NACWA Legal Alert (Leg07-04)

Member Pipeline - Legal - Alert (Leg 07-05)

To: Members & Affiliates, Legal Affairs Committee
From: National Office
Date: July 10, 2007
Reference: Legal Alert 07-05

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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.

Legal Affairs Committee to Meet at Summer Conference in Cleveland
The Legal Affairs Committee will meet as part of NACWA’s 2007 Summer Conference in Cleveland, OH on Friday, July 20 at 7:30 am. The meeting will feature an update on current litigation and Targeted Action Fund (TAF) projects, a discussion of the recently introduced Clean Water Restoration Act of 2007 (H.R. 2421) and Clean Water Act (CWA) jurisdiction, and a roundtable discussion of Legal Hot Topics. We hope you can join us!

Late Breaking Legal Issues Call
NACWA completed a successful Late Breaking Legal Issues call on June 13, focusing on recent legislation and guidance dealing with CWA jurisdiction. The call featured a roundtable discussion on the Clean Water Restoration Act of 2007 (H.R. 2421), a recently introduced bill which would change the CWA definition of “waters of the United States.” Roundtable participants included both supporters and opponents of the bill, and engaged in a lively discussion about the potential impacts of the legislation on clean water agencies. Also discussed on the call was the new joint guidance on CWA wetlands jurisdiction issued by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers. The guidance was issued to help clarify CWA jurisdiction following a number of recent U.S. Supreme Court decisions. Handouts from the call are available on the Late Breaking Legal Issues section on the legal page of the NACWA Member Pipeline.

The dates for future 2007 calls are September 12 and December 12. All calls are held from 2:00 – 3:00 pm eastern. Dial-in information for all 2007 calls can be found on the legal section of NACWA’s Member Pipeline.

Palm Springs, CA to Host 2007 Law Seminar
The 2007 Developments in Clean Water Law: A Seminar for Public Agency Attorneys & Managers (Seminar) will be held November 7-9, 2007 in sunny Palm Springs, CA at the Westin Mission Hills. A planning committee for the Seminar will be meeting at the Summer Conference in Cleveland, and a preliminary agenda will be available in the coming weeks. Mark your calendars now to join your clean water law colleagues at this annual event. Any ideas for the Seminar can be forwarded to Alexandra Dunn, NACWA’s General Counsel, at

First Draft of New Security Publication Completed
Edits to the first draft of NACWA’s new legal security publication are now complete, and work is well underway on the second draft. The new publication will provide wastewater utilities, water utilities, and public works directors with a description of key environmental and related legal issues relevant in times of heightened security, and will serve as both a practical manual and guidebook for security related issues. The project is a joint effort between NACWA, the Association of Metropolitan Water Agencies (AMWA), the American Public Works Association (APWA), and the Water Environment Federation (WEF). The publication will be available for distribution at the Law Seminar in November.

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.


Supreme Court Embraces NACWA View in Clean Water/Endangered Species Case
The U.S. Supreme Court issued a major environmental ruling on June 25 in U.S. Environmental Protection Agency (EPA) v. Defenders of Wildlife, embracing an argument made by NACWA when it found that the Endangered Species Act (ESA) does not trump the Clean Water Act (CWA) on issues of delegating National Pollutant Discharge Elimination System (NPDES) permitting authority to the states. In making its ruling, the Court noted that the CWA “commands that the EPA “shall” issue a permit whenever all…exclusive statutory prerequisites are met,” and further stated that adding ESA requirements on top of the CWA is inappropriate because reading the ESA so broadly “would thus partially override every federal statute mandating agency action by subjecting such action to the further condition that it pose no jeopardy to endangered species.” This reasoning parallels the arguments NACWA put forth in its February 20 amicus curiae brief, which asserted that the CWA lays out several factors EPA must consider when delegating NPDES authority, and ESA considerations are not among the permitted statutory considerations. NACWA also put forth in its brief that although Congress enacted the ESA after the CWA was passed, the ESA was never intended to supersede the CWA. The Court picked up on this reasoning, and stated that “we will not infer a statutory repeal unless the later statute expressly contradict[s] the original act or unless such a construction is absolutely necessary . . . in order that [the] words [of the later statute] shall have any meaning at all.” In this case, the Court determined that the ESA did not repeal or alter the requirements of the CWA, nor did Congress intend it to. See Legal Alert 07-04 for a more detailed analysis of the decision.

