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The National Association of Clean Water Agencies (NACWA) is pleased to provide the membership with the Winter 2012 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.

NACWA Legal Affairs Committee Meets at Winter Conference

The Legal Affairs Committee met on February 13 as part of the Association’s 2012 Winter Conference in Los Angeles.  The meeting kicked off with an update on the current status of the Association’s ongoing lawsuit against EPA over the Agency’s new sewage sludge incineration (SSI) regulations.  The committee also received updates on a number of other current litigation matters in which NACWA is participating, including cases dealing with nutrient, non-point source, and stormwater issues.

Following these updates, committee members engaged in a substantive discussion of key legal issues related to EPA’s new integrated permitting effort.  A focus of this discussion included the implementation aspects of potential municipal integrated plans and what options communities might choose for implementation, including the pros and cons of a permit approach or an enforcement order approach.  The meeting wrapped up with a presentation and discussion on Clean Water Act citizen suit issues in California and their potential impact on the rest of the country.

Handouts from the Committee meeting at the Winter Conference are available on NACWA’s website.  The next Legal Affairs Committee meeting will be held during NACWA’s National Environmental Policy Forum in Washington, D.C. during April 22-25, 2012 – we hope you will be able to join us!

Clean Water Act 101 & Clean Air Act 101 Web Seminars: It All Starts Here

NACWA is pleased to offer a two-part web seminar series on the critical federal statutes that impact virtually every aspect of clean water utility operations.  Whether new to the clean water arena, or a seasoned professional, this series offers a unique opportunity for you and your agency’s staff.

Clean Water Act 101, scheduled for March 8 from 2:00 – 3:30 pm Eastern, will provide a valuable overview of the Clean Water Act’s (CWA) statutory provisions and regulations related to the important topics impacting public clean water agencies, including water quality standards, effluent limitations, total maximum daily loads (TMDLs), use attainability, pretreatment, biosolids management, enforcement and more. Conducted by two leading Clean Water Act (CWA) attorneys, this invaluable seminar will serve as an excellent introduction to, or refresher on, the CWA.

The second session of this series, Clean Air Act 101, will take place on March 15 from 2:00 – 3:30 pm Eastern.  At a time when clean water agencies are being forced to address air emission issues under the Clean Air Act (CAA) more than ever before, this informative seminar, led by two legal experts on CAA issues, will cover a variety of topics including new rules for sewage sludge incinerators (SSIs), the Greenhouse Gas Tailoring Rule, new Toxics Release Inventory reporting requirements for hydrogen sulfide, and new rules on boilers and engines. All of these air regulations could impact POTWs, and this web seminar will outline what every clean water utility should know.

Registration for one or both of these seminars is now available on the NACWA website.  We invite you to gather your staff together in a group learning environment for these exceptional, high-value seminars.

CURRENT CASES

EPA to Deny Reconsideration of SSI Rule, Briefing in Legal Case Temporarily Delayed

NACWA learned in early February that EPA is planning to officially deny the Association’s administrative petition for reconsideration  of the Agency’s SSI rule.   EPA also announced that it will deny a separate petition for reconsideration of the SSI rule that was filed by the Sierra Club as well.  EPA is planning to publish a formal denial of the reconsideration requests in the Federal Register, and those announcements are expected to be published in March.  While NACWA is disappointed, this final decision by the Agency is not entirely surprising given EPA’s indication last August that it would likely deny the Association’s request.

One positive outcome from this development is that because denial will occur before the start of briefing in the Association’s parallel legal challenge, NACWA will now be able to incorporate the Agency’s denial of reconsideration into the legal case.  Briefing was scheduled to begin in late February, although has been temporarily delayed to account for EPA’s decision to formally deny reconsideration.  The parties in the litigation have agreed to submit a revised briefing schedule to the court no later than June 1.  NACWA is hopeful that opening merits briefs will be filed soon thereafter, with all briefing completed by late 2012.

Court Issues Mixed Ruling on Florida Nutrient Criteria

A federal court in Florida issued a ruling  February 18 striking down key elements of EPA’s controversial numeric nutrient criteria for the state, while at the same time upholding the Agency’s decision to impose federal criteria in place of existing state standards.
 
