AMSA Legal Alert (Leg 03-3)

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Attorney-Client Communication

AMSA is pleased to provide you with the latest Litigation Report. This Report provides an update on AMSA’s legal initiatives and summarizes recent developments in AMSA’s litigations.

Wet Weather Consent Decrees ... Protecting POTWs in Negotiations
AMSA is pleased to release to our members at the 2003 National Environmental Policy Forum a timely new publication entitled Wet Weather Consent Decrees … Protecting POTWs in Negotiations (the Handbook). Developed through AMSA’s Technical Action Fund (TAF), the Handbook is the latest in cutting edge legal resource tools prepared by the Association to benefit the publicly owned treatment works (POTW) community. The Handbook was created as a unique resource for the growing number of POTWs facing negotiations and litigation with the federal or state governments regarding combined and sanitary sewer overflow (SSO) issues. These negotiations and court proceedings can have a dramatic impact on municipal wastewater operations for decades into the future. Furthermore, wet weather negotiations generally require POTWs to plan for, fund, and make million – and even billion – dollar investments in their wastewater infrastructure. Given their high stakes, it is in a municipality’s best interest to enter these negotiations armed with as much knowledge as possible regarding the government’s past practices and agreements with other municipalities.

The Handbook covers key issues that municipal attorneys, managers, and staff may wish to consider before, during, and after wet weather negotiations. The Handbook assesses the various ways the government’s boilerplate Clean Water Act (CWA) consent decree language can be modified via negotiation to be more workable for a municipality and addresses techniques to craft workable standard decree provisions, such as compliance with law, stipulated penalties, force majeure, dispute resolution, and termination clauses. The Handbook also covers issues such as strategies to maintain municipal autonomy, leveraging POTW expertise in negotiations, and techniques to integrate legal obligations and deadlines into daily municipal operations. To complement the Handbook, the more than 30 municipal wet weather decrees and orders discussed in the Handbook will be posted on AMSA’s website as a reference library. AMSA expects the Handbook to be a key resource for our members for many years to come.

AMSA thanks partner David Burchmore of AMSA affiliate Squire, Sanders & Dempsey L.L.P. for his work on the Handbook. AMSA also thanks the team of member agency attorneys and managers who served on an advisory group for the project. They are: Jan Betz, City of Portland, OR; Kerry Bruce and Leslie Kovacik, City of Toledo, OH; Henry Gillman, Miami-Dade County, FL; Harold Gorman and John Lambert, Sewerage and Water Board of New Orleans, LA; Lisa Hollander, Northeast Ohio Regional Sewer District, OH; Pat Karney, Metropolitan Sewer District of Greater Cincinnati, OH; David Katz, Philadelphia Water Department, PA; Nancy Kurtz, Massachusetts Water Resources Authority, MA; Mike McCabe, Milwaukee Metropolitan Sewerage District, WI; Sally Mills, City of Atlanta, GA; Terry Satterlee, Lathrop & Gage, L.C., MO; Malcolm Steeves, Mobile Area Water and Sewer System, AL; and Chris Westhoff, City of Los Angeles Department of Public Works, CA.

Report on Legal Initiatives
In the first months of 2003, AMSA published a Winter edition of Legal Perspectives on the Data Quality Act. The forthcoming Spring issue will cover blending issues. We add new documents almost weekly to the Member Pipeline Legal e-Library. More than 30 agency attorneys and outside counsel participated in each of the first two Late Breaking Legal Issues conference calls – the February 26 call focused on SSO and blending issues, and the April 16 call addressed whole effluent toxicity permitting for POTWs. Additional Late Breaking Legal Issues calls will be held on June 18, August 20, October 15, and December 10. Dial-in information and further details are posted in the Member Pipeline legal section.

We are using the legal list serv more often to solicit information from member attorneys to assist their peers in the POTW legal community. Recent questions sent to the list serve received helpful responses. Via the list serv, member agency attorneys exchanged agreements to provide treatment services to satellite conveyance systems, consent decree alternatives such as memoranda of understanding, information on POTW worker strike rights, and strategies for permitting insect spraying activities.

