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NACWA Legal Alert (Leg05-03)

Member Pipeline - Legal - Alert (Leg 05-03)

To: Members & Affiliates, Pretreatment & Hazardous Waste Committee, Legal Affairs Committee
From: National Office
Date: May 31, 2005
Subject: COURT UPHOLDS EPA APPROACH TO EFFLUENT GUIDELINES PROGRAMS
Reference: Legal Alert 05-03

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On May 20, the U.S. District Court for the Northern District of California, relying upon many of NACWA’s legal arguments, dismissed a challenge to the U.S. Environmental Protection Agency’s (EPA’s) recent actions under the effluent limitations and effluent guidelines programs brought by several activist groups. Supported by NACWA’s Targeted Action Fund and Legal Affiliate Squire, Sanders & Dempsey’s David Burchmore, the Association participated as an intervenor in Our Children’s Earth Foundation (OCE) v. EPA. Over the course of the year long case, NACWA participated in two dynamic hearings before the California court, most recently on May 11, and overcame significant activist objections to our participation in the case.

NACWA’s participation in the case clearly played an important role in the court’s analysis, as the opinion relies precisely upon points that NACWA emphasized in briefs and at oral argument. In its opinion, the court holds that in its comprehensive 2004/2005 effluent guidelines plan (EGP), EPA met all requirements for: 1) the annual review of effluent guidelines (CWA § 304(b)); 2) the biennial adoption of an effluent guidelines plan (CWA § 304(m)); and 3) the five year review of effluent limitations (CWA § 301(d)). The court noted that EPA has broad discretion to determine how it conducts each of these activities, and that CWA § 304(m) does not require EPA to conduct a detailed technological review of all 450 categories and subcategories of effluent limitations in the biennial report. Rather, CWA § 304(m) requires EPA to set a schedule for its annual guidelines reviews, to identify new categories for effluent guidelines, and to propose schedules to develop those new effluent guidelines.

This Alert summarizes the decision for NACWA members. A copy of the decision is available in the Litigation Tracking section of NACWA’s Member Pipeline. As always, please feel free to contact NACWA’s General Counsel Alexandra Dunn at 202/533-1803 or adunn@nacwa.org with any questions.

I. Case Background

In May 2004, OCE brought this case against EPA, alleging that EPA failed to: 1) review all effluent guidelines annually; 2) review effluent limitations every five years; 3) issue a timely EGP ; and 4) adopt a proper EGP[1]. Specifically, OCE disagreed with the EPA’s use of a new risk/hazard assessment methodology in the EGP, in which the Agency screened previous effluent guideline categories, selected the categories posing the greatest risks to water quality, and promulgated effluent guidelines in the selected categories. In the EGP, the Agency also identified two industrial categories for which no guidelines currently existed, and two categories for which the guidelines might be modified.

In August 2004, NACWA moved to participate in the case in support of EPA. While EPA did not oppose NACWA’s involvement, the activist groups argued against our participation because their suit did not explicitly question EPA’s actions regarding the pretreatment program or indirect dischargers to publicly owned treatment works (POTWs). In rebuttal, NACWA demonstrated the close interrelationship between EPA’s effluent guidelines and effluent limitations programs for direct dischargers and the pretreatment programs for indirect dischargers. NACWA showed how POTWs have been actively involved in all aspects of the effluent limitations and effluent guidelines programs for many years, and that EPA consistently evaluates, assesses, and promulgates pretreatment standards at the same time it evaluates, assesses, and promulgates effluent limitations for direct dischargers. NACWA explained how revisions to EPA’s practice of reviewing and revising effluent guidelines, and the resulting effluent limitations, would impact public agency regulation of industrial user discharges of toxic pollutants into POTWs. After dynamic oral argument before the court, in October 2004 the judge granted NACWA’s full participation in the case to support EPA.

EPA sought to have the case dismissed, arguing that it adequately performed all duties under the CWA with respect to the effluent guidelines and effluent limitations programs. NACWA’s April 2005 motions supported EPA, and highlighted in particular:

NACWA participated in the oral argument held before the court on May 11 to review our arguments, the activists’ claims, EPA’s opposition, and the Effluent Guidelines Industry Coalition (EGIC)’s views.

II. Highlights of the Decision

The court’s May 20 opinion initially addresses issues such as mootness, standing, and jurisdiction. EPA argued that the activists’ suit should be dismissed as moot because the EGP was already issued. However the court, applying an exception to the mootness rule, decided to allow the case to proceed given that “the short duration of time permitted for the EPA’s annual and biennial reports, coupled with the EPA’s ongoing obligation to review and revise regulations and issue reports” makes it difficult to review EPA’s actions without encountering mootness issues. Opinion at 4. The EGIC argued that the activist groups lacked standing to challenge EPA’s actions. The court, however, found standing because each organization successfully showed that their members’ enjoyment of water-related activities, ability to teach their children about marine life, and ability to eat seafood were hampered by industrial pollution and EPA’s actions. Id. at 5-6.

The court then accepted EPA’s and NACWA’s arguments that substantive review of the specific effluent guidelines and effluent limitations promulgated should be brought in the courts of appeals under CWA § 509(b)(1)(E). Citing specifically to the legislative history identified by NACWA in its brief, the court therefore granted partial judgment on the pleadings to EPA on the jurisdictional issue. Id. at 7-8. However, the court went on to hold that the questions of whether EPA had performed the annual and five year reviews of the effluent guidelines and limitations were properly before the district court under the citizen suit provisions of CWA § 505(a)(2). Id. at 8.

Having concluded that the court could review the narrow and limited question of EPA’s actions to satisfy the CWA’s directives, the court held that EPA had in fact met the statute’s requirements. In terms of the details of the Agency’s reviews, the court found that EPA has broad discretion to determine how it conducts the annual reviews of effluent guidelines and five year reviews of effluent limitations, and how it develops the EGPs. The court also held that EPA must revise the guidelines or limitations only if EPA finds revisions are necessary.

The court rejected the activists’ assertion that EPA is required in the EGPs to undertake a comprehensive technological review of all 450 categories and subcategories of effluent guidelines in its biennial reports. Rather, the court found that EPA is only obligated to set a schedule for its annual reviews, to identify new effluent guideline categories, and to put forth a schedule for promulgating effluent guidelines for those newly identified categories. Id. at 9. The court noted that the activists “recognize that the EPA has complied at some basic level with these requirements” and that their real challenge was to the methods EPA used in the EGP. Id. at 10. The court stated that the activists specifically object to EPA’s use of the risk/hazard methodology to review the effluent limitations and effluent guidelines, particularly because EPA’s approach may exempt “certain categories of water pollution entirely from review.” Id. The court clearly states that substantive challenges to EPA’s approaches belong in the courts of appeals.

III. Next Steps

Given the court’s analysis, activist groups likely will raise future substantive challenges to EPA’s reviews of effluent guidelines and effluent limitations in the courts of appeals. This could occur when EPA promulgates its 2006/2007 EGP or upon EPA’s 2005 annual review of the effluent guidelines.

It also remains possible that the activist groups will appeal this specific ruling to the U.S. Court of Appeals for the Ninth Circuit. Should that occur, NACWA’s Board of Directors and the relevant Committees will evaluate whether further participation by the Association in the case is beneficial to the nation’s clean water agencies.

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[1] The court, finding the EGP timely, dismissed the third claim in August 2004.