November 21, 2012

Much ado about nothing?

By Damien M. Schiff Senior Attorney

The United States Supreme Court this Term will hear at least two cases arising under the Clean Water Act:  Decker v. Northwest Environmental Advocates, and Los Angeles County Flood Control District v. Natural Resources Defense Council.

The former concerns the legality of EPA’s regulation exempting owners and operators of forest roads from obtaining a Clean Water Act permit for the discharge of stormwater from those roads into the “waters of the United States.”  The Ninth Circuit ruled that EPA’s regulation, properly interpreted, does not absolve forest road owners and operators from obtaining a permit.  Whether the Ninth Circuit’s decision stands is of paramount importance to the timber and forest products industries.

The latter case also concerns the Clean Water Act’s regulation of stormwater, but it’s far from clear whether the case will have much if any impact. 

The case arises from a citizen suit action brought by two environmental groups that seeks to hold the District liable for heavily polluted stormwater that flows into the Los Angeles and San Gabriel Rivers.  (The lawsuit concerns other LA-area waters too, but the claims based on those waters are not before the Court).  Before getting too much further into facts, a brief review of the Clean Water Act’s stormwater regulation is in order.

The Act makes illegal the discharge of a pollutant from a point source into the “waters of the United States” that exceeds any applicable permit limitation.  Here, the District operates a municipal separate stormwater sewer system (known in the business as an MS4), which is essentially a large mixture of pipes, canals, drains, and the like, which channel stormwater from the 80+ municipalities within the District ultimately into several rivers (including the Los Angeles and San Gabriel Rivers) that in turn flow into the Pacific Ocean.  The parties agree that the Clean Water Act considers the District’s system to be a point source, and stormwater to be a pollutant.  They also agree that the Los Angeles and San Gabriel Rivers are “waters of the United States.”  Thus, there is no dispute that the District is a discharger and therefore needs a permit.

Because the District does have a permit, the environmentalists’ claims are based on the allegation that the District’s MS4 discharges have exceeded what the permit allows.  Accordingly, the case turns on how the District’s compliance with the permit is to be measured.  The permit itself requires that water quality be measured within the Los Angeles and San Gabriel Rivers.  There is no dispute that the water within these rivers, at the time of monitoring, far exceeded the levels of pollution allowed under the District’s permit.  But below the District contended that its compliance with the permit cannot be measured using instream gauges.  Why?  Because one cannot be sure that the pollutants already in the rivers were discharged by the District’s upstream MS4 outfalls, as opposed to other dischargers.  In other words, to hold the District liable, the environmentalists had to measure the discharge of pollutants at or near the outfalls where the District’s MS4 pipes and channels spill into the rivers.

The district court agreed with the District’s defense and ruled in its favor on all claims, but the Ninth Circuit reversed in part.  The court’s opinion, not a model of clarity, appears to operate on the assumption that two of the monitoring stations (for the Los Angeles and San Gabriel Rivers) are located within the District’s MS4.  Thus, the Ninth Circuit reasoned that if permit-exceeding water passed through these monitoring stations while within the MS4, then one could reasonably conclude that the polluted stormwater ultimately discharged into the Rivers.  But, other parts of the Ninth Circuit’s decision seem to assume that the portions of the Los Angeles and San Gabriel Rivers that are channelized, encased in concrete, or otherwise “improved” for stormwater and flood protection, are also part of the District’s MS4.  And it is that assumption on which the District has relied to obtain review in the Supreme Court.

Specifically, the Supreme Court granted review on the question of whether the District can be held liable for a “discharge” simply because (1) polluted stormwater flows through improved portions of rivers that are part of the District’s MS4 (2) into downstream portions of the river (3) that are not part of the MS4.  The question presented highlights a conflict between the Ninth Circuit’s apparent holding and the Supreme Court’s decision in South Florida Water Management District v Miccosukee Tribe, 541 U.S. 95 (2004).  That case addressed the Clean Water Act’s definition of the “discharge of a pollutant,” which depends on the “addition” of a pollutant.  The Supreme Court ruled in Miccosukee that there is no “addition” of a pollutant if water merely travels from one segment of the same waterbody to another segment.  The Court also explained that, to determine whether manmade improvements or alterations to a waterbody can operate to make them two waterbodies for purposes of the “addition” question depends on whether the different segments are “meaningfully distinct” from each other.

In Los Angeles County Flood Control District, the District argues that the Ninth Circuit’s decision conflicts with Miccosukee.  The District reasons that the improved segments of the Los Angeles and San Gabriel Rivers are not meaningfully distinct from their unimproved segments and therefore that the District has not caused an “addition” of any pollutant to the segments of these rivers that are downstream of their improved segments.  Alternatively, the District argues that the Ninth Circuit’s decision depends on the legally erroneous assertion that the segments of the rivers that are improved, over which the District has control, are point sources, not navigable waters.  But, the District argues, the Court has never held that a waterbody can be a “water of the United States” for some purposes and a “point source” for other purposes.  Further, the District observes that, to the extent that the improved segments of the rivers are exclusively point sources, then EPA’s and the United States Army Corps of Engineers’ Clean Water Act jurisdiction ceases (because such jurisdiction depends on the presence of “waters of the United States”), an absurd result.