2003 Developments in Clean Water Law Seminar: Key Biscayne, FL
AMSA will hold its sixth Developments in Clean Water Law Seminar from November 5-7, 2003 at the Sonesta Beach Resort Key Biscayne, Miami, FL. It is not too soon to mark your calendars!

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

CASE BRIEFS

AMSA Leads Municipal Coalition in Challenge to EPA's Final Toxicity Test Methods
On March 31, AMSA filed suit against the U.S. Environmental Protection Agency (EPA) in the District of Columbia Circuit Court of Appeals challenging EPA's November 19, 2002 final whole effluent toxicity (WET) test methods. WESTCAS v. EPA, 03-1091 (D.C. Cir.); 67 Fed. Reg. 69,952. AMSA built a POTW coalition to join in the filing, including the Virginia Association of Municipal Wastewater Agencies, the West Virginia Municipal Water Quality Association, the Maryland Association of Municipal Wastewater Agencies, the South Carolina Water Quality Association, the California Association of Sanitation Agencies, and the Texas Association of Metropolitan Sewerage Agencies. AMSA’s petition has been consolidated with those filed by the Western Coalition of Arid States (WESTCAS) and a group of industrial trade associations called the WET Coalition. The court also consolidated the new cases with the still open WET litigation filed in 1996 by WESTCAS and the Edison Electric Institute.

In the course of the litigation, AMSA and the POTW coalition members hope to reach agreement on a number of WET issues important to municipalities including numeric versus narrative criteria for WET, the WET methods’ ability to detect toxicity in undiluted effluent, WET test acceptability criteria, and the ramifications of single WET test failures. AMSA and the POTW coalition will file a nonbinding statement of issues with the court on April 30. AMSA anticipates settlement discussions to occur in the case throughout 2003, with issues identified for briefing by early 2004.

AMSA Joins Ninth Circuit Storm Water Debate
On March 7, AMSA filed an amicus curiae brief in support of EPA's February request that the Ninth Circuit rehear the Phase II municipal separate storm sewer (MS4) regulation case. Environmental Defense Center Inc. v. EPA (EDC), Nos. 00-70014 (9th Cir. 2003). On March 10 the court agreed to accept AMSA’s brief. AMSA was joined on the brief by the National League of Cities (NLC), the American Public Works Association, and the National Association of Flood and Stormwater Management Agencies (NAFSMA). AMSA’s brief argues that the court failed to follow CWA requirements when it held that that MS4 discharges are subject not only to the "maximum extent practicable" (MEP) MS4 standard but also to “general effluent limitations.” AMSA highlights that the court’s reasoning ignores its 1999 Defenders of Wildlife v. Browner decision, in which AMSA also was amicus, which held that the MEP standard – not effluent limitations to meet water quality standards – was the applicable standard for MS4s. AMSA is concerned that if left unreviewed, citizen groups and regulatory agencies could use EDC to pressure municipalities to accept numeric effluent limitations in MS4 permits. Actual rehearing by the court may not occur for several months.

Blending/SSO Case at Critical Point
Action in AMSA's blending and SSO case heated up in March, when the plaintiffs and AMSA filed separate motions strongly opposing EPA's effort to dismiss the case. Pennsylvania Municipal Authorities Association, et al. v. Whitman (PMAA), et al., No. 1:02CV01361 (D.D.C. July 8, 2002). In PMAA, AMSA, regional POTW group plaintiffs, and one city are challenging EPA Headquarters’ and Regions 3, 4, and 6’s inconsistent positions on blending and several other wet weather issues. Last October, EPA argued to the court that the case should be dismissed because the challenged regional actions are not "final agency actions" subject to court review. Over the winter, the court allowed the plaintiffs and AMSA to obtain internal EPA documents that might reveal a pattern of final decision making in the areas of blending and SSOs.

