NACWA Legal Alert (Leg07-01)

Member Pipeline - Legal - Alert (Leg 07-01)

To: Members & Affiliates, Legal Affairs Committee
From: National Office
Date: January 10, 2007
Reference: Legal Alert 07-01

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NACWA is pleased to provide the membership with the latest Litigation Report. This Report contains summaries of the Association’s legal initiatives and discusses developments in NACWA’s litigation matters.

Late Breaking Legal Issues Calls
NACWA completed its 2006 Late Breaking Legal Issues call series on December 13 with a joint call on current legal developments with the Association of State and Interstate Water Pollution Control Administrators (ASIWPCA). Topics discussed on the call included the U.S. Environmental Protection Agency’s (EPA’s) new fee-based National Pollutant Discharge Elimination System (NPDES) rulemaking, developments regarding total maximum daily loads (TMDLs), the pending court case challenging EPA’s delegation of NPDES authority to Arizona, and interbasin transfer permitting. Participants on the call enjoyed the joint format with ASIWPCA, and it paves the way for additional future cooperation between ASIWPCA and NACWA on issues of mutual interest.

NACWA will hold its next Late Breaking Legal Issues calls on January 17, 2007, when guest speakers from NACWA Legal Affiliate Bingham McCutchen will discuss City of Los Angeles v County of Kern, a key case in California involving the land application of biosolids. Speakers on the call will also address changes to the federal rules of civil procedure regarding electronic discovery. The dates for other 2007 calls are March 14, June 13, September 12, and December 12. All calls are held from 2:00 – 3:00 pm eastern. Dial-in information for all 2007 calls and handouts from 2006 calls can be found on the legal section of NACWA’s Member Pipeline.

2006 Law Seminar Well Attended; Receives Enthusiastic Reviews
Developments in Clean Water Law: A Seminar for Public Agency Attorneys & Managers (Seminar) held November 15-17, 2006 at the Sheraton Boston Hotel, MA, was solidly attended and received positive reviews from attendees. The National Office has completed the review and summary of attendee evaluations, and there were many favorable comments. Among them, one attendee said that NACWA “outdid” itself with the conference, noting that “it was fantastic…I’m already looking forward to next year.” Others commented on the “well focused programs” and the “very impressive, knowledgeable panelists.” Another attendee, when asked how to improve the Seminar, responded by saying “you can’t – it’s great!” Handouts and presentations from the Seminar may be found on the NACWA website at The 2007 Seminar will be held November 7-9 in Palm Desert, CA. Planning will begin later this year.

Legal Library on NACWA Webpage Expands, Includes More Information
The National Office has added two new sections to the NACWA Legal e-Library, increasing the amount of information on legal issues that is available to members on the website. The first new section, Committee Q&A Summaries, provides a forum to share responses to the frequent requests for information that are e-mailed to the Legal Affairs Committee. National Office staff summarizes the responses received and then post the summary in the Legal e-Library to serve as a resource to all members. A second new section, Enforcement Initiatives, provides an opportunity for members to share information about their state or federal enforcement experiences, and provides information on current EPA enforcement priorities.

For More Information
New documents are posted regularly in NACWA’s active cases in the Litigation Tracking section of the Member Pipeline. As always, please feel free to contact NACWA’s General Counsel Alexandra Dunn at 202/533-1803 or with any questions or comments on NACWA’s legal activities.


Oral Argument Date Set in Effluent Limitation Guideline Case
The U.S. Court of Appeals for the Ninth Circuit will hear oral arguments on February 13 in Our Children’s Earth Foundation (OCEF) v. Environmental Protection Agency. The case involves a challenge by OCEF to EPA’s Effluent Limitation Guidelines (ELG) program. NACWA entered the case as an intervenor and urged the appeals court in November 2005 to affirm the finding of the trial court that EPA is implementing the ELG program properly and consistent with Congress’ intent. In recent months, OCEF has informed the Ninth Circuit of an opinion from the U.S. District Court for the Central District of California, Natural Resources Defense Council (NRDC) v. EPA, 437 F. Supp.2d 1137 (June 27, 2006), and suggested that the NRDC decision supports OCEF’s argument that EPA has little discretion in implementing the ELG program. Although NACWA believes the NRDC case is not on point and will argue this before the court, how the Ninth Circuit will address the NRDC decision will not be known until the hearing. NACWA will provide an update on the case after oral arguments are held.

