V&E Environmental Law Update E-communication.
The U.S. Supreme Court has determined that EPA had validly interpreted its regulations to hold that stormwater runoff from ditches along logging roads is exempt from National Pollutant Discharge Elimination System (NPDES) permitting under the Clean Water Act (CWA). The Court's decision to reverse the Ninth Circuit's interpretation of EPA's rules will save many in the logging industry from the cost and expense of the permitting process. The jurisdictional holding in Decker v. Northwest Environmental Defense Center (NEDC), however, leaves environmental groups ample freedom to bring future CWA suits, even to challenge practices that EPA allows under its own interpretations of its rules. Several members of the Court also signaled willingness to reconsider the Court's current policy under Auer v. Robbins of deferring to agencies on the meaning of the rules they have created.
Logging and the Clean Water Act
The CWA prohibits the discharge of any pollutant into navigable waters from a point source without an NPDES permit. The Act defines "point source" broadly to include "any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit . . . from which pollutants are or may be discharged." During heavy rains, water runs off the roads used by logging companies to harvest wood into a system of ditches, culverts, and channels. In some cases, the water eventually makes its way into nearby rivers and streams. This stormwater often contains large amounts of sediment, which can be harmful to fish and other aquatic organisms, and is considered a "pollutant" under the CWA.
While EPA may not exempt categories of point sources from the CWA, the agency can issue regulations clarifying which types of sources fall within the definition of "point source." EPA has issued two such rules related to logging. First, under the "Silvicultural Rule," EPA limited point sources to "conveyance[s] related to rock crushing, gravel washing, log sorting, or log storage facilities which are operated in connection with silvicultural activities" and exempted a number of other forest-related activities. Second, because certain stormwater runoff is exempt from the CWA's permitting requirements, EPA issued the "Industrial Stormwater Rule," which clarifies that certain industries and industrial activities (including logging) are subject to NPDES permitting requirements.
Litigation in the courts below
In September 2006, Northwest Environmental Defense Center filed suit in the United States District Court for the District of Oregon under the CWA's citizen-suit provision. The group argued that stormwater runoff from two logging roads in Oregon's Tillamook State Forest created unpermitted discharges in violation of the Act. The district court concluded that the ditches, culverts, and channels alongside these roads were not point sources under the Silvicultural Rule and dismissed the action for failure to state a claim. The Court of Appeals for the Ninth Circuit reversed, holding that (1) the district court had jurisdiction to hear the case, (2) the discharges were not exempt under the Silvicultural Rule, and (3) the discharges were "associated with industrial activity" within the meaning of the Industrial Stormwater Rule, despite the EPA's conclusion to the contrary.
In response to the Ninth Circuit's decision, EPA amended the Industrial Stormwater Rule to reflect the language in the Silvicultural Rule, so that only logging activities "related to rock crushing, gravel washing, log sorting, or log storage facilities" would require NPDES permits. EPA finalized this amendment just days before the Supreme Court heard oral arguments in the case.
Supreme Court decision
The Supreme Court reversed the Ninth Circuit and upheld EPA's interpretation of its rules in a 7-1 opinion penned by Justice Kennedy. Justice Breyer, whose brother participated in the Ninth Circuit's decision, took no part in the Supreme Court's decision.
Jurisdiction
The Court held that NEDC properly invoked jurisdiction under the CWA's citizen suit provision (section 1365), and was not barred from bringing suit by the jurisdictional limit found elsewhere in the Act. Section 1369(b) of the CWA governs jurisdiction over particular EPA actions, including issuing permits, and only allows a challenge to be brought in the court of appeals within 120 days of EPA's action. The Court held that the section 1369(b) limitations did "not bar a district court from entertaining a citizen suit under section 1365 when the suit is against an alleged violator and seeks to enforce an obligation imposed by the Act or its regulations." The NEDC's claim fit within the citizen suit provision because it was a claim to enforce a permissible reading of the ambiguous Silvicultural Rule, rather than a challenge to the Rule itself.
The case was not moot, despite the fact that EPA had already amended the Industrial Stormwater Rule to exempt the petitioners from permitting requirements. As the Court explained, the case is still live because the petitioners could still be held liable for unlawful discharges under the earlier version of the Rule if NEDC prevailed on the merits.
Interpretation of the Industrial Stormwater Rule
Under Auer v. Robbins, courts must uphold an agency's interpretation of its own rule, so long as the interpretation is not "plainly erroneous or inconsistent with the statute" and was not created as a post hoc rationalization in response to litigation. The Court determined that EPA had reasonably interpreted the Industrial Stormwater Rule to exempt logging roads from permitting, and that the CWA did not foreclose EPA's reading. Furthermore, EPA had consistently used this same interpretation to exempt these kinds of logging discharges. The Decker Court therefore determined that EPA was entitled to Auer deference, and upheld EPA's interpretation. Given that a comprehensive set of state stormwater regulations were already in place, the Court noted that EPA could have fairly concluded that further federal regulation was not necessary.
Implications of the Deckerdecision
Given that EPA has already promulgated a new Industrial Stormwater Rule largely exempting logging roads, Decker will have little substantive impact on the application of permitting requirements for logging activities. More importantly, the decision leaves the door open for environmental groups who want to challenge actions they believe to violate environmental statutes. So long as these plaintiffs challenge actions that fall within a "permissible reading" of an ambiguous agency rule, they may seek to enjoin such actions even if the agency has determined that the challenged action does not violate the rule. Furthermore, under today's decision, such groups can continue to raise these claims even after the agency has amended its rules to clarify that the challenged actions were never intended to be covered by the regulations. Groups may continue to raise these claims at any time as long as they do not "seek an implicit declaration that the . . . regulations were invalid as written." Given that the CWA includes civil penalties of up to $25,000 per day and attorney's fees for such violations, ambiguous regulations now hang like the sword of Damocles over industry members that may be future targets for environmental groups.
The future ofAuerdeference
Decker was not an appropriate case to make such a determination, given that neither party had fully briefed the issue. In contrast, Justice Scalia argued in his partial concurrence and partial dissent that the time was ripe to overturn Auer. Instead of allowing an agency to select any reasonable interpretation, Justice Scalia asserted that the fairest reading of the regulations should apply. Justice Scalia explained that that the Court has not articulated a good justification for allowing an agency to "resolve ambiguities in its own regulations." He noted that agencies already have the power to amend their own regulations, or to decide not to prosecute particular cases and argued that these powers mitigated against the need to allow such broad interpretive deference. As Justice Scalia explained, "one of the great rules of separation of powers [is]: He who writes a law must not adjudge its violation." Three members of the Court have now signaled a willingness to reconsider Auer, which could have wide spread implications on the future review of agency actions. The "Auer"may soon be up for deference to agency interpretations of regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