The plaintiffs’ March 14 opposition used many of the documents obtained from EPA to support their claims. AMSA’s March 28 opposition focused on the fact that the regional positions "represent definitive pronouncements" and have an "immediate impact on the affected entities that have applied for . . . permits or permit renewals." Moreover, AMSA contended that EPA Headquarters can not be allowed to shield the regions from judicial review "simply by virtue of the fact that it has abdicated its own responsibility to ensure that the [Clean Water Act] . . . is administered in a fair and consistent manner throughout the country." The government’s April 4 reply once again argued that no final agency actions have been identified for court review.

AMSA and the plaintiffs now await the court’s decision on whether the case can remain in court and proceed to briefing on the merits. Should the court allow the case to proceed, we expect it will be resolved on cross motions for summary judgment in early 2004.

Supreme Court Asks for Government’s Position in Water Transfer Case
AMSA’s November 25, 2002 amicus brief filed jointly with member agency the New York City Department of Environmental Protection (NYCDEP) urges the Supreme Court to accept an important water transfer case for review. Miccosukee Indian Tribe of Florida, et al. v. South Florida Water Management District (SFWMD), 280 F.3d 1364 (11th Cir. 2002) (Miccosukee). In Miccosukee, the Eleventh Circuit held that the SFWMD needs a National Pollutant Discharge Elimination System (NPDES) permit to operate a flood control pump station that moves untreated water through a levee to a water conservation area. AMSA’s amicus highlights that Miccosukee’s potentially dramatic expansion of the NPDES program will have an adverse impact on local water management decisions. Our brief notes that if left to stand, Miccosukee could subject thousands of governmental water management activities to NPDES permits for the first time, including drinking water, water transfers, flood control, and irrigation. The Association of Metropolitan Water Agencies, NLC, and NAFSMA also joined AMSA and NYCDEP’s amicus brief.

On January 13, the Supreme Court deferred making a decision on whether or not to grant certiorari until it receives the views of the Department of Justice (DOJ) on whether it should take the case. This represents a critical statement of interest by the Supreme Court, and also means that the government must take a position on the issues raised in the case. For decades, EPA and courts have found these types of water transfers to be outside the NPDES program. Now at the Supreme Court’s invitation, the government will be able to reaffirm – or change – its position on permitting these transfers.

DOJ presently is sorting out the views of the various federal agencies with interest in water transfers. To date, the Army Corps of Engineers has gone on record as not supporting NPDES permitting of water transfers. The positions of EPA and the Department of Interior are unclear at this time. AMSA expects that DOJ will respond to the Supreme Court’s request by late June before the court recesses for the summer. If the Supreme Court eventually decides to take the case, AMSA would seek Board approval to file another amicus brief raising similar points with the Court.

EPA Meets Deadlines Under Biosolids Agreement/Decree with AMSA, NRDC
Under a settlement agreement with AMSA and the Natural Resources Defense Council (NRDC), EPA met its April 1 deadline to sign a notice for publication in the Federal Register explaining how it plans to respond to the July 2002 National Research Council (NRC) study of risks from toxicants and pathogens in land-applied biosolids, and how it plans to identify additional toxic pollutants in biosolids that may warrant regulation under CWA § 405(d). Gearhart v. Whitman, Civ. No. 89-6266-HO (D. Or.); published at 68 Fed. Reg. 17,379 (April 9, 2003). EPA is seeking public comment for 90 days on its proposed plans, and expects to publish final plans in the Federal Register in January 2004. AMSA will provide comments by the July 8 deadline.

