AMSA Legal Alert (Leg02-7)

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Attorney-Client Communication

AMSA is pleased to provide you with the latest Litigation Report. This Report provides an update on initiatives designed to enhance AMSA's legal services to member agency attorneys and summarizes recent developments in AMSA’s litigations.

AMSA added two new cases to its active litigation portfolio since the February 2002 Report. In March, the U.S. District Court for the District of Columbia granted AMSA’s motion to intervene in a third Clean Air Act (CAA) lawsuit filed last year by the Sierra Club. The suit seeks to require EPA to promulgate overdue technology-based CAA standards for urban area sources of hazardous air pollutants (HAPs) under CAA § 112(k), including for publicly owned treatment works (POTWs) and sewage sludge incinerators (SSIs). Settlement discussions continue in this, and two additional CAA cases, in which AMSA is involved.

In April, the U.S. District Court for the Southern District of West Virginia granted AMSA’s motion to intervene in an environmental group challenge to West Virginia’s Clean Water Act (CWA) antidegradation implementation procedures. West Virginia’s procedures include antidegradation exemptions important to POTWs. A successful challenge to West Virginia’s procedures could raise questions regarding antidegradation practices in other states. More details on these, and AMSA's other active cases, are included below under Case Briefs.

Status of 2002 Legal Initiatives
AMSA’s new initiatives to enhance legal services provided to member agency counsel are proving successful to date. The National Office has received positive feedback on the Legal Perspectives columns, which thus far have addressed sanitary sewer overflows, using Freedom of Information Act legal precedent to protect POTW vulnerability assessments, and antidegradation.

AMSA has held two of the six scheduled Late Breaking Legal Issue (LBI) conference calls. More than 25 member attorneys and outside counsel participated in each call. During the February call, guest speaker W. Malcolm Steeves, Director of the Mobile, Alabama Water and Sewer System, discussed his experience negotiating a capacity, management, operations and maintenance (CMOM) consent decree. The April call featured David Batchelor, Senior Policy Adviser to Assistant Administrator for Water Tracy Mehan. Batchelor is leading EPA’s water quality trading policy development efforts. Batchelor reported that AMSA input in advance of the call led to changes in the draft policy to make it more workable for POTWs. Both calls included discussion of other legal issues, including enforcement and permitting. The next LBI call will be held on June 19.

AMSA continues to update our legal contacts database. We are using the now expanded Legal Affairs Committee list serve to distribute information via e-mail to agency counsel. In addition, the Member Pipeline Legal e-Library is growing, with new permits and consent decrees posted. Finally, planning is underway for the 2002 Law Seminar, to be held November 6-8, 2002 in Denver, Colorado.

For More Information
Members can follow AMSA's active cases in the Litigation Tracking section of Member Pipeline, where key AMSA legal documents are posted. As always, please feel free to contact AMSA General Counsel Alexandra Dunn at 202/533-1803 or adunn@amsa-cleanwater.org with any questions or suggestions on AMSA's legal activities.

♦ ♦ ♦ CASE BRIEFS ♦ ♦ ♦

Antidegradation: Ohio Valley Environmental Coalition v. Whitman
On April 11, the U.S. District Court for the Southern District of West Virginia granted AMSA’s motion to intervene in Ohio Valley Environmental Coalition, et al., v. Whitman, Civ. No. 3:02-CV-59 (S.D. WV, Jan. 23, 2002). AMSA filed its motion on March 21 jointly with the West Virginia Municipal Water Quality Association (WVMWQA) and the West Virginia Municipal League (WVML). AMSA will continue to file all pleadings with the WVMWQA and the WVML, who are represented by the law firm of McGuire Woods. As required by local court rules, AMSA also retained local counsel in the Southern District of West Virginia to assist with the case.

In their January 23 complaint, the challenging citizen organizations allege that EPA’s November 2001 approval of West Virginia’s antidegradation implementation procedures violated the CWA and federal water quality standards regulations. They seek a declaratory judgment that EPA breached its statutory duties, an order setting aside EPA’s approval, and a remand to EPA for further review. West Virginia’s procedures contain antidegradation exemptions important to POTWs, including: 1) for de minimis activities resulting in less than a 10 percent reduction in the receiving water’s assimilative capacity; 2) for proposed new or expanded discharges from POTWs to alleviate public health concerns associated with failing septic systems, or untreated or inadequately treated sewage (including combined sewer overflow elimination or reduction projects); and 3) for POTW expansions or improvements. West Virginia based its implementation procedures on those developed by other states. Thus, a successful challenge to West Virginia’s procedures could raise questions regarding the antidegradation practices of other states.

