Member Pipeline - Legal - Alert (Leg03-2)
| To: | Members & Affiliates, Legal Affairs Committee |
| From: | National Office |
| Date: | February 19, 2002 |
| Subject: | NINTH CIRCUIT STORMWATER PHASE II DECISION |
| Reference: | Legal Alert 03-2 |
| Link: | - Point/Nonpoint Trading Example Permits |
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Attorney-Client Communication
Printer friendly versionOn January 14, 2003, the United States Court of Appeals for the Ninth Circuit issued a lengthy decision regarding the U.S. Environmental Protection Agency’s (EPA or Agency) Phase II municipal separate storm sewer (MS4) regulation (Phase II rule). Environmental Defense Center Inc. v. EPA, No. 00-70014 (EDC). The decision touches on two issues important to AMSA member agencies. First, the EDC court found that that the Phase II rule’s general permit program violates Clean Water Act (CWA) requirements regarding public availability of, and pre-discharge hearings on, permits. This finding raises key considerations for Phase II municipalities – generally those with populations under 100,000 – who must file Notices of Intent (NOIs) to comply with their state general permit (or with EPA’s general permit in non-delegated states) by March 10, 2003. Second, the EDC court misinterpreted the CWA’s maximum extent practicable (MEP) standard for MS4s in CWA § 402(p)(3)(B)(iii), suggesting that MS4 controls must assure compliance with water quality standards (WQS). The court’s analysis substantially differs from the Circuit’s 1999 Defenders of Wildlife v. Browner (Defenders), a case in which AMSA participated and which held that that MS4 discharges are not required to comply with WQS. The EDC court’s distortion of the MEP standard could lead to increased pressure by citizen groups to include numeric effluent limitations to meet WQS in MS4 National Pollutant Discharge Elimination System (NPDES) permits.
This Legal Alert provides details on the implications of the Ninth Circuit’s opinion, which can be accessed at http://www.ca9.uscourts.gov/ca9/newopinions.nsf. As always, please contact AMSA General Counsel Alexandra Dunn at 202/533-1803 or adunn@amsa-cleanwater.org with any questions on this case or AMSA’s other legal activities.
I. Background
EPA began work on the Phase II rule in 1996, shortly after the Phase I MS4 rules were finalized. The Agency convened a Federal Advisory Committee Act subcommittee to provide input on the rule, which included representatives from AMSA and other municipal organizations. The municipal delegates emphasized that the Phase II rule should be clear that the MS4 MEP standard does not require compliance with WQS. They urged EPA to include language in the Phase II proposal to clarify that the MEP standard is implemented through best management practices (BMPs) rather than numeric effluent limitations. The eventual Phase II proposed rule stated that MS4 permits would require cities to meet MEP “and protect water quality.” 63 Fed. Reg. 1635 (Jan. 9, 1998). These words were seen as a goal rather than a requirement for MS4 controls based on the CWA § 402(p)(3)(B)(iii) language, and the proposal was viewed by many cities as a manageable framework.
When the final Phase II rule was published on December 8, 1999, a new subparagraph stated that MS4s must “comply with any more stringent effluent limitations in [a] permit, including permit requirements that modify, or are in addition to, the minimum control measures based on an approved total maximum daily load (TMDL) or equivalent analysis. The permitting authority may include such more stringent limitations based on a TMDL or equivalent analysis that determines such limitations are needed to protect water quality.” 64 Fed. Reg. 68,722; 40 CFR § 133.34(e)(1). The preamble noted that EPA or the states could use CWA § 402(p)(3)(B)(iii) to require MS4 controls to meet WQS if necessary.
While this language cast a shadow on the MEP standard, AMSA and other municipal organizations declined to challenge the final Phase II rule. Other organizations did challenge the Phase II rule, although none raised the MEP issue. The Texas Cities Coalition on Stormwater and the Texas Counties Stormwater Coalition challenged the rule in the Fifth Circuit, arguing that it required municipalities to regulate their citizens and to communicate a federally mandated message in violation of the Tenth Amendment. The American Forest & Paper Association and National Association of Home Builders sought review of the rule in the D.C. Circuit, asserting that EPA’s regulation of construction site discharges of one to five acres was arbitrary. The Environmental Defense Center challenged the rule in the Ninth Circuit, joined by the Natural Resources Defense Council, stating that the rule set out an impermissible program of self-regulation, did not assure public participation, and failed to address several significant stormwater sources. The legal challenges were consolidated in the Ninth Circuit.