The Court accepted the case in early January 2007 after EPA appealed a decision by the U.S. Court of Appeals for the Ninth Circuit, which held that EPA improperly delegated NPDES permitting authority to the State of Arizona because ESA requirements were not sufficiently considered. NACWA’s Board of Directors approved the Association’s participation in the case at its January 2007 meeting because of the adverse implications that improper extension of the ESA to CWA activities could have on NACWA member agencies. Oral arguments were held on April 17. The case is one of the Court’s most important environmental decisions of this term and represents a major victory for NACWA and its members.

NACWA Wins Significant Victory in Minnesota Pre-TMDL Permitting Case
NACWA won a major legal victory on May 17 when the Minnesota Supreme Court ruled in the case of Cities of Annandale and Maple Lake (Cities) NPDES Permit Issuance that the Minnesota Pollution Control Agency (MPCA) may use an “offset” analysis when issuing an NPDES permit for a new wastewater treatment plant discharging into an impaired water body. (See Legal Alert 07-03 for more information.) The ruling overturns a 2005 decision of the Minnesota Court of Appeals, which held that MPCA could not issue an NPDES permit for the cities to discharge to a water body that does not meet water quality standards. MPCA had issued the permit based on a finding that reductions resulting from upgrades at another nearby POTW would have more than offset the new discharge. The lower court held that consideration of such offsets was improper. The case was appealed to the Minnesota Supreme Court, and NACWA filed a brief in December 2005 at the request of its Minnesota members which supported the state agency’s interpretation of the federal rule on permitting new discharges. The court’s ruling embraces NACWA’s reasoning and represents a significant victory for ensuring that states have the power to make NPDES permitting decisions that are equitable and environmentally sound.

Following the decision, the plaintiffs filed a motion to extend the time to ask for rehearing, based on the fact that one of the cases cited by the majority opinion is currently on appeal to the Ninth Circuit and is awaiting a decision. The other parties opposed such an extension, and the court denied the request. The time for filing a petition for rehearing has now passed, so the state court decision is final. It is possible the plaintiffs may still try to take the case to federal court, arguing that it raises issues of federal law, but such a move is not certain. We will keep the membership updated on any developments.

Discovery Process Ongoing in BEACH Act Case
NACWA is in the process of reviewing an extensive collection of documents produced by EPA during the discovery process in Natural Resourced Defense Council (NRDC) v. EPA. The case involves a legal challenge regarding EPA’s failure to establish new recreation water quality criteria as required by the Beaches Environmental Assessment and Costal Health Act (BEACH Act). The BEACH Act calls for EPA to assess potential human health risks from exposure to bacteria and other pathogens found in costal recreational waters, and to then publish resulting bacteria and pathogen indicators by October 2005. However, EPA missed this deadline and NRDC filed suit last summer against the Agency. The NACWA Board approved participation in the case in September 2006, and NACWA filed a Motion to Intervene in the case in December 2006 so that the Association could bring the clean water community’s voice to anticipated settlement discussions. NACWA was granted intervention in the case as a plaintiff in March, over the objections of NRDC.

Also in March, the court granted NRDC’s Motion for Summary Judgment on the Pleadings and ruled that EPA violated the BEACH Act by failing to publish the new criteria by October 2005. The focus of the case now is on how much time EPA will be given by the court to meet its BEACH Act obligations.

The documents produced by EPA in the discovery process will be used to help NACWA determine the Association’s position on how long EPA should be given to complete its obligations under the BEACH Act. Additionally, the documents will also guide NACWA in deciding whether to name an expert witness in the case. Initial settlement discussions have begun between EPA and NRDC, and both NACWA and the other intervenor, the County of Los Angeles (County) have asked to participate. The discovery process is expected to stretch into October, with the parties then exchanging Motions for Summary Judgment.

Additionally, the Beach Protection Act of 2007 has recently been introduced in the both the House and Senate to renew the BEACH Act, although this legislation is not expected to have an impact on the on-going litigation. NACWA will keep the membership updated of any developments in this case.

