AMSA Legal Alert (Leg 03-9)

On November 20, the United States District Court for the District of Columbia dismissed the ongoing blending and sanitary sewer overflow (SSO) case, finding that the inconsistent U.S. Environmental Protection Agency (EPA) regional guidance documents challenged in the suit are not "final agency actions" subject to court review. Pennsylvania Municipal Authorities Ass’n (PMAA) v. Horinko, No. 02-1361 (D.D.C.). AMSA intervened in the case commenced by plaintiffs PMAA, the Tennessee Municipal League, and the City of Little Rock, Arkansas last year, and participated in briefing and discussions with EPA. The court's dismissal was not surprising given that only days after publishing its November 7 proposed blending policy (see AMSA Regulatory Alert 03-14), EPA cited the proposal to the court as evidence of the non-final nature of EPA’s blending deliberations. Although the court declined in the end to review the case on the merits, its opinion is thoughtful and contains several helpful statements for publicly owned treatment works (POTWs) facing blending and SSO permitting scrutiny.

This Legal Alert provides details on the opinion, which can be accessed on AMSA’s Litigation Tracker at http://www.amsa-cleanwater.org/private/littrack along with other case documents. This Alert also provides an overview of the plaintiffs’ December 5 motion for reconsideration of select aspects of the court’s opinion. Finally, this Alert discusses AMSA’s next steps on blending and SSO issues, including the impending proposed blending policy comment deadline of January 9, 2004. AMSA urges all member agencies to file comments in support of EPA’s proposed policy by the deadline.

I. Background
The July 2002 PMAA case challenged EPA Headquarters’ and Region 3, 4, and 6’s inconsistent positions on blending and permitting of SSO points, and the lack of an appropriate standard for SSOs. The plaintiffs sought for the court to declare that: 1) blending is not prohibited under the Clean Water Act (CWA) and applicable regulations; 2) EPA lacks authority under the CWA to direct plant design or the use of specific processes to achieve effluent limitations; 3) emergency sanitary sewer outfalls in the collection system can be permitted; and 4) the best achievable technology/best conventional technology (BAT/BCT) standard, not secondary treatment, applies to SSOs. AMSA sought to intervene in the case with support from the Technical Action Fund (TAF), and in October 2002 the court granted AMSA’s request.

EPA, however, sought to dismiss the case by arguing that it had not taken final action on the challenged issues. EPA also sought a stay of its obligation to provide the plaintiffs with internal agency documents containing information on its blending and SSO interpretations. AMSA rebutted that the challenged regional actions are "definitive pronouncements" with "immediate impact” on POTW permits and renewals, and that the regions cannot be shielded "simply by virtue of the fact that [Headquarters] has abdicated its own responsibility to ensure that the [CWA] is administered in a fair and consistent manner” nationwide. The court ruled that EPA should produce the requested documents, which revealed that EPA Headquarters was aware of the inconsistent regional approaches, had analyzed the tremendous cost of a blending prohibition, and clearly demonstrated a coordinated effort by the challenged regions to object to or hold up state permits approving blending treatment approaches.

The case then lingered on for several months, leading to the plaintiffs’ August request that the court issue a preliminary injunction barring the regions from taking any further adverse actions until EPA issued a national blending policy. The plaintiffs attested that EPA’s Office of Enforcement and Compliance Assurance had interfered with and delayed a blending policy, and that irreparable harm would occur to POTWs if the regions continued their blending prohibitions. EPA opposed the injunction, and then in November, proposed the blending policy. Days thereafter, the court dismissed the case.

II. Highlights of the Court’s Opinion
The court first restates the case as challenging the regions’ (1) prohibitions on blending; (2) refusal to permit emergency SSO discharges; and (3) establishment of secondary treatment as the technology-based standard for SSOs. The court notes that these “alleged prohibitions and ultra vires regulations” appeared “in the form of dictates by regional administrators.” Opinion at 6. Furthermore, the court states that “departments within the national EPA disagree over the legality of blending and emergency outfalls.” Id. While noting that EPA Headquarters “is aware of the conflict between different regions on blending and SSOs and has agreed that blending and emergency outfalls can be permitted,” the court acknowledges that “Headquarters has done noting to prevent” the regions from taking the challenged actions. Id. at 7. The court then determines that EPA’s October 2002 motion to dismiss for lack of final agency action should take precedence over the plaintiffs’ August 2003 motion for preliminary injunction. Id. at 9-10.

