer Conference are available on NACWA’s website.  The next Legal Affairs Committee meeting will be held during NACWA’s 2012 Winter Conference in Los Angeles, California in February 2012 – we hope you will be able to join us!

Planning Underway for NACWA’s 2011 Law Seminar

Planning is underway for NACWA’s 2011 Developments in Clean Water Law Seminar, which will be held this year November 16 -18 in beautiful Charleston, South Carolina at the historic Francis Marion Hotel.  NACWA’s Law Seminar is the only conference of its kind focused specifically on the legal and regulatory challenges facing the municipal clean water community, and this year’s Seminar promises to follow in the footsteps of past years by delivering a timely and educational program covering the hottest current issues in clean water law.  The topics to be covered at the Seminar will span a range of legal and regulatory challenges impacting clean water utilities that will be relevant to any attorney or public agency manager working on municipal wastewater and stormwater issues.  Registration for the Seminar is now available on NACWA’s website, and additional details including a preliminary agenda and Continuing Legal Education (CLE) information will be available in early September.

CURRENT CASES

NACWA Moves Forward with Challenges to SSI, Solid Waste Rules

NACWA continues to aggressively pursue a legal and administrative challenge to EPA’s final air emission rule for sewage sludge incinerators (SSIs), as well as a parallel legal challenge to the Agency’s final rule defining non-hazardous solid waste.   NACWA filed both an administrative petition for reconsideration and a legal petition for review of the SSI rule in May, followed by a legal petition for review of the solid waste rule in June.

NACWA has stepped up the pressure on EPA in recent weeks to make a decision regarding the Association’s administrative petition for reconsideration and stay of the SSI rule.  In late July, NACWA met with senior staff in EPA’s Office of General Counsel to discuss the petition.  The meeting focused on NACWA’s assertion that Congress intended SSIs to be regulated under Section 112 of the CAA and that the Act itself clearly directs EPA to develop standards for SSIs under Section 112, not the more stringent Section 129 of the Act that EPA used to develop the final SSI standards.  NACWA also underscored the fundamental flaws that are pervasive in the final 129 rule and the impacts the rule will have on incineration.  Earlier in July, NACWA staff also met with key EPA air office staff to discuss the technical flaws with the final standards as outlined in NACWA’s petition.

As a result of these meetings, EPA has requested additional time to review NACWA’s legal and technical arguments outlined in the petition for reconsideration, indicating the Agency continues to give serious consideration to the arguments presented by NACWA in the petition.  EPA staff are now working together to formulate the Agency’s response to NACWA’s concerns and have indicated that they will provide a formal answer to the request for reconsideration and stay by the end of August.

If EPA does not grant NACWA’s administrative petition for reconsideration and stay of the final rule, NACWA is prepared to move forward in the parallel legal challenge to the SSI regulation and will file a legal Motion for Stay asking the court to judicially stay the rule until such time as the merits of the NACWA lawsuit are resolved.  The original court deadline for this filing was July 22, but because EPA is still reviewing NACWA’s administrative request the court has extended the deadline until September 9.

NACWA Submits List of Preliminary Issues in Solid Waste Rule Challenge
In a related development, NACWA filed a preliminary, non-binding statement of issues July 8 with the U.S. Court of Appeals for the District of Columbia Circuit in the litigation over the final definition of solid waste rule, outlining a number of important concerns the Association intends to raise in its lawsuit challenging EPA’s definition of non-hazardous solid waste.  Among the issues included in NACWA’s list is whether EPA’s determination that biosolids which are combusted qualify as a solid waste is a violation of existing federal solid waste law, including the long-standing exemption for domestic sewage from solid waste regulations.  NACWA also plans to question whether EPA’s solid waste rule ignores the comprehensive regulatory process set out for biosolids under the Clean Water Act (CWA); whether the solid waste rule was developed using faulty data; and whether the rule fails to exempt contained gases that are produced from biosolids from solid waste regulations.  A scheduling order from the court in this case is expected at any time, and briefing could begin later this year.