NACWA Seeks Role in BEACH Act Case
On December 14, NACWA filed a Motion to Intervene in Natural Resources Defense Council (NRDC) v. EPA, a critical case currently pending in U.S. District Court for the Central District of California that concerns EPA’s failure to establish new recreational water quality criteria as required under the Beaches Environmental Assessment and Costal Health Act of 2000 (BEACH Act). Specifically, the BEACH Act requires EPA to identify appropriate indicator organisms that can be used to detect the presence of bacteria and pathogens in costal and Great Lakes waters, and to asses the potential human health risks from exposure to such bacteria and pathogens. EPA has failed to meet the deadlines to complete these studies as required by the statute, and NRDC brought the suit to obtain a court schedule for EPA action.

The Board approved NACWA’s participation in the case in September 2006 to ensure that the Association brings a clean water voice to anticipated settlement discussions in the case, and that any court-ordered deadline imposed on EPA provides the Agency with sufficient time to create new recreational water quality criteria based on sound science. NACWA consulted with both NRDC and EPA prior to filing its intervention, and NRDC filed a Response on January 8 to our Motion to Intervene. Although NRDC does not oppose NACWA’s intervention in the suit, it does oppose our intervention as a Plaintiff and believes we should enter on the side of EPA. Given our concern with EPA’s failure to meet the requirements of the BEACH Act, NACWA plans to continue with our efforts to enter the case as a Plaintiff, and argument on this issue is set for January 22. We will keep the membership appraised of developments in this important litigation.

Water Transfer Case Headed to Supreme Court; NACWA to File Brief in Support
NACWA expects to file an amicus curiae brief with the U.S. Supreme Court by January 26, asking that the Court review the decision of the U.S. Court of Appeals for the Second Circuit in Catskill Mountains Chapter of Trout Unlimited, Inc. (Catskills) v. City of New York. NACWA is filing its brief in support of member agency the New York City Department of Environmental Protection’s (NYCDEP’s) November 20, 2006 request for high Court review of the Second Circuit’s ruling that NYCDEP must obtain an NPDES permit for the discharge of natural, untreated drinking water from one of its reservoirs into another of its reservoirs. NACWA has been actively supporting NYCDEP with this case over the past two years, filing amicus briefs on behalf of NYCDEP in the Second Circuit. NYCDEP’s petition asserts that the transfer of untreated water from one natural source to another does not require an NPDES permit. Initial reaction from the Solicitor General’s Office suggests that the federal government will ask the Supreme Court not to review NYCDEP’s petition because EPA has not yet finalized its rule on water transfers. See 71 Fed. Reg. 32,887. The rule is expected to clarify that transfers of untreated water like those carried out by NYCDEP are not subject to the NPDES permitting program.

In a related case dealing with water transfers, the U.S. District Court for the Southern District of Florida ruled on December 11, 2006 in Friends of the Everglades v. South Florida Water Management District (SFWMD) that the pumping of water by SFWMD from canals in the Everglades into Lake Okeechobee without an NPDES permit is a violation of the Clean Water Act (CWA). However, the court will not stop the pumping immediately, and has deferred final judgment in the case pending further proceedings to consider the plaintiffs’ request for injunctive relief. Although NACWA is not directly involved in the case we will closely monitor it and report developments to the membership as necessary given its potential to set precedent on the water transfer issue.

Supplemental Brief Filed in Daily Loads Case Seeking Supreme Court Review
On December 11, 2006, NACWA and the Wet Weather Partnership (WWP) filed a Supplemental Brief asking the U.S. Supreme Court to review the April 25, 2006 decision of the U.S. Court of Appeals for the District of Columbia (D.C.) Circuit in Friends of the Earth (FOE) v. EPA that all TMDLs must be expressed in daily terms only. This brief was submitted in response to a brief filed by EPA and the Solicitor General’s Office on November 24, 2006 asking the high Court not to review the case. The government’s brief states that EPA’s recent national guidance on TMDLs released in response to the D.C. Circuit ruling resolves all uncertainty created by the decision and obviates the need for Supreme Court review.

