What's All the Fuss
News and views on the EPA’s proposed water transfer rule
By
Henrietta H. P. Locklear
For a law that is as important as the Clean Water Act (CWA) is to state governments, local governments, industry, and environmental interests, a small change in wording can make an enormous difference. The proposed addition or subtraction of just a few words can cause a furor: Supporters of a change express elation, while accusations fly, and doleful predictions about the consequences of changing (or not changing) the act abound. One recent example of this phenomenon is the controversy surrounding the EPA’s proposed water transfer rule. The press release for the proposed rule quoted an EPA administrator who said, “The Water Transfer Rule gives communities needed flexibility to protect water quality, prevent costly litigation and promote the public good” (EPA 2006). A public comment filed in response to the proposed rule by the Conservancy of Southwest Florida asserts, “We do not believe this proposed rule fulfills the Clean Water Act (CWA) mandates that the Environmental Protection Agency (EPA) was created to implement” (Hecker 2006). This article describes the proposed water transfer rule, its relationship to recent events and court cases, and various viewpoints on the proposed rule.
What Is a Water Transfer?
The words water transfer may have a specific definition in a particular context, such as the definition used by the EPA in the proposed rule. However, the concept of a water transfer is simple: It is the artificial transport of water from one body of water to another. Water transfers are used to convey water from an area of abundance to an area of scarcity. Transfers have been used by civilizations since ancient times to supply civilizations with irrigation and drinking water. In the United States, water transfers are used often; vary in amount and complexity; and provide crops, livestock, cities, and metropolitan areas with vital water supplies.
West Versus East?
Some have characterized the diverse viewpoints on the issue as split along a regional divide, with eastern interests opposed to western ones [US Supreme Court 2004; Marten Law Group (a), 2006]. While it is true that many western interests support the proposed rule and a group of eastern state attorneys general submitted a public comment opposing the rule, the divisions among viewpoints are not as simple as an east-west dichotomy. For instance, the Wyoming Game and Fish Department says, “We do not support this unnecessary relaxation of an important water quality standard” while an eastern power company, the Oglethorpe Power Corp. of Georgia, expressed its support of the proposed rule (Emmerich 2006; Fulle 2006). It is logical that any entities, no matter what region of the US, that facilitate water transfers, or any groups that depend on them for water supplies, have an intense interest in their regulatory treatment because it affects how, when, and how easily transfers can occur. On the other hand, as an EPA document states, “activities that result in the movement of navigable waters …. can also serve to move pollutants from one water body (donor water) to another (receiving water),” which generates interest and concern among many other groups, both western and eastern (Klee et al. 2006) Interestingly, the cases that appear to have driven the issuance of the proposed rule are cases litigated in the East.
The Proposed Water Transfer Rule
On Wednesday, June 7, 2006, the proposed change to the EPA’s CWA regulations was published in the Federal Register (http://www.gpoaccess.gov/fr/index.html). The proposed change is an addition to 40 Code of Federal Regulations Part 122 (40 CFR Part 122): EPA Administered Permit Programs: National Pollutant Discharge Elimination System (NPDES). The section affected by the rule (122.3) lists the types of discharges that are exempt from NPDES permits. Among the existing exemptions are discharges of ballast water from oceangoing vessels, dredged or fill materials that are regulated under section 404 of the CWA, return flows from irrigated agriculture, and discharges into privately owned treatment works. The proposed new exemption reads as follows:
Discharges from a water transfer. Water transfer means an activity that conveys waters of the United States to another water of the United States without subjecting the water to intervening industrial, municipal, or commercial use. This exclusion does not apply to pollutants added by the water transfer activity itself to the water being transferred.
That is, the proposed rule says discharges from water transfers, as defined in the rule, would not be required to be covered under an NPDES permit. If the process of transferring water itself adds pollutants, the pollutants are subject to a permit. For instance, if a pump that is moving the water leaks oil into the water during the transfer, the oil would have to be covered under an NPDES permit (Guest 2006).
Proposed rules are subject to a public comment period, the specifics of which are published with the text of the proposed rule. The Federal Register notice for the proposed water transfer rule solicited public comments, including comments on several specific issues. These issues included the wording of the definition of “water transfer” and information on state programs that address water-quality impacts from water transfers. Initially, the comment period was slated to last 45 days, until July 24, 2006, but it was extended on July 19 for an additional 14 days and ended on August 7, 2006 [Federal Register (b) 2006]. More than 1,000 comments were submitted (www.regulations.gov) during the public comment period. The public comments that were submitted represent the views of a variety of organizations and individuals.
Recent Events Leading to the Proposed Rule
Over the past few years, according to the EPA’s Assistant Administrator for Water Benjamin Grumbles, there has been increasing uncertainty on the part of communities about the question of whether NPDES permits are required for water transfers, as a result of rulings in various court cases (Grumbles 2006). The cases with the most significant impact on the rule are lawsuits litigated over the past six years including the cases commonly referred to as Catskills I and II, Miccosukee, and, most recently, Okeechobee. These four are summarized here, along with the agency’s interpretive memo. Although the importance of these cases is recognized by the opposing sides, the meaning of the rulings is not fully agreed upon by all.