On April 11, the court also granted intervenor status to several industry groups, including the West Virginia Chamber of Commerce, the West Virginia Farm Bureau, the West Virginia Forestry Association, and the Federal Water Quality Coalition (industry associations). On April 18, the citizen plaintiffs requested that AMSA and the industry associations be required to file joint briefs to avoid “unnecessary burdens on the Court and plaintiffs.” On April 30, the court issued an order without awaiting AMSA and the industry intervenors’ oppositions to this request. The order directs AMSA and the intervenors to cooperate and avoid duplication, and states that EPA and the citizens may settle the case without our consent (a standard rule in most judicial districts). Regardless of the court’s order, on May 2, AMSA filed a timely opposition to the citizens’ request, which highlighted the differences between the municipal and industry groups’ interests in the case.

A discovery teleconference with the court will be scheduled in late May. A status conference with the court is expected to occur on June 13. We will keep the membership informed of developments in this case as they occur.

Clean Air Act Solid Waste Incinerator Suit: Sierra Club v. Whitman
On March 12, the U.S. District Court for the District of Columbia granted AMSA’s motion to intervene in Sierra Club’s case seeking performance standards under CAA § 129 for “other solid waste incinerators” (OSWI), including SSIs. At one time, EPA intended to include SSIs in the CAA § 129 OSWI regulations. 62 Fed. Reg. 1868 (Jan. 14, 1997). However, after further study and a Federal Advisory Committee on which AMSA participated, EPA decided not to include SSIs in the OSWI category. 65 Fed. Reg. 23,460 (Apr. 24, 2000). EPA concluded that CAA § 129 does not cover SSIs because the section requires the combusted solid wastes to be generated by commercial or industrial sources – which is not the case for sludge. Id. EPA also did not include SSIs in a later notice extending the final OSWI rule date to November 2005. 65 Fed. Reg. 67,357 (Nov. 9, 2000).

The court extended EPA’s deadline to answer the complaint in this case until May 31 to allow settlement meetings to occur. AMSA attended meetings with EPA and the Department of Justice (DOJ) on this and related CAA cases on February 12 and May 2. In draft confidential settlement documents, EPA would propose an OSWI rule in November 2004 and finalize the rule in November 2005. At this time, EPA will not commit to details on the OSWI rule’s content, including whether the eventual proposal will include SSIs. AMSA will continue to pursue a commitment from EPA that SSIs are not included in OSWI. However, AMSA may have to remain active in OSWI activities to ensure that SSIs are not included in EPA’s 2004 proposal or in any final OSWI rule.

Clean Air Act MACT Program and Sludge Incinerators: Sierra Club v. Whitman
In this CAA lawsuit, the Sierra Club is seeking technology-based maximum achievable control technology (MACT) standards under CAA § 112(d) for several industrial categories, including SSIs. The MACT program applies to major sources of HAPs, which are those with the potential to emit 10 tons per year (tpy) or more of any one HAP, or 25 tpy or more of any combination of HAPs. The Court granted AMSA's motion to intervene in this case on January 23, 2002.

On February 12, EPA took final action to delist SSIs from the scope of the MACT program. 67 Fed. Reg. 6521. EPA’s action results from AMSA members’ efforts over several years to provide EPA with comments and data supporting a delisting. EPA states that in July 1992 it placed SSIs on the list of categories to be regulated by MACT standards, but that after evaluating available emissions information, EPA found that no SSIs have the potential to emit HAPs at major source levels. EPA’s delisting is not subject to legal challenge or public comment.

As a result of EPA’s delisting, AMSA asked Sierra Club to remove SSIs from the scope of the case. Sierra Club has not agreed to this request. In an April 10 meeting with AMSA, EPA clarified that it will not commit to develop MACT regulations for SSIs in any settlement of the case. We will keep the membership informed of further developments in this matter.

