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EPA Faces Lawsuits Challenging Potentially Far-Reaching Rule Setting Numeric Nutrient Criteria in Florida Waters

February 10, 2011

Shortly after finalizing a nationally-watched regulation establishing numeric limits for nutrients in Florida waters, EPA has been sued multiple times by parties seeking to invalidate the rule – including by the State of Florida. EPA’s Final Rule,[1] published in the Federal Register on December 6, 2010 following a court-approved settlement with environmental groups, establishes numeric nitrogen and phosphorus standards for Florida’s freshwaters. The plaintiffs in the lawsuits, including the State of Florida, local governments, wastewater treatment plants, and members of industry, allege that the Final Rule is not technically sound and was motivated by stemming the tide of lawsuits that would require similar action in other states. The plaintiffs also allege that the numeric limits in the Final Rule place unreasonable economic burdens on local governments, stakeholders, and citizens. Because EPA’s establishment of numeric, rather than narrative, nutrient criteria has broad national implications, many states will be following the case as it makes its way through the courts.

Technical and Legal Background to Nutrient Water Quality Standards

Nutrients, such as nitrogen and phosphorus, are necessary for the proper functioning of biological communities. Excessive nitrogen and phosphorus in water bodies, however, can cause algae blooms, encourage the growth of nuisance vegetation, and reduce dissolved oxygen concentrations, which can harm fish and wildlife and damage or reduce habitat. Properly regulating nutrients requires a complex technical understanding of the unique nutrient balance within highly varied ecosystems. Unlike most water quality criteria, which are based on a toxicity threshold determined using laboratory tests, the variability of ecosystem responses makes developing a cause/effect relationship between nutrient concentrations and ecological attributes much more difficult. Additionally, effective nutrient management requires methods to control discharges from a range of sources, such as those associated with urban land use and development, municipal and industrial wastewater discharge, agriculture, and atmospheric deposition that may be increased by production of nitrogen oxides in electric power generation and internal combustion engines.

Clean Water Act (CWA) Section 303(c) requires states to develop water quality standards and review and update those standards every three years.[2] Water quality standards must include designated uses of water bodies, water quality criteria that are necessary to protect those uses, expressed in either numeric or narrative form, and antidegradation components.[3] States must submit their water quality standards to EPA for review and approval.[4] If EPA finds that a state’s proposal for one or more criteria is inadequate, it must notify the state, which then has 90 days to revise its standards in response to EPA’s concerns.[5] If the state does not do so, EPA is required to propose a federal standard that will apply to that state. Similarly, if EPA, independent of any state proposal, determines that a state needs a new or revised standard, and the state fails to act, the CWA directs EPA to propose the new or revised standard for that state.[6] If the state proceeds to develop its own standard while EPA is engaged in the rulemaking process, and the state standard is acceptable to EPA, then the CWA allows EPA to approve the state standard and abandon its own effort.

Background to EPA’s Final Rule

Florida currently implements a narrative nutrient criterion, which provides that “in no case shall nutrient concentrations of a body of water be altered so as to cause an imbalance in natural populations of aquatic flora or fauna.”[7] Florida implements this criterion through site-specific detailed biological assessments together with outreach to stakeholders when deriving wastewater discharge permit limits, developing and implementing total maximum daily loads (TMDLs), and assessing whether specific water bodies are “impaired” under CWA Section 303(d).

Not satisfied with these narrative standards, environmental groups sued EPA in July 2008 to force the agency to adopt numeric nutrient criteria for Florida. Initially, the environmental groups based their argument in part on a 1998 EPA document stating that numeric nutrient criteria were necessary under the CWA, and that EPA would require states to develop numeric criteria if the states did not do so themselves by the end of 2003.[8] Because Florida did not adopt numeric nutrient standards, the environmental groups alleged that EPA’s determination obligated the agency to propose numeric criteria for Florida under CWA Section 303(c)(4).

Following this lawsuit, EPA issued a January 14, 2009 “necessity determination“ under CWA Section 303(c)(4)(B) that numeric nutrient water quality standards were necessary for Florida to meet the requirements of CWA Section 303(c). EPA opined that, “despite Florida’s considerable data collection and analysis efforts and outreach with stakeholders to date,” applying the narrative criteria is “resource intensive, time consuming, and less than effective in implementing programs to protect water quality and prevent impairments of designated uses due to nutrient overenrichment.”[9] According to EPA, the “very substantial and widespread nature of nutrient challenges faced by the State and the barriers to effective implementation associated with narrative nutrient criteria in Florida … strongly support the need in this case for numeric nutrient criteria to effectively protect designated uses and prevent impairments.”[10] The environmental groups amended their complaint to base their claim in part on EPA’s necessity determination.