The court’s decision in Florida Wildlife Federation v. EPA to invalidate EPA’s nutrient criteria for flowing streams is an important victory for NACWA’s Florida utility members, which had challenged the Agency’s actions.  The ruling is also consistent with arguments made by NACWA in a brief  filed last June that contested the scientific basis for EPA’s nutrient limits.  The court’s decision found that EPA had established the “wrong target” in developing stream limits by focusing on criterion designed to identify any increase in nutrient level, instead of establishing the “right target” of criterion to identify only harmful increases in nutrients.

The court further found that because EPA failed to establish sufficient scientific reasoning for criteria based on any increase in nutrients as opposed to a harmful increase, the overall stream criteria were fatally flawed and could not survive judicial review.  The court appeared, however, to provide EPA with a fairly clear roadmap on how the Agency could fix these flaws, such as providing additional scientific rationale or adjusting the overall baseline criteria target.

On a more disappointing note, the court dismissed all challenges to EPA’s federalization of Florida’s criteria, finding that EPA acted properly in replacing the existing state narrative approach with federal numeric criteria.  This decision runs counter to arguments made by NACWA and others that EPA violated the Clean Water Act and illegally usurped the state’s primary role in setting water quality standards.  NACWA disagrees with this portion of the court’s decision and is concerned about its potential national precedent in other states where EPA may seek to federalize criteria.  NACWA will closely monitor any potential developments regarding this issue, including any appeals that might be filed to this element of the court’s ruling.

Federal Appeals Court Questions EPA Actions in Nutrients Case

In a related development regarding litigation over nutrients, a federal appeals court in Massachusetts held oral arguments in January in a case involving contested nutrient limits from a municipal discharge permit, and expressed significant reservations with EPA’s actions in issuing the permit.  The case involves a challenge by NACWA member agency the Upper Blackstone Water Pollution Abatement District (Millbury, Mass.) to inappropriate nutrient controls in the utility’s permit.   The court indicated strong concern before the arguments even began with the fact that EPA had failed to take into account new modeling data when establishing the nutrient limits in the permit, and suggested that the Agency would be on shaky legal ground if it sought to proceed with the case.   The court recommended  sending the matter to mediation, with directions that EPA must take into consideration new information on the performance of Upper Blackstone's treatment plant and new modeling data in setting nutrient limits.  The parties will now engage in a dialogue process to establish permit limits based on more accurate and appropriate data.

NACWA filed a brief  in November 2011 supporting the utility’s challenge and arguing EPA acted illegally and irrationally in setting nutrient limits in Upper Blackstone’s permit – without regard to pending upgrades at the utility’s treatment plant and without consideration of the performance or environmental benefits of those upgrades.   The brief also supported the utility’s contention that EPA erred in assigning the contested nutrient limits because it lacked a sound scientific basis and failed to demonstrate that the limits were necessary to achieve water quality standards.

NACWA Submits Brief in Stormwater Fee Litigation

NACWA filed a brief  Feb. 9 with a federal district court in Washington State supporting a municipal legal challenge against the U.S. Department of Justice (DOJ) over unpaid stormwater charges from a federal government facility.  The NACWA brief, filed on behalf of Association member the City of Vancouver, supports a Motion for Summary Judgment  filed by Vancouver on Feb. 7 and argues that the recent stormwater fee amendment (S. 3481 ), enacted in early 2011 to clarify federal responsibility for payment of municipal stormwater service charges, also applies to fees assessed prior to 2011.

NACWA’s brief emphasizes that S. 3481 simply clarified an existing obligation for federal government agencies, as opposed to creating a new obligation, and thus requires payment of past due amounts assessed prior to the bill’s passage.  In its brief, the Association focuses on the legislative history surrounding S. 3481, as well as highlights existing case law, to bolster the argument that Congress intended for the bill to mandate payment of past-due stormwater charges from federal properties.  Additionally, the brief provides an important national perspective on the impact the ruling in the case could have on municipal stormwater agencies elsewhere in the country – from both a practical and policy standpoint.  NACWA was joined on the brief by the National Association of Flood & Stormwater Management Agencies (NAFSMA) and the American Public Works Association (APWA).

