Tuesday, March 26, 2013

For those following stormwater regulatory issues, 2013 is proving to be a very interesting year. Last week, the U.S. Supreme Court upheld a regulation exempting stormwater flows from logging roads from permitting under the Clean Water Act. This is the third federal court decision of the year to address the scope of federal authority to regulate stormwater flows. Still to come are USEPA’s development/redevelopment stormwater regulations, the initial draft of which are anticipated this June.

The Supreme Court ruled last week that USEPA had properly interpreted its regulations in determining that stormwater flowing from logging roads does not require a NPDES permit. The opinion, Decker v. Northwest Envt’l Defense Center, No. 11-338 (March 20, 2013), resulted from a Clean Water Act citizen suit against a logging operation in Oregon. The suit, which claimed that stormwater discharges from the operation’s roads required a NPDES permit, indirectly challenged USEPA’s interpretation of its so-called Silvicultural Rule (40 C.F.R section 122.27(b)(1)), as exempting from the NPDES permitting program any stormwater flows from logging roads. The Ninth Circuit Court of Appeals had ruled against USEPA, and concluded that stormwater discharges from logging roads were “associated with industrial activity,” thus requiring a NPDES permit. Subsequent to the Ninth Circuit decision, USEPA amended the Silvicultural Rule to clarify that stormwater flows from logging roads were not “associated with industrial activities” and therefore not subject to NPDES permitting.

The Supreme Court overturned the Ninth Circuit and upheld USEPA’s interpretation. The Court concluded that, by amending the Silvicultural Rule, USEPA had not mooted the case, because the defendants could still be held liable for violations of the Clean Water Act if USEPA’s interpretation of the original Silvicultural Rule was invalid. Turning to that interpretation, the Court noted that USEPA’s interpretation need not be the only possible or even the best interpretation – only that it cannot be “plainly erroneous or inconsistent with the regulation.” Under that mild standard of review, the Court concluded that interpreting logging roads as falling outside the scope of industrial activity was a permissible interpretation.

Earlier this year, in Los Angeles County Flood Control District v. Natural Resources Defense Council, No. 11-460 (January 8, 2013), the Supreme Court ruled that the flow of contaminated stormwater between different sections of a municipal separate storm sewer system (MS4) did not trigger the need for a NPDES permit. That case followed the Court’s prior precedent regarding what constituted a “discharge” for the purposes of determining if a NPDES permit was required. Nonetheless, the case is important in that it overturned a Ninth Circuit holding that the flow of contaminated stormwater between components of the MS4 should be regulated as a discharge of pollutants. If left standing, the ruling below would have dramatically expanded the regulation of water flows within MS4s and other managed water systems and imposed unmanageable regulatory burdens on the operators of those systems.

Finally, a federal district court recently invalidated an effort by USEPA to use “surrogates” as a tool for regulating stormwater discharges. In Virginia Dept. of Transp. v. U.S. Envt’l Protection Agency, _____ F.Supp.2d ____, 2013 U.S. Dist. LEXIS 981 (January 3, 2013), the court addressed a Total Daily Maximum Load (TMDL) established by USEPA for the Accotink Creek, which used stormwater flow as a surrogate for limiting sediment loading in the creek from stormwater discharges. The court rejected this approach, because USEPA’s authority under the Clean Water Act to establish TMDLs is limited to “pollutants,” and stormwater is not deemed a “pollutant” under the statute. This case marks the fourth unsuccessful attempt by USEPA to regulate sediment loading from stormwater based on flow. USEPA has stated publicly that it will not appeal the decision.

As mentioned above, USEPA is preparing draft regulations that would establish a national program to regulate stormwater flows associated with development and redevelopment activities. These regulations are intended to fill the “gap” between current federal construction and industrial stormwater regulations. These regulations were mandated in a2010 settlement of a lawsuit filed by public interest groups to force regulators to improve water quality in the Chesapeake Bay. The three court decisions discussed above will unquestionably influence the agency’s decision-making as it attempts to finalize draft regulations for public release. Read together, these cases signal that on the one hand courts remain willing defer to USEPA’s interpretation of its regulations where there is some basis to support that interpretation. On the other hand, these decisions also reveal judicial suspicion of both efforts to expand the Clean Water Act’s regulatory footprint and novel regulatory schemes, absent a clear statutory basis to do so.