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Recent Decisions Limiting Government Attempts to Regulate Under the Clean Water Act

Environmental Law Alert Thomas P. McElligott, Raphael F. Ramos, David A. Strifling

Recent federal decisions have limited government attempts to regulate discharges under the Clean Water Act (CWA) in two respects: First, the Supreme Court reaffirmed that the transfer of water between different parts of the same water body is not a "discharge" for CWA purposes; and second, a federal district court held that the EPA cannot regulate flow as a surrogate for a regulated pollutant. These decisions indicate that agency efforts to expand the scope of CWA permitting obligations and discharge regulation have definitive limits.

The Transfer of Water Between Portions of the Same Water Body Is Not a Discharge Subject to Regulation Under the CWA

In Los Angeles Cnty. Flood Control Dist. v. Natural Res. Defense Council, Inc., 568 U.S. --- (2013), the U.S. Supreme Court unanimously concluded that the flow of polluted water from one portion of a water body to another portion of the same water body was not a "discharge of a pollutant" under the CWA. Environmental groups had argued that district operators were violating certain National Pollution Discharge Elimination System (NPDES) permit obligations when discharging storm water. The Court decided that no "discharge" occurred because the water at issue flowed from an upper part of a river, through a concrete channel, and then into a lower portion of the same river. The Court had previously reached a similar result in S. Fla. Water Mgmt. Dist. v. Miccosukee Tribe, 541 U.S. 95 (2004).

The Court examined the language of the CWA and concluded that the transfer of polluted water between two parts of the same water body was not a discharge of pollutants. The CWA defines a discharge as "any addition of any pollutant to navigable waters from any point source." 33 U.S.C. § 1362(12) (emphasis added by the Court). Because no pollutants are added to a body of water when water is transferred between portions of that body, the Court concluded that no discharge occurs. Accordingly, the Court held that there had been no violation of the NPDES permit.

EPA Cannot Regulate Flow as a Surrogate for a Regulated Pollutant

In Virginia, the state's Eastern District court rejected an EPA attempt to expand its regulatory authority under the CWA's total maximum daily load (TMDL) provisions by using water flow as a surrogate for sediment. Virginia Dep't of Transp. v. EPA, No. 1:12-CV-775 (E.D. Va. Jan. 3, 2013). TMDLs are established when necessary to bring an impaired water body back into compliance with water-quality criteria and typically establish the maximum amount of a pollutant that may be added to the water body on a daily basis. In the Virginia case, the EPA established a TMDL that limited the flow rate of storm water into a creek in order to regulate the amount of sediment in the creek. Both parties agreed that sediment was a pollutant and storm water was not, and the EPA used flow rate as a surrogate for sediment in the TMDL rather than regulating a specific pollutant.

Applying the two-step Chevron analysis, the Virginia court first considered whether the language of the CWA addressed the issue without ambiguity and then examined whether the agency's interpretation was permissible, ultimately concluding that the agency had exceeded its authority. Examining the language of the CWA, the court noted that states are granted authority to establish TMDLs "for those pollutants which the Administrator identifies . . . ." 33 U.S.C. § 1313(d)(1)(C). Concluding that there was no ambiguity in the statute, the Virginia court held that while the EPA is charged with establishing TMDLs for pollutants, it lacks authority to regulate non-pollutants. Because both parties agreed that storm water was not a pollutant and that sediment was, the court addressed the EPA's position that flow was appropriately used as a surrogate for sediment. While noting that expression of the TMDL in terms of flow may actually be the most effective method means of regulation, the court concluded that the EPA may not regulate something over which it has no power as a proxy for something over which it has power. Because there was no ambiguity over the EPA's breadth of authority, the court concluded that the EPA failed to satisfy the first step of the Chevron analysis.

Although further examination under step two of the Chevron analysis was unnecessary, the court went on to note that, even assuming that the CWA was ambiguous and deference was due to the EPA under Chevron, the use of flow as a surrogate for sediment would likely still be impermissible. The court emphasized that an agency's attempts to increase the extent of its own authority must be examined carefully by the courts. The court further stressed that the EPA's attempt to set TMDLs for non-pollutants went beyond permissible gap-filling and was an impermissible interpretation of the CWA.

These recent decisions demonstrate that there are real limits to EPA's regulatory powers under the CWA.

For more information, please contact Tom McElligott at (414) 277-5531 / thomas.mcelligott@quarles.com, Dave Strifling at (414) 277-5527 / david.strifling@quarles.com, Raphael Ramos at (414) 277-5539 / raphael.ramos@quarles.com or your Quarles & Brady attorney.