NACWA Requests Intervention in Air Litigation Related to SSI Rule
NACWA also filed a Motion to Intervene June 20 in a related CAA case that could impact EPA’s SSI rule, further expanding the Association’s legal advocacy efforts on SSI issues.  The lawsuit was filed by the Sierra Club and challenges EPA’s determination that the Agency has met its statutory requirement to control emissions from 90 percent of the area source emissions of the 30 hazardous air pollutants that are subject to emission standards.  EPA indicated that its recent rule establishing air emissions for SSIs helped to meet its 90 percent requirement.  As a result, any challenge to EPA’s determination could potentially impact how the Agency regulates SSIs even if NACWA is successful in its parallel challenge to the SSI rule.  Sierra Club’s legal case against the 90 percent determination is likely to attempt to increase the stringency of the emissions standards for area source categories, including the SSI rule.  NACWA will use its proposed intervention to push back against this potential argument and protect any gains made in the Association’s own legal and administrative challenges to the SSI rule.

Response Filed to Farm Bureau Opposition in Chesapeake Bay TMDL Case

NACWA filed a reply motion July 5 in the ongoing litigation over EPA’s final total maximum daily load (TMDL) for the Chesapeake Bay.  NACWA’s motion responds to the agricultural plaintiffs’ opposition to the Association’s intervention in the case and reiterates the importance of the Association’s participation to defend a holistic watershed approach for water quality improvement.  NACWA’s action follows a filing submitted by the plaintiffs in June arguing that NACWA and its municipal partners should not be granted intervention in the litigation because EPA is already sufficiently representing municipal utility interests.  The municipal reply brief disputes this assertion and argues that while NACWA may be supporting EPA in certain respects in defending a challenge to the TMDL by agricultural interests, the federal agency will not sufficiently represent the perspective of municipal clean water agencies.  In particular, the NACWA motion makes clear that municipal agencies have a unique interest in the case to ensure an equitable distribution of wasteload and load allocations under the TMDL among all sources and prevent public clean water utilities from bearing more of the burden if the agricultural dischargers are allowed to walk away from the process, a perspective that EPA will not adequately represent.  The NACWA motion also outlines the need for a distinct municipal voice in the litigation to defend a comprehensive watershed approach to water quality improvement.

The litigation, American Farm Bureau et al v. EPA, was initiated in January by a collection of agricultural groups arguing that EPA has no authority to regulate or assign allocations to nonpoint agricultural sources under the TMDL program.  NACWA moved to intervene in the case in May on the side of EPA to ensure that the interests of NACWA’s public utility members are protected and to ensure that EPA’s ability address nonpoint sources and administer a holistic watershed approach through the TMDL program is upheld.   NACWA is participating in the case along with the Maryland Association of Municipal Wastewater Agencies (MAMWA) and the Virginia Association of Municipal Wastewater Agencies (VAMWA).

NACWA Helps Secure Positive Outcome in Anacostia River TMDL Litigation

The United States District Court for the District of Columbia issued a long awaited ruling July 25 in the case of Anacostia Riverkeeper v. U.S. Environmental Protection Agency (EPA), issuing a largely favorable decision for municipal interests in the litigation challenging the Anacostia River TMDL for sediment and total suspended solids (TSS).  This case serves as the sequel to the earlier 2006 decision in Friends of the Earth v. EPA, -- also known as the “daily means daily” case -- which invalidated the previous TMDLs for the Anacostia River because they imposed seasonal and annual, rather than daily, loadings.  EPA reissued the TMDL for sediment and TSS with daily loads in 2007, and the Anacostia Riverkeeper appealed the TMDL again on the basis that the daily loadings were not sufficiently stringent, including the fact that the TMDL set very high daily limits for sediment and TSS.  NACWA, along with public agency member DC Water and other organizations representing municipal interests including the Wet Weather Partnership, MAMWA, and VAMWA, successfully filed a Motion to Intervene in the litigation in 2009 in support of EPA.  NACWA’s brief argued that restrictive daily loads are not necessary to control pollutants such as sediment or TSS that only need to be regulated on a seasonal or annual basis.