Catskill Mountains Chapter of Trout Unlimited Inc. v. City of New York (“Catskills I”)
Summary: In 2001 a case was argued before the Second Circuit Court of Appeals (the Second Circuit Court of Appeals hears cases arising in New York, Vermont, and Connecticut), which was an appeal of a lower court case brought by a group of plaintiffs referred to collectively as “Catskill” against the City of New York for failure to obtain an NPDES permit for turbid discharges for a water transfer from Schoharie Reservoir to Esopus Creek via Shandaken Tunnel. The city argued that the discharge did not constitute an “addition” of a pollutant composing a “discharge” for which a permit was required, on the basis of holdings in two 1980s cases [National Wildlife Federation v. Gorsuch, 693 F.2d 156 (D.C.Cir. 1982), and National Wildlife Federation v. Consumers Power Company, 862 F.2d 580 (6th Cir. 1988)]. These cases found that discharges from dams did not require permits as movement of water from one part of a single water body to another and involved the deference by the Court to the EPA’s construction of the CWA in these holdings. However, in Catskills I, the Court found that the discharge to Esopus Creek constituted the addition of a pollutant requiring a permit, vacating the lower court decision on that matter and remanding the case to the district court for further proceedings. In so finding, the Court did not grant the EPA the same level of deference to its definition of “addition” (as cited by the city) as was granted in the dam discharge cases because of the absence of “rulemaking or other formal proceeding.” After being remanded, the case was again appealed to the Second Circuit and was heard in 2006 (Catskills II).
Significance to the proposed rule: This case is linked to the proposed rule not only because of the subject matter but also because it was made clear in this opinion that the EPA’s position would be strengthened by a declaration of its interpretation, rather than just the “Agency’s longstanding practice” (Klee et al. 2006).
South Florida Management District v. Miccosukee Tribe of Indians
Summary: In 2004 a case was argued before the Supreme Court concerning a suit brought by the Miccosukee Tribe against the South Florida Water Management District for averred violations of the CWA. At issue was whether a transfer of water, via a pump, from one navigable water, which is a canal, to another, which is a preserved wetland, required an NPDES permit. The water that is being transferred is polluted; in particular, it contains phosphorous and causes algal blooms in the wetland area. Three main arguments disputing the requirement for an NDPES permit for the transfer were presented by the district and in briefs filed in support of the district by the federal government. The first argument was that the “discharge of pollutants” by a point source (which would trigger a point source permit) requires that the discharger actually add pollutants to the water. That is, the pump itself would have to add pollution to the water being pumped in order for the transfer to require an NPDES permit. The Court rejected this argument, saying that the CWA’s definition of point source includes conveyances that do not generate pollutants. The second argument was that, for the purpose of determining whether “any addition of any pollutant to navigable waters from any point source,” navigable waters should be regarded as a unitary whole, under the “unitary waters” theory. If the waters were regarded unitarily (in other words, as one), then it would follow that when water from one navigable water body is discharged into a second navigable water body, that discharge, even one containing pollutants, would not require an NPDES permit. The reason the discharge would not trigger the NPDES permit requirement is because, if waters of the United States are regarded as a single body, the transfer of pollutants with the water could not, strictly speaking, be an “addition” of pollutants requiring a permit. The Court viewed this argument with skepticism but declined to resolve the question. The third argument was that the canal and the wetland in this case were not two different water bodies but instead, were two parts of the same water body and so, as with the second argument, the discharge of water from one part of the water body to another could not be regarded as an “addition” of pollutants requiring a permit. The Court remanded the case for further proceedings to the 11th Circuit Court, ruling that further fact finding needed to be conducted at the lower court level to resolve the question of whether the canal and the wetland were two meaningfully distinct water bodies (The 11th Circuit Court hears cases arising in Alabama, Georgia, and Florida). The Court thus did not rule on whether an NPDES permit was required for the particular discharge at issue in the case.
Significance to the proposed rule: As part of the Court’s examination of the “unitary waters” argument presented by the district and the government, its opinion noted that “the Government does not identify any administrative documents in which EPA has espoused that position,” referring to the unitary waters argument (Id.). Some believe that the EPA regarded this as an invitation to issue an administrative document on the issue, though the EPA does not specifically cite Miccosukee as the prompt for an administrative opinion (Argent Communications Group 2006). The Court’s remark was cited, albeit in a somewhat broader context, in the agency interpretation on water transfers and NPDES permits (described below) the next year. The memorandum says, “the Court noted that EPA had not spoken to these legal issues in an administrative document” (Klee et al. 2006). The EPA did not address or rely on the unitary waters theory in the agency interpretation.