The Supplemental Brief was NACWA’s second filing with the Supreme Court in this case; NACWA and the WWP filed their original brief in support of review on August 24, 2006 supporting member agency District of Columbia Water and Sewer Authority’s (DC WASA’s) request for high Court’s review. NACWA’s Supplemental Brief addresses the arguments made by EPA in its opposition to Supreme Court review, and specifically identifies key weaknesses in EPA’s recent guidance on TMDLs. In particular, the brief explains that the Agency’s guidance does not resolve the legal uncertainty created by the D.C. Circuit ruling because it conflicts with EPA’s own regulations and a ruling by the U.S. Court of Appeals for the Second Circuit. Additionally, the guidance only discusses future TMDLs and fails to address the status of existing TMDLs, thus opening the door for significant future litigation over the status of existing load limits. NACWA’s Supplemental Brief further advocates for Supreme Court consideration by asserting that unless reviewed, the D.C. Circuit decision “undermines thousands of existing clean-up plans nationwide for impaired waters and potentially undermines thousands of future clean-up plans that many be developed upon an uncertain legal basis.” The Supreme Court is expected to decide this month whether to accept the case.

Pending possible Supreme Court action, the trial court on remand of the case entered an Order on September 18, 2006 staying the D.C. Circuit’s ruling regarding the existing TMDLs for the Anacostia River at issue in the case until June 7, 2008, thereby giving EPA until that date to develop new TMDLs consistent with the appeals court decision. DC WASA filed a Motion to Reconsider the stay with the trial court, and a decision by that court is expected soon. We will keep the membership informed of key developments in this case in the coming weeks.

Favorable Rule on SSIs Expected
NACWA has learned through communication with EPA that the Agency has decided not to reopen its final regulation for other solid waste incineration units (OSWI) under the Clean Air Act (CAA) § 129 to cover sewage sludge incinerators (SSIs). EPA had announced in June 2006 (71 Fed. Reg. 36,726) that it was considering revising the final OSWI rule to include coverage of SSIs. NACWA submitted comments in August 2006 strongly opposing this approach and arguing that SSIs could not be regulated as OSWI under § 129 of the CAA because EPA had already determined they would be regulated as separate area sources under CAA § 112. See Fed. Reg. 23430, 23460 (April 24, 2000). EPA’s decision not to reopen OSWI, which is currently undergoing interagency review at the Office of Management and Budget, represents a significant victory for NACAW’s advocacy efforts on SSIs. The rule is expected to be made final soon, and we will alert the membership upon its release.

EPA will now proceed with developing separate area source standards for SSIs. Although a proposed rule for these standards is not expected until at least 2008, NACWA plans to work closely with EPA on the development of the rule. EPA’s actions are in part a result of the August 2, 2006 opinion of the U.S. District Court for the District of Columbia in Sierra Club v. EPA, a case concerning EPA’s overdue air toxics regulations, including those for urban SSIs under the CAA § 112(k). The court directed in its ruling that EPA promulgate dozens of overdue CAA air toxics regulations between 2006 and 2009.

Negotiations Continue Regarding District of Columbia MS4 Permit
Settlement negotiations continue between the Friends of the Earth (FOE), Defenders of Wildlife (Defenders), EPA, and the District of Columbia (District) involving the March 2006 Final Modification to the District’s municipal separate storm sewer system (MS4) permit. FOE and Defenders lodged an appeal with EPA’s Environmental Appeals Board (EAB) over the permit, but all parties have agreed to extend EPA’s time to respond until at least March 1, 2007 to allow for additional settlement discussions.

In the appeal, FOE and Defenders cite the permit’s failure to “contain effluent limits adequate to assure compliance with water quality standards.” They allege that “pollutant specific, numeric limits” are “presumptively required” by the CWA. Contrary to the CWA’s legislative history, NACWA’s long-standing positions, and prior court decisions, the activists assert that CWA § 402(p)’s specific standard for MS4s – that cities remove stormwater pollutants to the maximum extent practicable (MEP) using best management practices – allows BMPs only where numeric limits are infeasible and where it is shown that other limitations will assure compliance with water quality standards. NACWA, the National League of Cities (NLC), the National Association of Flood and Stormwater Management Agencies (NAFSMA), the CSO Partnership (CSOP), the West Virginia Municipal League (WVML), and the Virginia Municipal League (VML) plan to continue our multi-year involvement in this case to protect the MEP standard for MS4 discharges.