The court’s decision granted NACWA’s and the other municipal intervenors’ Motion for Summary Judgment in part and denied it in part.  In agreeing the municipal intervenors and EPA, the court found that:

• It is permissible to set very high daily loadings for sediment/TSS when striving to implement a standard for secchi depth that is expressed as seasonal or annual averages — this was the main issue in the case and is a critical victory for NACWA and the municipal utility community;
• EPA properly targeted the TMDL to the seasonal secchi depth criteria rather than the numeric turbidity criteria;
• EPA may impose wasteload allocations for municipal separate storm sewer systems (MS4s) in the aggregate rather than having to break the loadings down and apply them to individual outfalls; and
• EPA may use an implicit margin of safety.

However, the court disagreed with EPA’s omission of loadings for other, non-aquatic life uses and held that when developing a TMDL for a particular pollutant, the State or EPA must address all applicable water quality standards (WQS), including all designated uses and water quality criteria.  The court rejected the argument that the TMDL need only address the use impairments included in the state’s 303(d) list.  The court indicated that EPA violated the CWA by failing to address all WQS and gave the Agency one year to go back and revisit the TMDL to develop loadings to address recreational and aesthetic uses for the river.

While NACWA is disappointed with the court’s requirement that the TMDL must address all applicable WQS, the ruling overall in this case represents an important victory for NACWA and the clean water community on a number of other critical issues.  Much of the media coverage of this case has missed these important municipal victories.  Most importantly, the court’s approval of very high daily load limits for pollutants such as sediment and TSS should help blunt the impact of the 2006 “daily means daily” case and reinforces EPA’s ability to set high daily loads for those pollutants that were previously expresses as seasonal or annual limits.  The court’s endorsement of using aggregate wasteload allocations for MS4s instead of assigning loadings to individual stormwater outfalls is a key win as well.  NACWA is continuing to track developments in the case, including possible appeals, and will keep the membership updated.

Association to File Brief in St. Louis Stormwater Fee Case

NACWA’s Board of Directors in July approved the Association filing an amicus curiae brief in support of member agency, the Metropolitan St. Louis Sewer District (MSD), in an appeal of a Missouri state court decision that invalidates the utility’s stormwater fee program.  The lawsuit stems from 2008 when a group of ratepayers filed a lawsuit in state court challenging MSD’s use of impervious surface as a basis for charging stormwater fees, alleging that such charges represent a tax and not a legitimate utility service charge.  A court trial was held in Spring 2010 and in July 2010 the court issued an opinion in favor of the plaintiffs, finding that there is not a sufficient scientific or legal foundation to use impervious surface as a basis for calculating stormwater service charges and that a stormwater charge based on impervious service qualifies as a tax and not as a user fee.  Based on these findings, the court determined that MSD was not actually providing a utility service and thus invalidated the utility’s stormwater fee program.

The issues in this litigation of using impervious surface as a basis for stormwater charges and whether such charges are fees or taxes present both legal and policy concerns of national significance that are of extreme relevance to NACWA and stormwater utilities around the nation.  The question of whether stormwater charges represent fees or taxes has also been a central component of NACWA’s stormwater advocacy in recent years.  For these reasons, NACWA will be filing an amicus brief supporting MSD it its appeal with a focus on two primary issues.  First, NACWA will argue that impervious area is increasingly becoming the national industry standard among utilities for measuring the use of stormwater services and calculating stormwater fees.  Second, NACWA will argue that stormwater charges based on impervious surface do quality as reasonable utility service charges and not as taxes, leveraging the Association’s significant involvement in this issue and the successful passage of federal stormwater legislation supported by NACWA last year.  Briefing in this case is expected to occur in September and NACWA will keep its membership apprised as any updates occur.

Brief Planned in Upper Blackstone in Permit Appeal Case

NACWA is planning to file an amicus curiae brief supporting member agency, the Upper Blackstone Water Pollution Abatement District (Upper Blackstone), located in Millbury, Massachusetts, in an appeal of their National Pollutant Discharge Elimination System (NPDES) permit to the U.S. Court of Appeals for the First Circuit.  The case involves nutrient limits included in the permit issued by EPA Region 1, and the litigation has potential national implications for other clean water utilities as it presents a unique opportunity to challenge nutrient limits in a discharge permit issued directly by EPA before a federal appeals court.  The focus of Upper Blackstone’s appeal is on the permit’s nitrogen and phosphorus limits, which were developed based on significantly flawed science and modeling.  The approach used by EPA Region 1 to develop the nutrient limits is one that EPA has considered incorporating into national guidance on deriving permit limits from narrative nutrient criteria, so this lawsuit presents an important chance to push back against EPA’s methodology.  Additionally, Upper Blackstone is challenging the imposition of the significant additional costs required to meet the new nutrient limits in the permit, which will be close to $200 million, on top of the $180 million the utility has already spent to achieve the nutrient reductions mandated in its previous NPDES permit.

