by Daniel E. Estrin
Supervising Attorney, Pace Environmental Litigation Clinic, Inc.
Adjunct Professor of Law, Pace Law School

More than thirty years ago, in NRDC v. Costle, 568 F.2d 1369 (D.C. Cir. 1977), the U.S. Court of Appeals for the D.C. Circuit held that the EPA lacks authority to categorically exempt point source discharges from the strict statutory NPDES permit requirement set forth in Sections 301 and 402 of the Clean Water Act.  The court explained that “Under the EPA’s interpretation the Administrator would have broad discretion to exempt large classes of point sources from any or all requirements of the FWCPA.  This is a result that the legislators did not intend.  Rather they stressed that the FWPCA was a tough law that relied on explicit mandates to a degree uncommon in legislation of this type.”  Id. at 1375.  The court ultimately concluded that:

The wording of the statute, legislative history, and precedents are clear: the EPA Administrator does not have authority to exempt categories of point sources from the permit requirements of § 402. Courts may not manufacture for an agency a revisory power inconsistent with the clear intent of the relevant statute.

Id. at 1377.  Notwithstanding the well-known holding in Costle, the EPA still occasionally promulgates rules with the intention of categorically excluding certain point source discharges of pollutants from NPDES permit requirements.  See, e.g., Final Rule on Application of Pesticides to Waters of the United States in Compliance with FIFRA, 71 Fed. Reg. 68,483 (Nov. 27, 2006) (codified at 40 C.F.R. § 122.3(h)(“NPDES Pesticides Final Rule”); NPDES Water Transfers Final Rule, 73 Fed. Reg. 33,697 (June 13, 2008) (codified at 40 C.F.R. § 122.3(i)) (“NPDES Water Transfers Final Rule”).  Apparently recognizing the potential Costle problem, the EPA currently refers to such rules as “interpretive” in nature, and argues that they don’t actually “exclude” or “exempt” anything, but are rather interpreting the Water Act in a manner that results in the specified category of pollutant discharge falling outside the Act’s NPDES permit mandate.  The irony in this explanation is hard to miss in light of the placement of these “interpretive” rules under a heading in the regulations titled “Exclusions.”  See 40 C.F.R. § 122.3.  Notably, the NPDES Pesticides Final Rule was held invalid and vacated by the Sixth Circuit in National Cotton Council of Am. v. U.S. EPA, 553 F.3d 927 (6th Cir. 2009), cert. denied, 130 S. Ct. 1505 (Feb. 22, 2010).  Numerous circuit court petitions for review challenging the NPDES Water Transfers Final Rule have been consolidated before the Eleventh Circuit and are currently pending.

(In the interest of full disclosure, the Pace Environmental Litigation Clinic, supervised by the author and other Pace Law professors, represented certain petitioners in the National Cotton Council case and currently represents certain petitioners in the pending challenges to the NPDES Water Transfers Final Rule).

In addition to these recent EPA rulemakings, numerous categorical regulatory exclusions promulgated by EPA in the 1970s remain “on the books.”  See, e.g., 40 C.F.R. §§ 122.3(a)-(g), 122.27.  Recently, certain of these exclusions have come under attack by environmental NGOs.  For example, in 2008, the regulatory exclusion for certain pollutant discharges from vessels, 40 C.F.R. § 122.3(a), was ruled invalid by the Ninth Circuit in N.W. Envt’l Advocates v. U.S. EPA, 537 F.3d 1006 (2008), primarily on the same grounds as those relied on by the NRDC v. Costle court.  See id. at 1021-22.

