April 11, 2013

Utility poles are not "point sources"

By Damien M. Schiff Senior Attorney

Last week, the Ninth Circuit Court of Appeals ruled in Ecological Rights Foundation v. Pacific Gas & Electric Co. that telephone companies are not liable for chemicals used to treat utility poles that end up in the nation’s waters.  Telephone poles are typically treated with a variety of chemicals to preserve them against the elements.  But rain generally washes these chemicals off the poles, and that rain, collected by stormwater systems, ultimately discharges into waters that the Clean Water Act regulates.  Here, the environmentalist plaintiff had argued that telephone poles are point sources under the Clean Water Act, such that the telephone company owners are liable for the chemicals that are washed off the poles and that end up in regulable waters.

In an opinion authored by Judge Callahan, the Ninth Circuit rejected the environmentalist argument.  The court explained that a utility pole did not comfortably fall within the statutory definition of point source.  Although in theory the statute could be interpreted to cover the poles, the court noted that the Environmental Protection Agency (the agency principally entrusted with interpreting and administering the Act) has not interpreted the statutory definition through regulation; and so the court’s best judgment, viz, poles aren’t point sources, must control.

Judge Callahan went on, however, to hold (and in this she was joined by Judge Tallman only) that even if utility poles are point sources, the phone companies would not be liable for their stormwater discharges because such discharges are not associated with an industrial activity (a statutory predicate for current stormwater regulation).  In so holding, the court relied on the Supreme Court’s decision this Term in Decker, which upheld EPA’s interpretation of the Act that stormwater runoff from forest road construction and maintenance is not associated with an industrial activity and therefore not currently subject to Clean Water Act regulation.  (The panel also rejected the environmentalist organization’s related claim under the Resource Conservation and Recovery Act, holding that the polluted runoff from the utility poles does not, at least in its current ambient concentration, constitute regulable “solid waste.”).

The Ninth Circuit’s decision is no doubt a good one for the regulated public, but it’s important to underline that the decision leaves the door open for future regulation.  First, the decision makes clear that the plain meaning of the statute’s definition of point source does not compel the court’s interpretation; thus, EPA could in theory through rulemaking interpret the definition to extend to point sources, and that interpretation would not necessarily conflict with the court’s decision.  Second, EPA has existing authority through new rulemaking to regulate stormwater discharges that are not associated with an industrial activity.  If utility poles are deemed to be point sources, then their stormwater runoff could be regulated through such new rulemaking.  Admittedly, there are a lot of conditions that would have to be met for the agency effectively to overrule the Ninth Circuit’s decision.  But the fact that it’s administratively possible tells me that the environmental community will shift from litigation to lobbying mode on this issue.

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