Clean Air Act Urban Air Toxics Litigation: Sierra Club v. Whitman
In this third CAA suit, the Sierra Club is seeking overdue technology-based standards for urban area HAP sources under CAA § 112(k). Area sources are those emitting less than 10 tpy of any one HAP or less than 25 tpy of any combination of HAPs. CAA § 112(d)(5) allows EPA to control area HAP sources via MACT or less stringent generally available control technology (GACT). In 1999, EPA listed POTWs as an urban area source category and indicated it was considering listing SSIs in the future. See 64 Fed. Reg. 38,721-38,722 (July 19, 1999).

The U.S. District Court for the District of Columbia granted AMSA’s February 12 motion to intervene in the case on March 12. The court extended EPA’s deadline to answer the complaint in this case until May 31 to allow settlement meetings to occur. Accordingly, AMSA attended meetings with EPA and DOJ on this and the related CAA cases discussed above on February 12 and May 2.

On March 22, EPA proposed CAA § 112(k) regulations for new and existing non-industrial area source POTWs. 67 Fed. Reg. 13,496. EPA stated that HAP emissions from existing area source non-industrial POTWs are low, noted that existing area source non-industrial POTWs do not have HAP controls, and found that the cost of adding HAP controls to area source non-industrial POTWs would be high. Accordingly, EPA proposed that these POTWs be subject to GACT of “no control.” For area source industrial POTWs, EPA proposed 1) that these facilities should be required to meet the same control requirements as major source industrial POTWs, but 2) that these sources should be exempt from CAA Title V permit requirements. AMSA supported EPA’s proposals in April 22 comments. Under draft confidential settlement documents in the case, EPA would finalize the CAA § 112(k) POTW rules by October 2002.

EPA was required under a 1997 Consent Decree to list all § 112(k) area source categories by 1999. The July 1999 Federal Register notice did not complete this obligation. Accordingly, in draft confidential settlement documents, EPA commits to listing as § 112(k) area source categories based on 1990 emissions data, SSIs and the other categories under consideration in 1999 by July 2002. Then, EPA would propose SSI area source regulations in October 2009, and finalize such regulations in December 2010. Although AMSA has submitted data to the Agency showing that SSI emissions have dropped dramatically since 1990, EPA cannot consider this information with regard to the listing. However, between now and EPA’s eventual proposal of SSI area source regulations, AMSA will be able to document for EPA current SSI emission rates and hopefully achieve GACT of no control. We will report on further developments in this case as they occur.

Dioxins in Land Applied Biosolids: Gearhart v. Whitman
On April 1, AMSA and other parties to a decade old lawsuit over EPA’s CWA sewage sludge regulations agreed to a significant extension of the Agency’s deadline to finalize regulations for dioxins in land-applied biosolids. Gearhart v. Whitman, Civ. No. 89-6266-HO (D. Or.) (Gearhart). EPA originally was required to finalize the regulations by December 15, 2001 under the Gearhart Consent Decree. Last summer, however, EPA notified AMSA, the Natural Resources Defense Council (NRDC), and citizen parties to the case that EPA needed to extend the deadline because significant new data on dioxins in land-applied biosolids were available. These new data include AMSA’s 2000/2001 Survey of Dioxin-like Compounds in Biosolids; EPA’s revised risk assessment for a final rule; and EPA’s 2001 dioxin in biosolids survey. In addition, EPA soon expects to approve a new, more stringent Agency-wide cancer value for dioxin. The revised cancer value will impact EPA’s assessment of land applied biosolids risks. After extensive negotiations and two interim extensions of the deadline, a Joint Stipulation granted by the Court on April 8 allows EPA to take public comment on the new data and gives EPA until October 17, 2003 to finalize the regulations.

The citizens and NRDC would agree to the extension only if EPA committed to take several additional actions on sewage sludge. These actions, and other conditions of the extension, are contained in a separate Agreement, which is not part of the Consent Decree and was not filed with the court. EPA, however, treats the Agreement as seriously as the court-filed documents.

Details of the Joint Stipulation and Agreement are contained in Legal Alert 02-6. Case documents are available on the Member Pipeline at http://www.amsa-cleanwater.org/private/littrack/littrack.cfm. AMSA has initiated a Technical Action Fund project to assist us in our review of and comments to EPA on the extensive new data. AMSA also is preparing a petition for reimbursement from the government of our in-house counsel litigation costs incurred negotiating the extension, which we are entitled to under the Joint Stipulation.