On August 17, 2010, the Ninth Circuit opined on yet another of these ancient (at least by Water Act standards) categorical exemptions—this time, the exemption for certain point source discharges from silvicultural activities.  See 40 C.F.R. §§ 122.27; 122.3(e).  In N.W. Envt’l Defense Center v. Brown (“NWED”), the court considered a challenge to this exemption as it applies to stormwater runoff that flows from logging roads, into systems of ditches, culverts, and channels, and is then discharged into forest streams and rivers.  The court noted that these discharges deposit “large amounts of sediment into streams and rivers.  This sediment adversely affects fish—in particular, salmon and trout—by smothering eggs, reducing oxygen levels, interfering with feeding, and burying insects that provide food.”  NWED Slip Op. at 12005-06.

The court initially examined whether such channelized stormwater discharges to streams were “from a point source,” and answered that question in the affirmative:

[W]hen stormwater runoff is collected in a system of ditches, culverts, and channels and is then discharged into a stream or river, there is a “discernable, confined and discrete conveyance” of pollutants, and there is therefore a discharge from a point source.  In other words, runoff is not inherently a nonpoint or point source of pollution.  Rather, it is a nonpoint or point source under § 502(14) depending on whether it is allowed to run off naturally (and is thus a nonpoint source) or is collected, channeled, and discharged through a system of ditches, culverts, channels, and similar conveyances (and is thus a point source discharge).

NWED Slip Op. at 12009-10.  After making this initial finding, the court engaged in a lengthy discussion of the Clean Water Act’s legislative history and the regulatory history of the Silviculture Rule, an earlier version of which was the subject of the D.C. Circuit’s vacatur in NRDC v. Costle.  The court also discussed one of its earlier opinions that also involved the Silviculture Rule, League of Wilderness Defenders v. Forsgren, 309 F.3d 1181 (9th Cir. 2002).  In Forsgren, the defendant Forest Service argued that its spraying of pesticides into surface waters did not require an NPDES permit because it constituted silvicultural activities that were not defined as point source discharges under 40 C.F.R. § 122.27.  The court “emphatically ‘reject[ed] the Forest service’s argument that the EPA has the authority to ‘refine’ the definitions of point source and nonpoint source pollution in a way that contravenes the clear intent of Congress as expressed in the statute.’”  NWED Slip Op. at 12026 (quoting Forsgren, 309 F.3d at 1190).

Ultimately, the court in NWED found the “answer to the question before [it] as clear as the answer to the questions presented in Costle and Forsgren.”  Pointing to the plain statutory language, the court noted that the Clean Water Act’s point source definition “in no way depends on the manner in which the pollutant arrives at the ‘discernible, confined and discrete conveyance.’  That is, it makes no difference whether the pollutant arrives as the result of ‘controlled water used by a person’ or through natural runoff.”  NWED Slip Op. at 12027; see also South Florida Water Management District v. Miccosukee Tribe of Indians, 541 U.S. 95, 104-05 (2004).  The court ultimately held that “the Silviculture Rule does not exempt from the definition of point source discharge under § 512(14) stormwater runoff from logging roads that is collected and channeled in a system of ditches, culverts, and conduits before being discharged into streams and rivers.”  NWED Slip Op. at 12028-29.

Finally, the court rejected an alternative argument advanced by the defendants that when Congress adopted the 1987 amendments to the Clean Water Act, it sub silentio approved of, or acquiesced in, the Silvicultural Rule.  Distinguishing the 1987 Water Act amendments from the rare instances in which Congressional acquiescence has been found (i.e., where there was “overwhelming evidence” of acquiescence), the court pointed out that there was nothing in the legislative history of the 1987 amendments that indicated that Congress was even aware of the Silvicultural Rule.  NWED Slip Op. at 12030-31.

The NWED opinion concludes with an interesting summary that expresses sympathy for the EPA’s regulatory burden, but nevertheless reiterates that “where Congress has not provided statutory exemptions from the definition of point source, federal courts have invalidated EPA regulations that categorically exempt discharges included in definition [sic] of point source discharge contained in § 512(14).”  Thirty-three years after the NRDC v. Costle decision, it is high time for the EPA to take these judicial rebukes to heart, and to learn its lesson.