NACWA played a critical role in securing passage of S. 3481 and is seeking to defend that hard-fought legislative victory through this litigation.  The case stems from an attempt by the City of Vancouver to collect approximately $100,000 in past due stormwater fees earlier this year from the Bonneville Power Administration (BPA), a federal government agency with facilities in Vancouver’s stormwater service area.   BPA refused payment of the fees and in July 2011 DOJ, acting on behalf of BPA, filed a lawsuit against Vancouver and the City of Renton requesting a declaratory judgment that S. 3481 does not apply to past due stormwater amounts.  Oral arguments are expected in April.

U.S. Supreme Court Holds Oral Arguments in Key Clean Water Act Case

The U.S. Supreme Court heard oral arguments Jan. 9 in Sackett v. EPA, a case involving the critical issue of EPA’s use of administrative orders (AOs) under the Clean Water Act (CWA).  NACWA and a number of other clean water associations filed a joint brief  in the case and all indications suggest the Court is likely to issue a favorable ruling.  The case addresses the issue of whether the CWA allows for pre-enforcement judicial review of AOs issued by EPA for alleged CWA violations.  EPA has maintained that pre-enforcement review of these AOs is not permitted and lower federal courts have agreed, but a large majority of the Supreme Court justices expressed skepticism about this position during their arguments.  Justices from both sides of the ideological spectrum aggressively challenged EPA’s assertion that the CWA implicitly prevents judicial review of AOs until the Agency brings an enforcement action in court, and appeared receptive to the petitioners’ position that such administrative orders should be immediately reviewable.

NACWA joined with the Wet Weather Partnership, the City of New York, and a number of state wastewater associations on a brief  in support of the petitioners.  The brief argues that the CWA does not explicitly or implicitly prevent review of AOs and highlights examples of how EPA has abused its power in issuing AOs to public clean water agencies.  The brief also provides examples of how EPA uses AOs to circumvent the protections built into the National Pollutant Discharge Elimination System (NPDES) permit program to shield permit-holders from unreasonable enforcement actions, and encourages the Supreme Court to curb these abuses by allowing for pre-enforcement judicial review of AOs.  A decision from the Supreme Court in the case is expected before the Court’s current term ends in June.

Farm Bureau Files Opening Brief in Chesapeake Bay Daily Loads Challenge

The American Farm Bureau filed a Request for Summary Judgment  on January 27 in the Chesapeake Bay TMDL litigation.  As expected, the plaintiffs’ argue that EPA has no authority to regulate nonpoint sources under the CWA, and that EPA’s only ability to regulate upstream dischargers is through the CWA 402 permitting program.  They also attack the technical underpinnings of the TMDL and argue that EPA withheld key documents from public review.

NACWA is participating in the case with the Maryland Association of Metropolitan Wastewater Agencies (MAMWA) and the Virginia Association of Metropolitan Wastewater Agencies (VAMWA).  All three groups were jointly granted intervention as a defendant in October.  The litigation stems from an attempt by the American Farm Bureau and other agriculture groups to challenge the final Chesapeake Bay TMDL and limit EPA’s ability to regulate non-point agricultural dischargers as part of the TMDL implementation.  These claims present a significant threat to the comprehensive watershed approach upon which point source interests are highly dependent and which NACWA strongly supports, and could result in increased regulatory pressure on point sources such as municipal wastewater and stormwater dischargers.  NACWA sought intervention in the litigation to protect the interests of the Associations’ public utility members are protected and ensure that EPA’s ability to address nonpoint sources and administer a holistic watershed approach through the TMDL program is upheld.   Under the briefing schedule approved by the court, EPA will file its response in late March, and NACWA will file its intervenor’s brief in support of EPA in April.