The opposing sides on the proposed rule do not agree on the impact of the Court’s decision. The Court did not rule on the question of whether this particular transfer required an NPDES permit. Thus, the EPA says that the matter of whether water transfers require an NPDES permit was “unresolved” by the Court. Others believe that although the permitting status of this particular instance was unresolved, the Court indicated that if the waters were found to be “meaningfully distinct” in the lower court upon remand, an NPDES permit would be required for the discharge [Marten Law Group (a) 2006].
“Agency Interpretation on Applicability of Section 402 of the Clean Water Act to Water Transfers” (EPA, August 5, 2006)
Summary: After Miccosukee, the EPA general counsel and assistant administrator of water issued a memorandum entitled “Agency Interpretation on Applicability of Section 402 of the Clean Water Act to Water Transfers.” Put simply, the agency interpretation is that NPDES permits are not required for water transfers. The memorandum interprets the language of the CWA and Congress’s intent in matters of water allocation to “defer to comprehensive solutions developed by State and local agencies” to control pollution associated with water transfers. The memorandum also discusses the term meaningfully distinct, being careful to emphasize that water transfers should be overseen by state and local agencies. The EPA describes factors the agency believes would be relevant to deciding whether two bodies of water (such as the canal and the wetland in Miccosukee) are “meaningfully distinct.”
Significance to the proposed rule: The memorandum is a significant step toward the rule because it articulates the legal rationale for the EPA’s position that was later used as the rationale for the proposed rule. The memorandum also stated the EPA’s intention to issue a rule on the matter.
NPDES Water Transfers Proposed Rule
The proposed rule, published 10 months after the agency interpretive memorandum, is based on the legal rationale established in the memorandum.
Catskill Mountains Chapter of Trout Unlimited Inc. v. City of New York (“Catskills II”)
One week after the proposed rule was published, the Second Circuit issued its ruling on the appeal of Catskills. The appeal concerned the same discharge as Catskills I. However, in this case, two issues were considered: 1) The city requested that the court reconsider its holding that the discharge constituted an “addition” of pollutants requiring an NPDES permit because of the “intervening legal developments” of the Miccosukee decision and the EPA memorandum, and 2) Both parties wanted the circuit court to overturn the civil penalty assessed against the city by the district court. The civil penalty, of $5,749,000, was regarded as too high by the city and as too low by the plaintiff.
The Court reexamined, but did not reverse, its original holding. The Court faulted the district court’s calculation of the penalty and remanded the case to the district court for reconsideration.
Significance to the proposed rule: Because the Court’s discussion of Miccosukee and the agency interpretation found the agency’s rationale unconvincing, one analysis of the ruling found that “the court’s ruling in Catskill Mountains [sic] casts an undeniable pall upon the proposal. By flaying the Agency’s 2005 memorandum as anathema to the plain language of CWA, the court substantially undermined the legality of the proposed rule without even acknowledging its existence” (Id.). However, on this point, another report on the case quoted an EPA official as follows: “EPA continues to conclude, based on the statute as a whole, that Congress intended for water transfers to be subject to oversight by water resource management agencies” (http://outdoorsbest.zeroforum.com/zerothread?id=566601&postid=685922).
Friends of the Everglades Inc. et al. v. South Florida Water Management District
Summary: On December 11, 2006, the US District Court for the Southern District of Florida issued its opinion on a case brought by Friends of the Everglades and others concerning whether an NPDES permit is required for pumping contaminated water into Lake Okeechobee. The opinion rejected the EPA’s interpretation of the CWA, concluding, “Accordingly, water transfers between distinct water bodies that result in the addition of a pollutant to the receiving navigable water body are subject to the NPDES permitting program.”
Significance to the proposed rule: The effect of the ruling in this case and any appeals arising from the decision had yet to be seen as of the writing of this article. The EPA continues to consider recent court decisions in addition to public comments in the formulation of the final rule, according to Grumbles, the EPA’s assistant administrator for water. On the other hand, David Guest, an attorney with Earthjustice, who argued the case, characterizes the decision as “a dagger in the heart of the proposed EPA rule” (http://1010wins.com/print_page.php?contentId=157789&contentType=4).
Perspectives on the Proposed Rule
In the debate on the proposed rule, the positions at opposing ends of the spectrum are best represented by the EPA and its supporting documents for the proposed rule, on the one hand, and by the public comments submitted by a group of state attorneys general and comments of Earthjustice’s David Guest who oppose the rule, on the other hand. In between the polar positions on the proposed rule are groups who support the proposed rule, with modifications. This section describes opposing groups’ positions, as well as one example of an intermediate position held by the Michigan Department of Environmental Quality.