But this is where things get interesting (at least to environmental law nerds like your humble servant).  The environmentalists in their opening brief agree with the District on the question presented, namely, the alterations to the bed and banks of the Los Angeles and San Gabriel Rivers do not make them partial point sources or otherwise deprive EPA and the Corps of jurisdiction.  But, the environmentalists argue that the District’s liability does not depend on the question presented.  Rather, the environmentalists contend that the Ninth Circuit made a simple record error when it concluded that the rivers’ monitoring stations are located within the District’s MS4.  In fact, the monitoring stations are located within the rivers themselves, which are not part of the MS4 (even though the District has improved portions of the rivers for flood control purposes).  The environmentalists continue that, under EPA’s regulations, every stormwater permit must have a compliance mechanism.  For the District’s permit, the compliance mechanism is the instream monitoring.  The environmentalists reason that, by accepting the permit, the District is bound by the permit’s presumption that exceedance of water quality standards as measured by the monitoring stations downstream of the MS4 outfalls shall be deemed an exceedance as if the measurements occurred right at the outfall.

(Note that the Ninth Circuit rejected this “deemed exceedance” argument as applied to the environmentalists’ claims for other rivers, where the record was clear that the monitoring stations were located in the rivers themselves and downstream of the MS4 outfalls.  The court ruled that instream measurements downstream of a discharge point cannot, without more evidence, impose liability on the discharger.)

The environmentalists also point out that the District is about to obtain a new stormwater permit that will measure exceedance at the MS4’s outfall points, not downstream of the outfalls within the rivers.  That fact, combined with their contention that there is no disagreement about the proper answer to the question presented, lead the environmentalists to argue either for a dismissal of the District’s cert petition as improvidently granted, or an affirmance of the Ninth Circuit’s judgment on the “deemed exceedance” argument.

Things become even more complicated with the United States’ amicus curiae brief, filed in support of neither party.  The United States agrees with the environmentalists that the error in the Ninth Circuit’s opinion is factual; it is not a misinterpretation or misapplication sub silentio of Miccosukkee.  Specifically, the United States argues that the Ninth Circuit erred in concluding that the monitoring stations are located within the MS4.  For that reason, the government believes that vacating the Ninth Circuit’s judgment would be appropriate.  But the government disagrees with the District and the environmentalists as to the next steps.  The government argues that the Court should remand the matter to the Ninth Circuit to allow it to determine whether, in light of the record correction, the District should be held liable.

What would likely happen if the Court were to follow the government’s suggestion? As noted above, the Ninth Circuit held that the District could not be liable for the environmentalists’ claims based on monitoring stations in other rivers that were located downstream of the MS4 outfalls.  In light of that conclusion, one would imagine that the Ninth Circuit would come to the same “no liability” conclusion with respect to the Los Angeles and San Gabriel Rivers claims, once its record error has been corrected.

So, is this case much ado about nothing?  Arguably yes.  The environmentalists and the government agree with the District on how the question presented should be answered.  The only disagreement is over whether the question presented is relevant to the District’s attempt to overturn the Ninth Circuit’s judgment.  On that score, the environmentalists contend that it is not relevant, and that judgment should be affirmed on alternative grounds (or at the very least that the writ should be dismissed as improvidently granted).  The government contends that the question presented is not relevant, but that a “do-over” in the Ninth Circuit is appropriate.  And the District argues that the Ninth Circuit’s decision could be interpreted in such a way as to make the question presented relevant, and if so that judgment should be entered for it.

In my view, the environmentalists and the government have the better argument on what the Ninth Circuit did wrong, but I sympathize with the District and its reasonable but contrary interpretation of the lower court’s decision.  It would, therefore, be unfair to the District to dismiss the writ while leaving the District and other regulated entities in the Ninth Circuit potentially subject to a misinterpreted Ninth Circuit decision (which again, if misinterpreted, would in my view support Supreme Court review and would make the question presented relevant to the judgment).  At the same time, the government’s suggestion of vacatur and remand is not particularly satisfying, for two reasons.  One, the Ninth Circuit’s opinion on the law is already clear.  Second, the issue is purely legal and there’s no reason why the Supreme Court could not decide whether instream water quality monitoring can conclusively determine liability for an upstream discharger.  Of course, one problem with the Court addressing that issue is that it is not fairly encompassed within the certiorari grant.  Thus, the Court might be compelled to remand to the Ninth Circuit, in which case the conclusion may very well be judgment for the District anyway.

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