EPA Releases Modification to Permit in NPDES/CSO Phase II Case
EPA Region III released a modification on December 7, 2006 to the NPDES permit issued to member agency DC WASA for the Blue Plains Wastewater Treatment Plant. The modification will reduce the nitrogen allocation for the plant from 8,467,200 pounds per year to 4,689,000 pounds per year. This change follows a series of comments received by EPA after the permit was first released on August 18, 2006. EPA has established a 30-day comment period on the modification until January 10, 2007, and DC WASA may appeal the change.

On August 23, 2006, EPA's EAB dismissed the Friends of the Earth and DC WASA appeal of DC WASA’s original permit issued in 2003. The dismissal came after EPA Region III issued the modified permit on August 18, rendering the appeal moot. However, the EAB stayed until February 20, 2007 a request by DC WASA to review Region III's decision not to include in the permit a compliance schedule for implementation of DC WASA's long-term control plan (LTCP). NACWA motioned to participate in the case in mid-2005 due to the importance of compliance schedules to combined sewer communities. We will report on the EAB’s decision when it is available, as well as any action by DC WASA to appeal the new nitrogen allocation.

Ruling Anticipated in Clean Water Act Attorneys Fee Award Case
Oral arguments were held on September 15, 2006, before the U.S. Court of Appeals for the Sixth Circuit in the case of U.S. v. Board of County Commissioners of Hamilton County, Ohio. The litigation involves NACWA member agency the Metropolitan Sewer District of Greater Cincinnati’s (MSDGC’s) appeal of a decision by the U.S. District Court for the Southern District of Ohio that the Sierra Club was a “catalyst” to MSDGC entering a consent decree, and the award to Sierra Club of $1 million in attorneys’ fees under the CWA’s citizen suit provision (§ 505(d)). NACWA filed an amicus curiae brief in support of MSDGC before the Sixth Circuit on February 15, 2006, arguing that the catalyst theory has been soundly rejected by the U.S. Supreme Court and that the Sierra Club could not be found as a “prevailing or substantially prevailing party” under the CWA because Sierra Club not only opposed entry of the decrees but also was not a party to the decrees. A decision from the Sixth Circuit is expected in the next few months, and we will report the court’s ruling as soon as it is released.

NACWA Files Letter of Support for Rehearing in Groundwater Discharge Permitting Case
NACWA, together with the California Association of Sanitation Agencies (CASA) and the Association of California Water Agencies (ACWA), filed a letter on September 8, 2006 with the U.S. Court of Appeals for the Ninth Circuit requesting a rehearing in City of Healdsburg (Healdsburg) v. Northern California River Watch. The letter was filed as a result of the Ninth Circuit’s decision on August 10, 2006 that Basalt Pond (NACWA member agency the City of Healdsburg’s manmade wastewater percolation pond that is also involved in gravel mining operations) is a "waters of the United States" for purposes of CWA regulation because Basalt Pond contains adjacent wetlands with a "significant nexus" to the Russian River, a navigable "waters of the United States." 457 F.3d 1023 (2006). Therefore, the court held that the City must obtain an NPDES permit to discharge to its percolation pond. The letter also follows a request for rehearing filed on August 23, 2006 by Healdsburg as well as a Motion for Clarification filed by the federal government on August 31, 2006. The Healdsburg decision is critically important because it is one of the first appellate court opinions to interpret the U.S. Supreme Court’s June 19, 2006 decision in Rapanos et ux., et al. v. United States and Carabell et al. v. U.S. Army Corps of Engineers et al. (Rapanos).

The letter NACWA filed with the court argues that the Ninth Circuit incorrectly applied Justice Kennedy’s “significant nexus” test from Rapanos and reached a conclusion that “would not be endorsed by either the four plurality or the four dissenting judges.” Accordingly, NACWA and its partners argue that the Ninth Circuit must rehear the case and re-examine the appropriate test to be used to determine CWA jurisdiction under recent Supreme Court case law.

The Ninth Circuit has referred the petitions for rehearing to the panel of judges that rendered the original decision. The panel has not yet indicated whether it will rehear the case, although a decision should be forthcoming in the next few months. The entire Circuit will not consider whether to rehear the case en banc until the panel decides whether it will rehear the case. We will keep the membership updated as developments in this case unfold.