Support of the Proposed Rule: EPA
The EPA position is stated most simply in the Federal Register on June 7, 2006 (71 Reg. 32887). “Based on the CWA as a whole, the Agency concludes that Congress intended to leave the oversight of water transfers to authorities other than the NPDES program,” and thus, no NPDES permit is required for such transfers. The EPA bases this conclusion on an analysis of the CWA that is intended to take the whole of the statute into account, rather than a single term or passage, and a focus on how its position maintains the “balance Congress created between federal and state” oversight of water resource management. This balance involves state control of water allocation, which would be “unduly interfere[d] with” by required NPDES permitting for water transfers. The EPA examines the structure of the CWA, concluding that discharges from water transfers differ in important ways from the discharges requiring NPDES permits covered under section 402. The EPA believes that they are more logically handled by water resources planning and land-use regulation—source controls rather than effluent controls. The EPA concludes that the language, structure, and legislative history of the act support its conclusion that water transfers do not require NPDES permits [Federal Register (a) 2006].
Stormwater spoke with Benjamin Grumbles about the proposed rule. An important purpose of the rule, apart from its actual impact of exempting water transfers from NPDES permitting, is that it adds “certainty and predictability” for water resource managers (Grumbles 2006). In addition, the rule solidifies the EPA’s position, codifying the interpretive memorandum issued in August 2005. It is intended to provide “stature and stability” to counteract what is, from the EPA’s perspective, the instability of the legal landscape on the issue at this time. The proposed rule provided an opportunity for the EPA to receive public comment on its position, which the issuance of the interpretive memorandum did not. In a reiteration of earlier statements on the proposed rule, Grumbles spoke of ensuring that local managers continue to have “tools” to manage water resources. As he explained, these tools include the certainty and clarity that will result from the final rule, safeguards included in the rule itself, the assurance and weight of state authority to allocate water and manage water quality ensured by the rule, and use of provisions in the CWA such as the nonpoint-source program and water-quality standards to protect the quality of receiving waters.
Grumbles noted that the EPA expects to finalize the rule in 2007. Currently the agency is reviewing the public comments as well as the pertinent court rulings and assessing their influence on the final rule. Grumbles said that he “looks forward to working with Congress if they want to become involved,” drawing attention to the fact that changes to the CWA often draw congressional interest and attention.
Opposition to the Proposed Rule: Articulated by State Attorneys General and Earthjustice
Comments submitted by the attorneys general of New York, Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Massachusetts, Minnesota, Missouri, Rhode Island, Vermont, and Wisconsin and the Minister of Water of Manitoba expressed opposition to the rule. The comments rebut the EPA’s position, arguing that the plain text of the act requires NPDES permits for discharges from water transfers as additions of pollutants. The attorneys argue that the proposed rule is in contradiction with relevant judicial rulings and that the EPA does not have the authority to exclude water transfers from the permitting scheme, creating an exception for a category of point sources. Contradicting the EPA’s argument that the structure of the act supports its view, the comments describe how programs under the act “work to prevent the introduction of pollutants that may adversely affect the water quality of each individual water body, and further demonstrate the Act’s structural water body-by-water body approach to ensuring water quality” (Spitzer et al. 2006). Finally, they argue that the permitting requirement is not unduly burdensome.
Stormwater spoke with David Guest of Earthjustice, who opposes the rule and who represented Friends of the Everglades in the Okeechobee case. From his perspective, similar to the attorneys general, the rule contravenes the language of the CWA and the Catskills II and Okeechobee rulings. He too emphasized the structure of the act, the approach to designating use of individual water bodies, and the view that permitting discharges from water transfers would retain the congressional intention of controlling the quality of discharges to a water body based on designated uses for each body of water (Guest 2006).
Support of the Rule With Conditions: Michigan DEQ
The Michigan Department of Environmental Quality (MDEQ) submitted a public comment in response to the proposed rule. The MDEQ recommended that the proposed exemption be modified to grant states that have authority to implement the NPDES program the authority to issue permits for water transfers on a case-by-case basis. The state would initiate a permitting process when a transfer would prevent the designated use of a water body from being maintained. Stormwater spoke with William Creal, permits section supervisor of the MDEQ Water Bureau, who clarified the department’s position further (Creal 2006). The MDEQ finds that few water transfers are problematic, from a water-quality standpoint. Water transfers with detrimental water-quality impact on the receiving body are currently difficult for the state to address. The MDEQ, said Creal, is not anxious to start a large-scale expansion of its NPDES permitting program but wanted an explicit statement in the new rule that delegated states could issue permits in cases where transfers present water-quality problems.
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The Way Forward
According to the EPA, the rule is expected to be finalized in 2007 (Grumbles 2006). Earthjustice’s David Guest thought the contrary, predicting that the proposed rule would lie fallow, because of the significant blow landed in the Catskills II and Okeechobee decisions. Others predict that no matter what the final rule says, litigation is sure to follow (Argent Communications Group 2006).
You can find more information on the proposed rule on the EPA Web site at: http://cfpub.epa.gov/npdes/home.cfm?program_id=41 and at the docket for the proposed rule at www.regulations.gov .
Author's Bio: Henrietta H. P. Locklear is with AMEC Earth and Environmental Inc. in Raleigh, NC.