EPA also is obligated under a consent decree with AMSA and NRDC to complete its Round Two rulemaking evaluating dioxin levels in land-applied biosolids by October 17. The October deadline will be extended under certain circumstances involving the release of EPA’s Dioxin Reassessment (“Reassessment”), an EPA report 10 years in the making which is expected to recommend a more stringent cancer value for dioxin. First, the deadline will be extended 150 days if EPA releases the Reassessment between May 16 and October 17 and determines that information in the Reassessment does not mandate additional public comment on the Round Two regulations. Or, the deadline will be extended to January 16, 2004 if EPA releases the Reassessment before October 17 and determines that information in the Reassessment does mandate further public comment on the Round Two regulations. Under the second scenario, AMSA, EPA, and NRDC also must meet to agree to a new deadline. At this time the Reassessment release date has slipped to late 2003 to late 2004, depending on the scope and duration of congressionally-mandated National Academy of Sciences review, making its release unlikely to delay the final biosolids regulations.

Farm Groups Take Pronsolino to Supreme Court
On February 6, the Pronsolinos, the American Farm Bureau Federation, and California state and local farm groups requested that the U.S. Supreme Court grant certiorari and reverse the U.S. Court of Appeals for the Ninth Circuit’s decision in Pronsolino v. Nastri, 291 F.3d 1123 (9th Cir. 2002). On March 5, the American Forest and Paper Association and the California forestry association supported the petition for certiorari. The Pronsolino court upheld the finding that impaired waters should be listed and subject to total maximum daily loads (TMDLs) under CWA § 303(d), whether impaired by point sources, nonpoint sources, or a combination of both.

AMSA is a party to the case, and participated actively before the district court and the Ninth Circuit. AMSA will file an opposition to the grant of certiorari by the May 16, 2003 deadline. EPA also is expected to oppose High Court review at that time. The Supreme Court could make a decision on the petition for certiorari before it recesses for the summer in late June.

AMSA, DC WASA File Amicus in D.C. TMDL Case
On April 21, the District of Columbia Circuit Court of Appeals heard oral argument from EPA and from Friends of the Earth (FoE) in a case in which FoE argues that TMDLs may be expressed only as true 24-hour daily loads. Friends of the Earth (FoE) v. EPA, Nos. 02-1123, 02-1124 (D.C. Cir. 2002). FoE challenged EPA’s issuance and approval of TMDLs for biochemical oxygen demand (BOD) and total suspended solids (TSS) for the Anacostia River in Washington, D.C. The BOD TMDL was expressed as an annual average and the TSS TMDL was expressed as a seasonal average. FoE argued that these averaging periods result in dischargers being able to discharge BOD and/or TSS at unacceptably high levels on individual days, yet still meet the average limit. The DOJ, arguing in support of EPA’s action, explained how EPA regulations allow flexibility in how TMDLs are expressed and how daily data was incorporated into EPA’s water model to develop the TMDLs. The court expressed skepticism regarding how EPA made some of its choices in setting the TMDLs, but also noted that the Agency’s consideration of worst case storm data for D.C. in the model appeared reasonable. A decision from the court is expected in the coming months.

AMSA and member agency the D.C. Water and Sewer Authority (WASA) filed an amicus brief in the case in January to highlight how FoE’s contention that TMDLs must be expressed 24-hour load form conflicts with CWA § 402(q) incorporating EPA’s 1994 Combined Sewer Overflow Policy (CSO Policy), and effectively precludes implementation of the CSO Policy. We emphasized how FoE’s position undermines planning and implementation under WASA’s Combined Sewer System Long Term Control Plan. A 24-hour load effectively would require separation of WASA’s combined sewer system, which is neither economically nor technically feasible and would provide less water quality benefits. Notably, during oral argument the court asked several questions about sewer separation and how prevalent the approach is across the country.