EPA and the environmental groups resolved their lawsuit in an August 2009 consent decree[11] that required EPA to propose numeric criteria for Florida waters under a staged approach, beginning with nearly all freshwaters and later for marine waters. As amended by the court in June 2010 and October 2010, the deadlines for complying with the consent decree were: January 14, 2010 for proposing numeric nutrient criteria for lakes and flowing waters (except in south Florida), finalizing those criteria by November 14, 2010; proposing criteria for freshwater in south Florida, estuaries, and coastal water by November 14, 2011, and finalizing those criteria by August 15, 2012.[12] The extended deadlines were designed to allow for a public peer review by EPA’s Scientific Advisory Board (SAB) of the scientific methodologies for estuarine and coastal criteria, flowing waters in south Florida, and downstream protection values for estuaries and coastal waters.[13]

EPA’s Final Rule

EPA’s Final Rule satisfies the first stage of its obligation under the consent decree. EPA initially published a proposed rule in the Federal Register in January 2010.[14] After receiving a barrage of over 20,000 comments on the proposal, including substantial technical criticisms, EPA published a supplemental notice of data availability and request for comment on specific aspects of the proposal in August 2010.[15]

As in its January 2010 proposal, EPA’s Final Rule outlines the need for nutrient regulation generally and concerns regarding Florida’s existing narrative standards in some detail, then provides a lengthy description of the technical bases for the numeric nutrient criteria it is establishing for Florida’s fresh waters – specifically, lakes and springs throughout Florida, and “flowing waters” (rivers, streams, and canals) outside south Florida.

According to the Final Rule, numeric nutrient criteria are necessary in Florida for the reasons set out in the necessity determination – i.e., as could be said in many states, Florida’s intricate narrative approach requires a time and resource-intensive, site-specific translation of the narrative criteria into numeric targets or permit limits. EPA acknowledges that Florida has invested substantial resources in collecting and analyzing data related to nutrients and biological health in Florida waters, created a comprehensive framework that addresses nutrient loadings from both point and nonpoint sources, and has continued to address necessary nutrient reductions in impaired waters through the TMDL program. However, according to EPA, the “combined impacts of urban and agricultural activities, along with Florida’s physical features and important and unique aquatic ecosystems,” make it clear to EPA that “the current reliance on the narrative criterion alone and a resource-intensive, site-specific implementation approach, and the resulting delays that it entails, do not ensure protection of applicable designated uses” for many of Florida’s waters.[16] EPA views numeric criteria as a tool that will enable Florida to expedite effective implementation of Florida’s existing point and nonpoint water quality programs.[17]

The bulk of the Final Rule is devoted to the technical underpinnings of EPA’s numeric criteria for Class I (potable water supplies, including impoundments and associated tributaries, certain lakes, rivers, or portions of rivers used as a drinking water supply) or Class III (recreation, propagation and maintenance of a healthy, well-balanced population of fish and wildlife) waters under Florida law in the following categories: For streams, EPA established numeric criteria for total nitrogen and total phosphorus in five watershed regions of Florida streams; for lakes, the Final Rule establishes numeric criteria for chlorophyll a, total nitrogen, and total phosphorus in three groups based on color and alkalinity (colored, clear & alkaline, clear & acidic); and for springs, EPA established a nitrate-nitrite criterion based on experimental laboratory data and field evaluations that document the response of nuisance algae to nitrate-nitrite concentrations. These portions of the Final Rule will take effect in March 2012.

The Final Rule also includes what EPA deems a flexible approach for deriving federal site-specific alternative criteria (SSAC) based upon EPA’s approval of submissions from Florida or stakeholders showing scientifically defensible recalculations of protective levels that meet the requirements of CWA section 303(c).[18] EPA contends that this procedure responds to concerns in some comments that a waterbody could exceed EPA’s established numeric criterion, yet still meet Florida’s designated uses for the waterbody.[19] This portion of the Final Rule takes effect in February 2011.