May 2007
What's All the Fuss
News and views on the EPA’s proposed water transfer rule
By
Henrietta H. P. Locklear
For a law that is as important as the Clean Water Act (CWA) is to state governments, local governments, industry, and environmental interests, a small change in wording can make an enormous difference. The proposed addition or subtraction of just a few words can cause a furor: Supporters of a change express elation, while accusations fly, and doleful predictions about the consequences of changing (or not changing) the act abound. One recent example of this phenomenon is the controversy surrounding the EPA’s proposed water transfer rule. The press release for the proposed rule quoted an EPA administrator who said, “The Water Transfer Rule gives communities needed flexibility to protect water quality, prevent costly litigation and promote the public good” (EPA 2006). A public comment filed in response to the proposed rule by the Conservancy of Southwest Florida asserts, “We do not believe this proposed rule fulfills the Clean Water Act (CWA) mandates that the Environmental Protection Agency (EPA) was created to implement” (Hecker 2006). This article describes the proposed water transfer rule, its relationship to recent events and court cases, and various viewpoints on the proposed rule.
What Is a Water Transfer?
The words water transfer may have a specific definition in a particular context, such as the definition used by the EPA in the proposed rule. However, the concept of a water transfer is simple: It is the artificial transport of water from one body of water to another. Water transfers are used to convey water from an area of abundance to an area of scarcity. Transfers have been used by civilizations since ancient times to supply civilizations with irrigation and drinking water. In the United States, water transfers are used often; vary in amount and complexity; and provide crops, livestock, cities, and metropolitan areas with vital water supplies.
West Versus East?
Some have characterized the diverse viewpoints on the issue as split along a regional divide, with eastern interests opposed to western ones [US Supreme Court 2004; Marten Law Group (a), 2006]. While it is true that many western interests support the proposed rule and a group of eastern state attorneys general submitted a public comment opposing the rule, the divisions among viewpoints are not as simple as an east-west dichotomy. For instance, the Wyoming Game and Fish Department says, “We do not support this unnecessary relaxation of an important water quality standard” while an eastern power company, the Oglethorpe Power Corp. of Georgia, expressed its support of the proposed rule (Emmerich 2006; Fulle 2006). It is logical that any entities, no matter what region of the US, that facilitate water transfers, or any groups that depend on them for water supplies, have an intense interest in their regulatory treatment because it affects how, when, and how easily transfers can occur. On the other hand, as an EPA document states, “activities that result in the movement of navigable waters …. can also serve to move pollutants from one water body (donor water) to another (receiving water),” which generates interest and concern among many other groups, both western and eastern (Klee et al. 2006) Interestingly, the cases that appear to have driven the issuance of the proposed rule are cases litigated in the East.
The Proposed Water Transfer Rule
On Wednesday, June 7, 2006, the proposed change to the EPA’s CWA regulations was published in the Federal Register (http://www.gpoaccess.gov/fr/index.html). The proposed change is an addition to 40 Code of Federal Regulations Part 122 (40 CFR Part 122): EPA Administered Permit Programs: National Pollutant Discharge Elimination System (NPDES). The section affected by the rule (122.3) lists the types of discharges that are exempt from NPDES permits. Among the existing exemptions are discharges of ballast water from oceangoing vessels, dredged or fill materials that are regulated under section 404 of the CWA, return flows from irrigated agriculture, and discharges into privately owned treatment works. The proposed new exemption reads as follows:
Discharges from a water transfer. Water transfer means an activity that conveys waters of the United States to another water of the United States without subjecting the water to intervening industrial, municipal, or commercial use. This exclusion does not apply to pollutants added by the water transfer activity itself to the water being transferred.
That is, the proposed rule says discharges from water transfers, as defined in the rule, would not be required to be covered under an NPDES permit. If the process of transferring water itself adds pollutants, the pollutants are subject to a permit. For instance, if a pump that is moving the water leaks oil into the water during the transfer, the oil would have to be covered under an NPDES permit (Guest 2006).
Proposed rules are subject to a public comment period, the specifics of which are published with the text of the proposed rule. The Federal Register notice for the proposed water transfer rule solicited public comments, including comments on several specific issues. These issues included the wording of the definition of “water transfer” and information on state programs that address water-quality impacts from water transfers. Initially, the comment period was slated to last 45 days, until July 24, 2006, but it was extended on July 19 for an additional 14 days and ended on August 7, 2006 [Federal Register (b) 2006]. More than 1,000 comments were submitted (www.regulations.gov) during the public comment period. The public comments that were submitted represent the views of a variety of organizations and individuals.