Clean Water/Drinking Water Case Set to Resume With Issuance of New Permit
NACWA member agency Sanitation District No. 1 of Northern Kentucky (SD No. 1) is expecting the issuance of a discharge permit for its new wastewater plant within the next few weeks. Once the permit is issued, SD No. 1 anticipates a challenge to the permit from the Greater Cincinnati Water Works (GCWW), starting the next chapter in an ongoing litigation over the new wastewater treatment facility. The case, which is one of the nation’s first truly cross-cutting clean water/drinking water disputes, began in 2004 with an appeal by GCWW of a permit issued to SD No. 1 for a new regional wastewater treatment facility. GCWW expressed concern that the facility’s outfall would be a source of problematic pollutants such as endocrine disrupters, cryptosporidium, giardia, and viruses at GCWW’s downstream drinking water plant. Due to unexpected difficulties affecting the cost, permitting, and environmental impact of the effluent pipeline and outfall structure, SD No. 1 decided to move the discharge location, thus making the original discharge permit moot. The new discharge location also happened to be further away from GCWW’s water intake, and there was some thought that this might avert any future legal challenges. However, GCWW has indicated that even with the change in the outfall location it will still appeal any revised permit for SD No. 1’s discharge site, and more litigation is expected when the permit is issued. 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.

New Petitions for Review Lodged Over Recent Blue Plains NPDES Permit
Member agency the District of Columbia Water and Sewer Authority (DCWASA) filed a petition for review on May 7 with the Environmental Appeals Board (EAB) over the new NPDES permit issued on April 5 for the Blue Plains Wastewater Treatment Plant. Among the issues raised by DCWASA in its petition is the decision of EPA Region III not to include in the permit a compliance schedule for implementation of DCWASA's long-term control plan (LTCP). NACWA and the Wet Weather Partnership (WWP) supported DC WASA in a 2005 appeal over an earlier permit that also lacked a compliance schedule, and are planning to support DCWASA in its appeal over the new permit as well due to the importance of compliance schedules for those agencies following LTCPs. The 2005 challenge is now moot as a result of the new appeals, and NACWA and the WWP plan to file a Motion to Intervene in the new petition for review in the coming weeks.

A number of environmental groups have also filed petitions for review of the new permit. The Chesapeake Bay Foundation filed a petition May 7 which, like DCWASA’s petition, challenges the permit for lacking a compliance schedule. The Sierra Club and the Friends of the Earth (FOE) also filed a joint petition on May 7 alleging, among other issues, that the new permit does not contain stringent enough water-quality based effluent limits, that Region III did not provide adequate time and opportunity to comment on the proposed permit language, and that the permit’s final language violates the antibacksliding provision of the CWA and EPA rules. DCWASA responded on May 29 by requesting an opportunity to reply to the Sierra Club and FOE petition, and the EAB granted this request on June 15. We will keep the membership informed of any developments.

Parties Discuss Settlement in Stormwater Fee Case
The City of Cincinnati is currently in negotiations with the federal government over disputed stormwater fees, raising the possibility that the case could end in settlement. This follows a ruling by an Ohio federal court on March 27, 2007 that a U.S. government facility within the City’s service area is not exempt from paying stormwater fees, endorsing the position advocated by NACWA. The case of City of Cincinnati (City) v. U.S. involves a Department of Health and Human Services (HHS) facility within the City’s service area that has refused to pay over $100,000 in past-due invoices for stormwater services. The case arose when the HHS facility alleged that the stormwater service charges are an impermissible “tax” on the federal government and thus refused payment. NACWA, along with the National League of Cities (NLC), the National Association of Flood and Stormwater Management Agencies (NAFSMA), and the American Public Works Association (APWA) filed an amicus curiae brief in the Fall of 2004 arguing that CWA Section 313 gives local governments the authority to collect fees from the federal government to cover the cost of stormwater services at its facilities.

The court agreed with this position in its March ruling, and noted that “the City’s stormwater system charge falls squarely within the waiver of sovereign immunity,” and thus the HHS facility is not exempt from paying the charges. Additionally, the court granted permission to the City to amend its complaint and aggregate its claims in order to achieve the full recovery of past-due bills. A status conference was held on June 19, at which time the parties updated the court on the progress of their negotiations and were granted until July 18 to continue discussions. NACWA will report on any developments.

Suitability Analysis Progresses in Wake of TMDL Case
NACWA continues work on a suitability analysis to determine the appropriateness of creating true “daily” TMDLs for certain pollutants, including nutrients, mercury, and bacteria. This study follows the decision of the U.S. Supreme Court in January not to review Friends of the Earth v. EPA, an April 2006 ruling by the U.S. Court of Appeals for the District of Columbia that all total maximum daily loads (TMDLs) for the Anacostia River must be expressed in daily terms, not in monthly or seasonal averages. As a result of the Supreme Court’s action, the D.C. Circuit decision will stand, and EPA has been directed to develop new TMDLs for the Anacostia River in accordance with the appeals court decision by June 2008. A second draft of the study will be presented to the Water Quality and Legal Affairs committees at the July meeting. Once finalized, NACWA will use the suitability analysis to further inform its discussion with EPA over the development of future TMDLs.