W. Va. Antidegradation Case Progresses
AMSA, together with the West Virginia Municipal Water Quality Association and the West Virginia Municipal League, is a party to this case in which citizen groups allege that EPA’s approval of West Virginia’s antidegradation implementation procedures violated federal water quality standards regulations. Ohio Valley Environmental Coalition, et al., v. Whitman, Civ. No. 3:02-CV-59 (S.D. WV, Jan. 23, 2002). West Virginia’s procedures contain antidegradation exemptions important to POTWs, including for: 1) de minimis activities resulting in less than a 10 percent reduction in the receiving water’s assimilative capacity; 2) proposed new or expanded discharges from POTWs to alleviate public health concerns associated with failing septic systems, or untreated or inadequately treated sewage (including CSO elimination or reduction projects); and 3) POTW expansions or improvements. As West Virginia based its procedures on those developed by other states, a successful challenge could raise questions regarding other states’ practices.

Given that all parties are arguing from the administrative record for the rulemaking, the case will be decided on cross motions for summary judgment. The plaintiffs filed their motion for summary judgment on February 27. Their motion argued that “West Virginia’s procedures illegally create a series of wholesale exemptions to, and limitations on, antidegradation applicability and review, resulting in state standards that fall far below the minimum floor of federal protection of water quality.” They also assert that the state’s antidegradation policy “is so riddled with exemptions . . . that it fails to require dischargers to show that their proposed activities would benefit the communities whose waters would be degraded. Proper implementation of the antidegradation policy would merely require would-be polluters to demonstrate these benefits.” EPA’s motion for summary judgment is due on April 29, and AMSA and the West Virginia groups’ motion for summary judgment is due on May 14, 2003. We expect the court will issue a decision in the case in early 2004.

July 2000 TMDL Rule Lawsuit to Become Moot
On March 13, EPA withdrew the controversial July 2000 TMDL rule before its April 30 effective date. 68 Fed. Reg. 13,608. AMSA supported this action in late January comments. Now that EPA has withdrawn the rule, the subject of litigation no longer exists. American Farm Bureau Federation v. Whitman, No. 00-1320 (D.C. Cir. 2000). On April 18, DOJ filed a motion to hold the case in abeyance until a month past the 120-day period for challenging EPA’s withdrawal of the rule (August 17). Assuming no challenges are filed, the government then will file a motion to dismiss the case as moot. We do not expect stakeholders, including AMSA, to oppose this motion.

AMSA participated in numerous meetings over the past few months to urge EPA and other federal officials to propose the watershed rule, which when eventually finalized, will provide new ground rules for the TMDL program. A new final rule also will provide AMSA and other interests with a fresh opportunity to file litigation if desired. Until that time, the TMDL program remains governed by EPA’s 1985/1992 regulations.

EPA Settles OSWI Deadline Case; Urban Air Toxics Deadlines Still Unresolved
AMSA is an intervenor in a series of cases brought by the Sierra Club alleging EPA’s failure to develop various Clean Air Act (CAA) regulations by their statutory deadlines. Sierra Club v. Whitman, No. 01-1537 and consolidated cases (D.D.C. July 2001). On March 21, EPA and the Sierra Club executed a partial consent decree establishing deadlines for some of the overdue regulations. Under the decree, EPA must propose overdue CAA § 129 rules for other solid waste incinerators (OSWI) by November 30, 2004 and finalize them by November 30, 2005. At one time, EPA’s OSWI category included sewage sludge incinerators (SSIs), but EPA determined in 2000 that § 129 does not apply to SSIs (65 Fed. Reg. 23,460). AMSA now will have to follow EPA’s rulemaking activities to ensure that EPA does not reintroduce SSIs into its § 129 rulemaking.

Still unresolved between EPA and Sierra Club are deadlines for EPA to propose and finalize overdue urban air toxics regulations for numerous source categories, including SSIs. Urban air toxics standards for POTWs originally also were at issue; however, last year EPA published final urban air toxics regulations for area source industrial and non-industrial POTWs. 67 Fed. Reg. 64,742 (Oct. 21, 2002). EPA has offered to propose the urban air toxics regulations in 2009 and to finalize them in 2010. Sierra Club has rejected any date beyond 2007. The Agency and Sierra Club now are in mediation before a magistrate judge to reach a mutually acceptable deadline.