Recent Events Leading to the Proposed Rule
Over the past few years, according to the EPA’s Assistant Administrator for Water Benjamin Grumbles, there has been increasing uncertainty on the part of communities about the question of whether NPDES permits are required for water transfers, as a result of rulings in various court cases (Grumbles 2006). The cases with the most significant impact on the rule are lawsuits litigated over the past six years including the cases commonly referred to as Catskills I and II, Miccosukee, and, most recently, Okeechobee. These four are summarized here, along with the agency’s interpretive memo. Although the importance of these cases is recognized by the opposing sides, the meaning of the rulings is not fully agreed upon by all.
Catskill Mountains Chapter of Trout Unlimited Inc. v. City of New York (“Catskills I”)
Summary: In 2001 a case was argued before the Second Circuit Court of Appeals (the Second Circuit Court of Appeals hears cases arising in New York, Vermont, and Connecticut), which was an appeal of a lower court case brought by a group of plaintiffs referred to collectively as “Catskill” against the City of New York for failure to obtain an NPDES permit for turbid discharges for a water transfer from Schoharie Reservoir to Esopus Creek via Shandaken Tunnel. The city argued that the discharge did not constitute an “addition” of a pollutant composing a “discharge” for which a permit was required, on the basis of holdings in two 1980s cases [National Wildlife Federation v. Gorsuch, 693 F.2d 156 (D.C.Cir. 1982), and National Wildlife Federation v. Consumers Power Company, 862 F.2d 580 (6th Cir. 1988)]. These cases found that discharges from dams did not require permits as movement of water from one part of a single water body to another and involved the deference by the Court to the EPA’s construction of the CWA in these holdings. However, in Catskills I, the Court found that the discharge to Esopus Creek constituted the addition of a pollutant requiring a permit, vacating the lower court decision on that matter and remanding the case to the district court for further proceedings. In so finding, the Court did not grant the EPA the same level of deference to its definition of “addition” (as cited by the city) as was granted in the dam discharge cases because of the absence of “rulemaking or other formal proceeding.” After being remanded, the case was again appealed to the Second Circuit and was heard in 2006 (Catskills II).
Significance to the proposed rule: This case is linked to the proposed rule not only because of the subject matter but also because it was made clear in this opinion that the EPA’s position would be strengthened by a declaration of its interpretation, rather than just the “Agency’s longstanding practice” (Klee et al. 2006).
South Florida Management District v. Miccosukee Tribe of Indians
Summary: In 2004 a case was argued before the Supreme Court concerning a suit brought by the Miccosukee Tribe against the South Florida Water Management District for averred violations of the CWA. At issue was whether a transfer of water, via a pump, from one navigable water, which is a canal, to another, which is a preserved wetland, required an NPDES permit. The water that is being transferred is polluted; in particular, it contains phosphorous and causes algal blooms in the wetland area. Three main arguments disputing the requirement for an NDPES permit for the transfer were presented by the district and in briefs filed in support of the district by the federal government. The first argument was that the “discharge of pollutants” by a point source (which would trigger a point source permit) requires that the discharger actually add pollutants to the water. That is, the pump itself would have to add pollution to the water being pumped in order for the transfer to require an NPDES permit. The Court rejected this argument, saying that the CWA’s definition of point source includes conveyances that do not generate pollutants. The second argument was that, for the purpose of determining whether “any addition of any pollutant to navigable waters from any point source,” navigable waters should be regarded as a unitary whole, under the “unitary waters” theory. If the waters were regarded unitarily (in other words, as one), then it would follow that when water from one navigable water body is discharged into a second navigable water body, that discharge, even one containing pollutants, would not require an NPDES permit. The reason the discharge would not trigger the NPDES permit requirement is because, if waters of the United States are regarded as a single body, the transfer of pollutants with the water could not, strictly speaking, be an “addition” of pollutants requiring a permit. The Court viewed this argument with skepticism but declined to resolve the question. The third argument was that the canal and the wetland in this case were not two different water bodies but instead, were two parts of the same water body and so, as with the second argument, the discharge of water from one part of the water body to another could not be regarded as an “addition” of pollutants requiring a permit. The Court remanded the case for further proceedings to the 11th Circuit Court, ruling that further fact finding needed to be conducted at the lower court level to resolve the question of whether the canal and the wetland were two meaningfully distinct water bodies (The 11th Circuit Court hears cases arising in Alabama, Georgia, and Florida). The Court thus did not rule on whether an NPDES permit was required for the particular discharge at issue in the case.
Significance to the proposed rule: As part of the Court’s examination of the “unitary waters” argument presented by the district and the government, its opinion noted that “the Government does not identify any administrative documents in which EPA has espoused that position,” referring to the unitary waters argument (Id.). Some believe that the EPA regarded this as an invitation to issue an administrative document on the issue, though the EPA does not specifically cite Miccosukee as the prompt for an administrative opinion (Argent Communications Group 2006). The Court’s remark was cited, albeit in a somewhat broader context, in the agency interpretation on water transfers and NPDES permits (described below) the next year. The memorandum says, “the Court noted that EPA had not spoken to these legal issues in an administrative document” (Klee et al. 2006). The EPA did not address or rely on the unitary waters theory in the agency interpretation.