Decision Awaited From Ninth Circuit in Effluent Limitation Guideline Case
No decision has been released yet by the U.S. Court of Appeals for the Ninth Circuit in Our Children’s Earth Foundation (OCEF) v. Environmental Protection Agency. Oral arguments were held on February 13, 2007 in the case, which 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. At oral arguments, the Association reiterated this position and emphasized to the court the 30 years of case law and CWA legislative history, which support EPA’s recent ELG program actions. The three judge panel examined the language of the CWA and whether EPA's duty to "review" ELGs every year includes a non-discretionary duty to evaluate the details of each ELG. One judge seemed convinced that nothing in the CWA mandates this type of review; and two judges seemed to believe EPA has significant discretion in how it chooses to carry out its mandatory “review.” The panel focused on the CWA’s language that EPA shall "review, and revise [ELGs] if necessary." We will inform the membership of the court’s decision when it is available.

Appeal of District of Columbia MS4 Permit on Hold Pending Mediation
Negotiations 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 continue, with the parties attempting to reach a settlement. FOE and Defenders filed petitions for review with EPA’s Environmental Appeals Board (EAB) over the permit, but all parties have continually agreed to extend EPA’s time to respond to allow for settlement discussions. The parties attended a status conference on June 8 where they discussed their progress in negotiations and the possibility that they might enter into formal mediation. As a result, the EAB has extended EPA’s time to respond the petitions until September 14, 2007.

In the petitions, 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 petitioners 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) have all been involved in this case to protect the MEP standard for MS4 discharges.

No Ruling Yet in Clean Water Act Attorneys Fee Award Case
The U.S. Court of Appeals for the Sixth Circuit has not yet released a decision 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 ruling 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. Oral arguments in the case were held before the Sixth Circuit on September 15, 2006, and the parties to the case think the delay in releasing an opinion may be due to a split decision and a dissent. We will inform the membership as soon as a decision is announced.

Ninth Circuit Still Considering Request for Rehearing in CWA Jurisdiction Case
A panel of the U.S. Court of Appeals for the Ninth Circuit is still considering whether to grant a rehearing in City of Healdsburg (Healdsburg) v. Northern California River Watch, a case involving CWA jurisdiction over a wastewater treatment percolation pond. A petition to the entire Ninth Circuit to rehear the case en banc has also not been ruled on. The petitions come as a result of the court’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). Based on this jurisdictional finding, the court held that the City must obtain an NPDES permit to discharge to the percolation pond. The Healdsburg decision is critically important because it was 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).

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 appeals court requesting a rehearing. The NACWA letter 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 letter filed by NACWA, CASA, and ACWA follows a request for rehearing filed on August 23, 2006 by the City of Healdsburg, as well as a Motion for Clarification filed by the federal government on August 31, 2006. A number of the parties have also filed supplemental briefs on a number of related, recently decided cases. However, the Ninth Circuit has yet to make any rulings, and we will inform the membership if there are any developments.

NACWA Eager to Engage in Ohio Phosphorus TMDL Case
NACWA and the Association of Ohio Municipal Wastewater Agencies (AOMWA) are still waiting for the City of Salem, OH (City) to initiate a challenge to EPA’s September 2005 approval of phosphorus TMDLs for several Ohio rivers. The City alleges 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, in turn, are the source of new, more stringent phosphorus effluent limitations in wastewater NPDES permits. NACWA’s Board in July 2006 approved the Association working with AOMWA on an amicus curiae brief supporting the City, and NACWA will develop the brief with AOMWA at an appropriate time once the City has initiated the litigation.

Interbasin Water Transfer Rule Anticipated
NACWA continues to await the release by EPA of a water transfer rule following the decision of the U.S. Supreme Court in February 26 not to review an appeals court decision, City of New York v. Catskill Mountains Chapter of Trout Unlimited, dealing with interbasin water transfers. NACWA filed a brief with the Court supporting a request by member agency the New York City Department of Environmental Protection (NYCDEP) for review of the decision from the U.S. Court of Appeals for the Second Circuit. The forthcoming rule is expected to clarify that transfers of untreated water like those carried out by NYCDEP are not subject to the NPDES permitting program. NACWA will continue to work with NYCDEP and other members on this issue and will circulate EPA’s transfer rule for review and comment when it is released. The Supreme Court’s refusal to hear the case means that NACWA’s involvement in this litigation is now ended, and this will be the final report included in the Litigation Update.