Decision Expected in Minnesota Pre-TMDL Permitting Case
NACWA is still anticipating a decision from the Minnesota Supreme Court in the case of Cities of Annandale and Maple Lake (Cities) NPDES Permit Issuance, which was argued before the court on May 3, 2006. The case concerns the Minnesota Court of Appeals’ 2005 holding that the Minnesota Pollution Control Agency (MPCA) improperly determined that an NPDES permit for the Cities would not cause or contribute to a violation of water quality standards in a CWA § 303(d) listed water. MPCA specifically found that the new discharge would be effectively “offset” by decreased discharges of the pollutant of concern by other entities in the waterbody. NACWA’s December 2005 amicus curiae brief supported the ability of permitting authorities like MPCA to undertake such analyses. NACWA emphasized that MPCA’s decision promotes a facility upgrade that will maximize the protection of public health and the achievement of water quality goals. NACWA will report on the decision when it is released.

NACWA, Ohio Agencies to File Amicus Curiae Brief in Phosphorus TMDL Case
NACWA and the Association of Ohio Municipal Wastewater Agencies (AOMWA) are awaiting action by the City of Salem, OH (City) in a challenge to EPA’s September 2005 approval of phosphorus TMDLs for several Ohio rivers. The City is alleging that approval was inappropriate because the Ohio Environmental Protection Agency (Ohio EPA), using an internal technical guidance document, developed the TMDLs based on “target values” rather than real world conditions. These TMDLs are now the source of stringent phosphorus effluent limitations in wastewater NPDES permits. In July 2006, NACWA’s Board approved the Association working with AOMWA on an amicus curiae brief supporting the City. NACWA will file the brief at the appropriate time once the City has initiated the litigation.

Clean Water/Drinking Water Case Held in Abeyance, Future Action Likely
The Kentucky Environmental and Public Protection Cabinet (KEPPC) has held in abeyance one of the nation’s first truly cross-cutting clean water/drinking water litigations pending issuance of a new discharge permit. The litigation began in 2004 with an appeal by Greater Cincinnati Water Works (GCWW) of a permit issued to NACWA member agency Sanitation District No. 1, KY’s (SD No. 1’s) new regional wastewater treatment facility. As a result of subsequent negotiations, SD No. 1 has agreed to move the discharge location further away from GCWW’s drinking water intake, thus making the original discharge permit issued to SD No. 1 moot. However, GCWW has indicated that even with the change in the outfall location it will still appeal SD No. 1’s discharge permit for the new site, and litigation is expected when the new permit is issued. GCWW has expressed concern that SD No. 1’s new wastewater facility will be a source of problematic pollutants at GCWW’s downstream drinking water plant. Such pollutants include endocrine disrupters, cryptosporidium, giardia, and viruses. NACWA supported SD No. 1 during the appeal of its first permit, and plans to continue its support during the expected litigation involving the forthcoming permit. A conference call with SD No. 1 and local counsel is planned for this month, and NACWA will report on any developments.

No Ruling Yet in Stormwater Fee Case
The case of City of Cincinnati (City) v. U.S., which concerns a Department of Health and Human Services (DHHS) facility within the City’s service area that has refused to pay over $100,000 in past-due invoices for stormwater services, continues to move forward slowly. A new judge was assigned to the case in June 2006, and the court is still considering motions for summary judgment that have been filed by both sides. The case arose when the federal DHHS facility alleged that the stormwater service charges are an impermissible “tax” on the federal government and thus refused payment. Given the long period of inactivity in this case, NACWA is hopeful that the court will issue its first rulings soon. NACWA was granted amicus curiae status in the case in Fall 2004 to support the City with the National League of Cities (NLC), the National Association of Flood and Stormwater Management Agencies (NAFSMA), and the American Public Works Association (APWA).

NACWA Victory Stands in Chesapeake Bay Case
The Circuit Court for the City of Richmond, Virginia has refused to rule on a request by the Chesapeake Bay Foundation (CBF) to reverse the favorable November 3, 2005 decision issued by the court in CBF v. Town of Onancock (Onancock). CBF filed its request in April 2006, but the court has taken no action on it, thus sustaining a key victory for NACWA and the Virginia Association of Municipal Wastewater Agencies (VAMWA). In its decision, the court agreed with the position expressed by NACWA and VAMWA in an April 2005 amicus curiae brief – that the Virginia Department of Environmental Quality (VDEQ) had the discretion not to impose numeric water quality-based effluent limitations when reissuing Onancock’s NPDES permit pending TMDL development. The court’s decision is valuable to NACWA members in Virginia, and helpful precedent for agencies facing pre-TMDL permitting and phased TMDL implementation issues in other states.