Economic Impact of EPA’s Final Rule Drives Criticisms, Lawsuits

EPA has faced harsh criticism since issuing the proposed rule in January 2010, including from Florida officials, stakeholders, and the regulated community. One focus of these objections is the financial impact of the Final Rule on businesses and citizens that may be forced to absorb the higher costs of the Final Rule. The true cost of the Final Rule has been sharply debated. According to EPA, the incremental cost of the Final Rule over current conditions in Florida will be between $135.5 million and $206.1 million per year, and will cost the average Florida household between $3 and $5 per month.[20] However, some opponents argue that EPA drastically underestimates the costs of the Final Rule by an order of magnitude: In light of the operational and technological changes that would be necessary to meet the new criteria, these opponents estimate that the actual costs of the Final Rule could range between $3.1 to $8.4 billion per year for the next 30 years.[21]

EPA has been hit with a slew of lawsuits challenging nearly every aspect of the Final Rule. Some plaintiffs include concerns that the Final Rule could – and should, based on the agency’s explanation – be extended to any number of other states, but is instead singling out Florida. In perhaps the most lengthy and far-reaching complaint, the State of Florida and the Florida Commissioner of Agriculture filed a federal lawsuit in the Northern District of Florida the day after the Final Rule was published in the Federal Register. The complaint includes ten causes of action based largely on the federal Administrative Procedure Act (APA), calls the Final Rule an “intrusion” into Florida’s previously approved clean water program, and seeks an injunction.

In its complaint, Florida alleges that controlling “nutrient loading from predominately non-point sources involves traditional States’ rights and responsibilities for water and land resource management which Congress expressly intended to preserve” in the CWA, and that “EPA’s usurpation of the responsibility for nutrient criteria violates the premise of cooperative federalism which Congress intended to be the underpinning of the CWA.”[22] Florida asserts that the genesis of the Final Rule – EPA’s January 14, 2009 necessity determination – was rushed through without the benefit of reasoned scientific analysis or public participation, and was issued to resolve the underlying lawsuit and quell the development of similar lawsuits in other states.[23] Florida describes the necessity determination as “not the product of careful deliberation but a legal maneuver to quash the debate over the 1998 Clean Water Action Plan and limit any nationwide precedential effect of the suit filed in Florida.”[24]

Florida also asserts that nearly every aspect of the Final Rule violates the APA, because EPA failed to establish a sound scientific basis for the numeric criteria. Florida’s complaint includes allegations that: the instream criteria lack a demonstrated cause and effect between the instream concentrations of nutrients and a negative biological response; the lakes criteria would impose a limit that is lower than the natural state in some lakes; the springs criterion is based on Florida’s draft criterion that was never finalized or fully vetted; the Final Rule fails to exclude the 79 TMDLs that were previously approved as establishing appropriate water quality standards for those waters; EPA failed to disclose the technical basis, regulatory implications, and economic impacts of the Final Rule or respond to technical criticisms of the rule; and EPA incorrectly represented the impact of the Final Rule on regulated entities in Florida.

Other lawsuits include claims brought by the Florida League of Cities and Florida Stormwater Association Inc.,[25] groups representing municipal and county interests in Florida; publicly owned utilities that provide water and wastewater treatment to Florida customers;[26] and local and national members of the fertilizer and mining industries.[27] These lawsuits also seek to enjoin implementation of the Final Rule, based in part on similar objections to the foundation and technical adequacy of the Final Rule.

Several of these plaintiffs also allege that it will be economically and/or technologically infeasible for them to comply with the established limits. For example, the Florida League of Cities and publicly owned utilities argue that their members will be unable to comply with the criteria without installing prohibitively expensive wastewater treatment equipment. Some entities that operate stormwater treatment systems argue that their systems simply lack the capability of meeting the limits in the Final Rule. Further, national fertilizer and mining industries argue that that the new standards, as related to point source discharge permits, will be economically and practically infeasible, and may force some businesses to suspend their operations.

Conclusion

EPA has for some time endorsed and supported state development of numeric nutrient criteria,[28] but many states have resisted their adoption. Environmental groups have already issued notices of intent to sue EPA to force Wisconsin and Kansas to implement numeric nutrient criteria, relying on similar legal arguments as in the Florida case. If EPA’s Final Rule withstands the current legal challenges, it could become a template that EPA tailors to the intricacies of other states.[29]

For more information on nutrient issues or Marten Law’s Water Quality practice, please contact Meline MacCurdy.

[1] 75 Fed. Reg. 75762 (Dec. 6, 2010) [hereinafter “Final Rule”].

[2] See 40 C.F.R. § 131.20.

[3] Id. §§ 131.6, 131.10-12; 33 U.S.C. § 1313(c)(2)(A).