The opposing sides on the proposed rule do not agree on the impact of the Court’s decision. The Court did not rule on the question of whether this particular transfer required an NPDES permit. Thus, the EPA says that the matter of whether water transfers require an NPDES permit was “unresolved” by the Court. Others believe that although the permitting status of this particular instance was unresolved, the Court indicated that if the waters were found to be “meaningfully distinct” in the lower court upon remand, an NPDES permit would be required for the discharge [Marten Law Group (a) 2006].
“Agency Interpretation on Applicability of Section 402 of the Clean Water Act to Water Transfers” (EPA, August 5, 2006)
Summary: After Miccosukee, the EPA general counsel and assistant administrator of water issued a memorandum entitled “Agency Interpretation on Applicability of Section 402 of the Clean Water Act to Water Transfers.” Put simply, the agency interpretation is that NPDES permits are not required for water transfers. The memorandum interprets the language of the CWA and Congress’s intent in matters of water allocation to “defer to comprehensive solutions developed by State and local agencies” to control pollution associated with water transfers. The memorandum also discusses the term meaningfully distinct, being careful to emphasize that water transfers should be overseen by state and local agencies. The EPA describes factors the agency believes would be relevant to deciding whether two bodies of water (such as the canal and the wetland in Miccosukee) are “meaningfully distinct.”
Significance to the proposed rule: The memorandum is a significant step toward the rule because it articulates the legal rationale for the EPA’s position that was later used as the rationale for the proposed rule. The memorandum also stated the EPA’s intention to issue a rule on the matter.
NPDES Water Transfers Proposed Rule
The proposed rule, published 10 months after the agency interpretive memorandum, is based on the legal rationale established in the memorandum.
Catskill Mountains Chapter of Trout Unlimited Inc. v. City of New York (“Catskills II”)
One week after the proposed rule was published, the Second Circuit issued its ruling on the appeal of Catskills. The appeal concerned the same discharge as Catskills I. However, in this case, two issues were considered: 1) The city requested that the court reconsider its holding that the discharge constituted an “addition” of pollutants requiring an NPDES permit because of the “intervening legal developments” of the Miccosukee decision and the EPA memorandum, and 2) Both parties wanted the circuit court to overturn the civil penalty assessed against the city by the district court. The civil penalty, of $5,749,000, was regarded as too high by the city and as too low by the plaintiff.
The Court reexamined, but did not reverse, its original holding. The Court faulted the district court’s calculation of the penalty and remanded the case to the district court for reconsideration.
Significance to the proposed rule: Because the Court’s discussion of Miccosukee and the agency interpretation found the agency’s rationale unconvincing, one analysis of the ruling found that “the court’s ruling in Catskill Mountains [sic] casts an undeniable pall upon the proposal. By flaying the Agency’s 2005 memorandum as anathema to the plain language of CWA, the court substantially undermined the legality of the proposed rule without even acknowledging its existence” (Id.). However, on this point, another report on the case quoted an EPA official as follows: “EPA continues to conclude, based on the statute as a whole, that Congress intended for water transfers to be subject to oversight by water resource management agencies” (http://outdoorsbest.zeroforum.com/zerothread?id=566601&postid=685922).
Friends of the Everglades Inc. et al. v. South Florida Water Management District
Summary: On December 11, 2006, the US District Court for the Southern District of Florida issued its opinion on a case brought by Friends of the Everglades and others concerning whether an NPDES permit is required for pumping contaminated water into Lake Okeechobee. The opinion rejected the EPA’s interpretation of the CWA, concluding, “Accordingly, water transfers between distinct water bodies that result in the addition of a pollutant to the receiving navigable water body are subject to the NPDES permitting program.”
Significance to the proposed rule: The effect of the ruling in this case and any appeals arising from the decision had yet to be seen as of the writing of this article. The EPA continues to consider recent court decisions in addition to public comments in the formulation of the final rule, according to Grumbles, the EPA’s assistant administrator for water. On the other hand, David Guest, an attorney with Earthjustice, who argued the case, characterizes the decision as “a dagger in the heart of the proposed EPA rule” (http://1010wins.com/print_page.php?contentId=157789&contentType=4).
Perspectives on the Proposed Rule
In the debate on the proposed rule, the positions at opposing ends of the spectrum are best represented by the EPA and its supporting documents for the proposed rule, on the one hand, and by the public comments submitted by a group of state attorneys general and comments of Earthjustice’s David Guest who oppose the rule, on the other hand. In between the polar positions on the proposed rule are groups who support the proposed rule, with modifications. This section describes opposing groups’ positions, as well as one example of an intermediate position held by the Michigan Department of Environmental Quality.