NACWA’s planned amicus brief in support of Upper Blackstone’s appeal will focus on two primary issues that have national implications for other NACWA members around the country.  First, NACWA’s brief will address the policy issue of EPA requiring Upper Blackstone to upgrade its treatment plant in its previous 2001 permit at a cost on $180 million to achieve nutrient reductions, only to come back in 2008 and require additional reductions costing an additional $200 million in the utility’s new permit before the first project had been completed or its reduction in nutrient loadings even achieved.   This action by EPA is a perfect example of the importance of NACWA’s ongoing Money Matters campaign and the need for better regulatory prioritization to avoid regulatory agencies piling on additional requirements without regard to cost or environmental benefit, and NACWA’s brief will provide an excellent opportunity to make the Money Matters argument within a litigation context.  Second, NACWA’s brief will highlight the legal and technical flaws in the nitrogen and phosphorus limits established in the Upper Blackstone permit, especially when EPA has not established a suitable scientific basis for the new limits or established that they will actually achieve water quality standards.  NACWA will argue that EPA should not use the methodology applied in this case by Region 1 as the basis for permit limits in any other part of the county.  NACWA’s brief will further underscore the dangerous precedent this permit could set for implementation of nutrient-related permit limits nationwide.  Briefing is expected to occur later this year.

No Ruling Yet in Florida Nutrient Criteria Case

NACWA continues to await a ruling on its June 15 amicus brief in Florida Wildlife Federation, et al v. EPA, which is a challenge to numeric nutrient criteria developed by EPA for freshwater lakes, streams, and rivers in the State of Florida.  The brief outlines NACWA’s position in the growing legal fight over EPA’s recently developed numeric nutrient criteria for Florida and supports the Association’s Florida member utilities in their Motion for Summary Judgment challenging the new nutrient regulations.  The NACWA brief argues that EPA’s actions in Florida are fundamentally inconsistent with the limited role that Congress envisioned under the CWA for federal involvement in establishing WQS, especially for nutrients.  NACWA further alleges that EPA’s decision to impose limits on Florida illegally usurped the state’s primary role in establishing nutrients limits and will have significant national implications by setting a negative precedent for the potential federalization of nutrient WQS beyond Florida.  The case is part of a broad challenge to EPA’s federalization of Florida’s nutrient criteria, which the Agency finalized in November 2010.  A ruling from the court is expected at any time, and NACWA will keep members informed of developments in this case as they occur.

Akron Consent Decree Litigation Placed on Hold

The appeal by NACWA member the City of Akron, Ohio of a federal district court decision to reject a proposed wet weather consent decree has been temporarily placed on hold while a mediator attempts to resolve the underlying issues in the litigation.  In a rather unusual move, the U.S. Court of Appeals for the Sixth Circuit has placed the case in abeyance through the end of September pending discussions between the court’s mediator and the original district court judge about reconsidering the rejection of the negotiated decree.  The case stems from a March 2010 decision by the district court judge to reject the decree even though it had been agreed to and was supported by the City, the federal government, and the state government.  Akron has filed an appeal of the district court’s decision not to enter the decree with the Sixth Circuit, and NACWA will be filing an amicus brief in support of the city’s appeal.

NACWA’s brief will highlight the importance of district court judges granting deference to the consent decree negotiation process, especially to a decree that has been mutually agreed to by the municipality and the federal and state governments after engaging in a comprehensive negotiation process.  The brief will also discuss from a national perspective how disruptive it will be to the overall consent decree negotiation process if cities cannot rely on the federal courts to approve agreements they reach with federal and state regulators.  Additionally, the brief will outline the significant problems that occur when federal judges attempt to substitute their views on highly technical consent decree matters such as engineering designs and financial capability assessments for those of municipal, federal, and state experts as agreed upon during the consent decree negotiation process.