[4] 33 U.S.C. §1313(c)(2)(A).

[5] Id. §1313(c)(3).

[6] Id. §1313(c)(4).

[7] Florida Administrative Code (F.A.C.) 62-302-530(47)(b).

[8] See EPA, National Strategy for the Development of Regional Nutrient Criteria, 63 Fed. Reg. 34648 (June 25, 1998); see also EPA, Clean Water Action Plan, 63 Fed. Reg. 14,109 (Mar. 24, 1998).

[9] Letter from B. Grumbles, EPA Assistant Administrator, to M. Sole, Florida Department of Environmental Protection, 8 (Jan. 14, 2009).

[10] Id.

[11] For additional information regarding the August 2009 consent decree and related issues, see S. Brandt-Erichsen & J. Kray, EPA to Set Water Quality Criteria For Phosphorus and Nitrogen in Florida Waters, Paving the Way for Other States to Follow, Marten Law Environmental News (Sept. 15, 2009).

[12] See Final Rule at 75772.

[13] Id.

[14] 75 Fed. Reg. 4173 (Jan. 26, 2010). For an overview of EPA’s January 2010 proposal and its implications for other states, see M. MacCurdy, EPA Proposal for Numeric Nutrient Standards for Florida Waters has National Implications, Marten Law Environmental News (Feb. 3, 2010).

[15] 75 Fed. Reg. 45579 (Aug. 3, 2010). The supplemental notice focused on the delineation of stream region boundaries based on geographical characteristics, criteria for streams based on two approaches, and protection of downstream lakes.

[16] Final Rule at 75771.

[17] Final Rule at 75771-72.

[18] See Final Rule at 75763-64, 75790-92.

[19] Several of the plaintiffs in the suit that precipitated the Final Rule have also filed a complaint challenging the SSAC. Florida Wildlife Federation, Inc., et al. v. EPA, No. 10-511 (N.D. Fla. Nov. 15, 2010). The plaintiffs take issue with EPA’s use of the SSAC to change the nutrient criteria for an entire watershed as opposed to a particular site.

[20] See Final Rule at 75793.

[21] Letter from Associated Industries of Florida, CF Industries Holdings, Inc., Florida Farm Bureau, and Florida Water Quality Coalition to Hon. Darrell Issa, Chairman of the Committee on Oversight and Government Reform, re: EPA Nutrient Rulemaking Poised to Stymie Job Growth in Florida (Jan. 6, 2011).

[22] Complaint ¶ 3, Florida v. Jackson, No. 10-503 (Dec. 7, 2010).

[23] See id. ¶¶ 10-19.

[24] Id. ¶ 16.

[25] Florida League of Cities Inc. v. EPA, No. 11-00011 (N.D. Fla. Jan. 10, 2011).

[26] Destin Water Users, Inc. et al. v. Jackson, No. 10-532 (N.D. Fla. Dec. 16, 2010).

[27] CF Industries v. Jackson, No. 10-513 (N.D. Fla. Dec. 9, 2010); The Fertilizer Institute and White Springs Agricultural Chemicals, Inc. v. EPA, No. 10-507 (N.D. Fla. Dec. 7, 2010); The Mosaic Company, Inc. v. Jackson, No. 10-506 (N.D. Fla. Dec. 7, 2010).

[28] See EPA, Water Quality Criteria for Nitrogen and Phosphorus Pollution (stating that EPA’s “goal is to assist in the adoption of numeric nitrogen and phosphorus criteria, which will help states, territories, and tribes move toward establishing water quality standards for nitrogen and phosphorus”); EPA, State Adoption of Numeric Nutrient Standards 1998-2008, 3 (Dec. 2008) (stating that “EPA has made protecting and restoring the nation’s waters from nitrogen and phosphorus pollution a top priority,” describing EPA’s efforts to assist states in developing numeric nutrient standards, and stating that “EPA believes that numeric nutrient water quality standards provide an important foundation to accelerate, guide, calibrate, and evaluate the implementation of” other tools to address nutrient pollution, such as TMDLs, BMPs, trading, economic incentives, and technology-based controls).

[29] T. Luntz, EPA Proposes Freshwater Nutrient Limits for Fla., a National First, N.Y. Times (Jan. 15, 2010) (quoting David Guest, the attorney who brought the plaintiffs’ case, as saying that the Florida rule “is a prototype that will be followed by other states,” and that, if states do not follow, “EPA will be able to do this rather quickly, because they’ve done the hard work now”).

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