II. Highlights of the Ninth Circuit’s Decision
The EDC court rejected most of the challenges to the Phase II rule. In rejecting the Tenth Amendment claims, the court found that the Phase II rule did not interfere with local government or improperly compel regulation of third parties because the rule provided cities with options – including not discharging stormwater to U.S. waters. Revealing a more sophisticated understanding of the issues, the dissent observed that “states cannot choose to stop stormwater from entering federal waters, nor can they stop third parties or Mother Nature from discharging into municipal stormwater systems.”
The majority, however, accepted the environmental groups’ argument that the Phase II general permit program violated CWA requirements for public availability of, and the opportunity for public hearings on, NPDES permits. Finding the Phase II NOI the functional equivalent of an NPDES permit, the court remanded the rule to EPA for it to 1) provide for pre-discharge public hearings on NOIs pursuant to CWA § 402(a)(1), and 2) to make NOIs publicly available under CWA § 402(j).
The court also accepted the environmental groups’ argument that the Phase II rule failed to provide for review of individual NOIs to ensure that MS4 controls selected by a city would reduce the discharge of pollutants to the MEP. The court agreed that the Phase II general permit program constituted an impermissible system of self-regulation because cities could essentially determine what controls are or are not “practicable” without permitting authority oversight. In reaching this conclusion, the court noted that 40 C.F.R. § 122.34(f) mandates compliance with requirements, standards, and conditions developed consistent with 40 C.F.R. §§ 122.41 to 122.49. The court highlighted that these cross-referenced provisions include 40 C.F.R. § 122.44, which requires compliance with CWA effluent standards and limitations. Thus, the court went on to assert that Phase II MS4 operators must not only reduce the discharge of pollutants to the MEP, but also must comply with CWA effluent standards.
III. Impacts of the Court’s Decision and Analysis
The Phase II rule remains in effect despite the identified flaws, as the court remanded but did not vacate the rule. Thus, the March 10, 2003 deadline remains in effect for Phase II cities to file a NOI, either with their NPDES delegated state or with EPA, to seek authorization to discharge stormwater under a general or individual Phase II permit. 40 CFR § 122.33(b)-(c). EPA plans to modify its draft Phase II MS4 general permit to address the Ninth Circuit’s concerns. Some states, like California, are delaying finalizing their Phase II permits to address the EDC decision. Given that many NPDES delegated states used EPA’s draft Phase II general permit as a model for their own Phase II permits, some state Phase II general permits are likely to lack the public availability, pre-discharge hearing opportunities, and independent MEP review provisions sought by the court. In these states, citizen groups could assert that city stormwater discharges are not covered by a valid general permit. Cities could rebut such arguments by noting that they submitted valid NOIs under the Phase II rule, and that the EDC court did not vacate the rule. Given that EPA may not clarify EDC’s impact on delegated states and Phase II cities between now and March 10, cities will have to balance their confidence in the NOI process against the burden of submitting an individual Phase II permit application, which does not suffer from the general permit flaws.
Although the court’s distortion of the MEP standard for MS4s could be dismissed as dicta, it remains troubling in its failure to consider the Defenders precedent. Furthermore, by relying on 40 C.F.R. § 122.34(f)’s cross-reference to other NPDES regulations, the court overlooked the applicability of those separate provisions. For example, 40 CFR § 122.44 requires that NPDES permits to contain technology-based effluent limitations and requirements to achieve WQS only “when applicable.” Even if EPA meant by a mere cross-reference that Phase II permits must ensure compliance with WQS, EPA can not by rule override the CWA’s plain language for MS4s. Regardless, activist groups can be expected to use EDC in the future to call for numeric effluent limitations in MS4 permits – in both Phase I and Phase II cities.
IV. Next Steps
The parties to the case have until February 28, 2003 to petition the Ninth Circuit for a rehearing. If a rehearing is sought, AMSA will evaluate whether we can successfully direct the court’s attention to our concerns with the MEP interpretation via an amicus brief in support of rehearing. We will keep the membership informed of additional developments in this case and in the Phase II program generally, as well as AMSA’s future actions.