Support of the Proposed Rule: EPA
The EPA position is stated most simply in the Federal Register on June 7, 2006 (71 Reg. 32887). “Based on the CWA as a whole, the Agency concludes that Congress intended to leave the oversight of water transfers to authorities other than the NPDES program,” and thus, no NPDES permit is required for such transfers. The EPA bases this conclusion on an analysis of the CWA that is intended to take the whole of the statute into account, rather than a single term or passage, and a focus on how its position maintains the “balance Congress created between federal and state” oversight of water resource management. This balance involves state control of water allocation, which would be “unduly interfere[d] with” by required NPDES permitting for water transfers. The EPA examines the structure of the CWA, concluding that discharges from water transfers differ in important ways from the discharges requiring NPDES permits covered under section 402. The EPA believes that they are more logically handled by water resources planning and land-use regulation—source controls rather than effluent controls. The EPA concludes that the language, structure, and legislative history of the act support its conclusion that water transfers do not require NPDES permits [Federal Register (a) 2006].
Stormwater spoke with Benjamin Grumbles about the proposed rule. An important purpose of the rule, apart from its actual impact of exempting water transfers from NPDES permitting, is that it adds “certainty and predictability” for water resource managers (Grumbles 2006). In addition, the rule solidifies the EPA’s position, codifying the interpretive memorandum issued in August 2005. It is intended to provide “stature and stability” to counteract what is, from the EPA’s perspective, the instability of the legal landscape on the issue at this time. The proposed rule provided an opportunity for the EPA to receive public comment on its position, which the issuance of the interpretive memorandum did not. In a reiteration of earlier statements on the proposed rule, Grumbles spoke of ensuring that local managers continue to have “tools” to manage water resources. As he explained, these tools include the certainty and clarity that will result from the final rule, safeguards included in the rule itself, the assurance and weight of state authority to allocate water and manage water quality ensured by the rule, and use of provisions in the CWA such as the nonpoint-source program and water-quality standards to protect the quality of receiving waters.
Grumbles noted that the EPA expects to finalize the rule in 2007. Currently the agency is reviewing the public comments as well as the pertinent court rulings and assessing their influence on the final rule. Grumbles said that he “looks forward to working with Congress if they want to become involved,” drawing attention to the fact that changes to the CWA often draw congressional interest and attention.
Opposition to the Proposed Rule: Articulated by State Attorneys General and Earthjustice
Comments submitted by the attorneys general of New York, Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Massachusetts, Minnesota, Missouri, Rhode Island, Vermont, and Wisconsin and the Minister of Water of Manitoba expressed opposition to the rule. The comments rebut the EPA’s position, arguing that the plain text of the act requires NPDES permits for discharges from water transfers as additions of pollutants. The attorneys argue that the proposed rule is in contradiction with relevant judicial rulings and that the EPA does not have the authority to exclude water transfers from the permitting scheme, creating an exception for a category of point sources. Contradicting the EPA’s argument that the structure of the act supports its view, the comments describe how programs under the act “work to prevent the introduction of pollutants that may adversely affect the water quality of each individual water body, and further demonstrate the Act’s structural water body-by-water body approach to ensuring water quality” (Spitzer et al. 2006). Finally, they argue that the permitting requirement is not unduly burdensome.
Stormwater spoke with David Guest of Earthjustice, who opposes the rule and who represented Friends of the Everglades in the Okeechobee case. From his perspective, similar to the attorneys general, the rule contravenes the language of the CWA and the Catskills II and Okeechobee rulings. He too emphasized the structure of the act, the approach to designating use of individual water bodies, and the view that permitting discharges from water transfers would retain the congressional intention of controlling the quality of discharges to a water body based on designated uses for each body of water (Guest 2006).
Support of the Rule With Conditions: Michigan DEQ
The Michigan Department of Environmental Quality (MDEQ) submitted a public comment in response to the proposed rule. The MDEQ recommended that the proposed exemption be modified to grant states that have authority to implement the NPDES program the authority to issue permits for water transfers on a case-by-case basis. The state would initiate a permitting process when a transfer would prevent the designated use of a water body from being maintained. Stormwater spoke with William Creal, permits section supervisor of the MDEQ Water Bureau, who clarified the department’s position further (Creal 2006). The MDEQ finds that few water transfers are problematic, from a water-quality standpoint. Water transfers with detrimental water-quality impact on the receiving body are currently difficult for the state to address. The MDEQ, said Creal, is not anxious to start a large-scale expansion of its NPDES permitting program but wanted an explicit statement in the new rule that delegated states could issue permits in cases where transfers present water-quality problems.
The Way Forward
According to the EPA, the rule is expected to be finalized in 2007 (Grumbles 2006). Earthjustice’s David Guest thought the contrary, predicting that the proposed rule would lie fallow, because of the significant blow landed in the Catskills II and Okeechobee decisions. Others predict that no matter what the final rule says, litigation is sure to follow (Argent Communications Group 2006).
You can find more information on the proposed rule on the EPA Web site at: http://cfpub.epa.gov/npdes/home.cfm?program_id=41 and at the docket for the proposed rule at www.regulations.gov .