ISSUES OF INTEREST

NACWA Comments on EPA/Army Corps Draft Clean Water Act Jurisdiction Guidance

On July 29 NACWA filed comments on the proposed joint agency draft guidance issued on April 27, 2011 by EPA and the U.S. Army Corps of Engineers (USACE) on the scope of jurisdictional waters protected by the CWA.  As NACWA stated in its comments, the Association “is broadly supportive of efforts to strengthen the water quality protection afforded by the CWA when done as part of a holistic watershed approach, and believes the proposed guidance takes some important steps in this direction. . . . Overall, NACWA believes the draft guidance addresses several key concerns of NACWA’s members but would benefit from some additional clarity.”  NACWA also stated that ultimately a full rulemaking process would be needed in order to ensure the issue of jurisdictional waters under the CWA has the benefit of full notice and comment procedures.

The comments also point out that should EPA proceed to finalize the draft guidance, it is critical that, like the draft, the final document preserve the existing regulatory exemption for waste treatment systems.  The final guidance should also include explicit exemptions for municipal stormwater collection systems and groundwater from CWA jurisdictional coverage.  NACWA’s comments also outline concerns raised by some NACWA members with the potential for certain types of ditches, as well as wetlands used in water reuse projects, to be deemed jurisdictional.  For additional analysis of the draft guidance, please see NACWA’s Advocacy Alert 11-15.  NACWA will keep members of informed of developments on this guidance as they develop.

Federal Government Initiates Lawsuit Over Payment of Past Due Stormwater Fees

The U.S. Department of Justice (DOJ) recently filed suit against two municipalities in Washington State attempting to collect outstanding stormwater utility charges from  certain federal government facilities operated by the Bonneville Power Administration (BPA), arguing that recent legislation passed by Congress requiring federal facilities to pay local stormwater fees does not apply to charges billed prior to January 2011.  The complaint lodged July 12 by DOJ’s Tax Division against NACWA member the City of Vancouver and the City of Renton requests a declaratory judgment that the stormwater fee legislation passed last year by Congress and signed into law in January 2011 does not apply to stormwater fees billed prior to the legislation’s enactment.  Additionally, the complaint seeks a refund from the municipalities for stormwater fees paid by the federal facilities in question prior to January of this year.

The recent Congressional legislation on stormwater fees was passed due in large part to NACWA’s significant advocacy efforts, and the Association is closely monitoring developments in this ligation.  NACWA strongly disagrees with DOJ’s position regarding the legislation’s applicability to past due amounts and is currently exploring options to participate in the litigation at the appropriate time.  NACWA will report on developments as they occur.

U.S. Supreme Court to Hear Case on Pre-Enforcement Review of EPA Administrative Orders Under CWA

The U.S. Supreme Court agreed on June 28 to review a lawsuit, Sackett v. EPA, which will focus on the issue of whether the CWA allows for pre-enforcement review of administrative orders issued by EPA.  The case stems from litigation brought by Idaho property owners who argue they were entitled to judicial review of an EPA wetlands compliance order before EPA began an enforcement action in federal court.  After the Sacketts filled in a half-acre of wetlands on their property to build a house, EPA issued a compliance order against them in November 2007, alleging the parcel is a wetland subject to the CWA and that they were in violation by filling in their property without obtaining a permit.  The Sacketts then sued EPA, challenging the compliance order as arbitrary and capricious and a violation of their due process rights.  The U.S. District Court for the District of Idaho granted EPA's motion to dismiss the lawsuit due to lack of subject matter jurisdiction.  The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal, holding the CWA precludes pre-enforcement judicial review of administrative compliance orders and that such preclusion does not violate due process.  The Sacketts filed a petition for certiorari in February 2011 with the U.S. Supreme Court, which was granted in June.  Although the facts of the case involve wetlands, the issue before the Supreme Court is not one of federal jurisdiction but instead focuses on the procedural question of whether the CWA prohibits pre-enforcement review of administrative orders.  Briefing is expected to occur in September and NACWA is currently considering whether to participate in the case as an amicus.