Oral Arguments Scheduled in St. Louis Stormwater Fee Appeal

Appellate arguments are scheduled for early March in a case involving NACWA member agency the Metropolitan St. Louis Sewer District (MSD) and whether the utility’s municipal stormwater fees qualify as reasonable service charges or impermissible taxes.  NACWA submitted a brief in September supporting MSD and arguing that the use of impervious surface to calculate stormwater service charges – as done by MSD in their stormwater program – is increasingly becoming the industry standard for calculating stormwater fees in the most equitable manner.  Additionally, the NACWA brief argues that many other states around the country have already determined that stormwater fees qualify as reasonable service charges and not taxes.  It highlights the fact that Congress has passed legislation that amended the CWA to clarify that municipal stormwater fees based on impervious surface area qualify as appropriate service fees for payment by federal government facilities.

The appeal is the result of a 2010 decision by a Missouri trial court finding that MSD’s stormwater utility fees were illegal taxes, thereby invalidating the utility’s entire stormwater fee program.  The issues involved in this litigation have significant national implications for other municipal stormwater utilities using a similar fee structure.  NACWA is participating in the case to push back against any negative legal precedent regarding the use of impervious surface as a basis for stormwater charges.  The American Public Works Association (APWA) and the National Association of Flood & Stormwater Management Agencies (NAFSMA) also joined NACWA on the brief.

Akron Consent Decree Litigation Still Awaits Mediation

The appeal by NACWA member the City of Akron, Ohio of a federal district court decision to reject a proposed wet weather consent decree continues to be on hold awaiting mediation.  The U.S. Court of Appeals for the Sixth Circuit placed the case in abeyance 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 Participates in EPA Workshops on Integrated Planning

NACWA representatives participated in all of EPA’s recent workshops on its new integrated planning initiative and draft framework .  Discussions were similar throughout the workshops, with representatives from national and local stakeholder groups participating in a facilitated dialogue on the elements of EPA’s plan.  Utility representatives emphasized the importance of approaching this effort as a partnership among federal, state and local officials to help clean water agencies achieve better prioritizations of their regulatory responsibilities.  Utility officials also strongly cautioned against EPA using the effort as a tool to address noncompliance.  Representatives from the environmental NGO community appeared skeptical about the effort at a number of the meetings, expressing concern that integrated planning not become a way for utilities to avoid meeting core CWA requirements.  State reaction to the effort seemed mixed, with many states uncertain of their potential role under the initiative or their ability to implement it.

The issue of sanitary sewer overflows (SSOs) was raised repeatedly at many of the workshops, with utility representatives noting that SSOs often are a small contributor to water quality impacts, but that EPA’s current policy toward zero overflows results in disproportionately high spending.  In response, EPA reiterated that it was not planning to change any of its existing policies on SSOs and peak flows through this effort.

Issues with the framework clearly remain, but NACWA hopes they will be addressed before the final version is released.  NACWA believes that while the framework is a step in the right direction and may provide a path forward for some utilities, a more comprehensive change is necessary -- including potential legislative options.  Accordingly, NACWA worked hard to help facilitate introduction of recent legislation to address the need for greater regulatory prioritization and integrated planning.  NACWA is also currently working to develop comments on the draft framework and will be submitting them to EPA.  The Agency has indicated that it hopes to finalize the framework document by the end of March.

OMB Begins Review of EPA Guidance Clarifying Clean Water Act Jurisdiction

EPA and the U.S. Army Corps of Engineers (Corps) on Feb. 21 forwarded proposed final guidance on CWA jurisdiction to the White House Office of Management & Budget (OMB) for interagency review.  NACWA will be meeting soon with OMB to discuss this development.  The guidance, now called the “Clean Water Protection Guidance,” follows the publication last year of draft guidance  by EPA and the Corps for public comment.  NACWA submitted comments  on the draft guidance in July, expressing general support for efforts to strengthen water quality protection as part of a holistic watershed approach but also calling for clarification on a number of key issues.

EPA received nearly 250,000 comments on the draft guidance, many of which encouraged the Agency to abandon the guidance effort and pursue a formal rulemaking process instead.  EPA announced in October that it was initiating a jurisdictional rulemaking in conjunction with the Corps, so the recent decision to send final guidance to OMB is somewhat surprising.  NACWA plans to meet with OMB to ensure that the Association’s position on the guidance, including its previous comments and preference for a rulemaking instead, is considered during the interagency review process.