Federal judges today heard arguments in a lawsuit that contends U.S. EPA is trying to bypass a court’s recent decision to toss out a pair of wastewater-treatment policies.
At issue is the 8th U.S. Circuit Court of Appeals’ 2013 decision to vacate two EPA rules — one on whether cities may dilute stormwater before discharging it into rivers and streams and another on how facilities treat wastewater during heavy rains — on procedural grounds.
EPA has since determined that the decision applies only within the geographic boundaries of the 8th Circuit, which stretches through the center of the country from North Dakota to Arkansas.
A coalition of municipal and industrial entities is asking the U.S. Court of Appeals for the District of Columbia Circuit to force EPA to halt the policies nationwide.
"EPA was caught acting illegally by the 8th Circuit, who ruled that their approach was irreconcilable with the adopted rules, and decided nonetheless that they would just continue doing it," John Hall of Hall & Associates, who is representing the entities, said in an interview before arguing the case today. "One would be hard-pressed to find a more arbitrary and capricious set of agency actions."
The case will likely turn on procedural grounds, including whether EPA made a decision that can be litigated and whether the timing is right for the lawsuit.
The case "doesn’t fit neatly" into the doctrine established by prior cases in the Supreme Court, said Judge Brett Kavanaugh, an appointee of President George W. Bush in the D.C. Circuit.
A three-judge panel today heard about an hour of oral arguments in Center for Regulatory Reasonableness v. EPA.
The litigation stems from a pair of letters that EPA sent to Sen. Chuck Grassley (R-Iowa) in 2011 in response to concerns the senator raised about Iowa cities. In the letters, the agency laid out what the 8th Circuit eventually found were illegal changes to the two wastewater treatment rules in Iowa League of Cities v. EPA.
In the first, the court found that EPA’s statements to Grassley created a new regulation over bacteria mixing zones, or places where pollution is diluted as it moves into lakes and streams.
EPA also created new regulations over the "blending" that happens at treatment plants during wet weather events, the 8th Circuit found, without proper notice-and-comment procedures and in violation of the Clean Water Act.
Typically, wastewater is supposed to pass through primary and secondary biological treatment before it’s discharged into waters. During heavy rains, though, facilities sometimes have more water than can be sent through secondary treatment.
During storms, some facilities route flows through non-biological units, then blend the water with water that’s undergone secondary treatment, before discharging it. EPA’s 2011 statements to Grassley, however, said that blending represented an illegal bypass of waste streams around secondary treatment (E&ENews PM, March 27, 2013).
In its lawsuit, the Center for Regulatory Reasonableness says that in the months following the 2013 court ruling, EPA statements in policy memos, at conference and meetings, and in undisclosed internal documents made clear the agency intended to ignore the court ruling in most places across the country.
The center’s lawsuit in the D.C. Circuit specifically challenges two letters EPA sent in April and June 2014 to municipal water agencies. The letters, according to the lawsuit, represent the agency’s final decision to continue the policies on a "case-by-case basis" everywhere except the 8th Circuit and are subject to judicial review.
"What they’re doing here is a new variation on a theme of illegal rulemaking, rendering the decision, transmitting it under the radar to regional offices and delegated states, and denying that they rendered the decisions they transmitted," Hall said. "That’s a whole new level of improper agency behavior."
The center also wants the court to compel EPA to submit more documents into the legal record.
The National Association of Clean Water Agencies, which represents local water agencies, filed an amicus brief in support.
NACWA estimates that about a third of publicly owned water treatment plants nationwide rely on blending during wet weather events. EPA’s approach has created uncertainty and, for facilities subject to the restrictions on blending, unnecessary cost, the organization says.
"The expenditures that would be necessary if blending is treated as a bypass will not in most cases result in significant improvement in water quality," NACWA said in an emailed statement. "In fact, it could result in increased overflows of raw sewage and basement backups."
EPA has raised a host of procedural defenses against the lawsuit, including that the center doesn’t have standing to sue and that the agency never took a final action that’s subject to judicial review.
"It didn’t command anyone to do anything or refrain from anything," said Andrew Doyle, a Department of Justice attorney who is representing EPA.
The agency also says that, even if it was found to have made a reviewable decision, nothing in the law bars it from limiting the 8th Circuit ruling geographically.
At times, judges today seemed to side with EPA’s contention that the case should be tossed out on several procedural grounds.
In the Clean Water Act, parties may take cases to federal appellate courts that involve EPA’s promulgation of "effluent limitation" or "other limitation." If more than one party files lawsuits in different circuits, cases are typically funneled to one appellate court.
"It’s very hard" to fit EPA’s letters regarding the 8th Circuit ruling into the Clean Water Act provision, said Senior Judge Stephen Williams, an appointee of President Reagan. "How is that a re-promulgation of an effluent limitation?"
But Kavanaugh noted that the "point of that provision was to set a national determination upfront" and that it seemed "inconsistent, at a minimum, with the spirit" of the Clean Water Act for EPA to claim a right to not be constricted to the 8th Circuit ruling.
Earlier this month, the Center for Regulatory Reasonableness told the court that a recent unanimous Supreme Court ruling against the government supports its argument that EPA’s decision was "final" and subject to judicial review.
In Army Corps of Engineers v. Hawkes Co. Inc., justices ruled that the Army Corps’ "jurisdictional determinations" about whether permits are required represent final agency actions.
As the court weighs the procedural issues, an "important factor" will be whether there is an opportunity for parties to challenge the decision in other venues down the line, Kavanaugh said. He also said the court will have to weigh whether parties would be forced to spend millions of dollars before being granted judicial review.
"This is the time and place" for judges to weigh in, Hall argued today.
But Doyle said parties would have the opportunity to challenge final permit decisions that are based on EPA’s interpretation of the 8th Circuit ruling later on in state courts.
Judge Robert Wilkins, an appointee of President Obama, also heard the case today.
Click here to read the Center for Regulatory Reasonableness’ brief.
Click here to read EPA’s brief.