Permit Shield Victory Appealed to Supreme Court: Piney Run v. Carroll County
The October 10, 2001, Fourth Circuit victory for POTWs on the CWA permit shield may be reviewed by the U.S. Supreme Court, if the High Court accepts a February 5 petition for certiorari filed by the citizens group. In Piney Run Preservation Association v. County Commissioners of Carroll County, Maryland, 268 F.3d 255 (4th Cir. 2001), the Fourth Circuit confirmed that National Pollutant Discharge Elimination System (NPDES) permits offer strong protection from enforcement for the discharge of pollutants listed in an NPDES permit, as well as pollutants not listed but whose discharge is reasonably contemplated by the permitting authority at the time a permit is issued. AMSA and the Water Environment Federation (WEF) filed a joint amicus brief in the case in August 2000, successfully arguing that the county should not be liable for unlisted pollutants under the CWA's permit shield.

The citizen's petition for U.S. Supreme Court review presents the following questions to the Court: “1) does the “permit shield” provision in the Clean Water Act allow a permit holder to discharge pollutants not listed on its NPDES permit?; 2) may a federal court construe the “permit shield” provision in the Clean Water Act to license a permit holder to discharge a pollutant in quantities that violate the applicable state water quality standards, when that pollutant is not listed on its NPDES permit?; and 3) does a federal court have the power to make legal the discharge of a pollutant not listed on a NPDES permit in quantities which the state permitting agency could not have permitted under its governing state law?” Carroll County opposed the petition for certiorari, and the citizens responded. A decision on the petition is expected by June 1, when the High Court recesses for the summer. Notably, the Court denies approximately 90 percent of the petitions filed. If the Court grants review, AMSA anticipates we will become involved in the case as amicus. The petition for certiorari is posted on the Member Pipeline at http://www.amsa-cleanwater.org/private/littrack/littrack.cfm.

Awaiting the Court’s Opinion on Nonpoints and TMDLs: Pronsolino v. Marcus
Surprisingly, we continue to await the decision of the Ninth Circuit Court of Appeals in Pronsolino v. Marcus, undoubtedly one of the next pivotal CWA decisions. The court seemed receptive to oral argument made July 9, 2001 by DOJ that impaired waters should be listed under CWA § 303(d), and be subject to TMDLs, without regard to the source of the pollutants B point source, nonpoint source, or a combination. On July 3, 2001, AMSA assisted DOJ with a review of its arguments during a moot court session. These efforts followed AMSA's December 2000 Intervenor-Appellee brief supporting the government's position that nonpoint source impaired waters are indeed subject to listing and TMDLs under the CWA. If the Ninth Circuit overturns the lower court's favorable decision that nonpoint source impaired waters are subject to listing and TMDLs B a result described as unlikely by many familiar with the Ninth Circuit's practice B it is expected that Pronsolino will be appealed to the U.S. Supreme Court.

TMDL Case on Hold: American Farm Bureau Federation v. Whitman
In December 2000, AMSA intervened in this D.C. Circuit case over EPA’s controversial July 2000 final total maximum daily load (TMDL) rules. AMSA sought to defend those aspects of the rule that put "teeth" in the program for nonpoint sources, and to oppose provisions that would lead to broad and complicated TMDL lists. Many industry and environmental groups also are involved in the case.

The case is on hold as a result of EPA’s Summer 2001 announcement that it would conduct a public review and reproposal of the rule. In October 2001, the District of Columbia Circuit Court ordered the many TMDL rule challenges be held in abeyance, and EPA delayed the TMDL rule’s effective date to April 30, 2003.

EPA plans to finalize new TMDL rules prior to April 2003, effectively nullifying the July 2000 rule. Last fall, EPA held five public sessions to receive suggestions on possible changes to the TMDL program. AMSA member agencies participated in nearly every meeting. On March 28, 2002, AMSA attended a litigation meeting in which EPA provided an update on its progress to date. EPA’s present plans will add a watershed focus to the rule and use the CWA § 303(e) Continuing Planning Process to implement TMDLs. The meeting revealed that many difficult issues are still to be resolved.