A. Regional Guidance Documents Are Not Final Agency Actions
The court first finds that while national guidance documents by federal agencies can constitute final agency action, regional guidance documents on National Pollutant Discharge Elimination System (NPDES) permits are not final actions. Id. at 13. Allowing court review of such guidance documents, the court notes “would discourage EPA from issuing guidance and sharing expertise with states ‘for fear that its communication would be interpreted as final agency action.’” Id. at 14-15. Thus, the court concludes that the necessary final agency action is not present where POTWs are “complaining only of prohibitions contained in regional guidance documents.” Id. at 16. The court suggests that these POTWs can bring future legal action when and if they suffer more concrete harms.

Of general help, however, is the court’s statement that “EPA Regions do not have authority to establish rules prohibiting the disputed practices” (emphasis added), and that because “regional guidance documents are not binding, these POTWs may continue to operate under the authority of their current permits until they expire, or are challenged by state or federal permitting authorities.” Id. at 15-16. These statements will support POTWs currently blending where their permit or application references the wet weather operational mode, as well as those with permitted SSO outfall points.

B. Specific Adverse Permit Decisions Are Final Agency Actions
The court then reviews the claims of POTWs that have suffered a state permit denial, a regional objection to a state permit, or regional issuance of a state permit with modifications (e.g., new prohibitions on blending). Positively for POTWs, the court finds that "municipalities denied permits by states or the EPA Regions, or issued permits banning blending, suffer enough tangible legal injury" to claim "final agency action." Id. at 19.

C. Proper Courts for Specific Permit Challenges
The court then discusses several jurisdictional issues, finding that challenges to regional permit vetoes, permits issued by regions, or permits issued or denied by EPA Headquarters should be brought in the federal Courts of Appeals under CWA § 509(b)(1)(F) as “actions of the Administrator” to issue or deny permits. Challenges to state-issued permits should be brought in state court. The court determines that EPA’s “silence” on state permit denials or state issuance of permits banning blending does not confer federal court jurisdiction, as these matters fall within EPA’s non-reviewable discretion to take or withhold action. Id. at 25.

The court recognizes that there is a "jurisdictional Catch-22" and the "somewhat labyrinthine judicial review provisions" of the CWA and the Administrative Procedure Act (APA) "seem to have shielded the EPA from legal action over genuine conflicts" in this case. The court concludes by stating that “[t]o be sure, federal agencies should not use the intricacies of the APA to avoid judicial review by, for instance, labeling policies ‘interim’ or ‘non-final’ and then proceeding to enforce them.” Id. at 27.

III. AMSA Focuses Effort to Secure Final Blending Policy
Because of a December 5 request by the plaintiffs to amend and correct elements of the opinion, there may be additional action in this case before the District Court. In short, the plaintiffs argue that since EPA essentially has admitted that the regions’ anti-blending activities are illegal, a district court can exercise jurisdiction over such ultra vires actions regardless of finality, ripeness, or exhaustion of administrative remedies. The plaintiffs also argue that EPA objections to permits (a step short of a formal EPA veto or takeover) can in fact be challenged in district court as “final” if they effectively mark the end of EPA’s evaluation of or action on a permit. After EPA responds to the motion, the court should rule on the request.

After careful deliberation, AMSA chose not to file additional pleadings before the court. AMSA now is mobilizing member agencies in support of EPA’s issuance of a final blending policy. Comments on EPA’s proposed policy are due by January 9, 2004. AMSA will provide member agencies with model comments to incorporate into agency-specific letters to EPA next week. In addition, AMSA will convene a conference call of member agencies to discuss the blending issue on December 18 at 2 p.m. Eastern Time. Additional information on this opportunity was distributed via Special Edition Fax Alert today. AMSA cannot emphasize enough the importance of member agencies supporting EPA’s release of a final blending policy given that a significant activist group opposition effort is underway.

EPA will not take up work on SSO permitting and standards issues until it first completes work on the blending policy. In the interim, AMSA is working to support member agencies facing controversy at the local level regarding permitting of, and the standard for, SSO points. AMSA is developing a SSO Legal Issues White Paper, which contains a succinct discussion on how the CWA, its implementing regulations, and the various legal and regulatory precedents can be woven together to achieve practical results for POTWs. The White Paper will be released via a forthcoming Legal Alert.

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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 SSO and related activities.