In an April 2 status report to the court, EPA stated that “[d]uring the next three months, EPA anticipates completing draft regulatory and preamble language, concluding its internal agency review process, and submitting the draft regulatory and preamble language to the Office of Management and Budget (OMB) for inter-agency review. It remains EPA’s goal to publish a proposed rule in the Federal Register in mid-2002 and promulgate a revised final TMDL rule before April 30, 2003.” AMSA will keep the membership updated on this case and related TMDL issues throughout the year.

Numeric Limits in Storm Water Permits: D.C. Storm Water Permit Appeal
AMSA continues to track petitions seeking numeric effluent limits in urban storm water NPDES permits. These efforts continue despite the Ninth Circuit’s confirmation in 1999’s Defenders of Wildlife v. Browner that Congress did not intend for municipal storm sewer discharges to comply strictly with state water quality standards (WQS), and that municipalities should use best management practices (BMPs) to reduce storm water pollutants to the maximum extent practicable (MEP).

In 2001, AMSA’s Board of Directors authorized the Association to file an amicus brief with other wastewater and storm water associations in a case before EPA’s Environmental Appeals Board (EAB) involving the District of Columbia’s storm water permit. In re: Government of the District of Columbia Municipal Separate Storm Sewer System, NPDES Appeal Nos. 00-14 and 01-09. In the case, environmental groups are challenging EPA Region III’s issuance of the District’s permit because they allege the permit’s BMPs will not ensure compliance with WQS or meet the MEP standard.

On February 20, the EAB issued an Order remanding the permit to Region III for further consideration. The Order contains some troubling statements suggesting that storm water discharge controls should ensure WQS compliance. The Order avoids the favorable Defenders precedent by noting that the Region did not rely on Defenders to issue the District’s permit. The Order’s discussion of the MEP approach is more consistent with Defenders, however, finding that the “key question” under CWA § 402(p)(3)(B) is what is “practicable.” Details of the Order are in Legal Alert 02-5, and case documents are on the Member Pipeline at http://www.amsa-cleanwater.org/private/littrack/littrack.cfm.

Under EAB rules, interested parties can file an amicus brief only after the EAB grants review of an appeal. The February remand to the Region delays AMSA’s opportunity to participate as an amicus. If the permit is not appealed further after the remand, such an opportunity may be fully foreclosed. AMSA will be evaluating other strategies to prevent the establishment of unfavorable storm water legal precedent. AMSA will keep the membership apprised of our deliberations in this regard.

The Value of Notice and Comment: City of Anderson v. South Carolina DHEC
On February 4, the South Carolina Court of Common Pleas issued its opinion in this case involving the City of Anderson, South Carolina’s (City’s) challenge to the state Department of Health and Environmental Control’s (DHEC’s) adoption of a Trophic State Index (TSI) without public notice or comment. City of Anderson v. State of South Carolina Board of Health and Environmental Control (Docket No. 00-CP-40-1255, Feb. 4, 2002). DHEC used the TSI to determine whether waterbodies were impaired by nutrients under the state’s narrative standard for aquatic life use, and then to place waters on the state § 303(d) list. AMSA’s April 2001 amicus brief argued that public comment on the TSI was needed because TMDL listings can lead to more stringent limits in individual CWA permits.

As an initial matter, the court found the City’s TSI challenge to be moot due to several specific events, including: 1) the state’s creation of a year 2000 § 303(d) list, rendering the City’s challenge to the 1998 list moot; 2) a February 2000 DHEC Board (Board) Order prohibiting exclusive use of the TSI in listing decisions; and the state General Assembly’s June 2001 approval of numeric nutrient standards, which replaced the narrative standards at issue in the case.

After finding the case moot, the court still rendered views on the merits of the City’s challenge. The court asserted that the proper time for a permittee to challenge a § 303(d) listing is when the permittee receives effluent limitations based on a TMDL for that waterbody. The court believed the Board correctly found the TSI was not a rule, as it was one of several factors used in § 303(d) listings. The court’s statements beyond the mootness finding are non-binding “dicta.” However, it will be important to keep this court’s views in mind as permittees continue to seek ways to review troublesome § 303(d) listings.

Details of the court’s opinion are in Legal Alert 02-4. Case documents are available on Member Pipeline at http://www.amsa-cleanwater.org/private/littrack/littrack.cfm. AMSA will continue to identify opportunities to participate in precedent setting § 303(d) listing cases.